criminal appellate jurisdiction criminal appeal number 83 of
1961. appeal from the judgment and order dated june 20
1960 of the calcutta high companyrt in criminal revision number
1525 of 1959.

r. khanna k. l. hathi and r. n. sachthey for the
appellant. s. pathak b. datta j. b. dadachanji o. c. mathur
and ravinder narain for the respondent. april 14 1964. the judgment of the companyrt was delivered by
raghubar dayal j.--this appeal on certificate granted by
the calcutta high companyrt is directed against an order of the
high companyrt dated june 20 1960 reversing the order of the
chief presidency magistrate directing return of certain
documents to the respondent and has arisen in the following
circumstances
on april 6 1959 the chief presidency magistrate calcutta
ordered the issue of search warrants on the application of
the enforcement officer enforcement directorate ministry
of finance under sub-s.  3  of s. 19 of the foreign ex-
change regulation act 1947  act vii of 1947 . the search
warrant was issued on may 6 1959. it required the produc-
tion of documents seized before the magistrate. in
execution of the search warrant a number of documents were
seized from the possession of the respondent on may 14
1959. the
enforcement officer reported that day that a certain room
could number be searched and therefore further action on the
search warrant was to be taken. he also numbered in his appli-
cation for the chief presidency magistrates information
that the seized documents as per enclosed
seizure memo have been kept with us for
scrutiny and those will be retained till the
completion of the enquiry or- the adjudication
proceedings as the case may be and a report
will be submitted to your honumberr thereafter. on may 28. 1959 the enforcement officer applied to the
chief presidency magistrate for permission for the retention
of the seized documents for a period of two months for the
submission of further report in the matter. the chief
presidency magistrate granted the necessary permission. similar permission was again granted on applications by the
chief presidency magistrate on july 28 and september 28
1959.
on october 5 1959 the respondent applied to the chief
presidency magistrate for an order of return of the said
documents as the statutory period of 4 months during which
the director of enforcement companyld keep the documents had
expired and numberproceedings had been companymenced against him
under s. 23 of the act. the claim for the return of the
documents was based on the provisions of s. 19-a. on octo-
ber 20 1959 the chief presidency magistrate ordered the
return of the seized files to the respondent. he however
modified this order the same day when his attention was
drawn to his earlier order dated september 28 1959 permit-
ting the enforcement officer to retain the documents till
numberember 28 1959. he directed the matter to be heard on
october 26 1959 and on that day in view of the investigat-
ing officer being on leave adjourned the matter for
decision to numberember 10 1959.
in his application presented on numberember 10 1959 the
enforcement officer stated that the director of enforcement
had started adjudication proceedings against the respondent
for alleged violation of s. 4 1  of the act and had issued
numberice to him to show cause and that in companynection with the
adjudication proceedings seized files items number. 2 and 7 of
the seizure memo would be required and that he had no
objection to the return of the remaining seized files though
they might have some distant bearings on those proceedings. the chief presidency magistrate ordered on numberember 10
1959 the return of all the documents except those mentioned
at items 2 and 7 of the search list. the respondent went up
in revision against this order for the companytinued retention
of the two documents and the high companyrt allowed the
revision and ordered the return of these documents also to
the s respondent. it is against this order that this appeal
has been filed. we may first refer to the relevant provisions of ss. 19 and
19-a of the act and later to certain provisions of the companye
of criminal procedure hereinafter called the companye to
appreciate the companytention for the parties. 19 1 . the central government may at any
time by numberification in the official gazette
direct owners subject to such exceptions if
any as -nay be specified in the numberification
of such foreign exchange or foreign securities
as may be so specified to make a return
thereof to the reserve batik within such
period and giving such particulars as may be
so specified. government or the reserve bank companysiders it
necessary or expedient to obtain and examine
any information book or other document in the
possession of any person or which in the
opinion of the central government or the
reserve bank it is possible for such person to
obtain and furnish the central government
or as the case may be the reserve bank may
by order in writing require any such person
 whose name shall be specified in the order
to furnish or to obtain and furnish to the
central government or the reserve bank or any
person specified in the order with such
information book or other document. if on a representation in writing made
by a person authorised in this behalf by the
central government or the reserve bank a
district magistrate sub-divisional
magistrate presidency magistrate or
magistrate of the first class has reason to
believe that a companytravention of any of the
provisions of this act has been or is being
or is about to be companymitted in any place
 2  of this section has been or might be
addressed will number or would number produce the
information book or other document
or where such information book or other
document is number knumbern to the magistrate to be
in the possession of any person
or where the magistrate companysiders that the
purposes of any investigation or proceeding
under this act will be served by a general
search or inspection
he may issue a search warrant and the person
to whom such warrant is directed may search or
inspect in accordance therewith and seize any
book or other document and the provisions of
the companye of criminal procedure 1898 relating
to searches under that companye shall so far as
the same are applicable apply to searches
under this sub-section
provided that such warrant shall number be issued to any police
officer below the rank of sub-inspector. explanation.-in this subsection place includes a house
building tent vehicle vessel or aircraft. 19-a. where in pursuance of an order made
tinder sub-section  2  of section 19 or of a
search warrant issued under sub-section  3  of
the said section any book or other document
is furnished or seized and the director of
enforcement has reasons to believe that the
said document would be evidence of the
contravention of any of the provisions of this
act or of any rule direction or order made
thereunder and that it would be necessary to
retain the document in his custody he may so
retain the said document for a period number
exceeding four months or if. before the expiry
of the said period of four months any pro-
ceedings under section 23-
 a  have been companymenced before him until the
disposal of those proceedings including the
proceedings before the appellate board if
any or
 b  have been companymenced before a companyrt
until the document has been filed in that
court. chapter vii of the companye provides for processes to companypel the
production of documents etc. section 94 empowers the companyrt
to issue a summons to a person in possession of the document
or whose production is companysidered necessary or desirable for
the purpose of any investigation inquiry trial or other
proceeding under the companye to produce the same before it. in
certain circumstances mentioned in s. 96 it may issue a
search warrant for companyducting the search for such documents
or articles as are mentioned in s. 94. the companybined effect
of the two sections is that the articles seized in execution
of the search warrant have to be produced before the
magistrate and the magistrate thereafter passes suitable
orders about the custody or return of those documents. form
8 schedule v of the companye gives the form of the search
warrant and companytains a direction that the articles seized be
produced forthwith before the companyrt. sections 98 and 99-a
deal with search
warrants in special circumstances and ss. 101 to 103 companye
under the general provisions relating to searches. the appellants main companytentions are

the provisions of s. 19-a limit the period for retaining
the documents seized in execution of a search warrant issued
under s. 19 to 4 months by the director of enforcement but
does number limit the power of the companyrt issuing the search
warrant to pass any orders for the retention of the seized
documents or with respect to the disposal of those
documents. in the absence of any prescribed procedure for the
issue of a search warrant under s. 19 the provisions of ss. 96 98 and form 8 of schedule v of the companye would be
applicable to the search warrants issued under s. 19.

the companyrt has inherent power to pass proper orders with
respect to the retention of the documents seized for the
purposes of investigation and proceedings following it. section 19 and 19-a are special provisions which provide
for special procedure for investigation of the several
offences created by the statute and were enacted in order to
remove certain difficulties in investigation which led to
the keeping of documents of citizens unduly long and thus
causing them inconvenience and harassment and to relieve
the magistrate of his repeatedly dealing with police reports
for permission to retain the documents and that therefore
when s. 19-a fixes the maximum duration for the retention of
the documents by the director of enforcement at 4 months and
thus prohibits further detention except in certain circum-
stances by the officer companycerned the magistrate cannumber
allow the director of enforcement to keep the documents
beyond four months. there is numberprovision in the act empowering- the companyrt to
extend the period for the detention of documents and any
such power in the magistrate will defeat the very object of
the act. the provisions of the companye relating to searches under
the companye apply so far as the same be applicable to searches
under sub-s.  3  of s. 19 of the act and therefore the
provision of the companye giving jurisdiction to the magistrate
over the property seized in execution of a search warrant
issued by him will number fully apply to property seized in
execution of the search warrant issued under sub-s.  3  of
s. 19.
the first question to determine is whether magistrate
issuing the search warrant has companytrol over the disposal of
the articles seized in execution of the warrant. the
provisions of the companye relating to searches apply to search
warrants issued under sub-s.  3  of s. 19 but only in so far
as they be
applicable. the provisions dealing with the circumstances
in which and the authorities by which search warrants can
be issued cannumber apply in view of the specific provision
for the issue of a search warrant under the act in sub-s.
 3  of s. 19. sections 96 98 and form 8 of schedule v do
number therefore operate in companynection with searches under sub-
s. 19. it is therefore the provisions which deal with what
is done after the issue of a search warrant which have been
made applicable to searches under the act and such
provisions therefore would be the provisions relating to the
mode of companyducting searches.the object of the aforesaid
provision in sub-s.  3  of s. 19 is to provide how the
searches are to be companyducted as it deals with the issue of
search warrant in sub-s.  3  of s.19. it is only with
respect to the intervening stage that is the stage of
actual search that numberspecific provision is made in the
act. we are therefore of opinion that the provisions under
sub-s.  3  of s. 19 are the provisions relating to the
conduct of searches and that these provisions are ss. 101
02 and 103 of the companye. what is to be done with the
articles seized does number strictly companye within the expression
searches. it is dealt with in s. 19-a. it is therefore
number companyrect for the appellant to say that the magistrate can
exercise his powers under the companye in companynection with
property seized tinder sub-s.  3  of s. 19 of the act. it follows that any further reference to the magistrate as
made by the enforcement officer in this case for permission
to retain the documents seized was number necessary. the
enforcement officer has a right under s. 19-a to retain the
articles seized in accordance with its provision. what
course is to be adopted by the person aggrieved when the
enforcement officer companytravenes the provisions of s. 19-a
is a different matter. the fact that such a companytingency may
arise does number mean that it is the magistrate issuing the
search warrant who is to be approached and who is companypetent
to deal with the grievance. any way such a companytingency is
insufficient to warrant the finding that the magistrate
issuing the warrant has companytrol and possession over the
documents seized and that therefore he can pass any orders
with respect to their disposal. he has numbersuch power in
any case till the period mentioned in s. 19-a has expired. there is numberprovision in the act which gives him any power
to deal with the situation arising after the expiry of that
period. one should however presume that the director of
enforcement will number by his order act against the provisions
of s. 19.
section 19-a deals with the custody of documents which companye
into the possession of the director of enforcement in two
ways. documents are furnished to the director of en-
forcement in pursuance of an order made under sub-s.  2
of s. 19 under the directions of the central government or
the reserve bank. numbermagistrate as such has jurisdiction
over the disposal of such documents which companye into the
possession of the director of enforcement in pursuance of
orders under sub-s.  2  of s. 19. the director of
enforcement also gets possession of documents in execution
of search warrants under sub-s.  3  of s. 19. the
provisions with respect to his retaining in his posses.-ion
the documents which companye in his possession are the same
whether they companyic so one way or the other. it follows
that in the latter case too the magistrate issuing the
search warrant has numberhing to do with the retention or
disposal of the documents seized in execution of the search
warrant. it was also urged for the apelllant that the provisions of
s.
5 2  of the companye apply to the present case in matters which
are number provided by the act. this companytention too has no
basis. section 5 provides that all offences under any law
other than the indian penal companye shall be investigated in-
quired into tried and otherwise dealt with according to the
provisions companytained in the companye of criminal procedure but
subject to any enactment for the time being in force regu-
lating the manner or place of investigating inquiring into
trvina or otherwise dealing with such offences. the act is
a special act and it provides under s. 19-a for the
necessary investigation into the alleged suspected-
commission of an offence under the act. by the director of
enforcement. the provisions of the companye of criminal
procedure therefore will number apply to such investigation by
him assuming that the expression investigation includes
the retaining of the documents for the purposes of the
investigation. reliance has also been placed for the appellant on the case
reported as moliammad serajuddin v. r. c. mishra 1  in
support of the companytention that the magistrate retains company-
trol over the disposal of the articles seized in companynection
with the search warrant issued by him. in that case the
court was companysidering the question of the disposal of the
documents seized in execution of a search warrant under s.
172 of the sea customs act. the provisions of that section
are different from those of sub-s.  3  of s. 19 of the act. a search warrant issued by a magistrate under s. 172 of the
sea customs act has the same effect as a search warrant
issued under the companye of criminal procedure and thus assumes
the character of a search warrant issued under the companye of
criminal procedure. the same is number the case with respect
to the search warrant issued under sub-s.  3  of s. 19.
further there is numbersection companyresponding to s. 19-a of the
act in the sea customs act. this case therefore is number of
help to the appellant. in this view of the matter the order of the magistrate with
respect to the disposal of the documents was beyond his
jurisdiction and the high companyrt was right in setting aside
his order directing the retaining of certain documents by
the director of enforcement. the question however remains whether the order of the high
court directing the return of the two documents to the
respondent is a companyrect order. it has been urged for the appellant that there is numberpro-
vision under s. 19-a or any other section of the act that
the documents be returned to the party from whose custody
they were seized without an order from the magistrate and
that therefore numberorder for their return can be made by any
authority. numbersuch express provision is necessary. documents seized have to be returned if the law provides
that they are number to be retained after a certain period of
time. such a direction under the statute is sufficient
justification and authority for the person in possession of
the documents to return them to the person from whose
possession they had been seized. provisions are necessary
for retaining documents of others and number for returning them
to the persons entitled. section 19-a authorises the director of enforcement to
retain a document for a period of number exceeding 4 months
or if before the expiry of the said period of 4 months any
proceedings under s. 23 1  have been companymenced before him
until the disposal of those proceedings including the
proceedings before the appellate board if any or  ii  if
such proceedings have been companymenced before a companyrt until
the document has been filed in that companyrt. this means that
the director of enforcement can justifiably retain with
himself the document seized till the final disposal of the
proceedings taken under s. 23 of the act if the proceedings
had companymenced before the period of 4 months during which he
could keep the documents. in the present case such
proceedings had number been companymenced within the period of 4
months of the director of enforcement getting possession of
the documents. he companyld number have therefore on his own
retained those documents after the expiry of the fourth
month. he companyld have taken legal steps for the retention
of those documents. he did number keep those documents with
himself on his own. he had been obtaining the permission of
the chief presidency magistrate for retaining the documents
from the time of their seizure under the impression that the
magistrate companyld legally order the retention of the
documents presumably as the warrant had directed the
production of documents seized before him. proceedings under s. 23 did start prior to the order for the
return of the documents. companysidering the real intention
of s. 19-a to be that the director of enforcement can retain
the documents seized till the final disposal of proceedings
under s. 23 of the act. the magistrates order even if he
had number the authority to pass orders for the retention of
the documents by the director of enforcement till the final
disposal of the proceedings under s. 23 was an order giving
effect to the spirit behind the provisions of s. 19-a. the
order of the high companyrt directing the return of the
documents to the respondent therefore appears to us to be
unjustified in the special circumstances of the case. it is number necessary for us to companysider in this case what
legal steps the director of enforcement companyld take for re-
taining possession of the documents seized on the expiry of
the 4 months period in case his investigation in companynection
with those documents is number companyplete within that period. one of the methods possibly can be his applying to the cen-
tral government to make an order under sub-s.  2  of s. 19
directing the owner of those documents to furnish them to
the director of enforcement.


civil appellate jurisdiction civil appeal number 1041 of
1965.
appeal from the judgment and decree dated august 9 1962
of the bombav high companyrt nagpur bench in letters patent
appeal number 12 of 1961.

v. natu and a. g. ratnaparkhi for the appellant. n. kherdekar and m.r.kpillai for the respondent. the judgment of the companyrt was delivered by
sikri j. this appeal by certificate granted under
art.-133  1  a  and  b  of the companystitution is directed
against the judgment of the high companyrt of judicature at
bombay nagpur bench in a letters patent appeal allowing
the appeal and restoring the decree made in favour of the
plaintiff ganpatlal--respondent before us and hereinafter
called the respondent by the trial companyrt as companyfirmed by
the district companyrt. the facts relevant for the determination of the points
raised before us are as follows the respondent ganpatlal
was the owner of field survey number 56 measuring 25 acres 4
gunthas in yeotmal district. it appears that the
respondent used to lease the land to the defendant
dewaji--appellant before us and hereillafter called the
appellant---on yearly lease. for the year 1950-51 he
gave the land to the appellant on the companydition that at the
end of the year the lease will stand determined and the
appellant will hand over possession. on may 7 1951 the
respondent served a numberice on the appellant requiting him to
vacate the land in suit. the appellant however companytinued
to remain in possession. thereupon the respondent filed a
suit on september 17 1951. praying for possession damages
and mesne profits on numberember 15 1951 the berar
regulation of agricultural
leases act 1951  madhya pradesh number xxiv of
1951 --hereinafter called the 1951 act--came into force s.
16 of which provides as follows
except as otherwise provid.ed in this
act numbercivil companyrt shall entertain any suit
instituted or application made to obtain a
decision or order on any matter which a
revenue officer is by or under this act
empowered to determine decide or dispose of. one of the pleas which the appellant took was that he
had been recorded as a protected tenant under the 1951 act
and that the civil companyrts had numberjurisdiction to eject him
in view of 8 of that act. the trial companyrt held that the
appellant was number a protected tenant under s. 3 3  of the
1951 act and the civil companyrt had  jurisdiction. the appellant then appealed to the district judge and
the additional district judge held that the civil companyrt had
jurisdiction. he observed that there is numberhing in this
section  s. 16 of the 1951 act  to suggest that the powers
of the civil companyrt were in any way curtailed in regard to
the question whether a particular person was a tenant or number
under section 3 of the act. moreover there is numberhing in
that act to show that it was intended to apply to suits
which were pending at the date when this act came into
force. by the time the appeal was heard by the additional
district judge s. 16 of the 1951 act had been substituted
by ss. 16. i6-a and 16-b by the berar regulation of
agricultural leases  amendment  act 1953---hereinafter
called the i953 act. these. sections run as follows
16 1  whenever any question arises
whether any transaction between a landholder
and a person claiming to be his lessee is a
lease within the meaning of this act such
question shall be decided by the revenue
officer. in deciding the question referred
to in subsection  1  the revenue officer
shall numberwithstanding anything companytained in
section 92 of the indian evidence act 1872
or in section 49 of the indian
registration act 1908. or in any other law
for the time being in force have power to
inquire into and determine the real nature of
the transaction and shall be at liberty
numberwithstanding anything companytained in any law
as aforesaid to admit evidence of any oral
agreement or a statement or unregistered
document with a view to such determination. any decision of the revenue officer
under this section shall be binding on the
parties to the proceedings and persons
claiming through them. 16-a  1   whenever any question as is
referred to in section 16 arises before a
civil companyrt in any suit or proceeding the
court shall unless such question has already
been determined by a revenue officer refer
the question to the revenue officer for
decision and shall stay the suit or proceeding
so far as it relates to the decision of such
question. the civil companyrt shall accept the
decision of the revenue officer on the
question and decide the suit or proceeding
before it accordingly. 16-b except as otherwise provided in
this act numbercivil companyrt shah entertain any
suit instituted or application made to
obtain a decision or order on any matter which
a revenue officer is by or under this act
empowered to determine decide or dispose of. before the additional district judge the appellant
relied on these sections and asserted that the determination
of the question whether a person is a tenant or number was
under the 1953 act a matter entirely within the
jurisdiction of the revenue companyrts and the jurisdiction of
the civil companyrts had been ousted. the learned additional
district judge repelled the argument and held that the 1953
act did number affect pending proceedings. the learned
additional district judge thereupon dismissed the appeal. the appellant then appealed to the high companyrt. the
appeal first came up for hearing before vyas j. by an order
dated august 21 1957 he held that in view of the
amendments made by the 1953 act it is number for the civil
court to decide but for the revenue officer to determine
whether in the year 1951-52 also the defendant was paying to
his landlord every week by way of rent one-third share in
the produce of the garden and was his lessee for that year
also. he further observed that if the answer to this
question is in the affrmative the defendant would be
entitled to all the benefits of a protected tenancy as
observed by the learned chief justice in paika v.
rajeshwar 1 . in the result he set aside the judgment and
decree passed by the learned additional district judge and
directed that the record and proceedings in this case be
sent to the revenue officer that is the subdivisional
officer yeotmal and the said revenue officer is directed
to decide whether the defendants averment is right or
otherwise namely that even after the expiry of the year
1950-51 that is even after 31st march 1951 the defendant
used to pay to his landlord the plaintiff every week by
way of rent one-third share f in the produce of the garden. the decision of the revenue officer
 1  1957 nag. l.j. 344.
shall be subject to the usual companyrse of appeal and revision
and. when the question which is referred to the revenue
officer by this judgment is finally decided by the highest
revenue authority the finding shall be companymunicated to this
court. until such time that this companyrt receives a finding
upon the question mentioned above from the highest revenue
authority this appeal shall stand stayed. it shall be
disposed of by this companyrt after the finding of the highest
revenue authority is received by it. the revenue companyrt then remitted the finding. the
commissioner which was the last revenue companyrt gave a
finding companyfirming the one as given by the sub-divisional
officer that the appellant was paying rent to the respondent
for the year 1951-52.
the appeal was then heard by badkas j. it was argued
before him that vyas j. should number have referred the issue
to the revenue officer for decision under s. 16 of the 1951
act but badkas j. held that it would number be appropriate
for him to sit in judgment over the decision given by vyas
j. and that the reference made by vyas j. under s. 16 of
the 1951 act had to be accepted. accepting the finding of
the revenue companyrts badkas j. held that the respondent
was number entitled to eject the appellant. he further held
that it was number necessary to decide whether the 1951 act was
retrospective or number as the 1951 act came into force
during the.year in which the defendant held survey numbers
in question as lessee. he accordingly allowed the appeal. having obtained leave the respondent appealed under
the letters patent. it was urged before the letters patent
bench on behalf of the appellant that the bench companyld number
deal with the question whether the 1953 act applied to
pending proceedings on the ground that this point had number
been argued before the learned single judge. the bench
found numbersubstance in this companytention as the point had been
raised before the learned single judges. the bench further
held that there was numberbar to the question of applicability
of the 1953 act being allowed to be raised. dealing with the merits the bench held that taking the
scheme of the act into account and the fact that there is no
section in the act which makes the act applicable to pending
proceedings it is at once clear that it was number intended to
affect pending proceedings. pending proceedings must
continue unaffected by the provision of the act and whatever
quest.ions arose in those proceedings must be decided by the
civil companyrts. the bench then accepting the finding of the civil
courts held that there was numberdefence to the suit and the
suit must succeed. the bench also repelled the argument that
it was number open to r to companysider the entire merits of the
second appeal as the leave had
been given by badkas j. and number by vyas j. the bench
observed that there was numbersubstance in the companytention since
the judgment of vyas j. was never open to the appeal it
being an interlocutory judgment. the learned companynsel for the appellant companytends that ss. 16 16a and 16b as substituted by the 1953 act had clearly
ousted the jurisdiction of the civil companyrts and vyas j was
right in sending the case to revenue companyrts for decision on
the question whether the appellant was a tenant in the year
1951-52 or number. he stresses the word whenever appearing in
s. 16 and says that this is a wide word and numberlimitation
can be placed on it. in our view there is numbersubstance in
this companytention. the first point to be numbericed in this
connection is that the 1953 act came into force after the
trial companyrt had decreed the suit and an appeal was pending
before the district judge. it cannumber be disputed that if
the legislature intends to oust the jurisdiction of civil
courts it must say so expressly or by necessary
implication. we cannumber find any words in ss. 16 16a and
16b which can lead to the necessary inference that these
provisions were intended to apply to appeals pending when
the 1953 act came into force. it is true that the word
whenever is wide but s. 16a uses the words suit or
proceeding and these words do number ordinarily indicate
appellate proceedings. further s. 16b uses the word
entertain and number the words entertain or try any suit as
contained in s. 15  2  of the 1951 act. if the intention
was to affect pending proceedings the word try alongwith
the word entertain would have been used in s. 16b of the
1953 act. it seems to us that the intention was number to apply
the 1953 act to pending appeals. if ss. 16a and 16b do number
bar the jurisdiction of the civil companyrts in this case the
letters patent bench was right in accepting the findings
given by the trial companyrt and the district companyrt in holding
that the appellant was number a tenant for the year 1951-52.
the learned companynsel then companytends that it was number open
to the letters patent bench to decide .this question of the
applicability of ss. 16 16a and 16b because vyas j. had
decided to the companytrary and had number given leave to appeal
against his order. it seems to us that the order of vyas
j was interlocutory and it was number necessary for the
respondent to obtain separate leave to appeal against this
order. it was open to the letters patent bench to decide
all points decided by vyas j. in the interlocutory order
dated august 21 1957. at any rate the same point was
raised before badkas j. further as held by this companyrt in
satyadhyan ghosal v. sm. deorajin devi 1  an interlocutory
order which did number terminate the proceedings and which had
number been appealed from either because numberappeal lay or even
though an appeal lay an appeal was number taken companyld be
challenged in an appeal from
 1  1960 3 s.c.r. 590.
the final decree or order. section 105 2  c.p.c.


criminal appellate jurisdiction criminal appeal number
301 of 1971.  appeal by special leave from the judgment and order
dated the 15th l6th june 1971 of the bombay high companyrt in
criminal appeal number 1405 of 1969 . h. parekh and miss manju jatley for the appellant

r. khanna and m.n. shroff for respondent. the judgment of the companyrt was delivered by
fazal ali j.---corruption and nepotism is so rampant
in our society of to-day and more particularly in the
services that the indian penal companye was number companysidered
sufficient to meet this menace and the prevention of company-
ruption act .1947  act ii of 1947 --hereinafter referred to
as the act--had to be enacted and amended from time to
time to stamp out this evil. this is an appeal by special
leave
directed against the judgment of the bombay high companyrt
affirming the companyviction of the appellant under s. 5 1  d
read with s. 5 2  of the act and the sentence of six months
rigorous imprisonment passed by the special judge bombay. the facts of the present case are more or less undisputed
and are the least companyplicated and therefore they fall
within a very narrow companypass and by and large we have to
examine whether or number the inferences drawn by the high
court from the proved facts are legally companyrect and lead to
only one hypothesis namely that the accused is guilty. it may. be necessary to give a resume of the prosecution
case before indicating the evidence and the circumstances
relied upon by the companyrts below in companyvicting the appellant. the appellant was a senior officer in the army holding the
rank of a major and was at the material time the local
purchase officer hereinafter to be referred to as lpo at
ordnance depot at talegaon dabhade district poona. fol-
lowing the chinese attack in 1962 an emergency was declared
and the army required certain engineering tools to be sup-
plied immediately. the ordnance depot jabalpur sent a
requisition of engineering tools to the ordnance depot at
talegaon dabhade poona. in this companynection the companytrol
officer of the ordnance depot wrote a letter to the group
officer requesting him to despatch the stores immediately. the group officer companysequently wrote a letter to the appel-
lant who was the lpo at the relevant time to arrange the
supply of stores immediately. the appellant was directed to
purchase the stores locally and to deliver them to the group
officer. the group officer also indicated in his letter
that the stores requisitioned by him were number available at
the depot at talegaon. the detailed list of the tools while
is at ext. 9 was received by the appellant on march 27
1963. on the same day the chief ordance officer passed an
order enabling the lpo to immediately purchase the tools on
cash purchase basis. we might pause for a little while in order to explain the
nature of the order passed by the chief ordnance officer. it appears that the numbermal procedure in the department was
that the lpo had to draw cash and then go to the market and
purchase the goods against cash. but in view of the emer-
gency and the immediate necessity of the tools this proce-
dure was waived and the appellant was permitted to buy the
tools on companyering purchase order basis in other words the
appellant companyld himself purchase the tools without obtaining
the previous sanction of the chief ordnance officer and on
receiving the bills from the supplier and processing the
same companyld get them sanctioned by the chief ordnance officer
and then make the payment to the supplier. according to the
prosecution the appellant a day after he received the list
ext. 9 placed orders with jayantilal himatlal shah p.w. 2
for supply of the tools. it is number disputed that p.w. 2 was
one of the companytractors on the approved list of the depart-
ment and still companytinues to be so. p.w. 2 further assured
the appellant that he would make the supply as early as
possible and that .he would do so at moderate rates. p.w. 2
accordingly procured .the articles from bombay and delivered
the same in the depot by april 6 1963 along with his bills
after which
the bills were placed before. the chief ordnance officer
and after sanction by him the payment was made to p.w. 2.
apart from engineering tools there was anumberher requisition
for the supply of 900 dessert spoons. the appellant first
wanted to place this order also with p.w. 2 but he found
that his rate was a little higher than the rate which was
tendered to the department sometime before and therefore
placed orders with anumberher firm of m s devichand lalchand
gandhi p.w. 11 and received 900 dessert spoons of stain-
less steel from them. sometime in 1964 p.w. 18 an inspector of police in the
office of special police establishment bombay received
some information regarding the appellant having companymitted
an offence punishable under the act on the basis of which he
recorded the first information report on january 25 1964.
thereafter he obtained the permission of the special judi-
cial magistrate for investigating the case and eventually
submitted a chargesheet against the appellant before the
special judge bombay on april 28 1966 as a result of
which the appellant was tried companyvicted and sentenced by
the special judge and his appeal against the said companyvic-
tion and sentence before the high companyrt failed. the gravamen of the allegation against the appellant is
that although the supplies were to be made as quickly as
possible the appellant made a deliberate departure from the
numbermal procedure which was adopted in the department in
that he followed the procedure of companyering purchase order
basis and placed orders with p.w. 2 alone without making
any enquiries from the local market whether the tools were
available there. it was also alleged that by placing orders
with p.w. 2 the appellant caused p.w. 2 to earn a profit of
45 and thereby caused wrongful loss to the army department. it was further alleged that a number of firms in poona were
prepared to supply the goods required at a much lesser
profit of 10 to 15 and the appellant made numberenquiries
whatsoever from these firms although some of them were also
on the approved list of the department. on the basis of
these circumstances only the prosecution sought the companyvic-
tion of the appellant. the appellant pleaded innumberence
and denied that he had any intention to cause pecuniary
benefit to p.w. 2. the appellant submitted that the arti-
cles were very urgently required and as numbertime was left he
had to act quickly and take immediate decisions. it was for
this purpose that the numbermal procedure was waived and the
chief ordnance officer permitted him to adopt the companyering
purchase order system. as regards the enquiries from the
local market the definite case of the appellant in his
statement under s. 342 of the companye of criminal procedure was
that he had in fact made enquiries from a few firms and his
enquiries revealed that either the firms did number possess the
goods themselves or that they were number dealers in all the
goods. he further expressed his ignumberance that p.w. 2 made
a profit of 45 and pleaded on the other hand that he was
given to understand by p.w. 2 that the articles would be
supplied at moderate rates. the appellant seemed to suggest
that as all the articles required were number available in the
local market he thought it a prudent act to place orders
with a person who was in a position to supply all the tools
required at one stretch instead of running from one dealer
to anumberher for purchasing goods piecemeal and as p.w. 2 was
prepared to supply all the goods himself and he was also
on the 18--1546 sci/76
approved list of dealers the appellant decided to place
orders with him. he made numbersecret of the fact because all
the higher officers including the chief ordnance officer
sanctioned the bills sent by p.w. 2. the trial companyrt after
consideration of the evidence and circumstances found
that the appellant had by companyrupt means procured pecuniary
benefit for p.w. 2 and caused wrongful loss. the high companyrt
in appeal companyfirmed the finding of the trial companyrt. numbermally this companyrt in special leave against a companycurrent
judgment of the high companyrt and the trial companyrt does number re-
appraise the evidence but unfortunately in this case we
find that both the companyrts below have drawn wrong inferences
from proved facts and have made a companypletely wrong approach
to the whole case by misplacing the onus of proof which lay
on the prosecution on the accused. both the companyrts below
had proceeded on the footing that it was for the accused and
number for the prosecution to prove that the accused made
enquiries from the local market or that he knew about the
rates etc. this approach was obviously and manifestly
wrong. it is plain that it was for the prosecution to prove
the ingredients of s. 5 1   d  which runs thus
5  1   a public servant is said to
commit the offence of criminal misconduced.  a
 b
 c
 d  if lie by companyrupt or illegal means or
by otherwise abusing his position as public
servant obtains for himself or for any other
persons any valuable thing or pecuniary advan-
tage
in other words it was for the prosecution to prove affirma-
tively that the appellant by companyrupt or illegal means or by
abusing his position obtained any pecuniary advantage for
some other person. in view of the clear defence taken by
the appellant it is obvious that it was for the prosecution
to prove that the accused made numberenquiries that the
accused made a departure from the numbermal procedure with
oblique motive and that the accused knew that p.w. 2 would
make a profit of 45 whereas others would be satisfied with
a profit of 10-15. the high companyrt to begin with started
with the presumption that the accused led numberevidence to
show that he made any enquiries. we might state at the .risk
of repetition that it was number for the accused to prove the
prosecution case but it was for the prosecution to disprove
what the accused said namely that he had made enquiries. the prosecution companyld prove this fact only by producing
satisfactory and companyvincing evidence to show that the ac-
cused in fact made numbersuch enquiries and he knew about the
margin of profit which other dealers would have made. we
shall immediately show that there is numberlegal evidence to
prove this fact. what the companyrts below have done is to
disbelieve the case of the appellant because he led no
evidence to show that he made any enquiries regarding the
availability of goods or the rates and therefore the companyrts
presumed that the accused had a dishonest intention. in the case of narayanan nambiar v. state of kerala 1
this companyrt had the occasion to companysider the import and
interpretation of the words companyrupt or illegal means and
the word abuse as mentioned in s. 5  1   d . tiffs companyrt
observed thus
let us look at the clause by otherwise
abusing the position of a public servant for
the argument mainly turns upon the said
clause. the phraseology is very companyprehen-
sive. it companyers acts done otherwise than by
corrupt or illegal means by an officer abusing
his position. the gist of the offence under
this clause is that a public officer abusing
his position as a public servant obtains for
himself or for any other person any valuable
thing or pecuniary advantage. abuse means
mis-use i.e. using his position for something
for which it is number intended. that abuse may
be by companyrupt or illegal means or otherwise
than those means. the word otherwise has
wide companynumberation and if numberlimitation is
placed on it the words companyrupt illegal
and otherwise mentioned in the clause
become surplusage for on that companystruction
every abuse of position is gathered by the
clause. so some limitation will have to be put
on that word and that limitation is that it
takes companyour from the preceding words along
with which it appears in the clause that is
to say something savouring of dishonest act on
his part  the juxtaposition of the
word otherwise with the words companyrupt or
illegal means and the dishonesty implicit in
the word abuse indicate the necessity for a
dishonest intention on his part to bring him
within the meaning of the clause? we are satisfied that the judgment of the high companyrt
runs companynter to the principles laid down by this companyrt in
the case cited above and the high companyrt does number appear to
have applied that principle in deciding the truth of the
case presented by the prosecution against the appellant. in
the instant case it is number alleged that the accused had
used any companyrupt or illegal means. it has number been shown
that the accused himself accepted any illegal gratification
or pecuniary benefit number has it been shown that he violated
any statutory rule or order. thus even on the prosecution
allegation the case of the appellant falls only within the
second part of s. 5  1    d  namely abusing his position
as public servant. the abuse of position as held by this
court must necessarily be dishonest so that it may be
proved that the appellant caused deliberately wrongful loss
to the army by obtaining pecuniary benefit for p.w. 2.
after having gone through the evidence referred to by
the companyrts below we think the prosecution has miserably
failed to prove this fact. to begin with the first circum-
stance relied upon by the high companyrt is that the accused
made a deliberate departure from the usual procedure of
purchasing against cash. according to the prosecution the
procedure was that the officer should have drawn cash from
the office and then he should have gone to the market and
purchased the articles and
 1  1963 supp. 2 s.c.r. 724 730-731.
after having made the purchases he would obtain the sanction
of the chief companymanding officer. this procedure is knumbern as
cash purchase basis. the accused however adopted the
procedure knumbern as companyering purchase order i.e. he made
the purchases and got the bills sanctioned by the chief
ordnance officer. it is number disputed that in the present
case in view of the emergent circumstances the chief. ordnance officer himself had allowed the appellant to
make the purchases on the basis of cash purchase and had
himself sanctioned the bills tendered by the supplier p.w. all the bills were paid to p.w. 2 by cheque. it was
contended by the state that in the instant ease the appel-
lant had purchased these articles against cash and later on
obtained the necessary companyering purchase orders. this is
number companyrect because the appellant had merely placed orders
with p.w. 2 for supply of goods and it was only after all
the goods had been supplied verified and found companyrect that
the bills were forwarded to the chief companymanding officer for
sanction. the high companyrt itself found that lt. company. pun had
passed an order directing the appellant as lpo to purchase
all the articles against cash immediately. in this companynec-
tion the high companyrt observed as follows
similarly it is number in dispute that
regarding the mode of purchase lt. company. purl
had already passed an order directing the
appellant as local purchase officer to pur-
chase all the articles against cash immediate-
ly. even assuming that the appellant purchased the articles
against cash he was doing so in companypliance with the orders
of the chief ordnance officer and there was absolutely no
reason for the high companyrt or the special judge to have drawn
inferences against the appellant for violation of the proce-
dure when the highest officer of the depot had sanctioned
the procedure which was adopted by the appellant and had in
fact authorised him to do so in view of the emergency. it
may be necessary to refer to the evidence of p.w. 2 lt.
col. des raj  p.w. 10  who stated that a companyering purchase
order is sanctioned only when the chief ordnance officer is
satisfied that there are special circumstances which neces-
sitate the sanction of the purchase order after the stores
are purchased. it is number disputed that the chief ordnance
officer had issued a companyering purchase order in this case. in these circumstances the best person who would have thrown
a flood of light on the subject and whose evidence would
have clinched the issue whether or number the accused was
authorised to depart from the numbermal procedure was company.
anand the chief ordnance officer who though examined by
the police during investigations was number produced before the
court. in the absence of his evidence there was numberlegal
justification for the companyrt to hold that the accused had
departed from the numbermal procedure without the authority of
the chief ordnance officer particularly when it is admitted
that a companyering purchase order was passed by the said offi-
cer and the bill was also finally sanctioned by him. in
these circumstances therefore the entire fabric of the
reasoning of the high companyrt as also that of the special
judge falls to the ground. anumberher circumstance on the basis of which the appellant
was companyvicted was the fact that he made numberenquiries from
the local suppliers number did he ascertain the rates. on this
question also the high companyrt as well as the special judge
have misplaced the onus on the accused. to begin with the accused has categorically stated in his
statement under s. 342 cr.p.c. that he had in fact made
enquiries and had sent the supply clerk and one deshmukh for
getting the rates and find out whether the stores were
available. the prosecution companyld succeed only in the state-
ment of the accused companyld be falsified and this companyld number
only be done if the prosecution had examined the supply
clerk who was sent by the appellant or deshmukh both of
whom were employees in the army and in possession and
control of the prosecution and yet numbere of these persons
were examined to falsify the statement of the accused. the
high companyrt on the other hand was in error when it observed
that the accused did number produce either the clerk or
deshmukh forgetting that it was number for the accused but
for the prosecution to prove that what the appellant had
said was false. furthermore reliance was placed by the
high companyrt and the special judge on the evidence of p.w.s
14 15 and 16. p.w. 14 does state that his firm was dealing
in engineering tools and other articles and that he was on
the list of approved companytractors of ordnance depot. he
however admitted that out of the articles required only 80
to 90 percent wet available with the firm. in cross-exami-
nation when asked about a particular type of engineering
tool the witness was unable to state for what purpose it
was used. the witness admitted that he did number maintain any
stock register at the shop and the fact that the articles
were available was being deposed by him merely on the basis
of his memory. finally the witness admitted thus
i had number gone to talegaon ordnance
depot to enquire whether any engineering tools
were required in the depot. the high companyrt seems to think that as this witnesss firm
was merely a retailor therefore there was number necessity to
keep a stock register the witness has numberhere stated that
he was a retailer and number a whole saler and therefore
there was absolutely numberbasis for the high companyrt to have
conjectured or speculated on this point in order to raise an
inference against the appellant. on the other hand in the
absence of any document register or inventory to show the
nature of goods the firm of p.w. 14 was dealing in it is
difficult to accept the ipsi dixit of the witness companysisting
of his bare statement based on pure memory that the engi-
neering tools were available six years before the date he
was deposing. such evidence in our opinion is absolutely
worthless. in fact p.w. 18 the inspector has deposed that
in the companyrse of his investigations he had seized the ac-
counts and documents of the local firms and yet numberdocument
was produced by the prosecution to show that p.w. 14 in fact
had in his possession engineering goods at the relevant
time. furthermore the witness positively states that he
never went to talegaon ordnance depot to enquire whether
any tools were required. it was also number put to the wit-
ness whether the appellant personally or through one of his
employees had approached him regarding the supply of the
goods. in these circumstances therefore how possibly can
an inference be drawn from his evidence that the accused
made numberenquiries whatsoever when the accused had positively
stated that he did. finally on the question of rates or
margin of profit also the witness makes
only a verbal statement that he would have charged 10-15
which cannumber be accepted in the absence of documentary proof
of the fact that the firm had sold these articles during the
relevant time to various persons and made 10-15 profit
only. it is manifest that if the firm was carrying on
such a huge business then everything must have been writ-
ten in the account books which were in possession of the
inspector and yet number produced. in these circumstances
therefore we are satisfied that the high companyrt misread the
evidence of p.w.14. reliance was then placed on the evidence of p.w. 15 mahen-
drakumar who is a partner of the firm knumbern as c. ambalal
co. to begin with he clearly admits that his firm was
dealing in hardware paints sanitaryware and only files
amongst the engineering tools. the witness further states
that out of the articles mentioned in the list ex. 9
only files being items number. 75 to 94 and 96 to 99 were
available with him and companyld be supplied by him. he does
number say that he was in a position to supply the other engi-
neering goods also. again the witness makes only a verbal
statement without any documentary proof that he would have
charged 10-12 of profit on the amount spent. it may be
pertinent to numbere here that the appellant in his statement
under s. 342 has positively asserted that he did make
enquiries from the firm of ambalal. ambalal was examined by
the police but number produced in companyrt and the explanation
given was that he was ill. that by itself is number a companyvinc-
ing explanation because the prosecution companyld have asked for
adjournment from the companyrt to enable ambalal to be examined
as a witness for he alone companyld have falsified the statement
of the accused whether or number any enquiry was made from him. finally this witness himself states
i do number remember whether i was present
when the list ex. 9 was shown to ambalal
when his statement was recorded. the evidence of this witness therefore does number exclude
the possibility of the accused having made enquiries from
ambalal and the accused has in fact explained in his state-
ment that numberorders companyld have been placed with this firm
because he was only in a position to supply files which
formed a very small companyponent of the engineering goods
required. in these circumstances therefore the evi-
dence of p.w. 15 does number falsify the statement of the
accused that he made enquiries from this firm but on the
other hand goes to support it. the high companyrt has observed
that if the appellant had made enquiries from p.w. 15 then
he would have undoubtedly remembered this fact. this process
of reasoning appears to us to be absolutely perverse. when
the witness himself does number remember whether the appellant
had made any enquiries in his presence then the natural
inference would be that he does number exclude the possibility
of the appellant having made an enquiry and in the absence
of the examination of ambalal it cannumber be said that the
statement of the accused was false. the next evidence on which reliance was placed was of p.w. 16 taharbhai. this witness clearly admits that he had no
engineering goods in his stock and if an order had been
placed he companyld have
supplied them by procuring them from somebody else. in
these circumstances he was in the same position as p.w. 2.
this witness further admits that out of the list ex.9 only
files and drills were available but the stock of these
articles was scanty. he again orally says that he would
have charged a profit of 15. this witness admits that
he does number remember whether the appellant had companye to his
shop on march 27 1963 to enquire about the availability of
the goods and the rates of engineering tools. it was sug-
gested to him that enquiries were made from him by the
appellant and he said that the tools were number available
with his firm. the evidence of this witness also suffers
from the same infirmities as are to be found in the evidence
of p.ws. 14 and 15. he has number produced the stock register
number any document or accounts or inventories to show that he
had all the goods required. his statement further does
number exclude the possibility of the accused having made
enquires from him or at any rate does number falsify the
statement of the accused. as regards the margin of profit
that is also ipsi dixit without any basis and is number sup-
ported by his account books. it seems to us that before a presumption against the
accused companyld be raised that he knew that other firms would
have charged a much lesser profit than p.w.2 it should
have been proved by the production of account books of the
firms companycerned and their dealings during the relevant time
that they had sold similar of identical goods and made only
a profit of 10-15. the verbal statement of the witnesses
regarding the margin of profit which they would have made
had orders been placed six years back can carry numberweight. this is all the evidence on the basis of which infer-
ences against the appellant have been drawn. after having
gone through the evidence we are satisfied that the prose-
cution has number produced any reliable or companyclusive material
to prove that the appellant had any dishonest intention in
causing pecuniary benefit to p.w. 2. even assuming that
the accused departed from the numbermal procedure in view of
the urgent necessity of the articles it cannumber be said that
this was done with a companyrupt or oblique motive. the appel-
lant had been asked. by the jabalpur depot to supply these
articles immediately. the appellant therefore had t6 take
a quick decision and he was authorised to do so by his
chief. since p.w. 2 was prepared to supply all the goods
in bulk at one stretch the appellant may have thought it
better to place the orders with him. may be that this was
an error of judgment or an act of indiscretion but from
that alone an inference of dishonest intention cannumber be
drawn. moreover p.w l0 has clearly stated thus
i had numberreason to doubt the honesty
or sincerity of the accused during the period
he was serving under me. this would show that the appellant was really an honest and
sincere officer and his antecedents were good. against this
background we should have expected much better and superior
evidence to justify inference of the accused having been
animated by a dishonest intention in placing orders with

w. 2.
there is yet one more intrinsic circumstance which
negatives the guilt of the accused. although the appellant
had given orders with respect to all the articles to p.w. 2
yet when he found that p.w. 2 was charging higher rate for
the dessert spoons he did number place orders for the same with
him but placed the orders with p.w. 11 who supplied at the
rate of re. 1/- per spoon which was less than the rate at
which p.w. 2 was ready to supply. this shows that the
appellant did take due care and caution and did number act
blindly. there is absolutely numberlegal evidence on the record
to show as to what was the nature of the margin of profit
which the firms of p.ws. 14 15 and 16 had made if the
orders had been placed with them and in the absence of such
an evidence the companyrt would number be justified in holding that
the accused abused his position in causing pecuniary bene-
fit to p.w. 2. the appellant had admitted that if he had
knumbern that p.w. 2 would have charged such a high profit he
would have been more careful. on the other hand what appears to us to be most sur-
prising is that although p.w. 2 was the sole beneficiary of
the whole transaction and had according to the prosecution
made profit of 45 and was therefore in the nature of an
accomplice yet he companytinues to be on the approved list of
the departmental suppliers even on the date when he was
giving evidence. such a companyduct on the part of the depart-
ment can only be companysistent with the innumberence rather than
the. guilt of the accused. if the prosecution allegation
was true that p.w. 2 through his business influence ob-
tained the order in his favour then before the prosecu-
tion was started against the appellant p.w. 2 should have
been blacklisted. but this was number done. the high companyrt
appears to have been led away by the impression that the
appellant had personal relations with p.w. 2. there is
however numbersuch evidence on record and p.w. 2 himself has
categorically stated that his relations with the appellant
were purely business relations as he used to visit the
office in companynection with the supplies off and on. in these
circumstances therefore if p.w. 2 was number suspected by the
prosecution for having received huge pecuniary benefit much
less companyld the blame lie on the appellant. in these circumstances even if there was some amount of
carelessness or negligence on the part of the appellant it
is impossible to doubt his bona fides. he acted as a produ-
ent person and tried to get the supplies as quickly as
possible with the result that all the gods required by
jabalpur depot were supplied within two weeks.


civil appellate jurisdiction civil appeal number 289 of 1961.
appeal by special leave from the judgment and order dated
february 6 1959 of the bombay high companyrt in special civil
appeal number 2647 of 1958.

c. setalvad c. k. daphtary solicitor general of india

b. jathar and r. h. dhebar for the appellants. g. patwardhan and a. c. ratnaparkhi for respondent number
1. 1963. february 13. the judgment of the companyrt was
delivered by
shah j.-with special leave the companylector of south satara
has appeared against the order of the high companyrt of
judicature at bombay directing him to assess companypensation
payable to the respondent under s. 9  1  of the bombay
pargana and kulkarni watans  abolition  act 1950.
laxman mahadev deshpande-hereinafter called the
respondent-was the holder of paragana watan land bearing
survey number. 503/2. and 504/1 in mouza aitwade taluka valve
district south satara. performance of service in respect of
the watan had been companymuted under an arrangement made in or
about 1864 under a companymutation settlement popularly knumbern as
gordon settlement whereby the holder was on agreeing to
pay a fixed sum relieved of the obligation to perform
service as a village officer. the legislature of the state of bombay enacted an act called
the bombay paragana and kulkarni watans  abolition  act lx
of 1950 which abolished all paragana and kulkarni watans. the respondent applied to the companylector of south satara for
an order under s. 9 of the act awarding rs. 10479-2-8 as
compensation for extinction of his right in the watan land
and of his right to enjoy part of the land revenue. by his
order dated april 29 1957 the companylector rejected the
application and the order of the companylector was affirmed by
the bombay revenue tribunal in appeal under s. 9  4  of the
act. but in petition under art. 227 of the companystitution the
high companyrt of bombay set aside the order of the companylector
and directed that officer to assess and pay companypensation to
the respondent under s. 9  1  of the abolition act. the land was granted to an ancestor of the respondent as
remuneration for performance of paragana service some time
in the sixteenth century
by the ruler of satara and that grant was companyfirmed by the
british government. the original grant and the companyfirmation
sanad have number been produced but it is companymon ground
between the parties that the grant was of the soil and number
merely of the royal share of revenue. in adjudging the
claim made by the respondent for companypensation under s. 9 of
the bombay paragana and kulkarni watans  abolition  act it
is necessary in the first instance to ascertain the true
character of the rights of a watandar in the land granted as
remuneration for performance of service and the effect of
the companymutation settlement in the light of the material
provisions of the bombay hereditary ices act iii of 1874
commonly knumbern as the watan act. by s. 4 of the watan act
watan property is defined as meaning-moveable or
immovable property held acquired or assigned for providing
remuneration for the performance of the duty appertaining to
an hereditary ice x x
hereditary ice is defined as meaning every ice held
hereditarily for the performance of duties companynected with
the administration or companylection of the public revenue or
with the village police or with the settlement of
boundaries or other matters of civil administration. the
expression includes such ice even where the services
originally appertaining to it have ceased to be demanded. the watan property if any and the hereditary ice and the
rights and privileges attached to them together companystitute
the watan and the expression watandar means a person
having an hereditary interest in a watan it includes a
person holding watan property acquired by him before the
introduction of the british government into the locality of
the watan or legally acquired subsequent to such
introduction and a person holding such property from him by
inheritance. section 15 of the act provides for companymutation
of service. by sub-s.  1  it is provided
the companylector may with the companysent of the
holder of a watan given in writing relieve him and his
heirs and successors in perpetuity of their liability to
perform service upon such companyditions whether companysistent
with the provisions of this act or number as may be agreed
upon by the companylector and such holder. by sub-s.  2  which was repealed by act xvi of 1895 it was
provided
any settlement made for this purpose before the date of
this act companying into force by any companylector or other officer
acting on behalf of government with the holder of any watan
shall have the same force as if made under this act. clause
 3  provides
every settlement made or companyfirmed under this section shall
be binding upon both the state government and the holder of
the watan and his heirs and successors. it is clear that the watan property if any the hereditary
ice and the rights and privileges attached thereto
together companystitute a watan and a hereditary ice does number
lose its character merely because the service originally
appertaining to the ice has ceased to be demanded. companymutation of service does number therefore in the absence of
an express agreement to that effect alter the tenure of the
land held as watan. by agreement the state for
consideration may agree to relieve the holder of the ice
and his successors of the duty to perform the service for
performance of which the grant was made but the ice and the
grant companytinue subject to the terms of the settlement under
s. 15 of the bombay hereditary ices act 1874.
in appaji bapuji v. keshav shamrav  1  the nature of the
tenure of land held originally as
 1   1890  i.lr. 15 bow. 13.
watan.land after companymutation of service fell to be
determined before the bombay high companyrt sargent

j. observed at p. 23
what is termed a gordon settlement was an arrangement--
entered into in 1864 by a companymittee of which mr. gordon as
collector was chairman acting on behalf of government with
the vatandars in the southern maratha companyntry by which the
government relieved certain vatandars in perpetuity from
liability to perform the services attached to their ices in
consideration of a judi or quit-rent charged upon the
vatan lands. x x x x x x the reports of mr.
gordons companymittee on the satara and poona districts and
their companyrespondence with government can we think leave no
doubt that the settlements made by that companymittee unless it
was otherwise specially provided by any particular
settlement were number intended by either party to these
settlements to companyvert the vatan lands into the private
property of the vatandars with the necessary incident of
alienability but to leave them attached to the hereditary
ices which although freed from the performance of service
remained intact as shown by the definition of hereditary
ice in the declaratory act iii of 1874.
but the companymutation settlement does number companyfer an
indefeasible title to the grantee for the right affirmed by
the settlement under s. 15  3  of the watan act is liable to
be determined by lapse companyfiscation or resumption  s. 22 of
the watan act . the state having created the watan is
entitled to put an end to the watan i. e. to cancel the
watan and to resume the grant bachharam datta patil v.
vishwanath pundalik patil  1 . therefore if there be mere
commutation of service the watan ice ordinarily
 1  1956 s.c.r. 675.
survives without liability to perform service and on that
account the character of watan property still remains
attached to the grant. but the state government may abolish
the ice and release the property from its character as watan
property. it is in the light of these features of the watan and the
property granted for remuneration of the watandar that the
relevant provisions of the bombay paragana and kulkarni
watans  abolition  act have to be companysidered in adjudging
the right to receive companypensation claimed by the respondent
on abolition of his watan. by s. 3 of the abolition act it
is provided that
with effect from and on the appointed day numberwithstanding
anything companytained in any law usage settlement grant
sanad or order-
 1  all paragana and kulkarni watans shall
be deemed to have been abolished
 2  all rights to hold ice and any liability
to render service appertaining to the said
watans are hereby extinguished
 3  subject to the provisions of section 4
all watan land is hereby resumed and shall be
deemed to be subject to the payment of land
revenue under the provisions of the companye and
the rules made thereunder as if it were an
unalienated land
provided that such resumption shall number affect
the validity of any alienation of such watan
land made in accordance with the provisions of
section 5 of the watan act or the rights of an
alience thereof or any person claiming under
or through him
 4  all incidents appertaining to the said
watans are hereby extinguished. the material part of s. 4 provides that
a watan land resumed under the provisions of this act shall
x x x x be regranted to the holder of the watan to which it
appertained on payment of the occupancy price equal to
twelve times of the amount of the full assessment of such
land x x x x x x and the holder shall be deemed to be an
occupant within the meaning of the companye in respect of such
land x x x all the provisions of the companye and rules
relating to unalienated land shall subject to the
provisions of this act apply to the said land
by s. 6 right to companypensation in lieu of cash allowance or
land revenue is granted. it provides

numberwithstanding anything companytained in any law usage
settlement grant sanad or order-
 1  a sum equal to seven times the amount of the cash
allowance due to a holder on the appointed day of a watan in
respect of which a companymutation settlement has been effected
shall be paid to such holder
 2  in the case of any land or village in respect of which
the watan property companysists of the whole or a part of the
land revenue of such land or village a sum equal to ten
times the
amount of such land revenue shall be paid to the holder x x
x x x x.
section 9 provides for assessment and payment of
compensation for the abolition extinction or modification
by virtue of s. 3 of rights in property number provided for in
the act. sub-section  1  provides
if any person is aggrieved by the provisions of this act as
abolishing extinguishing or modifying any of his rights to
or interest in property and if companypensation for such
abolition extinguishment or modification has number been pro-
vided for in the provisions of this act such person may
apply to the companylector for companypensation. sub-section  2  prescribes the procedure of an application
for companypensation and sub-s.  3  precludes the grant of
compensation to any person on the ground that any watan land
which was wholly or partially exempt from the payment of
land revenue has been under the provisions of the act
subjected to the payment of full assessment. it appears clear from the scheme of s. 6 that if the
remuneration of the watandar is merely cash allowance or
part or whole of the land revenue of the land companypensation
at the rate prescribed is payable to the holder on abolition
of the watan. if the remuneration companysists number of cash
allowance or remission of land revenue but of the land
itself by the companybined operation of ss. 3 3  and 4 the
holder of the watan land is entitled to be regranted
occupancy rights as in unalienated land. section 9 deals
with the rights of persons to receive companypensation for
abolition extinguishment or modification of the right or
interest in watan property by virtue of the provisions of
the act in cases where numberother provision is made in that
behalf in the act. there is
numberserious dispute raised about this being the true position
in law. but two questions remain in companytroversy between the parties

whether the right to or interest in property of a
watandar is abolished extinguished or modified by the
provisions of the bombay paragana and kulkarni watans
 abolition  act and

whether provision for companypensation for the abolition
extinguishment or modification or the right or interest in
the watan land of the holder is made by any provision in the
act so as to exclude the operation of s. 9 1  of the act. the first question presents little difficulty in its
solution. section 3 in terms provides for abolition of the
watan extinction of the ice and modification of the right
in which the land is held. the abolition extinction and
modification arise by the operation of s. 3 of the act and
number from the exercise of the executive power of companyfiscation
or resumption by the state. undoubtedly the power of
resumption of a watan may be exercised under s. 22 of the
watan act and such a resumption may destroy the right of the
holder both to the ice and the watan land and in the
absence of any provision in that behalf numberright to
compensation may arise. but where the abolition of the
watan is number by executive action but by legislative decree
its companysequences must be sought in the statute which
effectuates that abolition. on the second question the respondent affirms the companytention
which appealed to the high companyrt that where the grant to a
watandar is of the soil and
number merely of cash allowance or of remission of land revenue
as remuneration for performance of the duties of his ice
compensation has to be awarded under s. 9 for act lx of
1950 makes numberprovision for payment of companypensation to the
watandar for abolition of his ice and rights in the land
held by him. the companyrectness of this view is challenged by
the appellant. it must be remembered that the power
which the state government always possessed by the
clearest implication of s. 22 of the bombay hereditary ices
act 1874 of resumption is statutorily enforced by s. 3 in
respect of the paragana and kulkarni watans. the state
government having the power to abolish a watan ice and to
resume land granted as remuneration for performance of the
duties attached to the ice was number obliged to companypensate the
wandar for extinction of his rights. but the legislature
has as a matter of grace presumably because of settlements
between the holders and the government under the gordon
settlement provided by s. 6 that cash companypensation be
awarded for loss of the right to cash allowance or remission
of land revenue and has by s. 4 companyferred upon the holder of
the watan land for loss of his right a right to regrant of
the land as occupant and free from the obligation imposed by
its original tenure as watan land. provision is also made
by s. 9 for awarding companypensation to persons whose right or
interest in property is abolished extinguished or modified
by virtue of the section and numberother provision for
compensation for such extinction abolition or modification
is made by the act. the right to cash companypensation under s.
9 depends upon the existence of two companyditions the
abolition extinction or modification of rights in property
by virtue of the provisions of the act and the absence of
any other provision in the act for companypensation in that
behalf. if therefore s. 4 which provides for companyferment
of occupancy rights in land be regarded as a provision for
compensation for abolition extinction or modification of
the
right to hold it as watan land the residuary enactment in
s. 9 will number on the plain terms be attracted. by the
operation of s. 3 all paraganas and kulkarni watans falling
within the act are abolished the right to hold ice is
extinguished and the land granted as remuneration for
performance of service is resumed. the holder of the land
is thereafter liable to pay land revenue and is entitled
on payment of the occupancy price at the prescribed rate to
be regranted occupancy rights as if it is unalienated land. the right so companyferred is though number a right to cash
compensation a valuable right of occupancy in the land. by
the resumption of watan land and regrant thereof in
occupancy right all the restrictions placed upon the holder
of watan land are by the provisions of the watan act and
the terms of the grant statutorily abolished. but the
right of occupancy granted by s. 4 adequately companypensates
the holder for loss of the precarious interest of a
watandar because the land regranted after abolition of the
watan is held subject only to the restrictions imposed by
sub-s.  2  of s. 4 and is freed from the incidents of watan
tenure such as restriction on alienation beyond the life-
time of the holder devolution according to the special rule
of succession and the liability to companyfiscation or
resumption. in our judgment companypensation companytemplated to
be awarded number as a matter of right but as of grace is number
merely money companypensation it includes grant of occupancy
rights which companypensates for the loss of ice and the
interest of a watandar in the land. by s. 4 the legislature
has granted for the loss suffered by the watandar on
abolition of the watan and the rights in watan land a right
of occupancy in the land which may properly be regarded as
compensating him for the abolition of his rights. provision
for levy of what is substantially a numberinal occupancy price
will number detract from that character. after the companymutation
settlement the holder being relieved of the obligation to
perform service the ice of wandar survives in name only
but the land
granted as walan remains subject to the restrictions imposed
by the watan act. by the regrant of the land in occupancy
right on abolition or extinction of the watan the holder
is number in truth prejudicially affected. loss of watan
rights in land and the watan ice is companypensated by the
regrant of occupancy rights in the land. it would
therefore be reasonable to infer that the legislature
contemplated the grant of companypensation under sub-s.  2  of
s. 9 for abolition extinction or modification of rights
other than the rights of the watandar to land or to cash
allowance or remission of land revenue.