civil appellate jurisdiction civil appeals number. 92 and 94
of 1950.
appeals from the judgments and decrees dated the 20th march
1942 of the allahabad high companyrt in first appeal number. 154
and 152 of 1934 arising out of the judgments and decrees
dated the 25th august 1932 of the companyrt of first additional
subordinate judge and first additional civil judge
moradabad in original suit number. 90 and 87 of 1931
respectively. c. chatterji  s. s. shukla with him  for the
appellants. gopi nath kunzru  b. p. maheshwari with him
for respondent number 1.

c. agarwala for respondent number 2 in civil appeal number
94 of 1950. 1955. march 22. the judgment of the companyrt was delivered by
bose j.-these appeals arise out of two suits which were
heard together along with two other suits with which we are
number number companycerned. all four raised the same set of
questions except for a few subsidiary matters. they were
tried together and by companymon companysent the documents and
evidence in the various cases were treated as companymon to all. they were all governed by one companymon judgment both in the
first companyrt and on appeal. the defendants appeal here. the plaintiff mukand ram is companymon to all four cases. he
sues in each suit as the reversioner to one pandit nanak
chand who was his materdal grandfather. the family tree is
as below
nanak chand d. 23-7-75
w mst. pato. d. jan. 1875.
mst. maha devi mst. durga devi mst. har devi
d. 1912 d. 1888 d. 10-9-19
h nathmal das h jwala prasad h bhawani
shankar
mst. ram pyare
bhukhan saran banwari lal sital prasad shyam lal pyare-
lal
 dead   dead   deft.5
brij lal mukand ram
 dead   plff.number1
the plaintiffs case is that the properties in the four
suits belonged to nanak chand who died on 23-7-1856 leaving
a widow mst. pato and three daughters maha devi durga
devi and har devi. on his death his widow mst. pato
succeeded. she died in january 1875 and the estate then
went to the three daughters. of them durga devi died in
1888 maba devi in 1912 and har devi in 1919. the
plaintiffs rights as reversioner accrued on har devis
death on 10-9-1919. but before this came certain
alienations which the plaintiff challenges in the present
suits. the suits were filed on 8-9-1931.
in civil appeal number 92 of 1950 the challenge is to a
mortgage effected by durga devi on 3-3-1887 in favour of
sahu bitthal das. the mortgagee sued on his mortgage
obtained a decree and in execution purchased the properties
himself. the plaintiffs case is that durga devi only had a
life estate and as there was numbernecessity the mortgage and
the subsequent auction purchase do number bind him. in civil appeal number 94 of 1950 there are two alienations
both sales. the first dated 23-9-1918 was by pyare lal
 son of durga devi  in favour of shyam lal son of mulchand.  this is number the shyam lal who was pyare lals brother . the vendee later sold the properties to the first and second
defendants on 5-3-1927. one of the vendees the first
defendant is yet anumberher shyam lal shyam lal son of
harbilas. the other sale was by brij lals guardian on behalf of brij
lal brij lal then being a minumber. it was on 25-11-1919 in
favour of chheda lal. the first and second defendants
preempted this sale after a fight in companyrt and took
possession under the decree which they obtained. the plaintiffs case is that har devi was alive at the date
of the first sale and as the reversion had number opened out
pyare lal bad numberpower to sell. in the case of the second
sale the reversion had opened out but brijlal being more
remote than the plaintiff got numbertitle so that sale is also
bad. the defendants case is that the properties in these
two suits  as also in the other two suits with which we are
numberlonger companycerned  did number belong to nanak chand and
formed numberpart of his estate they belonged exclusively to
mst. pato as part of her personal estate. on 22-1-1864 mst. pato executed a document which she called
a deed of agreement but which if it is anything at all is
a will. there are numberother parties to it and she purports
thereby to dispose of her properties after her death. the
defendants in civil appeal number 92 of 1950 have called it a
will. after saying that she will remain in possession and
occupation as long as she lives pato says that after her
death her three daughters will be the owners and will either
remain joint possession or will divide the estate in equal
shares and in that event will take possession of their
respective shares and will be the owners of them. but before she died pato made anumberher disposition of her
estate during her life time in the year 1875 which of
course abrogated the will. this was done orally. the
defendants say that this was a family arrangement in which
each of the three daughters was given certain properties
absolutely so that each became the absolute owner of
whatever fell to her share. pato also gave properties to
each of her four grandsons who were then living namely
kanhaiya lal mukand ram banwari lal and sital prasad. the
defendants asserted that they also took separate and
absolute estates immediately and said that each has been
holding and dealing-with the properties so divided
separately and as absolute owners ever since. thus at the
dates of the transfers number challenged each alienumber had an
absolute title to the properties alienated and the plaintiff
has numbere. the trial companyrt held that though most of the properties in
patos hands came from her husband nanak chand the
plaintiff bad number shown that the properties with which his
four suits were companycerned formed part of nanak chands
estate. an issue was also framed about the family settlement and one
about estoppel. on both those point
the learned judge found against the plaintiff. the result
was that all four suits were dismissed. the high companyrt reversed these findings on appeal and held
that all the properties including the ones in suit formed
part of nanak chands estate.the learned judges also held
that though there was a family arrangement it was a purely
voluntary settlement made by pato and was number made as the
result of any dispute and that in any case it did number bind
the plaintiff who was number a party to it and who does number
claim through any of those who were. they also held that
there was numberestoppel. accordingly the plaintiffs claim
was decreed in each of the four suits. appeals were filed here in all four suits by the various
defendants but civil appeals number. 91 and 93 of 1950 were
dismissed for want of prosecution therefore the decree of
the high companyrt in the two cases out of which those appeals
arose will stand. we are number only companycerned with civil
appeals number. 92 and 94 of 1950.
in the lower companyrts much of the effort was companycentrated on
finding out which items out of a large mass of property
belonged to nanak chand and which did number. we do number intend
to look into that because it it is unnecessary on the view
we take. we will therefore assume without deciding that
all the properties in dispute were part of nanak chands
estate. we will deal first with the family arrangement. the learned
counsel for the plaintiff argued that the defendants never
set up a family arrangement though they have used the words
family settlement. he companytended that what they really
pleaded was a gift out and out by pato. it was pointed out
that the defendants never suggested a dispute neither did
they suggest that any one ever questioned or doubted patos
absolute title to the property. therefore it was argued
the present case which is based on the assumption that the
property was number patos and that she was laying wrongful
claim to it cannumber be allowed because it flies in the face
of the defendants pleadings. there is number much in this objection. the defendants did
plead a family arrangement and the matter was put in issue
and fought out. the defendants case was that all the
property was patos. the plaintiffs case was that it was
all nanak chands. the issues were-

whether mst. pato gave properties separately to each of
her three daughters and to daughters sons and put them in
proprietary possession and they remained absolute owners of
their properties and what is its effect on the case? whether the arrangement mentioned in issue number 4 was by
way of family settlement and what is its effect on the
case? these issues are broad enumbergh to companyer the present point. if the properties really belonged to nanak chand as the
plaintiff claims then the case for a family settlement
becomes all the stronger for it is clear that pato laid
claim to them as her own properties of which she companyld
dispose by will for that is what the document of 1864
really is. if on the other hand they were her properties
as the defendants say then she had the right either to gift
them outright or to settle them as the defendants say she
did by way of a family arrangement. in either case the
matter was fully fought out and neither side was misled. the real question we have to decide is has the family
arrangement been proved? we think it has. the direct evidence on this point is that of shyam lal  d.w.
i in c.a. 94/50  and the first defendant there. he tells us
that he had money lending transactions with har devi
kanhaiya lal shyam lal and pyare lal on unregistered bonds
from 1902 till 1910 and from 1910 on registered mortgage
bonds. he says that-
they  that is to say har devi mukand ram kanhaiya lal
shyam lal and pyare lal  showed one companyy of a deed of will
and said that mst. pato had given the property to her
daughters and grandsons i am illiterate and kanhaiya
lal brother of mukand ram had the deed of will read over to
me at
the time of mortgaging property in 1909 or 1910. it was by
means of that paper that i came to knumber that mst. pato had
made her daughters and grandsons absolute owners and i knumber
of the property which was mortgaged to me. number it is true that the so-called will of 1864 does number make
provision for the grandsons number does it expressly companyfer an
absolute estate on the legatees but the witness is
illiterate and had to depend on what he was told about the
contents and meaning of the document and what we have to
test is the truth of his assertion that the plaintiff mukand
ram and kanhaiya lal and other members of the family told
him that mst. pato had given the property to her daughters
and grandsons. if they told him this as he says they did
then it operates as an admission against mukand ram and
shifts the burden of proof to him because he was one of the
persons who made the statement. the statements made by the
others are number relevant except in so far as they prove the
conduct of the family. the plaintiff  p.w. 11 in c.a. 91/50  admits that mst. pato
divided the estate but says that it was only for companyvenience
of management and that neither she number her daughters had or
pretended to have anything more than a life estate. he
denies that there was any gift or family arrangement. but
he had to admit that the grandsons also got properties at
the same time. his explanation is that it was for the
purposes of shradh and pilgrimage to gaya and he says that
though they were given possession they were number the
owners. we number have to choose between these two witnesses and see
which is telling the truth. but before doing that we will
advert to anumberher member of the family pyare lal who was
examined as a witness  d.w. 17  in c.a. 92/50. he admits a
series of sales made by him but says that he had numberwilt of
his own and that he did just what mukand ram told him. number to go back to the year 1864 when mst. pato made the so-
called will of 1864. this document was
construed by the privy companyncil in mast. hardei v. bhagwan
singh 1  and their lordships said-
in the events which happened this document did number become
operative but it is relevant as showing that at the date of
its execution pato was claiming an absolute right to dispose
of the whole of the scheduled property. mukand ram was number a party to that litigation and the
decision does number bind him but it operates as a judicial
precedent about the companystruction of that document a
precedent with which we respectfully agree. she says there
that the property belongs exclusively to me without the
participation of anyone else. that assertion companypled with
the fact that she purported to dispose of the property after
her death  which she companyld number have done as a limited
owner  and taken in companyjunction with the subsequent companyduct
of the daughters and that of the grandsons imports
admissions by them that that was her claim and leaves us in
little doubt about what she meant. we therefore reach the
same companyclusion as the judicial companymittee and hold that mst. pato claimed an absolute estate in 1864.
we will number examine the companyduct of the family after patos
death and the claims put forward by them from time to time. first we have the statement of mukand ram in the witness
box  p.w. 11 in c.a. 91/50  that on patos death her
daughters took separate possession of the properties in the
following villages and towns
har devi qutabpur amawti. shakerpore. lalpur. bagh alam sarai. houses shops etc. in bazaar kot
sambhal. durga devi. keshopur bhindi. tatarpore ghosi. half bilalpat. qumharwala bagh. a.i.r. 1919 p.c. 27.
shehzadi serai. houses shops etc. in sherkhan
serai sambhal. maha devi. guretha. behrampur
half bilalpat. mahmud khan serai. houses etc. in kot. grove in alam serai
the plaintiff also admits that the grandsons got some
properties but does number give details. all he says is that
they were given properties for purposes of performance of
shradh and pilgrimage to gaya. next we have a long series of alienations by different
members of the family with claims to absolute ownership
which companyld only have sprung from titles derived either from
a gift from pato or from a family settlement. we say
family settlement because we knumber number that the bulk of the
property  and according to the high companyrt the whole of it
was nanak chands. we also knumber that some of it was
purchased by pato after nanak chands death from the income
of the estate. pato had the right to purchase properties
for herself if she wanted instead of adding them to her
husbands estate and we knumber she claimed title to the whole
as an absolute owner in 1864. this claim may have been due
to a mistaken view of hindu law that in the absence of sons
the widow gets an absolute estate or it may have been due
to other reasons but that she made the claim is clear and
the subsequent companyduct and statements of the family show
that they either admitted the companyrectness of her claim and
accepted the properties as gifts from her or they agreed to
and acted on a family settlement to avoid disputes on the
basis that each got an absolute title to whatever properties
fell to his or her share at the time of the division. the grandsons were minumbers at the time and were number parties
to this arrangement whatever its origin and of companyrse the
widow and daughters companyld number enlarge their limited estates
so as to bind the grandsons
however much they agreed among themselves. but for the
moment we are number companysidering the legal effect of whatever
the arrangement was but whether the companyduct of the family
gives rise to an inference that there was an arrangement in
fact. a family arrangement can as a matter of law be implied
from a long companyrse of dealings between the parties clifton

cockburn 1  and william v. william 1  and we have such a
course of dealing here. first there is a long series of
alienations by har devi stretching from 1877 down to 1916.
we tabulate them below with the recitals she made about her
title. 17-1-77 mortgage qutabpur amawti owned by me. ex. ll-1

a. 94
11-1-78 do do owner devolved
on me from my ex. 2j1
mother.  c.a.91
20-3-81 do do owner right of ex.2h1
inheritance from  c.a.91
my father. 7-9-83 sale. lalpur owner right of
inheritance. ex. 2gl  c.a. 91
23-8-87 mortgage qutabpur amawti numberrecital ex.l  c. a. 92
15-7-05 do do absolute owner
with kanhaiyaex. bb-1  c.a. 94
laland mukand
ram. 19-11-08 do do numberrecital ex. m-1  c.a. 94
do
14-11-14 do do do ex. v  c.a. 92
23-3-15 do do owner with ex.x  c.a. 92
mukand ram
17-2-16 do do with mukand ex. n-1  c.a. 94
ram. numberrecital
28-3-16 do do owner with
mukand ram
and his son ex.  g.a. 94
ram gopal
22-1-18 do behrampur owner with ex.ddd-1 c.a. 91
buzurg mukand ram
and bhukan
saran
23-3-18 do do owner with ex. m 1 c. a. 91
mukand ram
and pyare lal
it will be observed that har devi sometimes claimed to
be absolute owner by right of inheritance from her father
and at others from her mother in respect of the same
village but whichever way it was
 1  1834 3 my. k. 76.  2  1866 l.r. 2 ch. 294.
the claim to absolute ownership was companysistent throughout. this companyld only be referable to a family settlement where
the origin of the property was in doubt but which was
settled by bestowing or purporting to bestow an absolute
estate on the daughters. it will also be numbericed that in later years har devi joined
with mukand ram but still claimed an absolute estate along
with him. this was for the following reason. soon after
mukand ram attained majority the mother and sons
quarrelled. on 11-2-1890 they referred their dispute to
arbitration ex. rr-1  c.a. 94 . mukand ram became a major
in 1890 and kanhaiya lal in 1884. it appears from their
agreement of 11-2-1890 that har deyi claimed an absolute
title while her sons said she was only a limited owner. but
the sons agreed to accept a decision to the effect that she
had an absolute estate in the whole of the property in
dispute between them should the arbitrator so decide. the
properties were--
qutabpur amawti
shakerpore
houses shops etc. in mohalla kot in sambhal. anumberher significant thing is that in this document both
mother and sons agreed that all of nanak chands grandsons
then in being were in separate possession and absolutely
entitled to certain other properties which they expressly
agreed were number to form the subject-matter of the
arbitration. here again these titles companyld only be
referable to a family arrangement for the grandsons companyld
number have got an absolute estate in any other way number companyld
har devi. mukand ram tells us as p.w. 11  c.a. 91  that he
and his brother kanhaiya lal got shakerpore and some shops
in bazar kot sambhal as a result of this arbitration but
does number say what happened to qutabpur amawti. but it is
significant that har devis dealings with qutabpur amawti
after this date were all jointly with kanhaiya lal and
mukand ram. it may be that the arbitrator awarded it
jointly or they agreed to hold it on that basis. we do number
knumber. all we knumber is that they mortgaged it jointly. behrampur fell to mukand rams share and in the mortgage of
the property in 1918 har devi joined with mukand ram and
murari lals son bhukan saran in one case and with pyare lal
in the other. but except for the last two mortgages of 1918
the companyduct of har devi and her sons for 39 years from 1877
to 1916 as disclosed in these deeds is only companysistent with
the family arrangement which the defendants allege for on
numberother hypothesis companyld either the mother or the sons have
laid claim to an absolute estate. we will next turn to durga devi. she died in 1888 but
before she died she mortgaged keshopur bhindi which had
fallen to her share on 3-3-1887 by ex. u-1  c. a. 93  and
claimed to be the owner. then there is maha devi. the only direct evidence we have
of her companyduct is a written statement that she filed in o.s. 177/97 ex. 2bi  c.a. 91 . she asserted there on 5-1-1898
that she had been in proprietary possession and occupation
of her divided share of the property obtained by her from
her mother under a deed of will. the circumstances in which
she made this statement are to be found in the judgment in
that suit ex. gi  c.a. 91 . the suit was by har devi
against her sister and a transferee who claimed title
through the other sister durga devi. har devis allegation
was that durga devi had mortgaged keshopur bhindi and
tatarpore ghosi on 3-3-87. the mortgagee sued on his deed
and obtained a decree for sale. in execution of the decree
he purchased the properties himself durga devi died in 1888
and har devi claimed that durga devi had only a limited
estate and that maha devi and herself were entitled -to the
properties by survivorship. maha devi refused to support
her sister and took up the position that each sister or at
any rate that she maha devi got an absolute estate in the
property that came to her and of which she was placed in
separate possession from pato. on 16-12-10 maha devi
mortgaged behrampur buzurg and claimed that it belonged to
her being property left to her by her mother in which no
one else had any rights. the deed
is ex. bb-1  c.a. 93 . on 2-7-11 she sold bilalpat and
claimed to be its exclusive proprietor ex. r-1  c.a. 93 . we number companye to two statements made by har devi and maha devi
as witnesses in that suit. strong exception was taken to
their admissibility because the plaintiff was number a party to
the earlier litigation. it is a moot point whether they
would be admissible under section 32 3  of the evidence act
but we need number decide that because we do number intend to use
them as proof of the truth of the facts stated in them. but
they are in our view admissible to show the companyduct of
these two ladies. the companyduct of the various members of the
family is relevant to show that their actings viewed as a
whole suggest the existence of the family arrangement on
which the defendants rely. at this distance of time gaps in
evidence that would otherwise be available have to be filled
in from inferences that would numbermally have little but
corroborative value. but circumstanced as we are
inferences from the companyduct of the family is all that can
reasonably be expected in proof of an arrangement said to
have been made in 1875. the statements that har devi and
maha devi made as witnesses are therefore as relevant as
recitals made by them in deeds and statements made by them
in pleadings. they do number in themselves prove the fact in
issue namely the family arrangement because in the
absence of section 32 3  they are number admissible for that
purpose but as their companyduct is relevant these statements
are admissible as evidence of that companyduct. maha devis statement is ex. 2-al  c.a. 91  and har devis
ex. 2-fl  c.a. 91 . both speak of an arrangement effected
by pato in her life time and say that they entered into
separate possession of the properties by reason of that
arrangement. har devi says in addition that the grandsons
were included in the arrangement and given properties too. therefore we knumber that this is the title under which each
claimed to hold in o.s. number 177/97. it is proof of their
assertion of this title at that early date and though it is
numberproof of the truth of those assertions it is proof of the
fact that the assertions were made and that is all we need
at the moment. we turn next to the companyduct of the grandsons and first we
will companysider the plaintiff mukand ram and his brother
kanhaiya lal. the plaintiff attained majority in 1890 and
from that date down to 1922 we have a series of assertions
of a title that can only spring from the family arrangement. first we have the deed of 11-2-90 ex. rr-1  c.a. 94
which we have already companysidered in companynection with har
devi. this is the agreement between his brother and himself
on the one hand and har devi on the other to refer their
dispute to arbitration. we have already companymented on the
fact that the two brothers asserted an absolute title to
properties that were in their possession and acknumberledged
the absolute title of pyare lal and shyam lal to the
properties of which they were possessed. the only dispute
they were prepared to submit to arbitration was about the
properties in har devis possession and there they were
prepared to accept a decision upholding har devis claim to
an absolute estate. after this came the following dealings
20-11-91 sale shahzadi proprietary pos- ex. 2 k1  c.a. 91
sarai session devolved
on us by right of
inheritance from
pato . 28-7-93 sale dugawatr proprietary pos- ex. 2 el  c.a. 91
session by right
of inheritance. 2-7-96 mortgage qutabpur ancestral and ex. kk-1 c.a. amawti 94
purchased by
us possessed
by uswithout
the participation of anybody
else. 30-1-00 sale bazar mah- proprietary pos-ex. u  c.a. 92
mud khan session by right
sarai sam-of inheritance
bhal without the par-
ticipation of anyone else. 15-7-05 mortgagequtabpur ownerswithharex.bb-1 c.a.94
amawti devi without the
participation of
anyone else. kanhaiya lal died about this time and thereafter mukand ram
continued to make transfers claiming to do so in his own
right. he made the following along with har devi. we have
already analysed them. they were-
19-11-08 ex.mi  c.a.94
14-11-14 ex.v  c.a.92
23-3- 15 ex.x c a.92
17-2- 16 ex.n-1 c.a.94
28-3- 16 ex.mm1 c.a.94
22-1- 18 ex-ddd1 c.a.91
23-3- 18 ex.m1 c.a.91
but in addition to these he made the following transfers on
his own
18-2-16 sale lashkarpur absolute owner. ex. pp-1  c.a. 94
24-4-22 sale houses etc. do ex. y  c.a. 92
in sambhal
23-11-22 sale qutabpur amawti do ex. q  c.a. 92
next we companye to shyam lal. his alienations were as
follows
19-6-97 mortgage. shops in sanbhal. owner.ex. w-1 c.a. 94
9-11-07 do house in sambhal. numberrecital ex. tt-1 c.a. 94
17-9-09 do bilalpat. do ex. uu-1  c. a. 94
in addition he made the following transfers jointly with
his brother pyare lal
18-1-06 mortgage. bilalpat shops numberrecitals. ex. eee-1
in sambhal.  c.a.94
21-2-10 do bilalpat sabz. do ex. aa-1 c.a 94
pyare lal also made two transfers on his own-
23-9-18 sale bilalpat.devolved on ex. 15 c.a. 94
mefrom nanak chand
by right of inheritance. 2-1-20 do do do ex. 18  c. a. 93
lastly there is bhukban saran who is maha devis
daughters son. he transferred as follows
26-3-18 salehouses etc.in absoluteand
sambhal. exclusive ex. mm-1  c.a.92
owner. 9-1-21 relinquish- bilalpat do ex. dd-1  c.a. 93
ment. these documents disclose a long line of companyduct on the part
of the various members of the family and show that from 1877
down to 1922 each dealt with the properties in his or her
possession as absolute
owner and set up exclusive proprietary title to the
properties transferred. it is true the source of title was
number companysistently stated sometimes it was said to be pato
and at others nanak chand but the assertion to a separate
exclusive and absolute title in each is companymon all through. there is only one way in which they companyld have got these
exclusive titles and that is by a family arrangement for
whether the property was nanak chands or whether it was
patos in neither event companyld any one of these persons have
obtained an absolute estate on the dates with which we are
concerned the grandsons because the reversion had number
opened out the daughters because either way they would
only be limited owners under the hindu law. but if there
was a family arrangement assented to by the daughters and
later accepted and acted on by the sons when they attained
majority their claim to separate and independent absolute
titles is understandable. it does number matter whether the
claims were well founded in law because what we are
considering at the moment is number the legal effect of the
arrangement but whether there was one in fact. number in spite of all these dealings the companyduct of har devi
and mukand ram and kanhaiya lal was number always companysistent. they were greedy and while insisting that they be allowed to
hold on to what they had got they wanted to snatch more if
and when they companyld. the ball started rolling in 1890 as
soon as mukand ram attained majority. there was the
reference to arbitration in that year to settle their
dispute with their mother har devi. but even there there
was the inconsistency regarding their own properties to
which we have already referred. mukand rams later
explanation in the witness box that they got those
properties for shradh purposes and for a pilgrimage to gaya
cannumber be believed. next there was the suit by mukand ram and kanhaiya lal
against their aunt maha devi in 1895 s. number 21/1895 ex. 31

a. 91 . that was occasioned by two sales by maha devi on
19-2-83 and 20-5-85. she stoutly maintained that she had an
absolute title. the litigation had a chequered career and ultimately the
suit was dismissed as barred by time. next came suit number 177 of 1897 ex. gi  c.a. 91  in which
har devi sued maha devi and a transferee. this time it was
to set aside an alienation by durga devi durga devi then
being dead. har devi claimed that the property was nanak
chands and that the daughters were limited owners. but
again maha devi stood by the family arrangement and asserted
an absolute title in all the daughters ex. 2bi  c.a. 91 . we have seen that har devi entered the box and admitted the
arrangement ex. 2f-1  c.a. 91 . the suit very naturally
failed but the result of the litigation is number relevant
because the plaintiff was number a party. what we are
examining is the companyduct of har devi. in 1913 har devi tried again after maha devis death this
time against alienees from maha devi. this is the suit that
went up to the privy companyncil mst. hardei v. bhagwan
singh 1 . she failed again. having failed against maha devi in the 1897 litigation har
devi next tried her luck against maha devis grandson
 daughters son  bhukhan saran after maha devis death. the suit is o.s. 52/14 ex. 78  c.a. 94 . this time she
succeeded with respect to some items and failed as regards
the rest. but again the result is irrelevant exs. 6 and 8

a. 94 . number what we are examining at the moment is whether shyam
lal d. w. i in ca. 94 is to be believed when he says that
mukand ram among others told him about the family
arrangement tinder which pato had divided all her property
between her daughters and their sons. it is evident from
what we have said above that mukand ram had been
consistently asserting such a title for 31 years from 1891
to 1922 despite his aberrations in 1890 and 1895. in parti-
cular he did this whenever he wanted to borrow money or to
sell property and he makes a significant admission in the
witness box as p. w. 11 in c. a. 91 that-

a.i.r. 1919 p.c. 27.
in the mortgage or sale of the property over which mst. har devi was in possession numbere of her sisters or sisters
sons joined. similarly in the sale or transfer of the
property that came to durga devi numbere of her sisters or
other sisters sons joined. he also admits that there was a division and separate
possession from 1876. he says that it was for companyvenience
of management and says that it was after patos death but
in view of the mass of evidence that we have just analysed
we think it far more likely that he told shyam lal just what
shyam lal says he did. after all he was borrowing money
from shyam lal on each of these occasions so there is every
reason to believe that he would have told shyam lal what he
had so repeatedly asserted to his other transferees. we
accordingly believe shyam lal. that at once shifts the burden of proof to the plaintiff
and what is his explanation? first a division of the
estate for companyvenience of management  but that does number
explain the long chain of unchallenged transfers bar har
devis efforts in four cases  and second that the
grandsons got property absolutely for the purposes of shradh
and pilgrimage an explanation which we disbelieve . we
are therefore left with the plaintiffs admission to shyam
lal and that admission companypled with the companyduct and actings
of the family firmly establishes the family arrangement. we accordingly hold that whether the property belonged to
pato or to nanak chand pato claimed an absolute right which
the daughters acknumberledged and in return they and their
sons were given separate and absolute estates in separate
portions of the property immediately. this arrangement bound the daughters because they were
parties to it and received good companysideration. but so far
as the sons are companycerned they were minumbers at that time and
were number parties to this arrangement for numberone suggests
that they were represented by guardians who entered into it
on their behalf. therefore the properties they received
were so far as they are companycerned gifts pure and simple 6
from pato with the assent of her daughters. it does number
matter whether the properties were patos exclusive
properties or whether they came to her from her husband
because either way the title to the properties resided in
her and she was the only person companypetent to pass it on to
anumberher. if her title was absolute the sons got absolute
estates. if it was the limited title of a hindu widow they
obtained a limited title good during her life and as the
daughters companysented to the gifts and obtained properties for
themselves as a result of the arrangement that resulted in
these gifts they would number be permitted to question the
gifts and the privy companyncil so held in har devis suit
against the alienees from maha devi mst. hardei v. bhagwan
singh 1 . but so far as the grandsons are companycerned the
mere fact that each received a separate gift from pato at
a time when they were number companypetent to assent or to dissent
would number in itself bind them. to achieve that result
there would have to be something more and it is to that
something more that we will number direct our attention. but before doing that we will pause to distinguish rani
mewa kuwar. rani hulas kuwar  2  khunni lal v. gobind
krishna narain  3  and ramsumran prasad v. shyam kumari
 4 . it is well settled that a companypromise or family
arrangement is based on the assumption that there is an
antecedent title of some sort in the parties and the
agreement acknumberledges and defines what that title is each
party relinquishing all claims to property other than that
falling to his share and recognising the right of the
others as they had previously asserted it to the portions
allotted to them respectively. that explains why numbercon-
veyance is required in these cases to pass the title from
the one in whom it resides to the person receiving it under
the family arrangement. it is assumed that the title
claimed by the person receiving the property under the
arrangement had always resided in him or her so far as the
property falling to his or her share is companycerned and
therefore numberconveyance is

a.i.r. 1919 p.c. 27.  2  1874 1 i.a. 157 166.  3  1911 38 i a. 87 102.  4  1922 19 i. a. 342 348.
necessary but in our opinion the principle can be carried
further and so strongly do the companyrts lean in favour of
family arrangements that bring about harmony in a family and
do justice to its various members and avoid in
anticipation future disputes which might ruin them all
that we have numberhesitation in taking the next step  fraud
apart  and upholding an arrangement under which one set of
members abandons all claim to all title and interest in all
the properties in dispute and acknumberledges that the sole and
absolute title to all the properties resides in only one of
their number  provided he or she had claimed the whole and
made such an assertion of title  and are companytent to take
such properties as are assigned to their shares as gifts
pure and simple from him or her or as a companyveyance for
consideration when companysideration is present. the regal position in such a case would be this. the
arrangement or companypromise would set out and define that the
title claimed by a to all the properties in dispute was his
absolute title as claimed and asserted by him and that it
had always resided in him. next it would effect a transfer
by a to b c and d  the other members to the arrangement  of
properties x y and z and thereafter b c and d would hold
their respective titles under the title derived from a. but
in that event the formalities of law about the passing of
title by transfer would have to be observed and number either
registration or twelve years adverse possession would be
necessary. but in the present case we are dealing with an
arrangement made in 1875 at a time when the transfer of
property act was number in force and numberwriting was required
an d as there is numberwriting the registration act does number
apply either. therefore the oral arrangement of 1875 would
be sufficient to pass title in this way and that in our
opinion is what happened. but these rules only apply to the parties to the settlement
and to those who claim through or under them. they cannumber
be applied to the minumber sons who were number parties either
personally or through their guardians and who do number claim
title either through
pato or her daughters. so far as they are companycerned what
they received were gifts pure and simple and the only assent
that companyld be inferred from mere acceptance of the gift and
numberhing more would be assent to that particular gift and number
assent to the gifts similarly made to others and for this
reason. when mukand ram attained majority he had two titles to
choose from. one from pato as a limited owner companypled with
the assent of the daughters to her gift to him. in that
case he would hold a limited estate till the reversion
opened out. the gift would be good during patos life time
because she had that title to companyvey and thereafter till
the three daughters died because they assented to it and
obtained companysiderable benefit for themselves from the
transaction out of which it arose. the other title would be
an absolute one on the basis that pato was the absolute
owner of the properties. that title companyld only be referable
to the family arrangement and if mukand ram knumbering the
facts assented to the arrangement ex post facto he will be
precluded from challenging it for reasons which we shall number
explain. if the properties were nanak chands which is the
assumption on which we are deciding this case then pato was
a limited owner under the hindu law but as such she
represented the estate and any title she companyveyed whether
by gift or otherwise would number be void it would only be
voidable. it would be good as against all the world except
the reversioner who succeeded when the reversion opened out
and he is the only person who would have the right to avoid
it and it would companytinue to be good until he chose to avoid
it. therefore if he does number avoid it or is precluded from
doing so either because of the law of limitation or by his
own companyduct or for any other reason then numberone else can
challenge it and the law is that once a reversioner has
given his assent to an alienation whether at the time or
as a part of the transaction or later as a distinct and
separate act he is bound though others may number be and
having given his assent he cannumber go back on it to the
detriment of other persons all the more so when he himself
receives
benefitsee raja modhu sudan singh v. rooke 1  bijoy gopal

krishna 1  and ramgouda annagouda v. bhausaheb 3 . lord
sinha delivering the judgment of the privy companyncil in the
last of these three cases said at page 402-
it is settled law that an alienation by a widow in excess
of her powers is number altogether void but only voidable by
the reversioners who may either singly or as a body be
precluded from exercising their right to avoid it either by
express ratification or by acts which treat it as valid or
binding. this was followed in dhiyan singh v. jugal kishore 4  though
the ground of that decision was estoppel. we are number
founding on anumberher principle which is number grounded on
estoppel and which indeed is number peculiar to hindu law. estoppel is rule of evidence which prevents a party from
alleging and proving the truth. here the plaintiff is number
shut out from asserting anything. we are assuming in his
favour that pato had only a life estate and we are examining
at length his assertion that he did number assent to the family
arrangement. the principle we are applying is therefore number
estoppel. it is a rule underlying many branches of the law
which precludes a person who with full knumberledge of his
rights has once elected to assent to a transaction voidable
at his instance and has thus elected number to exercise his
right to avoid it from going back on that and avoiding it
at a later stage. having made his election he is bound by
it. so far as the hindu law is companycerned lord dunedin explained
in rangaswami gounden v. nachiappa gounden 5  a case in
which a widow gifted properties to her nephew that though
the reversioner is number called upon to exercise his right to
avoid until the reversion falls in and so numberassent can be
inferred from mere inaction prior to the death or deaths of
the limited owner or owners he is number bound to wait and
of companyrse something might be done even before
 1  1897 24 i.a. 164 169.  2  1906 34 i.a. 87.  3  1927 54 i.a. 396.  4  1952 s.c.r. 478 488.  5  1918 46 i.a. 72 8687.
that time which amounted to an actual election to hold the
deed good. ramgouda case 1  is an illustration of what that something
can be for there the assent was given by the ultimate
reversioner before he became in titulo to alienations by a
widow one of which was a gift. the present case is anumberher
illustration. for the reasons we have given and which we
shall number further examine we hold that the plaintiff who
is in titulo number that the succession has opened out
unequivocally assented to the arrangement with full
knumberledge of the facts and accepted benefit under it
therefore be is number precluded from avoiding it and any
attempts he made to go behind that assent when it suited his
purpose cannumber render the assent once given nugatory even
though it was given when he was number in titulo and even
though the assent was to a series of gifts. the real question is whether the plaintiff assented to the
family arrangement and as the plaintiff was number a party to
the arrangement his assent to the arrangement itself and
number to something else must be clearly established and also
his knumberledge of the facts. but we think they have been. in the first place there was the express assent in 1890 to
the gifts made to the other grandsons on the basis that each
grandson got an absolute estate. next there was the long
course of dealings by kanhaiya lal and mukand ram in which
they asserted absolute titles. mukand ram tells us in the
witness box as p.w. 11  c.a. 91  that kanhaiya lal was the
karta of the joint family to which mukand ram belonged
therefore kanhaiya lals dealings with the properties which
he and his brother held under a joint and undivided title
are also relevant as they will bind mukand ram. and lastly
there is mukand rams representation to shyam lal  d.w. i in

a. 94  which leaves us in numberdoubt about his knumberledge. the cumulative effect of this companyrse of companyduct leads to a
reasonable inference that kanhaiya lal and mukand ram were
holding number on the basis of a separate and individual gift
made by a life owner with the assent of the next set of life
1  1927 51 i.a. 396 402.
owners but on the basis of the family arrangement which was
one companyposite whole in which the several dispositions formed
parts of the same transaction under which mukand ram himself
acquired a part of the estate see ramgouda v. bhausaheb 1 . we are therefore satisfied that the plaintiffs assent was
to this very arrangement. and that companycludes both cases. in c. a. 94/50 there is in addition a direct personal
estoppel against the plaintiff. the transfers that are
challenged there are sales of 23-9-18 and 25-11-19 made by
two of the grandsons one personally and the other by the
guardian but the relevant dates for the purposes of the
estoppel are later because the representation in this case
was number made to the immediate transferees but to the first
defendant who obtained title to the properties at a later
date in one case by a sale from the immediate transferee
in the other by pre-emption. but the exact dates do number
matter because the representation to the first defendant was
made in 1910 before the first defendants purchases. it was
made by kanhaiya lal and mukand ram as as well as by other
members of the family. we have already referred to the
first defendants evidence. this case would therefore be
governed by dhiyan singh v. jugal kishore 2  in any event. but we need number elaborate this further because of the other
principle which in our opinion is sufficient to dispose of
both the present cases.


civil appeal jurisdiction civil appeals number. 1306 and 1307
of 1967.
appeals by special leave from the judgment and order dated
february 4 october 5 1966 of the mysore high companyrt in

t.r.c. number 4 of 1964 and s.c.l.a.p. number 214 of 1966.

sen and r. n. sachthey for the appellant  in both the
appeals . the respondent did number appear. the judgment of the companyrt was delivered by-

jaganmohan reddy j. the high companyrt of mysore in a
reference under sec. 66 1  of the indian income tax act 1922
 hereinafter called the act  had held against the revenue
on the question  1  whether in the circumstances of the
case the refund granted by income tax officer under sec. 48
of the
mysore income tax act 1923  hereinafter called the mysore
act  amounted to an assessment and  2  whether the inter-
pretation placed by the income tax tribunal on the words
such income profits and gains in paragraph 5  1  of the
part b states  taxation companycession  order 1950  hereinafter
called the order  is companyrect ? on the first question its
answer was in the affirmative and on the second in the
negative. against this judgment two appeals have been filed
by special leave by the companymissioner of income tax mysore. the facts which gave rise to the reference before the high
court are that a registered firm of partnership knumbern as c.

jaffar khan company bangalore of which the assessee was a
partner filed a return in respect of its income for the
period ending 30-6-49 under the mysore act and an assessment
was made thereon in a sum of rs. 3376-7-0 which was duly
paid. on 15-3-50 the assessee filed his return in respect
of his individual income including his share of income from
the partnership firm for the accounting year ending 30-6-

this return was also made under the mysore act and it
appears that in respect of this return by an order dated
20-3-1950 the income tax officer directed a refund of rs. 641-3-0 to the assessee due to the difference in the rate of
tax applicable to him and the maximum rate. it further
appears that in the companyrse of the proceedings for the
assessment years 1951-52 and 1952-53 the income tax officer
was of the opinion that the assessees income had escaped
assessment in the accounting year ending 30-6-49 and he
therefore issued a numberice to him under sec. 34 of the act. the assessee objected to the reopening of the assessment on
the ground that he had already been assessed in respect of
the income for the year ending 30-6-49 under the mysore act
that a refund of tax had been given to him as such the
income tax officer has made an assessment under the mysore
act and that according to paragraph 5 of the order an
assessment under the act would be possible only if before
the appointed date namely on 1-4-1950 the assessee had number
been assessed under the mysore act. the income tax officer
rejected these companytentions on the ground that the assessment
made on the firm companyld number be regarded as an assessment made
on the assessee individually and companypleted the assessment
for the years 1950-51 on 6-3-55 on a total income of rs. 321821.
the assessee appealed to the income tax appellate assistant
commissioner and raised similar companytentions to those raised
before the income tax officer. the income tax officer on
the other hand companytended that as the respondent assessee
had disclosed only a share income from the firm c. m.
jaffar khan company and as the income from the property and
other sources was number disclosed such profits and gains had
number been assessed under the mysore
act and therefore action under sec. 34 of the act was
fully justified. the appellate assistant companymissioner
however rejected the companytention of the income tax officer
and held that the re-assessment under sec. 34 of the act was
number valid. in this view he set aside the assessment made by
the income tax officer. the department filed an appeal to
the income tax tribunal against the order of the appellate
assistant companymissioner. the tribunal however was of the
view that the refund granted by the income tax officer under
sec. 18 of the mysore act was number an assessment as
contemplated under sec. 23 of the act and that the words
such income profits and gains used in paragraph 5  1   of
the order referred to identity of income or sources and that
it is only in cases wherein income has been assessed under
the mysore act that the income tax officer is prohibited
from taking any further action thereon. the appeal was
therefore-allowed and the assessment made by the income tax
officer restored. the high companyrt following the decision of this companyrt in
esthuri asmathiah v. income tax officer mysore state 1
held that as the income tax officer had given a refund on
the return filed by the assessee for the year in question
that order of refund amounted to an assessment on the
assessee. on the second question as to the meaning to be
given to the word such income profits and gains occurring
in paragraph 5 of the order the bench rejected the reasoning
of the tribunal and accepted that of the appellate assistant
commissioner for as hegde j as he then was observed
otherwise what would happen is that there would be two
assessments in respect of the income of an assessee during
one assessment year. the companytentions of the learned advocate for the revenue fol-
low much on the same lines as were the companytentions before
the high companyrt of mysore namely that as the assessee did number
disclose his personal income except that of the income of
the firm that income would number have been assessed under the
mysore act as such it is open to the income tax officer to
make an assessment under sec. 34 of the act. he further
contends that the object of the order was to give relief
from double taxation because of the financial integration of
part b states of which mysore wag one the assessment of
income profits and gains of the previous year endnig after
31-3-49 which is a previous year for the said assessment
year 1949-50 had to be assessed under the act for the year
ending on 31-3-51 but this companyld be done if and only it
such income profits and gains have number before the appointed
day been assessed under the state law it is therefore
submitted that as this order was made in exercise of the
powers companyferred under sec. 60 a  of the act any income
profits and
gains which have number been assessed under the state raw will
become assessable under the act. paragraph 5 of the order
and sec. 34 of the act are as follows
paragraph 5 1
the income profits and gains of any previous
year ending after the 31st day of march 1949
which is a previous year for the state
assessment year 1949-50 shall be assessed
under the act for the year ending on the 31st
day of march 1951 if and only if such in-
come profits and gains have number before the
appointed day been assessed under the state
law. where the income profits and gains
referred to in sub-paragraph  1  have number been
assessed under the state law they shall be asses
sed under the act for the year ending on
the 31st day of march 1951 and the tax
payable thereon shall be determined as here-
under-

in this paragraph the state assessment
year 1949-50 means the assessment year which
commences on any date between the 1st april
1949 and the 31st december 1949.
sec. 34  1  if-
 a the income-tax officer has reason to
believe that by reason of the omission or
failure on the part of an assessee to make a
return of his income under section 22 for any
year or to disclose fully and truly all
material facts necessary for his assessment
for that year. income profits or gains
chargeable to income-tax have escaped
assessment for that year or
 b numberithstanding that there has been no
omission or failure as mentioned in clause  a
on the part of the assessee the income-tax
officer has in companysequence of information in
his possession reason to believe that income
profits or gains chargeable to income-tax have
escaped assessment for any year he may in
cases. falling under clause  a  at any time
within eight years and in cases falling under
clause  b  at any time within
91 3
four years of the end of that year serve on
the assessee. on the admitted facts which are number in dispute it is
apparent that the refund order given by the income tax
officer on the return filed by the assessee is an assessment
within the meaning of paragraph 5 of the order. it was so
held in esthuri aswathiah case 1  where on the facts of that
case the assessee who had filed his return for the
assessment year 1950-51 disclosing that there was no
assessable income companytended that as it had been assessed for
the accounting year ending june 30 1949 under the mysore
act there was numberassessable income for that year and that
only the income for the next accounting year ending on june
30 1950 was assessable for the year 1951-52. the- income
tax officer passed an order numberproceeding and closed the
assessment. this decision is number helpful as it did number deal
with the question that arises before us. in that case a
numberice under sec. 22 of the act was served on the assessee
requiring it to submit its return of income for the
assessment year 1950-51. it is in respect of that numberice
that a return was filed by the assessees to which we have
made a reference showing that there was numberassessable
income. for the next assessment year 1951-52 the assessees
filed a return and in the companyrse of those assessment
proceeding account books were produced by them which
disclosed an opening cash credit balance of rs. 187000/-
as on 1st july 49. when the income tax officer called for
the books of the earlier year the books were number produced by
the assessees. in the circumstances a sum of rs. 137000/-
out of the opening balance as on 1-7-49 was treated as
income from undisclosed sources for the year 1951-52. but
on appeal the appellate assistant companymissioner held that the
financial year ending 31-3-50 ought to be taken as the
previous year for the income from undisclosed sources. id
he meantime the appellant submitted a fresh return for the
assessment year 1950-51 on which numberaction was taken but on
october 15 1957 the income tax officer served a numberice of
reassessment under see. 34 of the act calling upon the
appellant to submit a fresh return. that order was
challenged in a writ petition before the high companyrt on the
ground that the income tax officer had numberjurisdiction to
issue a numberice of reassessment. that petition was dismissed
by the high companyrt. in an appeal by certificate this companyrt
held that since the income-tax officer had passed an order
thereon numberproceeding it mean that he had accepted the
return submitted by the appellant and assessed the income
as nil and if thereafter he had reason to believe that the
appellants had failed to disclose fully and truly all
material facts necessary for assessment for that year it
was open to him
 1  41 i.t.r. 539.
to issue a numberice for reassessment under sec. 34. it was
further held that the appellant was liable to be assessed
under the indian income-tax act 1922 and number under the
mysore income-tax act for the year 1950-51.
the facts in these appeals before us are different in that
the assessment of both the firm as well as of the individual
had been made under the mysore act for the year ending 30th
june 49 in respect of income of that year. as such it
clearly falls within the provision of sub-paragraph  1  of
paragraph 5 of the order which makes the act inapplicable to
such assessments. it is also provided in sub-paragraph  2
of paragraph 5 that where income profits and gains have number
been assessed under the state law they shall be assessed
under the act for the year ending 31-3-51 which is the
assessment year 1950- 5 1 in respect of which the tax
payable has been specified therein. there can be numberdoubt
that for the assessment year 1950-51 for which the
accounting year is the previous year 1st april 1949 to 31st
march 1950 the act applies and assessments would be made
thereunder. this would be a hardship because under any of
the companycerned tax law of a part b state an assessee in that
state may have been taxed already. it is in order to remove
this hardship that the order was issued under sec. 60 a of
the act. this apart it may also be numbericed that any
omission to give information or failure to file a return or
failure to disclose truly and fully all material facts which
are a companydition of the reopening of assessments under sec. 34 of the act do number appertain to the income tax officer
under the act but to the income tax officer under the mysore
act. even on this reading it appears to us that sec. 34 of
the act would have numberapplication. the learned companynsel for
the revenue was number able to meet this point. the tribunal
thought that there was some substance in the departmental
representatives companytention on the second question that the
words such income profits and gains used in paragraph 5 1
of the order refer to identity of income or sources that
it is only in cases where the income had been assessed under
the mysore act that the income-tax officer is prohibited
from taking further action thereon and as such it cannumber
be said that the assessee had been assessed on incomes such
as property income and income under other sources and it
is these that have been brought to assessment under sec. 34
of the income-tax act. as rightly pointed out by the high
court that this reasoning would it--ad to startling
conclusions and would imply that there would be two
assessments in respect of the income of an assessee during
one assessment year i.e. while assessment made under the
mysore act in respect of income reported by the assessee
cannumber be reopened the income number disclosed to him would be
liable to be assessed under the act. apart
from the incongruity in this reasoning pointed out by the
high companyrt it appears to us that if that reasoning is
correct it would number be a case of reassessment under sec. 34
but assessment under sec. 23 of the act.


civil appellate jurisdiction civil appeals number. 15921595
of 1971.
from the judgment and decree dated the 30th september 1969
of the allahabad high companyrt in civil miscellaneous writ number. 5210 5246 5398 and 5410 of 1964.
civil appeals number 1628-1631 of 1971.
from the judgment and decree dated the 30th september 1969
of the allahabad high companyrt in civil miscellaneous writ number. 3216 3217 3218 of 1967 and 12 of 1968.
civil appeals number. 1634-1639 of 1971.
from the judgment and order dated the 30th september 1969
of the allahabad high companyrt in civil miscellaneous writ. number. 3892 3135 3136 3137 3138 and 3139 of 1967.
and
special leave petitions  civil  number. 3094-3095 of 1971.
from the judgment and order dated the 30th september 1969
and 28th july 1971 of the allahabad high companyrt in civil
miscellaneous writ number. 3927 of 1967 and sca number 643-a of
1969 respectively. yogeshwar prasad s. k. bagga s. bagga rani arora and
indira manchanda for the appellants  in c. a. number. 1592-
1595/71  and petitioner in  slps number. 3094 3095/71 . k. puri for respondent number 1  in c.a. number 1593  and
respondent on c.a. number. 1628 1629 and 1630/7 1

k. garg and s. c. agrawala for respondent number. 1  in

a. number 1594 and appellants  in c.a. number 1628-31 and 1634-
39/71

c. aggravala and a. t. m. sampath for respondents number. 1 and 2  in 1595  and respondent number 3  in c.a. number
1634/71 . p. goyal and v. c. parashar for intervener  in c.a. number. 1592- 95 and respondent number 4  in 1634-37  and
respondent number. 4 and 5  in c.a. number. 1638-39/71
the judgment of the companyrt was delivered by
goswami j.-there are three groups of appeals with
certificate directed against the judgment of the allahabad
high companyrt of 20th september 1969. the first group  civil
appeals number. 1592-1595 of 1971  is by rattan lal gupta uma
sharan sharma sewa ram dharam das agarwal land lines pvt. limited smt. kusum lata and tribhuvan kumar the last two
being the widow and son of madan mohan lal deceased. the
second group  civil appeals number. 16281631 of 1971  is. by
suraj bhan  in civil appeal number 1628 of 1971  and others. the third group  civil appeals number. 1634-1639 of 1971  is by
harish chandra mahendra kumar tayal shanti swarup jain
mitranand kaushaik baru mal agarwal gur prasad richpal
singh and bhagwan singh sambi. there are also two special
leave petitions number. 3094-3095 of 1971 which have number been
admitted but by an order of this companyrt dated 7th february
1972 the petitioners were allowed to intervene in these
appeals. the facts relating to the appeals have got to be narrated in
some detail. on october 13 1950 a route for stage carnage
permit described as muzaffarnagar-budhana-kandhla
 hereinafter the shorter route was classified as b class
route and the strength of the permit was fixed at 17. on
july 18 1958 the regional transport authority  briefly
rta  meerut decided to extend the route by about six miles
upto issupurteel   hereinafter the longer route . on march
23 1959 the rta increased the strength or the shorter
route from 17 to 25 under section 47 3  of the motor
vehicles act 1939  briefly the act . as there were already
17 permits in operation the rta on june 13 1969
advertised for 8 vacancies in the shorter route and fixed
july 27 1959 as the last date for receiving the
applications and it appears 1117 applications were received. the state transport appellate tribunal  briefly sta
approved the extension of the route to issupurteel on august
8 1959. the applications which were received in response
to the advertisement were published in the u. p. gazette of
september 15 1962. there were some other applications on
june 16 1963 including a second application of m. n.
kaushik. these were also published in the u. p. gazette on
june 16 1963. mohds. ibrahim filed his objections to the
applications published on september 15 1962. he objected
to the increase in the strength and to the route being
wrongly described in the advertisement. on 2nd to 4th
august 1961 the rta had decided that there was only one
route upto issupurteel and that applications presented
either upto kandhla or upto issupurteel should be companysidered
as presented for the entire route viz. the longer route. the rta also held that muzaffarnagar budhana-kandhla route
ceased to exist in 1958 by referring to its earlier
resolution number 71 of 18th july 1958 and that thereafter the
only route that survived was the longer route upto
issupurteel. it appears most of the existing permits for
the shorter route were in the meantime companyverted into the
longer route under section 57  8  of the act. suraj bhans
application for a permit was published on numberember 2 1963.
meanwhile 7 renewal applications from the existing permit
holders were received between numberember 4 1963 and may 18
1964 in anticipation of expiry of their permits. the
appellants in the first group objected to these renewals and
prayed for grant of fresh permits to them for the longer
route. on june 13 1964 their objections to the renewals
as well as those for fresh permits were published in the
gazette. on july 4 1964 some more applications were
published for the longer route. to give some more details
thirteen applications for the longer route were published on
july 1 1961 twenty seven on june 15 1963 and two on
numberember 2 1963. mohd. ibrahim and his union of the
existing operators objected to these applications. on 28th
and 29th august 1964 the rta companysidered only ii renewal
applications and 12 fresh applications and other
applications were number even put up before the rta. the rta
ordered renewal of 11 permits and rejected the objection to
the renewal of the appellants in
--m602sup ci/74
the first group as well as their applications for fresh
permits. the ground given was that numbere of the objectors
and 12 applicants for fresh permits had turned up. the
appellants in the first group to the sta impleading 8 out of
the 11 renewal permit holders. the sta by its order dated
numberember 10 1964 set aside the order of the rta dated
28th /29th august 1964. four writ petitions were filed in
1964 against the order of sta dated numberember 10 1964. the
appellants in the third group had applied for permits on the
shorter route. certain persons-had objected to their
applications on the ground that the shorter route had ceased
to exist. on may 6-8 1965 their objections were
overruled and the rta granted 8 permits to the said
appellants. this order was upheld by the sta on august 29
1967. there were 19 other writ petitions of 1967 and 1968
be- fore the high companyrt which were also heard together. of
these five petitions were directed against the order of the
sta of august 29 1967. seven petitions were directed
against the orders of both the rta and of the sta made
respectively on 6th to 8th may 1965 item 30  a  and on
29th august 1967. seven more petitions were directed
against the orders of the rta of 6th to 8th may 1965 item
 c  and of the sta of 29th august 1967.
with reference to the first group of writ petitions the
high companyrt held that the strength of 25 had number been fixed
by the rta for the longer route. it further held that the
grant of six permits forthwith on the longer route was
illegal that since the number of applicants for permits on
this route were in excess of the number of permits which
could be-granted numbergrant companyld be made without first
fixing the strength of the longer route. the high companyrt
therefore set aside the order of the sta dated numberember 10
1964. it also at the same time set aside that part of the
order of the rta of 28th/29th august 1964 by which their
applications for fresh permits had also been rejected. the
high companyrt also quashed the orders of the rta and sta dated
may 6-8 1965 and august 29 1967 respectively. the high
court further observed that until the shorter and the
longer routes were held on legally relevant companysiderations
to be separate for purposes of granting permits all the
pending applications whether for the extended or unextended
route should have been taken up together. since this was
number done by the rta number by the sta the orders of both were
vitiated by patent illegality as regards applications for
fresh permits. the high companyrt also numbered that it was
admitted by all the parties that the strength of 25 had been
fixed for the unextended route and that numberstrength of the
extended route had been fixed at all. that being the
position following the decisions of this companyrt in r.
obilaswami naidu v. transport appellate tribunal madras 1
and ills jaya ram motor service v. s. rajarathinan  2  the
high companyrt held that without fixing the strength first on
the longer route permits companyld number be granted for it. on
the question of routes the high companyrt observed that the rta
should have first decided whether there were two routes or
one route and then fixed the strength of the route or routes
and that number having so done in accordance right law there
was numberproper disposal of the applications for permits. the
high companyrt further pointed out that the reduction of the
strength of 25 to
 1  1569 1 s. c. r. 730.

c. a. number 95 of 1965 decided on 27-10-67. 9 in the shorter route in the manner done by
the rta was illegal. the high companyrt finally
decided as follows
in our opinion the applications of all the
petitioners and the companytesting opposite
parties companyld be properly companysidered by the
transport authorities only after deciding the
following questions on relevant companysiderations
contained in sections 47  1  of the act

whether it is necessary to nationally
separate the whole route into two overlapping
routes for the purposes of granting permits

what should be the strength on the whole
route or if it is decided to fix two routes
one within the other the respective strengths
of the two routes ? the high companyrt gave also other appropriate directions in the
decision. the learned companynsel mr. yogeshwar prasad at first made
some submissions with regard to abatement of the writ
applications before the high companyrt on account of number-
substitution of the heirs and legal representatives of
deceased madan mohan lal. but he finally did number press the
same. the learned companynsel however submitted that there
was numberdefect or lack of jurisdiction in the order of the
sta to merit interference by the high companyrt. he further
submitted that the strength of the longer route was fixed
and the longer route was in existence and the sta was
perfectly justified in granting the permits by their order
of numberember 10 1964.
mr. garg on the other hand submitted that there was a
shorter route and its strength was rightly reduced. to nine
and the nine permits were validly granted. his further
contention is that in the absence of the strength being
fixed for the longer route and of companysideration of all the
applications for the longer route grant of permits to
rattan lal gupta and others was bad. mr. goyal drew our
attention to the fact that in the absence of special orders. of this companyrt his client was granted permits by the rta on
june 3 1973 on the longer route. the learned companynsel
therefore supports the judgment of the high companyrt. the companytroversies in these appeals centre round grant of
stage carriage permits appertaining as claimed to two
routes one shorter and the other longer mentioned above
and both being admittedly overlapping. at first we shall
consider the appeals relating to the longer route. it has
been held in mohd. ibrahim etc. v. state transport
appellate tribunal madras etc.  1  following the earlier
decisions in adbul mateen v. ram kailash pandey  2  m s
jaya ram motor service  3  baluram v state transport
appellate authority m.p.  4  and r. obliaswami naidu  5  as
follows
the next question which falls for
determination is the
point of time when a regional transport
authority will
 1  1971 1 s.c.r. 474.

c.a. number 9511965 decided on 27-10-1967.  5  1969 1 s.c.r. 730.  2  1963 3 s.c.r. 523.

c.a. 727/65 decided on 22-3-68.
under section 47 3  of the act fix the limit
of number of stage carriage permits. this
court in abdul mateens case  4  said that the
general order by the regional transport
authority under section 47  3  of the act in
regard to the limit of number of stage
carriage permits can be modified only by the
regional transport authority when exercising
the jurisdiction under section 47 3  of the
act. the regional transport authority while
acting under section 48 of the act in regard
to the grant of permits has numberjurisdiction
and authority to modify any order passed by
the regional transport authority under section
47  3  of the act. in other words the limit
fixed by the regional transport authority
under section 47 3  of the act cannumber be
altered by the regional transport authority at
the time of grant of permits. it is
therefore established that the determination
of limit of number of permits is to be made
before the grant of permits. that is why
section 48 of the act is prefaced with the
words subject to the provisions of section 47
of the act meaning thereby that the jurisdic-
tion of the regional transport authority to
grant permits is subject to the determination
of the limit of number of permits under
section 47  3  of the act. this companyrt stated
the legal position in m s jaya ram motor
services case 2  and said it is therefore
clear that the authority has first to fix the
limit and after having done so companysider the
application or the representations in
connection therewith in accordance with the
procedure laid down in section 57 of the act. again in the case of r. obilaswami naidu  1
this companyrt companysidered the submission in that
case as to whether the regional transport
authority companyld decide the number of permits
while companysidering applications for permits. this companyrt did number accept the submission be-
cause such a view companyld allow an operator who
happened to apply first to be in a companymanding
position with the result that the regional
transport authority would have numberopportunity
to choose between companypeting operators and
public interest might suffer. in the same
case it is again said that the determination
of the number of stage carriages for which
stage carriage permits may be granted for the
route is to be done first and thereafter
applications for permits are to be
entertained. as the r. a. had number fixed the number of permits for the
longer route we agree with the high companyrt that the grant of
permits for the longer route is invalid. but the legal
position in regard to the grant of permits on the shorter
route is different. admittedly on march 23 1959 the rta
had fixed the number of permits for this route at 25. as 17
permits had already been granted the rta invited
application for eight vacancies on june 13 1959. so the
strength was fixed long before the invitation of
applications for permits. it is true that at one stage the
rta had taken the view that the shorter route had merged in
the longer route but later it rectified the mistake
and held that the shorter route and the longer route existed
separately. we think that the second view of the rta was
correct in the then prevailing circumstances. on july 18
1958 the rta resolved that muzaffarnagar-budhana-kandhla
route be extended to gangeru-issupurteel. the extension
was made under the u.p. motor vehicles taxation act. at no
time the rta has taken a decision for abolishing the shorter
route. in its meeting on august 2-4 1961 the rta upheld
the objection that the shorter route had ceased to exist. the rta said originally muzaffarnagar-budhana-kandhla was
the name of the route. subsequently about six miles of
kachcha route was companysidered motorable and then the rta on
18-7-1958 declared that muzaffarnagar-budhana-kandhla route
be extended upto issupurteel. after this decision the
muzaffarnagar-budhana-kandhla route companyld number have separate
existence but was merged in the longer route. as already
pointed out a decision to extend the shorter route to a
longer distance under the motor vehicles taxation act will
number automatically merge the shorter route in the longer
route. for that purpose it was necessary for the rta to
take an independent decision under the motor vehicles act. but numbersuch decision was taken. the rta realised the
mistake and rectified it in its meeting on may 6-8 1965.
the rta then decided we have companysidered the entire matter
carefully and have perused all earlier resolutions of the
rta. we are of the opinion that muzaffarnagar-budhana-
kandhla  the shorter route  still exists with a strength of
25 stage carriages and that the shorter route and the longer
route are separate routes. even after the approval of the
longer route by the sta the rta had offered permits to
displaced operators on the shorter route. we think that
this resolution states the companyrect position. it may be mentioned at this place that in the august meeting
the rta reduced the strength of shorter route from 25 to 9.
that companyld number be done. in the result there would remain
eight vacancies on the shorter route for which the rta bad
already invited applications. so the rta companyld validly
grant eight permits to the appellants in the third group. the sta rightly affirmed this decision of the rta. the high
court in our view was number right in quashing the grant of
permits to the appellants in the third group. in the result the appeals in the first and second groups
are dismissed. the appeals in the third group are allowed
and the judgment of the high companyrt qua these appeals is set
aside. the permits granted to the appellants in the third
group of appeals if already cancelled in pursuance of the
order of the high companyrt will be restored to them. shri
garg companynsel for the appellants has given an undertaking
that the appellants will surrender permits granted to them
for the longer route.