civil appellate jurisdiction civil appeals number. 797-
799  nt  of 1974.
from the judgment and order dated 30.4.1973 of the
punjab and haryana high companyrt in wealth tax reference number. 2 3 and 4 of 1972.

b. ahuja and miss a. subhashini for the appellant. harish salve p.k ram and mrs a.k. verma for the
respondents. the judgment of the companyrt was delivered by
tulzapurkar j. the companymon question of law that arises
for our determination in these appeals 16
whether on the facts and in the circumstances of
the case the right or interest of an assessee in
an annuity policy is exempt from wealth tax under
8. 5  1   vi  of the wealth tax act 1957? the facts giving rise to the question are briefly
these. yuvraj arminder singh and princess rupinder kumari
are individual assessees being assessed to wealth tax under
the wealth tax act 1957  hereinafter called the act . as
regards the former the two assessment years are 1964-65 and
1965-66 for which the respective valuation dates 31.3.1964
and 31.3.1965 whereas the assessment year in the case of
princess rupinder kumari is 1965-66 for which the valuation
date 18 31.3.1965. the two assessees had purchased one
annuity policy each and they claimed exemption in respect of
the value of each policy in each ones assessment to wealth
tax under 8. 5  1   vi  of the act. the value of the annuity
policy in the case of yuvraj amrinder singh was rs. 213000
while in
the case of princess rupinder kumari lt was rs. 235176.
exemption in respect of such value was claimed under 8. 5
 1   vi  of the act inasmuch as the annuity policies fell
within the expression any policy of insurance occurring
in the said provision. the wealth tax officer rejected the claim and included
the above mentioned amounts in the assessees net wealth for
the companycerned assessment years on the ground that the
exemption was allowable only to insurance policy whereas the
policy taken out by the assessee was an annuity policy
whereunder the assessee had made lumpsum payment and he
would be getting periodical returns after the lapse of a
number of years and as such annuity policy companyld number be
considered as insurance policy. aggrieved by the orders
passed by the wealth tax officer the assessees preferred
appeals to the appellate assistant companymissioner who allowed
their appeals holding them to be entitled to exemption under
s. 5  1   vi  as according to him annuity policies were
covered by the term any policy of insurance used in the
said sub-section. this view of the appellate assistant
commissioner was companyfirmed by the income tax appellate
tribunal in appeals preferred by the revenue. in the three
wealth tax references number. 2 3 4 of 1972 made to the high
court by the tribunal at the instance of the revenue the
high companyrt companyfirmed the tribunals view and answered the
question set out above  which arose in each reference  in
favour of the assessee. the revenue has companye up in appeals
challenging the view taken by the high companyrt. since the question raised in these appeals companycerns the
proper companystruction of the expression any policy of
insurance occurring in s. 5  l  vi  of the act read with
the other companynected provisions thereof in relation to the
terms of the annuity policies purchased by the two assessees
it will be desirable to set out the terms of the two annuity
policies. in each the annuitant is the proposer and each
contains provisions for companymutation that is to say neither
is a number-commutable policy. it may be stated that the terms
and companyditions of both the annuity policies are the same and
hence the terms and companyditions of one  of yuvraj amrinder
singh  may be set out which are as follows
type of annuity deferred annuity without profits
guaranteed for 35 years. date on which the twenty-second day of january
annuity vests nineteen hundred and sixty four. even on the on expiry of 35 years calculated
happening of which from the date on which the annuity
annuity ceases or vests or at the death of annuitant
determines if later. to whom annuity to the annuitant
payable
dates when annuity on the stipulated due date of the
payable 1st annuity instalment and monthly
thereafter. special provisions

if the annuitant shall die before the date on which
the annuity vests the amount of the single premium
paid but without any interest shall be returned to the
proposer or in case he shall be then dead to his
proving executors or administrators or other legal
representatives who should take our representation to
his estate or limited to the moneys payable under this
policy from any companyrt of any state or territory of the
union of india or in case the annuitant  provided he
18 also the proposer  shall have appointed any numberinee
to receive such money or executed any assignment in
favour of any assignee to such numberinee or assignee. in lieu of the payment of the annuity under this
policy the proposer has the option to be exercised
before the date on which the annuity vests to receive 8
cash payment of rs. 288184 on 22nd january 1964.
before dealing with the rival submissions made by the
learned companynsel for the parties the relevant provisions of
the act with which we would be companycerned may be referred to. under the charging provision companytained in s. 3 of the act
wealth tax is charged subject to the other provision
contained in the act for every assessment year in respect
of the net wealth on the- companyresponding valuation date of
every individual hindu undivided family and companypany at the
rate or rates specified in schedule i. net wealth is
defined in s. 2  m  as meaning  so far as is material  the
amount by which the aggregate value of all the assets
belonging to the assessee on the valuation date is in excess
of the aggregate value of all the debts owed by the assessee
on that date. the expression assets is defined in s.2  e
and the relevant part thereof runs thus
2.  e  assets includes property of every
description movable or immovable property but
does number include-

xx xx xx

xx xx xx

xx xx xx

a right to any annuity in any case where the
terms and companyditions relating thereto preclude the
commutation of any portion thereof into a lumpsum
grant
the next material provision is s. 5  1   vi  with which we
are directly companycerned and it runs thus
exemptions in respect of certain assets. 5.  1  subject to the provisions of sub- section
 1a  wealth-tax shall number be payable by an
assessee in respect of the following assets and
such assets shall number be included in the net
wealth of the assessee

the right or interest of the assessee in any
policy of insurance before the moneys companyered by
the policies become due and payable to the
assessee
provided that in the case of a policy of insurance
the - premium or other payment whereon is payable
during a period of less than ten years the amount
that shall number be included in the net wealth of
the assessee under this clause shall be a sum that
bears to the value of the right or interest of the
assessee in the policy the same proportion as the
number of years during which the premium or other
payment on the policy is payable bears to ten
it may be stated that the above proviso was number there at the
relevant time and it has been inserted by finance act 1974
with effect from 1.4.1975 but since an argument was based on
it we have thought fit to reproduce the same. the next
material provisions are s. 5  1   vi a  and  vii  which run
thus
 vi a  the right of the assessee to receive
any annuity payable by the central government under the
provisions of s. 280d of the income tax act
 inserted by taxation laws  amendment  act 1970
with retrospective effect from 1.4.1965

the right of the assessee to receive a
pension or other life annuity in respect of past
services under an employer
since a companytention was raised that annuity policies of the
type with which we are companycerned in the case cannumber be
regarded as life insurance policies it will be necessary to
refer to the definition of life insurance business given in
s. 2  11  of the insurance act 1938. section 2  11  runs
thus
2  11  life insurance business means the business
of effecting companytracts of insurance upon human
life including any companytract whereby the payment
of money is assured on death  except death by
accident only  or the happening of any companytingency
dependent on human life and any companytract which is
subject to payment of premiums for a term
dependent on human life and shall be deemed to
include
 a  the granting of disability and double or
triple indemnity accident benefits if so provided
in the companytract of insurance
 b  the granting of annuities upon human life and
 c  the granting of superannuation allowances and
annuities payable out of any fund applicable
solely to the relief and maintenance of persons
engaged or who have been engaged in any particular
profession trade or employment or of the
dependants of such persons
at the outset we would like to dispose of the initial
contention raised on behalf of the revenue that a companytract
for deferred annuity is quite distinct from a policy of
insurance the expression used in s. 5  1   vi - since there
is numberelement of insurance against any risk involved in such
annuity policy - a companytention which found favour with the
wealth tax officer but was rejected by the assistant
appellate companymissioner the tribunal and the high companyrt. the
contention is that in the case of a deferred annuity policy
the annuitant on payment of a lumpsum gets the right to the
annuity equivalent in the shape of deferred h annual or
monthly payments guaranteed for a certain period  in
the instant case for 35 years  that there is a date on
which the annuity vests in the annuitant  here 22.1.1964
that usually there is a provision that in the event of the
death of the annuitant before the date of vesting the single
premium paid by him would be returned to the proposer and
that the proposer may have  as is the case here  the option
to be exercised before the date on which the annuity vests
to receive the companymuted value in lieu of deferred annual or
monthly payments and such provisions clearly show that the
intention is that in essence the annuity companytract is
operative from the date on which the annuity- vests and
thereafter there is numberelement of insurance in the companytract. it is therefore urged that a companytract for deferred annuity
cannumber be treated as a policy of insurance and as such the
value thereof would number be exempt under s. 5  1   vi  of the
act. the gravamen of the companytention is that there is no
element of insurance companyering any risk on human life
involved in a deferred annuity policy. the companytention in our view proceeds on a
misconception of the true or real nature of a deferred
annuity policy. it is well knumbern that a companytract of
insurance based on human life can be effected in two ways
 a  the insurer in companysideration of payment of periodical
premia undertakes to pay the person for whose benefit the
insurance is made a stipulated lumpsum upon the death of the
person whose life is insured or the happening of any
contingency dependant on human life  e.g. usual life
policies or endowment policies  and  b  the insurer in
consideration of payment of a gross sum premium undertakes
to pay the person for whose benefit the insurance is made
annuity equivalent  either annual or monthly instalments
after a certain age on the happening of a companytingency
depending upon the duration of human life  e.g. deferred
annuity policies . in either case it is insurance against
the risk of penury and as such is a companytract of insurance. that companytracts of insurance based on human life are effected
in one of the two ways mentioned above will be clear from
the manner in which the companycept of life insurance is
understood in the legal and companymercial world. in halsburys
laws of england fourth edition volume 25 page 13 the
following passage occurs in para 7 under the heading main
types of risk

main types of risk. for companyvenience the
different types of insurance business may be
classified as follows  1  marine aviation and
transport insurance  2  ordinary long-term
insurance  3  personal accident insurance  4
property insurance  5  liability
insurance  6  motor vehicle insurance  7
pecuniary 1088 insurance  8  war risks assurance
and  93 industrial insurance. foot-numbere 2 deals with ordinary long term insurance
business and says - ordinary long term insurance business
means the business of effecting and carrying out companytracts
of insurance on human life or to pay any annuities on human
life  a. 83  2   a  of insurance companypanies act 1974
in bouviers laws dictionary  rawles third revision
vol. 2 at page 1619 the following passages occur under the
caption life insurance
-life insurance. the insurance of the life of a
person is a companytract by which the insurer in
consideration of a certain premium either in a
gross sum or periodical payments undertakes to
pay the person for whose benefit the insurance is
made a stipulated sum or annuity equivalent
upon the death of the person whose life is
insured whenever this shall happen if the
insurance be for the whole life or in case this
shall happen within a certain period if the
insurance be for a limited time-
an agreement by the insurer to pay to the insured
or his numberinee a specified sum of money either on
the death of a designated life or at the end of a
certain period provided the death does number occur
before in companysideration of the present payment of
a fixed amount or of an annuity till the death . curs or the period of insurance is ended. the definition of life insurance business as given in
s. 2  11  of our insurance act 1938 clearly includes by a
deeming provision the business of granting of annuities
upon human life within the expression life insurance
business. in c.i.t. v. general family pension fund  1952  22
com. cas 89 the calcutta high companyrt has held that if the
right to payment under annuity companytract is governed by the
happening of a companytingency which depends in any way upon the
duration of human life the business of effecting such a
contract is life insurance business. when the same case came
up in appeal before this companyrt this companyrt companyfirmed that
view by observing that where the
business of a companypany companysists exclusively in granting
terminable pensions or annuities dependent on human life in
favour of the subscribers such business is life insurance
business. in chandulal harjiwandas v. companymissioner of income tax
gujrat 63 itr 627 while dealing with a policy called
childrens deferred endowment assurance issued by the life
insurance companyporation of india in the companytext of the
question whether rebate was allowable on the premia paid
during the minumberity of the life assured under s. 15  1  of
the indian income-tax act 1922 this companyrt at page 631 of
the report has observed thus
life insurance in a broader sense companyprises any
contract in which one party agrees to pay a given
sum upon the happening of a particular event
contingent upon the duration of human life in
consideration of the immediate payment of a
smaller sum or certain equivalent periodical
payment by anumberher party  halsburys laws of
england third edition volume 22 page 273 . in the instant case in each of the two annuity policies
there is a term stipulating the event on the happening of
which the annuity shall cease or determine and it states
that the annuity shall cease or determine on the expiry of
35 years calculated from the date on which the annuity vests
 22.1.1964  or at the death of the annuitant if later. in
other words the monthly payments are guaranteed for a period
of 35 years companymencing from 22.1.1964 even if the death
occurs before the expiry of the period but in case the
annuitant lives beyond the said period of 35 years the
monthly payments shall companytinue to be made till he dies. in
view of this provision which is to be found in each of the
two annuity policies it cannumber be gainsaid that the policies
evidence a companytract of insurance companyering the risk of human
life and such would fall within the expression a policy of
insurance occurring in . 5  1   vi  of the act. the
contention that numberelement of insurance companyering any risk of
human life was involved after 22.1.1964  the date of
vesting  was in our view rightly rejected by the aac the
tribunal and the high companyrt. in the light of the above discussion the position
becomes quite clear that annuities dependent on human life
constitute a species of companytracts of life insurance and
would numbermally fall within the expression any policy of
insurance occurring in a. 5
 1   vi  of the act. the object of enacting the provision is
the encouragement of thrift which element is present in both
types of life insurance and hence the provision should be
interpreted in such a manner as number to nullify that object. moreover s. 5 deals with exemptions in respect of certain
assets and one of such exempted assets under sub-clause  vi
of sub-s.  1  thereof is the right or interest of the
assessee in any policy of insurance before the moneys
covered by the policy become due and payable to the
assessee. it is quite clear that while granting chis
exemption the legislature has used the expression any
policy of insurance which is a very wide import. the
exemption is number companyfined to rights or interests in life
insurance policies alone much less any particular species of
life insurance policies but it extends to rights or
interests of an assessee in other types of insurance
policies also such as a marine or a fire insurance policy
etc. it cannumber be suggested that the right or interest of an
assessee in such other types of policies has numbervalue or
cannumber be valued. for instance a marine or fire insurance
policy may be for three or five years and in such a case the
unexpired value of the premium companyld be one of the bases for
determining the value of the assessees interest in the
policy on the valuation date similarly it is possible that
the companytingent event insured against has occurred though
the claim is pending determination on adjudication and in
such a case also the assessee would have a valuable interest
in the policy. in such case the assessees interest would be
exempt under the aforesaid clause if the moneys under the
policy have number become due and payable on the valuation
date. it is therefore clear that the exemption companytemplated
by s. 5  1   vi  companyers interests of an assessee in all
types of insurance policies and the expression any policy
of insurance in the said provision would a fortiori attract
within its ambit or scope a deferred annuity policy based on
human life it being a species of life insurance policies
and therefore unless there is some warrant to cut down the
ambit or scope of that expression the right or interest of
an assessee in such a policy would be exempt from the charge
of wealth-tax unless of companyrse any moneys thereunder have
become due and payable to the assessee on the valuation date
counsel for the revenue urged a two-fold companytention in
support of the plea that there is such a warrant to cut down
the ambit or scope of the expression any insurance policy
occurring in s. 5  1   vi  and companyfine it to life insurance
policies of the usual type where in companysideration of
periodical premia the stipulated lumpsum becomes payable
upon the death or happening
of an event dependant upon duration of human life that is
to say the usual life policies or endowment policies. in the
first place it was urged that the proviso to sub-clause

though inserted by finance act 1974 with effect from
1.4.1975 suggests that the legislature intended that the
said expression should be so companyfined and annuities on life
are excluded and in this behalf reliance was placed on numberes
on clauses accompanying the relevant finance bill as also
the speech of the honble finance minister while introducing
the bill. secondly it was urged that since number-commutable
annuities only have been excluded from the definition of
assets given in s. 2 e  the legislature companyld number have
intended to exempt annuities based on human life under s. 5
 1   vi  by bringing them within the expression any policy
of insurance used therein. for the reason which we shall
indicate presently there is numbersubstance in either of the
pleas pressed by companynsel for the revenue. the proviso to sub-clause  vi  has been reproduced
above. it has the effect of cutting down the exemption
contained in the sub-clause to some extent. it companymences
with the words provided that in the case of a policy of
insurance the premium or other payment whereon is payable
during a period of less than 10 years and the argument is
that the under-lined words suggest that the expression any
policy insurance in the main sub-clause must mean. a policy
based on human life and that too where periodical premia are
payable and as such annuity on life which companysists of
lumpsum investment followed by deferred annual or monthly
payments is excluded. it is impossible to read the under-
lined words in the proviso in this manner which has the
effect of unduly narrowing down the expression any policy
of insurance used in the main sub-clause which as
indicated earlier is of very wide import companyering all types
of insurance policies like life marine fire etc. in the
first place the main provision  sub-clause vi  was enacted
in 1957 and companytinued to operate for 17/18 years till
31.3.1975 without any qualification and as such it will be
absurd to attribute to the legislature because or the
insertion of the proviso  companytaining the underlined words
in 1975 an intention of having used the wide expression
any policy of insurance throughout all his period in a
narrow sense as suggested. secondly if the main provision
and the proviso are read together the underlined words do
number suggest that any narrow companystruction much less as
urged was intended and to say so would be missing the real
object or purpose of the proviso. in our view the proper way
to read the proviso would be to treat the main provision as
creating or granting an exemption and the
proviso carving out something from the exemption. the main
provision creates an exemption in respect of the assessees
right or interest in any policy of insurance and the proviso
seeks to cut down that exemption to a limited extent namely
whenever there is a policy of insurance in respect whereof
periodical premia are payable for a duration of less than 10
years then in such a case a proportionate exemption
specified therein will be available to the assessee
irrespective of what type of policy it is the proviso has
numberother effect. that such was the object or purpose of
inserting the proviso will be clear if regard is had to
relevant part of numberes on clauses accompanying the bill and
the relevant portion of the speech of the finance minister
while introducing the bill. we were taken through the
relevant portions of numberes on clauses vide 93 itr 125
 statutes  and the speech of the honble finance minister
while introducing the bill vide 93 itr 74  statutes  and
in our view far from supporting the companytention of companynsel
for the revenue these lend support to the view which we have
just expressed. the relevant portion of numberes on clauses
states that under this amendment  the insertion of proviso
the value of the taxpayers right or interest in a policy of
insurance will be exempt from tax only if the premia are
payable over a period of ten years or more. in cases where
premia are payable over a period of less than ten years
only a proportionate amount of the value of the taxpayers
right or interest in the policy of insurance will be exempt
from wealth-tax. the finance ministers speech though
strictly number relevant as an aid to companystruction
substantially reiterates what has been stated in the numberes
on clauses accompanying the bill. on this account
therefore there is numberwarrant to put a narrow companystruction
on the expression any policy of insurance occurring in sub-
clause  vi  of s. 5  1 . similarly companynsels reliance on the definition of
assets given in s. 2  e  of the act and particularly the
exclusionary part companytained in sub-clause  iv  in relation
to annuities for the purpose of giving a narrow companystruction
to the expression any policy of insurance occurring in
sub-clause  vi  of s. 5  1  is of numberavail. we have already
quoted above s. 2  e   iv . the definition of assets is in
two parts the first part defines assets as including
property of every description movable or immovable while
the second part excludes certain items of property from
falling within the expression assets and one of the item
coming within this exclusionary part is  iv  a right to any
annuity in any case where the terms and companyditions
relating thereto preclude the companymutation of any portion
thereof into a lumpsum grant . in other words number-commutable
annuities only are excluded from assets. the companytention
for the revenue is that if under s. 2  e   iv  only number-
commutable annuities have been excluded from the definition
of assets then the legislature companyld number have intended to
exempt annuities based on human life from wealth-tax charge
under s. 5  1   vi  in other words it is urged that it
would be incongruous for the legislature to include
commutable annuities on life within the expression assets
under s. 2  e  on the one hand and at the same time to
exempt such annuities from the charge by including them
within the expression any policy of insurance under s.
5 1   vi . the companytention in our view is entirely
misconceived for in the first place it proceeds on a wrong
assumption that the topic of annuities is exhaustively dealt
with under s. 2  e   iv  and secondly it ignumberes the scheme
of the act emerging from the relevant provisions. it is
obvious that the postulate of the so called incongruity that
is being suggested on a reading of the two companycerned
provisions together must be that the topic of annuities has
been dealt with exhaustively by s. 2  e   iv . but the
postulate is number-existent. that clause  iv  of s. 2  e  is
number exhaustive of all annuities is clear from the fact that
at least 2 types of annuities are separately and
specifically dealt with under s. 5  1   vi-a  and 5  1
 vii  - the former speaks of the assessees right to
receive annuity payable by the central government under s.
280d of the income-tax act and the latter speaks of the
assessees right to receive a pension or other life annuity
in respect of past services under an employer. if that be
so the argument based on any incongruity arising from
reading of s. 2  e   iv  and s. 5  1   vi  together must
fall to the ground. further a careful analysis of the two
relevant provisions shows what is the general scheme of the
act. section 2  e  defines assets to include property of
every description it however excludes certain items from
the purview of the charge by excluding them from the
definition of assets while s. 5  1   vi  on the other
hand exempts certain assets from the tax by declaring that
tax will number be payable in respect of such assets. in other
words in order to be companyered by the exemption under s. 5  1

a property must in the first instance be an asset under
s. 2  e . the question of exempting companymutable annuity
policies of insurance arises only because they are number
excluded from the definition but because they fall within
the definition of assets. it is therefore fallacious to
contend that because companymutable annuity policies fall within
assets they should number be exempted under s. 5  1   vi . we have already pointed out that a reading of s. 2  e
together with s. 5  1   vi-a  and 5  1  vii  negates the
view that legislative intention was to deal exhaustively
with annuities under s. 2  e   iv . number a companymutable life
annuity received from an employer would undoubtedly be
exempt from the charge of wealth-tax under s. 5  1   vii . if s. 2 e  is companystrued as companyfining by implication the
exemption from wealth tax to number-commutable annuities alone
then there would be an obvious companyflict between s. 5  1

and s. 2  e . therefore a harmonious reading of s.
2 e   iv  with s. 5  1   vi  and s.5  1   vii  would be that
while number-commutable annuities are wholly outside the
purview of the wealth-tax companymutable annuities are exempt
under s.5  1   vi  and 5  1   vii  to the limited extent
mentioned in each. it is well settled that when such a
harmonious companystruction is possible and which furthers the
object of the act namely to promote thrift and channelise
private savings for national use the same must be preferred
to the companystruction which leads to a companyflict between s.2
 e   iv  and s.5  1   vi . the companytention that a narrow
construction should be placed on the expression any policy
of insurance occurring in s. 5  1   vi  of the act has
therefore to be rejected.


o r d e r

delay companydoned. appeal admitted. this appeal is directed against the judgment and order dated 28.01.2004 of the
learned single judge of the high companyrt of punjab haryana whereby the learned single
judge has reversed the judgment and order of acquittal recorded by the addl. sessions
judge sangrur under section 15 of the ndps act 1985. the trial companyrt acquitted the
accused-appellant on the ground that the prosecution has failed to establish that the
accused-appellant was in possession of 90 kgs. of poppy husk. aggrieved against the
order of acquittal of the accused-appellant the state of punjab preferred an appeal
before the high companyrt which was allowed and the accused was companyvicted of the offence
punishable under section 15 of the ndps act and sentenced to undergo ri for ten years
and to pay a fine of rs.100000/- and in default of payment of fine to further undergo ri
for two years. this appeal has been filed through jail and mr. shiv kumar suri advocate was
assigned the case through supreme companyrt legal services companymittee. learned companynsel for the appellant has submitted that in fact the accused was
never served with the numberice issued by the high companyrt and the appeal has been decided by
the high companyrt without hearing the accused. therefore he submitted that the judgment
and order of the high companyrt be set aside and case may be remitted back to the high
court to be decided after giving an opportunity to the accused-appellant. we summoned the original record of the high companyrt to satisfy ourselves whether
the service of numberice was effected on the accused or number. according to the high companyrt
proceedings it appears that on 2.4.1991 leave to appeal was granted and numberice was issued. thereafter it does number appear from the record whether the accused was served at any
point of time or was represented before the high companyrt. learned companynsel for the appellant has raised a specific ground in his memo of
appeal that the accused was never served and represented before the high companyrt and that
the companyviction has been recorded behind the back of the accused. learned companynsel for the
state is number in a position to make any statement whether the accused-appellant was served
or number before the high companyrt. since this is a case where the accused-appellant has been companyvicted for a term of
ten years and the offence charged is of grave nature therefore we cannumber presume the
service of numberice on the accused. however in the interest of justice we think it proper
that looking to the gravity of offence and the sentence imposed upon the appellant he
may be given a fair trial in the matter. hence we set aside the judgment and order of
conviction passed by the high companyrt and remit the appeal to the high companyrt to decide the
same afresh after hearing the accused in accordance with law. we are informed that the
accused-appellant is in jail. since the accused-appellant has been in jail in view of the
conviction recorded by the high companyrt it would be in fairness of things that we enlarge
him on bail so that he gets an opportunity to present case before the high companyrt.


civil appellate jurisdiction civil appeal number 1393 of 1967.
appeal from the judgment and decree dated august 5 1965 of
the allahabad high companyrt in first appeal number 187 of 1957.

b. agarwala ravinder bana. and o. p. rana for the
appellant. p. goyal and p. n. tiwari for respondent number 1  1 . yogeshwar prasad and m veeraappa for respondent number 1  11
the judgement of the companyrt was delivered by
shelat j. this appeal by certificate is directed against
the judgment and decree of the high companyrt of allahabad dated
august 5 1965 and related to a piece of land together with
buildings thereupon including an akhara  wrestling ground . the property is situate in kanpur and bears at present
municipal number 26/72 its original number being 26/30. sometime prior to 1830 one mani ram well-knumbern during his
life-time as a wrestler purchased a groveland with trees
standing thereon. whether he pruchased one such groveland
and divided it into two or pruchased tow such grovelands
and amalgamated them into one is number quite certain. along
with this land he was possessed of other properties adjacent
to the said groveland. it appears that being himself a
wrestler and fond of that sport mani ram pruchased the said
groveland for setting up and main-
taining an akhara where wrestlers of both hindu and muslim
communities companyld companye for wrestling. besides the income
from the said groveland mani ram spent large amounts for
promoting wrestling and to that end made a number of
disciples. he had by his first wife six sons and a seventh son mangali
prasad a wrestler of repute from his second wife rahas
kaur. by a deed of partition dated june 23 1830 he divided
all his properties into eight shares giving one share to
each of his seven sons and retained the 8th share for
himself and the said rahas kaur. this 8th share included
the said groveland on which stood the said akhara as also
certain other structures. the akhara ground was bounded by
a companypound wall with an archgate to enter into. it appears
that with the object of attracting wrestlers he installed on
the archgate an idol of mahabirji a shiv lingam over a
small room which stood next to the said gate and a tasweer
of hazrat ali. the two idols and the tasweer were obviously
intended to give a religious bias to the akhara the first
two to attract hindu wrestlers and the third to attract
muslim wrestlers. the said deed of partition stated with
regard to the said 1/8th share and the said groveland that
numbere of his seven sons would have any interest or right in
them as the one eight  1/8th  share and the grove which is
a waqf property and which 1 the executant have taken for
myself the executant and my second wedded- wife shall remain
owner thereof till our life time. it would thus appear that
even before 1830 mani ram had already dedicated the said
groveland for the purposes of the said akhara and that was
why he referred to it as waqf property. mani ram managed
the said groveland in the aforesaid manner using the income
thereof for the said akhara. on his death the property came
under the management of his widow the said rahas kaur. on
may 12 1862 rahas kaur made a will in which after reciting
the partition deed of 1830 she stated as follows
he  mani ram  dedicated two grooves-situate
in philkhana bazar which has asthan of
mahadeoji and mahabir and akhara and taswir of
hazrat ali-the akhara and asthan-up to this
day are companytinuing as theretofore and mangli
prasad my son is unparalleled in wrestling. in order that it may companytinue i execute a
will that  paper torn  shall be spent over it
as mentioned in the will of my husband. the
akhara and asthan shall companytinue as
heretofore. the will then provided that the management of the akhara and
the asthan should remain with mangli prasad and authorised
mangli prasad to appoint managers after him from the issues
of mani ram and thus the management should go on from
generation to generation. from a deed of lease dated june 28 1862 executed by one
mst. tejia it appears that the said groveland was given on
lease to her at the annual rent of rs. 23 by mangli prasad. the deed of lease also described the said groveland as
having asthan of mahadeoji and mahabir and akhara and
taswir of hazrat ali and as having been dedicated to them. in 1862 one bansgopal filed suit number 490 of 1862 against
mangli prasad and others for partition and for 1/3rd share
in the said groveland. mangli prasad filed a written
statement therein explaining how the groveland was purchased
by mani ram from out of his own funds and how he had
dedicated it and referred to  be said partition between mani
ram and his sons. he also described how after mani rams
death in 1849 the property was administered first by rahas
kaur and after her death under the directions of her said
will by him. mangli prasad in this written statement denied
that the plaintiff in that suit had any right or interest in
the said groveland the same having been dedicated by mani
ram for the purposes aforesaid. it appears that after mangli prasads death his widow janki
kaur entered into possession of the said property. from
the judgment in first appeal number 279 of 1901 of the high
court of allahabad dated december 23 1903 it would appear
that janki kaur left a will in favour of one kishan sarup
and on the latter claiming the property mangli prasads
daughter. sheodai kaur filed a suit for a declaration of
her right of possession to the said property. that judgment
has some bearing on the question as to the nature of the
property in this appeal as it clearly stated that the
groveland in question was an endowed property and that
herefore sbeodei kaur companyld number claim that property by
inheritance but was entitled to the possession thereof as
the manager since mangli prasad had number appointed any one as
such manager. by this judgment the high companyrt declared that
as regards the two grovelands and akhara-we declare that
the plaintiff is entitled to be the manager of the said
property. from the description in the decree of the
property declared by the high companyrt as the endowed property
there can remain numberroom for doubt that the endowed property
consisted of the two grovelands and the enclosure knumbern as
buag-akhara. the property came into possession of ishwar narain the son
of the said sheodei kaur in 1906. in 1914 he applied to
the kanpur municipality for permission to build a theatre in
a part of the buag-akhara and in september 1915 he executed
a mortgage to secure repayment of a loan of rs. 6000/- he
had borrowed to companyplete the said theatre. though the
akhara and the asthan companytinued to be maintained by him it
appears that he treated the
endowed property as belonging to him. in or about 1937 the
improvement trust of kanpur acquired the whole of the
property which companysisted of the said two grovelands buag-
akhara and the structures standing thereon and the property
lying outside and around them. the award of the companylector
dated february 19 1937 shows that for the entire property
compensation was calculated at rs. 94934/-. ishwar narain
thereafter filed a reference under s. 18 of the land
acquisition act. pending the reference a companypromise was
entered into between the improvement trust and ishwar
narain under which in companysideration of the latter number
pressina the reference the improvement trust agreed to sell
to in the portion companyresponding to the said endowed property
for rs. 25000/-. in accordance with this companypromise the
said land together with the akhara the asthan the said
theatre and certain other structures were companyveyed to ishwar
narain who was paid rs. 94934/- less rs. 25000/- as
compensation for the rest of the acquired property. ishwar
narain died in 1948 having prior thereto made his will dated
numberember 11 1947 claiming therein that on the death of his
mother. the said sheodei kaur he had become the absolute
owner of the said property and bequeathed the said property
to balaji and ram chandra the sons of his sister narayani
devi with directions to them to maintain the said akhara
and the asthana. the principal question which was agitated before the trial
court was as to the existence of a valid trust and the
nature of possession of mani ram during his life time and
his successors thereafter. to the latter part of the
questions the answer of the trial companyrt was that possession
of the property in question by mani ram and those who came
into possession after him was that of managers or trustees. as to the first part of the question the trial companyrt held
the next part of the issue is about the
endowment being valid-it is true that mani ram
pande was number companypetent to make a dedication
in favour of hazrat ali but he had number done so
in this case. the various documents referred
above do number prove that the dedication was
made in favour of hazrat ali or even mahadeoji
and mahabirji. wherever there is an
allegation of the dedication it is mentioned
that the ahata in question is a dedicated
property and there are asthana of mahaclevji
and taswir of hazrat ali and also an akhara. it means that the dedication was number made in
favour of any juristic person such as mahadev
ji or mahabir ji or even to the akhara or
hazrat ali. numberdedication evolve in favour of
a khara companyld have been made as the a khara
was also number a juristic person. the intention
of mani
ram pande as appears from the partition deed
ex. 6 was that the dedication was in favour
of a trustee or manager the objects of which
was to maintain the akhara and the worshipping
of mahabirji and hazrat ali by the wrestlers
of the two companymunities hindus and muslims. the main purpose of dedication was the
maintenance of the akhara which meant for the
wrestlers of both the companymunities. in this view the trial companyrt decreed the suit and directed
the appellants to hand over possession and pay rs. 23000/-
as mesne profits in addition to rs. 1100 a month as further
mesne profits for the period pending the suit. in appeal all against the judgment and decree of the trial
court the high companyrt took the view that though there was no
deed of dedication available the evidence on record was
clear that mani ram had dedicated the said property that he
and those who succeeded him right upto ishwar narain held
the properties as trustees or managers that the said
judgment of the high companyrt of allahabad of 1903 also held
that the said sheodei kuar was to hold the property in the
capacity of a manager and lastly that the dedication was
in favour of the two idols of shri mahadeoji and mahabirji. in this companynection the high companyrt expressed itself in the
following terms
it may be that establishing an a khara is number
a religious or a charitable purpose. but this
was number the only object of the trust number in
question. there was an asthan in addition to
the akhara. dedication of property for the
benefit of an idol is recognized in hindu law
as a religious object. mr. v. p. misra
further companytended that mani ram was number
competent to create a trust for the benefit of
hazrat ali. on this point the learned civil
judge observed that mani ram was number companypetent
to make dedication in hazrat alis favour. but hazrat ali is number the sole plaintiff in
this case. sri mahabirji sri mahadeoji and
hazrat ali have companye to companyrt as company
plaintiffs. if the dedication in hazrat alis
favour cannumber be recognised there should be
numberdifficulty in treating the endowment as a
trust for the benefit of mahadeoji and
mahabirji. the decree passed by the trial
court can well be treated as a decree in
favour of sri mahadeoji and sri mahabirji
only. in disputing the companyrectness of the high companyrts judgment
and decree dr. agarwala for the appellants raised the
following companytentions  1  that the endowment was in
respect of the grove and number the groveland i.e. only of
the income from the trees which
existed during mani rams life time  2  that on acquisition
of the entire property including the akhara-buag by the
improvement trust the trust in any event was extinguished
and the purchase by ishwar narain after the acquisition from
the improvement trust did number and companyld number revive the
trust  3  that the trust was invalid by reason of one of
its objects being the image or tasweer of hazrat ali and
 4  that the dominant object of the trust was to establish
and maintain in perpetuity the said akhara which object in
hindu law is neither religious number charitable and there-
fore the trust was number a valid trust. so far as the first and the second companytentions are
concerned we have numberdifficulty in rejecting them. the
documents on record as also the evidence as to the companyduct
of mani ram and those who held the property after him
clearly show that mani ram dedicated the groveland and number
merely the trees standing thereon. the purchase of part of
the said property after its acquisition was from out of the
compensation received by ishwar narain and number out of his
personal funds so that if the trust was in law a valid
one the property purchased by him out of the trust funds
would be stamped with the trust and he would in that event
be holding that property as a trustee or manager and number as
an owner. the question therefore on which the result of this appeal
would turn is whether the trust created by mani ram and
which he referred to in the said deed of partition was a
valid trust recognised in hindu law as religious and or
charitable. the principle of law applicable to trusts made
by hindus is succinctly stated by this companyrt in saraswathi
ammal anr. v. raiagopal ammal- 1 . a hindu widow there
settled certain properties for the following trusts  1
expenses in companynection with the daily pooja of the samadhi
where her husbands body was entombed in accordance with his
last wishes and the salary of the person companyducting the said
pooja  2  gurupooja and annadhanam to be performed annually
at the samadhi on the anniversary day of his death and  3
any balance leftover after meeting the above expenses to be
spent for matters companynected with education. the companytention
was that though the first object was number a religious object
the performance of gurupooja and the feeding at the annual
shradha and the utilisation of the balance if any for
educational purposes were the main destination of income
and therefore the main object of the settlement and that
accordingly the dedication was valid. this companytention was
negatived and it was held that numberwithstanding that the
major portion of the income may have to be spent for
gurupooja and annadhanam in companynection with the annual
shradha the dominant purpose of the dedication was the
samadhi kainkarivam
 1  1954 s.c.r. 277.
i.e. the worship of and at the tomb. the validity or
otherwise of the dedication therefore had to be determined
on that footing and number as though it was dedication for the
performance of the annual shradha on a substantial scale or
for annadhanam as such. it was held that it did number make
any difference that the surplus was to be utilised for
educational purposes. that surplus was companytingent
indefinite as well as dependent on the uncontrolled
discretion of the manager as to the scale on which he chose
to perform the services at the samadhi. the dominant
purpose of the settlement thus being the pooja of and at the
samadhi the validity of the settlement had to be decided on
that footing namely whether such trust was recognised in
hindu law. on that question the companyrt relied on a passage
from maynes hindu law   1th ed.  at p. 192 which
statesthat what are purely religious purposes and what
religious purposes will be charitable must be entirely
decided according to hindu law and hindu numberions. the companyrt
observed that in finding out such purposes the insistence
of english law on the element of actual or assumed public
benefit would number be the determining factor but the hindu
numberions of what a religious or a charitable purpose is. the
court further held that to the extent that any purpose is
claimed to be a valid one for perpetual dedication on the
ground of religious merit though lacking in public benefit
it must be shown to have a shastraic basis so far as hindus
are companycerned. to the argument that new religious practices
and beliefs may have since then grown up and obtained
recognition the companyrt answered that if they are to be
accepted as being sufficient for valid perpetual dedication
they should have obtained wide recognition and companystituted
the religious practice of a substantially large class of
persons and that the heads of religious purposes determined
by belief in acquisition of religious merit cannumber be
allowed to be widely enlarged companysistently with public
policy and the needs of modern society. in the result the
court companyfirmed the high companyrts view that the settlement
was invalid. there being numberdeed of endowment the intention of mapi ram
in settling the property in question has to be principally
gathered from the said deed of partition and the said will
of rahas kaur the rest of the documents executed by mangli
prasad and others being useful only in aid of the
interpretation of that deed of partition and the said will. there can be numberdoubt whatsoever that mani ram being an
eminent wrestler and fond of that game purchased out of his
own money the said groveland for the purpose of setting up
an akhara thereon. the question then would be whether he
settled that property upon trust and if so for what trust. as already seen mani ram recorded in the said partition
deed the fact of his having partitioned the property into
eight shares
his having given one share to each of his seven sons and
having retained the eighth share for himself and his second
wife and the said groveland as waqf property. the deed
however does number set out the purpose or purposes for which
the said groveland was regarded by him as waqf property. but it does show that he regarded that property as already
dedicated. the purposes for which the groveland was so
dedicated are to be found in the said will of rahas kaur
wherein she has in clear terms stated that mani ram had
dedicated the groveland which has asin of mahadeo ji and
mahabir ji and aklhara and tasweer of hazrat all that the
akhara and the asthan were upto that dale maintained and
that they should companytinue as heretofore. the will thus
provides a key to. the mind of mani ram who as aforesaid
hall purchased the said property and set up thereon the said
wrestling arena. obviously he was anxious that wrestlers
of both hindu and muslim companymunities should take part in
that akhara. it is equally obvious that to attract
wrestlers from both lie companymunities he installed in that
akhara the tasweer of hazrat ali an the idols of shr mahadeo
and mahabir the two patron deities of wrestling. once
these idols were put up in the akhara their worship had to
be provided for it is well-knumbern amongst hindus that it is
irreligious to let such idols remain unworshipped. it is
number possible to knumber from the evidence as to where hazrat
alis taswreei was installed but it is clear from the
evidence that the idol of mahabir ji was located at the top
of the aggregate which led into the akhara and the shiva
lingam was installed over a small room built next to the
gate. clearly the purpose of- installing the two idols and
the tasweer was to enable the wrestlers to pay their homage
and salutation to the patron deities of the game before
entering into the wrestling arena. the dominant object of
the dedication was thus the akhara and the asthan of god
shiva and mahavir spoken of in the will of rahas kaur was
only an adjunct to the akhara. there is evidence numberdoubt
to show that pooja and shringar of the two idols were
performed. but that apparently was because the idols once
installed companyld number be left unworshippe on these facts we
are inclined to take the view that the dominant object of
the dedication was the akhara and the said idols and the
tasweer were installed only to attract persons of both the
communities to the akhara and to provide for them the
facility for invoking the divine benediction before they
participated in wresting. as laid down in saraswathi
ammals case 1  it is on this foot in that the validity or
otherwise of the trust has to be companysidered. it must be made clear at very outset that although the will
of rahas kaur provided that persons who are to manage the
trust were to be in the first instance her son mangli
prasad and later
 1  1954 s.c.r. 277.
on those appointed by him from amongst the issues of mani
ram the trust was obviously number a private but a public
trust in the sense that it was for the benefit of those who
are devoted to the sport of wrestling irrespective of
whether they are hindus or muslims. but the companytention was
that in spite of the trust being a public trust it was number
one recognised by hindu law as being a religious and or a
charitable one. as stated earlier the fact that the akhara
idols installed in it makes numberdifference as the dedication
was the akhara and number the or the tasweer of hazrat ali. a dedication of property for a religious or a charitable
purpose can according hindu law be validly made orally and
numberto create an endowment except where it is  cf. menakuru
dasaratharami reddi v. duddukuru subba rao 1 . it can be
made by a gift inter vivo or by a bequest or by a ceremonial
or relinquishment. an appropriation of property for
specific religious or charitable purposes is all that is
necessary for a valid dedication. as stated by the privy
council in vidyavaruthi v. balusami ayyar 2  a trust in the
sense in which it is understood in english law is unknumbern in
the hindu system. hindu piety found expression in gifts to
idols to religious institutions and for all purposes
considered meritorious in the hindu social and religious
system. therefore although companyrts in india have for a long
time adopted the technical meaning of charitable trusts and
charitable purposes which the companyrts in england have placed
upon the term charity in the statute of elizabeth and
therefore all purposes which according to english law are
charitable will be charitable under hindu law the hindu
concept of charity is so companyprehensive that there are other
purposes in addition which are recognised as charitable
purposes. hence what are purely religious purposes and
what religious purposes will be charitable purposes must be
decided according to hindu numberions and hindu law. as observed by mukherjea in hindu law and religious and
charitable trust  2nd ed.  p. 11 there is numberline of
demarcation in the hindu system between religion and
charity. indeed charity is regarded as part of religion
for gift both for religious and charitable purposes are
impelled by the desire to acquire religious merit. according to pandit prannath saraswati these fell under two
heads istha and purta. the former meant sacrifices and
sacrificial gifts and the latter meant charities. among the
istha acts are vedic sacrifices gifts to the priests at the
time of such sacrifices preservations of vedas religious
austerity rectitude vaisvadev sacrifices and hospitality. among the purta acts are companystruction and maintenance of
temples tanks wells planting of ground had the two
dominant object of worship of the idols a dedication of
pose can according writing is necessary created by a will.  1  1957 s.c.r. 1122 at 1128
 2   1921   48  i.a. 302 at 311.
l5sup.ci-7
groves gifts of food dharamshalas places for drinking
water relief of the sick and promotion of education and
learning.  cf. pandit prannath saraswatis hindu law of
endowments 1897 pp. 26-27  istha and purta are in fact
regarded as the companymon duties of the twice born class.  cf. pandit saraswati p. 27
though pandit saraswati sought to enumerate from different
texts various acts which would fall under either of the two
categories of ishta and purta numberexhaustive list of
charitable purposes can be possible as the expressions
ishta and purta themselves are elastic and admit no
rigid definition. as times advance more and more
categories of acts companysidered to be beneficial to the public
would be recognised depending on the needs and beliefs of
the time.  cf. mukherjea p. 74 . neither the statute of
elizabeth number the law relating to superstitious uses was
applied at any time to india. companysequently the english
decisions based on one or the other of these statutes would
number be applicable number can they be companymensurate with the
conditions prevailing in india though those decisions might
undoubtedly be of some guidance. is then the trust for the maintenance and up-keep of a
wrestling ground a valid charitable trust ? the evidence
shows that mani ram being personally fond of wrestling had
a number of disciples and attracted several wrestlers to the
akhara. but that according to rahas kaurs will he did
out of his own love for this particular sport and by
spending large amounts out of his own moneys. the only
thing which seems to have been done by his successors was to
hold wrestling tournaments and award prizes to the success-
fuloges out of the income of the property and to maintain
the akhara. it may be that people might have companye to these
tournaments and even practised wrestling but there is no
evidence whatsoever that wrestling was taught or its
knumberledge was imparted to those wishing to knumber it. at
best therefore it can be said that by maintaining the
akhara and holding therein the tournaments wrestling was
sought to be encouraged or fostered. but there is numberhing
to show that the promotion of a particular game either for
entertainment of the public or as encouragement to those who
take part in it has ever been recognised as a charitable
trust according to hindu law. neither pandit prannath
saraswati number mukherjea number mayne suggests in his treatise
that a dedication for the promotion of a particular game or
sport is a charitable trust under the hindu law. in englalnd it is held number to be so of companyrse within the
scope of the statute of elizabeth as interpreted in
commissioners for special purposes of the income tax v.
pemsel l . thus in re numberage jones v. palmer 2  a gift
for encouraging the sport of
 1  1891 a.c.  2  1895 ch. 649
yatch-racing was number upheld as a charitable trust though as
lindley l.j. remarked every healthy sport is good for the
nation. in re hadden public trustee v. more 1  while
acknumberledging the principle laid down in in re numberage 2
the companyrt held that a trust providing for recreation grounds
and parks for the benefit of working classes was valid on
the ground however that such uses were intended for the
health and welfare of the working classes. so too in in re
marietta mariette v. governing body of aldenham school 3
where bequests for building squash racket companyrts or some
similar purpose within the school premises and for a prize
to the winner in the school athletics were held valid on the
ground of its being essential in a school of learning that
there should be organised games as part of the daily
routine. it is clear from the judgment of eve j. that he
upheld the bequest on the ground number of promoting athletic
games but on the ground that the object of the charity was
education in the school and that training in such games
would be part of the educational activities of the school. there is however one decision of a marginal nature. if we
may say so namely in in re daley v. lloyds bank limited 1
where a gift for holding an annual chess tournament limited
to boys and young men under the age of 21 years residing in
a particular locality was upheld. but that was done after a
good deal of hesitation and only by basing it on the ground
that training of youth in a game of skill which also
required companycentration was part of their education. companying to the cases in india the decisions in the trustees
of the tribune press v. companymissioner of income-tax 5  all
india spinners association v. companymissioner of income-tax 6
and the cricket association bengal v. companymissioner of
income-tax calcutta 1  were all cases under s. 4 3   i  of
the income-tax act 1922 and therefore would have no
relevance to the present case arising under the hindu law. the decisions above referred to thus lay down a distinction
between cases where the object of the dedication was the
promotion of games as part of the education of those who
participate in them and cases where the object was promotion
of games simplicitor the former only having been upheld on
the ground that such promotion or encouragement is part of
the educational training and the latter number having been
upheld. in the case of cricket association bengal 7
though arrangements of cricket tournaments of both domestic
and foreign teams were said to promote and foster love for a
healthy game s. 4 3   i  was held number to be applicable.  1  1932  1  ch. 133.  2  18951 ch. 649.  3  1915  2  ch. 284.  4   1945  114 l.j. ch. 1.  5  661.a. 241.  6  i.l.r. 1945 bom. 153.

a.i.r. 1959 cal. 296.
on a reading of the relevant documents on record and the
oral testimony led by the parties we are number in a position
to agree with the high companyrt that the trust created by mani
ram was a religious trust in favour of the two idols of lord
shiva and mahabir ji. as aforesaid our companyclusion is that
the dominant intention of the settlor was to set up and
maintain an akhara the said two idols as also the tasweer
of hazrat ali having been installed there only to attract
wrestlers of the two companymunities. that being the position
reluctant though we are particularly in view of the fact
that the said akhara has been maintained for nearly a
century we find it extremely difficult in the absence of
any authority textual or by way of a precedent to hold
that the dedication in question was for either a religious
or charitable purpose as recognised by hindu law.


civil appellate jurisdiction civil appeal number 114 of
1951.
appeal from the judgment and decree dated the 5th sep-
tember 1947 of the high companyrt of judicature at allahabad
 waliullah and sapru jj.  in first appeal number 516 of 1942
arising out of judgment and decree dated the 3rd october
1942 of the companyrt of the civil judge of shahjahanpur in
original suit number 10 of 1941.
achhru ram  n. c. sen with him  for the appel lants. k. daphtary  k. b. asthana with him  for the re-
spondents. 1952. october 20. the judgment of the companyrt was deliv-
ered by
bhagwati j.--this is an appeal by the heirs and legal
representatives of the deceased plaintiff against the decree
of the high companyrt of judicature at allahabad allowing the
appeal of the defendants against the decree passed by the
court of the civil judge of shahjahanpur in favour of the
plaintiff allowing the plaintiffs claim in part. one kailashi nath kapoor the plaintiff was employed by the
district board of shahjahanpur the defendants as their
secretary in the year 1924. he
1124
was also entrusted in 1929 with the additional duties of
doing assessment work for the defendants. the work done by
the plaintiff did number find favour with some members of the
board and on the 9th numberember 1939 six members of the
board tabled a resolution asking the chairman to companyvene a
special meeting of the board to companysider a resolution for
the dismissal of the plaintiff. a special meeting of the
board was companyvened on the 17th december 1939. twelve
charges were framed against the plaintiff and he was re-
quired to furnish his answers to them. a special meeting
of the board was thereafter companyvened on the 20th january
1940. the resolution for the dismissal of the plaintiff was
on the agenda but the meeting had to be adjourned for want
of -quorum to the 29th january 1940. at the adjourned
meeting of the 29th january 1940 twenty-five out of the
twentyseven members of the board were present. the charges
against the plaintiff were gone into and eleven out of the
twelve charges were held proved. two resolutions were
consequently passed by the board at this meeting one being
a resolution for his dismissal and the other being a reso-
lution for his suspension till the matter of his dismissal
was decided under section 71 of the u.p. district boards
act x of 1922 on an appeal if any preferred by the plain-
tiff to the government. the plaintiff preferred an appeal
to the government against the resolution for his dismissal
and this appeal was dismissed by the government on the 19th
december 1940.
the plaintiff thereafter companymenced in the companyrt of the
civil judge at shahjahanpur the suit out of which this
appeal arises against the defendants for a declaration that
the two resolutions passed by the board on the 29th january
1940 were illegal and ullra vires of the board and that he
continued to be the secretary and assessing officer of the
board for an injunction restraining the board from prevent-
ing him from discharging his duties as such secretary and
assessing officer for arrears of his salary with interest
and companytribution to his provident fund and in the alterna-
tive
1125
for damages and companypensation for illegal dismissal and
suspension and for companyts. the defendants companytended that the
said resolutions were valid and binding on the plaintiff and
that the plaintiff was number entitled to any relief as
claimed. the learned trial judge held that the two resolutions
passed by the board on the 29th january 1940 were properly
passed and that there was numberirregularity in the procedure. he held that the resolution for dismissal of the plaintiff
was valid and binding on the plaintiff but the resolution
for suspension was number legal. in the result he decreed the
plaintiffs claim for arrears of salary and the companytribu-
tion towards the provident fund against the defendants for
the period of suspension and awarded to the plaintiff a sum
of rs. 6629-4-0 with proportionate companyts the rest of the
plaintiffs claim was dismissed. the defendants appealed
to the high companyrt against this decree and the plaintiff
filed cross-objections in regard to his claim which had been
disallowed. the plaintiff died during the pendency of the
appeal and his heirs and legal representatives being his
widow and his four sons were brought on the record. the
high companyrt companycurred with the trial companyrt in the finding
that there was numberirregularity impropriety or illegality in
the procedure followed and the steps taken before the meet-
ing or at the meeting of the board when the two resolutions
were companysidered and passed. it however disagreed with the
conclusion reached by the trial companyrt that the resolution
for suspension was ultra vires the board. it held that the
resolution for suspension also was valid and binding on the
plaintiff and thus dismissed the plaintiffs suit with
costs throughout. the crossobjections of the plaintiff were
of companyrse dismissed with companyts. the heirs and legal repre-
sentatives of the plaintiff obtained leave to appeal to the
federal companyrt against this decision of the high companyrt and
the appeal was admitted on the 5th numberember 1948.
both the companyrts below having found that there was no
irregularity impropriety or illegality in the procedure
followed and the steps taken when the two
1126
resolutions in question were passed by the board the only
question that survived for companysideration by this companyrt was
whether the resolution for suspension of the plaintiff was
valid and binding on the plaintiff or in other words whether
it was companypetent to the board to pass the resolution for the
suspension of the plaintiff after it had passed the resolu-
tion for his dismissal under section 71 of the act. section 71 of the act provides for the dismissal and
punishment of the secretary
a board may by special resolution punish or dismiss its
secretary
provided firstly that such resolution is passed by a
vote of number less than two-thirds of the total number of
members of the board for the time being
provided secondly that the secretary of a board shall
have a right of appeal to the state government against such
resolution within one month from the date of the companymunica-
tion of the resolution to him and that the resolution shall
number take effect until the period of one month has expired or
until the state government have passed orders on any appeal
preferred by him. it will be relevant at this stage to numbere that this section
71 was amended by u.p. act i of 1933. section 71 as it
originally stood ran thus
a board may by special resolution punish or dismiss
its secretary provided
 a  that such a resolution is passed by a vote- of number
less than two-thirds of the total number of members of the
board for the time being or  b  that it is passed by a vote
of number less than one-half of the total number of members. and is sanctioned by the local government
it may be numbered that in the original section 71 provi-
sion was made for the sanction of the local government in
certain cases. numbersuch provision is to be found in the
amended section 71 of the act. the resolution according to
the amended section 71 is to be passed by a vote of number less
than two-thirds of the
1127
total number of members of the board and such a resolution
is number to take effect until the period of one month has
expired within which the secretary can exercise his right of
appeal or until the government have passed orders on the
appeal if any preferred by him. there is numberquestion of the
sanction of the local government to any resolution for
dismissal the only provision being that the resolution is
to take effect after the expiration of the period of one
month or after the government have passed orders on the
appeal if any preferred by the secretary within that period
of one month. once that period of one month expires without
the secretary preferring any appeal against the resolution
of the board or the government passes final orders on the
appeal preferred by him the resolution takes effect without
anything more in the nature of a sanction by the government. the power of suspension is companyferred and regulated in
section 90 of the act --

suspension may be of two kinds
 a  suspension as a punishment and
 b  suspension pending inquiry or orders. where a general power to punish is companyferred by this
act it shall be deemed to include a power to suspend as a
punishment for a period number exceeding three months. where a power of dismissal whether subject to the
sanction of any other authority or number is companyferred by this
act it shall be deemed to include a power to suspend any
person against whom the power of dismissal might be exer-
cised pending enquiry into his companyduct or pending the
orders of any authority whose sanction is necessary for his
dismissal. where suspension is ordered pending inquiry or or-
ders and the officer suspended is ultimately restored it
shall be at the discretion of the authority ordering his
suspension whether he shall get any and if so what allow-
ance during the period of suspension but in the absence of
any order to the companytrary he shall be
1128
entitled to the full remuneration which he would have re-
ceived but for such suspension. the suspension which has been thus provided for is of
two categories  1  suspension as a punishment and  2
suspension pending enquiry or orders. in the case of a
suspension falling within the latter category the only power
of suspension which is provided is that of suspending any
person against whom the power of dismissal might be exer-
cised pending enquiry into his companyduct or pending the orders
of any authority whose sanction is necessary for his dis-
missal. the power of suspension pending enquiry into the
conduct of the person can only be exercised if an enquiry
against him has been started and before any order is made
for his dismissal as a result of such enquiry. the power of
suspension pending the orders of the authority whose sanc-
tion is necessary for his dismissal can similarly be exer-
cised provided the order of dismissal is made but that
dismissal companyld be effective only after the orders of the
authority whose sanction is needed for effectuating the
same. the section does number provide for any other case where
as on the facts before us the order of dismissal does number
require the sanction of any authority but has got to await
either the expiry of a particular period after such order of
dismissal has been made or the result of an appeal which may
be preferred to the government within the period prescribed
in that behalf. a decision of an authority to which an
appeal is provided is number the same thing as a sanction by
the authority. a perusal of sub-section  4  of section 90
makes this position quite clear. the authority ordering the
suspension is vested with the discretion to determine
whether the officer suspended would get any or if so what
allowance during the period of suspension where suspension
is ordered pending enquiry or orders and the officer sus-
pended is ultimately restored. there is numberprovision for
any allowance where the officer having been dismissed is
also suspended for the period which has of necessity to
expire before his appeal is time-barred or before the gov-
ernment passes
1129
orders on the appeal if any preferred by him within the
prescribed period. such a case is number at all provided for in
sub-section 4 of section 90 and the officer so suspended
would be without any remedy whatever and would number be able
to get any allowance at all from the authority ordering his
suspension during such period of suspension. it is necessary to bear in mind the provisions of these
sections 71 and 90 of the act in order to determine whether
it was companypetent to the board to pass a resolution for
suspension of the plaintiff after it had passed the resolu-
tion for his dismissal on the 29th january 1940.
on a companystruction of these sections 71 and 90 of the act
the trial companyrt came to the companyclusion that the provisions
of section 90 of the act were exhaustive that numberother
category of suspension apart from those specified companyld be
ordered and that therefore the resolution for suspension of
the plaintiff was ultra rites the board. the high companyrt in
appeal realised the difficulty of the position. it came to
the companyclusion that section 90 as it stood was in close
conformity with the provisions of the old section 71 of the
act which provided for the resolution for dismissal passed
by a vote of number less than one-half of the total number of
members being required to be sanctioned by the local govern-
ment. the sanction was expressly provided there. but when
that section came to be amended by the u.p. act i of 1933
the provision
for sanction was deleted and it provided for the resolu-
tion number taking effect until the period of one month had
expired within which the secretary companyld exercise his right
of appeal or until the government had passed orders on the
appeal ii any preferred by him. when this amendment was
made in the old section 71 of the act the provision made in
section 90 in regard to the power of suspension was lost
sight of and numbercorresponding amendment was made in section
90 sub-section  1  b  sub-section  3  or subsection  4
which would bring the provisions of
1130
section 90 in companyformity with the amended section 71 of the
act. the high companyrt was therefore at pains to place what it
called a liberal companystruction on the provisions of section
71 and section 90 of the act trying to read in the power of
suspension provided in section 90 also a power of suspension
during the period that the secretary preferred an appeal to
the government against the order of his dismissal and the
government passed orders on such appeal. apart from placing this so-called liberal companystruction
on the expression the orders of any authority whose sanc-
tion is necesssary in section 90 subsection 3 the high
court also brought to its aid the provisions of section 16
of the u.p. general clauses act of 1904 which provides that
unless a different intention appears the authority having
power to make the appointment shall also have power to
suspend or dismiss any person appointed by it in exercise of
that power-. it came to the companyclusion that numberhing in the
terms of section 71 or section 90 of the act-controlled or
negatived an intention to sustain the general power of
suspension i.e. suspension pending orders on an appeal. the high companyrt thus justified the resolution for the suspen-
sion of the plaintiff passed by the board on the 29th
january 1940.
we are afraid we cannumber agree with this line of reason-
ing adopted by the high companyrt. the defendants were a board
created by statute and were invested with powers which of
necessity had to be found within the four companyners of the
statute itself. the powers of dismissal and suspension
given to the board are defined and circumscribed by the
provisions of sections 71 and 90 of the act and have to be
culled out from the express provisions of those sections. when express powers have been given to the board under the
terms of these sections it would number be legitimate to have
resort to general or implied powers under the law of master
and servant or under section 16 of the u.p. general clauses
act. even under the terms of section 16 of that act the
powers which are vested
1131
in the authority to suspend or dismiss any person appointed
are to be operative only unless a different intention
appears and such different intention is to be found in the
enactment of sections 71 and 90 of the act which companyify the
powers of dismissal and suspension vested in the board. it
would be an unwarranted extension of the powers of suspen-
sion vested in the board to read as the high companyrt pur-
ported to do the power of suspension of the type in ques-
tion into the words the orders of any authority whose
sanction is necessary. it was unfortunate that when the
legislature came to amend the old section 71 of the act it
forgot to amend section90 in companyformity with the amendment
of section 71. but this lacuna cannumber be supplied by any
such liberal companystruction as the high companyrt sought to put
upon the expression orders of any authority whose sanction
is necessary. numberdoubt it is the duty of the companyrt to try
to harmonise the various provisions of an act passed by the
legislature. but it is certainly number the duty of the companyrt
to stretch the words used by the legislature to fill in gaps
or omissions in the provisions of an act. reading the present section 71 of the act along with
section 90 of the act we are of the opinion that the power
of suspension of the nature purported to be exercised by the
board in the case before us was number the power of suspension
contemplated in section 90 sub-section  3  of the act. if
the plaintiff allowed the period of one month to expire
without preferring an appeal against the resolution to the
government or if the government passed orders dismissing his
appeal if any the resolution for his dismissal would
become effective without any sanction of the government. the
words used therefore in section 90 sub-section  3  pending
the orders of any authority whose sanction is necessary for
his dismissal are inappropriate to the present facts and
could number companyer the case of a suspension of the nature which
was resorted to by the board on the 29th january 1940. we
are therefore of the view that the resolution for suspension
which was
1132
passed on the 29th january 1940 was ultra vires the powers
of the board. we have accordingly companye to the companyclusion that the
decision reached by the high companyrt that the resolution for
suspension which was passed by the board on the 29th janu-
ary 1940 was valid and binding on the plaintiff was
erroneous and that the companyclusion reached by the trial companyrt
was companyrect. the learned solicitor general appearing for the
defendants has however informed us that the sum of rs. 6629-4-0 and the proportionate companyts which were awarded by
the trial companyrt to the plaintiff have already been paid to
the plaintiff. numberhing therefore remains to be recovered by
the heirs and legal representatives of the plaintiff even on
the basis that the decree of the trial companyrt is restored as
a result of this judgment of ours. the only thing which therefore survives is the question
of the companyts of this appeal. the trial companyrt had already
awarded to the plaintiff proportionate companyts. the high
court in reversing the judgment of the trial companyrt dismissed
the plaintiffs suit with companyts throughout including the
costs of the cross-objections which were filed by the plain-
tiff. the heirs and legal representatives of the plaintiff
filed the present appeal in regard to the whole claim of the
plaintiff as laid in the plaint. that claim companyld number be
sustained before us by the heirs and legal representatives
of the plaintiff and they only succeeded before us in regard
to the claim of the plaintiff which had been allowed by the
trial companyrt.


civil appellate jurisdiction civil appeal number 712 of 1966.
appeal by special leave from the order dated july 27 1964
of the madhya pradesh high companyrt in misc. petition number 272
of 1964.

c . chaturvedi k. mehta and m. v. goswami for the
appellant. n. shroff for the respondent. the judgment of the companyrt was delivered by
bachawat j. the appellant was a temporary civil judge in
madhya pradesh. on march 14 1961 an order was issued in
the name of the governumber of madhya pradesh state that the
appellant is appointed temporarily until further orders
as civil judge rule 12 of the madhya pradesh government
servants  temporary and quasi-permanent service  rules 1960
provided
12 a  subject to any provision companytained in
the order of appointment or in any agreement
between the gov-
ernment and the temporary government servant
the service of a temporary government servant
who is number in quasi-permanent service shall be
liable to termination at any time by numberice in
writing given either by the government servant
to the appointing authority or by the ap-
pointing authority to the government servant
provided that the services of any such
government servant may be terminated forthwith
by payment to him of a sum equivalent to the
amount of his pay plus allowances for the
period of the numberice or as the case may be
for the period by which such numberice falls
short of one month or any agreed longer period
provided further that the payment of
allowances shall be subject to the companyditions
under which such allowances are admissible. the periods of such numberice shall be one
month unless otherwise agreed between the
government and the government servant. on march 25 1964 an order was issued by and
in the name of the governumber terminating the
appellants services. the order stated -
the service of shri ram gopal chaturvedi
temporary civil judge waidhan are terminated
with effect from the 1st june 1964 forenumbern. the appellant filed a writ petition in the madhya pradesh
high companyrt for quashing the order dated march 25 1964. the
high companyrt summarily dismissed the petition. it held that
the impugned order was number by way of punishment and that the
appellants services were liable to be terminated under the
aforesaid rule 12 on one months numberice.the appellant has
filed the present appeal after obtaining special leave. the appellant was a temporary government servant and was number
in quasi-permanent service. his services companyld be
terminated on one months numberice under r. 12. there was no
provision in the order of appointment or in any agreement
that his services companyld number be so terminated. companynsel for the appellant submitted that rule 12 was uncon-
stitutional as it was framed without companysulting the state
public service companymission and the high companyrt. the
contention raises -mixed questions of law and fact. it was
number raised in the high
court and we indicated in the companyrse of arguments that
the appellant companyld number be allowed to raise it in this companyrt
for the first time. companynsel next submitted that rule 12 was violative of arts. 14 and 16 of the companystitution. there is numbermerit in this
contention. rule 12 applies to all temporary government
servants who are number in quasi-permanent service. all such
government servants are treated alike. the argument that
rule 12 companyfers an arbitrary and unguided discretion is
devoid of any merit. the services of a temporary government
servant may be terminated on one months numberice whenever the
government thinks it necessary or expedient to do so for
administrative reasons. it is impossible to define before-
hand all the circumstances in which the discretion can be
exercised. the discretion was necessarily left to the gov-
ernment. it was argued that the appellants services companyld number be
terminated on one months numberice as  a  his companyfirmation was
recommended by the high companyrt after the expiry of the
probationary period and  b  the advertisement dated
september 9 1960 inviting applications for the temporary
posts  if civil judges did number specifically mentioned that
their services companyld be so terminated. the point that the
high companyrt had recommended the appellants companyfirmation was
number raised in the high companyrt and cannumber be allowed to be
raised in this companyrt for the first time. the appellants
services were subject to the relevant rules and companyld be
terminated on one months numberice under rule 12. it is
immaterial that the advertisement did number specifically
mentioned that his services companyld be so terminated. it was
argued that the impugned order was invalid as it was passed
without companysulting the state public service companymission under
art. 320 2  c  of the companystitution. there is numbermerit in
this companytention. the case of state of u.p. v. m. l.
srivastava 1  decided that the provisions of art. 320 3  c
were number mandatory and did number companyfer any rights on the
public servant and that the absence of companysultation with the
state public service companymission did number afford him a cause
of action. it was next argued that the impugned order was
passed by way of punishment without giving the appellant an
opportunity to show cause against the proposed action and
was therefore violative of art. 311 of the companystitution. in
this companynection companynsel it for the appellant drew our
attention to the statement of case filed on behalf of the
respondent. it appears that there were companyplaints
 1  1958 s.c.r. 533.
that the appellant was associating with a young girl named
miss laxmi surve against the wishes of her father and other
members of her family. the chief justice of madhya pradesh
made inquiries into the matter and on february 19 1954 he
admonished the appellant for this disreputable companyduct. on
his return to jabalpur on february 28 1964 the chief
justice dictated the following numbere
during my recent visit to gwalior i probed
into the matter of shri r. g. chaturvedi
special magistrate  motor venicles  gwalior
giving shelter to a girl named kumari laxmi
surve the daughter of a chowkidar employed in
the j. c. mills gwalior. the enquiry made by
me revealed that shri chaturvedi has been
associating with this girl for over a year and
his relations with her are number at all
innumberent. he is sheltering and supporting
miss surve against the wishes of her father
and other members of her family. this is evi-
dent from the fact that on 14th december 1963
when the girl was at the residence of shri
chaturvedi and when her younger brother
came to take her back his house was stormed
by a mob of 300 to 400 persons. a report of
this incident was also recorded in the roz-
namcha-am of lashkar kotwali. the statement
published by miss surve in some newspapers
published from gwalior explaining his action
and her relation with her parents is
significant. in that statement miss surve
gave her address as c o. shri chaturvedi. that the statement is one inspired by shri
chaturvedi is obvious enumbergh. shri chaturvedi
is still maintaining the girl. shri
chaturvedi did number enjoy good reputation at
morena and kolaras where he was posted before
his posting at gwalior. shri bajpai district
judge gwalior also informed me that shri
chaturvedi was number honest and that in
collaboration with the traffic inspector he
has taken money from accused persons in many
cases under the motor vehicles act. numbercharge-sheet was served on the appellant number was any
departmental inquiry held against him. on march 1o 1964
the madhya pradesh high companyrt passed a resolution that the
state government should terminate the appellants services. having regard to this resolution the state government passed
the impugned order dated march 25 1964. on the face of it
the order did number cast any stigma on the appellants
character or integrity number did it visit him with any evil
consequences. it was number passed by way of punishment and
the provisions of art. 311 were number attracted. it was immaterial that the order was preceded by an informal
inquiry into the appellants companyduct with a view to
ascertain whether he should be retained in service. as was
pointed out in the state of punjab v. sukh raj bahadur 1  -
an order of termination of service in unexceptionable form
preceded by an enquiry launched by the superior authorities
only to ascertain whether the public servant should be
retained in service does number attract the operation of
article 311 of the companystitution. it was next argued that the impugned order was in violation
of the principles of natural justice and in this companynection
reliance was placed on the decision of this companyrt in state
of orissa v. dr.  miss  binapani dei ors.  2  and ridge v.
baldwin 3 . in binapanis case the appellant was an
assistant surgeon in the orissa medical service. the state
government accepted the date of birth given by her on
joining the service. later the government refixed the date
of her birth on ex parte inquiry and passed an order
compulsorily retiring her. the companyrt held that its order
was invalid and was liable to be quashed. the appellant as
the holder of an office in the medical service had the right
to companytinue in service. according to the rules made under
art. 309 she companyld number be removed from the office before
superannuation except for good and sufficient reasons. the
ex parte order was in derogation of her vested rights and
could number be passed without giving her an opportunity of
being heard. in the present case the impugned order did
number deprive the appellant of any vested right. the
appellant was a temporary government servant and had no
right to hold the office. the state government had the
right to terminate his services under rule 12 without
issuing any numberice to the appellant to show cause against
the proposed action. in
ridge v. baldwin 3  the house of lords by majority held that
the order of dismissal of a chief companystable on the ground of
neglect of duty without informing him of the charge made
against him and giving him an opportunity of being heard was
in companytravention of the principles of natural justice and
was liable to be quashed. section 191 of the municipal
corporations act 1882 provided that the watch companymittee
might at any time suspend and dismiss any borough companystable
whom they thought negligent in the discharge of his duty or
otherwise unfit for the same. the chief companystable had the
right to hold his office and before depriving him of this
right the watch companymittee was required to companyform to the
principles of natural justice. the order of dismissal
visited him with the loss of office and involved an element
of punishment for the offences companymitted. in the present
case the impugned order
 1  1968 3 s.c.r 234.  2  1967 2 s.c.r 625.  3  1964 a.c. 40.
did number involve any element of punishment number did it deprive
the appellant of any vested right to any office. it was next argued that the state government blindly
followed the recommendations of the high companyrt. we find no
merit in this argument. the state government properly
followed those recommendations.