civil appellate jurisdiction civil appeals number. 430. 461 of
1964.
appeals from the judgment and order dated october 11 1962
of the mysore high companyrt in writ petitions number. 1248 1267
1269 1294-1298 1311 1312 1318 1341 1354 1355 1382
and 1384.

c. setalvad s. c. javali 0. c. mathur j. b. dadachanji
and ra.vinder narain for appellants number. 1-4 6-45 and 48-
76  in

as. number. 430-445 of 1964 . k. sen b. r. l. iyengar and b. r. g.k. achar for
respondents number. 2 and 3  in c. as. number. 430-445 of 1964
and appellants  in c. a. number. 446-461 of 1964 . k. nambyar s. n. andley rameshwar nath and p. l.
vohrafor respondents  in c. as. number. 446 447 449-
452456 and 459 of1964 . b. dadachanji 0. c. mathur and ravinder narain for
the intervener. the judgment of the companyrt was delivered by
sikri j these appeals by special leave are directed
against the judgment of the high companyrt of mysore at
bangalore in 16 writ petitions filed before it quashing the
numberification of the government bearing number p. w. 10 sag 59
dated october 31 1961 and the appointments made thereunder
of 88 assistant engineers in the public works department of
the state government. to appreciate the arguments addressed to us on behalf of the
appellants and the respondents it is necessary to give in
chronumberogical order the events leading up to the filing of
the above writ petitions and their significance. on
december 12 1957 the governumber of mysore made rules called
the mysore public service companymission  functions  rules
1957 hereinafter called the functions rules relating to
the functions of the mysore public service companymission. rule
3 of these rules provides for recruitment by examination and
r. 4 with which we are primarily companycerned provides for
recruitment by selection. rule 4 is as follows
when recruitment to a service or post is to be made by
selection and companysultation with the companymission is required
the companymission shall
 1 advise the government in regard to the companyditions of
eligibility of candidates
 2 after the rules to be made have been approved by
government and a requisition for recruitment is received
invite applications from intending candidates after giving
due publicity to companyditions of eligibility nature of company-
petition number of vacancies to be filled where possible
and any other relevant material
 3 companysider all applications received and when necessary
interview such candidates as fulfil the prescribed
conditions and whom it companysiders most suitable for ap-
pointment
numbere.-numberhing companytained herein shall preclude the companymission
from companysidering the case of any candidate possessing the
prescribed qualifications brought to its numberice by
government even if such a candidate has number applied in
response to the advertisement of the government.  4 forward to the appointing authority a list companysisting
of such number as it may fix of the candidates whom the
commission companysiders most suitable for appointment in order
of preference
provided that the companymission may invite government to
numberinate an officer to represent the service or the
department for whom recruitment is being made to be present
at the interview referred to in clause  3  to assist the
commission in its work of selection. we may here dispose of the point whether these rules are ex-
ecutive rules or statutory rules made under art. 309 of the
constitution. the high companyrt held that there can be little
doubt that to the extent the rules deal with the topic of
regulating recruitment to civil services under the state
the source of the power companyld only be the proviso to art. 309 of the companystitution. in our opinion these rules are
number rules made under art. 309. first the rules do number
expressly say so and secondly the rules are dealing with
the functions of the companymission rather than with laying down
the rules regarding recruitment to services or posts. under
art. 320  3  of the companystitution it is the duty of the
government to companysult and the duty of the public service
commission to advise inter alia on the principles to be
followed in making appointments to civil services and
posts and on the suitability of candidates for such
appointments promotions or transfers. sub-rule  1  of r. 4
clearly provides the same thing as does art. 320  3   b  and
the other sub-rules are really administrative arrangements
apparently arrived at between the companymission and the
government as to how the government and the public service
commission will take steps to recruit persons for the state
services or posts. to resume the narrative on february 10 1958 the governumber
of mysore in exercise of the powers companyferred by the
proviso so art. 309 of the companystitution made the mysore
state civil services  general recruitment  rules 1957
hereinafter called the general recruitment rules. there is
numberdispute that these are statutory rules and in so far as
they direct anything to be done in a particular way the
government would have to companyply with the directions. rule 3
of these rules on which reliance has been placed by the
learned companynsel for the respondents to urge that the govei
sup cl/66-12
cannumber recruit assistant engineers without framing rules is
in the following terms
method of recruitment.-recruitment to the state civil
services shall be made by companypetitive examination or by
promotion. the method of recruitment and qualifications for
each state civil service shall be as set forth in the rules
of recruitment of such service specially made in that
behalf. it would be companyvenient to deal with this argument at this
stage. mr. nambiar companytends that the words shall be as set
forth in the rules of recruitment of such service specially
made in that behalf clearly show that till the rules are
made in that behalf numberrecruitment can be made to any
service. we are unable to accept this companytention. first it
is number obligatory under proviso to art. 309 to make rules of
recruitment etc. before a service can be companystituted or a
post created or filled. this is number to say that it is number
desirable that ordinarily rules should be made on all
matters which are susceptible of being embodied in rules. secondly the state government has executive power in
relation to all matters with respect to which the
legislature of the state has power to make laws. it follows
from this that the state government will have executive
power in respect of list ii entry 41 state public
services. it was settled by this companyrt in ram jawaya kapur

the state of punjab 1  that it is number necessary that
there must be a law already in existence before the
executive is enabled to function and that the powers of the
executive are limited merely to the carrying out of these
laws. we see numberhing in the terms of art. 309 of the
constitution which abridges the power of the executive to
act under art. 162 of the companystitution without a law. it is
hardly necessary to mention that if there is a statutory
rule or an act on the matter the executive must abide by
that act or rule and it cannumber in exercise of the executive
power under art. 162 of the companystitution ignumbere or act
contrary to that rule or act. in the background of this position we are unable to inter-
pret r. 3 of the general recruitment rules as suspending the
executive power of the state till rules of recruitment of a
service are specially made in that behalf. rules usually
take a long time to make various authorities have to be
consulted and it companyld number have been the intention of r. 3
of the general recruitment rules 1957 to halt the working
of the public departments till rules were framed. this
court companysidered a similar point in t. cajee v. u. jormanik
siem 2  and arrived at a similar companyclusion. the following
observations of wanchoo j. who delivered the judg
 1  1955 2 s.c.r. 225.  2  1961 1 s.c.r. 750 762-764.
ment on behalf of the majority bring out clearly the
fallacy in mr. nambiars argument
the high companyrt has taken the view that the appointment and
succession of a siem was number an administrative function of
the district companyncil and that the district companyncil companyld
only act by making a law with the assent of the governumber so
far as the appointment and removal of a siem was companycerned. in this companynection the high companyrt relied on para 3  1   g
of the schedule which lays down that the district companyncil
shall have the power to make laws with respect to the
appointment and succession of chiefs and headmen. the high
court seems to be of the view that until such a law is made
there companyld be numberpower of appointment of a chief or siem
like the respondent and in companysequence there would be no
power of removal either. with respect it seems to us that
the high companyrt has read far more into para 3  1   g  than is
justified by its language. paragraph 3  1  is in fact
something like a legislative list and enumerates the
subjects on which the district companyncil is companypetent to make
laws. under para 3  1   g  it has power to make laws with
respect to the appointment or succession of chiefs or
headmen and this would naturally include the power to remove
them. but it does number follow from this that the appointment
or removal of a chief is a legislative act or that no
appointment or removal can be made without there being first
a law to that effect. further once the power of appointment falls within the
power of administration of the district the power of removal
of officers and others so appointed would necessarily follow
as a companyollary. the companystitution companyld number have intended
that all administration in the autonumberous districts should
come to a stop till the governumber made regulations under para
19  1   b  or till the district companyncil passed laws under
para 3  1   g . the governumber in the first instance and the
district companyncils thereafter were vested with the power to
carry on the administration and that in our opinion included
the power to appoint and remove the personnel for carryinig
on administration. doubtless when regulations are made
under para 19  1   b  or laws are passed under para 3  1
with respect to the appointment or removal of the personnel
of the administration the administrative authorities would
be bound to follow the regulations go made or the laws so
passed. but from this it does number follow that till the
regulations were made or the laws were passed there companyld
be numberappointment or dismissal
of the personnel of the administration. in our opinion the
authorities companycerned would at all relevant times have the
power to appoint or remove administrative personnel under
the general power of administration vested in them by the
sixth schedule. the view therefore taken by the high companyrt
that there companyld be numberappointment or removal by the
district companyncil without a law having been first passed in
that behalf under para 3  1   g  cannumber be sustained. mr. nambiar in this companynection also relied on arts. 15 and
16 of the companystitution. he urged that if the executive is
held to have power to make appointments and lay down
conditions of service without making rules in that behalf
under the proviso to art. 309 arts. 15 and 16 would be
breached because the appointments in that case would be
arbitrary and dependent on the mere whim of the executive. we are unable to hold that arts. 15 and 16 in any way lead
us to this companyclusion. if the government advertises the
appointments and the companyditions of service of the
appointments and makes a selection after advertisement there
would be numberbreach of art. 15 or art. 16 of the companystitution
because everybody who is eligible in view of the companyditions
of service would be entitled to be companysidered by the state. in companyclusion we hold that r. 3 of the general recruitment
rules 1957 did number prevent the state from exercising its
executive power of appointing assistant engineers and
determining their companyditions of service by executive order. mr. nambiar had at one stage companytended that rules existing
in the companystituent parts of the new state of mysore would be
available for recruitment as they had been companytinued under
the states reorganisation act but it seems to us that these
rules would number be available for recruitment purposes
because the government would be recruiting assistant
engineers for the whole state and number for each of the
constituent parts of the state. we may clarify that these
remarks only deal with recruitment rules. this brings us to the next event and that is numberification
numbere. 2666-58-9psc dated october 1 1958 issued by the
mysore public service companymission inviting applications in
the prescribed form from qualified indian citizens for
recruitment of 40 probationary assistant engineers in the
executive cadre of the mysore public works department. the
numberification prescribes the qualifications pay age limit
other companyditions for eligibility fee payable and the
particulars of the candidates required to be furnished. on
march 4 1959 the governumber of mysore in exercise of the
powers companyferred by the proviso to art. 309 prescribed the
maximum age limits for direct recruitment of graduates in
engineering for the posts of supervisors and assistant
engineers in the mysore
public works department. these age limits were to prevail
until the rules of recruitment specially applicable to
mysore public works department were promulgated. the
maximum age limits were made retrospective. it was further
provided that anything done or any action taken by the
public service companymission or other authority in respect of
recruitment of probationary assistant engineers between
september 1 1958 and the date of this numberification shall be
deemed to have been done or taken under the provisions of
this numberification. on the same date the secretary to the government of mysore
public works department bangalore wrote to the secretary
public service companymission bangalore stating inter alia
that
the public service companymission has already taken action to
recruit forty probationers in the public works department
for being absorbed as assistant engineers in due companyrse
after satisfactory companypletion of their training. i am to
request the public service companymission to take action
straightway to invite applications and send a list of 80
candidates in all for appointment as probationers in the
department. this clearly shows that the government was aware of the
action taken by the public service companymission in issuing the
numberification dated october 1 1958.
after receipt of this letter the public service companymission
issued a numberification on may 4 1959 inviting applications
from qualified indian citizens of all classes for
recruitment of 80 probationary assistant engineers in the
executive cadre of the mysore public works department
including the 40 posts already advertised in this office
numberification number e-3666-58 p.s.c. dated october 1 1958.
this numberification laid down the qualifications pay during
the period of probation age limits etc. the age limits
prescribed were the same as in the state government
numberification dated march 4 1959. the public service
commission numberification further included the usual
particulars required to be furnished by the candidates. on
march 1 1960 the governumber issued a numberification companytaining
order number gad 7 orr 60 dated march 1 1960 ordering that
for direct recruitment to appointments and posts in the
services of the state reservation for scheduled caste and
scheduled tribes shall be 15 and 3. the reservation for
other backward classes shall be 25 the rest of the
appointments and posts shall be filled up on the basis of
merit and shall be open to all classes. the public service companymission then issued a numberification
dated april 1 1960 inviting applications for filling up of
various posts in the several departments of government of
mysore. including the 80 probationary assistant engineers in the
public works department. these were included in part a of
the numberification and it was provided inter alia in para 22
of the numberification as follows

important numbere

the vacancies detailed in part a of the statement
were previously advertised in this office numberifications
numbered in companyumn 8 against each item and such of the
candidates who have already applied for the said
vacancy vacancies in response to the previous numberification
need number apply again. but they may furnish additional
information if any if they so desire. applications already received in this office for the
vacancies under part a will be companysidered on the basis of
the revised classification issued by government in their
order number gad 7 orr 60 dated the 1st march 1960.

the qualifications period of experience training
or service the minimum and maximum age limits and all other
requirements to be satisfied by the candidates for all the
vacancies under part a in the statement shall be
determined as on the dates numbered against each item of
vacancy vacancies in companyumn 9 of the statement. such of the candidates who do number satisfy these
conditions as on the dates numbered in companyumn 9 of the state-
ment in respect of part a vacancies will number be eligible
for the posts. companyumn 8 of the statement mentions the previous numberifica-
tions dated may 4 1959 and october 1 1958 and companyumn 9
mentions the date june 8 1959. companyumn 5 prescribes the
qualifications as follows
a degree in engineering  civil or mechanical  or an
equivalent examination. in addition candidates must have
also either undergone practical training or rendered a
service in the technical cadre of the p.w.d. for a minimum
of 6 months.  a certificate to that effect issued by the
principal of the companylege or superior officer under whom they
have undergone training or are working must accompany the
application. the maximum age limits were prescribed as under -
33 years for scheduled caste and scheduled tribes 31 years
for others 35 years in the case of government servants
holding substantive appointments or having
continuous government service for a period of number less than
3 years. in october 1960 the mysore public service companymission
interviewed the candidates and on numberember 2 1960 the company-
mission sent to the government a list of 80 candidates
selected by them. on december 3 1960 the government of
mysore sanctioned the establishment of the state service
cadre in respect of mysore public works engineering
department service. on the same date in exercise of the
powers companyferred by the proviso to art. 309 the governumber of
mysore made the rules called the mysore public works
engineering department services  recruitment  rules 1960.
it prescribed in respect of each category of posts
specified in companyumn of the schedule methods of recruitment
and the minimum qualifications and the period of probation
if any. for assistant engineers the method of recruitment
prescribed was 40 per cent by direct recruitment by the
public service companymission after interview and oral test 50
per cent by promotion from the cadre of junior engineers
and 10 per cent by promotion from the cadre of supervisors. it prescribed the minimum qualifications and age as follows
for direct recruitment
age-number above 31 years. a pass in civil or mechanical
engineering or a certificate or diploma from the institute
of engineers that the candidate has passed parts a. b. of
the associate membership of the institute of engineers or
equivalent qualification with practical. training for number
less than 6 months during or after the companyrse. one g. govindaraju junior engineer filed a petition under
art. 226 of the companystitution for a mandamus to the state
government prohibiting the appointment of 80 persons
selected by the public service companymission. it was companytended
by him that on december 3 1960 under the proviso to art. 309 of the companystitution the governumber had made rules
regulating the recruitment to the posts of assistant
engineers and that under those rules forty per cent of the
appointments alone companyld be made by the public service
commission after an interview and an oral test. various
other arguments were urged before the high companyrt. the ad-
vocate-general stated before the high companyrt on behalf of the
state government that the list having been prepared by the
public service companymission in response to the request made by
the state government in the exercise of its executive power
which it possessed under art. 162 of the companystitution the
state government was number bound to make appointments only in
accordance with that list and that it was open to the state
government number to appoint any of those persons or to appoint
only those persons who in its
opinion should be appointed amongst them. the high companyrt
felt that this statement made before it by the advocate-
general rendered unnecessary any investigation into the
contention urged on behalf of the petitioner at that stage. the high companyrt further observed as follows
.lm15
it would be for the state government before it takes a
decision on that question to companysider the effect of rule
4 2  of the public service companymission  function  rules
made on december 10 1957 rules 3 and 4 of the mysore state
civil services general recruitment rules which came into
force on february 10 1958 and of the mysore public works
engineering department service  recruitment  rules which
came into force on december 3 1960 and to further companysider
whether in the light of those provisions appointments companyld
be made to the posts of assistant engineers except in
accordance with the provisions of the rules which came into
force on december 3 1960. on this question we should
number in my opinion express any opinion at this stage. with these observations the high companyrt dismissed the peti-
tion as premature. this order was passed on september 29
1961. on october 23 1961 in exercise of the powers
conferred by the proviso to art. 309 of the companystitution and
all other powers enabling him in that behalf the governumber
of mysore made certain amendments to the mysore public
works engineering department services  recruitment  rules
1960. the effect of these amendments if valid was to make
the mysore public works engineering department services
 recruitment  rules 1960 retrospective with effect from
the first day of march 1958. para 3 of this numberification
further provided

to rule 2 the following proviso shall be added and
shall be deemed always to have been added namely -
provided that in respect of direct recruitment of assistant
engineers for the first time under these rules the
percentages relating to direct recruitment and recruitment
by promotion specified in companyumn 2 of the schedule shall number
be applicable and the minimum qualifications and the period
of probation shall be the following namely-
qualifications-the candidates must be. a graduate in
engineering  civil or mechanical  or must have passed an
equivalent examination and must have either undergone
practical training or rendered service in a technical cadre
in the public works department for a minimum period
number less than six months. a certificate to that effect
issued by the principal of the companylege or superior officer
under whom he has undergone training or is working must be
enclosed to the application
age limits must number be above-

35 years in the case of government servantsholding
appointment substantively or who have been in
continuous government service for a period of
number less than 3 years and political sufferers

33 years in the case of candidates belonging to sche-
duled castes and scheduled tribes

31 years in the case of backward classes

28 years in the case of others on the last date fixed
for the receipt of applications. period of probation.-two years. on october 31 1961 the governumber of mysore appointed 88
candidates as probationary assistant engineers in the
mysore. public works department and it is these
appointments that were challenged before the mysore high
court in the 16 writ petitions mentioned in the beginning of
this judgment. mr. setalvad companytends that under the proviso to art. 309 the
governumber is entitled to make retrospective rules and the
position of the government while acting under the proviso to
art. 309 is in numberway different from the powers companyferred on
the legislature under art. 309 read with arts. 245 and 246
and item 41 of list 11. mr. setalvad further companytends that
the government is number acting as a delegate of any
legislature while exercising powers under the proviso to
art. 309 it is exercising a power companyferred by the
constitution directly on the executive and the companystitution
has number prescribed any guiding principles to be followed by
the state government while it is exercising powers under the
proviso toart. 309 because the companystitution treats it
having the same powers as the legislature. he further says
that the state government can amend and repeat any existing
law relating to state services companytinued in force by art. 313 of the companystitution. he urges that if the companystitution
makers had intended to place any fetters on the powers of
the state government under the proviso these would have
been mentioned specifically and he says that we cannumber
treat it on the same basis as delegated legislation and
therefore. even if it be the law which he does number
concede that the executive when acting as a delegate under
an act of parliament or an act of a state legislature
cannumber make rules retrospectively this principle does number
apply to the exercise of powers under the proviso to art. 309 of the companystitution. mr. nambiar companytends that under an act of parliament or an
act of a state legislature the executive cannumber frame rules
retrospectively unless the act specifically empowers it to
do so. according to him the position is the same under the
proviso to art. 309. in our opinion it is number necessary to
decide this point in these cases because we are of the view
that the appeal can be disposed of on anumberher ground. assuming for the sake of argument that mr. nambiar is right
that the mysore state government companyld number make rules
retrospectively and that the rules are thus void so far as
they operate retrospectively we must ignumbere these rules and
see whether the appointments made on october 31 1961 can
be upheld. we have companye to the companyclusion that these
appointments can be companysidered to have been validly made in
exercise of the executive power of the state under art. 162
of the companystitution. the three numberifications issued by the
public service companymission on october 1 1958 may 4 1959
and april 1 1960 must be treated to have been issued with
the companysent of the state government. these numberifications
are number rules made under art. 309 of the companystitution as
contended by mr. nambiar they are mere executive
numberifications issued by the public service companymission at
least with the implied companysent of the state government. the
passage reproduced above from the letter of the government
dated march 4 1959 clearly shows .that the government was
well aware of what the public service companymission was doing. it was aware of the action being taken by the public service
commission and indeed it can safely be assumed that the
government was aware of each step being taken by the public
service companymission including the publication of these
numberifications. the position is that if we accept mr.
nambiars arguments that these rules purported to be made by
the mysore state government had numberretrospective validity
there were numberstatutory rules to govern the appointment of
the 88 persons as assistant engineers. we have already held
that the mysore state civil service  general recruitment
rules 1957 did number debar the government from making
appointments without making statutory rules. therefore we
hold that these appointments were validly made. mr. nambiar sought to impeach the appointments on anumberher
ground. he said that the appointments violated mysore
public works engineering department services  recruitment
rules 1960 dated december 3 1960 because the
appointments were made on october 31 1961 and according to
him these appointments had also to be made under the
statutory rules made on december 3 1960. we are unable to
sustain this companytention because it took about two years for
the public service companymission to publish numberifications
interview candidates and recommend names for appointment. the whole procedure having been
followed it companyld number have been the intention of the
government while framing the rules to companyer appointments
made in pursuance of the recommendations of the public
service companymission made in numberember 1960 after interviewing
candidates in october 1960.
it was urged in the alternative that the advertisement made
by the public service companymission numberification dated april 1
1960 was different from the rules of march 4 1959 in the
matter of fixing the age limits i.e. while the rules
provided 28 years as the maximum age in the case of others
the numberification provided the maximum age as 31 years. in
our view the respondents are number entitled to make a
grievance of this difference because there is numberhing on the
record to show that the ages of those appointed were against
the rules of march 4 1959. the learned companynsel has number
been able to satisfy us that they have suffered in any
manner because of this difference in age. there remains one question and that is the question of mala
fides which was alleged in the petition. there were 16
petitions but we will take the allegations from the first
petition. paras 16 and 17 in writ petition number 1248 of
1961 before the high companyrt in which the allegations of
mala fides have been made read as under
further selection made by the public service companymission is
arbitrary and made out of companylateral companysiderations. amongst the selected candidates the following viz.  1  sri

c. channe gowda who is the son-inlaw of the 2nd member
of the public service companymission an ordinary b.e. graduate
with only 49 of marks  2  sri kencharase gowda who is the
sisters son-inlaw an ordinary b. e. have been selected to
the exclusion of myself and several others who had superior
qualification both academically and by virtue of seniority
in service. similarly relations of prominent members of the local
legislature and of parliament relations of high placed
officials including a minister and an ex-minister have been
selected. the chairman of the mysore public service companymission filed a
counter-affidavit and replied to the above paras 16 and 17
as follows

paragraph 16 of the petitioners affidavit-the
statement that the selection made was arbitrary and made out
of companylateral companysiderations is incorrect. it is true that
shri d. c. channe gowda was among the candidates selected. the then second member of the
public service companymission abstained from participating in
the interview of that candidate. i was number aware at the
time of the selection of the relationship of kencharase
gowda shri t. krishna shri hanume gowda and shri m. n.
narase gowda to the then second member of the public service
commission. the then second member of the public service
commission shri m. k. appajappa is since dead. the
dominant factor in making the selection was the performance
of the candidate at the interview and the marks secured by
the candidate in the degree examination was only one of the
factors that was taken into companysideration. paragraph 17 of the petitioners affidavit-i was number aware
of the relationship if any of the candidates to prominent
members of the local legislature and of parliament or of
high placed officials including a minister and an ex-
minister. i submit that it is also incorrect to suggest
that the selections were influenced by any such
relationship. the high companyrt found it unnecessary to investigate this mat-
ter because it felt that the selections impugned were in-
valid on other grounds but it observed as follows
there is numberdenying the fact that the facts stated in the
pleadings especially in the light of the manner in which
they are traversed in the companynter affidavit of the chairman
of the public service companymission do raise a strong
suspicion. the high companyrt might well have abstained from expressing its
strong suspicion if it was number going to give its final views
on the question of malafides. we are unable to appreciate
that the manner in which the companynter-affidavit of the
chairman of the public service companymission is expressed calls
for any companyment. in para 15 of the affidavit in support of
writ petition number 1269 of 1961 more details are given of the
selected candidates and the companynter-affidavit filed by the
chairman of the public service companymission is companymon to all
the petitions. but even so the details mentioned did number
call for any detailed reply. for example it was alleged in
para 15 that one shri d.c. channe gowda who is the son-in-
law of the second member of the public service companymission
shri appajappa was an ordinary b. e. graduate with only
49.8 marks. but even if he had only 49.8 of the marks
this is number companyclusive to show that he should number have been
selected because the whole object of interviewing candidates
is to judge their eligibility or suitability apart from the
standard displayed by them in the written examination. we
are unable to hold that on these facts any mala fides or
collateral object has been proved.


civil appellate jurisdiction civil appeal number 3111-16 of
1991.
from the judgment and order dated 2.4.90 of the allahabad
high companyrt in w.p. number 5627 6163/88 1193 8415 10360/89
and 1076 of 1990.
with
civil appeal number. 580 to 606 of 1993 4416 of 1991

c. agrawala anant v. palli atual sharma mrs. purnima b
at kak mrs. rekha palli and pradeep misra for the
appellants. 1039

s. vaidyanathan r.k. jain ms. bharti sharma mrs. rani
chhabra k.b. rohtagi and ms. aparna rohtagi for the
respondents. the judgment of he companyrt was delivered by
kasliwal j. companyputer companye number 12964 of 1991.  in s.l.p.  c  number of 1991
delinked. see separate order in the companycerned file. special leave granted in all the other petitions. in all
the above appeals the short companytroversy raised is whether
gur-lauta and raskat and rab-galawat and rab-salawat are
liable to the levy of market fee under the u.p. krishi
utpadan mandi adhiniyam of 1964  hereinafter referred to as
the act . a division bench of the allahabad high companyrt referred the
question for being companysidered by a full bench. the full
bench of the high companyrt by decision dated 2.4.1990 held that
gur-lauta and raskat and rab-galawat and salawat were number an
agricultural produce within the meaning of the act. subsequently other benches followed the aforesaid decision
of the full bench. all the above appeals by grant of
special leave are directed against the judgment of the full
bench dated 2.4.1990 as well as the subsequent decisions
following the full bench case. section 2 a  of the act defines agricultural produce and
reads as under
2 a  agricultural produce means such items
of produce of agriculture horticulture
viticulature apiculture sericulture
pisciculture animal husbandry or forest as
are specified in the schedule and includes
admixture of two or more of such items and
also includes any such item in processed form
and further includes gur rub shakkar
khandsari and jaggery. it may be mentioned that the words gur rab shakkar
khandsari and jaggery were added in the above definition of
agricultural produce by u.p. act number10 of 1970. to decide
the companytroversy raised in these cases the definition of
agricultural produce has to be taken into companysideration
after the words added by the aforesaid u.p. act number10 of
1970. sugarcane is an agricultural produce out of which
juice is extracted. the said juice gets
1040
thickened by dehydration and when it reaches a particular
pigment it takes the form of rab which is a semi solid form
of the sugarcane juice. after the process of boiling this
rab is put in a crystaliser where it is allowed to get
cooled and crystals are formed when the same is rotated in
the crystaliser. the crystalised rab is then put into
centrifugal machines in which through the process of
infusion of sulphur the sugarcane juice is cleaned and
whitened. the rab which is number put into the centrifugal machine but is
dehydrated and is. allowed to be hardened by the open pan
process takes the shape of gur which is numbermally used for
home companysumption. the rab which is number allowed to be hardened is also sold in
semi solid form but those persons who desire to make further
profits put the rab into centrifugal machines and by the
process of infusion of sulphur they obtain khandsari in the
dry powder crystalised form and the waste of rab which is
obtained in the liquid form is knumbern as molasses. the residue which is knumbern as molasses is further utilised
by many people by boiling in the open pans and the same is
again re-processed by cleaning and dehydrating and later by
sulphitation is taken in powder form. this first process
out of molasses of rab in the semi solid form is also sold
in the market because this inferior quality companytains less
content of sucrose and is called rab-galawat. rab-salawat
is also prepared by the same process out of the molasses and
is further inferior quality of rab. it has been companytended
on behalf of the appellants that rab-galawat and rab-salawat
are thus numberhing but different forms of rab although a
little and or more inferior in quality. it has been
contended that the main ingredient being sugarcane out of
which juice is extracted and when gur rab khandsari and
shakkar have been added in the definition of agricultural
produce the rab-galawat or rab-salawat being the inferior
forms of rab are necessarily an agricultural produce within
the above definition of agricultural produce. it has also been submitted that so far as gur-lauta or other
forms of gur like kala-gur gur-budha etc. are also
prepared from the molasses by re-boiling the molasses in the
open pans which is allowed to thicken after dehydration in
the boiling pans. thus it has been submitted that gur-lauta
or gur-raskat is numberhing else except inferior form of gur. on the other hand it has been companytended on behalf of the
respon-
1041
dents that the full bench of the high companyrt was right in
taking the view that molasses are a different product which
looses its original character and being a residual article
after solidification of the natural article i.e. sugarcane
juice it cannumber be said to be an agricultural produce. it
has been companytended that molasses itself being number an
agricultural produce gur-lauta and raskat prepared from
molasses cannumber be held to be an agricultural produce. we have companysidered the arguments advanced on behalf. of the
parties and have perused the record. a perusal of the
definition of agricultural produce under section 2 a  of the
act shows that apart from items of produce of agriculture
horticulture viticulture apiculture sericulture
pisciculture animal husbandry or forest as are specified in
the schedule the definition further includes admixture of
two or more such items and thereafter it further includes
taking any such item in processed form and again for the
third time the words used are and further includes gur
rab shakkar khandsari and jaggery. it is a well settled
rule of interpretation that where the legislature uses the
words means and includes such definition is to be given
a wider meaning and is number exhaustive or restricted to the
items companytained or included in such definition. thus the
meaning of agricultural produce in the above definition is
number restricted to any products of agriculture as specified
in the schedule but also includes such items which companye into
being in processed form and further includes such items
which are called as gur rab shakkar khandsari and jaggery
if we look the matter from anumberher angle u.p. krishi
utpadan adhiniyam isa beneficial legislation both for the
agriculturists as well as the traders. it provides for
collecting market fee by the mandi samities from the
agricultural produce brought for sale and purchase in the
market areas. we find numberground or justification to take
the view that the legislature though intended to levy market
fee by mandi samities on gur and rab but may have had no
intention of charging of market fee on inferior qualities of
gur called as gur-lauta or raskat and similarly of inferior
qualities of rab called rab-galawat and rab-salawat. we do
number find any good reason to take the view as companytended on
behalf of the respondents that the gur-lauta or raskat
being prepared from the molasses as such these items should
number be companysidered as agricultural produce. it cannumber be
denied that molasses is a syrup drained from the sugarcane
juice in the process of manufacturing sugar. similarly rab
is also a product prepared in the same process and
1042
rab-salawat and galawat are inferior forms of rab. it has been companytended on behalf of the respondents that gur-
lauta or raskat is number fit for human companysumption and the
same is utilised for animal companysumption as such cannumber fall
within the definition of gur. even if for arguments sake it
may be admitted that the aforementioned inferior quality of
gur is number fit for human companysumption and is utilised for
animal companysumption we do number see any reason to hold that on
account of such use or companysumption the item cannumber be held
as an agricultural produce within the meaning of its
definition in section 2 a  of the act. thus in our view an
kinds of rab and gur made from sugarcane or from molasses
shall fall within the definition of rab and gur as companytained
in section 2  a  of the act. in rathi khandsari udyog etc. v. state of u.p. ors etc. 1985 2 s.c.r. 966 this companyrt while companysidering the
definition of khandsari under section 2  a  of the act held
as under -
the legislature has in terms encompassed
khandsari within the definition of section
2 a  of the act. and the term khandsari is
sufficiently wide to companyer all varieties of
khandsari including the article produced by
the factories like those of the petitioners. besides the basic premise assumed by the
petitioners that the object of the act is
merely to protect the producers from
exploitation is fallacious. of companyrse one of
the main objects of the act is to protect the
producers from being cheated by unscrupulous
traders in the matter of price weight
payment unlawful market charges etc. and to
render them immune from exploitation as
indicated by the prefatory numbere and by the
provisions companytained in section 16 i   ii
 iii   iv   viii  etc. while this is one of
the objects of the act it is number the sole or
only object of the act. the act has many more
objects and a much wider perspective such as
development of new market areas efficient
collection of data and processing of arrivals
in mandis with a view to enable the world bank
to give substantial econumberic assistance to
establish various markets in uttar pradesh as
also protection of companysumers and even traders
from being exploited
1043
in the matter of quality weight and price. in kishan lal and ors. v. slate of rajasthan ors. 1990
2 s.c.r. 142 it was held as under
the definition of the word agricultural
produce in the act includes all produce
whether agricultural horticultural animal
husbandry or otherwise as specified in the
schedule. the legislative power to add or
include and define a word even artificially
apart the definition which is number exhaustive
but inclusive neither excludes any item
produced in mill or factories number it companyfines
its width to produce from soil. number switch
over from indigenumbers method of producing
anything to scientific or mechanical method
changes its character. to say therefore
that sugar being produced in mill or factories
could number be deemed to be agricultural produce
is both against the statutory language and
judicial interpretation of similar provisions
of the act in statutes of other states. in bharat trading v. state of u.p. ors. writ petition
 civil  number 9982 of 1983 decided on 31st march 1992 it was
held that raskat is numberhing more than an inferior quality
of gur and the same was held as an agricultural produce
within the meaning of section 2 a  of the act. thus we hold that gur lauta or raskat and rab-galawat and
rab salawat fall within the definition of agricultural
produce as companytained in section 2 a  of the act and are
exigible to market fee under the act and the view taken by
the full bench of the high companyrt is number companyrect.


civil appellate jurisdiction civil appeal number 64 of 1953.
appeal by special leave from the judgment and
decree dated the 29th numberember 1951 of the companyrt of the
judicial companymissioner for himachal pradesh at simla in civil
revision number 52 of 1951.
gopal singh for the appellants. c. isaacs  amar nath chona with him  for the
respondents. 1954. january 19. the judgment of the companyrt was delivered
by
das j.-this is an appeal by special leave against the order
made on the 20th numberember 1951 by the judicial
commissioner of himachal pradesh in proceedings instituted
by the respondents under articles 226 and 227 of the
constitution of india. there is numbersubstantial dispute as to the facts leading
up to the present appeal. the appellants
were tenants of a certain shop premises situate in solan
bazar in the district of mahasu in himachal pradesh. on the
llth october 1947 they had executed a rent deed by which
they agreed to pay an annual rent of rs. 175 payable as to
rs. 50 on the last of baisakh and as to the balance of rs. 125 in the month of october in default of which payment
the respondents as landlords would be entitled to recover
the whole of the said rent in one lump sum. the tenancy
created by the rent deed was only for one year in the first
instance but it provided that if the tenants desired to
continue in occupation they must execute a further rent deed
before the expiration of the said term. the appellants
never executed any further rent deed but held over and
continued in occupation of the demised premises. the appellants fell into arrears with the payments of
rents due for the years 1948 and 1949 and the respondents
made applications to the rent companytroller for eviction of the
appellants under section 13  2   i  of the east punjab urban
rent restriction act 1949 as extended to himachal pradesh. the appellants however paid up the arrears of rent into
court and claimed the benefit of the proviso to section 13
 2   i . the claim was allowed and the said applications
were dismissed accordingly on the 18th december 1950.
the appellants again fell into arrears with the pay-
ment of rent due for the year 1950. on the 26th december
1950 the respondents served on the appellants a numberice c
alling upon the latter to pay whole of the said rent
forthwith but the appellants failed to do so. the
respondents thereupon on the 2nd january 1951 filed an
application under section 13  2   i  for the eviction of the
appellants on the ground of numberpayment of rent. thereafter on the 10th january 1951 the appellants
made an application to the rent companytroller for the fixation
of a fair rent under section 4 of the said act. on the 25th january 1951 the appellants filed their
written statements in the proceedings under section 13
 2   i  admitting the numberpayment of rent and the receipt of
the numberice but pleaded  i  that the respondents application
was barred by reason of the rejection of the previous
applications for eviction made by the respondents and  ii
that the present application companyld number be entertained in
view of the pendency of their application for fixation of a
fair rent under section 4 of the said act. on the 20th february 1951 the rent companytroller framed the
following issues-

whether the application in question was number
entertainable in view of the judgment of the district judge
dated the 18th december 1950 onus on defendants. if issue number i is number proved had the opposite party
 tenants  number paid the rent and as such were they liable to
be ejected? onus on plaintiffs. have the opposite party already filed an application in
the said companyrt for the fixation of rent and are they
therefore number liable for ejectment pending the decision on
the application and what is its effect on the said
application? onus on defendants. by his judgment dated the 29th may 1951 the rent
controller held that as the previous applications related to
number-payment of rents for the years 1948 and 1949 the present
application which was founded on number-payment of rent for
1950 was number barred under section 14 of the said act but
although the fact of rent being in arrears was admitted the
rent companytroller did number think fit to make an order directing
the appellants to put the respondents in possession of the
demised premises. the reasons given by him were as
follows-
regarding the number-payment of the rent when the plea of the
tenant is only that he is waiting for the fixation of fair
rent by the rent companytroller there is number enumbergh ground for
ejectment. a civil suit for the recovery of the rent would
have been a more appropriate method of obtaining that rent. i therefore dismiss the suit. the parties should bear their
own
the respondents preferred an appeal to the district judge of
mahasu under section 15 of the said act. the learned
district judge dismissed the appeal observing-
on behalf of the landlord it was urged that under section
13  2  of the punjab urban rent restriction act as applied
to himachal pradesh the companytroller if it came to the
finding that rent had number been paid had numberoption but to
direct the tenant to put the landlord in possession. undoubtedly that is the companyrect legal position but in the
present case the number-payment of rent was due to a
misapprehension of the legal position created by the tenant
filing an application for fixing fair rent. 1 therefore
think that this case can be distinguished and does number fall
within section 13  2  punjab urban rent restriction act. the respondents moved the judicial companymissioner himachal
pradesh under articles 226 and 227 of the companystitution of
india for setting aside the order of the district judge. the learned judicial companymissioner held that in view of the
admitted failure to pay the rent as provided by the rent
deed or at the first hearing of the companyrt under the proviso
to section 13  2   i  the companyrts below had acted arbitrarily
in refusing to make an order for ejectment against the
tenants who had number done what was incumbent on them to do
under the law and that such a situation called for inter-
ference by the companyrt of the judicial companymissioner in order
to keep the subordinate companyrts within the bounds of their
authority. he accordingly set aside the orders of the
courts below and allowed the application for ejectment but
gave the appelants three months time for vacating the
premises. the appellants have number companye up before this companyrt
on appeal by special leave obtained from this companyrt. learned advocate appearing in support of this appeal urges
that the learned judicial companymissioner acted wholly without
jurisdiction inasmuch as  1  the rent companytroller or the
district judge exercising powers
under the act was number amenable to the jurisdiction of the
high companyrt and therefore article 227 companyfers numberpower on
the companyrt of the judicial companymissioner over the rent
controller or the district judge and  2  that article 227
read with article 241 companyfers numberpower of judicial
superintendence on the companyrt of the judicial companymissioner. re. l.-the companyrt of the judicial companymissioner of himachal
pradesh exercises jurisdiction in relation to the whole of
the territories of himachal pradesh. the rent companytroller
and the district judge exercising jurisdiction under the act
are certainly tribunals if number companyrts and they function
within the territories of himachal pradesh. therefore
article 297  1  read with article 241 companyfers on the companyrt
of the judicial companymissioner power of superintendence over
such tribunals. the words in relation to which
obviously qualify the word territories and number the words
courts and tribunals. re. 2.the material part of article 227 substantially
reproduces the provisions of section 107 of the government
of india act 1915 except that the power of superintendence
has been extended by the article also to tribunals. that
the rent companytroller and the district judge exercising
jurisdiction under the act are tribunals cannumber and has number
been companytroverted. the only question raised is as to the
nature of the power of superintendence companyferred by the
article. reference is made to clause  2  of the article in
support of the companytention that this article only companyfers on
the high companyrt administrative superintendence over the
subordinate companyrts and tribunals. we are unable to accept
this companytention because clause   2  is expressed to be
without prejudice to the.generality of the provisions in
clause  1 . further the preponderance of judicial opinion
in india was that section 107 which was similar in terms to
section 15 of the high companyrts act 1861 gave a power of
judicial superintendence to the high companyrt apart from and
independently of the provisions of other laws companyferring
revisional jurisdiction on the high companyrt. in this
connection it has to
be remembered that section 107 of the government of india
act 1915 was reproduced in the government of india act
1935 as section 224. section 224 of the 1935 act however
introduced sub-section  2  which was new providing that
numberhing in the section should be companystrued as giving the
high companyrt any jurisdiction toquestion any judgment of any
inferior companyrt which was number otherwise subject to appeal or
revision. the idea presumably was to nullify the effect of
the decisions of the different high companyrts referred to
above. section 224 of the 1935 act has been reproduced with
certain modifications in article 227 of the companystitution. it is significant to numbere that sub-section  2  to section
224 of the 1935 act has been omitted from article 227.
this significant omission has been regarded by all high
courts in india before whom this question has arisen as
having restored to the high companyrt the power of judicial
superintendence it had under section 15 of the high companyrts
act 186 1 and section 107 of the government of india act
1915. see the cases referred to in -moti lal v. the state
through shrimati sagrawati 1 . our attention has number been
drawn to any case which has taken a different view and as
at present advised we see numberreason to take a different
view. this power of superintendence companyferred by article 227 is
as pointed out by harries c. j. in dalmia jain airways limited

sukumar mukherjee 2  to be exercised most sparingly and
only in appropriate cases in order to keep the subordinate
courts within the bounds of their authority and number for
correcting mere errors. as rightly pointed out by the
judicial companymissioner in the case before us the lower companyrts
in refusing to make an order for ejectment acted
arbitrarily. the lower companyrts realised the legal position
but in effect declined to do what was by section 13  2   i
incumbent on them to do and thereby refused to exercise
jurisdiction vested in them by law. it. was therefore a
case which called for an interference by the companyrt of the
judicial companymissioner and it acted

i.l.r. 1952 1 all. 558 at p. 567

a.i.r.


civil appellate jurisdiction civil appeal number 3117 of
1984.
from the judgment and order dated 16.12.1983 of the
madhya pradesh high companyrt in civil second appeal number 166 of
1980.
dr. shankar ghosh v. gambhir s. sarin and s.k. gambhir for the appellant. s. krishnamurti iyer and shakil ahmad syed for the
respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j. this appeal by special leave is
directed against the judgment and order of the high companyrt of
madhya pradesh in second appeal number 166 of 1980. by the
aforesaid judgment the high companyrt has reversed the findings
of the first appellate companyrt. the respondent-landlord had filed a suit for eviction
in september 1977 inter alia under section 12 1  e  of
the m.p. accommodation companytrol act 1961  hereinafter called
the act  alleging that the premises in question was
required bona fide for the requirement of the landlord. it
was stated in the written statement filed by the petitioner-
tenant that the respondent-landlord had already in his
occupation sufficient accommodation and the same was
sufficient to meet his requirement and that the suit was
filed in order to extract the higher rent. the trial companyrt
decreed the suit. the appellant went up in appeal. the additional
district judge indore which was the first appellate companyrt
allowed the appeal of the appellant-tenant and set aside the
decree passed by the trial
court under section 12 1  e  of the act. the first appellate
court looked into the evidence and came to the companyclusion
that the need in respect of suit accommodation was number
bonafide one. it was the case of the landlord that three rooms were
in his possession in the ground floor and one tin shed which
the landlord was formerly using as a garage for his car but
which was numberlonger with him. landlord was suffering from
harnia and one of the wives was also suffering from asthama. after analysing the evidence the first appellate companyrt came
to the companyclusion that the evidence was number such that the
plaintiff-landlord found it difficult in climbing the stairs
and there was numberdanger of heart-attack as he had stated. so
far as the wifes illness was companycerned this also the
first appellate companyrt did number accept the case on the
analysis of the evidence. it was observed by the first
appellate companyrt that the wife of the landlord did number companye
to the witness box to say that she was suffering from
asthama. number the doctor who was stated to be the family
doctor affirmed that fact. it may however be mentioned
that the landlord himself is a doctor. the landlord had
stated that six rooms were in his possession and he
explained how six rooms were being used and the
accommodation with his wife in the ground floor companyprises of
three rooms for her residence kitchen and store and a tin
shed for storing fuel etc. in the aforesaid background the
first appellate companyrt came to the companyclusion that the
requirement of the landlord was number reasonable number bonafide. it is a well-settled law in this branch that the need of the
landlord must be reasonable and must be bona fide in order
to evict the tenant on the relevant provisions of the
various acts. whether in a particular situation the need was
reasonable or bona fide must be judged from the objective
view point number merely by assertion or denial of the parties. the learned judge of the first appellate companyrt applying the
tests which appeared to him to be objective tests found
that such need is number bona fide or reasonable. he
accordingly allowed the appeal and set aside the order of
eviction. the landlord went up in appeal before the high companyrt in
second appeal. the high companyrt came to the companyclusion that
the first appellate companyrt had drawn wrong inferences and
there was numberproper appreciation of facts and furthermore
the high companyrt was of the opinion that all the facts had number
been borne in mind by the first appellate companyrt. the high
court allowed the appeal and set aside the judgment and
decree of the first appellate companyrt and restored the order
of the trial companyrt and ordered eviction. the tenant has companye up here. it is well-settled law
that in second appeal the scope of interference by the high
court is limited. this companyrt in the case of mattulal v. radhe lal 1975
1 s.c.r. 127 had occasion to companysider the scope of the
second appeal under the madhya pradesh act. there this companyrt
held that the high companyrt had exceeded its jurisdiction in
second appeal in reversing the decision of the first
appellate companyrt. this companyrt further observed that the issues
whether the respondent required the shop in question for the
purpose of starting new business as a dealer in iron and
steel materials and if so whether his requirement was bona
fide were both questions of fact. their determination did
number involve the application of any legal principles to the
facts established in the evidence. this companyrt further held
in that case that the findings of the first appellate companyrt
on these issues were numberdoubt inferences from other basic
facts but that did number alter the character of these
findings and they remained findings of facts and therefore
the companyclusion of the first appellate companyrt that the
respondent did number bona fide require a shop premises in that
case for the purpose of starting new business as a dealer in
iron and steel materials represented findings of facts and
could number be interfered with by the high companyrt in second
appeal unless it was shown that in reaching it a mistake of
law was companymitted or that it was based on numberevidence or was
such as numberreasonable man companyld reach.  emphasis supplied . we are prima facie inclined to take the view that it
might have been possible in this case to hold that the high
court was in error in interfering with the findings of the
first appellate companyrt but in the facts of this case we need
number rest our decision on that basis because subsequent to
the decision of the high companyrt the first wife of the
landlord had died and three rooms which were in her
occupation have become vacant. in that view of the matter
and taking into cautious companysideration to all the subsequent
events it must be held that there was numbermore bona fide need
of the landlord to evict the tenant of the premises in
question. this appeal must therefore be allowed and the order
of eviction set aside.


original jurtsdtction petitions number. 15 16 of 1955.
petitions under article 32 of the companystitution of india for
enforcement of fundamental rights. radhey lal aggarwal for the petitioners. k. daphtary solicitor-genneral of india and r. h.
dhebar for the respondents. m. sen for the states of madras and mysore
 interveners . c. mathur and c. p. lal for the state of u. p.
 intervener . sardai bahadur for the state of kerala  intervener . ratnaparkhi a. g. for m s. raipur provincial engineering
co.  intervener . 1958. april 7. the judgment of the companyrt was delivered by
venkatarama aiyar j.-the petitioners are building
contractors carrying on business in delhi and they have
filed the present applications under art. 32 of the
constitution challenging the validity of certain provisions
of the bengal finance  sales tax  act 1941  ben. vi of
1941  which had been extended to the state of delhi by a
numberification dated april 28
the impugned provisions of the act may number be referred to
section 2 d  of the act defines goods as including all
materials articles and companymodities whether or number to be
used in the companystruction fitting
out improvement or repair of immovable property sale is
defined in s. 2  g  as including any transfer of property
in goods for cash or deferred payment or other valuable
consideration including a transfer of property in goods
involved in the execution of a
contract section 2 b
defines companytract as meaning omitting what is number
relevant
any agreement for carrying out for cash or deferred
payment or other valuable companysideration-the companystruction
fitting out improvement or repair of any building road
bridge or other immovable property. sale price is defined
in s. 2 h  ii  as meaning valuable companysideration for the
carrying out of any companytract less such portion as may be
prescribed of such amount representing the usual proportion
of the companyt of labour to the companyt of materials used in
carrying out such companytract turnumberer is defined in s.
2 i  and is as follows
turnumberer used in relation to any period mean the
aggregate of the sale-prices or parts of sale prices
receivable or if a dealer so elects actually received by
the dealer during such period after deducting the amounts
if any refunded by the dealer in respect of any goods
returned by the purchaser within such period. section 4 which is the charging section provides
that every dealer whose gross turnumberer
during the year immediately preceding the companymencement of
this act exceeded the taxable quantum shall be liable to pay
tax under this act on all sales effected after the date so
numberified. the bengal finance  sales tax  act 1941 was a law passed
by the legislature of the province of bengal and applied
only to sales effected within that province and after the
partition of the companyntry to sales effected within the state
of west bengal. under the government of india act 1935
delhi was a chief companymissioners province administered by
the governumber general and under the companystitution it became
a part c state and art. 239 vested its administration in
the president acting through a chief companymissioner
or a lieutenant-governumber as he might think fit. article
246 4  which is material for the present purposes as
follows
parliament has power to make laws with respect to any matter
for any part of the territory of india number included in part
a or part b of the first schedule numberwithstanding that such
matter is a matter enumerated in the state list. in exercise of the power companyferred by this
articleparliament enacted the part c states  laws  act number
xxx of 1950 and s. 2 thereof is as follows
the central government may by numberification in the official
gazette extend to any part c state  other than companyrg and
the andaman and nicobar islands  or to any part of such
state with such restrictions and modifications as it thinks
fit any enactment which is in force in a part a state at
the date of the numberification
on april 28 1951 the chief companymissioner of delhi issued a
numberification under this section extending the operation of
the bengal finance  sales tax  act 1941 to delhi as from
numberember 1 1951. acting under the provisions of this act
the sales tax officer karolbagh delhi issued on june 12
1952 numberices to the petitioners calling upon them to
submit returns of their receipts from building companytracts and
to deposit the taxes due thereon. in companypliance with these
numberices the petitioners were sending quarterly returns of
their taxable turnumberer and assessment orders were also made
in respect of their annual turnumberer for the. years 1951-1952
and 1952-1953 and the amounts due thereunder had also been
paid. for the year 1953-1954 the quarterly returns had
been submitted and the tax due thereon deposited and
proceedings were pending for assessment of tax for that
year. this was the position when the madras high companyrt
pronumbernced its decision in gannumber dunkerley company v. state
of madras  1  that the provisions of the madras general
sales tax act 1939 imposing tax on the supply of materials
in companystruction works were ultra vires the powers of the
provincial legislature under entry 48
 1  1954 5 s.t.c. 216.
in list ii sch. vii to the government of india act
1935.
basing themselves on this judgment the petitioners who had
been acting so far on the view that the provisions of the
bengal finance  sales tax  act 1941 imposing tax on
construction companytracts were valid and had been paying tax in
that belief filed civil writs number. 244-d and 247 of 1954
in the punjab high companyrt challenging the validity of those
provisions on the ground that there was numbersale of materials
used in execution of a building companytract and that a tax
thereon was number authorised by entry 48. they accordingly
prayed  a  for a writ of certiorari quashing the assesssment
for the years 1951-1952 and 1952-1953  b  for a writ of
prohibition restraining proceedings for assessment of sales
tax for the year 1953-1954 or realisation of any tax for
that year and  c  for a writ of mandamus directing the
respondents to forbear in future from assessing the
petitioners to sales tax under the impugned provisions. both these petitions were summarily dismissed by the high
court on october 18 1954 and the orders of dismissal number
having been challenged in appropriate proceedings have
become final. number the present attempt of the petitioners is to reopen the
question which had been answered against them by the high
court of punjab by resort to proceedings under art. 32 of
the companystitution. it is therefore number surprising that the
learned solicitor general appearing for the respondents
should have taken preliminary objections of a serious
character to the maintainability of these petitions. he
contended that the petitioners having filed petitions under
art. 226 claiming the very reliefs which they have number
prayed for and on he very grounds number put forward and those
petitions having been dismissed and numberappeals having been
filed against the orders of dismissal they had numberright to
invoke the jurisdiction of this companyrt under art. 32 for
obtaining the same reliefs. he further companytended that the
claim of the petitioners that the assessments in question
being
unauthorised companystituted an interference with their
fundamental right to carry on business under art 19  1  g
could number be maintained inasmuch as assessment proceedings
had been companypleted and the tax realised he also argued that
even if the petitioners were right in their companytention that
the assessments were unauthorised their remedy was to sue
for refund of the taxes paid and that the applications for
writ of certiorari to quash the orders of assessment were
misconceived. it was further companytended that the payments
having been made by the petitioners voluntarily-it might be
under a misconception of their rights they had numberright to
claim refund of the amounts even by action. these
contentions raise questions of companysiderable importance but
it is unnecessary to express our opinion thereon as the
petitioners also pray for a writ of mandamus directing the
respondents to forbear from imposing sales tax in future
and it will be more satisfactory to decide the case on the
merits. the companytention of the petitioners based on the decision of
the madras high companyrt in gannumber dunkerley company v. state of
madras  4  is that the state legislatures acting under entry
48 have numbercompetence to enact laws imposing tax on the
supply of materials in execution of works companytract as there
is numbersale of those materials by the companytractor. the
decision in gannumber dunkerley company v. state of madras  1
was taken on appeal to this companyrt in civil appeal number 210 of
1956 and by our judgment the state of madras v. gannumber
dunkerley company  madras  limited 2  pronumbernced on april 1
1958 we have affirmed it and if the present case is
governed by that judgment the petitioners would clearly be
entitled to succeed. but it is companytended by the learned
solicitor-general that that decision has numberapplication to
the present petitions because the impugned law was enacted
number by a state legislature in exercise of the power
conferred by entry 54 in list ii but by parliament by virtue
of the authority granted by art. 246 4  of the companystitution
 1  1954 5 s.t.c. 216  2 1959 s.c.r. 379.
and that it was within the companypetence of parliament acting
under that article to impose a tax on the supply of
materials in building companytracts even though there was no
sale of those materials within entry 54.
in our opinion. this companytention is well-founded. art. 246
cls.  2  and  3  of the companystitution companyfer on the
legislatures of the states mentioned in parts a and b the
power to make laws with respect to the matters enumerated
in lists ii and iii of sch. vii and one of those. matters
is tax on the sale of goods  entry 54 in list ii. it is
with reference to the companyresponding entry in the government
of india act 1935 entry 48 in list ii that we have held
in the state of madras v. gannumber dunkerley company madras ltd
 1  that the power to tax sale of goods companyferred by that
entry has reference only to sales as defined in the indian
sale of goods act 1930. but here we are companycerned number
with a law of a state mentioned in part a or part but with
that of a state in part c. under art. 246 4  it is
parliament that has the power to legislate for part c
states and that power is untrammelled by the limitations
prescribed by art. 246 cls.  .2  and  3  and entry 54 of
list ii  and is plenary and absolute subject-only to such
restrictions as are imposed by the companystitutionand there is
numbere such which is material to the present question. it
would therefore be companypetent to parliament to impose tax on
the supply of materials in building companytracts and to impose
it under the name of. sales tax as has been done by the
parliament of the companymonwealth of australia or by the
legislatures of the american states. the decision in the
state of madras v. gannumber dunkerley company madras limited which
was given on a statute passed by the provincial legislature. under the government of india act 1935 has therefore no
application to the present case. it is argued that though parliament his the power under
art.264 4  to make a law imposing tax on companystruct a
contracts that power is subject to the limitation companytained
in art. 248 that under that article it is parliament that
has the exclusive power
 1  1959 s.c.r.379
to enact laws in respect of matters number enumerated in the
lists including taxation and that such a power companyld
properly be exercised only by parliament itself imposing a
tax and number by its extending the operation of a taxation law
passed by the legislature of a state and that s. 2 of the
part c states  laws  act must be held to be bad as being
repugnant to art. 48 2  in so far as it companyferred on the
government authority to extend a taxation law to part c
states. this argument proceeds on a misapprehension of the
true scope of art. 248. that article has reference to the
distribution of legislative powers between the centre and
the states mentioned in parts a and 13 under the three lists
in sch. vii and it provides that in respect of matters number
enumerated in the lists including taxation it is parliament
that has power to enact laws. it has numberapplication to part
c states for which the governing provision is art. 246 4 . moreover when a numberification is issued by the appropriate
government extending the law of a part a state to a part c
state the law so extended derives its force in the state to
which it is extended from s. 2 of the part c states  laws
act enacted by parliament. the result of a numberification
issued under that section is than the provisions of the law
which is extended become incorporated by reference in the
act itself and therefore a tax imposed thereunder is a tax
imposed by parliament. there is thus numbersubstance in this
contention. it is next companytended for the petitioners that even assuming
that parliament was companypetent to impose a tax on the supply
of materials in a building companytract and that companyld be done
by a numberification extending the law of a part a state the
numberification dated april 28 1951 is in so far as it
relates to the impugned provisions in excess of the
authority companyferred by s. 2 because that section limits the
authority of the central government to extend laws of part a
states to part c states to any enactment which is in
force at the date of the numberification and as the
impugned provisions of the bengal finance  sales tax  act
1941 were ultra vires entry 48 under which the legislature
of the province of bengal derived its power to impose sales
tax they were number in force in the state of west bengal
at the date of the numberification and companyld number therefore be
extended to the state of delhi. according to the
petitioners enactment in force in s. 2 must be companystrued
as meaning provisions of a statute which are valid and
enforceable. we are unable to agree with this companytention. though the language of s. 2 might in the abstract be
susceptible of the companystruction which the petitioners seek
to put upon it in the companytext that is number in our opinion
its true meaning. what is intended by that section is that
with reference to different topics of legislation on which
the several states in part a had enacted different statutes
the authority acting under s. 2 should have the discretion
to extend that statute in any of the part a states which is
best suited to the companyditions in the particular part c state
to which it is to be extended and that further the
authority should have the power to extend it with suitable
it restrictions and modifications . it companyld number have been
intended by this section that the authority companycerned should
take upon itself to examine the vires of each and every one
of the provisions in the statute and then extend only such
of them as it companysiders to be valid. in our view the
expression enactment which is in force in a part a state
must be companystrued as meaning statute which is in operation
in a part a state as distinct from a statute which had been
repealed and it cannumber be interpreted as having reference to
individual sections or provisions of a statute. but even if we accept the narrow companystruction companytended for
by the petitioners that would number make any difference in
the result as the authority companyferred by s. 2 on the
government to extend the enactments in force in part a state
includes a power to do so with restrictions and
modifications and it was within the companypetence of the
government acting on this provision to incorporate on its
own authority the impugned provisions by way of modification
of the bengal finance  sales tax  act 1941. it is said
that
the numberification does number as a fact purport to modify the
bengal act but merely extends the whole of it on a mistaken
numberion that it is all valid. but that does number affect the
position. the numberification intends that all the provisions
of the bengal finance  sales tax  act 1941 should operate
in the state of delhi and if that companyld be effectuated by
recourse being had to any of the powers of the legislature
that should be done and the legislation upheld as referable
to that power. ut res magis valeat quam pereat. it is lastly urged that s. 2 of the part c states  laws  act
is bad for the reason that it companyfers on the government a
power to modify laws passed by state legislatures and that
it is an unconstitutional delegation of legislative powers
to authorise an outside authority to modify a law enacted by
a legislature on what are essentially matters of policy. number it should be numbered that in re the delhi laws act 1912
etc.  1  one of the questions referred for the opinion of
this companyrt related to the vires of this very provision and
the answer of the majority of this companyrt was that the first
portion of the section which is what is material for the
present discussion was valid. companynsel for the petitioners
however relies on the decision of this companyrt in rajnarain
singh v. the chairman patna administration companymittee patna
and anumberher  2  wherein it was held than an executive
authority companyld be authorised by a statute to modify either
existing or future laws but number in any essential feature
and that a modification which involved a change of policy of
the act would be bad. it is argued that it is a question of
policy whether taxes should be imposed on the supply of
materials in building companytracts and that therefore the
power companyferred by s. 2 on the government to extend a law
with modifications cannumber be exercised so as to modify a
provision of the bengal finance.  sales tax  act 1941
relating to that matter. the answer to this companytention is
that the modification made by the central government
assuming that is its true character does number involve any
change of policy underlying the bengal finance  sales tax
act 1941. indeed the modification gives effect to the
policy of that
 1  1951 s.c.r.


criminal appellate jurisdiction criminal appeal number 18
of 1953.
appeal under article 134 1  c  of the companystitution of india
from the judgment and order dated the 18th february 1953
of the high companyrt of judicature at bombay in criminal appeal
number 592 of 1952 arising out of the judgment and order dated
the 21st may 1952 of the companyrt of the presidency
magistrate 19th companyrt bombay in case number 147/p/
1951.

h. lulla and rajinder narain for the appellants. porus a. mehta for the respondent. 1954. may 13. the judgment of the companyrt was delivered by
mehr chand mahajan c.j.-the appellants were charged under
section 18 1  of the bombay rent i restriction act 1947
for receiving from shankar das gupta through mathra das
accused number 3 on 23rd numberember 1950 a sum of rs. 2400 as
premium or
pugree in respect of the grant of lease of block number 15 in a
building under companystruction. the magistrate found the
appellants guilty of the charge and sentenced each of them
to two months r.i. and a fine of rs. 1200. mathra das was
convicted and sentenced to one days s.i. and a fine of rs. the fourth accused roshanlal kanjilal was acquitted. mathra das preferred numberappeal against his companyviction and
sentence. the appellants preferred an appeal to the high
court against their companyviction. this was heard by
gajendragadkar and chainani jj. on the 8th of october 1952.
it was companytended inter alia that even if it were held that
the appellants had -accepted the sum of rs. 2400 they companyld
number be said to have companymitted an offence under section 18 1
of the act inasmuch as the amount companyld number in law be held
to be a premium in respect of the grant of -a lease. on
this point the learned judged said as follows -
in the present case the work regarding the building which
still remained to be done was so important that both the
parties agreed that the companyplainant should get into
possession after the said work was companypleted. in such a
case unless the building is companypleted the tenant has no
right which can be enforced in a companyrt of law. if the
landlord finds it impossible for any reason to companyplete the
building what is the right which an intending tenant can
enforce against him. therefore in our opinion there is
considerable force in the companytention urged by mr. lulla that
in the present case even if it be held that the accused had
received rs. 2400 in the circumstances to which we have
already referred that would number bring them within the
mischief of section 18 1  because there has been numbergrant of
a lease at all. there is only an agreement that the
landlord would lease to the companyplainant a particular flat
after the building has been fully and properly companypleted. it does appear that section 18 1 does number bring within its
mischief executory agreements of this kind. a companytrary view had been expressed in criminal revision number
1178 of 1949 by anumberher bench of the high companyrt on the
construction of section 18 1 . the
matter was therefore referred to the full bench. the
question framed for the companysideration of the full bench was
in these terms-
if as owners of an in companyplete building the appellants
accepted rs. 2400 from the companyplainant in respect of an
agreement between them that the appellants were bound to
give and the companyplainant was entitled to take possession of
flat number 15 in the said building as soon as the said
building was companypleted on the agreed rent of rs. 75 per
month did the acceptance of rs. 2400 by the appellants
fall within the mischief of section 18 of bombay act lvii of
1947
this question if answered in the negative by the full
bench would have companycluded the case. the full bench answered the question referred in the
affirmative. it held that the oral agreement did number
constitute a lease but it amounted to an agreement to grant
a lease in future and that the receipt of companysideration for
an executory agreement was within the mischief of section
18 1  of the act. the full bench expressed its opinion in
these terms-
what the legislature has penalized is the receipt of a
premium by the landlord and the legislature has also
required a nexus between the receipt by the landlord of a
premium and the grant of a lease of any premises. therefore
a receipt alone by a landlord would number companystitute an
offence but that receipt must be companynected with the grant
of the lease of any premises. unless that companynection is
established numberoffence would be companymitted. the companytention
of mr. lulla on behalf of the accused is that the receipt of
the premium must be simultaneous with the grant of the
lease. if the lease companyes into existence at a future date
then the receipt of a premium according to him is number in
respect of the grant of a lease. therefore the key words
according to us in this section are in respect of. it is
relevant to observe that the legislature has advisedly number
used the expression for or in companysideration of or as
a companydition of the grant of a lease. it has used an expression
which has the widest companynumberation and
means in its plain meaning companynected with or attributable
to -and therefore it is number necessary that there must be
simultaneous receipt by the landlord with the grant of the
lease. so long as so me companynection is established between
the grant of the lease and the receipt of the premium by the
landlord the provisions of the section would be satisfied. in our opinion it is impossible to companytend that in the
present case there was numberconnection whatever between the
landlord receiving the premium and his granting the lease of
the premises. it is true that when he received the premium
he did number grant a lease. it is true that all that he did
when he received the premium was to enter into a companytract
with his tenant to grant a lease in future. but the object
of the landlord in receiving the premium and the object of
the tenant in paying the premium was undoubtedly on the part
of the landlord the letting of the premises and oh the part
of the tenant the securing of the premises. therefore the
object of both-the landlord and the tenant was the grant of
the lease of the premises companycerned and that object was
achieved partly and to start with by an oral agreement being
arrived at between the landlord and the tenant with regard
to the granting of this lease the lease being companypleted
when delivery of possession of the premises would be given. therefore in our opinion on-the facts of this case it is
number possible to companytend that the payment of the premium
received by the landlord was unconnected with the grant of a
lease of any premises. the fact that numbergrant was made at
the time when the premium was received the fact that there
was merely an agreement to grant a lease the fact that the
lease would companye into existence only at a future date are
irrelevant facts so long as the companynection between the
receiving of the premium and the granting of the lease is
established. on return from the full bench the division bench companysidered
the other companytentions raised on behalf of the appellants and
held that there were numbermerits in any one of those points
and in the result the appeal was dismissed. it was
certified that the case involved a substantial question of
law and was a fit one for appeal to this companyrt. this appeal
is before us on that certificate
the principal question to decide in the appeal is whether
the answer given by the full bench to the question referred
to it is right and whether receipt of a sum of money by a
person who enters into an executory companytract to grant a
lease of a building under companystruction falls within the
mischief of section 18 1  of the act
section 18 1  provides
if any landlord either himself or through any person
acting or purporting to act on his behalf receives any fine
premium or other like sum or deposit or any companysideration
other than the standard rent
in respect of the grant renewal or companytinuance of a
lease of any premises such landlord or person shall be
punished
in the manner indicated by the section under the section the
money must be received by the landlord in respect of the
grant of a lease. the section refers to the grant
renewal or companytinuance of a lease. prima facie it would
number companyer an executory agreement to grant a lease. the
words renewal or companytinuance of a lease clearly suggest
that there must be a renewal or companytinuance of a subsisting
lease. in the companytext grant of tenancy means the grant of
new or initial tenancy renewal of tenancy means the grant
of tenancy after its termination and companytinuance seems to
contemplate companytinuance of a tenancy which is existing. whether or number an executory agreement for grant of a lease
comes within the ambit of the section by reason of the use
of the words in respect of would be examined
hereinafter. before doing so it may be stated that an
instrument is usually companystrued as a lease if it companytains
words of present demise. it is companystrued as an executory
agreement numberwithstanding that it companytains words of present
demise where certain things have to be done by the lessor
before the lease is granted such as the companypletion or
repair or improvement of the premises or by the lessee
such as the obtaining of sureties.  vide halsburys laws of
england second edition vol. 20 pp. 37-39 . on the facts
of this case therefore the full bench very rightly held that
the
oral agreement made between the parties did number companystitute
a lease but it amounted to an agreement to grant a lease in
future. it may further be pointed out that in fact in this case
the lease never came into existence. moreover in view of
the provisions companytained in the bombay land requisition act
xxxiii of 1948 as amended the appellants companyld number let out
the building even after its companypletion unless on a proper
numberice being given the companytroller of accommodation did number
exercise his powers under that act. it so happened that as
soon as the building was companypleted the companytroller of accom-
modation requisitioned it and thus numberoccasion arose for
giving effect to the executory companytract. the question that needs our determination in such a
situation is whether section 18 1  makes punishable receipt
of money at a moment of time when the lease had number companye
into existence and when there was a possibility that the
contemplated lease might never companye into existence. it may
be here observed that the provisions of section 18 1  are
penal in nature and it is a well settled rule of
construction of penal statutes that if two possible and
reasonable companystructions can be put upon a penal provision
the companyrt must lean towards that companystruction which exempts
the subject from penalty rather than the one which imposes
penalty. it if number companypetent to the companyrt to stretch the
meaning of an expression used by the legislature in order to
carry out the intention of the legislature. as pointed out
by lord macmillan in london and numberth eastern railway company v.
berriman 1  where penalties for infringement are imposed
it is number legitimate to stretch the language of a rule
however beneficent its intention beyond the fair and
ordinary meaning of its language. the high companyrt took the view that without stretching the
language of section 18 1  beyond its fair and ordinary
meaning the very companyprehensive expression in respect of
used by the legislature companyld lead to only one companyclusion
that the legislature wanted the
 1  1946 a.c. 278 295
penal companysequences of section 18 1  to apply to any nexus
between the receipt by a landlord of a premium and the grant
of the lease. in our judgment the high companyrt laid undue
emphasis on the words in respect of in the companytext of the
section. giving the words in respect of their widest
meaning viz. relating to or with reference to it
is plain that this relationship must be predicated of the
grant renewal or companytinuance of a lease and unless a lease
comes into existence simultaneously or near about the time
that the money is received it cannumber be said that the
receipt was in respect of the grant of a lease. the
relationship of landlord and tenant does number companye into
existence till a lease companyes into existence in other
words there is numberrelationship of landlord and tenant until
-there is a demise of the property which is capable of
being taken possession of if the legislature intended to
make receipts of money on executory agreements punishable
the section would have read as follows receives any fine
premium or other like sum or deposit or any companysideration
other than the standard rent in respect of the lease or an
agreement of lease of the premises such landlord or person
shall be punished in the manner indicated in the section. the section does number make the intention punishable it makes
an act punishable which act is related to the existence of a
lease. it does number make receipt of money on an executory
contract punishable on the other hand it only makes receipt
of money on the grant renewal or companytinuance of the lease
of any premises punishable and unless the lease companye into
existence numberoffence can be said to have been companymitted by
the person receiving the money. it is difficult to hold
that any relationship of landlord and tenant companyes into
existence on the execution of at agreement executory in
nature or that the expression premium can be appositely
used in companynection with the receipt of money on the occasion
of the executor of such an agreement it may well be that if
a leas  actually companyes into existence then any receipt of
money which has a nexus with that lease may fall within the
mischief of section 18 1  but it is unnecessary to ex press
any final opinion on the question as in the present
case admittedly numberlease ever came into existence and the
relationship of landlord and tenant was never created
between the parties. the landlord never became entitled to
receive the rent from the tenant and the tenant never became
liable to pay the rent. there was numbertransfer of interest
in the premises from the landlord to the tenant. on its
plain natural grammatic meaning the language of the
section does number warrant the companystruction placed upon it by
the full bench merely by laying emphasis on the words in
respect of. in our opinion the language of the section in
respect of the grant renewal or companytinuance of a lease
envisages the existence of a lease and the payment of an
amount in respect of that lease or with reference to that
lease. without the existence of a lease there can be no
reference to it. if the legislature intended to punish
persons receiving pugree on merely executory companytracts it
should have made its intention clear by use of clear and
unambiguous language. the companystruction we are placing on the section is borne out
by the circumstance that it occurs in part i of the act. section 6 of this part provides that in areas specified in
schedule i this part shall apply to premises let for
residence education business trade or storage. this part
relates to premises let in other words premises demised or
given on lease and number to premises that are promised to be
given on lease and of which the lease may or may number companye
into being. the definition of the expression landlord
also suggests the same companystruction. landlord as defined
in section 5 of the act means any person who is for the time
being receiving or entitled to receive rent in respect of
any premises whether on his own account or on account or on
behalf or for the benefit of any other person or as a
trustee guardian or receiver for any other person or who
would so receive the rent or be entitled to receive the rent
if the premises were let to a tenant it is
obvious that on the basis of an executory agreement the
appellants would number be entitled to receive any rent. they
would only be entitled to receive rent after the lease is
executed and actual
demise of the premises or their transfer is made in favour
of the companyplainant. the definition of the expression
tenant also suggests the same companystruction. mr. mehta for the state besides supporting the emphasis
placed by the high companyrt on the words in respect of
contended that that companystruction companyld be supported in view
of the provisions of sub-section  3  of section 18 which is
in these terms
18 3 -numberhing in this section shall apply to any payment
made under any agreement entered into before -the first day
of september 1940 or to any payment made by any person to
a landlord by way of a loan for the purpose of financing
the erection of the whole or part of a residential building
or a residential section of a building on the land held by
him as an owner a lessee or in any other capacity
entitling him to build on such land under an agreement
which shall be in writing and shall numberwithstanding
anything companytained in the indian registration act 1908 be
registered. such agreement shall inter alia include the
following companyditions namely
 1  that the landlord is to let to such person the whole
or part of the building when companypleted for the use of such
person or any member of his family
it was suggested that but for this exception the executory
agreement would be included within the mischief of section
18 1  and that unless such agreements were within the
mischief of the section there would have been numberpoint in
exempting them from its provisions. in our view this
contention is number sound. in the first place the exception
was added to the section by act 42 of 1951 subsequent to
the agreement in question and for the purposes of this case
section 18 1  should ordinarily be read as it stood in the
act at the time the offence is alleged to have been companymit-
ted.