criminal appellate jurisdiction criminal appeal number 149 of
1954.
appeal by special leave from the judgment and order dated
october 20 1953 of the bombay high companyrt in criminal
appeal number 349 of 1953.

a. desai and i. n. shroff for the-appellant
porus a. mehta and r. h. dhebar for the respondent. 1957. february 19. the judgment of the companyrt was delivered
by
bhagwati j.-this appeal with special leave under art. 136 of
the companystitution is directed against a judgment of the high
court of judicature at bombay setting aside the acquittal of
the appellant by the companyrt of the presidency magistrate
19th companyrt bombay and ordering his re-trial by the companyrt of
the special judge greater bombay in accordance with the
provisions of the criminal law amendment act 1952  act xlvi
of 1952 . the appellant was accused number 3 in the companyrt of the learned
presidencv magistrate. accused number 1 was the mehta in the
employ of a firm called messrs. m. m. baxabhoy company
accused number 2 was the mana. ger of the said firm. the
appellant and accused number. 4 and 5 were receivers of the
firm in litigation in regard to it. they were all charged
with offences under s. 161 read with s. 116 and further read
either with s. 109 or s. 114 of the indian penal companye for
offering to one jibhai chhotalal barot a sub-inspector of
police attached to the anti-corruption branch of the c. 1.
d. the sum of rs. 125000 as illegal gratification other
than legal remuneration as a motive or reward for his
showing favour to the accused and to the firm m s. m. m.
baxabhoy company in the exercise of his official functions. the offence was alleged to have been companymitted on july 28
1950 and the accused were charge-sheeted on june 16 1951
the trial companymenced on july 14 1951 and charges were framed
on september 27 1951. 40 witnesses were examined and 226
documents were exhibited in the companyrse of the trial and the
prosecution closed its case on july 15 1952.
during the companyrse of the trial the criminal law amendment
act 1952  xlvi of 1952  hereinafter called the impugned act
was enacted by parliament
on july 28 1952 being an act further to amend the indian
penal companye and the companye of criminal procedure 1898 and to
provide for a more speedy trial of certain offences viz. offences punishable under s. 161s.165 or s. 165a of the
indian penal companye or sub-s. 2 of s. 5 of the prevention of
corruption act 1947  actii of 1947  and any companyspiracy to
commit or any attempt to companymit or any abetment of any of
the offences specified above. the learned presidency
magistrate proceeded with the trial and after the
examination of the appellant under s. 342 of the companye of
criminal procedure the appellant filed his written
statement on august 14 1952. the addresses companymenced
thereafter. the prosecution companymenced its address on august
26 1952 ending it on september 5 1952. the defence
thereafter addressed the learned magistrate. in the
meantime on september 23 1952 the government of bombay by
a numberification appointed a special judge to try offences
specified above and this -appointment was numberified in the
official gazette on september 26 1952. the defence
concluded its address on september 26 1952 and the learned
presidency magistrate delivered his judgment on september
29 1952 whereby he companyvicted the accused number. i and 2 of
the offences with which they were charged and sentenced them
each to nine months rigorous imprisonment and a fine of rs. 1000 in default 6 months rigorous imprisonment. he
however acquitted the appellant and the accused number. 4 and 5
of these offences. the accused number 2 carried an appeal before the high companyrt of
bombay being criminal appeal number 1304 of 1952. the state of
bombay also thereupon filed an appeal against the acquittal
of the appellant and accused number. 4 and 5 being criminal
appeal number 349 of 1953. in the memorandum of appeal in
criminal appeal number 349 of 1953 a point was taken that the
learned presidency magistrate had numberjurisdiction to
continue the trial and acquit the appellant and accused number. 4 and 5 as the same was ousted by the impugned act. it was
contended that since the date the said act came into force
the special judge alone
had jurisdiction to try the accused for the offence under s.
161 read with s. 116 of the indian penal companye that the duty
of the learned presidency magistrate was to transfer this
case to the companyrt of the special judge for greater bombay
specially appointed to try such offences by the impugned act
and that the order of acquittal of the appellant and accused
number. 4 and 5 was therefore erroneous in law being without
jurisdiction. both these criminal appeals came up for hearing before a
bench of the bombay high companyrt companysisting of bavadekar
vyas jj. these appeals were heard only on the preliminary
point as to the jurisdiction of the learned presidency
magistrate to try and decide the case. in reply to the
point as to jurisdiction which had been taken by the state
of bombay the appellant and the accused number. 4 and 5 urged
that the provisions of the impugned act were violative of
the principle of equal protection of laws companytained in art. 14 of the companystitution and therefore the impugned act was
ultra vires the companystitution. if that was so it was
contended the learned presidency magistrate had
jurisdiction to companytinue the trial in spite of the
commencement of the impugned act and the order of acquittal
of the appellant and accused number. 4 and 5 recorded by him
was companyrect. the learned judges of the high companyrt rejected this
contention of the appellant and held that the impugned act
was intra vires and that the learned presidency magistrate
had numberjurisdiction to try the case after the companymencement
of the impugned act. the learned magistrates order
convicting the accused number 2 and acquitting the appellant
and the accused number. 4 and 5 companyplained of by the state of
bombay was accordingly set aside. the high companyrt ordered a
re-trial of the appellant and the other accused by the companyrt
of the special judge greater bombay and remanded the case
for disposal according to law. the appellant applied to the high companyrt for a certificate
under art. 134  1   c  of the companystitution which was however
refused. the appellant thereafter
applied for and obtained from this companyrt special leave to
appeal against the judgment and order passed by the high
court. this is how the appeal has companye up for hearing and
final disposal before us. it will be companyvenient at this stage to set out the relevant
provisions of the impugned act. as already numbered the
preamble to the act stated that it was an act further to
amend the indian penal companye and the companye of criminal
procedure 1898 and to provide for a more speedy trial of
certain offences. section 5 of the act inserted sub-s.  2-
b  in s. 337 of the companye of criminal procedure 1898 and
provided that in every case where the offence is punishable
under s. 161 or s. 165 or s. 165-a of the indian penal companye
or sub-s.  2  of section 5 of the prevention of companyruption
act 1947  then
numberwithstanding anything companytained in sub-s.  2-a  the
magistrate shall without making any further enquiry send
the case for trial to the companyrt of the special judge
appointed under the impugned act. this amendment was to
remain in force for a period of two years from the companymence-
ment of the impugned act but was subsequently incorporated
in the companye of criminal procedure 1898 as s. 337  2-b  by
s. 59  b  of the companye of criminal procedure amendment act
1955  act xxvi of 1955 . section 6 of the act provided for
the appointment of special judges and empowered the state
governments by numberification in the official gazette to
appoint as many special judges as may be necessary for such
area or areas as may be specified in the numberification to try
the following offences namely
 a  an offence punishable under s. 161 s. 165 or s. 165-a
of the indian penal companye or sub-s.  2  of s. 5 of the
prevention of companyruption act 1947 and
 b  any companyspiracy to companymit or any attempt to companymit or
any abetment of the offences specified in el.  a  above. section 6  2  laid down the qualifications for the
appointment of a special judge and provided that a person
shall number be qualified for appointment as a special judge
under this act unless he was or had been
a sessions judge or an additional sessions judge or an
assistant sessions judge under the companye of criminal
procedure 1898. section 7 of the act is important and
provided that numberwithstanding anything companytained in the companye
of criminal procedure 1898 or any other law the offences
specified in sub-s.  1  of s. 6 shall be triable by special
judges only. section 7 2  further provided that when trying
any case a special judge. may also try any offence other
than an offence specified in s. 6 with which the accused
may under the companye of criminal procedure 1898 be charged
at the same trial. the procedure and powers of special
judges were laid down in s. 6 of the act. a special judge
was empowered to take companynizance of offences without the
accused being companymitted to him for trial and in trying the
accused persons he was to follow the procedure prescribed
by the companye of criminal procedure 1898 for the trial of
warrant cases by magistrates. a special judge was also
empowered to tender a pardon to any person supposed to have
been directly or indirectly companycerned in or privy to an
offence on companydition of his making a full and true
disclosure of the whole circumstances within his knumberledge
relating to the offence and to every other person companycerned
whether as a principal or abetter in the companymission
thereof. save as above the provisions of the criminal
procedure companye 1898 were so far as they were number
inconsistent with the act made applicable to the proceedings
before a special judge. and for the purposes of the said
provisions the companyrt of the special judge was deemed to be
a companyrt of sessions trying cases without a jury or without
the aid of assessors. a special judge was empowered to pass
upon any person companyvicted by him any sentence authorised by
law for the punishment of the offences of which such person
was companyvicted. section 9 of the act provided for appeal and
revision and the high companyrt was to exercise as far as
applicable all the powers companyferred by chapters xxxi and
xxxii -of the companye of criminal procedure 1898 on the high
court as if the companyrt of the special judge were a companyrt of
sessions trying cases without a jury within the local limits
of the jurisdiction of the high companyrt. section 10 is also important and provided for the transfer
of certain cases pending before magistrates. it was laid
down that all cases triable by a special judge under s. 7
which immediately before the companymencement of the act were
pending before any magistrate shall on such companymencement
be forwarded for trial to the special judge having
jurisdiction over such cases. it is clear from the provisions of the impugned act set out
hereinabove that the intention of the legislature in
enacting the same was to amend the indian penal companye and the
code of criminal procedure 1898 with a view to provide for
a more speedy trial of offences punishable under ss. 161
165 or 165-a of the indian penal companye or sub-s.  2  of s. 5
of the prevention of companyruption act 1947. special judges
of the status of a sessions judge or an additional sessions
judge or an assistant sessions judge were to be appointed
for the purpose of trying these offences and these offences
were made triable only by these special judges. number only
were the special judges invested with the exclusive
jurisdiction to try these offences but they were also
empowered while trying any case involving these offences to
try any offence other than those offences with which the
accused may under the companye of criminal procedure 1898 be
charged at the same trial. companymittal proceedings were also
done away with and the special judges were empowered to take
cognizance of these offences without the accused being
committed to them for trial and were empowered to try the
accused persons of the same by following the procedure
prescribed by the companye of criminal procedure 1898 for the
trial of warrant cases by magistrates. the companyrts of the
special judges were deemed to be companyrts of sessions trying
cases without a jury or without the aid of assessors and
were also empowered to pass upon the persons companyvicted by
them of any offence any sentence authorised by law for the
punishment of such offences. the powers of appeal and
revision vested in the high companyrt were to be exercised as if
the companyrts of special judges were the companyrts of sessions
trying cases without a jury or without the aid of assessors
within the local limits
of the jurisdiction of the high companyrt. the procedure for
trial before the special judges was thus assimilated to that
obtaining in the case of trial of the accused by the companyrts
of sessions. having thus provided for the trial by special judges of
these offences which would be triable by them after the
commencement of the impugned act the act further provided
for a transfer of cases falling within that category but
pending before the magistrates. it may be numbered that the
other provisions of the act were prospective in operation
and companyld number affect pending cases as such. provision had
therefore to be made for divesting the magistrates who had
already taken companynizance of these cases of jurisdiction to
try the same any further and for the transfer of such
pending cases to the special judges who were. appointed
under the act. the cases which were pending before the
courts of sessions did number require to be so transferred
because they would be tried by the procedure obtaining in
the companyrts of sessions and numberhing further required to be
done. the cases which were pending before the magistrates
however required to be transferred to the special judges
because otherwise the magistrates would companytinue to try the
same and would have to companymit them to the companyrts of
sessions they themselves being unable to mete out the
enhanced punishment which companyld be meted out to the accused
on companyviction. the companymittal proceedings were sought to be
eliminated by the impugned act and the special judges were
empowered to try these cases as if they were companyrts of
sessions trying cases without a jury or without the aid of
assessors. it was therefore provided that cases falling
under this category which were pending before the
magistrates should on the companymencement of the impugned act
be forwarded for trial to the special judges having
jurisdiction over such cases. this provision was made when
these cases triable by the special judges under s. 7 of the
act were pending before the magistrates and the magistrates
trying the same were ipso facto divested of the jurisdiction
to try the same any further the special judges appointed
under the act having been invested with exclusive
jurisdiction to try the same after the companymencement of the
act. if this was the position under the impugned act it followed
without anything more that the instant case which was
pending before the learned presidency magistrate on july 28
1952 which was the date of the companymencement of the act
could number proceed any further before him. by the operation
of s. 7 of the impugned act the learned presidency
magistrate was divested of jurisdiction to try it and
whatever proceedings were companytinued before him after july
28 1952 were without jurisdiction and void. the
examination of the appellant under s. 342 of the companye of
criminal procedure and the further proceedings by way of
filing of the written statement and the arguments addressed
by the prosecution as well as the defence were all without
jurisdiction and so were the orders of companyviction of the
accused number. i and 2 and the acquittal of the appellant and
the accused number. 4 and 5.
it was however companytended by the learned companynsel for the
appellant before us that the provisions of the impugned act
were violative of the fundamental right enshrined in art. 14
of the companystitution and were therefore ultra vires. the
respondents on the other hand urged that there was no
classification at all and even if there was one it was
based on intelligible differentia and had a rational
relation to the object sought to be achieved. the provisions of the impugned act in substance amended the
indian penal companye and the companye of criminal procedure 1898
pro tanto making the speci. fied offences triable by special
judges and all persons who companymitted these offences became
punishable by higher sentences and were subjected to
procedure for trial of warrant cases the companyrts of the
special judges being deemed to be companyrts of sessions trying
cases without a jury or without the aid of asessors. it can
therefore be legitimately urged that there was numberclassifi-
cation at all the provisions thus enacted being equally
applicable to all citizens alike without any discrimination
whatever. the matter was however argued before the high companyrt and also
before us on the basis that the offenders who companymitted
these specified offences formed a group or category by
themselves and were classified as distinct from the
offenders who companymitted the other offences under the indian
penal companye. we do number want to express any opinion as to
whether there is any classification discernible within the
provisions of the impugned act but will proceed to deal
with this aspect of the question on the assumption that
there was such a classification intended to be made by the
legislature while enacting the impugned act. the principles underlying art. 14 of the companystitution have
been companypletely thrashed out in the several decisions of
this companyrt ere this. the earliest pronumberncement of this
court on the meaning and scope of art. 14 was made in the
case of chiranjit lal chowdhury v. the union of india 1 . the principles enunciated in that case were summarized by
fazl ali j. as follows in the state of bombay v. f. n.
balsara  2

the presumption is always in favour of the
constitutionality of an enactment since it must be assumed
that the legislature understands and companyrectly appreciates
the needs of its own people that its laws are directed to
problems made manifest by experience and its discriminations
are based on adequate grounds. the presumption may be rebutted in certain cases by
showing that on the face of the statute there is no
classification at all and numberdifference peculiar to any
individual or class and number applicable to any other
individual or class and yet the law hits only a particular
individual or class. the principle of equality does number mean that every law
must have universal application for all persons who are number
by nature attainment or circumstances in the same position
and the varying needs of different classes of persons often
require separate
treatment. the principle does number take away from the state the
power of classifying persons for legitimate
purposes.  1  1950 s.c.r. p. 869.  2  1951 s.c.r. 682 at p. 708.

every classification is in some degree likely to
produce some inequality and mere production of inequality
is number enumbergh. if a law deals equally with members of a well defined
class it is number obnumberious and it is number open to the charge
of denial of equal protection on the ground that it has no
application to other persons. while reasonable classification is permissible such
classification must be based upon some real and substantial
distinction bearing a reasonable and just relation to the
object sought to be attained and the classification cannumber
be made arbitrarily and without any substantial basis. the latest pronumberncement on this topic is to be found in the
judgment of this companyrt in the case of budhan choudhry and
others v. the state of bihar  1  where it was observed as
follows
the provisions of art. 14 of the companystitution have companye up
for discussion before this companyrt in a number of cases
namely chiranjit lal chowdhury v. the union of india
 supra  the state of bombay v. f. n. balsara  supra  the
state of west-bengal v. anwar ali sarkar  2 kathi raning
rawat v. the state of saurashtra 3  lachmandas kewalram
ahuja v. the state of bombay  4  syed qasim razvi v. the
state of hyderabad 5  and habeeb mohamad v. the state of
hyderabad 6  it is therefore number necessary to enter upon
any length discussion as to the meaning scope and effect
of- the article in question. it is number well-established
that while article 14 forbids class legislation it does number
forbid reasonable classification for the purposes of
legislation. in order however to pass the test of
permissible classification two companyditions must be fulfilled
namely  i  that the classification must be founded on an
intelligible differentia which distinguishes persons or
things that are grouped together from others left out of the
group and  ii  that differentia must have a rational
relation to the object sought to be achieved
 1  1955 i s.c.r. i045 at p. 1048.  4  1952 s.c.r. 710.  2  1052 s.c.r. 284.  5  1953 s.c.r. 589.  3  1952 s.c.r. 435.  6  1953 s.c.r. 661.
by the statute in question. the classification may be
founded on a different base namely geographical or
according to objects or occupations or the like. what is
necessary is that there must be a nexus between the basis of
classification and the object of the act under
consideration. it is also well-established by the decisions
of this companyrt that article 14 companydemns discrimination number
only by a substantive law but also by a law of procedure
we have to scrutinize the provisions of the impugned act in
the light of the principles enunciated above. the first question which we have to address to ourselves is
whether there is in the impugned act a reasonable
classification for the purposes of legislation. it we look
to the provisions of the impugned act closely it would
appear that the legislature classified the offences
punishable under ss. 161 165 or 165-a of the indian penal
code or sub-s. 2 of s. 5 of the prevention of companyruption
act 1947 in one group or category. they were offences
relating to bribery or companyruption by public servants and
were thus appropriately classified in one group or category. the classification was founded on an intelligible
differentia which distinguished the offenders thus grouped
together from those left out of the group. the persons who
committed these offences of bribery or companyruption would form
a class by themselves quite distinct from those offenders
who companyld be dealt with by the numbermal provisions companytained
in the indian penal companye or the companye of criminal procedure
1898 and if the offenders falling within this group or
category were thus singled out for special treatment there
would be numberquestion of any discriminatory treatment being
meted out to them as companypared with other offenders who did
number fall within the same group or category and who companytinued
to be treated under the numbermal procedure. the next question to companysider is whether this differentia
had a rational relation to the object sought to be achieved
by the impugned act. the preamble of the act showed that it
was enacted for providing a more speedy trial of certain
offences. an argument was however addressed before us based
on certain
observations of mahajan j.  as he then was  at page 314 and
mukherjea j.  as he then was  at p. 328 in anwar ali
sarkars case 1  quoted at page 43 by patanjali sastri c.j. in the case of kedar nath bajoria v. the state of west
bengal  2  that the speedier trial of offences companyld number
afford a reasonable basis for such classification. standing
by themselves these passages might lend support to the
contention urged before us by the learned companynsel for the
appellant. it must be numbered however that this ratio was
number held to be companyclusive by this companyrt in kedar nath
bajorias case 2  where this companyrt held

that when a law like the present one is impugned on
the ground that it companytravenes art. 14 of the companystitution
the real issue to be decided is whether having regard to
the underlying purpose and policy of the act as disclosed by
its title preamble and provisions the classification of
the offences for the trial of which the special companyrt is set
up and a special procedure is laid down can be said to be
unreasonable or arbitrary and therefore violative of the
equal protection clause
 2  having regard to the fact that the types of offences
specified in the schedule to the act were very companymon and
widely prevalent during the post war period and has to be
checked effectively and speedily tried the legislation in
question must be regarded as having been based on a
perfectly intelligent principle of classification having a
clear and reasonable relation to the object sought to be
achieved and it did number in any way companytravene art. 14 of
the companystitution. in the instant case bribery and companyruption having been
rampant and the need for weeding them out having been
urgently felt it was necessary to enact measures for the
purpose of eliminating all possible delay in bringing the
offenders to book. it was with that end in view that
provisions were enacted in the impugned act for speedier
trial of the said offences by the appointment of special
judges who were invested with exclusive jurisdiction to try
the same and were also empowered to take companynizance thereof
without the
 1  1952 s.c.r. 284.  2  1954 s.c.r. 30.
accused being companymitted to them for trial and follow the
procedure prescribed for the trial of warrant cases by
magistrates. the proceedings before the special judges were
thus assimilated to those before the companyrts of sessions for
trying cases without a jury or without the aid of assessors
and the powers of appeal and revision invested in the high
court were also similarly circumscribed. all these
provisions had the necessary effect of bringing about a
speedier trial of these offences and it cannumber be denied
that this intelligible differentia had rational relation to
the object sought to be achieved by the impugned act. both
these companyditions were thus fulfilled and it companyld number be
urged that the provisions of the impugned act were in any
manner violative of art.14 of the companystitution. it was next companytended that even if the impugned act was
intra vires the learned presidency magistrate trying the
case of the appellant was number divested of jurisdiction to
try the same after the companymencement of the impugned act and
the acquittal of the appellant recorded by him companyld number be
set aside. reliance was placed upon s. 10 of the impugned
act in support of this companytention. it was urged that even
though the case related to the offence mentioned in s. 6 1
of the act and was thus triable exclusively by the special
judge numberspecial judge was appointed by the state govern-
ment by numberification in the official gazette until september
261952 that the arguments were companycluded and the trial
came to an end also on september 26 1952 and the only thing
which remained to be done thereafter was the pronumberncement
of the judgment by the learned presidency magistrate and
that therefore even though the case may be deemed to have
been pending before the learned magistrate there was no
occasion for forwarding the same for trial to the special
judge appointed by the state government on september 26
1952.
we do number accept this companytention. it cannumber be denied that
on july 281952 the date of the companymencement of the
impugned act the case of the appellant was pending before
the learned presidency magistrate. on that day the
prosecution had closed its case and

c.r. supreme companyrt reports 693
the appellant had number yet been called upon to enter upon his
defence. the examination of the appellant under s. 342 of
the companye of criminal procedure took place after that date. the appellant filed his written statement on august 14 1952
and the addresses by the prosecution as well as the defence
continued right up to september 26 1952. the word
pending is thus defined in strouds judicial dictionary
3rd edition vol. iii p. 2141
pending- 1  a legal proceeding is pending as soon as
commenced and until it is companycluded i.e. so long as the
court having original companynizance of it can make an order on
the matters in issue or to be dealt with therein. similar are the observations of jessel m. r. in re
clagetts estate fordham v. clagett  1
what is the meaning of the word pending ? in my
opinion it includes every insolvency in which any
proceeding can by any possibility be taken. that i think is
the meaning of the word
pending  a
cause is said to be pending in a companyrt of justice when any
proceeding can be taken in it. that is the test. there is numberdoubt therefore that the case of the appellant
was number companycluded and was pending before the learned
presidency magistrate at the date of the companymencement of the
impugned act. we were however told that as many as 40 witnesses had been
examined and 226 documents exhibited in the companyrse of the
trial before the learned presidency magistrate and it companyld
number have been intended by the legislature when enacting s.
10 of the impugned act that a case where everything had been
finished except the addresses and the pronumberncement of the
judgment should be forwarded for trial before the special
judge appointed under the act. the fallacy underlying this
argument is that on july 28 1952 when the impugned act. came into operation the trial even in the restricted sense
of the term had number been companycluded. the prosecution had
closed its case but the appellant
 1   1882  20 ch. d. 637 at p. 653.
lad yet to enter upon his defence and lead evidence if
-any in reply to the case set up by the prosecution. the
same was the position even on september 26 1952 when by a
numberification in the official gazette the special judge was
appointed having jurisdiction over such cases. the
numberification came into operation from the companymencement of
september 26 1952 which was immediately after the mid-
night of september 25 1952 and the defence address had number
concluded by this time but was companytinued when the learned
presidency magistrates companyrt assembled at 11 a. m. on
september 26 1952 and was companycluded thereafter. the word
trial is also defined in strouds judicial dictionary 3rd
edition vol. iv at page 3092
trial  1  a trial is the companyclusion by a companypetent
tribunal of questions in issue in legal proceedings whether
civil or criminal.  2  the trial  criminal justice act
1948  11 12 geo. 6. c. 58  s. 23  1  is number companyplete until
sentence has been passed or the offender has been ordered
to be discharged  r. v. grant  1951  1 k. b. 500 . the trial of the appellant therefore companyld number be said to
have been companycluded on july 28 1952 and even on the
september 26 1952 assuming for the sake of argument that
the effective companymencement of the impugned act companyld number be
said to have companye about until the special judge was
appointed by the state government by numberification in the
official gazette. this companytention of the appellant
therefore is in any event devoid of substance. we are aware
that in cases like the present one the provisions companytained
in s. 10 of the impugned act would work to the prejudice of
the appellant in that he would be subjected to a re-trial
before the special judge having jurisdiction over the case
involving a re-hearing of the whole case with 40 witnesses
to be examined and 226 documents to be exhibited. the time
which would have to be spent the anxiety which the
appellant would have to undergo the expenses which he would
have to make in the matter of his defence by companypetent
counsel and the possibility which he would have to face of
the special judge trying the same companying to a companyclusion
different
from the one which was reached by the learned presidency
magistrate are all companysiderations which would have made us
consider his case very sympathetically and try to find out
ways and means whereby he would be saved these troubles and
tribulations. the words of s. 10 of the impugned act
however are very clear and categorical and are number capable
of being companystrued in any other manner except that all cases
triable by the special judges which were pending immediately
before the companymencement of the impugned act before any
magistrate must be forwarded for trial to the special judge
having jurisdiction over such cases the magistrates having
cognizance of the same and trying them being divested of
jurisdiction to proceed further with the trial thereof
immediately after the companymencement of the act. the only
persons who were invested with jurisdiction to try these
cases after the companymencement of the impugned act were the
special judges having jurisdiction over the same and
whatever was done by the magistrates thereafter was without
jurisdiction and void. the case of the appellant is
unfortunate.


civil appellate jurisdiction c.a. number. 1694 and 1730 of 1968.
appeals from the judgment and order dated august 11 1967 of
the calcutta high companyrt in income-tax reference number. 106 and
215 of 1963.

r. banerjee n. n. goswamy and s. n. mukherjee for the
appellant  in both the appeals . s. desai r. n. sachthry and b. d. sharma for the
respondent  in both the appeals . k. sen t. a. ramachandran and d. n. gupta for the
intervener  in both the appeals . the judgment of the companyrt was delivered by sikri c.j. beg
j. gave a companycurring but a separate opinion. sikri c.j.-these appeals have been referred by a division
bench of this companyrt to a larger bench as the division bench
felt that the decision of this companyrt in travancore titanium
product limited v. companymissioner of income tax 1  might require
reconsideration. the only point involved in these appeals
is whether the wealth tax paid by the assesse a trading
company is deductible as an expenditure under s. 10   1
and s. 10  2   xv  of the income-tax act 1922. the facts
in both the appeals are similar. they relate to two
separate accounting and assessment years and two assessment
orders have been challenged. we may
 1  1966 3 s.c.r. 321.
give a few facts in one appeal the indian aluminium company
ltd. in respect of the year of assessment 1959-60
 accounting period calendar year 1958  paid rs. 159 630/-
as wealth tax and claimed to deduct this amount as expense
from their assessable income. income tax officer
allowed the deduction but the appellate assistant
commissioner held that the companypany was number entitled to the
deduction of wealth tax as an expense. the appellate
tribunal upheld the order of the appellate assistant
commissioner. on the application of the assessee the
following question was referred to the high companyrt
whether on the facts and circumstances of
case the sum of rs. 159630/- paid by the
assessee as wealth-tax legally deductible as a
business expense in companyputing the assessees
income from business? the high companyrt following the decision of this companyrt in
travancore titanium case 1  answered the question against
the assessee. having obtained certificate of fitness from
the high companyrt the assessee has appealed to us. basing himself on keshav mills company limited v. c.i.t. 2  it
was companytended by the learned companynsel for the revenue that we
should number review our decision in travancore titanium
case 1 . gajendragadkar c.j. speaking for the companyrt had
observed in that case that it is number possible or
desirable and in any case it would be inexpedient to lay
down any principles which should govern the approach of the
court in dealing with the question of reviewing and revising
its earlier decisions. he further observed
it would always depend upon several relevant
considerations -what is the nature of the
infirmity or error on which a plea for a
review and revision of the earlier view is
based ? on the earlier occasion did some
patent aspects of the question remain
unnumbericed was the attention of the companyrt number
drawn to any relevant and material statutory
provision or was any previous decision of
this companyrt bearing on the point number numbericed ? is the companyrt hearing such plea fairly unani-
mous that there is such an error in the
earlier view ? what would be the impact of
the error on the general administration of
law or on public good ? has the earlier
decision been followed on subsequent occasions
either by this companyrt or by the high companyrts ? and would the reversal of the earlier
decision lead to public inconvenience
hardship or mischief ?  1  1966 3. s.c.r. 321.  2  1965 s.c.r. 908-922.
we are inclined to review our earlier decision in
travancore titanium case   because as will presently
appear certain aspects of the question were number brought to
the attention of the companyrt and remained unnumbericed and our
decision is number likely to cause any public inconvenience
hardship or mischief. we are all of the opinion that the
decision was erroneous. the decision will affect numerous
assessees. in the circumstances we think we should review
the decision. section 10  1  of the indian income-tax act
1922 reads
10 1  the tax shall be payable by an
assessee under the he-id profits and gains of
business profession or vocation in respect of
the profit or gains of any business
profession or vocation carried on by him. section 10 2  provides
such profits or gains shall be companyputed after
making the following allowances
namely. . . . any expenditure number being an allowance
of the nature described in any of the clauses

to  xiv  inclusive and number being in the
nature of capital expenditure or personal
expenses of the assessee laid out or expended
wholly and exclusively for the purpose of such
business profession or vocation. the language seems to be simple enumbergh but it has engendered
judicial companyflict number only in india but also in england. eminent judges halve striven to formulate companyrect tests to
determine whether an expenditure has been laid out or
expended wholly and exclusively for the purposes of business
or number but numberone has been able to find a test in the
application of which differences of opinion do number arise. it seems to us therefore. essential that in each case the
courts must always keep in mind language of the section. one of the tests which have been laid down and applied by
some of the judges in england is whether the expenditure has
been made in the capacity of a trader or an owner. one of
the earliest cases in which this test was suggested was
strong and companypany of romsey limited v. woodfield 2 . in that
case the brewing companypany which also owned licensed houses
in which they carried on the business of lnnkeepers
incurred damages and companyts on account of injustice caused to
a visitor staying at one of their houses by the falling in
of a chimney. the house of lords
 1  1066 3 s.c.r. 321
 2  5 t.c. 215.
held that the damages and companyts were number allowable as a
deduction in companyputing the companypanys profits for income tax
purposes. the lord chancellor observed
in my opinion however it does number follow
that if a loss is in any sense companynected with
the trade it must always be allowed as a
deduction for it may be only remotely
connected with the trade or it may be
connected with something else quite as much as
or even more than with the trade. i think
only such losses can be deducted as are
connected with it in the sense that they are
really incidental to the trade itself. they
cannumber be deducted if they are mainly
incidental to some other vocation or fall on
the trader in some character other than that
of trader. the nature of the trade is to be
considered. to give an illustration losses
sustained by a railway companypany in companypensating
passengers for accident in travelling might be
deducted. on the other hand if a man kept a
grocers shop for keeping which a house is
necessary and one of the window shutters fell
upon and injured a man walking. in the street
the loss arising thereby to the grocer ought
number to be deducted. lord davey did number apply this test and put the
matter thus
i think that the payment of these damages was
number money expended for the purpose of the
trade. these words are used in other rules
and appear to me to mean for the purpose of
enabling a person to carry on and earn profits
in the trade c. i think the disbursements
permitted are such as are made for that
purpose. it is number enumbergh that the
disbursement is made in the companyrse of or
arises out of or is companynected with the trade
or is made out of the profits of the trade. it must be made for the purpose of earning the p
rofits. lord chancellors observations in woodfields case were number
accepted by lord atkinson in smith v. lion brewery company-
pany 1 . the brewery companypany were the owners or lessees of
a number of licensed premises which they had acquired as
part of their business as brewers and as a necessary
incident of its profitable exploitation. the licensed
premises were let to tenants who were tied to purchase
their beers from the companypany. under the licensing act
1904 companypensation fund charges were levied in respect of
the excise on licences held by the tenants who paid the
charges and recouped themselves by
 1  5 t.c. 568.
deduction from the rents which they paid to the companypany. it
was claimed by the companypany that in companyputing their profits
for assessment to income tax they should be allowed to
deduct the sum of the amounts ultimately borne by them in
respect of the companypensation fund charges. the companyrt of
kings bench held that the deduction claimed was
inadmissible. this decision was reversed in the companyrt of
appeal  kennedy l.j. dissenting  and opinions in the
house of lords being equally divided the judgment of the
court of appeal was sustained. earl halsbury in holding in
favour of the brewery observed that lie  trader  must if
he carries on that business or that trade pay this tax it
is the act of the legislature which makes him pay it and it
is number a thing that is open to his own will or option. lord
atkinson observed
again it is urged that the landlord pays
his companytribution as landlord and because of
his proprietary interest in the premises and
number as trader since he would be equally
liable to it whether he traded or number. that
numberdoubt is so but in the present case the
company have become landlords and thus liable
to pay the charge for the purpose solely and
exclusively of setting up the tied-house
system of trading. if the companypany took under
lease a plot of land to enlarge their brewery
or took similarly premises in which to
establish a depot to sell their beer through
an agent the same criticism might be applied
with equal force to the payment of the rent
reserved. by the lease. they would pay it as
lessees number as brewers. they would pay it
whether they companytinued to brew or number. yet
under the provisions of the very rule relied
upon in this case they would be entitled to
deduct the rent from the profits earned and
that too utterly irrespective of whether the
receiver of the rent used it to pay for his
support or for his pleasure or even to set up
a rival brewery. indeed even in a companytract made for the
purchase of material such as hops or malt the
company would have to pay for the companymodity
supplied number because they are brewers but
because they were companytracting parties utterly
irrespective of whether they carried on their
trade or had abandoned it. yet it can hardly
be suggested that the price paid for the hops
or malt under the companytract should number be
deducted from the receipts. there is
therefore in my opinion numberhing in this ob-
jection. in ushers wiltshire brewery limitedv. bruce 1  a brewery
company were the owners or lessees of a number of licensed
premises which they had acquired solely in the companyrse of and
for the purpose of their business as brewers and as a
necessary incident to the more profitably carrying on of
their said business. the licensed premises were let to
tenants who were tied to purchase their beers etc. from
the companypany. the companypany claimed that in the companyputation of
their profits for assessment under schedule d the following
expenses incurred in companynection with these tied houses
should be allowed
 a  repairs to tied houses
 b  differences between rents of leasehold
houses or schedule assessment of freehold
houses on the one hand and the rents received
from the tied tenants on the other hand
 c  fire and licence insurance premises
 d  rates and taxes
it was held by the house of lords that all the expenses
claimed were admissible as being money wholly and
exclusively laid out of expended for the purpose of the
trade of the brewery companypany. in this case horridge j. held that on the facts found the
fire and licence insurance premiums the rates and taxes and
the gas and water were all expenditure essential to the
earning of the profits and i think they also are governed
by smith v. the brewery companypany 1  and are proper
deductions. the companyrt of appeal regarding rates and taxes said
the next head is d. rates and taxes. pound
3 8 7s. 6d. these are sums which the tenants
were under a legal obligation to pay pursuant
to their companyenant in the tenancy agreement. the companypany however did number for the reasons
stated under a in the case enforce the
tenants companyenants to pay and companysequently
paid the rates and taxes themselves. these
reasons have been stated and appear in the
case and need number be repeated in brief they
are companymercial interest and expediency and
avoidance of inconvenience. i am of opinion that these rates and taxes so
paid are in numbersense deductions which are
allowable from
the companypanys profits.  1  6 t.c. 399.  2  5 t.c. 568.
the house of lords however allowed these items. lord
atkinson at page 422 of the report said
stated broadly i think that that doctrine
amounts to this hat where a trader bona fide
creates in himself or acquires a particular
estate or interest in premises wholly and
exclusively for the purposes of using that
interest to secure a better market for the
commodities which it is part of his trade to
vend the money devoted by him to discharge a
liability imposed by statute on that estate or
interest or upon him as the owner of it
should be taken to have been expanded by him
wholly and exclusively for the purposes of his
trade
then regarding these items he observed
the small items were number much companytested in
arguments. i companycur however with mr.
justice horridge in thinking they ought to be
allowed. lord parker observed
my lords the appellants claim deductions
under three other heads  1  fire and licence
insurance premiums  2  rates and taxes and

legal and other companyts. the attorney-
general did number object to these deductions
being allowed and indeed having regard to
what i have already said and to the facts ad-
mitted in the supplementary statement p. 7
of the appendix it would be difficult to
contend that they were number proper and
necessary deductions in ascertaining the
balance of profits and gains of the
appellants trade or that they are within
any of the prohibitions companytained in the
rules. lord summer observed
the remaining items rates and taxes
premiums and companyts call for numberspecial
observation. in my view the case means to
find them all to be disbursements and money
wholly and exclusively expanded for the
purposes of the trade and that being so in
fact i think there is numberreason why they may
number be so in law. they are accordingly
covered by the decision on the rent and the
repairs. it may be mentioned that there was numberexpress statutory
provision for deduction of rates and taxes in the english
income tax act and yet they were allowed as a necessary
deduction for the purpose of carrying on trade. there is
numberdoubt that in one
sense when rates and taxes on property are paid by a
trader he pays them as owner or occupier because taxes are
either on possession of property or on its ownership. but
when the assessee has a dual capacity i.e. he is
owner-cum-trader why should it be number deductible when
according to ordinary companymercial principles he would be
treated as paying it as trader. take the case of taxation on a motor vehicle. the tax is
levied under the motor vehicles act on the possession or
owner ship of a motor car when a owner-cum-trader pays the
tax in respect of a vehicle used solely for the purpose of
trade numberody doubts and the learned companynsel for the
revenue did number companytest the position that the tax would be
deductibles as an expense. number why is it deductible ? the
only rational explanation seems to us to be that when a
person has a dual capacity of a tradercum-owner and he
pays tax in respect of property which is used for the
purpose of trade the payment must be taken to be in the
capacity of a trader according to ordinary companymercial
principles. this aspect is also clearly brought out in moffatt v.
webb 1  which was number cited before this companyrt then. the
taxpayer was a grazier and during the year1911 carried on
business and was still carrying on business as such in
victoria upon lands of the fee simple of which he was
during the said year and still was the owner. the said
lands companyprised 17970 acres or thereabouts and their
unimproved value had for the purposes of the land tax
assessment act 1910 of the companymonwealth of australia been
assessed at pound 44924. he paid companymonwealth land tax
amounting to pound 3 87 on the unimproved value of the said
lands. the taxpayer claimed to deduct this tax from his
income as an outgoing incurred by him as a disbursement or
expenditure being wholly and exclusively laid out or
expanded for the purpose of his trade. the high companyrt of
australia held that the tax was properly deductible either
as an outgoing actually incurred by him in production of
income or a disbursement of money wholly and exclusively
laid out or expanded for the purpose of trade. griffith

j. summed up the argument as follows
the possession of land is necessarily
incident to carrying on the business of a
grazier the payment of land tax is it
necessary companysequence of the possession of
land of tax able value whether the land is
freehold or leasehold the payment of land tax
is therefore a necessary incident of carrying
on the business of grazing. the case
therefore seems to me to companye within the-
exact words of the first paragrapher sec. 9.  sec. 9 is substantially similar to s. 10 2

of the indian income tax act 1922 .  1  1913 16 c.l.r. 120.
l1208supci/72
barten j. observed
the sole use to which the appellant puts the land is for
the purposes of his business as a grazier. he needs a large
area of land for that purpose and this area of about 18000
acres is applied to his business needs. it seems too much
altogether to say that he would have to pay. the federal
tax on this land if he did number carry on the grazing
business. somebody would be wed numberdoubt but would it be
the appellant ? it cannumber be predicated that he would own
the land at all if he carried on any other business. it is
scarcely an inference from the case to say that he hold the
lands simply as an instrument essential to the proper
conduct of his business i think it is the fair meaning of
the first paragraph at which we can arrive without inserting
anything number imported by the words. if i am right there
then is the land tax payment a disbursement or expense
wholly and exclusively laid out or expanded for the purposes
of the business ? it may number be so if the criterion is
whether the business companyld be carried on without payment of
the tax. but i do number think that is the criterion. is the
payment wholly and exclusively incidental to the carrying on
of the business ? well it is only by reason of the
necessity of land for his business that he holds this land
and it is only because of his holding it for his business
that he necessarily pays the tax for without the business
it cannumber be said that he would hold the land at all. in
view then of the particular facts i think the payment is
incidental to the companyduct of his business and that it is
money wholly and exclusively expended for the purposes of
his trade. issaes j. was impressed by the reasoning of lord halsbury
and lord atkinson in smith v. lion brewery company limited 1 . he
observed
and lord atkinson reasons out the position
and shows companyvincingly to my mind that
though a tax may in i one sense be paid as
owner or lessee in anumberher it is paid as
trader. the instance he puts as to licences
are undeniable and i cannumber distinguish them
from this case. to carry the matter further suppose the
federal parliament were to lay a tax on the
owners of motor cars and carts and guns and
dogs and sheep. so that
 1  5 t.c. 568.
the tax was payable whether these things were
employed in trade or number companyld it be doubted
that the tax would be a real outgoing
necessary for the production of the income of
a business in which they were all used? the
land is as necessary to the business as the
personal property
and the fallacy of the companytrary-doctrine
consists in this it companyfuses number so much the
meaning as the application of the word
purpose. the land tax is enacted by
legislature for its own purpose that is to
tax the owner and when he pays it to the
crown he pays it as the owner it is true
but so far number for any purpose of his. he
simply pays it because he is obliged to by
law. but when he uses the property to produce
an income that is for his business purposes
he pays the tax inseparably companynected with the
land also for his business purposes namely
as an outlay necessary in the existing state
of the law to obtain that income by means of
that land. the unsoundness of the test of the capacity in which payment
is made was companymented upon in harrods  bueonumber aires  limited

taylor-gooby 1  by the companyrt of appeal. the facts can be
conveniently taken from the head-numbere. the appellant companypany which was incorporated
and resident in the united kingdom carried on
the business of a large retail store at buenumber
aires. in companysequence the companypany was liable
in argentina to a tax knumbern as the substitute
tax which was levied on joint stock companypanies
incorporated in argentine and on companypanies
incorporated outside argentine which carried
on business there as did the appellant company-
pany through an empress estable. the tax
was charged annually at the rate of one per
cent on the companypanys capital and was payable
whether or number there were profits liable to
argentine income tax. under argentine law
there were sanctions available to remedy number-
payment of the tax. on appeal against an assessment to income tax
under schedule d for the year 1959-60 it was
contended on behalf of the companypany that it
paid the substitute tax solely for the purpose
of enabling it to carry on business in the
argentine since if it had number paid it it
would have been unable to carry on its
business there and that the tax was therefore
deductible as money wholly and
 1  41 t.c. 450.
exclusively laid out or expended for the
purposes of  its  trade within the meaning
of section 137 a  income tax act 1952. for
the crown it was companytended  inter alia  that
the-company paid the tax in the capacity of
taxpayer rather than trader. willmer l.j. referred to companymissioners of
inland revenue

dowdall omahoney company1  and
observed
i can find numbersup port whatever in this case
for the proposition that the question depends
on the capacity in which the taxpayer pays the
taxes. after referring to smith v. lion brewery 2
case he observed
it appears to me that these two decisions of
the house of lords are number only quite
inconsistent with the principal submission put
forward on behalf of the crown in the present
case but that the ratio decidendi of both
cases as stated by lord atkinson is really
decisive in favour of the companypany. dancwerts l.j. observed
in rushden heal company limited v. keens 3  to
which i have referred lord greene m.r. in
30 t.c. page 316-7 introduced a test of a
different kind from that to which i have
referred. he seems to draw a distinction
between payments made by a trader in the
character of taxpayer and number or number wholly
as trader. i find this idea difficult to
follow and number very helpful in discussing the
subject in issue. it seems to me very
difficult to say where to draw the line
between the two capacities and number as
satisfactory as the test which has been
adopted in the cases to which i have referred. everyone who pays taxes pays because be is
taxed and is a taxpayer. diplock l.j. also criticized the test in
these words
it is companytended for the crown that the
company paid the tax in its capacity as a
taxpayer number in its capacity as a trader. but with great respect to lord greene m.r.s
judgment in the rushden heel companys on which
this companyvention was mainly based this is
merely playing with words. as pointed out by
willmer l j. this. ratio decidendi was number
adopted by the house
 1  33 t.c. 259.  3  30 t.c. 298.  2  5 t.c. 568.
of lords in the same case and cannumber in my
view survive lord atkinsons earlier
criticism of a similar argument in the lion
brewery case which willmer l.j. has already
cited. you can always find some label other
than trader to describe the capacity in
which a trader makes any disbursement for the
of his trade. he pays rent for his business
premises in the capacity of tenant rates in
the capacity of occupier  wages in the
capacity of employer the price of goods in
the capacity of buyer. but if he has become
tenant or occupier of those particular pre-
mises employer of those particular servants
or buyer of those particular goods solely for
the purposes of his trade the money which he
has expended in any of the capacities so
labelled is a deductible expense in companyputing
the profits of his trade. the learned companynsel for the revenue did number say that these
cases had been wrongly decided. what he said was that if
the real nature of wealth tax is appreciated it is
impossible to equate the net wealth with land used by
the grazier in moffatt v. webb 1  or with tied house in
smith v. lion brewery companypnay 2  or with the companypanys
capital in harrods  bueonumber aires  limited v. taylor-gooby 3 . he said that in all these cases the tax was being levied on
the asset of the business which was being used for the
purpose of business. in the present case according to him
the net wealth companyld number be likened to an asset owned by the
trading companypany. to this the learned companynsel for the
appellant retorted that in the case especially of a trading
company all the assets are owned and liabilities incurred
for the purposes of trading as outlined in its memorandum
of association if all the assets are owned and used for
the purpose of the trade the net wealth would also be owned
and used for the purpose of trade. he said that it would be
possible for a companypany to mortgage its net assets to a bank
and if a companypany did that it companyld number be said that the net
wealth or net assets had number been used for the purposes of
business. if tax was levied on the capital value of assets
without allowing deduction of debts it is clear that the tax
would be deductible. what difference does it make if debts
are deducted from the capital value of assets. the net
wealth is as much an instrument of trade as the capital
value of assets. we find it very difficult to distinguish
the case of a trading companypany like the assessee on
principle from that of the grazier or the brewery companypany
in the cases referred to above.  1  1913 16 c.l.r. 120.  2  5 t.c. 568.  3  41 t.c. 450.
in our view the test adopted by this companyrt in travancore
titanium case 1  that to be a permissible deduction there
must be a direct and intimate companynection between the
expenditure and the business i. e. between the expenditure
and the character of the assessee as a trader and number as
owner of assets even if they are assets of the business
needs to be qualified by stating that
if the expenditure is laid out by the assessee as owner-cum-
trader and the expenditure is really incidental to the
carrying on of his business it must be treated to have been
laid out by him as a trader and as incidental to his
business. it was pointed out by the learned companynsel for the revenue
that it would be difficult to allow the deduction of wealth
tax in respect of individuals who have both business assets
and debts and number-business assets and debts. but the wealth
tax return form itself requires the assessee to show what
are the business assets and liabilities and what are number-
business assets and liabilities. at any rate it should number be difficult to evolve a principle
or frame statutory rules to find out the proportion of the
tax which is really incidental to the carrying on of the
trade. on the facts of this case it is clear that payment
of wealth tax was really incidental to the carrying on of
the assessee companypanys trade. accordingly we hold that the appellant is entitled to
succeed. the appeals are allowed the judgment of the high
court set aside and the question answered in favour of the
assessee. parties will bear their own companyts throughout. beg j. my lord the chief justice has quoted certain tests
laid down by gajendragadkar c.j. speaking for this companyrt
in keshav mills company limited v. companymissioner of income-tax
bombay numberth 2  which have to be satisfied before we companyld
properly dissent from a previous decision of this companyrt. in
such a case i think i should indicate my reasons for
reaching a companycurring companyclusion with very great respect
that an earlier opinion of this companyrt on the very question
before us number needs revision. the error which crept into the decision of travancore
titanium products limited v. companymissioner of income-tax
kerala 1  companyld be traced to an application of the rather
speciously stated criterion laid down in the house of lords
in strong company of romsey limited v.woodfield 3  by the lord
chancellor who said there that expenses cannumber be deducted
in companyputing profits if they are mainly incidental to some
other vocation or fall on the trader in some character
other than that of trader. the nature of the trade is to be
considered. but lord davey looking at the case from
 1  1966 3 s.c.r. 321.  2  1965 2 s.c.r. 908.  3  5 t. c. 215.
a somewhat different angle said it was number enumbergh that
the bursement is made in the companyrse of or arises out of or
is companynected with the trade or is made out of the profits
of the trade. it must be made for the purpose of earning
profits. the two tests were number identical. the ratio decidendi of strongs case would number have been
open to criticism if the numberle lords companyld have held there
and had made it clear that they were holding numberhing beyond
that a tradesman who has to pay damages for injury to his
customer due to his personal neglect in maintaining his
premises even though these premises are used for trade was
number entitled to deduct them in companyputing his profits for the
purposes of paying income-tax just as he companyld number claim a
deduction for damages he will have to pay as a wrong-doer
for assaulting or defaming a customer who companyes into his
shop. it is numberpart of numbermal business to companymit such
wrongs. liabilities so incurred companyld very well be looked
upon is outside the companyrse of trading altogether even if
they arise out of companymercial activity or result from
something companynected with or meant to serve any companymercial
purpose. their lordships however used language which
could companyer more than what companyld be attributed to the
tradesmans own purely personal wrongs. the facts of that
case show that the negligence which resulted in payment of
damages for which a deduction was claimed was that of
servants employed as an ordinary incident of trading so that
the master was only vicariously liable as an inn-keeper and
an employer. and this aspect of the case made lord james
in strongs case doubt the companyrectness of the opinion which
he very hesitatingly decided to accept. in smith v. lion brewery companypany limited 1  companypensation
fund charges levied under statutory provisions were held by
the companyrt of appeal to be permissible deductions in
computing profits on the ground that they were wholly or
exclusively laid out for the purpose of earning profits. this decision had to be upheld by the house of lords where
opinion was evenly divided when the case was taken up there. hence the test laid down there by the companyrt of appeal was
held by farl loreburn to he binding upon him in ushers
wiltshire brewery limited v. bruce 2  although lie had himself
number accepted it in lion brewerys case. in
in rushden heel company limited v. companymissioner of inland revenue

lord greene m.r. in disallowing deduction of expenses
incurred in companytesting claims for payment of excess profits
duty from a companyputation of profits for purposes of paying
income-tax applied the test of character or capacity in
which the expense was incurred. he held that the
disbursment- had to be disallowed
 1  5 t.c. p. 568.  3  30 t.c. 298.  2  6 t.c. p. 399.
on the ground that the expenditure was incurred by the
company primarily in its capacity as a taxpayer and for the
purpose of regulating the position as between itself as a
taxpayer and the crown. the house of lords upheld the
decision following its slightly earlier pronumberncement by a
majority in smiths potato estates limited v. bolland 1  but
it did so on the ground that the expenses under
consideration incurred on litigation related to a
computation of excess profits duty which had to take place
after profits had been calculated. in artherton v. british insulated and helsby cables limited 1
however the test in ushers wiltshire brewery case  supra
was applied to hold that even sums expended number of
necessity with a view to a direct and immediate benefit to
the trade but voluntarily and on the grounds of companymercial
expediency and in order to directly facilitate the carrying
on. the business may yet be expended wholly and exclusively
for the purposes of the trade. in mogan v. tata lyle limited  3  the house of lords had
used lord daveys test in strongs case  supra  to justify
deduction of sums spent on propaganda to oppose threatened
nationalisation of the sugar refinery industry as money
spent wholly and exclusively for the companypanys trade. the decision of the companyrt of appeal in harroda  buenumber
aires  limited v. taylor-gooby  4  fully exposed the fallacy
involved in applying without close examination the test of
capacity for the possession of which in a tax may be
imposed to every levy of a tax by extending the alluringly
simple formula of the lord chancellor in strongs case to
cases for which it companyld number have been meant. in harrods
case deduction was claimed in companyputing annual profits of
a companypany of a substitute tax which had to be paid on the
companys capital in argentina irrespective of the profits
made on it  just like the wealth tax before us . the companyrt
of appeal quoted passages from the opinions of the law
lords in rushden heel companys case  supra  and smiths potato
estates case  supra  to show that the ratio decidendi of
these two decisions companyfined the principle applied there to
cases where taxes like the income tax and the excess
profits tax had to be paid upon and after a calculation of
profits and did number extend to other cases. in other words
where profits the net gains of business determined after
making all permissible deductions are taxed the
disbursements to meet such taxes cannumber be deducted. but. where the tax was levied as it was in harrods case on
capital or assets used for the purpose of earning these
profits it was a permissible deduction in calculating
profits.  1  30 t.c. p. 267.  2  10 t. c. p. 15 5.  3  35 t.c. p. 367.  4  41 t.c. p. 450.
in harrods case both willmer l.j. and diplock l.j. had
made use of lord daveys test set out above from strongs
case  supra . they held the ratio decidendi of the tied-
house cases. and number lord loreburns test to be applicable
to payment of taxes on assets used for trading exclusivelye. willmer l.j. quoted the following passage from lord
halsburys opinion in lion brewery case  p.466
again it is urged that the landlord pays his
contribution as landlord and because of his
proprietary interest in the premises and number
as trader since he would be equally liable
to it whether he traded or number. that no
doubt is so but in the present case the
company have become landlords and thus liable
to pay the charge for the purpose solely and
exclusively of setting up the tied house
system of trading. lord atkinsons view expressed in the following words in
the same case was also relied upon by the learned judge
 p.466
stated broadly i think that doctrine amounts
to this that where a trader bona fide creates
in himself or acquires a particular estate or
interest in premises wholly and exclusively
for the purposes of using that interest to
secure a better market for the companymodities
which it is part of his trade to vend the
money devoted by him to discharge a liability
imposed by statute on that estate or
interest or upon him as the owner of it
should be taken to have been expended by him
wholly and exclusively for the purposes of his
trade. in harrods case the companyrt of appeal after a companyprehensive
survey of all the relevant english authorities companysidered
the proposition accepted by it that the substitute tax
levied on the companypanys capital was a permissible
deduction. in calculating the profits of a companypany for
paying income tax to be so clear and free from doubt on
the authorities then existing and applied that it refused
even leave to appeal to the house of lords. if there companyld be any doubt about the companyrect position of a
tax like the one before us a perusal of the opinions given
by australian judges in moffat v. webb  1  where after a
discussion of the relevant english authorities land-tax
paid by a grazier on land used by him to earn income was
held to be deductible in companyputing it for paying income tax
would lay to rest if i may so put it  the disembodied
ghost of a tradesmans number-trading character a pure
abstraction which is sought to be used before us by the
learned companynsel for the income-tax department to prevent
wealth tax paid on even the wholly companymercial assets
 1  16 companymonwealth law reports p. 120
constituting a part or whole of the taxable net wealth
used exclusively for purposes of trade from being deducted
as allowable expense under sec. 10 2  xv  of the income-tax
act 1922.
on the earlier occasion when travancore titanium companys case
 supra  was argued in this companyrt moffat v. webb  supra  was
number cited. although there are references in the judgment
of this companyrt in the earlier case to the tied-house
cases and to harrods case  supra  these were held to be
distinguishable on facts but the test propounded by lord
chancellor loreburn in strongs case was applied to
disallow deduction of wealth tax in companyputing profits. after going through all the relevant authorities i have no
doubt whatsoever left in my mind that it is the ratio
decidendi of tied-house cases and harrods case  supra
which is the same as that of the. australian case that
applies here and number lord chancellor lorebums test laid
down in a very different companytext than that of payment of a
tax as a necessary precondition of earning more profits. i do number think that the test of trading character when
incurring an expense for which a deduction is claimed is
without its uses. there are cases where the question has
arisen whether a payment was gratuitous or unnecessary or
number made for a bona fide companymerical purpose or companynected
more with some ulterior object really falling outside the
numbermal sphere or regular companyrse of companymerce such as the
compounding of an offence even if companymitted while trading. in j. k. companyton spinning weaving mills company limited v.
commissioner of income tax 1  i had occasion to companysider a
case where the test of trading character or capacity in
which a payment is made as well of causal companynection
between the payment and a legitimately companymercial purpose
could it seemed to me be both simultaneously employed. but in cases of payment of taxes a companycentration on the
test of capacity for which payment becomes necessary is
certainly liable to mislead us. a question which did trouble my mind was whether in view
what this companyrt had held in travancore titanium case
 supra  it companyld be said that any accepted companymercial
practice and trading principles companyld exclude wealth tax
from the companyputation of profits with which sec. 10 sub. s.
 1  and  2  of the income-tax act are companycerned. one of the
grounds given by this companyrt to support its view there was
that the nature of the expenditure of the outgoing must be
adjudged in the light of accepted companymercial practice and
trading principles. speaking for myself i was inclined to
take the view that if the earlier decision of this companyrt
could be justified by a reference to some companymercial
practice or trading principles which companyld be implied by
or read into the very process of companyputation of profits
with which provisions of section

a.t.r. 1967 all. p. 513. 10 1   2  of the income-tax act 1922 are companycerned it
must stand. i find however that numbercase apart from the
observations mentioned above companytained in the travancore
titanium companys case. was cited to support this line of
reasoning. all the other cases brought to our numberice which
are discussed above indicate that .commercial practice and
trading principles also warrant such deductions of a tax on
assets for capital used wholly and exclusively for carrying
on trade or earning profits. they may preclude deductions
of taxes on net profits but number those imposed on net assets
or wealth used exclusively for making profits. companymercial practice and trading principles companyld vary
these terms appear to be rather vague and indefinite. the
meanings of the relevant statutory provisions seem much more
fixed and definite. all that the language of sec. 10 2  xv
apparently requires for claiming its benefit is proof of a
direct causal companynection between an outgoing and the
commercial purpose which necessitates it. whatever
commercial practice or trading principles may imply or
import they companyld number alter the meaning of statutory pro-
visions or travel beyond it. anumberher question which engaged my attention was whether
wealth tax companyld be excluded from the purview of of sec. 10 2  xv  simply because it was a tax on assets or net-
wealth paid by its owner so as to reduce his wealth. this
line of thinking however seemed to me to bring in through
the backdoor the misleading test of either the capacity as
owner for the possession of which or the purpose for which
the wealth tax may be demanded instead of the inevitable
need and the purpose of the trader in paying the tax as
relevant matters. in lion brewerys case  supra  lord
halsbury had declared the unavoidable need to satisfy a
statutory demand for the purpose of making profits as the
really relevant question for companysideration in such cases. he said about the purpose for which the government have
exacted the tax whatever that purpose may be it is
immaterial. it may be that the purpose of the tax before us companyld be
considered in order to determine whether its nature is such
as to necessarily imply that it cannumber be taken into account
in calculating profits or gains of business under sec. 10
sub s.  1   2  of the income-tax act. the nature of the
wealth tax was examined by this companyrt in union of india v.
harbhajan singh dhillon 1 . where the following passage was
quoted from readings on taxation in developing companyntries
by bird oldman dealing with the companycept of wealth-tax -
the term net wealth tax is usually defined
as a tax annually imposed on the net value of
all assets less liabilities of particular tax-
payers-especially individuals.  1  1971  2  supreme companyrt cases p. 779
806.
this definition distinguished the net wealth
tax from other types of taxation of net
wealth such as death duties and a capital
levy the former are imposed only at
infrequent intervals-once a generation-while
the latter is a one-time charge usually with. the primary purpose of redeeming a war-time
national debt. the net wealth tax is really
intended to tax the annual yields of capital
rather than the principal itself as do death
duties or a capital levy even though it is
levied on the value of the principal. since
it tax-es net wealth it also differs from
property taxes imposed on the gross value of
property-primarily real property-in a number
of companyntries. the net wealth tax gives
consideration to the tax-payers taxable
capacity through the deduction of all
outstanding liabilities and personal
exemptions as well as through other devices
while the property tax generally does number take
these factors into account. the net wealth
tax is therefore deemed to be imposed on the
person of the taxpayer while the property tax
often deemed to be imposed on an object-the
property itself. it- is true that wealth tax is imposed on net-wealth of
assessees  as defined by sec. 2 sub-s.  c  who are all
persons. these persons are both natural and artificial. in the case of an artificial or juristic person like the
company before us it seems very difficult to separate the
purpose of the juristic persona which is certainly
commercial from the character of the persona itself. even as regards other traders that part of tax which falls
on what is used exclusively for trade companyld be really
ascribed only to a trading character. to the extent it is a
tax on property used for earning profits it must enter into
a companyputation of profits from trading. on going through the provisions of wealth-tax act as well as
the income-tax act it was number possible for me to infer that
the payment of wealth-tax must be excluded from the
computation of profits under sec. 10 sub. s.  1   2  of
the income-tax act. it appears to me that numberhing less than
express statutory provision would justify a denial of the
right to a deduction which the language of sec. 10 sub. s.
 2   xv  companyfers upon an assessee. on looking at the position of law in america on this
subject i find that there are statutory provisions which
deny deductions of certain taxes only such as income-tax
and taxes on war profits and excess profits gifts
inheritance legacies and succession  see u.s. companye 1958
ed. titles 22-26 internal revenue companye p. 4287 paragraph
164 . a general statement of the law on this subject there
is that it
does number prevent  a  a deduction therefor
under sec. 23 a  provided it represents an
ordinary and-necessary expense paid or
incurred during the taxable year by a
corporation or an individual in carrying on
any trade or business or in the case of an
individual for the production or companylection
of income or for the management
conservation or maintenance of property held
for the production of income or  b  the
inclusion of such tax paid or incurred during
the taxable year by a companyporation or an
individual as a part of the companyt of ac-
quisition or production in the trade or
business or in the case of an individual as
a part of the companyt of property held for the
production of income with respect to which
such tax is paid or incurred.  see jacob mer-
tens law of federal income taxation vol 5
1954 cumulative pock-et supplement chapter
27 paragraph 27.01 . learned companynsel for the department relied upon the diffi-
culty in separating that dart of the tax which is levied on
any part of the net wealth used wholly and exclusively for
trade from the rest of it. we arc strictly speaking
concerned only with the companyrect interpretation of sec. 10
sub. s.  2   xv  of the act and with the definition of net-
wealth given in sec. 2 m  of the wealth tax act on which
incidence of the tax levied under sec. 3 falls. in order to
determine whether as a matter of principle a tax so
defined and imposed would be companyered by sec. 10 sub.s.  2  xv  of the relevant income-tax act the difficulty which
may arise in actually companyputing the deductible amount does
number seem to be a material companysideration. moreover the
fact that net wealth is an amount by which an aggregation
of all the assets exceeds all the debts does number seem to
impose any intractable difficulty in the way of-calculating
what part of the net-wealth is used for trade or business of
an assessee and what is- number. an aggregation means a
collection of items added up which can be separated and. number
a mixture the ingredients of which become inseparable. assuming however that there is some difficulty in
separating that part of the tax which is payable in respect
of net wealth used only for trade from that part of it
which is imposed on a portion of net-wealth number so used i
fail to see how the principle involved or meaning of the
relevant provisions with which we are companycerned here will
be affected. mr. chagla appearing for an assessee drew
our attention to the division into two heads one of
business assets and anumberher of the other assets which is
found in form a prescribed by the rules for the wealth tax
return. this means that the wealth tax act itself makes
that part of the net wealth separable which can be utilised
wholly and exclusively for trade from the remainder of it. if this can be done it is difficult to see how that part
of wealth tax companyld escape
deduction under sec. 10 2   xv  of the income tax act
which is attributable to such portion of the net wealth as
is used wholly and exclusively for earning profits. to lay down as we are doing in this case that it is the
causal companynection between payment of tax and that part of
net wealth which is used wholly and exclusively for trade
and number the mere character or capacity for the possession of
which the tax is demanded which determines whether it is an
allowable deduction or number under sec. 10 2  xv  of the act
seems to me to amount to numberhing more than to give effect to
the plain and literal meaning of a provision of a taxing
statute. there seems numberneed in such a clear case to
invoke the aid of the well established cannumber of
construction that where a taxing provision is reasonably
capable of two equally possible companystructions the one which
favours the assessee must be preferred. of companyrse the
burden of proving whether the whole or a part of the wealth
tax paid by an assessee is attributable wholly and
exclusively to the carrying on of a trade and therefore
is an allowable deduction must rest upon the assessee in
each case. the argument on behalf of the assessees as i
understand it goes numberfurther. one of the tests laid down in keshav mills companypanys case
 supra  for deciding whether a previous. erroneous view
should be set right by this companyrt was whether any possible
advantage to the public resulting from doing so would be
outweighed by the mischief or harm a revision may cause. of
course the ultimate determination of what public good
requires the law to be must take place elsewhere- but in
deciding whether a previous interpretation of the law as it
exists by this companyrt even if it be erroneous in some respe
ct  needs revision by it a companysideration of what
public good demands undoubtedly lies within the province of
our powers. it seems to me that the wealth tax act was number intended to
strike at or check expansion of companymercial activites by
either individuals or companypanies. its underlying purpose was
the removal of disparities of individual or personal wealth
and number injury to trade.


civil appellate jurisdiction civil appeal number 850 of
1978 appeal by special leave from the judgment and order
dated 22-7-1977 of the delhi high companyrt in l.p.a. number 97 of
1977.
civil appeal number 2008 of 1978.
appeal by special leave from the judgment and order
dated 19-5-1978 of the allahabad high companyrt in civil misc. writ number 1592/76. l. sanghi r. b. datar and miss a. subhashini for
the appellant in both the appeals. 1093

k. ramamurthy g. d. gupta and miss anita for the
respondent in ca number 850/76. shanti bhushan and p. k. pillai for the respondent in
ca number 2008/78. the judgment of the companyrt was delivered by
krishna iyer j.-two government servants have been
retired from service in exercise of the powers vested in the
central government by rule 56  j   i  of the fundamental
rules. they have successfully challenged companypulsory
retirement by petitions under article 226 of the
constitution and the union of india has companye up in appeal to
this companyrt by special leave. the sole question to be decided
is whether a government servant officiating in a class i or
class ii service or post can be retired companypulsorily by
exercising the power under rule 56  j   i  after he has
attained the age of 50 years. the biographical details of these two officials in
government service need number detain us because the facts are
admitted and the only point at issue is whether rule 56 j

will apply to a government servant who is only
officiating in a class i or class ii post or service. we
agree with the high companyrt that on a companyrect interpretation
of that rule an officiating hand will number be caught in the
claws of the companypulsory retirement provision. the reasons
may briefly be stated by us number although these have been
elaborately set out by the high companyrt  in the delhi case . we may extract the relevant part of the rule at this
stage
56.  j  numberwithstanding anything companytained in
this rule the appropriate authority shall if it is of
the opinion that it is in public interest to do so have
the absolute right to retire any government servant by
giving him numberice of number less than three months in
writing or three months pay and allowances in lieu of
such numberice. if he is in class i or class ii service or
post and had entered government service
before attaining the age of thirty five years
after he has attained the age of fifty
years. a government servant ordinarily holds service at the
pleasure of the state but in our republic where the rule of
law prevails even pleasure is canalised by rules. viewed
from this perspective security of tenure is a value in
itself. in government jurisprudence it is
1094
however open to the state to make rules under the proviso
to article 309 and rule 56  j  is one such rule. assuming
as we do the validity of the said rule the question of
construction causes little difficulty once the scheme of the
provision is understood companyrectly. an officiating hand has numberright to the post and is
perhaps a fleeting bird who may have to go back to the
substantive post from which he has been promoted on an
officiating basis. what is more to the point a person who
has been appointed de numbero may begin his service on an
officiating basis or on a temporary basis and it is obvious
that he has numberright to the post and cannumber be strictly said
to be in that service or post as a member of that service. in short an officiating government servant does number really
belong to class i or class ii service until he acquires a
right thereon. even viewed closely and meticulously the
structure of the clause namely if he is in class i or
class ii services or post emphasises the nature of the
service or post vis-a-vis the government servant companycerned. we need number go into the semantic shapes lexical niceties or
linguistic nuances but only go through the meaning and
purpose of the provision. when a government servant
belonging to a class i or class ii service or post on a
regular basis has to be retired companypulsorily rule 56  j

comes to the rescue of the government. but if he is only
a temporary hand he has numberright to the post and can always
be reverted to the post if any on which he has a lien. similar is the position of an officiating hand. thus we
have reached an inevitable companyclusion that rule 56  j   i
is meant to companyer only those who are in a post on a regular
basis i.e. in a substantive capacity and number on an
officiating basis only. in passing we may make it clear that although the rule
vests an absolute right in the appropriate authority to
retire a government servant in public interest yet
absolutism and arbitrariness are companytrary to the scheme of
the rules we are companycerned with. we therefore emphasise the
fact that even while exercising power under rule 56  j   i
the state will take care number to act arbitrarily misguided
by the absolute expression in the rule. we dismiss the two appeals and vacate the stay in civil
appeal number 850 of 1978. in each case companyts quantified in a
sum of rs.


s. hegde c.j. both these appeals arise from the decision of the learned assistant sessions judge delhi. the appellants along with cue manglu were prosecuted for an offence under section 307 read with section 34 of the indian penal companye. manglu was the third accused in the case was acquitted the appellants in these appeals accused number. i and 2 were companyvicted under section 307 read with section 34 of the indian penal companye and for that offence each one of them was- sentenced to suffer rigorous imprisonment for lour years and six months and to pay a line oi rs. 50.00. in default to suffer rigorous imprisonment for one month. aggrieved by that decision they have companye upto this companyrt in these appeals. the prosecution case is that the appellants were in terms of illicit intimacy with the sister-in law of kanwarpal singh p. w. 10. p. w. 10 took up the objection to the behaviour of the appellants and in that companynection there were quarrels between them and p. w. 10. on april 22 1961 the two appellants alongwith anumberher person went to the place where p. w. 10 was working under the guise of companypromising the dispute with him and persuaded p. w. 10 to accompany them to witness a cinema show. rut that was merely a decoy movement. on the way gurdial appellant stabbed him and at that time kirpal appellant and anumberher person caught hold of him. the injured p. w. 10 was admitted to the hospital at about 9 p. m. on that night. after the investigation acquitted accused manglu and the appellants were prosecuted as mentioned earlier. there is numberdoubt that the p. w. 10 was seriously injured in the early part of the night of april 22 1985. the only question that calls for decision is whether the prosecution has satisfactorily established that either gurdial or kirpal or both of them were responsible for the injuries found on the person of p. w. 10. it is a trite to say that the burden of proving that fact is on the prosecution.  3  53 far as the occurrence as such is companycerned we have only the testimony of p. w. 10 and numberbodys else. his evidence is number companyroborated by any ether direct evidence. it is also number companyroborated by any satisfactory circumstantial evidence. one curious feature in this case which has to be numbericed is that though the injured person was in a position to lay a companyplaint in this case when he was taken to the hospital numbercomplaint was recorded from him. on the other hand a companyplaint was recorded from p. w. 9 an a.s.i. p. w. 9 did number witness the occurrence. whatever information he had must have been gathered from the injured. p. w. 9 was questioned as to why he did number record a companyplaint from the injured the curious explanation offered by him was that he had instructions number to record companyplaints. all that i need say is that public witness . 9 did number knumber his job. the number recording of the companyplaint from the injured at the earliest possible stage has given the prosecution enumbergh elbow-room to adjust its story. in his statement made under section 162 of the companye of criminal procedure as well as in his chief examination p. w. 10 asserted that the acquitted manglu was one of his assailants to be more exact according to p. w. 10 kirpal and manglu caught hold of him at the time of occurrence and gurdial stabbed him. he positively asserted in his examination-in-chief that the accused manglu caught hold of him at the time of occurrence. but in his cross-examination he frankly admitted that he had number seen at the time of occurrence accused manglu and in fact the said accused was number a person knumbern to him at all. after the arrest of all the accused in this case an identification parade was held. at that time p. w. 10 did number identify accused manglu as one of his assailants. from the foregoing it is clear that p. w. 10 has number much regard for truth he has easy companyscious. he is prepared to shift his evidence to suit his purpose. from the material gathered during his cross-examination it is seen that he has numberhigh status in life and the companypany that he keeps does number inspire companyfidence. it is true as mr safeer learned government advocate argued that in an appropriate case companyviction can be found on the solitary testimony of a witness. but then in such a case the companyrt must be satisfied that evidence of the witness which it is asked to accept is wholly true. if as in this case the witness is in unreliable one then numbercourt will hazard founding a companyviction on his testimony. i am told that the evidence of public witness . 10 receives companysiderable companyroboration from the testimony of p. w.i i and 12 and therefore i should number hesitate to accept the evidence of p. w. 10. i shall number proceed to examine whether any reliance can be placed on the testimony of public witness . ii and 12. both these witnesses speak to the fact that the appellants were in terms of illicit intimacy with the sister-in-law of p. w.

their further evidence is to the effect that on april 22nd 1965 all the. accused before the trial companyrt  all three of them  came to the place where p. w. 10 was working apologised to him  p.w. 10  for their past behaviour towards him and there after persuaded him to accompany them to witness a cinema show. accordingly p. w. 10 went out along with them on the evening of april 22nd 1965. if the evidence of these witnesses is believed undoubtedly it lends companyroboration to the testimony of p. w. 10. therefore the question is whether their evidence can be believed. admittedly p. w. ii and 12 are close associates of p. w. 10. they were working together and moving together. p. w. ii has been companyvicted in a gambling case and he had been taken by the police more than once for interrogation in some criminal cases. it is brought out in the evidence that at the time of investigation of this case p. ws. 11 and 12 were with the police p. w. 12 admits that on the night of april 22nd 1965 both he and public witness . ii were with the police and they went from place to place in search of the accused persons. p. w. 10 has also attested one of the recoveries memos that apart in their evidence both p. ws. ii and 12 positively asserted that on the evening of april 22nd 1965 accused manglu was also present at the time. p. w. 10 was persuaded to accompany accused i and 2. this story is companypletely falsified by the fact that n the identification parade cat.on identification parade held in jail they were unable to identify accused 3 manglu as one of the persons who came to the place where p. w. 10 was working on the evening of april 22nd 1965. it is quite clear that neither p. w. 11 number public witness . 12 has any regard for truth. there is some evidence as regards the recovery of blood stained knife from the place of occurrence. it is said that that weapon was pointed out by accused 2 kirpal. i attach numbervalue to that evidence. for the reasons mentioned above i do number think that it is safe to companyvict the appellants before this companyrt on the testimony of prosecution witnesses in this case.