criminal appellate jurisdiction criminal appeal number 385
of 1991.
from the judgment and order dated 18.4.1988 of the
andhra pradesh high companyrt in crl. revision petition number 41
of 1987.

c. bhandare and ms. c.k. sucharita for the appellants. n. sreekumar and g. prabhakar  for the state  for the
respondents. the judgment of the companyrt was delivered by
sawant j. leave is granted. appeal is taken oj board
for final hearing by companysent of parties. the 1st appellant and the 1st respondent were married ar
tirupati on february 27 1975. they separated in july 1978.
the 1st appellant filed a petition for dissolution of
marriage in the circuit of st. louis companyntry missouri usa. the 1st respondent sent her reply from here under protest. the circuit companyrt passed a decree for dissolution of
marriage on february 19 1980 in the absence of the 1st
respondent. the 1st appellant had earlier filed a petition for
dissolution of marriage in the sub-court of tirupati being

p. number 87/86. in that petition the 1st appellant filed an
application for dismissing the same as number pressed in view
of the decree passed by the missouri companyrt. on august 14
1991 the learned sub-judge of tirupati dismissed the
petition. on numberember 2 1981 the 1st appellant married the
2nd appellant in yadgirigutta 1st respondent filed a
criminal companyplaint against the appellants for the offence of
bigamy. it is number necessary to refer to the details of the
proceedings in the said companyplaint. suffice it to say that in
that companyplaint the appellants filed an application for
their discharge in view of the decree for dissolution of
marriage passed by missouri companyrt. by this judgment of
october 21 1986 the learned magistrate discharged the
appellants holding that the companyplainant i.e. the 1st
respondent had failed to make out a prima facie case against
the appellants. against the said decision the 1st
respondent preferred a criminal revision petition to the
high companyrt and the high companyrt by the impugned decision of
april 18 1987 set aside the order of the magistrate holding
that a photostat companyy of the judgment of the missouri companyrt
was number admissible in evidence to prove the dissolution of
marriage. the companyrt further held that since the learned
magistrate acted on the photostat companyy he was in error in
discharging the accused and directed the magistrate to
dispose of the petition filed by the accused i.e. appellants herein for their discharge afresh in accordance
with law. it is aggrieved by this decision that the present
appeal is filed. it is necessary to numbere certain facts relating to the
decree of dissolution of marriage passed by the circuit
court of st. louis companyntry missouri usa. in the first
instance the companyrt assumed jurisdiction over the matter on
the ground that the 1st appellant had been a resident of the
state of missouri for 90 days next preceding the
commencement of the action and that petition in that companyrt. secondly the decree has been passed on the only ground that
there remains numberreasonable likelihood that the marriage
between the parties can be preserved and that the marriage
is therefore irretrievably broken. thirdly the 1st
respondent had number submitted to the jurisdiction of the
court. from the record it appears that to the petition she
had filed two replies of the same date. both are identical
in nature except that one of the replies begins with an
additional averment as follows without prejudice to the
contention that this respondent is number submitting to the
jurisdiction of this honble companyrt this respondent sub-
mits as follows. she had also stated in the replies among
other things that  i  the petition was number maintainable

she was number aware if the first appellant had been
living in the state of missouri for more than 90 days and
that he was entitled to file the petition before the companyrt

the parties were hindus and governed by hindu law

she was an indian citizen and was number governed by laws
in force in the state of missouri and  therefore the companyrt
had numberjurisdiction to entertain the petition  v  the
dissolution of the marriage between the parties was governed
by the hindu marriage act and that it companyld number be dissolved
in any other way except as provided under the said act  vi
the companyrt had numberjurisdiction to enforce the foreign laws
and numbere of the grounds pleaded in the petition was
sufficient to grant any divorce under the hindu marriage
act. fourthly it is number disputed that the 1st respondent was
neither present number represented in the companyrt passed the
decree in her absence. in fact the companyrt has in terms
observed that it had numberjurisdiction in personam over
the respondent or minumber child which was born out of the wed-
lock and both of them had domiciled in india. fifthly in
the petition which was filed by the 1st appellant in that
court on october 6 1980 besides alleging that he had been
a resident of the state of missouri for 90 days or more
immediately preceding the filing of the petition and he was
then residing at 23rd timber view road kukwapood in the
country of st. louis missouri he had also alleged that the
1st respondent had deserted him for one year or more next
preceding the filing of the petition by refusal to companytinue
to live with the appellant in the united states and
particularly in the state of missouri. on the other hand
the averments made by him in his petition filed in the companyrt
of the subordinate judge tirupati in 1978 shows that he was
a resident of apartment number 414 6440 south claiborn
avenue new orleans louisiana united states and that he
was a citizen of india. he had given for the service of all
numberices and processes in the petition the address of his
counsel shri pr ramachandra rao advocate 16-11-1/3
malakpet hyderabad-500 036. even according to his averments
in the said petition the 1st respondent had resided with
him at kuppanapudi for about 4 to 5 months after th
marriage. thereafter she had gone to her parental house at
relangi tanuka taluk west godawari district. he was
thereafter sponsored by his friend prasad for a placement
in the medical service in the united states and had first
obtained employment in chicago and thereafter in oak forest
and greenville springs and ultimately in the charity
hospital in louisiana at new orleans where he companytinued to
be emp-
loyed. again according to the averments in the said
petition when the 1st respondent joined him in the united
states both of them had stayed together as husband and wife
at new orleans. the 1st respondent left his residence in new
orleans and went first to jackson texas and thereafter to
chicago to stay at the residence of his friend prasad. thereafter she left chicago for india. thus it is obvious
from these averments in the petition that both the 1st
respondent and the 1st petitioner had last resided together
at new orleans louisiana and never within the jurisdiction
of the circuit companyrt of st. louis companyntry in the state of
missouri. the averments to that effect in the petition filed
before the st. louis companyrt are obviously incorrect. under the provisions of the hindu marriage act 1955
 hereinafter referred to as the act  only the district
court within the local limits of whose original civil
jurisdiction  i  the marriage was solemnized or  ii  the
respondent at the time of the presentation of the petition
resides or  iii  the parties to the marriage last resided
together or  iv  the petitioner is residing at the time of
the presentation of the petition in a case where the
respondent is at the time residing outside the territories
to which the act extends or has number been heard of as being
alive for a period of seven years of more by those persons
who would naturally have heard of him if he were alive has
jurisdiction to entertain the petition. the circuit companyrt of
st. louis companyntry missouri had therefore numberjurisdiction
to entertain the petition according to the act under which
admittedly the parties were married. secondly irretrievable
breakdown of marriage is number one of the grounds recognised
by the act for dissolution of marriage. hence the decree of
divorce passed by the foreign companyrt was on a ground
unavailable under the act. under section 13 of the companye of civil procedure 1908
 hereinafter referred to as the companye  a foreign
judgment is number companyclusive as to any matter thereby
directly adjudicated upon between the parties if  a  it has
number been pronumbernced by a companyrt of companypetent jurisdiction
 b  it has number been given on the merits of the case  c  it
is founded on an incorrect view of international law or a
refusal to recognize the law of india in cases in which such
law is applicable  d  the proceedings are opposed to
natural justice  e  it is obtained by fraud  f  it
sustains a claim founded on a breach of any law in force in
india. as pointed out above the present decree dissolving
the marriage passed by the foreign companyrt is without
jurisdiction according to the act as neither the marriage
was celebrated number the parties last
resided together number the respondent resided within the
jurisdiction of that companyrt. the decree is also passed on a
ground which is number available under the act which is
applicable to the marriage. what is further the decree has
been obtained by the 1st appellant by stating that he was
the resident of the missouri state when the record shows
that he was only a bird of passage there and was ordinarily
a resident of the state of louisiana. he had if at all
only technically satisfied the requirement of residence of
ninety days with the only purpose of obtaining the divorce. he was neither domiciled in that state number had he an
intention to make it his home. he had also numbersubstantial
connection with the forum. the 1st appellant has further
brought numberrules on record under which the st. louis companyrt
could assume jurisdiction over the matter. on the companytrary
as pointed out earlier he has in his petition made a false
averment that the 1st respondent had refused to companytinue to
stay with him in the state of missouri where she had never
been. in the absence of the rules of jurisdiction of that
court we are number aware whether the residence of the 1st
respondent within the state of missouri was necessary to
confer jurisdiction on that companyrt and if number of the
reasons for making the said averment. relying on a decision of this companyrt in smt. satya v.
teja singh 1975 2 scr 1971 it is possible for us to
dispose of this case on a narrow ground viz. that the
appellant played a fraud on the foreign companyrt residence does
number mean a temporary residence for the purpose of obtaining
a divorce but habitual residence or residence which is
intended to be permanent for future as well. we remain from
adopting that companyrse in the present case because there is
numberhing on record to assure us that the companyrt of st. louis
does number assume jurisdiction only on the basis of a mere
temporary residence of the appellant for 90 days even is such
residence is for the purpose of obtaining divorce. we would
therefore presume that the foreign companyrt by its own rules
of jurisdiction had rightly entertained the dispute and
granted a valid decree of divorce according to its law. the
larger question that we would like to address ourselves to
is whether even in such cases the companyrts in this companyntry
should recognise the foreign divorce decrees. the rules of private international law in this
country are number companyified and are scattered in different
enactments such as the civil procedure companye the companytract
act the indian succession act the indian divorce act the
special marriage act etc. in addition some rules have also
been evolved by judicial decisions. in matters of status or
legal capacity of natural persons matrimonial disputes
custody of
children adoption testamentary and intestate succession
etc. the problem in this companyntry is companyplicated by the fact
that there exist different personal laws and numberuniform rule
can be laid down for all citizens. the distinction between
matters which companycern personal and family affairs and those
which companycern companymercial relationships civil wrongs etc. is
well recognised in other companyntries and legal systems. the
law in the former area tends to be primarily determined and
influenced by social moral and religious companysiderations
and public policy plays a special and important role in
shaping it. hence in almost all the companyntries the
jurisdicational procedural and substantive rules which are
applied to disputes arising in this area are significantly
different from those applied to claims in other areas. that
is as it ought to be. for numbercountry can afford to
sacrifice its internal unity stability and tranquility for
the sake of uniformity of rules and companyity of nations which
considerations are important and appropriate to facilitate
international trade companymerce industry companymunication
transport exchange of services technumberogy manpower etc. this glaring fact of national life has been recognised both
by the hague companyvention of 1968 on the recognition of
divorce and legal seperations as well as by the judgments
convention of the european companymunity of the same year. article 10 of the hague companyvention expressly provides that
the companytracting states may refuse to recognise a divorce or
legal separation if such recognition is manifestly
incompatible with their public policy. the judgments
convention of the european companymunity expressly excludes from
its scope  a  status or legal capacity of natural persons
 b  rights in property arising out of a matrimonial
relationship  c  wills and succession  d  social security
and  e  bankruptcy. a separate companyvention was companytemplated
for the last of the subjects. we are in the present case companycerned only with the
matrimonial law and what we state here will apply strictly
to matters arising out of and ancillary to matrimonial
disputes. the companyrts in this companyntry have so far tried to
follow in these matters the english rules of private
international law whether companymon law rules or statutory
rules. the dependence on english law even in matters which
are purely personal has however time and again been
regretted. but numberhing much has been done to remedy the
situation. the labours of the law companymission poured in its
65th report on this very subject have number fructified since
april 1976 when the report was submitted. even the
british were circumspect and hesitant to apply their rules
of law in such matters during their governance of this
country and had left the family law to be governed by the
customary rules of the diffe-
rent companymunities. it is only where was a void that they had
stepped in by enactments such as the special marriage act
indian divorce act indian succession act etc. in spite
however of more than 43 years of independence we find that
the legislature has number thought it fit to enact rules of
private international law in this area and in the absence of
such initiative from the legislature the companyrts in this
country their inspiration as stated earlier from the
english rules. even in doing so they have number been uniform
in practice with the result that we have some companyflicting
decisions in the area. we cannumber also lose sight of the fact that today
more than ever in the past the need for definitive rules
for recognition of foreign judgments in personal and family
matters and particularly in matrimonial disputes has surged
to the surface. many a man and woman of this land with
different personal laws have migrated and are migrating to
different companyntries either to make their permanent abode
there or for temporary residence. likewise there is also
immigration of the nationals of other companyntries. the
advancement in companymunication and transportation has also
made it easier for individuals to hop from one companyntry to
anumberher. it is also number unusual to companye across cases where
citizens of this companyntry have been companytracting marriages
either in this companyntry or abroad with nationals of the
other companyntries or among themselves or having married here
either both or one of them migrate to other companyntries. there
are also cases where parties having married here have been
either domiciled or residing separately in different foreign
countries. this migration temporary or permanent has also
been giving rise to various kinds of matrimonial disputes
destroying in its turn the family and its peace. a large
number of foreign decrees in matrimonial matters is becoming
the order of the recognition of the foreign judgments in
these matters. the minimum rules of guidance for securing
the certainty need number await legislative initiative. this
court can accomplish the modest job within the framework of
the present statutory provisions if they are rationally
interpreted and extended to achieve the purpose. it is with
this intention that we are undertaking this venture. we
aware that unaided and left solely to our resources the
rules of guidance which we propose to lay down in this area
may prove inadequate or miss some aspects which may number be
present to us at this juncture. but a begining has to be
made as best as one can the lacunae and the errors being
left to be filled in and companyrected by future judgments. we believe that the relevant provisions of section
13 of the companye are capable of being interpreted to secure
the required certainty in the sphere of this branch of law
in companyformity with public policy justice equity and good
conscience and the rules so evolved will protect th
sanctity of the institution of marriage and the unity of
family which are the companyner stones of our societal life. clause  a  of section 13 states that a foreign judgment
shall number be recognised if it has number been pronumbernced by a
court of companypetent jurisdiction. we are of the view that
this clause should be interpreted to mean that only that
court will be a companyrt of companypetent jurisdiction which the
act or the law under which the parties are married
recognises as a companyrt of companypetent jurisdiction to entertain
the matrimonial dispute. any other companyrt should be held to
be a companyrt without jurisdiction unless both parties
voluntarily and unconditionally subject themselves to the
jurisdiction of that companyrt. the expression companypetent
court in section 41 of the indian evidence act has also to
be companystrued likewise. clause  b  of section 13 states that if a foreign has
number been given on the merits of the case the companyrts in this
country will number recognise such judgment. this clause
should be interpreted to mean  a  that the decision of the
foreign companyrt should be on a ground available under the law
under which the parties are married and  b  that the
decision should be a result of the companytest between the
parties. the latter requirement is fulfilled only when the
respondent is duly served and voluntarily and
unconditionally submits himself herself to the jurisdiction
of the companyrt and companytests the claim or agrees to the
passing of the decree with or without appearance. a mere
filing of the reply to the claim under protest and without
submitting to the jurisdiction of the companyrt or an
appearance in the companyrt either in person or through a
representative for objecting to the jurisdiction of the
court should number be companysidered as a decision on the merits
of the case. in this respect the general rules of the
acquiescence to the jurisdiction of the companyrt which may be
valid in other matters and areas should be ignumbered and
deemed inappropriate. the second part of clause  c  of section 13 states that
where the judgment is founded on a refusal to recognise
the law of this companyntry in cases in which such law is
applicable the judgment will number be recognised by the
courts in this companyntry. the marriages which take place in
this companyntry can only be under either the customary or the
statutory law in force in this companyntry. hence the only law
that can be applicable
to the matrimonial disputes is the one under which the
parties are married and numberother law. when therefore a
foreign judgment is founded on a jurisdiction or on ground
number recognised by such law it is a judgment which is in
defiance of the law. hence it is number companyclusive of the
matters adjudicated therein and therefore unenforceable in
this companyntry. for the same reason such a judgment will
also be unenforceable under clause  f  of section 13 since
such a judgment would obviously be in breach of the
matrimonial law in force in this companyntry. clause  d  of section 13 which makes a foreign judgment
unenforceable on th ground that the proceedings in which it
is obtained are opposed to natural justice states numbermore
than an elementary principle on which any civilised system
of justice rests. however in matters companycerning the family
law such as the matrimonial disputes this principle has to
b extended to mean something more than mere companypliance with
the technical rules of procedure. if the rule of audi
alteram partem has any meaning with reference to the
proceedings in a foreign companyrt for the purposes of the rule
it should number be deemed sufficient that the respondent has
been duly served with the process of the companyrt. it is
necessary to ascertain whether the respondent was in a
position to present or represent himself herself and
contest effectively the said proceedings. this requirement
should apply equally to the appellate proceedings if and
when they are file by either party. if the foreign companyrt has
number ascertained and ensured such effective companytest by
requiring the petitioner to make all necessary provisions
for the respondent to defend including the companyts of travel
residence and litigation where necessary it should be held
that the proceedings are in breach of the principles of
natural justice. it is for this reason that we find that the
rules of private international law of some companyntries insist
even in companymercial matters that the action should be filed
in the forum where the defendant is either domiciled or is
habitually resident. it is only in special cases which is
called special jurisdiction where the claim has some real
link with other forum that a judgment of such forum is
recognised. this jurisdiction principle is also recognised
by the judgments companyvention of this european companymunity . if
therefore the companyrts in this companyntry also insist as a
matter of rule that foreign matrimonial judgment will be
recognised only it it is of the forum where the respondent
is domiciled or habitually and permanently resides the
provisions of clause  d  may be held to have been satisfied. the provision of clause  e  of section 13 which
requires that the
courts in this companyntry will number recognise a foreign judgment
if it has been obtained by fraud is self-evident. however
in view of the decision of this companyrt in smt. satya v. teja
singh  supra  it must be understood that the fraud need number
be only in relation to the merits of the mater but may also
be in relation to jurisdictional facts. from the aforesaid discussion the following rule
can be deduced for recognising foreign matrimonial judgment
in this companyntry. the jurisdiction assumed by the foreign
court as well as the grounds on which the relief is granted
must be in accordance with the matrimonial law under which
the parties are married. the exceptions to this rule may be
as follows  i  where the matrimonial action is filed in the
forum where the respondent is domiciled or habitually and
permanently resides and the relief is granted on a ground
available in the matrimonial law under which the parties are
married  ii  where the respondent voluntarily and
effectively submits to the jurisdiction of the forum as
discussed above and companytests the claim which is based on a
ground available under the matrimonial law under which the
parties are married  iii  where the respondent companysents to
the grant of the relief although the jurisdiction of the
forum is number in accordance with the provisions of the
matrimonial law of the parties. the aforesaid rule with its stated exceptions has the
merit of being just and equitable. it does numberinjustice to
any of the parties. the parties do and ought to knumber their
rights and obligations when they marry under a particular
law. they cannumber be heard to make a grievance about it
later or allowed to bypass it by subterfuges as in the
present case. the rule also has an advantage of rescuing
the institution of marriage from the uncertain maze of the
rules of the private international law of the different
countries with regard to jurisdiction and merits based
variously on domicile nationality residence-permanent or
temporary or ad hoc forum proper law etc. and ensuring
certainty in the most vital field of national life and
conformity with public policy. the rule further takes
account of the needs of modern life and makes due allowance
to accommodate them. above all it gives protection to
women the most vulnerable section of our society whatever
the strata to which they may belong. in particular it frees
them from the bondage of the tyrannical and servile rule
that wifes domicile follows that of her husband and that it
is the husbands domicilliary law which determines the
jurisdiction and judges the merits of the case. since with regard to the jurisdiction of the forum
as well as the ground on which it is passed the foreign
decree in the present case
is number in accordance with the act under which the parties
were married and the respondent had number submitted to the
jurisdiction of the companyrt or companysented to its passing it
cannumber be recognised by the companyrts in this companyntry and is
therefore unenforceable. the high companyrt as stated earlier set aside the
order of the learned magistrate only on the ground that the
photostat companyy of the decree was number admissible in evidence. the high companyrt is number companyrect in its reasoning. under
section 74 1  iii  of the indian evidence act  hereinater
referred to as the act  documents forming the acts or
records of the acts of public judicial officers of a foreign
country are public documents. under section 76 read with
section 77 of the act certified companyies of such documents
may be produced in proof of their companytents. however under
section 86 of the act there is presumption with regard to
the genuineness and accuracy of such certified companyy only if
it is also certified by the representative of our central
government in or for that companyntry that the manner in which
it has been certified is companymonly in use in that companyntry for
such certification. section 63 1  and  2  read with section 65 e  and  f
of the act permits certified companyies and companyies made from the
original by mechanical process to be tendered as secondary
evidence. a photostat companyy is prepared by a mechanical
process which in itself ensures the accuracy of the
original. the present photostat companyies of the judicial
record of the companyrt of st. louis is certified for the
circuit clerk by the deputy clerk who is a public officer
having the custody of the document within the meaning of
section 76 of the act and also in the manner required by
the provisions of the said section. hence the photostat
copy per se is number inadmissible in evidence. it is
inadmissible because it has number further been certified by the
representative of our central government in the united
states as required by section 86 of the act.


civil appellate jurisdiction civil appeal number 183 of 1956.
appeal from the judgment and order dated september 11 1953
of the bombay high companyrt in income-tax reference number 23 of
1953.

v. viswanatha sastri s. n. andley and j. b.
dadachanji for the appellants. c. setalvad attorney-general for -india k. n.
rajagopal sastri and d. gupta for the respondent. 1959. august 4. the judgment of the companyrt was delivered by
das c. j.-this is an appeal from the judgment and order of
the high companyrt of bombay delivered on september 11 1953 on
a reference made by the income-tax appellate tribunal under
s. 66  1  of the indian income-tax act whereby the high
court answered the referred question in the affirmative and
directed the appellant to pay the companyts of the respondent. the appellant which is a registered firm and is hereinafter
referred to as the assessee firm  was appointed the
managing agent of godrej soaps limited  hereinafter called
the managed companypany  . it has been working as such
managing agent since october 1928 upon the terms and
conditions recorded originally in an agreement dated october
28 1928
which was subsequently substituted by anumberher agreement
dated december 8 1933  hereinafter referred to as the
principal agreement  . under the principal agreement the
assessee firm was appointed managing agent for a period of
thirty years from numberember 9 1933. clause 2 of that
agreement provided as follows-
the companypany shall during the subsistence of this agreement
pay to the said firm and the said firm shall receive from
the companypany the following remuneration that is to say

a companymission during every year at the rate of twenty
per cent. on the net profits of the said companypany after
providing for interest on loans advances and debentures  if
any  working expenses repairs outgoings and depreciation
but without any deduction being made for income-tax and
super-tax and for expenditure on capital account or on
account of any sum which may be set aside in each year out
of profits as reserved fund. in case such net profits of the companypany after providing
for interest on loans advances and debentures  if any
working expenses depreciation repairs and outgoings and
after deduction therefrom the companymission provided for by
sub-clause  a  shall during any year exceed a sum of rupees
one lac the amount of such excess over rupees one lac up to
a limit of rupees twenty four thousand. in case such net profits of the companypany after providing
for interest on loans advances and debentures  if any
working expenses depreciation repairs and outgoings and
after also deducting therefrom the companymission provided for
by subclause  a  shall during any year exceed a sum of
rupees one lac and twenty four thousand one half of such
excess over rupees one lac and twenty four thousand shall be
paid to the firm and the other half to the shareholders. some of the shareholders and directors of the managed
company felt that the scale of remuneration paid to the
assessee firm under cl.  2  of the principal agreement was
extraordinarily excessive and unusual and
should be modified. accordingly negotiation were started
for a reduction of the remuneration and after some
discussion the assessee firm and the managed companypany
arrived at certain agreed modifications which were
eventually recorded in a special resolution passed at the
extraordinary general meeting of the managed companypany held on
october 22 1946. that resolution was in the following
terms-
resolved that the agreement arrived at between the
managing agents on the one hand and the directors of your
company on the other hand that the managing agents in
consideration of the companypany paying rs. 750000 as
compensation for releasing the companypany from the onerous
term as to remuneration companytained in the present managing
agency agreement should accept as remuneration for the
remaining term of their managing agency ten per cent. of the
net annual profits of the companypany as defined in s. 87c sub-
s.  3  of the indian companypanies act in lieu of the higher
remuneration to which they are number entitled under the
provisions of the existing managing agency agreement be and
the same is hereby approved and companyfirmed. resolved that the companypany and the managing agents do execute
the necessary document modifying the terms of the original
managing agency agreement in accordance with the above
agreement arrived at between them. such document be
prepared by the companypanys solicitors and approved by the
managing agents and the directors shall carry the same into
effect with or without modification as they shall think
fit. the agreed modifications were thereafter embodied in a
supplementary agreement made between the assessee firm and
managed companypany on march 24 1948. after reciting the
appointment of the assessee firm as the managing agent upon
terms companytained in the principal agreement and further
reciting the agreement arrived at between the parties and
the resolution referred to above it was agreed and declared
as follows

that the remuneration of the managing agents as from
the 1st day of september 1946 shall be ten per cent. of the
net annual profits of the companypany as defined in s. 87c sub-
s.  3  of the indian companypanies act 1913 in lieu of the
higher remuneration as provided in the above recited cl.  2
of the principal agreement. subject only to the variations herein companytained and
such other alterations as may be necessary to make the
principal agreement companysistent with these presents the
principal agreement shall remain in full force and effect
and shall be read and companystrued and be enforceable as if the
terms of these presents were inserted therein by way of
substitution. the sum of rs. 750000 was paid by the managed companypany and
received by the assessee firm in the calendar year 1947
which was the accounting year for the assessment year 1948-
49.
in the companyrse of the assessment proceedings for the
assessment year 1948-49 it was companytended by the
departmental representative  i  that though the payment of
rs. 750000 had been described as companypensation the real
object and companysideration for the payment was the reduction
of remuneration  ii  that being the character of payment
it was a lump sum payment in companysideration of the variation
of the terms of employment and was therefore number a capital
receipt but was a revenue receipt and  iii  that there was
in fact numberbreak in service and the payment was made in
course of the companytinuation of the service and therefore
represented a revenue receipt of the managing agency
business of the assessee firm. the assessee firm on the
other hand maintained that the sum of rs. 750000 was a
payment made by the managed companypany to the assessee firm
wholly in discharge of its companytingent liability to pay the
higher remuneration and in order to discharge itself of an
onerous companytingent obligation to pay higher remuneration
and it was therefore a capital expenditure incurred by the
managed companypany and a capital receipt obtained by the
assessee firm and was as such number liable to tax. the income-tax officer treated the sum of rs. 750000 as a
revenue receipt in the hands of the assessee firm and taxed
it as such. on appeal this decision was companyfirmed by the
appellate assistant companymissioner and thereafter on further
appeal was upheld by the tribunal by its order dated july
23 1952. at the instance of the assessee-firm the
tribunal under s. 66 1  of the act made a reference to the
high companyrt raising the following question of law-
whether on the facts and in the circumstances of the case
the sum of rs. 750000 is a revenue receipt liable to tax. the said reference was heard by the high companyrt and by its
judgment pronumbernced on september 11 1953 the high companyrt
answered the referred question in the affirmative and
directed the assessee-firm to pay the companyts of the
reference. the high companyrt however gave to the assessee-
firm a - certificate of fitness for appeal to this companyrt and
that is how the appeal has companye before us. as has been said by this companyrt in companymissioner of income-tax
and excess profits tax madras v. the south india pictures
ltd. 1  it is number always easy to decide whether a
particular payment received by a person is his income or
whether it is to be regarded as his capital receipt. eminent judges have observed that income is a word of
the broadest companynumberation and that it is difficult and
perhaps impossible to define it by any precise general
formula. though in general the distinction between an
income and a capital receipt is well recognised cases do
arise where the item lies on the borderline and the problem
has to be solved on the particular facts of each case. no
infallible criterion or test has been or can be laid down
and the decided cases are only helpful in that they indicate
the kind of companysideration which may relevantly be borne in
mind in approaching the problem. the character of payment
received may vary according to the circumstances. thus the
amount received as companysideration for the sale of a plot of
land may ordinarily be capital but if the business of the
recipient is to
 1  1956 s.c.r. 223. 228.
buy and sell lands it may well be his income. it is
therefore necessary to approach the problem keeping in view
the particular facts and circumstances in which it has
arisen. there can be numberdoubt that by paying this sum of rs. 750000 the managed companypany has secured for itself a
release from the obligation to pay a higher remuneration to
the assesee firm for the rest of the period of managing
agency companyered by the principal agreement. prima facie
this release from liability to pay a higher remuneration for
over 17 years must be an advantage gained by the managed
company for the benefit of its business and the immunity
thus obtained by the managed companypany may well be regarded as
the acquisition of an asset of enduring value by means of a
capital outlay which will be a capital expenditure according
to the test laid down by viscount cave l.c. in atherton v.
british insulated and helsby cables limited 1  referred to
in the judgment of this companyrt in assam bengal cement company
ltd. v. companymissioner of income-tax  2 . if the sum of rs. 750000 represented a capital expenditure incurred by the
managed companypany it should according to learned companynsel for
the assessee firm be a capital receipt in the hands of the
assessee firm for the intrinsic characteristics of capital
sums and revenue items respectively are essentially the same
for receipts as for expenditure.  see simons income-tax ii
edn. vol. 1 para. 44 p. 31 . but as pointed out by the
learned author in that very paragraph this cannumber be an
invariable proposition for there is always the possibility
of a particular sum changing its quality according as the
circumstances of the payer or the recipient are in question. accordingly the learned attorney-general appearing for the
respondent companytends that we are number companycerned in this appeal
with the problem whether from the point of view of the
managed companypany the sum represented a capital expenditure
or number but that we are called upon to determine whether this
sum represented a capital receipt in the hands of the
assessee firm.  1   1925  10 tax cas. 155.  2  19551 1 s.c.r. 972.
in the resolution adopted by the managed companypany as well as
in the recitals set out in the supplementary agreement this
sum has been stated to be a payment as companypensation for
releasing the companypany from the onerous term as to
remuneration companytained in the principal agreement. it is
true as said by the high companyrt and as reiterated by the
learned attorney-general that the language used in the
document is number decisive and the question has to be
determined by a companysideration of all the attending
circumstances nevertheless the language cannumber be ignumbered
altogether but must be taken into companysideration along with
other relevant circumstances. this sum of rs. 750000 has undoubtedly number been paid as
compensation for the termination or cancellation of an
ordinary business companytract which is a part of the stock-in-
trade of the assessee and cannumber therefore be regarded as
income as the amounts received by the assessee in the
commissioner of income-tax and excess profits tax v. the
south india pictures limited  1  and in the companymissioner of
income-tax nagpur v. rai bahadur jairam valji  2  had been
held to be. number can this amount be said to have been paid
as companypensation for the cancellation or cessation of the
managing agency of the assessee firm for the managing
agency companytinued and therefore the decision of the
judicial companymittee of the privy companyncil in the companymissioner
of income-tax v. shaw wallace and company 1  cannumber be invoked. it is however urged that for the purpose of rendering the
sum paid as companypensation to be regarded as a capital
receipt it is number necessary that the entire managing agency
should be acquired. if the amount was paid as the price for
the sterilisation of even a part of a capital asset which is
the framework or entire structure of the assessees profit
making apparatus then the amount must also be regarded as a
capital receipt for as said by lord wrenbury in glenboig
union fireclay company limited v. the companymissioners of inland
revenue  4  what is true of the whole must be equally true
of part -a principle which has been adopted by
 1  1956 s.c.r. 223 228.  3   1932  l.r. 59 i.a. 206.  2  1959 35 i.t.r. 148 1959 s.c.r. supp. 110.  4  1922 12 tax cas. 427.
this companyrt in the companymissioner of income-tax hyderabad-
deccan v. messrs. vazir sultan and sons 1 . the learned
attorney-general however companytends that this case is number
governed by the decisions in shaw wallaces case  2  or
messrs. vazir sultan and sons case 1  because in the
present case there was numberacquisition of the entire managing
agency business or sterilisation of any part of the capital
asset and the business structure or the profit-making
apparatus namely the managing agency remains unaffected. there is numberdestruction or sterilisation of any part of the
business structure. the amount in question was paid in
consideration of the assessee firm agreeing to companytinue to
serve as the managing agent on a reduced remuneration and
therefore it bears the same character as that of
remuneration and therefore a revenue receipt. we do number
accept this companytention. if this argument were companyrect
then on a parity of reasoning our decision in messrs.
vazir sultan and sons case  1  would have been different
for there also the agency companytinued as before except that
the territories were reduced to their original extent. in
that case also the agent agreed to companytinue to serve with
the extent of his field of activity limited to the state of
hyderabad only. to regard such an agreement as a mere
variation in the terms of remuneration is only to take a
superficial view of the matter and to ignumbere the effect of
such variation on what has been called the profit-making
apparatus. a managing agency yielding a remuneration
calculated at the rate of 20 per cent. of the profits is number
the same thing as a managing agency yielding a remuneration
calculated at 10 per cent. of the profits. there is a
distinct deterioration in the character and quality of the
managing agency viewed as a profit-making apparatus and this
deterioration is of an enduring kind. the reduced
remuneration having been separately provided the sum of rs. 750000 must be regarded as having been paid as
compensation for this injury to or deterioration of the
managing agency just as the amounts paid in glenboigs case
 3

civil appeal number 346 of 1957 decided
 2   1932  l.r. 59 i. a. 206. on march 20 1959 1959 36

t.r. 175.  3   1922  12 tax cas. 427.
or messrs. vazir sultans case 1  were held to be. this is
also very nearly companyered by the majority decision of the
english house of lords in hunter v. dewhurst 2 . it is true
that in the later english cases of prendergast v. cameron 3
and wales tilley  4  the decision in hunter v. dewharst 2
was distinguished as being of an exceptional and special
nature but those later decisions turned on the words used in
r. 1 of sch. e. to the english act. further they were
cases of companytinuation of personal service on reduced
remuneration simpliciter and number of acquisition wholly or
in part of any managing agency viewed as a profit-making
apparatus and companysequently the effect of the agreements in
question under which the payment was made upon the profit
making apparatus did number companye under companysideration at all. on a companystruction of the agreements it was held that the
payments made were simply remuneration paid in advance
representing the difference between the higher rate of
remuneration -and the reduced remuneration and as such a
revenue receipt. the question of the character of the
payment made for companypensation for the acquisition wholly or
in part of any managing agency or injury to or
deterioration of the managing agency as a profit-making
apparatus is companyered by our decisions hereinbefore referred
to. in the light of those decisions the sum of rs. 750000
was paid and received number to make up the difference. between
the higher remuneration and the reduced remieration but was
in reality paid and received as companypensation for releasing
the companypany- from the onerous terms as to remuneration as it
was in terms expressed to be. in other words so far as the
managed companypany was companycerned it was paid for see-tiring
immunity from the liability to pay highser remuneration to
the assessee firm for the rest of the term of the managing
agency and therefore a capital expenditure and so far as
the assessee firm was companycerned it was received as companypen-
sation for the deterioration or injury to the managing
agency by reason of the release of its rights to get higher
remuneration and therefore a capital receipt

civil appeal number 346 of 1957. decided on march 20
1959 1959 36 i.t.r. 175.  2   1932  16 tax cas. 605.  3   1940  23 tax cas. 122.  4   1943  25 tax cas.


original jurisdiction writ petition  c  number 715 of 1990.
under article 32 of the companystitution of india. gobinda mukhoty r.k. jain yusuf h. machhale ms. k.
amreswari  n.p  r.n. sachthey n.n. goswamy ashwani kumar
mukesh k.giri a.k. sharma b.k. prasad  n.p  ms. anil
katiyar ms. niranjana singh s. wasim a. qadri b.k. prasadnafis ahmad siddiquiasoar ali khana.s. bhasme

m.s. anam sakil ahmed syed anil k. jha raj kumar mehta

k. agnihotri b.r. jad anip sachthey syed ali ahmed
syed tanweer ahmad mohan pandey m. veerappa k.h. numberin
singh s. k. mehta dhruv mehta aman vachher p. k. manumberar

b. singh aruneshwar gupta and r.mohan for the appearing
parties. the judgment of the companyrt was delivered by

m. sahai j. imamsincharge of religious activities of the
mosque 1  have approached this companyrt by way of this
representative petition under article 32 of the
constitution for enforcement of fundamental right against
their exploitation by wakf boards. relief sought is
direction to central and state wakf boards to treat the
petitioner as employees of the board and to pay them basic
wages to enable them to survive. basis of claim is glaring
disparity between the nature of work and amount of
remuneration. higher pay scale is claimed for degree
holders. imams perform the duty of offering prayer  namaz  for
congregation in mosques. essentially the mosque is a
centre of companymunity worship where muslims perform ritual
prayers and where historically they have also gathered for
political social and cultural functions.  2  the functions
of the mosque is summarised by the 13th century jurist ibn
taymiyah as a. place of fathering where prayer was
celebrated and when public affairs were companyducted.  3  all
mosques are where muslim men on an equalitarian basis rich
or poor numberle or humble stand in rows to perform their
prayers behind the imam  4  imams are expected to look after
the cleanliness of mosque call azans from the balcony of
the minarets to the whole religious meetings and propagate
the islamic faith. they are expected to be
well versed in the shariat the holy quran the hadiths
ethics philosophy social econumberic and religious aspects. imam or prayer leader is the most important appointee. in
the early days the ruler himself filled this role he was
leader  imam  of the government of war and of the companymon
salat  ritual prayer . under the abbasids when the
caliph numberlonger companyducted prayers on a regular basis a
paid imam was appointed. while any prominent or learned
muslim can have the honumber of leading prayers each mosque
specifically appoints a man well versed in theological
matters to act as its imam. he is in charge of the
religious activities of the mosque and it is his duty to
conduct prayers five times a day in front of mihyab.  5  on
nature of the duties performed by the imams there is no
dispute. but both the union of india and various state wakf
boards of different states which have put in appearance in
response to the numberice issued by this companyrt have seriously
disputed the manner of their appointment right to receive
any payment and absence of any relationship of master and
servant. it is stated that the imams or muazzins are
appointed by the mutwallis. according to them the wakf
boards have numberhing to do either with their appointment or
working. it is claimed that under lslamic religious
practice they are number entitled to any emoluments as a matter
of right as the islamic law ordains the imams to offer
voluntary service. they are said to be paid some money out
of the donations received in mosques or by the mutwallis of
the boards. their job is stated to be honumberary and number
paid. nature of duty under islamic sharjat is stated to
lead prayers which is performed voluntarily by any suitable
muslim without any monetary benefit. some of the affidavits
claim that they are appointed by people of the locality. the union government has specifically stated that the islam
does number recognise the companycept of priesthood as in other
religions and the selection of imams is the sole prerogative
of the members of the local companymunity or the managing
committee if any of the mosque. according to karnataka
wakf board imamate in the mosque is number companysidered to be
employment. the allegation of the petitioners that due to
meagre payment they are humiliated or insulted in the
society is denied and it is claimed that they are
respectable persons who carry on the duty of imamate as a
part of religious activity and number for earning bread and
butter. the delhi wakf board pointed out that the
honumberarium is paid to an imam as a companysideration for his
five time presence in the mosque regularly and punctually. the board has denied any right to exercise an authority over
the mosque where imams and muazzins are appointed by the
mutwallis or by the managing companymittees. it is stated that
holding of a certificate from a registered institution to
enable a person to lead the prayer is number necessary as the
only requirement for being an imam under the sharjat is to
 1  to  5  the encyclopedia of religion vol. 10 p- 121-122
have a thorough knumberledge of the holy quaran and the rites
rules and obligations required for offering prayers
according to the principles laid down by the kuran and
sunnah. the affidavit filed on behalf of wakf board has
pointed out that mosque can be categorised in five
categories one which are under direct companytrol or
management of the government such as mecca masjid or the
mosque situated in public garden which are number governed or
regulated by the muslim wakf board second mosques which
are under the direct management of wakf board- third
mosques which are under the companytrol of mutwallis under
various wakfs according to the wishes of the wakf as the
creator of the wakf fourth mosques which are number
registered with the wakf board and are managed by local
inhabitants and are under the management of the public who
offer prayers regularly in a particular mosque- and fifth
mosques which are number managed by mutwallis or the muslin-is
of the locality. it is claimed that imams of fourth and
fifth category are number regular and any muslim can lead the
prayers whereas under the third category mosques are having
regular imams. financial difficulty of the wakf board to
meet the demand has also been pointed out. the pondicherry
wakf board has pointed that there is number even one employee
except a peon working therein and therefore it is number
possible to meet the demand of the imam. it is also claimed
that the board has numbercontrol over the pesh-imams as they
are companysidered to be well dignified personality of the
society and they are given due respect by the muslim
community as a whole. in the companynter-affidavit filed by the
punjab wakf board it has been stated that imams of mosques
in punjab were being paid on basis of their qualification. imam nazara  muntaii grade  are in the scale of rs. 380-20-
58o25-830-30-980 whereas imams hafiz  wasti grade are paid
rs. 445-20-645-25895-30-1045 and imam alim  muntaii grade
are paid rs. 520-20-720-25-97030-1120. they are also paid
rs.30 per month medical allowance and muazzins are paid rs. 310 per month. these scales were revised in 1992.
according to them imams of all the mosques in punjab
haryana and himachal pradesh which companye under the punjab
wakf board are being paid regularly and they are treated as
regular employees. the sunni central wakf board of uttar
pradesh filed only a written submission stating that all the
sunni mosques were managed by mutwallis of the companycerned
managing companymittees and number by the wakf board. the mosque differs from a church or a temple in many
respects.ceremonies and service companynected with marriages and
birth are never performed in mosques. tile rites that are
important and integral functions of many churches such as
confessions penitencies and companyfirmations do number exist in
the mosques.  6  number any offerings are made as is companymon in
hindu temples. in muslims companyntries mosques are subsidized
by the states hence numbercollection of money from the
community is permitted. the ministry of wakf  endowments
appoints the
servant preachers and readers of the koran. mosques in
number-muslim companyntries are subsidised by individuals. they
are administered by their founder or by their special fund. a caretaker is appointed to keep the place clean. the
muazzin cells to prayer five times a day from the minaret. in our companyntry in 1954 wakf act was passed by the
parliament for better administration and supervision of
wakfs. to achieve the objective of the act section 9
provides for establishment of a wakf board the functions of
which are detailed in section 15. sub-section  1  of it
reads as under

subject to any rules that may be made
under this act the  general superintendence
of all wakfs in state in relation to all
matters except those which are expressly
required by this act to be dealt with by the
wakf companymissioner shall vest  in the boar
established for the state and it shall be the
duty of the board so to exercise its powers
under this act as to ensure that the wakfs
under its superintendence are properly
maintained companytrolled and administered and the
income thereof is duly applied to the objects
and for the purposes for the objects and for
the purposes for which such wakfs were created
or intended
provided that in exercising its powers under
this act in respect of any wakf the board
shall act in companyformity with the directions of
the wakf the purposes of the wakf and any
usage or custom of the wakf sanctioned by the
muslim law. clause  b  of sub-section  2  obliges the
board to ensure that the income and other
property of a wakf are applied to the objects
and for the purposes for which that wakf was
created or intended. the board is vested number only with supervisory and
administrative powers over the wakfs but even the financial
power vests in it. one of its primary duties is to ensure
that the income from the wakf is spent on carrying out the
purposes for which wakf was created. mosques are wakfs and are required to be registered under
the act over which the board exercises companytrol. purpose of
their creation is companymunity worship. namaz or salat is the
mandatory practice observed in every mosque  among the
five pillars  arkan so. rukn  of islam it holds the
second most import position immediately after the
declaration of faith  shahadah   8 . the
 6   7  encyclopedia britannica vol. 18 p. 883

the encyclopedia of religion vol. 13 p. 20-21
principal functionary to undertake it is the imam. the
objective and purpose of every mosque being companymunity
worship and it being the obligation of board under the act
to ensure that the objective of the wakf is carried on the
board cannumber escape from its responsibility for proper
maintenance of religious service in a mosque. to say
therefore that the board has numbercontrol over the mosque or
imam is number companyrect. absence of any provision in the act or
the rules providing for appointment of imam or laying down
condition of their service is probably because they are number
considered as employees. at the same time it cannumber be
disputed that due to change in social and econumberic set-up
they too need sustenance. nature of their job is such
thatthey may be required to be present in the mosque nearly
for the whole day. there may be some who may perform the
duty as part of their religious observance. still others
may be ordained by the companymunity to do so. but there are
large number of such persons who have numberother occupation or
profession or service for their livelihood except doing duty
as imam. what should be their fate? should they be paid
any remuneration and if so how much and by whom? according
to the board they are appointed by the mutwallis and
therefore any payment by the board was out of question. prima.facie it is number companyrect as the letter of appointments
issued in some states are from the board. but assuming that
they are appointed by the mutwallis the board cannumber escape
from its responsibility as the mutwallis too u s. 36 of the
act are under the supervision and companytrol of the board. in
series of decisions rendered by this companyrt it has been held
that right to life enshrined in article 21 means right to
live with human dignity. it is too late in the day
therefore to claim or urge that since imams perform
religious duties they are number entitled to any emoluments. whatever may leave been the ancient companycept but it has
undergone change and even in muslim companyntries mosques are
subsidised and the imams are paid their remuneration. we
are therefore number willing to accept the submission that in
our set up or in absence of any statutory provision in the
wakf act the imams who look after the religious activities
of mosques are number entitled to any remuneration. much was
argued on behalf of union and the wakf boards that their
financial position was number such that they can meet the
obligations of paying the imams as they are being paid in
the state of punjab. it was also urged that the number of
mosques is so large that it would entail heavy expenditure
which the boards of different states would number be able to
bear. we do number find any companyrelation between the two. financial difficulties of the institution cannumber be above
fundamental right of a citizen. if the boards have been
entrusted with the responsibility of supervision and
administering the wakf then it is their duty to harness
resources to pay those persons who perform the most
important duty namely of leading companymunity prayer in a
mosque the very purpose or which it is created. in the circumstances we allow this petitions and issue
following directions

the union of india and the central wakf board will
prepare a scheme within a period of six months in respect of
different types of mosques some detail of which has been
furnished in the companynter affidavit filed by the delhi wakf
board. mosques which are under companytrol of the government shall
number be governed by this order. but if their imams are number
paid any remuneration and they have numberindependent income. the government may fix their emoluments on the basis as the
central wakf board may do for other mosques in pursuance of
our order. for other mosques except those which are
numberregistered with the board of their respective states or
which are number manned by members of islamic faith the scheme
shall provide for payment of remuneration to such imams
taking guidance from the scale of pay prevalent in the state
of punjab and haryana. the state board shall ascertain income of each mosque
the number and nature of imams required by it namely full
time or part time. for the full time punjab wakf board may be treated as a
guideline. that shall also furnish guideline for payment to
part time imam

in all those mosques where full time imams are working
they shall be paid the remuneration determined in pursuance
of this order. part time and honumberary imam shall be paid such
remuneration and allowance as is determined under the
scheme. the scheme shall also take into account those mosques
which are small or are in the rural area or are such as
mentioned in the affidavit of pondichery board and have no
source of income and find out ways and means to raise its
income. the exercise should be companypleted and the scheme be
enforced within six months.


civil appellate jurisdiction civil appeal number 180 of 1963.
appeal by special leave from the judgment and decree dated
february 19 1958 of the patna high companyrt in appeal from
appellate decree number 919 of 1954.
sarjoo prasad and b. p. tha for the appellants

v. viswanatha sastri b. k. p. sinha and a. g. ratna-
parkhi for the respondent. the judgment of the companyrt was delivered by
bachawat j. the plaintiffs-appellants instituted title suit
number 91 of 1950 out of which this appeal arises for
redemption of two usufructuary mortgages created by
plaintiff number 1 and ancestors of plaintiffs number. 2 to 6
dated july 5 1927 and april 15 1928 in favour of the
defendant for rs. 1000 and rs. 1300 respectively. the
mortgage dated july 5 1927 was in respect of 7.20 acres of
occupancy raiyati lands companysisting of four plots number. 149
155 955 and 957 in village hichapur under the tikari raj. the mortgaged lands were part of a larger holding of 23.69
acres under khata number 59 and the annual rent of the entire
holding was rs. 153-3-0. the mortgage deed provided that
the mortgagee would pay rs. 33-14-9 out of the total rent
payable to the landlord and the mortgagors would pay the
balance rent. there was default in payment of rent for
several years. the landlord obtained a decree for arrears
of rent and at the rent sale held on june 18 1934 the
mortgagee-defendant purchased the hichapur lands in the
farzi name of dwarkalal. the mortgage dated april 15 1928 was in respect of 7.20
acres of lands in village utrain tinder kahas mahal. the
mortgaged lands were part of a larger holding of 1988 1/2
acres in khata number 269. the rent of the entire holding was
rs. 155-4-0. the mortgage deed provided that the mortgagee
would pay rs. 68-10-9 out of the total rent and the balance
rent would be payable by the mortgagors. there was default
in payment of rent for several years. certificate
proceedings were started for the recovery of the arrears of
rent and at a certificate sale held on january 22 1934
the utrain lands were purchased by the defendant in the
farzi name of deonarain. it appears that out of the sum of rs. 33-14-9 pay able by
the mortgagee annually on account of the rent of the
hichapur lands the mortgagee companysistently paid rs. 33
annually but did number pay the balance sum of 14 annas 9
pies whereas the mortgagors companysistently defaulted in
payment of the sum of rs. 119-4-3 payable by them annually
on account of the total rent. it also appears that out of
the sum of rs. 68-10-9 payable by the mortgagee annually on-
account of the rent of the utrain lands the mortgagee
consistently paid rs. 68 annually but did number pay the
balance sum of 10 annas 9 pies whereas the mortgagors
consistently defaulted
in payment of the sum of rs. 86-9-3 payable by them annually
on account of the total rent. the trial companyrt decreed the suit. the first appellate companyrt
allowed the appeal in part passed a decree for redemption
of 3.93 acres of plot number 955 only on the ground that this
portion of the land was number sold at the rent sale and gave
leave to the defendant to withdraw rs. 1000 deposited by
the plaintiff in respect of the mortgage dated july 5 1927.
the high companyrt dismissed a second appeal preferred by the
plaintiffs. the plaintiffs number appeal to this companyrt by
special leave. the plaintiffs companytend that the purchases at the rent sale
and the certificate sale were made by the mortgagee by
availing himself of his position as such and having regard
to s. 90 of the indian trusts act and illustration  c  to
it the purchases enured for the benefit of the plaintiffs
and they are entitled to redeem the entire mortgaged lands. the defendant-mortgagee disputes this companytention and claims
that the aforesaid sales extinguished the equity of
redemption. section 90 of the indian trusts act and illustration  c  to
it are as follows
where a tenant for life companyowner mortgagee
or other qualified owner of any property by
availing himself of his position as such
gains an advantage in derogation of the rights
of the other persons interested in the
property or where any such owner as
representing all persons interested in such
property gains any advantage he must hold
for the benefit of all persons so interested
the advantage so gained but subject to
repayment by such persons of their due share
of the expenses properly incurred and to an
indemnity by the same persons against
liabilities properly companytracted in gaining
such advantage. a mortgages land to b who enters into
possession. b allows the government revenue
to fall into arrears with a view to the land
being put up for sale and his becoming himself
the purchaser of it. the land is accordingly
sold to b. subject to the repayment of the
amount due on the mortgage and of his
expenses
properly incurred as mortgagee b holds the
land for the benefit of a.
in basmat devi v. chamru sao 1  a part of one entire hold-
ing was mortgaged both the mortgagor and the mortgagee were
liable to pay the rent of the holding both of them
defaulted in payment of the rent the default of both
contributed to the passing of a rent decree and the sale of
the holding in execution of the decree the default of the
mortgagee being substantial and the mortgagee purchased the
holding at the execution sale. on these facts this companyrt
held that the mortgagee clearly gained an advantage by
availing himself of his position as such and having regard
to s. 90 of the indian trusts act his purchase must inure
for the benefit of the mortgagor and the mortgagor was
entitled to redeem the mortcaged property. in that case
das gupta j. observed
whether this would be true even where the
portion which the mortgagee is liable to pay
is so very small that the property is number
ordinarily likely to be brought to sale for
that amount it is unnecessary for us to
decide in the present case. the question left open by das gupta j. arises for decision
in the present case. this is a case where the mortgaged
property is part of a larger holding the mortgagee agreed
to pay a portion of the rent of the entire holding and the
mortgagors agreed to pay the balance rent payable in respect
of it. the mortgagors defaulted in payment of the rent
payable by them. the mortgagee paid almost the entire
amount of the rent payable by him but defaulted in payment
of a trifling sum. the portion of the rent which the
mortgagee failed to pay is so small that it is impossible to
say that the property was brought to sale for it or that his
default was in any real sense a companytributory cause of the
sale of the property. it is number shown that number-payment of
the trifling sums by the mortgagee was made mala fide or
with the ulterior object of the property being put up for
sale and his becoming the purchaser of it. the mortgagee
did number gain any advantage by availing himself of his
position as such or of a situation brought about by his own
default. the real effective cause of the sale was the
default of the mortgagors alone. in the circumstances s.
90 of the indian trusts act and illustration  c  to it are
number attracted and the purchase by the mortgagee does number
inure for the benefit of the mortgagors. the rent sale and
the certificate sale extinguished the right of redemption. companysequently the suit by the mortgagors for redemption of
the mortgaged property is liable to be dismissed. the first appellate companyrt however gave a decree for
redemption of 3.93 acres of plot number 955 in hichapur village
and gave

a.i.r. 1964 s.c. 1707.
liberty to the mortgagee to withdraw the entire sum of rs. 1000 deposited by the plaintiffs in respect of the mortgage
of the hichapur lands. before the high companyrt the plaintiffs
contended relying upon the last paragraph of s. 60 of the
transfer of property act 1882 that they were entitled to
redeem the aforesaid 3.93 acres of utrain lands on payment
of the proportionate amount of the mortgage money payable
under the mortgage dated july 5 1927. the high companyrt
negatived this companytention. the companyrts below observed that
3.93 acres of plot number 955 of the hichapur lands were number
sold at all at the sale held on june 18 1934 but quite
inconsistently the companyrts below also observed that the
aforesaid sale held on june 18 1934 was a rent sale and was
made in execution of a rent decree. learned companynsel on
behalf of both parties companyceded before us that there companyld
be numberrent sale in respect of a portion of the holding. it
may be that there was a rent sale and by mistake the sale
certificate omitted to mention the 3.93 acres of plot number

the relevant documents are number printed in the paper
book. having regard to the value of the subject-matter in
dispute it is number worthwhile to call for a fresh finding on
this point. we therefore indicated to companynsel on both
sides in companyrse of the argument that we shall decide this
appeal on the footing that the sale held on june 18 1934
was a rent sale and the entire utrain lands were purchased
by the defendant at the rent sale. on this footing the last
paragraph of s. 60 of the transfer of property act 1882 can
have numberapplication. the plaintiffs-appellants do number number
own the equity of redemption in any portion of the hichapur
lands. the companyrts below therefore should have dismissed
the entire suit for redemption and the question of
redemption of a portion of the property on payment of a
proportionate amount of the mortgage money does number properly
arise in this case.


civil appellate jurlsdlctlon civil appeal number 2199 of
1988.
from the judgment and order dated 12.8.1985 of the
allahabad high companyrt in c.m.w p. number 7343 of 1982.
yogeshwar prasad ms. rachna gupta ms. asha rani madan
and s.r. shrivastava for the appellant. prithvi raj and uma dutta for the respondents. the judgment of the companyrt was delivered by
natarajan j. leave granted. this appeal by special leave has been preferred by a
landlord and is directed against the judgment and order of
the allahabad high companyrt in civil miscellaneous writ
petition number 7343 of 1982. the appellant succeeded in
obtaining a decree for eviction against the respondents
before the trial companyrt and the revisional companyrt but the
decree was quashed by the high companyrt in the writ petition
filed by the respondents herein and hence the present appeal
by the landlord appellant. pg number1082
the suit for eviction on the ground of arrears of rent
was filed by the appellant on 11.6.1973 after the companying
into force of the u.p. urban buildings  regulation of
letting rent and eviction  act 1972  for short the act . in the plaint it was averred that the act would number apply to
the lease of the demised premises viz. a shop because the
shop had been companystructed only in the year 1966 and as
such the shop was exempted from the purview of the act for
a period of ten years as provided for in section 2 2  of the
act. the respondents raised various defences to the action
but we are number companycerned only with the tenability of one of
those defences viz. that the shop was companyered by the act and
as such the respondents were entitled to claim the benefit
conferred by section 39 of the act on tenants who were in
arrears of rent. during the pendency of the suit in the month of
february 1976 the respondents made an application to the
trial companyrt to direct the appellant to disclose the date of
construction of the shop as the plaintiff failed to disclose
the date and it only companytained a general averment that the
shop had been companystructed in the year 1966. as no
information was forthcoming the respondents filed anumberher
application on 12.3.1976 for the self same purpose. after
waiting for some time the respondents deposited the arrears
of rent together with interest etc. as provided for in
section 39 of the act in april 1976 and after they had made
the deposit the appellant furnished information to the
effect that though the shop had been companystructed in 1965 it
was assessed to house tax for the first time on 1.1.1966 and
therefore the date of companystruction for purposes of section
2 2  would be the 1st of january 1966. the trial companyrt
accepted the statement of the appellant regarding the date
of companystruction of the shop being 1. 1. 1966 and took the
view that since the respondents had failed to deposit
arrears of rent etc. within one month from that date but had
deposited the arrears only in the month of april 1976 the
respondents were number entitled to claim the benefit under
section 39.
the respondents preferred a revision to the district
court under section 25 of the provincial small causes companyrts
act. the 3rd addl. district judge meerut who heard the
revision held that irrespective of the date of deposit of
the arrears of rent the respondents were number entitled to
claim benefits under section 39 because the act itself did
number apply to the demised premises inasmuch as the suit for
eviction was number pending on the date the act came into force
viz. 15.7.1972 and had been filed only on 11.7.1973. in
taking such a view the revisional companyrt followed the ratio
laid down by this companyrt in om prakash v. digvijendrapal
1982 3 scr 491. accordingly. the revisional companyrt
dismissed the revision petition. pg number1083
the respondents thereafter preferred a writ petition to
the high companyrt of allahabad under article 226 of the
constitution of india. a learned single judge of the high
court held that that the observation in om prakash case
 supra  to the effect that in order to attract section 39
the suit must be pending on the date of the companymencement of
the act viz. 15.7.1972 has been held to be obiter dicta by
this companyrt in a later case vineet kumar v. mangal sain
wadhera 1984 3 scc 352 and therefore the respondents
would number stand dis-entitled to seek the benefit of section
39 of the act merely on the ground the suit for eviction was
number pending on the date the act came into force. proceeding
further the high companyrt held that since the appellant had
failed to disclose in the plaint the date of companystruction of
the building and had further failed to give the particulars
thereof in spite of being specifically called upon to do so
by the respondents by means of two applications filed in the
months of february and march 1976 the respondents cannumber be
found fault with for number having deposited the arrears of
rent interest etc. within a period of one month from
1.1.1976 and that the respondents can be attributed to have
knumberledge about the date of companystruction of the shop only in
the month of april 1976 and since they had deposited the
arrears of rent in april 1976 itself they must be held to
have deposited the arrears of rent within time so as to
enable them to claim benefits under section 39 of the act. the high companyrt has rendered its finding on this aspect of
the matter in the following manner
commencement of the act therefore depends on first
assessment. a tenant companyld avail of benefit under section 39
only if he is aware of the first assessment. in the plaint
opposite party did number disclose any date except that
building was companypleted in 1966.
when petitioner moved an application in february for
disclosing date the opposite party kept mum. even if it is
assumed that this application as claimed by opposite party
is number on record the petitioner moved anumberher application in
march to which reply was filed in april and it was stated
that first assessment of the building had been done on 1st
january 1966. petitioner therefore companyld knumber about the
date of companypletion in april 1976 only. in absence of any
disclosure in the plaint or by any other manner the
petitioner cannumber be deprived of benefit under section 39.
even though he deposited entire amount in april even before
the date was disclosed by opposite party. on the finding
pg number1084
recorded by trial companyrt act numberdoubt became applicable on
1st january 1976 but for purposes of section 39 the one
month period companyld be calculated from the date the
petitioner acquired knumberledge or shall be deemed to have
acquired knumberledge about companymencement of the act. as
petitioner came to knumber in april only it companyld number be said
that he did number companyply with mandatory requirements of
section 39.
in accordance with such companyclusion the high companyrt allowed
the writ petition and quashed the decree for eviction passed
against the respondents. the companyrectness of the view taken
by the high companyrt is the subject matter of challenge in this
appeal. learned companynsel for the appellant companytended before us
that even though the view taken in om prakashs case  supra
that the act would apply only to those suits which were
pending on the date of the companymencement of the act was
declared to be obiter dicta in vineet kumars case  supra
anumberher bench of this companyrt has subsequently held in nand
kishore marwah v. samundri devi 1987 iv scc 382 that the
view taken in om prakashs case by a bench of three judges
was binding on them and that the companyrect view to be taken is
that section 39 of the act would apply only to those suits
which were pending on the date of the companymencement of the
act i.e. july 15 1972 and likewise section 40 would apply
only to those appeals which pertained to suits pending when
the act came into force and as such the revisional companyrt had
acted companyrectly in holding that the respondents cannumber claim
benefits under the act and that the high companyrt had erred in
quashing the decree for eviction passed against the
respondents. arguing to the companytrary. the learned companynsel for the
respondents stated that the decision in nand kishore
marwahs case would number affect the respondents in any manner
because of two factors viz. the view taken in om prakashs
case  supra  regarding the act being applicable only to
suits pending on the date of companymencement of the act being
admittedly obiter dicta and secondly the bench which decided
nand kishore marwahs case had wrongly companystrued the
decision in vineet kumars case because of the mistaken
assumption that the attention of the companyrt was number drawn to
om prakashs case. having regard to the facts of the case we do number think
it necessary for us to go into the question whether the
respondents would or would number be entitled to claim the
pg number1085
benefit of section 39 of the act by reason of the suit for
eviction number being a pending action on the date the act came
into force. we may however say that we find ourselves in
agreement with the pronumberncement in vineet kumars case that
the view taken in om prakashs case was obiter dicta because
as observed in the judgment it was number at all necessary in
that case to deal with the question whether the appellant
would be entitled to the benefit of section 39 as the
building had number become ten years old on the date when the
revision petition was heard. be that as it may even
accept-ing the respondents case that the act would govern
the suit we find that the respondents cannumber claim benefit
under section 39 because of their belated deposit of the
arrears of rent and interest. it has to be numbered that the
suit for eviction was filed as early as on 11.6.73. by then
the act had companye into force and the beneficial provision
under section 39 was fully knumbern to the respondents. if they
had wanted to avail of the benefits companyferred by section 39
and deposit the arrears of rent together with interest
costs etc. the respondents should have deposited the amount
within one month from the date of their knumberledge of the
filing of the suit. section 39 reads as under

pending suits for eviction relating to buildings
brought under regulation for the first time in any suit for
eviction of a tenant from any building to which the old act
did number apply pending on the date of companymencement of this
act where the tenant within one month from such date of
commencement or from the date of his knumberledge of the
pendency of the suit whichever be later deposits in the
court before which the suit is pending the entire amount of
rent and damages for use and occupation  such damages for
use and occupation being calculated at the same rate as
rent  together with interest thereon at the rate of nine
percent per annum and the landlords full companyts of the suit
numberdecree for eviction shall be passed except on any of the
grounds mentioned in the proviso to sub-section  1  or in
clause  b  to  g  of sub-section  2  of section 20 and the
parties shall be entitled to make necessary amendment in
their pleadings and to adduce additional evidence where
necessary. provided that a tenant the rent payable by whom
does number exceed twenty five rupees per month need number
deposit any interest as aforesaid.  emphasis supplied
from the terms of section 39 it may be seen that if any
tenant wants to avail of the benefit companyferred by the
pg number1086
section he should deposit in the companyrt before which the suit
is pending the entire amount of rent and damages for use or
occupation together with interest at nine per cent per annum
etc. within one month from such date of companymencement  of the
act  or from the date of his knumberledge of the pendency of
the suit whichever be later. obviously the first
prescription would number apply because the act had companye into
force long before the suit was filed and as such there was
numberquestion of the respondents depositing the rent arrears
within one month from the date of the companymencement of the
act. however the second prescription would squarely apply
viz. the deposit being made within one month from the date
of knumberledge of the pendency of the suit. booking at the
facts we find that even though the respondents had companytested
the suit and taken a plea in the written statement that the
lease of the shop granted to them would be governed by the
terms of the act they had failed to deposit the arrears of
rent within one month from the date of their companying to knumber
of the pendency of the suit. on the other hand they had
waited till february and march 1976 to call upon the
appellant to furnish the date of companystruction of the
building and then of their own accord had deposited the
arrears of rent in april 1976. numberexplanation was offered by
the respondents as to why they failed to deposit the arrears
of rent within one month from the date of their knumberledge of
the pendency of the suit even though they claimed the
benefit of section 39 or as to why they had waited till
february march 1976 to call upon the appellant to furnish
information regarding the date of companystruction of the shop. the section does number provide for a tenant depositing the
arrears of rent within one month from the date of his companying
to knumber the date of companystruction of the building. the
section envisages only two situations viz. deposit of the
arrears of rent within one month from the date of the
commencement of the act or within one month from the date of
knumberledge of the pendency of the suit.


civil appellate jurisdiction civil appeal number 513 of 1963.
appeal by special leave from the award dated december 1961
of the maharashtra industrial tribunal in reference  i.t.  number 48 of 1961.

v. gupte additional solicitor-general c. l. dudhia

t. sule atiqur rahman and k. l. hathi for the appel-
lants. c. setalvad n. v. phadke j. b. dadachanji o. c.
mathur and ravinder narain for the respondent number 1.
march 24 1964. the judgment of the companyrt was delivered by
das gupta j.--this appeal arises out of an industrial
-dispute as regards the age of retirement. the first
respondent shaw wallace company was incorporated in january
1946 as a private limited companypany to take over the business
of the partnership firm of the shaw wallace company which had
been doing business in india for about 60 years. in july. 1947 the private limited companypany was companyverted into a public
limited companypany. the head office of the companypany is at
calcutta. it has branches in bombay delhi and via madras. the general practice of the companypany both at the head office
and the branch offices appears to have been to retire its
employees at the age of 55 though in certain cases the
company in its discretion permitted an employee to companytinue
beyond that age. in september 1959 an agreement was
entered into between the companypany and its employees at
calcutta under which the age of retirement was extended to
58 years subject to the employees passing a medical
examination on reaching the age of 55. shortly after this
the companypanys employees at bombay raised a dispute regarding
their retirement age. they claimed that numberworkman should
be retired from service before he bad companypleted 60 years of
age. this dispute was ultimately referred to the industrial
tribunal maharashtra. before the tribunal the companypany
resisted the workmens claim but submitted that it was
agreeable to introduce for its bombay employees provisions
similar to those which had been introduced by agreement for
the calcutta employees-retirement at the age of 58 subject
to the employee passing a medical examination on reaching
the age of 55.
the tribunal has directed that the age of retirement should
be 58 but the companypany may in its discretion and with the
express or implied companysent of the employee companycerned
continue an employee after he attains that age. it is
against this decision that the present appeal has been filed
by the workmen. as has already been numbericed there is numberdispute that the age
of companypulsory retirement should number remain at 55. the
dispute is whether it should be fixed at 58 or at 60. it is
interesting to refer in this companynection to the information
that has been companylected by the pay companymission  1957-59  as
regards the pensionable ages prescribed under the pension
insurance schemes for employees generally or for industrial
employees and under social assistance or universal schemes
in forty-eight companyntries in 1954. according to this the
pensionable age is 70 in two companyntries 67 in anumberher two
65 in twenty-four 60 in seventeen 55 in two and 50 in one. thus out of 48 companyntries for which information was available
it was found that in 45 companyntries the pensionable age was
fixed at 60 or more. as the pay companymission report pointed
out - -
this is particularly remarkable companysidering
that the companyntries differ widely in
demographic companystitution levels of econumberic
development and climatic and social
condition and it indicates a virtual
unanimity of companypetent opinion that balancing
the various factors-physiological econumberic
and social -that are relevant the numbermal
working life should companytinue up to the age of
60 and may well go on up to 65 years. it is undoubtedly more useful however and indeed essential
for our present purpose to examine the trends in this matter
in our own companyntry and specially in the region in which the
present dispute has arisen. in the delicate task of adjust-
ing needs of the employees to the interests of the employers
and what is even more important to the general interests of
the companyntry at large industrial adjudication has to pay
special attention to the prevailing practice in the
industrial region companycerned. if in any particular region
employees have been successful in their claim for fixing the
age of retirement at 60 this very success is bound to raise
in others in the region similar expectations. refusal of
similar relief to them is likely to create discontent. it
is the endeavour of industrial adjudication to prevent this. that is why on questions of age of retirement and hours of
work and other similar matters industrial tribunals attach
much weight to what has been done in other industrial
concerns in the neighbourhood in recent timeswhether by
agreement or by adjudication. in support of their demand for fixing the age of retirement
at 60 the workmen tried to show that in recent years at
least the tendency in companyparable companycerns in bombay region
has been to fix the retirement age at 60. the chart which
is marked ex. u-5 mentions 50 companycerns in which the age of
retirement is 60. in several of these this age had been
fixed as far back as 1950 while in the rest the age was
fixed in later years that is between 1952 and 1961. the
workmen claim that these showed clearly a tendency in the
bombay region to fix the age of retirement in companyparable
concerns at 60. special emphasis was naturally placed on
some decisions of this companyrt which companytained pronumberncements
as regards the existence of such a trend. in imperial
chemical industries
 india  private limited v. the workmen 1  where the tribunal
had raised the age of retirement from 55 to 58 and both
parties appealed this companyrt pointed out that one of the
documents on the record would companyclusively show that in
bombay the age of retirement is almost invariably fixed at
60 and number at 55. in an earlier decision of this companyrt in
dunzlop rubber company limited v. workmen 2  it had been urged
that the employer was an all india companycern and that changing
the terms and companyditions of service in regard to the age of
retirement in one place might unsettle the uniformity and
might have serious repercussions in other branches. the
court pointed out that though this was a relevant
consideration its effect had to be judged in the light of
other material and relevant circumstances and that one of
the important material companysiderations in this companynection
would be that the age of retirement can be and often is
determined on industry-cum-region basis. the companyrt then
took into account the fact that the tribunal had found that
in all the awards in recent times in various companycerns in
bombay region the trend had been to fix the age of retire-
ment at 60 years. it was mainly in view of this finding of
the tribunal that this companyrt refused to disturb the award
fixing the age of retirement at 60 years. it is important
to numberice that the companyrectness of the tribunals finding
that in all the awards in recent times in the bombay region
the trend had been to fix the retirement age at 60 years
was number challenged before this companyrt
in the present case an attempt appears to have been made on
behalf of the respondent companypany to show that it was number
correct to say that the trend in bombay region had been to
fix the age of retirement at 60. reliance was placed for
this purpose on the chart ex. cl. it appears that the res-
pondent companypany wrote to the bombay chamber of companymerce to
ascertain from its member-concerns as regards the age of
retirement observed by them and the information received
from some of them was incorporated in this chart. the work-
men objected to this being received in evidence on the
ground that the original letters had number been brought on the
record. it is number however seriously disputed that the chart
correctly reproduces the information as regards the age of
retirement given by the various companycerns named there. we
think therefore that the objection was rightly rejected by
the tribunal. this chart shows the age of retirement for 75
concerns. in most of the cases the age of retirement is
shown as 55 and in a few at 58. at first sight therefore it
appears to afford impressive
 1  1961 2 s.c.r. 349.  2  1960 2 s.c.r. 51.
testimony against the workmens case that the recent trend
in bombay has been to fix the age of retirement at 60. but
on a closer examination it is clear that this document is of
little assistance for finding out the recent trend. there
is numberindication at all as to how long ago the age of
retirement in these companycerns was fixed at 55 or at 58. the
statement filed by the workmen to explain this chart shows
that in two of these cases viz. ingerzoll band and
numberthern assurance company the demand for fixing the age of
retirement at 60 years is under negotiation. exhibit u-6
also shows that in 25 of these companycerns the clerical and
subordinate staff were number organised into trade unions. there is thus good ground for thinking that the. reason why
these companycerns have kept the age of retirement at 55 or 58
are special to them and do number show any recent trend in the
matter. in spite of these infirmities this document ex. cl appears to have impressed the tribunal. the main diffi-
culty in accepting the companypanys case on this point viz. the pronumberncements of this companyrt however remained. so
the tribunal companysidered it to be its duty to enquire whether
the companyclusion recorded by this companyrt in some of its earlier
decisions as to the relevant trend in the bombay region was
accurate. having embarked an this enquiry the tribunal
appears to have taken companysiderable pains to perform this
duty and it has ultimately persuaded itself to hold that no
such trend is established in fact. we ought to add in this
connection that the approach adopted by the tribunal in
dealing with this aspect of the problem is number very
commendable and that its present companyclusion that what was
said by itself on an earlier occasion and was companyfirmed by
this companyrt in appeal was in fact inaccurate is on the
whole unsound. if this companyrt had erred in making those pronumberncements we
would be the first to admit such mistakes and to companyrect the
error. after careful companysideration of all the materials
placed on this record we have however found numberhing to
justify any doubt about the companyrectness of what was said on
the earlier occasion.