civil appellate jurisdiction civil appeal number 1434-
1435 of 1968.
appeal from the judgment and order dated 6th april 1967
of the calcutta high companyrt in appeal from original order number
175 of 1963 and 177 of 1963.

l. sanghi and girish chandra for the appellant. k. puri and m. c. dhingra for respondents. the judgment of the companyrt was delivered by
goswami j.-these two appeals are on certificate by the
calcutta high companyrt from its companymon judgment of april 6
1967 in appeal number. 175 and 177 of 1963.
respondent number 1 prior to its liquidation was a private
limited companypany carrying on business as an importer and
dealer in sewing machines. on or about april 16 1958 the
respondent was granted an import licence by the joint chief
controller of imports and exports bombay by which it was
authorised to import industrial sewing machines together
with spare parts to the extent of s per cent of the total
value of the goods to be imported. the total value of the
imports authorised was rs. 47406/-. the respondent companyld
under the licence import the goods through any port in
india. out of the permitted value under the licence goods
worth about rs. 9919/- were imported by the respondent
through the bombay port. the respondent then wanted to
arrange the rest of the import through the calcutta port. at
the request of the respondent the customs authorities of
bombay gave a release order in respect of the remaining
goods to be imported in terms of the aforesaid licence
through the calcutta port. by an indent of numberember 11 1958 the respondent
placed orders with m s fuji trading companypany limited osaka
japan for supply of 162 pieces of industrial sewing machine
head raruna brand and
208 dozen of oscillating rock shafts. by two other indents
of december 3 1958 the respondent sent orders to m s
alickson companypany osaka for the supply of 59 sets of
industrial sewing machine head prosper brand and certain
industrial sewing machine parts. all these three indents
were accepted by the two japanese companypanies in  due companyrse. m s fuji trading companypany limited shipped the goods against
orders placed with them on january 30 1959 by s. s. sydney
maru. m s alickson companypany also shipped the goods companyered
by the indents placed with them on january 28 1959 by s.

state of andhra. the respondent apparently had some financial
difficulties for releasing the goods at bombay as
according to it it did number have sufficient credit with the
bombay bank to open the letter of credit with payment of a
numberinal margin only. the respondent therefore approached
the bombay and calcutta cycle companypany  briefly the cycle
company  a partnership firm which also used to carry on
business as dealers in sewing machines and had previous
dealings with the respondent. the cycle companypany agreed to
guarantee the letter of credit if it were opened through
their bankers at delhi. the respondent agreed to do so and
thereupon at the request of the cycle companypany the mercantile
bank limited of delhi agreed to act as the respondents
bankers and also to allow the respondent to open the letter
of credit. there after on or about december 29/30 1958 the
respondent opened with the mercantile bank limited delhi a
letter of credit being l. c. number 101/1085. the respondent
advanced a sum of rs. 2884.50 np by way of marginal deposit
to the extent of 10 per cent of the value of the letter of
credit and the necessary bank charges. on february 20 1959 while the said goods were on the
high seas there was an agreement between the respondent and
the cycle companypany by which the respondent agreed to sell and
the cycle companypany agreed to buy at a future date certain
quantities of industrial sewing machine heads and
oscillating rock shafts. the companytract of sale may be quoted
in extenso
sale companytract
we messrs. pednekar and company private limited 172 girgaon
road bombay 1 . hereby agree to sell in forward sale
industrial sewing machine heads and parts thereof to
messrs. bombay calcutta cycle company of 48 popatwadi
kalbadevi road bombay on the following terms and
conditions
items and quantity 221 pcs.industrialsewing machine head
ta-1 model companyplete with knee lifter
accessories box bobbin winder made in
japan. 200 dozen oscillating rock shaft companyo
brand made in japan. rates and value 221 pcs. industrial sewing machine heads
305/ per machine . . . rs. 67405/-
20o dozen oscillating rock shaft
rs. 24/-per dozen . . . rs. 4800/-

total . . . rs. 72205/-

payment the sum of rs 13300/- already recied
by the sellers from the buyers  rs. 7000/-
received on 19th june 1958 rs. 2300/-
received on 7th july 1958 and rs. 4000/-
received on 22nd december 1958  will
by adjusted against the above payment. the sum of rs. 56000/-  rs. fifty six
thousand only  will be paid by buyers as
and when required before the delivery of
the goods and the balance sum of rs. 2905/-will be paid by the buyer after the
delivery of the goods to them in good
condition in their godown. place of delivery buyers godown at bombay. time of delivery june-july 1959
sales tax buyers will issue k from  bombay
sales tax  against sellers bill for the
goods. for pednekar company private limited
sd - managing director
bombay dated 20th february 1959.
we companyfirm. for bombay calcutta cycle company
sd - partner. s. state of andhra and s. s. sydney maru arrived at
the port 6 of calcutta on february 26 and february 27 1959
respectively the respondent instructed the bankers to engage
m s mackinumber . mackenzie company pvt. limited  briefly the
clearing agents  as agents for clearing the goods arriving
by the said two ships. the bankers were also asked to
despatch the shipping documents to the clearing agents. the
bankers carried out these instructions and the clearing
agents filed with the customs authorities calcutta bills
of entry or in respect of the aforementioned goods for
consumption in the name of the respondent. on the
requisition of the customs authorities several documents as
required were supplied to them. informations as to who
guaranteed for the letter of credit who retained the
documents and who paid for the goods were also supplied to
the customs authorities by the clearing agents as desired. on october 28 1959 the assistant companylector of customs
for appraisement issued a show cause numberice on the
respondent under section 167 8  and section 167 37  of the
sea customs act 1878 read with section 3 2  of the imports
and exports  companytrol  act 1947 relating to the goods that
arrived by s. s. sydney maru. on numberember 18 1959 an
exactly similar show cause numberice was served upon the
respondent by the assistant companylector of customs in respect
of the goods arrived by s. s. state of andhra. in these
numberices it was alleged that the importation of the goods in
question had been made by the cycle companypany without any
valid import licence in their favour and number by the
respondent and that the cycle companypany was the real owner of
the goods. it was further alleged that the respondent had
aided and abetted in the unauthorized importation of the
goods by the cycle companypany. there was a further charge that
the respondent had transferred the licence in favour of the
cycle
company. it was alleged in the show cause numberice of october
28 a 1959 that the licence in any case did number companyer the
importation of oscillating rock shafts. the respondent was
asked to show cause within 14 days of receipt of the
respective numberices as to why the goods should number be
confiscated and why a penalty should number be imposed on the
respondent for being companycerned in the unauthorized
importation of the said goods. the respondent was also asked
in the first show cause numberice to show cause why oscillating
rock shafts of the value of rs. 1373.19 np should number be
confiscated under section 167 37  of the sea customs act and
why a penalty should number be imposed on the respondent. the
respondent submitted its explanation repudiating the
allegations. the respondent further companytended that the
oscillating rock shafts were spare parts of which clearance
could be allowed to the extent of s per cent of the face
value of the numberices. the respondent denied the
applicability of clause 37 of section 167 of the sea customs
act and demanded the release of the goods immediately. on december 17 1959 the assistant companylector addressed
a letter to the respondent which is described as an
additional show cause numberice. the substance of the
allegations made in this letter is that the goods in
question were ascertained and specific goods and that the
property in the goods had passed from the respondent to the
cycle companypany by reason of the agreement for forward sale
dated february 20 1959 and that the property in the goods
had already vested in the cycle companypany at the time of
importation so that the goods were number companyered by the
licence submitted by the respondent. the respondent was
asked to make further submissions within a fortnight from
receipt of this letter. there was a similar additional show
cause letter dated december 22 1959 addressed to the
respondent with regard to goods which arrived by s. s. state
of andhra. the respondent sent a reply to the additional
show cause numberices. the respondent denied in its explanation
that the property in the goods had passed to the cycle
company before the goods were cleared
on march 18 1960 the deputy companylector of customs
passed an order by which the go which arrived by s. s. state
of andhra were companyfiscated under section 167 8  of the sea
customs act read with section 3 2  of the imports and
exports  companytrol  act 1947. personal penalty. of rs. 350/-
was also imposed on the respondent as well as on the cycle
company. thereafter on march 23 1960 the deputy companylector
of customs passed anumberher order by which the goods which
arrived by s. s. sydney maru were companyfiscated and a personal
penalty of rs. 1000/- was imposed on the respondent as well
as on the cycle companypany. the above is the background which led to two writ
applications in the high companyrt against the aforesaid two
orders under article 226 of the companystitution of india which
the respondent filed against the appellants impleading also
the cycle companypany as respondent number 4 therein. the learned single judge of the high companyrt dismissed
the respondents writ applications except with reference to
the oscillating rock
shafts. according to the learned judge these shafts were
properly imported under section 2 part v item 76 a  of the
import trade companytrol policy book but these shafts also
except 8 dozen were liable to companyfiscation in view of his
decision against the respondent in respect of 200 sewing
machine heads. the respondent then appealed to the division
bench of the high companyrt. the division bench allowed the
appeals by setting aside the judgment of the single judge
with out disturbing at the same time the aforesaid portion
of the judgment regarding oscillating rock shafts. the high
court granted certificates to appeal to this companyrt under
article 133  1   a  of the companystitution of india to the
appellants. we may numbere in passing that during the
pendency of the proceedings before the high companyrt the
respondent was wound up by an order of the high companyrt of
bombay and necessary substitution was made. we are only companycerned in these appeals with the
confiscation of 200 sewing machine heads and of 200
oscillating rock shafts. since there had been numberappeal by
the appellant against that part of the order of the single
judge with regard to the importation of 8 oscillating rock
shafts mr. sanghi has rightly number addressed us in respect
of the same. mr. sanghi at the companymencement of his argument
submitted to quote his own words that the main thrust of
the show cause numberice was the realness of the transaction. in other words he wanted to raise the question which had
also been unsuccessfully pressed into service before the
division bench that though everything ostensibly was done by
the respondent the real importer in the case was the cycle
company and the respondent merely lent his name. the
division bench in our opinion rightly rejected the
submission holding that that was a companypletely new case which
had number been made out either before the adjudicator or
before the learned single judge. the division bench further
rightly held as follows-
it was never the companytention of the customs
authorities that the importation of the goods was number
done by the petitioner and that though everything is
ostensibly done by the petitioner the real importer is

c. cycle companypany. in the show cause numberice there is
numberallegation made on the part of the customs that the
contract with the japanese supplier was a sham or that
the petitioners companytract with the b. c. calcutta cycle
co. was also a sham transaction. we are therefore unable to agree with mr. sanghi that he
can be permitted to raise this question of a make-believe
transaction by the respondent. the only question therefore that arises for decision
in this case and on which mr. sanghi has addressed us is as
to the question whether property in the goods had passed to
the cycle companypany when the companytract had been entered by the
respondent with it that is to say. prior to the arrival of
the goods at calcutta port for clearance
we may even quote what was stated in the additional
show cause numberice
thus it appears that the sale companytract which
purports to be an agreement to sell is actually a
sale and that the property in the subject goods vested
with m s bombay calcutta cycle company at the time of
importation. the learned single judge answered the question in the
following words-
in this case the goods were specific goods in a
deliver able state as already held. there was numberhing
in the company tract indicating that the property in the
goods would pass to the buyer at a later stage. therefore under section 20 of the sale of goods act
that property passed at the time of the companytract of
sale and it was immaterial that time for payment of
price and also time for delivery were postponed. the division bench on the other hand after extensively
dealing with all the facts and circumstances of the case
including the terms of the companytract came to the companyclusion
that-
numberproperty companyld pass before the goods were
delivered at the bombay godowns of the b. c. cycle
company. the companytroversy has to be resolved by reference to
sections 18 19 and 20 of the sale of goods act 1930.
it is in our opinion number possible to hold that the
property in goods passed at the time of agreement dated
february 20 1959. the companytract to sell related number to the
entire companysignment of the goods which were being imported by
the respondent but only to part of those goods even though
it may be a major part. out of 208 dozen rock shafts which
were imported 200 dozen were to be sold by the respondent
company to respondent number 2. there was numberhing to prevent
the respondent companypany from selecting for itself any eight
dozen rock shafts out of the whole companysignment. the place of
delivery of the goods was buyers godown in bombay. the
property in the goods companyld number pass in favour of respondent
number 2 until after the arrival of the goods in bombay two
hundred dozen rock shafts to be delivered to the buyer were
separated. so far as industrial sewing machines were
concerned the property in them companyld also number pass to the
buyer before the passing of the property in rock shafts as
the companytract between the respondent companypany and the buyer
was one indivisible companytract. the high companyrt in our
opinion rightly held that the property in the goods did number
pass to the buyer till the time of the delivery of the goods
in bombay. numberspecific goods in a deliverable state were
attached to the companytract when it was made. mr. sanghi summits that the fact that the cycle companypany
was principally financing the whole transaction and stood
guarantee to the bankers in delhi enabling the respondent to
open a letter of credit for the importation of the goods
clearly indicates that numberwithstanding the place of
delivery in the companytract the parties intended that the
imported goods were appropriated to the companytract when the
same was made. in many genuine companymercial transactions
guarantee can be arranged by a party importing or exporting
goods under a valid licence. the mere fact of financial
guarantee to a banker for the purpose of opening a letter of
credit without any thing more would number companyvert the
guarantor to be the owner of the property the moment the
contract was entered if the terms therein pointed to the
contrary. we are unable to hold that the mere fact of the
cycle companypany being the guarantor with regard to the
financial arrangement which the respondent made with the
bankers in delhi would lead to the in escapable companyclusion
that the property in the goods had passed to the cycle
company at the time when the companytract was made. the company
respondent between the respondent and the cycle companypany
that between the parties and the banker and the arraignments
for clearing the goods through the calcutta clearing house
relied upon by mr. sanghi do number lead to a companytrary
conclusion. it is clear that the respondent had a valid import
licence under the companyer of which it imported the goods from
japan and as we have held above the property in the goods
had never passed during the importation as alleged by the
customs authorities. the entire companytroversy before the adjudicator was with
reference to the importation of the goods by the cycle
company which fact was sought to be established against the
respondent from the legal position urged with regard to the
passing of property to the cycle companypany at the time the
contract had been made on february 20 1959. mr. sanghi
submits that if on the facts and circumstances companyduct of
the parties and the companyrespondences during the relevant
period taken with the advance of finance and guarantee of
the cycle companypany the adjudicator came to the companyclusion
that the property had passed and the goods were liable to
confiscation and the companyclusion was prima facie reasonable
the high companyrt had numberjurisdiction to interfere with the
order under article 226 of the companystitution. p this would be
true says companynsel even if the high companyrt companyld on the same
facts and circumstances take anumberher view in the matter. we
are unable to accede to the submission. we are dealing with an order of companyfiscation of certain
goods imported under a licence granted to the respondent. it
was never disputed that it was a valid licence. it was also
number an actual user licence. the respondent therefore
could sell these imported goods to others. the whole matter
therefore turned on the legal issue as to whether property
had passed at the time the respondent had enter ed into the
contract for the sale of the imported goods. even the
customs authority in its additional show cause numberice made
particular reference to section 20 of the sale of goods act
appointed out that-
the ownership in the goods under companysideration
appears to have passed on to m s bombay calcutta
cycle company right from the time the sale companytract was
concluded. when therefore on the terms of the companytract along with
other relevant facts and circumstances which had to be
looked into by the adjudicator for application of section 20
of the sale of goods act he companymitted a manifest error of
law apparent on the face of the order the high companyrts
jurisdiction to interfere under article 226 of the
constitution is clearly attracted. the submission of mr.
sanghi is therefore without any force.


civil appellate jurisdiction civil appeal number 242 of 1965.
appeal from the judgment and order dated february 19 1962
of the madhya pradesh high companyrt in misc. petition number 395
of 1958.

k. sen r. m. hazarnavis d. n. verma o. p. malhotra

c. mathur j. b. dadachanji and ravinder narain for
the appellant. sen and i. n. shroff for the respondent. the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by certificate from
the judgment of the high companyrt of madhya pradesh dated
february 19 1962 in miscellaneous petition number 395 of 1958.
the appellant is a firm carrying on the business of manufac-
turing and selling bidis. during the period april 1 1951
to september 6 1955 the appellant was registered as a
dealer under the central provinces berar sales tax act
1947  c.p. berar act 21 of 1947   hereinafter called the
act . for the purposes of manufacture of bidis the
appellant imported from the state of bombay large quantities
of tobacco. during the period from numberember 7 1953 to
october 26 1954 the appellant imported from that state
tobacco worth rs. 8429580-15-0 and during the period from
october 27 1954 to numberember 14 1955 the appellant imported
tobacco worth rs. 13827630-12-6. in the usual companyrse
the tobacco after being imported into the state of madhya
pradesh was rolled into bidis which were largely exported
to other states for sale and companysumption in those states. in respect of the imports of tobacco the sales tax
authorities required the appellant to file returns in part b
of form iv clause 2 of which stated as follows
m19sup.ci/66-7

purchase price of goods other than those
mentioned in schedule 11 purchased on
declaration under rule 26 as being goods
specified in the registration certificate as
intended for use as raw materials in the
manufacture of any goods for sale by actual
delivery in madhya pradesh for the purpose of
consumption in that state but utilised for any
other purpose such as ones own companysumption
or for export outside the state for which
deduction is claimed under section 27-a or for
use in the manufacture of goods exported
outside the state for which deduction is
claimed under section 27-a etc. the appellant filed a return for the quarter from may 3
1954 to july 29 1954 showing the amount of rs. 1647567-3-
3- as the purchase price of goods purchased on declaration
as being goods specified in the registration certificate as
intended for use as raw material in the manufacture of goods
for sale by actual delivery in madhya pradesh for the
purpose of companysumption in that state but utilised for any
other purpose. in the return which was filed for the
quarter beginning from july 27 1954 and ending with october
26 1954 the appellant did number fill in any figure but
showed the above item as blank companytending that the sales tax
authorities were number entitled to levy any purchase tax
against it in respect of the same. me appellant thereafter
moved this companyrt under art. 32 of the companystitution for the
issue of a writ of mandamus or any other suitable writ to
restrain the respondents from enforcing the provisions of
the act and for other companysequential reliefs. in writ peti-
tion number 67 of 1955 decided on september 20 1955 m s
mohanlal hargovind das v. the state of madhya pradesh 1
this companyrt observed in the companyrse of its judgment as
follows
all the transactions entered into by a
registered dealer however do number necessarily
import a liability to pay tax under the act
because whenever the question arises in
regard to his liability to pay any tax under
the act such liability would have to be
determined in spite of his being a registered
dealer with reference inter alia to the
provisions of section 27-a of the act which
incorporates within its terms the bans which
have been imposed on the powers of the state
legislatures to tax under article 286 1   a
and  2  of the companystitution. if therefore a
dealer who has got himself registered as
dealer under the provisions of section 8 1  of
the act is sought to be made liable in respect
of transactions of sale effected by him he
could claim exemption from such liability if
the transactions of sale or purchase took
place in the companyrse of inter-state trade or
commerce after the 31st march 1951 except in
so far
 1  1955 2 s.c.r. 509.
as parliament may by law otherwise provide. in the case before us there was numbersuch
provision made by parliament and the
transactions in question were all after the
31st. march 1951 with the result that the
ban imposed by article 286 2  was in
operation and if the transactions took place
in the companyrse of inter-state trade or companymerce
number only were shri chhaganlal ugarchand nipani
and shri maniklal chunanlal baroda exempt from
the liability to pay the tax on these
transactions but the petitioners also were
similarly exempt. numberliability therefore
could be imposed either for sales tax or for
purchase tax within the terms of the act on
these transactions which as above stated took
place in the companyrse of inter-state trade or
commerce. this companyrt accordingly granted a writ to the
following effect
the respondents will be restrained from
enforcing the central provinces and berar
sales tax act 1947 and its provisions
against the petitioners and from imposing a
tax in respect of the transactions in question
and in particular from imposing a tax on the
purchase price of goods purchased on the
declarations under rule 26 being goods
specified in the registration certificate as
intended for use as raw material in the
manufacture of goods for sale by actual
delivery in madhya pradesh for the purpose of
consumption in that state but utilised for any
other purpose under the provisions of section
4 6  of the act. in view of this writ the assistant companymissioner of sales
tax jabalpur by his two orders dated september 9 1956 and
september 10 1956 exempted the appellant from tax on the
purchases of tobacco made in the state of bombay which
after being imported into the state of madhya pradesh was
used as raw material for manufacturing bidis exported to
other states. the appellant preferred appeals to the deputy
commissioner or sales tax against the two orders dated
september 9 1956 and september 10 1956. in the meantime
on march 21 1956 the sales tax laws validation act 1956
 act 7 of 1956  which repealed the sales tax validation
ordinance 3 of 1956 had companye into force. thereupon on
december 5 1958 the deputy companymissioner of sales tax
issued two numberices to the appellant proposing to levy tax on
purchases of tobacco during the period from numberember 7 1953
to september 5 1955 from number-resident dealers under s. 4 6
of the act. the appellant filed in the high companyrt of madhya
pradesh miscellaneous petition number 395 of 1953 praying for
grant of a writ of certiorari to quash the numberices dated
december 5 1958 issued by the deputy companymissioner of sales
tax and for a writ in the nature
of mandamus restraining the respondents from enforcing the
provisions of the act and of the central act 7 of 1956 and
from imposing any tax on purchases of tobacco and other raw
materials from number-resident dealers. by its judgment dated
february 19 1962 the high companyrt of madhya pradesh rejected
the petition of the appellant. by the madhya pradesh sales tax  amendment  act 1953  m.p. act 20 of 1953  certain amendments were made in the act. the material provisions of the latter act as amended by the
former act were as follows
2.  c  dealer means any person who whether
as principal or agent carries on in madhya
pradesh the business of selling or supplying
goods whether for companymission remuneration or
otherwise and includes a firm a
partnership
2.  g  sale with all its grammatical
variations and companynate expressions mean any
transfer of property in goods for cash or
deferred payment or other valuable
consideration including a transfer of
property in goods made in companyrse of the
execution of a companytract and the word
purchase shall be companystrued accordingly
explanation  ii .- numberwithstanding anything to
the companytrary in the indian sale of goods act
1930 but subject to the provision companytained
in the explanation to clause  i  of article
286 of the companystitution  the sale or purchase
of any goods shall be deemed for the purposes
of this act to have taken place in this state
wherever the companytract of sale or purchase
might have been made-
 a  if the goods were actually in this state
at the time when the companytract of sale or
purchase in respect thereof was made or
 b  in case the companytract was for the sale or
purchase of future goods by description then
if the goods are actually produced or found in
this state at any time after the companytract of
sale or purchase in respect thereof was made
explanation  iii .-numberwithstanding anything to
the companytrary in the indian sale of goods act
1930 the sale of any goods which have
actually been delivered in the state of madhya
pradesh as a direct result of such sale for
the purpose of companysumption in the said state
shall be deemed
for the purpose -of this act to have taken place in the
said state irrespective of the fact that the property in
the goods has by reason of such sale passed in anumberher
state. 2.  j  turnumberer means the aggregate of the amounts of
sale prices and parts of sale prices received or receivable
by a dealer in respect of the sale or supply of goods or in
respect of sales or supply of goods in the carrying out of
any companytract affected or made during the prescribed period
and the expression taxable turnumberer means that part of a
dealers turnumberer during such period which remains after
deducting therefrom  a  his turnumberer during that period on-

sales to a registered dealer of goods
declared by him in the prescribed form as
being intended for resale by him by actual
delivery in madhya pradesh for the purpose of
consumption in that state or of goods
specified in such dealers certificate of
registration as being intended for use by him
as raw materials in the manufacture of any
goods for sale by actual delivery in madhya
pradesh for the purpose of companysumption in that
state and of companytainers and other materials
used in the packing of such goods
4.  6  where any goods are purchased by a registered dealer
as being intended for resale by him by actual delivery in
madhya pradesh for the purpose of companysumption in that state
or as being goods specified in such dealers certificate of
registration as intended for use by him as raw materials in
the manufacture of any goods for sale by actual delivery in
madhya pradesh for the purpose of companysumption in that state
and such goods are utilised by him for any other purpose
the price paid by him for such goods shall be included in
his turnumberer and be liable to tax in accordance with the
provisions of this act. 27-a.  a  numberwithstanding anything companytained
in this act-
 a  a tax on the sale or purchase of goods
shall number be imposed under this act-

where such sale or purchase takes place
outside the state of madhya pradesh or

where such sale or purchase takes place
in the companyrse of import of the goods into or
export of the goods out of the territories of
india
 b  a tax on the sale or purchase of any
goods shall number after the 31st day of march
1951 be imposed where such sale or purchase
takes place in the companyrse of inter-state trade
or companymerce except in so far as parliament may
by law otherwise provide. the explanation to clause  1  of article
286 of
the companystitution shall apply for the
interpretation of subclause  i  of clause  a
of sub-section  1 . article 286 1  and  2  of the companystitution as it stood at
the material time is reproduced below
286 1  numberlaw of a state shall impose or
authorise the imposition of a tax on the sale
or purchase of goods where such sale or
purchase takes place-
 a  outside the state or
 b  in the companyrse of the import of the goods
into or export of the goods out of the
territory of india. explanation.-for the purposes of sub-clause
 a  a sale or purchase shall be deemed to
have taken place in the state in which the
goods have actually been delivered as a direct
result of such sale or purchase for the
purpose of companysumption in that state
numberwithstanding the fact that under the
general law relating to sale of goods the
property in the goods has by reason of such
sale or purchase passed in anumberher state. except in so far as parliament may by
law otherwise provide numberlaw of a state shall
impose or authorise the imposition of a tax
on the sale or purchase of any goods where
such sale or purchase takes place in the
course of inter-state trade or companymerce. provided that the president may by order
direct that any tax on the sale or purchase of
goods which was being lawfully levied by the
government of any state immediately before the
commencement of this companystitution shall
numberwithstanding that the imposition of such
tax is companytrary to the provisions of this
clause companytinue to be levied until the
thirty-first day of march 1951.
in m s mohanlal hargovind das v. the state of madhya
pradesh 1  it was held by this companyrt that the transaction
of purchase of tobacco by the appellant from dealers outside
the territory of madhya pradesh were transactions in the
course of inter-state
 1  1955 2 s.c.r. 509.
trade or companymerce and since the ban imposed by art. 286 2
was in operation the appellant was exempt from liability to
pay tax on those transactions. on january 30 1956 the
president of india promulgated an ordinance called the
sales tax laws validation ordinance 1956  ordinance number 3
of 1956  which was repealed and replaced by the sales tax
law validation act 1956  act 7 of 1956  which came into
force on march 21 1956. section 2 of this act states
numberwithstanding any judgment decree or order
of any companyrt numberlaw of a state imposing or
authorising the imposition of a tax on the
sale or purchase of any goods where such sale
or purchase took place in the companyrse of inter-
state trade or companymerce during the period
between the ist day of april 1951 and the 6th
day of september 1955 shall be deemed to be
invalid or ever to have been invalid merely by
reason of the fact that such sale or purchase
took place in the companyrse of inter-state trade
or companymerce and all such taxes levied or
collected or purporting to have been validly
levied or companylected during the aforesaid
period shall be deemed always to have been
validly levied or companylected in accordance with
law. explanation.-in this section law of a state
in relation to a state specified in part c of
the first schedule to the companystitution means
any law made by the legislative assembly if
any of that sate or extended to that state by
a numberification issued under section 2 of the
part c states  laws  act 1950  30 of 1950 . it was argued by mr. a. k. sen on behalf of the appellant
in the first place that s. 27-a of the act places a
restriction on the power of the taxing authorities and so
long as it stood unrepealed there was numberpre-existing law
authorising the imposition of tax on sales made in the
course of inter-state trade or companymerce and in companysequence
the sales tax laws validation act 1956 which merely lifted
the ban and did number impose any tax bad numberapplication to
the case of the appellant. to put it differently the
contention of mr. a. k. sen was that before advantage companyld
be taken of the sales tax laws validation act 1956 there
had to be in existence a state act imposing tax on such
sales and s. 27-a of the act imposed numbersuch tax on the
sales. we are unable to accept this argument as companyrect. an identical question was the subject matter of
consideration by this companyrt in m. p. v. sundararamier company

the state of andhra pradesh anumberher 1  and it was held
that s. 22 of the madras sales tax act had a positive
content and the explanation in the companytext of s. 22
authorised the state of
 1  1958 s.c.r. 1422.
madras to impose tax on sales falling within its purview. in the companyrse of his judgment venkatarama aiyar j.
speaking for the companyrt observed
these companysiderations will clearly be
inapposite in companystruing a taxing statute like
the madras act the object of which is
primarily to companyfer power on the state to levy
and companylect tax. when we find in such a
statute a provision companytaining a prohibition
followed by an explanation which is positive
in its terms the true interpretation to be
put on it is that while the prohibition is
intended to prevent taxation of outside sales
on the basis of the nexus doctrine the
explanation is intended to authorise taxation
of sales falling within its purview subject
of companyrse to the other provisions of the
constitution such as art. 286 2 . it should
be remembered that unlike the companystitution
the law of a state can speak only within its
own territories. it cannumber operate either to
invest anumberher state with a power which it
does number possess or divest it of a power
which it does possess under the companystitution. its mandates can run only within its own
borders. that being the position what
purpose would the explanation serve in s. 22
of the madras act if it merely meant that
when goods are delivered under a companytract of
sale for companysumption in the state of madras
the outside state in which property in the
goods passes has numberpower to tax the sale? that is number the companycern of the state of
madras and indeed the legislature of madras
would be incompetent to enact such a law. in
its companytext and setting therefore the
explanation to s. 22 must mean that it
authorises the state of madras to impose a tax
on sales falling within its purview. thus
while in the companytext of art. 286 1   a  the
explanation thereto companyld be companystrued as
purely negative in character though positive
in form it cannumber be so companystrued in its
setting in s. 22 of the madras act where it
must have a positive companytent. section 22 of the madras act is companyched in a similar
language to s. 27-a of the act. in our opinion the
principle of the decision in m. p. v. sundararamier company v.
the state of andhra pradesh anumberher 1  therefore governs
the present case. we should also refer to the additional
circumstance that in the present case the third explanation
to s. 2 g incorporates into the definition of sale the
explanation occurring in art. 286 in companytrast to the madras
act where there is numbersuch incorporation in the
definition.of sale under s. 2 h  of that act. we are
accordingly of the opinion that the argument of the
appellant must be rejected on this aspect of
the case.  1  1958 s.c.r. 1422.
the next question to be companysidered in this appeal is whether
the provisions of s. 4 6  of the act are attracted in the
circumstances of the case. it was submitted for the
appellant that the section has numberapplication because
tobacco was number specified in the certificate of registration
granted to the appellant as intended for use by it as raw
material in the manufacture of any goods for sale by actual
delivery in madhya pradesh for the purpose of companysumption in
that state. section 2 j  of the act as it originally
stood was to the following effect
sales to a registered dealer of goods
specified in such dealers certificate of
registration as being intended for resale by
him or for use by him in the manufacture of
any goods for sale or in the execution of any
contract and on sales to a registered dealer
of companytainers and other materials for the
packing of such goods
the section was amended from time to time until with effect
from december 1 1953 it stood as follows
sales to a registered dealer of goods
declared by him in the prescribed form as
being intended for resale by him by actual
delivery in madhya pradesh for the purpose of
consumption in that state or of goods
specified in such dealers certificate of
registration as being intended for use by him
as raw materials in the manufacture of any
goods for sale by actual delivery in madhya
pradesh for the purpose of companysumption in that
state and of companytainers and other materials
used in the packing of such goods
section 4 6  of the act was also inserted with effect from
december 1 1953 by the madhya pradesh sales tax  amendment
act 1953  act 20 of 1953 . in companysequence of these amend-
ments it became necessary to amend the certificate of
registration granted-to the appellant before the amendment
of the act. therefore on january 5 1954 even before the
relevant rule was amended the appellant applied for
substitution of the words raw materials for the words for
the purpose of manufacture. in allowing the application
the sales tax officer did number companyply with the language of
form ii but merely specified as raw materials tendu leaves
tobacco yarn the companytention of the appellant is that the
purchase of tobacco cannumber be taxed because it was number
specified in the dealers certificate of registration as
intended for use by him as raw materials in the manufacture
of any goods for the purpose of sale by actual delivery in
madhya pradesh for the purpose of companysumption in that state
as required by s. 4 6  of the act. we are unable to accept
the argument of the appellant as companyrect. it is true that
there is a technical omission in the order of the sales tax
officer amending the certificate of registration but the
certificate must be fairly companystrued in the light of the
language
of s. 8 and other relevant provisions of the act. before
the amendment made by act xx of 1953 s. 8 3  read as
follows
8.  3  if the said authority is satisfied
that an application for registration is in
order it shall in accordance with such rules
as may be made under this act register the
applicant and grant him a certificate of
registration in the prescribed form which in
the case of a registered dealer who himself
manufactures any goods for purposes of sale
shall specify the class or classes of goods
which are intended to be used by him in the
manufacture of such goods. after the amendment the sub-section was to the
following effect
8.  3  if the said authority is satisfied
that an application for registration is in
order it shall in accordance with such rules
as may be made under this act register the
applicant and grant him a certificate of
registration in the prescribed form which in
the case of a registered dealer who manufac-
tures any goods for purposes of sale by
actual delivery in madhya pradesh for the
purpose of companysumption in that state shall
specify the raw materials which are intended
to be used by him in the manufacture of such
goods. in this companynection reference may be made to s. 2 j   a   ii
which states that a selling dealer is entitled to deduct
from his turnumberer sales to a registered dealer of goods
specified in such dealers certificate of registration as
being intended for use by him as raw materials in the
manufacture of any goods for sale by actual delivery in
madhya pradesh for the purpose of companysumption in that
state. it is manifest that the only legitimate object
which the purchasing dealer seeks in having a class of good
specified in the certificate of registration as raw
materials is to purchase the goods tax-free in the sense
contemplated by the act. by asking for such specification
the dealer represents that he intends to use the goods
specified in the manufacture of other goods for the purpose
of sale by actual delivery in the state of madhya pradesh
for the purpose of companysumption in that state. in this
context reference should be made to declarations made by the
appellant to the bombay dealers printed at page 88 of the
paper book. in these declarations the appellant stated that
it was purchasing tobacco for use as raw materials in the
manufacture of goods for sale by actual delivery in madhya
pradesh for the purpose of companysumption in that state and
that tobacco was so specified in its certificate of
registration. as we have already said the certificate of
registration granted to the .appellant must be companystrued in
the companytext of s. 8 as it stood after its amendment and the
declarations of the appellant made to the bombay dealers. if the language of the certificate is so companystrued
in the companytext of the amended s. 8 of the act and along with
the declarations of the appellant it is manifest that the
appellant is liable to pay tax on tobacco imported from
bombay dealers for the relevant periods and that the
requirements of s. 4  6  of the act are satisfied in this
case. the view that we have taken is borne out by the
decision of this companyrt in modi spinning weaving mills company
ltd. v. companymissioner of sales tax punjab and anumberher 1  in
which it was held that the registration certificate was only
evidence that the assessee was a registered dealer for
purposes of certain companymodities to be used in manufacture
and any formal defect in the registration certificate was
number material.


original jurisdiction writ petition number. 5105-13 of
1983.  under article 32 of the companystitution of india

k. ramamurthi mrs. indra sawhney mrs. c. malhotra
and m. a. krishnamoorthy for the petitioners. yogeshwar prasad mrs. rani chabra gopal subramaniam
and mrs. sobha dikshit for the respondent. the judgment of the companyrt was delivered by
desai j. the petitioners in this group of petitions
under art. 32 of the companystitution were inducted as khandsari
inspectors between march 1960 and 1964. respondents 4 to 19
were also recruited as khandsari inspectors on different
dates. respondents 1 and 2 are the chief secretary govt. of

p. and the secretary industries respectively of the u.

government and respondent number 3 is the sugar companymissioner
of u. p. the dispute amongst the petitioners and the
respondents 4 to 19 is about inter-se seniority between them
in the cadre of khandsari inspectors. it appears that in the year 1958-59 the state
government framed what is styled as khandsari licensing
scheme to regulate the supply of sugarcane to sugar
factories by g.o. number 4588  1  xviii-a-680/59 dated numberember
21 1959. posts of khandsari inspectors initially designated
as licensing inspectors were created in the pay-scales of
rs. 120-250. petitioners number. 1 2 and 3 were appointed as
khandsari inspectors between march and may 1960. thereafter
some of the respondents were recruited as
khandsari inspectors and some others who were recruited
departmentally were approved by the public service
commission. on march 22 1971 the third respondent the
sugar companymission circulated a provisional seniority list of
khandsari inspectors. the grievance of the petitioners is
that some of the petitioners have been assigned lower place
in the seniority list even though they were recruited
earlier and have been companytinuously in service. to
illustrate petitioners pointed out that petitioners 1 to 3
have been placed at serial number 2529 and 27 respectively
though all of them were recruits of 1960 while respondent
number 7-j.s. negi who was recruited on march 23 1961 was
assigned the place at serial number 15 and respondent number4

n. chaturvedi who was recruited on march 23 1961 was
shown at serial number 6. similarly respondent number 9-p.n. rai
who was also recruited on march 23 1961 was shown at serial
number17 and respondent number 5 was shown at serial number 8. the
petitioners further pointed out that petitioners number. 4 5
6 7 and 8 who were recruits of 1961 have been assigned
places number. 30 34 42 35 and 31 respectively while
recruits of 1963 have scored a march over them in the
provisional seniority list. the petitioners assert that when
the recruitment was made in the year 1960 the post of
khandsari inspector was number within the purview of the public
service companymission and that they were regularly recruited to
posts which were temporarily sanctioned and indefinitely
continued till today and therefore in reckoning the
seniority they must be given the benefit of the length of
continuous officiation. they further companytend that when the
post of khandsari inspector was later brought within the
purview of the public service companymission the names of the
petitioners who were already recruited in service as also of
some of the respondents were forwarded to the public service
commission for approval and except petitioner number9 s. p.
gupta the names of rest of the petitioner were approved by
the public service companymission on september 30 1963 the
relevant date in the case of petitioner number 9 is april 14
1978. the petitioners assert that even assuming that their
appointment would be regular after approval of the public
service companymission yet once such approval is granted it
would relate back to the
date of appointment and the previous length of service
cannumber be ignumbered or denied in companyputing their seniority in
the absence of any statutory rule or administrative
instruction which has the force of law. the petitioners
further aver that in the absence of any other statutory rule
or administrative instruction for determining seniority
length of companytinuous officiation provides a valid principle
for determining seniority. viewed from this angle
petitioners 1 to 3 would be senior to all the respondents
and the placement of the remaining petitioners vis-a-vis the
respondents will have to be recomputed. on the circulation
of the provisional seniority list the petitioners submitted
various representations pointing out the error in drawing-up
the provisional seniority list but till this day numberreply
was given number any final seniority list circulated number
reasons assigned for rejecting the representations. the
petitioners further say that despite their representation
respondents 1 2 and 3 are operating the tentative seniority
list for making further promotions to the post of khandsari
officer and assistant sugar companymissioner and thereby they
are being denied equality of opportunity in the matter of
promotion. the petitioners accordingly questioned by these
writ petitions the validity and legality of the provisional
seniority list asserting that as the final seniority list is
number being drawn up and as the representations are being
ignumbered and yet the provisional seniority list is being
operated to the disadvantage of the petitioners thereby
denying them equality of opportunity in the matter of
promotion which action of the respondents 1 to 3 is
violative of arts. 14 and 16.
kailash narain pandey additional sugar companymissioner
filed affidavit in opposition. it was admitted that by the
govt. order dated numberember 21 1959 temporary posts of
licensing inspectors later redesignated as khandsari
inspectors in the pay scale of rs. 120-250 were created but
according to him as the maximum of the scale was over rs. 200 right from its inception the post was within the
purview of the public service companymission in view of
regulation 5  a  of appointment department misc. number 99/ii-
b-151-60 dated january 29 1954 issued under the uttar
pradesh public service companymission  limitation of func-
tions  regulations 1954. it was then stated that on the
framing of the khandsari licensing scheme it became
necessary to urgently appoint inspectors to implement the
scheme and therefore the third respondent-sugar
commissioner as appointing authority pending regular
selection through open companypetition by the public service
commission proceeded to make appointments and the
appointment of the petitioners were of a stopgap or ad-hoc
nature and that it created numberright to the post. it was
admitted that petitioners number 1 and 2 were recruited after
holding departmental companypetitive test on march 4 1960.
petitioner number 3 who was then working as a clerk in cane
union federation limited lucknumber was selected on may 24 1960
by applying a weeding out test. petitioners number. 4 to 8 were
recruited after holding qualifying test and interview on
23rd march 1961 and petitioner number 9 was appointed as and
by way of stopgap arrangement. it was companytended that the
petitioners were appointed on an ad-hoc and temporary basis
as a measure of stopgap arrangement. it was companyceded that
all the petitioners except petitioner number 9 were approved
by the public service companymission for regular appointment in
the year 1963 to be specific on 30th september 1963 and
they have companytinued uninterruptedly in the posts of
khandsari inspectors. it was further averred that within a
period of one year and seven months from the date of
appointment of the petitioners the state public service
commission selected candidates to replace the already
working unapproved licensing inspectors on the request of
the department and sent a list of approved candidates on
september 14 1961 but only 5 out of 44 such selected
candidates joined and hence the department has to permit the
petitioners to companytinue though according to the third
respondent numberice of termination of service were served on
some of the petitioners. it was further pointed out that
when the state public service companymission proceeded to
recommend candidates for the post of khandsari inspectors
some of the petitioners applied for such posts but their
applications were rejected at the stage of scrutiny. but on
a request from the department the state public service
commission entertained the applications called the
petitioners for interview and approved them. it was admitted
that except petitioner number 9 all the rest of the petitioners
were approved by the public service companymission on september
30 1963. justifying the drawing-up of the tentative
seniority list as being based on recommendations of public
service companymission it
was said that the service which can be taken into
consideration for determining the length of companytinuous
officiation must companymence from the date of substantive
appointment and accordingly the provisional seniority list
has been drawn-up keeping in view the date of approval by
the public service companymission in respect of each candidate. it was averred that if this principle is valid for the
purpose of art. 16 there is numbererror in drawing-up the
seniority. it was specifically stated that it was open to
the government to ignumbere officiating service or service
rendered on appointment in an ad hoc or stopgap arrangement. it was broadly stated that before a man can claim to have
his seniority determined in the cadre he must belong to the
cadre and he can only enter the cadre on substantive
appointment. the rival companytentions would bring into focus the
controversy between the parties. the impugned provisional
seniority list dated march 22 1971 is drawn-up on the
length of companytinuous officiation determined by the date of
selection approval of each person be the state public
service companymission. in the process service prior to the
approval by the public service companymission is wholly ignumbered
while reckoning seniority with the result that the recruits
of 1961 have scored a march over those who were recruited
earlier in the cadre and have been uninterruptedly
officiating in the post and who at a later date were
approved by the public service companymission for appointment as
khandsari inspectors. the question is where on account of
exigencies of service recruitment to a post within the
purview of the public service companymission is made by the
appointing authority but at a later date the public service
commission puts its seal of approval on such an appointee
whether the companytinuous and uninterrupted service rendered by
such appointee prior to the approval by the public service
commission can and should be taken into companyputation while
determining seniority based on the principle of length of
continuous officiation ? when a seniority list is challenged as being violative
of the guarantee of equality enshrined in arts. 14 and 16
and prima facie it appears that these who came into the
cadre later on scored a march over those who were already in
the cadre it would be for the authority justifying the
seniority list to plead and point out the rule for
determining seniority on the basis of which the list is
drawn up. if any such rule is pleaded it would be for those
impugning the seniority list to aver and establish that the
alleged seniority
rule is violative of the fundamental rights guaranteed by
arts. 14 and 16.
in the affidavit-in-opposition filed by the additional
sugar companymissioner on behalf of respondents 1 to 3 it was
asserted that the impugned seniority list of the khandsari
inspectors was drawn-up on the principle of the length of
continuous officiation reckoned from the date of
selection approval by the public service companymission in
respect of each employee belonging to the cadre. it is
necessary to refer to this aspect because the averment is
vague and of a general nature and later on at the hearing of
the petitions reliance was placed on memo number o-66/ii-233-
1938 dated january 30 1940  1940 order for short  for
sustaining the seniority list the affidavit being
conspicuously silent with regard to this order. there is number
a whisper of the 1940 order in the whole of the affidavit-
in-opposition. however if the respondents would be in a
position to justify the seniority list on any existing
statutory rule or administrative instruction which has been
invariably followed it would number be proper to attach too
much importance to the vagueness in drawing-up pleadings
shifting the stand in the companyrse of the proceedings. it
must however be made clear that mr. gopal subramaniam
learned companynsel who appeared for respondent number 1 to 3
attempted to reconcile the averments in the affidavit and
the oral submissions made at the hearing of the petitions by
urging that when it is said in the affidavit that the
seniority in respect of each member of the cadre was
reckoned on the principle of length of companytinuous
officiation companymencing from the date of selection approval
of each member by the state public service companymission
respondents 1 to 3 had the 1940 order in mind. it is therefore necessary first to examine the nature
and character of the 1940 order and whether it lays down
either by way of a statutory rule or administrative
instruction a binding rule of seniority for determining the
seniority in the cadre of khandsari inspectors. if it does
it will have to be further ascertained whether upon its true
construction the relevant rule excludes any service
rendered by a member of the service prior to his
approval selection by the state public service companymission. the 1940 order styled as a memorandum was number annexed
to the affidavit-in-opposition. a companyy of it was submitted
at
the time of hearing of the petitions. in its preamble it
proceeds to recite that in view of the appointment
department memorandum number 233 1  ii-38 dated july 27 1939
the department of secretariat are informed that under
section 241  1   b  and  2   b  of the government of india
act 1935 rules have to be framed for appointment to the
civil services and posts and companyditions of services of
persons serving. it further proceeds to state that the
existing rules for the various provincial specialist and
subordinate services under the government should be revised
so as to bring them to companyformity with the provisions of the
government of india act 1935 and new rules should also be
drawn-up for services and posts which existed prior to april
1 1937 but for which numberrules were framed or which have
been created after that date. the 1940 order further
recites that enquiries are being received as to the lines on
which either the old existing rules have to be revised or
new rules have to be framed. it then states that the
general principles which have been accepted by government
are stated below para 2 of the order clearly brings out
the nature and character of the 1940 order the relevant
portion of which reads as under

among other things the rules should provide
for the following matters. at item number 11 seniority is mentioned. elaborating how
the rule about seniority should be drawn-up the memorandum
proceeds to prescribe guidelines as under
seniority in service shall generally be
determined from the date of substantive appointment to
a service or from the date of the order of first
appointment if such appointment is followed by
confirmation. in special cases seniority may be
determined in accordance with the companyditions which may
suit a particular service. after extensively referring to the 1940 order it was
urged on behalf of the respondents that the impugned
seniority list is drawn-up keeping in view the date of
appointment the date
of selection approval by the public service companymission
which is the relevant date for the purpose of companyputing
seniority under g.o. of 1940 and the date of companyfirmation by
the department and date of promotion. the first question is does the 1940 order lay down a
binding rule of seniority in respect of khandsari inspectors
? it may at once be made clear that the cadre of khandsari
inspectors was first formed under khandsari licensing
scheme which was framed somewhere in numberember 1959. it is
difficult to believe that two decades earlier a seniority
rule for a future cadre was prescribed. it is of companyrse open
to the government to lay down general companyditions of service
governing all services in the state either by rules framed
under sec. 241 of the government of india act 1935 or on
the advent of the companystitution under the proviso to art. 309
of the companystitution. it must be companyceded that in the absence
of statutory rules companyditions of service in a particular
cadre may be governed by executive instructions issued by
the government in exercise of its executive power. at any
rate 1940 order does number purport to lay a statutory rule
framed under sec. 241 of the government of india act 1935
because the memorandum recites that in view of the
provisions companytained in sec. 241 rules have to be framed
for appointment to civil service and posts and companyditions of
service of persons serving. it further recites that rules
will have to be framed in respect of services which may be
created for the first time after the advent of the
government of india act 1935. the memorandum further
provides that whenever there is an occasion for framing
statutory rules or issuing executive instructions governing
conditions of service there must be some uniformity in this
behalf and accordingly the memorandum proceeded to point out
what should generally be the companytents of the rules and on
what model they should be framed. therefore unquestionably
the memorandum prescribes guidelines for framing rules
governing companyditions of service. the memorandum is something
akin to model standing orders. at any rate it does number
purport to prescribe statutory rules or executive
instructions governing companyditions of service. this further becomes clear from the penultimate paragraph of
the memorandum in which it is stated that the principles set
out in the memorandum will be generally suitable for service
or posts recruitment to which is companyducted through the
public service companymission and whenever the departure is made
the same should be justified. directions are given by the
memorandum that the departments of the secretariat should
proceed with the revision of the existing service rules or
frame rules for new service and posts under their companytrol in
accordance with the principles set out in the memorandum. the departments were directed to draw-up the draft rules and
when ready they were required to be submitted for the
scrutiny of the appointment department and should be
accompanied by a self companytained numbere in which the important
points and deviation from the above principles should be
explained and justified. it is thus abundantly clear that
the memorandum of 1940 merely prescribed guidelines for the
departments of the secretariat either to frame statutory
rules or executive instructions governing companyditions of
service in respect of existing services if there are no
rules or they may be modified or amended so as to bring them
generally in companyformity with the 1940 order and whenever a
new post or a new cadre in a service is set up to frame
rules in companyformity with guidelines prescribed in 1940
order. the 1940 order does number purport to lay down
conditions of service governing any cadre either
specifically or generally. it provides a model and unless
the model is adopted it is companymonsense to say that it is
number binding. therefore the companytention that 1940 order
prescribes binding companyditions of service and which have been
followed in drawing-up the seniority list does number companymend
to us and must be rejected. assuming that in the absence of any specific rule to
the companytrary having number been shown to have been adopted the
department accepted the model as the binding one the next
question is whether upon its true companystruction it permits
previous service to be wholly ignumbered in reckoning
seniority. the model set out at item number 11 governing seniority
merely enacts the well-knumbern rule of seniority in government
service namely seniority being determined in accordance
with length of companytinuous officiation. in the absence of any
other rule valid for
determining seniority under art. 16 rule or seniority being
determined by the length of companytinuous officiation has been
accepted as valid by the companyrts. in a very recent opinion of
this companyrt in p.s. mahal and ors. v. union of india and ors. bhagwati j. after referring to bishan sarup gupta v. union
of india observed as under
there was numberspecific seniority rule to determine
inter-se seniority between the direct recruits and the
promotees appointed regularly within their respective
quota from and after 16th january 1959 and though in
the absence of any specific seniority rule the companyrt
could have applied the residuary rule based on length
of companytinuous officiation the companyrt did number do so
because it felt that since the old seniority rule had
ceased to operate by reason of the infringement of the
quota rule it would be for the government to devise a
just and fair seniority rule as between the direct
recruits and the promotees for being given effect to
from 16th january 1959.
therefore in the absence of any specific rule of
seniority governing a cadre or a service it is well-settled
that length of companytinuous officiation will provide a more
objective and fair rule of seniority. and that is exactly
what the model in the memorandum prescribes. it says that
seniority in service shall generally be determined from the
date of substantive appointment to a service. if the rule
were to stop here the question would arise what
constitutes substantive appointment to a post within the
purview of the public service companymission ? but the rule does
number stop by merely saying that the seniority shall generally
be determined from the date of substantive appointment to a
service. it further provides that it may be determined
commencing from the date of the order of the first
appointment but proceeds to qualify the last clause by
providing if such appointment is followed by
confirmation. in other words a rule for determining
seniority may provide length of companytinuous officiation from
substantive appointment or from the date of the order of the
first appointment if such appointment is followed by
confirmation. in the latter case once companyfirmation is made
and the service till then is uninterrupted and companytinuous it
relates back to the date of the order of the first
appointment. number model rule 11 suggests as guidelines two independent
principles for determining seniority namely  1  seniority
be reckoned from the date of substantive appointment and  2
from the date of the order of first appointment if such
appointment is followed by companyfirmation. two different
starting points for reckoning seniority are set out in the
model and it is difficult to assume that department adopted
one and rejected the other without making a specific rule in
that behalf. the question that can then be posed is what
constitutes substantive appointment in a cadre which is
within the purview of the public service companymission. number the
cadre of khandsary inspectors was formed in 1959. there is
numbermaterial to show that at that time it was within the
purview of the public service companymission. a vague statement
was made that under the uttar pradesh public service
commission  limitation of functions  regulations 1954 any
post with a sanctioned scale the maximum of which exceeds
rs. 200/- would be within the purview of the public service
commission. it was therefore said that the post of
khandsari inspector was within the purview of the public
service companymission. it was then urged that as the khandsari
licensing scheme was to be urgently implemented the
appointing authority filled-in the posts pending recruitment
by the public service companymission. this statement is number
borne out by the record. on may 4 1960 9 persons including
petitioners number. 1 and 2 were temporarily appointed as
licensing inspectors. the appointment order does number show
that the appointment was pending selection of regular
candidates by the public service companymission. in fact some
confusion in this behalf crept in because a statement was
made at the hearing of these petitions that the post of
khandsari inspectors came within the purview of the public
service companymission in 1961. undoubtedly the post of
licensing inspector was created in the first instance upto
march 31 1960. but it may be mentioned that it has
continued uninterruptedly till today and has become a
permanent cadre. identical appointment orders was issued in
favour of petitioner number 3 some of the petitioners including
petitioners number. 4 5 6 7 and 8 and some of the
respondents including respondents number. 4 5 6 7 and
several others came to be appointed by the order dated
march 23 1961.  annexure b to the petition . in this
appointment order it was clearly stated that on the result
of the qualifying test and interview held for the posts of
khandsari inspectors in the months of february and march
1961 the candidates as numbered in the enclosed list are
temporarily appointed as officiating khandsari inspectors in
the scale of rs. 120-6-210-eb-10-250 plus usual dearness
allowance per month subject to final selection by public
service companymission at any later date. the recitals in the
order do number spell-out that the appointees were to hold
stop-gap arrangement till a candidate by the public service
commission is made available. on the companytrary the recitals
clearly indicate that those appointees will have to face the
approval test by the public service companymission. number if
petitioner number. 1 and 2 came to be appointed in 1960 and
respondents 4 5 and 6 came to be appointed in 1961 and the
appointment of each of them had to be approved by the public
service companymission once the approval is granted the same
will relate back to the date of first appointment. that is
the meaning of the expression in model number11 or from the
date of the order of the first appointment if such
appointment is followed by companyfirmation. it is number disputed
that all the petitioners except petitioner 4 were approved
by the public service companymission on september 30 1963 and
yet respondent number 7-j.s. negi is shown at s. number 17 while
petitioner number 1 who joined service on march 41960 and
whose appointment was approved on the same day has been
assigned s. number 27 in the seniority list. if the first
appointment is made by number following the prescribed
procedure but later on the appointee is approved making his
appointment regular it is obvious companymonsense that in the
absence of a companytrary rule the approval which means
confirmation by the authority which had the authority power
and jurisdiction to make appointment or recommend for
appointment will relate back to the date on which first
appointment is made and the entire service will have to be
computed in reckoning the seniority according to the length
of companytinuous officiation. that had number been done in this
case. therefore assuming that the model principle set out
in the 1940 order has a binding effect the impugned
seniority list does number companyform to the prescribed guideline
and would certainly be invalid. once it is shown that the 1940 order did number prescribe
any binding rule or seniority but it was a model prescribed
for adoption and the adoption having number been shown it
cannumber prescribe a binding rule of seniority. assuming that
it is deemed to have been adopted the seniority list does
number companyform to the model as interpreted by us. number if there was numberbinding rule of seniority it is
well-settled that length of companytinuous officiation
prescribes a valid principle of seniority. the question is
from what date the service is to be reckoned ? it was urged that any appointment of a stop-gap nature or
pending the selection by public service companymission cannumber be
taken into account for reckoning seniority. in other words
it was urged that to be in the cadre and to enjoy place in
the seniority list the service rendered in a substantive
capacity can alone be taken into companysideration. we find it
difficult to accept this bald and wide submission. each case
will depend upon its facts and circumstances. if a stop-gap
appointment is made and the appointee appears before the
public service companymission when the latter proceeds to select
the candidates and is selected we see numberjustification for
ignumbering his past service. at any rate there is no
justification for two persons selected in the same manner
being differently treated. that becomes crystal clear from
the place assigned in the seniority list to petitioner number 1
in relation to respondent number 7. in fact if once a person
appointed in a stop-gap arrangement is companyfirmed in his post
by proper selection his past service has to be given credit
and he has to be assigned seniority accordingly unless a
rule to the companytrary is made. that has number been done in the
case of all the petitioners. the error is apparent in the
case of petitioner 1 and respondent number 7. these errors can
be multiplied but we companysider it unnecessary to do so. in
fact a fair rule of seniority should ordinarily take into
account the past service in the stop-gap arrangement is
followed by companyfirmation. this view which we are taking is
borne out by the decision of this companyrt in baleshwar dass
and ors. etc. v. state of u.p. and ors. etc. wherein this
court observed that the principle which has received the
sanction of this companyrts pronumberncement is that officiating
service in a post for all practical purposes of seniority is
as good as service on a regular basis. it may be
permissible within limits for government to ignumbere
officiating service and companynt only regular service when
claims of seniority companye before it provided the rules in
that regard are clear and categorical and do number admit of
any ambiguity and cruelly arbitrary cut-off of long years of
service does number take place or there is functionally and
qualitatively substantial difference in the service
rendered in the two types of posts. it was said that
service rules will have to be reasonable fair and number
grossly unjust if they are to survive the test of articles
14 and 16. it is thus well-settled that where officiating
appointment is followed by companyfirmation unless a companytrary
rule is shown the service rendered as officiating
appointment cannumber be ignumbered for reckoning length of
continuous officiation for determining the place in the
seniority list. admittedly that has number been done and the
seniority list is drawn
up from the date on which the approval selection was made by
the public service companymission in respect of each member of
the service which is clearly violative of art. 16 and any
seniority list drawn up on this invalid basis must be
quashed. a grievance was made that the petitioners have moved
this companyrt after a long unexplained delay and the companyrt
should number grant any relief to them. it was pointed out that
the provisional seniority list was drawn up on march 22
1971 and the petitions have been filed in the year 1983. the
respondents therefore submitted that the companyrt should throw-
out the petitions on the ground of delay latches and
acquiescence. it was said that promotions granted on the
basis of impugned seniority list were number questioned by the
petitioners and they have acquiesced into it. we are number
disposed to accede to this request because respondents 1 to
3 have number finalised the seniority list for a period of more
than 12 years and are operating the same for further
promotion to the utter disadvantage of the petitioners. petitioners went on making representations after
representations which did number yield any response reply or
relief. companypled with this is the fact that the petitioners
belong to the lower echelons of service and it is number
difficult to visualise that they may find it extremely
difficult to rush to the companyrt. therefore the companytention
must be rejected. in view of the discussion these petitions succeed and
are allowed and a writ in the nature of certiorari is issued
quashing the impugned seniority list dated march 22 1971 in
respect of khandsari inspectors.


criminal appellate jurisdiction criminal appeal number. 416-18 of 1974.
appeals by special leave from the judgment and order
dated the 23rd/24th august 1973 of the bombay high companyrt in
crl. appeal number. 68298 510 of 1972.

c. talukdar c. v. subba rao and r.n. poddar for the
appellant. p. rana and m.n. shroff for the state of maharashtra. r. srivastava for respondent number 1 in crl. a. 416.
the judgment of the companyrt was delivered by
bhagwati j. these appeals by special leave are
directed against a companymon judgment dated 27th august 1973
passed by a single e judge of the high companyrt of bombay in so
far as it acquitted the first respondent in criminal appeal
number 146 of 1978 respondent number 1 and 2 in criminal appeal
number 147 of 1974 and the first respondent in criminal appeal
number 418 of 1974  hereinafter referred to as the accused  of
the offence under section 135  1  a  ii  of the customs act
1965. the entire companytroversy between the parties in these
appeals turns on the true interpretations of section 135  1
 a   ii  and it is therefore number necessary to set out the
facts in detail but in order to appreciate how the question
arises for companysideration we may briefly reproduce a few
relevant facts. on 9th june 1968 at about 2 p.m. shri mugve the
assistant companylector of customs who was then principal
appraisar in the directorate of revenue intelligence
bombay received information that a fishing vessel was going
to load silver at ghas bunder after 9 p.m. on that day and
it was going to take the silver to a spot near khanderi
island in order to put it on an arab dhow for despatching it
to dubai. on receipt of this information shri mugve kept a
watch in a privately owned motor launch in the stream near
ballard pier about four miles away from the shore. at about
11 p.m. shri mugve and the other customs officers
accompanying him numbered that a heavily loaded fishing vessel
was proceeding towards the khanderi island without
navigational lights. they immediately chased the fishing
vessel and asked the crew to stop it but instead of stopping
the crew increased the speed and tried to run away. the
fishing vessel was chased and eventually it was intercepted
by shri mugve and the other customs officers. on being
questioned the tindel of the fishing vessel made a statement
that 194 ingots of silver of the value of rs. 92 lakhs were
being taken towards khanderi island for being loaded on an
arab dhow which was going to dubai. the fishing vessel was
thereupon towed to ballard pier and 194 ingots of silver
found in it were seized under a panchnama in the reasonable
belief
that they were being smuggled out of india. the accused who
were in the fishing vessel were also prosecuted in the companyrt
of additional chief presidency magistrate 5th companyrt dadar
for offences under section 120 of the indian penal companye
section 135  1   a   ii  of the customs act 1962 section 5
of the imports and exports  companytrol  act 1947 and section 23
 1 a  of the foreign exchange regulation act 1973. the
additional chief presidency magistrate found the accused
guilty of all the offences charged against them and
sentenced them to various terms of imprisonment including
fine. the accused there upon preferred three appeals in the
high companyrt of bombay against the order of companyviction and
sentence passed against them by the additional chief
presidency magistrate. these appeals were heard by a single
judge of the high companyrt and by a companymon judgment dated 27th
august 1973 the learned single judge companyfirmed the
conviction of the accused under section 120 of the indian
penal companye and section 5 of the imports and exports
 companytrol  act 1947 but set aside the companyviction under
section 135  1   a   ii  of the customs act 1962 and section
23  1 a  of the foreign exchange regulation act 1973. the
assistant companylector of customs accepted the judgment of the
learned single judge in so far as it acquitted the accused
of the offence under section 23  1 a  of the foreign
exchange regulation act 1973 but he was aggrieved by that
part of the judgment which set aside the companyviction under
section 135  1   a   ii  of the customs act 1962 and he
accordingly preferred the present three appeals with special
leave obtained from this companyrt. before we set out the rival arguments addressed before
us it would be companyvenient to reproduce section 135  1   a

of the customs act 1962. that section reads as follows

evasion of duty or prohibitions- 1
without prejudice to any action that may be taken
under this act if any person-
 a  is in relation to any goods in any way
knumberingly companycerned in any fraudulent evasion or
attempt at evasion of any duty chargeable thereon
or of any prohibition for the time being imposed
under this act or any other law for the time being
in force with respect to such goods he shall be
punishable-

in any other case with imprisonment for
a term which may extend to  three years  or with
fine or with both. the argument of the prosecution was that on the facts proved
in the case the accused were knumberingly companycerned in
fraudulent evasion or attempt at evasion of the prohibition
on the export of silver without a licence imposed under the
export trade companytrol order 1968 issued by the central
government under section 3 of the imports and exports
 companytrol  act 1947 and they were therefore guilty of the
offence falling under section 135  1   a   ii  which makes
it penal if any person is in relation to any goods in any
way knumberingly companycerned in any fraudulent evasion or attempt
at evasion of any prohibition for the time being imposed
under any other law for the time being in force with respect
to such goods. this argument was sought to be met on behalf
of the accused by companytending that the words with respect to
such goods occurring at the end of section 135  1   a   ii
referred to goods on which duty was chargeable as
contemplated in the first part of that section and since no
duty was chargeable on export of silver it did number fall
within the words with respect to such goods and hence
fraudulent evasion or attempt at evasion of the prohibition
on export of silver without a licence imposed under the
export trade companytrol order 1968 issued under section 3 of
the imports and exports  companytrol  act 1947 was number
punishable under section 135  1   a   ii . it was this
contention urged on behalf of the accused which appealed to
the learned single judge of the high companyrt of bombay and
resulted in the acquittal of the accused. the sole question
which therefore arises for companysideration on these rival
arguments is as to what is the true meaning of the
expression with respect to such goods. is it limited only
to goods falling within the first part of section 135  1
 a   ii  that is goods on which duty is chargeable or does
it refer to any goods in respect of which prohibition is
imposed under the customs act 1962 or any other law for the
time being in force. the answer to this question does number in
our opinion admit of any doubt because the language of
section 135  1   a   ii  is clear and explicit and one has
merely to read the words of the section according to their
plain grammatical companystruction to companye to the companyclusion
that the view taken by the m learned single judge of the
high companyrt is plainly erroneous. we proceed to give our
reasons for saying so but we may point out straightway that
this view taken by the learned single judge of
the high companyrt has been subsequently overruled by a division
bench of the same high companyrt in the state of maharashtra v.
kassam 1 . if we analyse and break up the provision enacted in
section 135 1   a   ii  it will be clear that structurally
it is divisible into three parts namely

if any person is in relation to any goods in
any way knumberingly companycerned in any fraudulent
evasion or attempt at evasion of any duty
chargeable thereon he shall be punishable
with imprisonment for a term which may extend
to three years or with fine or both. if any person is in relation to any goods in
any way knumberingly companycerned in any fraudulent
evasion or attempt at evasion of any
prohibition for the time being imposed under
the customs act 1962 with respect to such
goods he shall be punishable with
imprisonment for a term which may extend to
three years or with fine or both. if any person is in relation to any goods in
any way knumberingly companycerned in any fraudulent
evasion or attempt at evasion of any
prohibition for the time being imposed under
any other law for the time being in force
with respect to such goods he shall be
punishable with imprisonment for a term which
may extend to three years or with fine or
both. the ingredients of the offence under section 135 1   a   ii
would clearly be satisfied if the case falls within any one
of these three parts. each of these three parts is distinct
and independent of the other two and whether a case falls
within any one part or number has to be judged by reference to
the ingredients of that part and number of any other part. the
ingredients of one part cannumber be projected in the other two
parts. the first part deals with a case where in relation to
any goods a person is knumberingly companycerned in any fraudulent
evasion or attempt at evasion of any duty chargeable on such
goods. obviously therefore the first part. postulates that
the
goods in respect of which the offence is companymitted must be
goods chargeable with duty. but the second and third parts
are number companycerned with the question whether any duty is
chargeable on the goods or number. these two parts speak only
of fraudulent evasion or attempt at evasion of any
prohibition for the time being imposed under the customs act
1962 or any other law for the time being in force in respect
of any goods. what these two parts companytemplate is that in
respect of the goods in question there must be a prohibition
imposed under the customs act 1962 or any other law for the
time being in force it being totally irrelevant whether duty
is chargeable on such goods or number and the accused must be
knumberingly companycerned in any fraudulent evasion or attempt at
evasion of such prohibition. the prohibition fraudulently
evaded or sought to be evaded may be with respect to any
goods and it is number necessary that it should be with
respect to goods on which duty is chargeable. the expression
with respect to such goods had obviously to be used at the
end of the section because the second and third parts of the
section start with the words if any person is in relation
to any goods  knumberingly companycerned in any fraudulent
evasion or attempt at evasion. the words such goods have
clearly reference to any goods at the companymencement of the
section. these words are number descriptive of the kind of
goods to which the first part of the section is applicable. it is totally impermissible on a plain natural companystruction
of the language used in section to read these words as
importing the requirement that the goods must be chargeable
with duty in order to fall within the second or third part
of the section. we are therefore of the view that where goods are
chargeable to duty and any person is knumberingly companycerned in
any fraudulent evasion or attempt at evasion of such duty
the case would fall within the first part of the section
but where there is a prohibition imposed with respect to any
goods under the customs act 1962 or any other law for the
time being in force then irrespective of whether duty is
chargeable on such goods or number any person knumberingly
concerned in any fraudulent evasion or attempt at evasion of
such prohibition would clearly be companyered by the second or
third part as the case may be.


civil appellate jurisdiction civil appeal number 379 of
1965.
appeal by special leave from the judgment and decree dated
december 21 1961 of the allahabad high companylit in second
appeal number 920 of 1952.

p. goyal and sobhagmal fain for the appellant. p. sinha and m. 1. khowaja for the respondents. the judgment of the companyrt was delivered by bhargava j.
this appeal arises out of a suit for possession of 11th
january 1939 one ram das filed suit number 354 of 1939
against ram lal in the companyrt of judge small causes for
recovery of a sum of rs. 144/-. that suit was later
transferred to the companyrt of the munsif and an ex parte
decree in that suit was passed on 27th march 1939 after
the companyrt held that ram lal had been sufficiently served. in
execution of that decree the house was sold and the sale
certificate was issued on 21st january 1941 in favour of
prabhu dayal the father of the appellant in this appeal. formal delivery of possession was taken and the certificate
of delivery of sale is dated 15th may 1941. admmittedly
ram lal companytinued to live in the house even thereafter and
on 19th september 1945 he died leaving numberheir. ram lal
was a subject of the maharaja of jaipur and on ram lals
death the servants of the maharaja took possession of the
house on 20th september 1945.
thereupon suit number 552 of 1946 was filed by prabhu
dayalthe father of the appellant for possession of the
house on 10th july 1946. the suit was companytested on the
ground that ram lal was a lunatic and the earlier suit number
354 of 1939 had been instituted against ram lal without
appointment of a guardian-ad-litem so that the decree in
the suit was a nullity. the sale in execution of that decree
was also therefore challenged as void. this defence was
accepted by the trial companyrt and the suit was dismissed on
24th january 1950. the first appellate companyrt also upheld
that decision. the second appeal came before a learned
single judge of the allahabad high companyrt who referred it to
a division bench as in his opinion the case involved an
important question of law. the bench of the high companyrt
confirmed the decisions of the lower companyrts and
consequently the appellant has number companye up to this companyrt by
special leave. as has been mentioned above the suit was dismissed by
the trial companyrt and that decision has been upheld by the
first and the second appellate companyrts on the ground that
the decree against ram lal -was a nullity and the sale held
in execution of that decree was therefore void. it appears
from he judgment of the high companyrt that in that companyrt no
attempt was made on behalf. of the appellant to companytend that
the decree which was obtained against ram lal and in
execution of which the house was sold was number null and void
and was number a nullity. on the face of it the decree was
passed in companytravention of the provisions of 0. 32 r. 15 of
the companye of civil procedure. it has been found as a fact
that ram lal was insane when suit number 354 of 1939 was
instituted as well as when the house was sold in execution
of the
decree passed in that suit. it is number a well-settled
principle that if a decree is passed against a minumber
without appointment of a guardian the decree is a nullity
and is void and number merely voidable. this principle becomes
applicable to the case of a lunatic in view of r. 15 of 0. 32 of the companye of civil procedure so that the decree
obtained against ram lal was a decree which has to be
treated as without jurisdiction and void. in these circum-
stances the sale held in execution of that decree must also
be held to be void. learned companynsel appearing on behalf of the appellant
contended that this proposition should number be accepted by us
in view of the decision of this companyrt in janak rai v.
gurdial singh and anumberher 1 . the decision of that case is
however number applicable to the case before us at all. in
that case a stranger to the suit was the auction-purchaser
of the judgment-debtors immovable property in execution of
an ex parte money decree. before the sale companyld be
affirmed the ex parte decree was set aside and the question
arose whether the auction-purchaser was entitled to a company-
firmation of the sale under 0. 21 r. 92 c.p.c. the companyrt
held that the sale should be companyfirmed. the law makes ample
provision for the protection of the interests of the
judgment-debtor when his property is sold in execution. he
can file an application for setting aside the sale under the
provisions of 0. 21 rr. 89 and 90 c.p.c. if numbersuch
application was made or when such an application was made
and disallowed the companyrt has numberchoice but to companyfirm the
sale. this principle can be of numberassistance to the
appellant in the present case because in that case when
the sale-was actually held a valid ex parte decree did
exist. the sale having been held in execution of a valid
existing decree was itself valid and the only question
that came up for decision was whether such a valid sale
could be set aside otherwise than by resort to the
provisions of rr. 89 and 90 of 0. 21 c.p.c. in the present
case the decree being a nullity has to be treated as number-
est and companysequently the sale when he-id was void ab
initio. in such a case there is numberquestion of any party
having to resort to the provisions of rr. 89 and 90 of 0. 21 c.p.c. to have the sale set aside. any claim based on a
void sale can be resisted without having that sale set
aside. the decision of this companyrt in that case itself
brings out this distinction by stating
it is to be numbered however that there may be
cases in which apart from the provisions of
rr. 89 to 91 the companyrt may refuse to companyfirm
a sale as for instance where a sale is held
without giving numberice to the judgmen
t-debtor
or where the companyrt is misled in fixing the
reserve price or when there was numberdecree in
existence at the time when the sale was held.  1  1967 2 s.c.r. 77.
this companyrt thus in that case clearly recognised that if
there be numberdecree in existence at the time when the sale is
held the sale can be ignumbered and need number be set aside
under the provisions of rr. 89 to 91 c.p.c. in the present
case as we have held the decree passed against ram lal was
void and has to be treated as number-existent and companysequently
the sale must be held 1 to be a nullity. learned companynsel also referred us to the decision of the
privy companyncil in khiarajmal and others v. daim and
others 1  but even that case in our opinion does number help
the appellant. in that case the equity of redemption in
respect of certain property was sold in execution of decrees
without service of numberice on some of the mortgagors. the
privy companyncil held
their lordships agree that the sales cannumber
be treated as void or number be avoided on the
grounds of any mere irregularities of
procedure in obtaining the decrees or in the
execution of them. but on the other hand
the companyrt had numberjurisdiction to sell the
property of persons who were number parties to
the proceedings or properly represented on the
record. as against such. persons the decrees
and sales purporting to be made would be a
nullity and might be disregarded without any
proceeding to set them aside. proceeding further and dealing with the case of one of the
mortgagors it was held that because his interest in the
property had been ignumbered altogether and there was numberdecree
against him the companyrt had numberjurisdiction to sell his
share. the portion of the judgment on which learned companynsel
relied related to the remarks made by the privy companyncil
when dealing with an earlier decision in malkarjun v.
narhari 1 . after discussion the ratio of that case their
lordships at the end remarked
in companying to this companyclusion their
lordships are quite sensible of the importance
of upholding the title of persons who buy
under a judicial sale but in the present case
the real purchaser was the judgment creditor
who must be. held to have had numberice of all
the facts. on the basis of this companyment it was urged that their
lordships of the privy companyncil intended to lay down that if
the auction-purchaser was number a judgment-creditor the sale
could number be a nullity. we are unable to read any such
principle in that decision. in fact the privy companyncil in
very clear words held that the sale was a nullity and only
at the end took numberice of the fact that in that particular
case before it the real purchaser happened to be the
judgment creditor so that the interest of a stranger-
 1  32 i.a. 23
 2  27 i.a. 216.
purchaser companyld number be defeated by him. we are number
prepared to read in that judgment any decision that if the
auction-purchaser is number the judgment creditor but a
stranger the sale would be a valid sale even though it was
held in execution of a decree which was void. a sale is
void ab initio if it is held in execution of a decree which
is a nullity and companysequently to be treated as number-
existent. in the present case therefore numberrights companyld
be acquired by the purchaser prabhu dayal the father of the
appellant when he purported to purchase the house in
execution of the decree against ram lal. ram lal having
died without leaving any heir the property naturally passed
by escheat to the maharaja of jaipur. that principle is
clearly recognised in hindu law.