original jurisdiction petition number 102 of 1958.
petition under art. 32 of the companystitution of india for
enforcement of fundamental rights. k. nambiar and s. n. andley for the petitioners. n. sanyal additional solicitor-general of india

p. balagavgadhar menumber and sardar bahadur for the
respondents. 1961. april 14. the judgment of the companyrt was delivered by
gajendragadkar j.-the government of kerala  appointed a
committee in exercise of its powers
conferred by cl.  a  of sub-s.  1  of s. 5 of the minimum
wages act 1948  act xi of 1948   hereafter called the act
to hold enquiries and advise the government in fixing
minimum rates of wages in respect of employment in the tile
industry and numberinated eight persons to companystitute the said
committee under s. 9 of the act. this numberification was
published on august 14 1957. the companymittee made its report
on march 30 1958. the government of kerala then companysidered
the report and issued a numberification on may 12 1958
prescribing minimum rates of wages as specified in the
schedule annexed thereto. this numberification was ordered to
come into effect on may 261958. on that date the present
petition was filed under art. 32 by the nine petitioners who
represent six tile factories in feroke kozhikode district
challenging the validity of the act as well as the validity
of the numberification issued by the government of kerala. the
state of kerala is impleaded as respondent to the petition. the petitioners allege that the minimum wage rates fixed by
the numberification are very much above the level of what may
be properly regarded as minimum wages and it was essential
that before the impugned wage rates were prescribed the
employers capacity to pay should have been companysidered. since this essential element had number been taken into account
at all by the companymittee as well as by the respondent the
numberification is ultra vires and inumbererative. according to
them the burden imposed by the numberification is beyond the
financial capacity of the industry in general and of their
individual capacity in particular and this is illustrated
by the fact that nearly 62 tile factories in trichur closed
soon after the numberification was published. the petitioners
seek to challenge the validity of the act on several
grounds set out by them in clauses  a  to  g  of paragraph
21 of the petition. it is urged that the act does number
define what the minimum wage is to companyprise or to companyprehend
and as such companyfers arbitrary authority on the appropriate
governments to impose unreasonable restrictions on the
employers. the law companyferring such arbitrary power is
violative of art. 19 1  g  of the companystitution. since the
act
empowers the fixation of a wage which may disable or destroy
the industry it cannumber be said to be reasonable and as such
is beyond the purview of art. 19 1  and  6  of the
constitution. the act does number lay down any reasonable
procedure in the imposition of restrictions by fixation of
minimum wage and so authorises any procedure to be adopted
which may even violate the principles of natural justice. it is also alleged that the act is discriminatory in effect
inasmuch as it submits some industries to its arbitrary
procedure in the matter of fixation of minimum wages and
leaves other industries to the more orderly and regulated
procedure of the industrial disputes act. it is on these
grounds that the validity of the act is
impugned. the petitioners impugn the validity of the numberification also
for the same reasons. besides it is urged that the
numberification has in effect fixed number minimum wages but fair
wages and so it was essential that the capacity of the
employers to bear the burden proposed to be imposed ought to
have been companysidered. failure to companysider this essential
aspect of the matter has it is urged rendered the
numberification void. that in substance is the nature of the
case set out by the petitioners in their present petition. the respondent has traversed all these allegations. it is
urged that the validity of the act is numberlonger open to
challenge since the question is companycluded by the decisions
of this companyrt and it is alleged that what the numberification
purports to do is to fix the minimum wage and numbermore and as
such the capacity of the employer to pay such a minimum wage
is irrelevant. it is further alleged that decisions of this
court have firmly established the principle that in the
matter of fixing minimum wages the capacity of the employer
to pay need number be companysidered and that if any employer is
unable to pay what can be regarded as minimum wages to his
employees he has numberright to carry on his industry. it is
further pointed out that out of 18 factories in feroke only
six factories have companye to this companyrt and it is suggested
that the grievance made by the petitioners that the wage
rates fixed are
beyond their capacity is number genuine or honest. the
respondent also points out that the companymittee appointed by
it was a representative companymittee and its report showed that
it had companysidered the matter very carefully. alternatively
it is urged that the report of the said companymittee would
show that the capacity to pay had number been ignumbered by the
committee. the impact of the minimum wage rate suggested
by it had been companysidered by the companymittee and so the
committee made its recommendations area-wise. in regard to
the closure of factories in trichur the respondents case
was that the said closure was number the result of financial
inability of the factories to bear the burden but was
probably actuated by political motives. the respondent also
put in a general plea that in fact all the factories in the
kerala state except some of the factories in the trichur
area and one of the petitioners had implemented the
numberification without any objection or protest and so it was
argued that there was numbersubstance in the grievance made by
the petitioners. that in brief is the nature of the
contentions raised by the respondent in reply to the
petitioners case. at this stage it would be relevant to refer briefly to the
committees report in the order to find out how the
committee proceeded to discharge its task and what is the
nature of its recommendations. the companymittee companysisted of
eight members three of whom were the employers
representatives and three the employees representatives
while the chairman mr. v. r. pillai and mr. g. s.pillai the
district labour officer were numberinated on the companymittee as
independent members. the chairman mr. pillai is a m.a. m.
sc. in econumberics of the london university. he is a
professor of econumberics in the university companylege at
trivandrum and has had companysiderable experience inasmuch as
he has served on several such companymittees in the past. the
committee issued a questionnaire to all the tile factories
in the state and other persons interested companysidered the
replies received from them personally visited certain
factories recorded evidence of various associations
representing the
tile factories as well as of individuals and took into
account various facts which the companymittee thought were
relevant. the report of the companymittee shows that subject
to minumber differences disclosed in the minute of dissent
filed by mr. k. subramonia iyer and the reply to it filed by
mr. a. karunakaran the recommendations of the companymittee
were unanimous and so prima facie we start with the fact
that the recommendations of the companymittee were approved number
only by the two independent members but they secured the
concurrence of the representatives of the employers as well
as the employees. the report of the companymittee companysists of five chapters. chapter 1 deals with the development of the tile industry in
kerala chapter 11 deals with the problem of standardisation
in the tile industry chapter iii companysiders the problem of
wage-structure area wise chapter iv discusses the problem
of minimum wage fixation its principles and procedure and
chapter v records the companyclusions and recommendations of the
committee. in dealing with the problem of wage structure
the companymittee has observed that the prevailing wage rates in
the tile factories in the state show companysiderable difference
from one centre to anumberher and that according to the
committee is partly due to historical factors and partly to
the econumberic status of the workers in the areas companycerned. the companymittee formed the opinion that there being very
little scope for alternative employment except in low paid
agricultural occupations the bargaining position of the
workers has all along been very weak and wages too have
tended to remain at a relatively low level. it is in the
light of this background that the companymittee naturally
proceeded to companysider the problem of the fixation of minimum
wage rates. the companymittee has accepted the observation of the fair wages
committee that the minimum wage must provide number merely for
the bare subsistence of life but for the preservation of the
efficiency of the workers. then it examined the food
requirements of the employee on the basis of three
consumption units recognized in dr. aykroyds formula. it
then adopted
the assessment made by the planning companymission in regard to
the requirements of the employees in companyton textiles and
placed the employees requirement at a per capita
consumption of 18 yards per unit then it took into account
the requirement of housing and it held that the additional
requirements of workers for fuel lighting and additional
miscellaneous items of expenditure should generally be fixed
at 20 of the total wage in cases where the actual
percentage has number been found out by a family budget
enquiry. the companymittee was companyscious that it had to
approach the problem from the point of view of the minimum
needs of workers in order to maintain a subsistence
standard and so it enumerated the requirements of workers
in that behalf as food clothing fuel lighting and other
miscellaneous items in which are also included rent
education medical aid and entertainment. on this basis the
committee formulated the weekly food budget of the employee
added to it the requirement of clothing and miscellaneous
items. according to the companymittee the total weekly expen-
diture on this basis would be food 13.03 clothing 1.15 and
miscellaneous 2.84 the total being rs. 17.02 np. the
committee then observed calculating on the basis of six
days per week a worker should get a minimum of rs. 2.67 np. per day to maintain a subsistence plus standard. ultimately the companymittee recommended that the minimum basic
wage of an unskilled worker in the a region viz. quilon
and feroke should be re. 1. with a companyt of living index for
the tile centers at an average figure of 400 and the
minimum requirements of the workers at rs. 2.67 np. this
basic wage companyresponds to 150 in the companyt of living index
number. as to dearness allowance the companymittee recommended
that it should be related to the companyt of living index and
that the dearness allowance should be fixed at the rate of 1
np. for every two points for all points above 200. thus
when the companyt of living index is 400 an unskilled worker
will get re. 1 as basic wage and re. 1 as dearness allowance
making a total of rs. 2. the companymittee added that if the
rise in the companyt of living had to be companypletely
neutralised he should get rs. 1.67 np as dearness allowance
but he gets only re. 1 that is to say 100/ 167 or 60 of the
increase in the companyt of living. therefore the extent of
the neutralisation of the increase in the companyt of living is

the companymittee recognised regional differences and so
introduced five grades classified as a b c d and e for
the purpose of fixing the wage structure. the companymittee
hoped that the regional differences recommended by it would
enable the backward areas to companye up by improving the
efficiency of production and marketing so that eventually
they will be in a position to pay the same wages as advanced
areas. the numberification issued is substantially on the lines of the
recommendations made by the companymittee. employees engaged in
the tile industry have been categorised and their minimum
wage rates have been classified into clauses a to e. in
regard to dearness allowance the numberification provides that
a flat rate of dearness allowance for all workers
irrespective of sex or grade shall be paid at the rate of
one naya paisa for every two points in the companyt of living
index in each year in excess of rs. 200. thus the
numberification purports to prescribe the minimum rates of
wages in regard to tile industry in the state it is the
validity of this numberification that is impugned before us by
the present petition. before dealing with the points raised by mr. nambiar on
behalf of the petitioners it is necessary to refer very
briefly to the material provisions of the act. this act was
passed in 1948 because it was thought expedient to provide
for fixing minimum rates of wages in certain employments. under s. 3 the appropriate government is empowered to fix
mini. mum rates of wages in regard to employments as therein
specified and review the same at such intervals as
specified by s. 3 1 . section 3 3  companytemplates that in
fixing or refixing minimum rates of wages different minimum
rates of wages may be fixed for different scheduled
employments different classes of work in the same scheduled
employments adults
adolescents children and apprentices and different
localities. under s. 4 any minimum rate of wages fixed or
revised may inter alia companysist of a basic rate of wages
and a special allowance at a rate to be adjusted or a basic
rate of wages with or without the companyt of living allowance
and the cash value of the companycessions in respect of supplies
of essential companymodities at companycession rates where so
authorised or an all-inclusive rate allowing for the basic
rate the companyt of living allowance and the cash value of the
concessions if any. section 5 prescribes the procedure for
fixing and revising minimum wages. it is under this section
that a companymittee was appointed by the respondent in the
present case. section 9 makes provision for the companyposition
of the companymittee. such companymittees have to companysist of equal
number of representatives of employers and employees and of
independent persons number exceeding. one-third of the total
number of members. section 12 1  imposes on the employer
the obligation to pay the minimum rates of wages prescribed
under the act. section 22 provides for penalties for
offences and s. 22a makes a general provision for punishment
of offences number otherwise expressly provided for. under s.
25 any companytract or agreement whether made before or after
the companymencement of this act which affects an employees
right to a minimum rate of wages prescribed under the act
shall be null and void so far as it purports to reduce the
said minimum rate of wages. section 27 empowers the
appropriate government after giving numberification as
prescribed to add to either part of the schedule any
employment in respect of which it is of opinion that minimum
rates should be fixed and thereupon the schedule shall be
deemed to be amended accordingly in regard to that state. in the case of the edward mills company limited beawar ors. v.
the state of ajmer  1  the validity of s. 27 of the act was
challenged on the ground of excessive delegation. it was
urged that the act prescribed numberprinciples and laid down no
standard which companyld furnish an intelligent guidance to the
administrative
 1  1955 1 s.c.r. 735.
authority in making selection while acting under s. 27 and
so the matter was left entirely to the discretion of the
appropriate government which can amend the schedule in any
way it liked and such delegation virtually amounted to a
surrender by the legislature of its essential legislative
function. this companytention was rejected by mukherjea j. is
he then was who spoke for the companyrt. the learned judge
observed that the legislature undoubtedly intended to apply
the act to those industries only where by reason of un-
organised labour or want of proper arrangements for
effective regulation of wages or for other causes the wages
of labourers in a particular industry were very low. he
also pointed out that companyditions of labour vary under
different circumstances and from state to state and the
expediency of including at particular trade or industry
within the schedule depends upon a variety of facts which
are by numbermeans uniform and which can best be ascertained by
a person who is placed in charge of the administration of a
particular state. that is why the companyrt companycluded that in
enacting s. 27 it companyld number be said that the legislature had
in any way stripped itself of its essential powers or
assigned to the administrative authority anything but an
accessory or subordinate power which was deemed necessary to
carry out the purpose and the policy of the act. in the same year anumberher attempt was made to challenge the
validity of the act in bijay companyton mills limited v. the state
of ajmer  1 . this time the crucial sections of the act
namely ss. 3 4 and 5 were attacked and the challenge was
based on the ground that the restrictions imposed by them
upon the freedom of companytract violated the fundamental right
guaranteed under art. 19 1  g  of the companystitution. this
challenge was repelled by mukherjea j. as he then was who
again spoke for the companyrt. the learned judge held that the
restrictions were imposed in the interest of the general
public and with a view to carry out one of the directive
principles of state policy as embodied in art. 43 and so the
impugned sections
 1  1955 1 s.c.r. 752.
were protected by the terms of cl.  6  of art. 19. in
repelling the argument of the employers inability to meet
the burden of the minimum wage rates it was observed that
the employers cannumber be heard to companyplain if they are
compelled to pay minimum wages to their labourers even
though the labourers on account of their poverty and
helplessness are willing to work on lesser wages and that
if individual employers might find it difficult to carry on
business on the basis of minimum wages fixed under the act
that cannumber be the reason for striking down the law itself
as unreasonable. the inability of the employers may in many
cases be due entirely to the econumberic companyditions of those
employers. it would thus be seen that these two decisions
have firmly established the validity of the act and there
can numberlonger be any doubt that in fixing the minimum wage
rates as companytemplated by the act the hardship caused to
individual employers or their inability to meet the burden
has numberrelevance. incidentally it may be pointed out that
in dealing with the minimum wage rate intended to be pre-
scribed by the act mukherjea j. has in one place observed
that the labourers should be secured adequate living wages. in the companytext it is clear that the learned judge was number
referring to living wages properly so-called but to the
minimum wages with which alone the act is companycerned. in
view of these two decisions we have number allowed mr. nambiar
to raise any companytentions against the validity of the act. it is true that mr. nambiar attempted to argue that certain
aspects of the matter on which he wished to rely had number
been duly companysidered by the companyrt in bijay companyton mills
ltd.s case  1 . in our opinion it is futile to attempt to
reopen an issue which is clearly companycluded by the decisions
of this companyrt. therefore we will proceed to deal with the
present petition as we must on the basis that the act
under which the companymittee -as appointed and the
numberification was ultimately issued is valid. we have already seen what the act purports to achieve is to
prevent exploitation of labour and for
 1  1955 1 s.c.r. 752.
that purpose authorises the appropriate government to take
steps to prescribe minimum rates of wages in the scheduled
industries. in an under-developed companyntry which faces the
problem of unemployment on a very large scale it is number
unlikely that labour may offer to work even on starvation
wages. the policy of the act is to prevent the employment
of such sweated labour in the interest of general public and
so in prescribing the minimum wage rates the capacity of the
employer need number be companysidered. what is being prescribed
is minimum wage rates which a welfare state assumes every
employer must pay before he employs labour. this principle
is number disputed  vide messrs. crown aluminium works v.
their workmen 1
it is therefore necessary to companysider what are the
components of a minimum wage in the companytext of the act. the
evidence led before the companymittee on fair wages showed that
some witnesses were inclined to take the view that the
minimum wage is that wage which is essential to companyer the
bare physical needs of a worker and his family whereas the
overwhelming majority of witnesses agreed that a minimum
wage should also provide for some other essential
requirements such as a minimum of education medical
facilities and other amenities. the companymittee came to the
conclusion that a minimum wage must provide number merely for
the bare subsistence of life but for the preservation of the
efficiency of the worker and so it must also provide for
some measure of education medical requirements and
amenities. the companycept about the companyponents of the minimum
wage thus enunciated by the companymittee have been generally
accepted by industrial adjudication in this companyntry. sometimes the minimum wage is described as a bare minimum
wage in order to distinguish it from the wage structure
which is subsistence plus or fair wage but too much
emphasis on the adjective bare in relation to the minimum
wage is apt to lead to the erroneous assumption that the
maintenance wage is a wage which enables the worker to companyer
his bare
 1  1958 s.c.r. 651.
physical needs and keep himself just above starvation. that clearly is number intended by the companycept of minimum wage. on the other hand since the capacity of the employer to pay
is treated as irrelevant it is but right that numberaddition
should be made to the company ponents of the minimum wage which
would take the minimum wage near the lower level of the fair
wage but the companytents of this companycept must ensure for the
employee number only his sustenance and that of his family but
must also preserve his efficiency as a worker. the act
contemplates that minimum wage rates should be fixed in the
scheduled industries with the dual object of providing
sustenance and maintenance of the worker and his family and
preserving his efficiency as a worker. mr. nambiar companytends that when the statute purports to
prescribe a minimum wage in effect it directs the fixation
of a statutory minimum wage and as such capacity to pay
must be companysidered before such minimum wage is fixed. his
argument is that in any event the impugned numberification
statutorily prescribes such minimum wage rates for the tile
industry in the state of kerala and as such the rates so
recommended do number companystitute merely the industrial and
econumberic minimum as understood by industrial adjudication
but it companystitutes a statutory minimum which can be fixed
only after taking into account the employers capacity to
pay the same. in support of this argument mr. nambiar has
strongly relied on some observations made by this companyrt in
the case of express newspapers  private  limited v. the union
of india  1 . we will presently refer to the said
observations but in appreciating the nature and effect of
the said observations it is necessary to recall that in that
case the companyrt was dealing with the problem of fixation of
wages in regard to working journalists as prescribed by s. 9
of the working journalists  companyditions of service  and
miscellaneous provisions act 1955  45 of 1955 . section 9
of the said act required that in fixing rates of wages in
respect of working journalists the board had to have regard
to the companyt of living the prevalent
 1  1959 s.c.r. 12.
rates of wages for companyparable employments the circumstances
relating to newspaper industry in different regions of the
country and to any other circumstance which to the board may
deem relevant. it was held that the wage structure
contemplated by s. 9 was number the structure of minimum wage
rates it was a wage structure permitted to be prescribed by
that statute after taking into account several relevant
facts and the scheme of that act showed that the wage
structure thus companytemplated was very much beyond the minimum
wage rates and was nearer the companycept of a fair wage. that
is why the companyrt took the view that the expression any
other circumstance specified by s. 9 definitely included
the circumstance namely the capacity of the industry to
bear the burden and so the board was bound to take that
factor into account in fixing the wage structure. it
appeared to the companyrt that this important element had number
been companysidered by the board at all and that introduced a
fatal infirmity in the decisions of the board. thus the
wage structure with which the companyrt was companycerned in that
case was number the mini. mum wage structure at all. it is
essential to remember this aspect of the matter in
appreciating the argument urged by mr. nambiar on the
strength of certain observations made by this companyrt in the
course of its judgment. in the companyrse of his judgment bhagwati j. who spoke for
the companyrt has elaborately companysidered several aspects of the
concept of wage structure including the companycept of minimum
wage. the companyclusion of the fair wage companymittee as to the
content of the minimum wage has been cited with approval  p.
83 . then a distinction has been drawn between a bare
subsistence or minimum wage and a statutory minimum wage
and it is observed that the statutory minimum wage is the
minimum which is prescribed by the statute and it may be
higher than the bare subsistence or minimum wage providing
for some measure of education medical requirements and
amenities  p. 84 . this observation is followed by a
discussion about the companycept of fair wage and in
dealing with the said topic the minimum wages act has also
been referred to and it is stated that the act was intended
to provide for fixing minimum rates of wages in certain
employments and the appropriate government was thereby
empowered to fix different minimum rates of wages as
contemplated by s. 3 3 . then it is stated that whereas the
bare minimum or subsistence wage would have to be fixed
irrespective of the capacity of the industry to pay the
minimum wage thus companytemplated postulates the capacity of
the industry to pay and numberfixation of wages which ignumberes
this essential factor of the capacity of the industry to pay
could ever be supported. mr. nambiar companytends that the last
part of the observation refers to the minimum wage
prescribed by the act and it requires that before
prescribing the said wage the capacity of the industry must
be companysidered. we do number think that this argument is well
founded. it would be numbericed that in companysidering the
distinction drawn between the minimum wage fixed by
industrial adjudication and the minimum wage prescribed by a
statute which is called statutory minimum it has been made
clear that the latter can be higher than the bare
subsistence or minimum wage and as such is different in kind
from the industrial minimum wage. we do number think that the
observation in question was intended to lay down the
principle that whereas a minimum wage can be laid down by an
industrial adjudication without reference to an employers
capacity to pay the same it cannumber be fixed by a statute
without companysidering the employers capacity to pay. such a
conclusion would be plainly illogical and unreasonable. the
observations on which mr. nambiar relies do number support the
assumption made by him and were number intended to lay down any
such rule. cases are number unknumbern where statutes prescribe a
minimum and it is plain from the relevant statutory
provisions themselves that the minimum thus prescribed is
number the econumberic or industrial minimum but companytains several
components which take the statutorily prescribed minimum
near the level of the fair wageand when that is the effect
of the statutory provision capacity to pay may numberdoubt have
to be
considered. it was a statutory wage structure of this kind
with which the companyrt was dealing in the case of express
newspapers  private  limited  1  because s. 9 authorised the
imposition of a wage structure very much above the level of
the minimum wage and it is obvious that the observations
made in the judgment cannumber and should number be divorced
from the companytext of the provisions with respect to which it
was pronumbernced. therefore we feel numberhesitation in reject-
ing the argument that because the act prescribes minimum
wage rates it is necessary that the capacity of the employer
to bear the burden of the said wage structure must be
considered. the attack against the validity of the
numberification made on this ground must
therefore fail. it still remains to companysider whether in fact the numberi. fication has prescribed a wage structure which is above the
level of the minimum wage properly socalled. if the
numberification has in fact prescribed a wage structure which
is nearer the fair wage level and is above the minimum wage
structure that numberdoubt would introduce an infirmity in the
numberification since it does appear that the capacity of the
employer to bear the burden has number been companysidered either
by the companymittee or by the government. this part of the
attack against the numberification is based on two grounds. mr. nambiar companytends that in making its calculations about
the minimum wage rates the companymittee has taken into account
an item of entertainment and that says mr. nambiar is
clearly inadmissible. he also points out that the companymittee
has described the daily minimum of rs. 2.67 np. ultimately
deduced by it as intended to maintain the employees
subsistence plus standard and that again shows that the
wage structure is above the minimum standard and goes
towards the lower level of the fair wage. we are number
impressed by this argument. it would be recalled that
amongst the miscellaneous items in respect of which rs. 2.84
np. are added by the companymittee in its calculations are rent
education
 1  1959 s.c.r. 12.
medical aid and entertainment. the first three are number
inadmissible and so the attack is against the inclusion of
the last item alone. even assuming that the last item is
inadmissible it is number difficult to imagine that the
addition of this last item companyld number have meant much in
the calculations of the companymittee and so the grievance made
on account of the inclusion of the said item cannumber be
exaggerated. there are however two other factors which
are relevant in this companynection. what the companymittee has
described as the subsistence plus standard should on its
own calculations represent the daily minimum of rs. 2.84
np. number rs. 2.67 np. rs. 2.67 np. is plainly the result of
miscalculation so that it can be safely assumed that the
said sum which is taken to represent the daily minimum to
maintain a subsistence plus standard in fact does number
include an amount which may be attributed to entertainment. besides it is necessary to remember that what the companymittee
has ultimately recommended is number the award of rs. 2.67 np. which according to it represents subsistence. plus
standard but only rs. 2 and that itself shows that what is
re. companymended is below the subsistence plus standard. there is yet anumberher point which leads to the same
conclusion. even if the whole of the miscellaneous item is
excluded and calculations are made on the basis that the
total permissible items amount to rs. 14.18 np. we would
still reach the figure for the daily minimum which is more
than rs. 2. therefore look at it how we may it is
impossible to accept the argument that the wage structure
ultimately recommended by the companymittee is anything higher
than what the companymittee thought to be the minimum wage-
structure. therefore we are number prepared to hold that the
numberification which is in companyformity with the recommendations
of the companymittee has prescribed wage rates which are higher
than the minimum wage structure. if that be so failure to
take into account the capacity of the industry to bear the
burden can introduce numberinfirmity either in the
recommendations of the companymittee or in the numberification
following upon them. mr. nambiar numberdoubt wanted to attack the merits of the
numberification on the ground that the wage rates fixed by it
are unduly high. in that companynection he relied on the fact
that the minimum wage rates prescribed by the madras
government by its numberification published on february 25
1952 as well as the wage rates prevailing in other
industries in kerala were slightly lower. he also pointed
out that the wage rates awarded by industrial adjudication
and even the claims made by the employees themselves would
tend to show that what has been awarded by the numberification
is higher than the prescribed minimum wages. it is number
possible for us to entertain this companytention. the
determination of minimum wages must inevitably take into
account several relevant factors and the decision of this
question has been left by the legislature to the companymittee
which has to be appointed under the act. we have already
referred to the companyposition of the companymittee and have
reviewed very briefly its report. when a companymittee
consisting of the representatives of the industry and the
employees companysiders the problem and makes its
recommendations and when the said recommendations are
accepted by the government it would ordinarily number be
possible for us to examine the merits of the recommendations
as well as the merits of the wage structure finally numberified
by the government. the numberification has accepted the
recommendations of the companymittee to categorise the workers
and that obviously was overdue. the fact that wages paid in
other industries in kerala or in other states in companyparable
concerns are lower would have been relevant for the company-
mittee to companysider when it made its recommendations. in
appreciating the effect of the prevalence of lower rates it
may also be relevant to bear in mind that in some places and
in some industries labour is still employed on wages much
below the standard of minimum rates. in fact in its report
the companymittee has pointed out that in kerala. the bargaining
position of the workers has all along been very weak and
wages have tended to remain in a deplorably low level. therefore the fact that lower wages are paid in other
industries or in some other places may number necessarily show
that the rates prescribed by the numberification are unduly
high. in any event these are companysiderations which
ordinarily cannumber be entertained by us because obviously we
are number sitting in appeal over the recommendations of the
committee or the numberification following upon them. that is
why the grievance made by mr. nambiar on the merits of the
wage structure prescribed by the numberification cannumber
succeed. there is however one aspect of this problem to which we
must refer before we part with this case. it appears that
soon after the numberification was issued as many as 62 tile
factories in trichur closed their works and that led to
unemployment of nearly 6000 employees. in order to resolve
the deadlock thus created the respondent referred the
industrial dispute arising between the trichur factories and
their employees for industrial adjudication  i.d. 45 of
1958 . on this reference an interim award was made and it
was followed by a final award on september 26 1960. both
the interim and the final awards were the result of
settlement between the parties and the order passed by the
tribunal shows that the respondent acting through its
labour minister left aside the prestige of the government
came to the scene and effected a settlement. mr. nambiar
has strongly criticised the companyduct of the respondent in
permitting a departure from the numberification in respect of
62 tile factories at trichur companytrary to the provisions of
the act and in insisting upon its implementation in respect
of the other parts of the state. his argument is two-fold. he suggests that the settlement reached between the parties
in trichur shows that the minimum prescribed by the
numberification was above the legally permissible minimum and
beyond the capacity of the trichur factories and that would
support his grievance that the rates prescribed are number the
minimum but they are such above that level. we are number im-
pressed by this argument. as we have already observed we
would ordinarily refuse to companysider the merits of the wage
structure prescribed by the numberification. besides the
closure of the factories in trichur may
either be because the factories there found it difficult to
pay the wage structure or may be for reasons other than
industrial. we propose to express numberopinion on that point
because that is number a point in issue before us and so the
settlement can have numberbearing on the fate of the present
petition but the other argument urged by mr. nambiar raises
a serious question. under the act the numberification has to
apply to all the tile factories in the state and breach of
the provisions of the numberification is rendered penal under
s. 22 of the act. an agreement or companytract companytrary to the
numberification would be void under s. 25 of the act. it is to
be regretted that the respondent acting through its labour
minister appears to have assisted in bringing about a
settlement companytrary to the terms of the act. if the respon-
dent thought that such a settlement was necessary in respect
of trichur factories it may companysider the question of
withdrawing the numberification in respect of that area and in
fairness may also reconsider the problem in respect of all
the other areas and decide whether any modification. in the
numberification is required.


civil appellate jurisdiction civil appeals number. 28-30 of
1969.
appeals by certificate under article 133 of the companystitution
of india from the judgment and order dated numberember 15 1967
of the calcutta high companyrt in w. t. reference number 405 of
1962.

k. daphtary t. a. ramachandran and d. n. gupta for
the appellant. d. karkhanis r. n. sachthey b. d. sharma and s. p.
nayar- for the respondent. the judgment of the companyrt was delivered by
hegde j. these are asessees appeals by certificate from
the judgment of the high companyrt of calcutta in a reference
under s. 27  i  of the wealth-tax act  to be hereinafter
referred to as the act . at the instance of the assessee
 which will hereinafter be referred to as the companypany  as
well as the companymissioner of wealth tax west bengal the
income-tax appellate tribunal b bench calcutta referred
the following questions to the high companyrt for its opinion. whether on the facts and in the
circumstances of the case the amounts of
pound 199940 and pound 192907 pound
98017 standing in the special reserve
account in the books of the assessee companypany
were deductible in determining the net wealth
of the companypany for the assessment years 1957-
58 1958-59 and 1959-60 respectively ? whether on the facts and in the
circumstances of the case the amounts of
pound 154434 pound 208934 and pound
262811 standing in the shareholders accounts
as on respective valuation dates were
deductible in determining the net wealth of
the companypany for the assessment years 1957-58
1958-59 and 1959-60 respectively ? whether on the facts and in the
circumstances of the case the amounts of pound
66275 pound 131180 and pound 274587 out of
the debentures of the companypany were allowable
as debts owed by the companypany in the light of
section 2 m  read with section 6 of the
wealth-tax act ? 1035
the high companyrt answered all the three
questions in favour of the revenue. hence
these appeals. the assessee is a sterling companypany. in the
relevant assessment years it was operating
the calcutta tramways company it is a number-
resident companypany for the purpose of
explanation 2 to s. 6 of the act. the
assessment years with which we are companycerned
in these appeals are 1957-58 1958-59 and
1959-60 and the relevant valuation dates are
31st december 1956 31st december 1957 and
31st december 1958 respectively. the wealth
tax officer valued the assets of the companypany
under s. 7  2   a  of the act. in 1951 the government of west bengal proposed
to acquire the undertaking of the calcutta
tramways company limited in pursuance of that
policy the government entered into an
agreement with the companypany on august 30 1951.
this agreement was later given statutory
force. the clauses of the agreement which are
relevant for our present purpose are 4 7 and

they read
4 1  the companypany shall apply its revenues in
the manner following that is to say-

firstly paying all expenses of
managing maintaining and working the
undertaking including debentures interest

secondly paying all indian and united
kingdom taxes payable by the companypany

thirdly setting aside in each
accounting year in a renewals and replacements
reserve account the sum of eight thousand
pounds sterling or such greater sum as the
directors of the companypany for the time being
may in companysultation with the government
consider necessary in the light of experience
and in view of the expansion of the
undertaking or increase in prices

fourthly setting aside in each
accounting year in a fund  hereinafter
called shareholders account  the following
sums

pound 87457 together with

four per cent upon any additional
outside share capital raised by the companypany
with the companysent of the government after the
date of this agreement. 1036

fifthly accumulating any surplus in a
special reserve account the balance of which
 after providing for losses if any  will
eventually accrue to the benefit of the
government.  before such transfer however of
a loss against the credit standing in the
special reserve account the government should
be companysulted the final decision on such
matter nevertheless being reserved to the
company . if in any accounting year the revenues
arising
from the undertaking are insufficient to
provide for all the matters enumerated in the
preceding sub-clause of this clause such
revenues shall be so applied in the priority
there set out. 7.  1  number later than twelve months before
the purchase date the government may serve
upon the companypany numberice in writing
 hereinafter called a purchase numberice  of
its intention to acquire the undertaking on
the purchase date. in the event of the government serving a
purchase numberice the following provisions shall
have effect that is to say .--

the government shall subject to the
exchange regulations and other relevant laws
prevailing at time in the united kingdom and
india pay to the companypany in sterling in london
number less than thirty days before the purchase
date

the sum of pound 3750000

a sum equal to the amount of any
additional outside capital brought into the
undertaking with the companysent of government
under clause 6 1  of the agreement during the
period between the date of this agreement and
the first day of january one thousand nine
hundred and seventy-one. subject to payment being made in terms
of subclause  a  above all the right title
and interest of the companypany of and in the
undertaking shall on the purchase date become
vested in the government free from all
mortgages charges and liens created by the
issue of debenture or debenture stocks of the
company. provided that the companypany shall be
entitled to retain all statutory
1037
books of account and other documents numbermally
kept outside india but shall afford every
facility to the government to have inspection
of same or take companyies of or extracts
therefrom. the government shall also pay to the
company in sterling in london the amount of
the balance  if any  of the shareholders
account at the purchase date within one month
after a certificate by the companypanys auditors
of the amount thereof has been served on the
government. numberfurther sum than is provided for in
this clause shall be payable to the companypany in
respect of the transfer of the undertaking to
the government. from and after such vesting of the
undertaking in
the government all powers rights obligations
and liabilities excepting the liabilities in
respect of the share and loans capital of the
company shall be exercisable by and be binding
on the government in substitution for the
company and shall cease to be exercisable by
or binding on the companypany. provided that numbercontract entered into by the
company after the date of this agreement and
extending for more than one year beyond the
purchase date shall be binding on the
government unless it has been previously
approved by the government. if the government does number serve a
purchase numberice in accordance with the last
preceding clause then all the terms and
conditions of this agreement shall companytinue in
force subject to the following modifications.-
 a   i  the government shall pay to the
company in sterling london such sums as may
from time to time be necessary to redeem the
second debenture stocks of the companypany on
their due dates

after the second debenture stocks have
been redeemed as aforesaid the companypany shall
from time to time until the undertaking is
vested in the government pay to the government
sums equal to the interest which would have
been payable on such debenture stocks had the
same number been redeemed. 1038
 b   i  the government shall on giving two
year numberice to the companypany be entitled to
acquire the undertaking on the 1st day of
january of any subsequent year and such date
shall be the purchase date. in the event of the undertaking being
acquired in pursuance of a numberice under this
clause there shall be deducted from the sum
payable under clause 7  2   a   i  hereof any
sums which may have been paid by the
government in pursuance of paragraph  a   i
of this clause. in companypliance with the provisions in the agreement the
company maintained a special reserve. the amounts lying to
the credit of that amount on the respective valuation dates
were pound 199407 pound 192940 and pound 98617. the
company also maintained shareholders account in its books
as required by clause 4  i   d  of the agreement. amounts
credited to the said account on the relevant valuation dates
stood at pound 154434 pound 208934 and pound 262811
respectively. the companypany had issued debentures which were secured by a
floating change on the general assets of the companypany. the
assets of the companypany located outside india were valued a
pound 427786 pound 351888 and pound 195916 on the
respective valuation dates. the companypanys assets in india
on those dates were valued at pound 2930032 pound
3010560 and pound 3119149. all the debenture-holders
were residents in united kingdom. the specialities were in
united kingdom and the debts were payable in that companyntry. the companypany claimed the amounts in special reserve account
those in the shareholders reserve account as well as
debenture loans as debts deductible in ascertaining the net
wealth of the companypany. the wealth-tax officer rejected
those companytentions. in appeal the appellate assistant
commissioner agreed with the wealth-tax officer in his
finding relating to the amounts in the special reserve
account as well as in the shareholders account. but as
regards the debenture loans he distributed the same on the
basis of the assets held by the companypany in the united
kingdom and those held by it in this companyntry. companysequently
gave deduction in respect of that portion of the debt which
according to him should be borne by the assets in india. both the companymissioner as well as the companypany appealed to the
tribunal. the tribunal disagreed with the companyclusions
reached by the appellate assistant companymissioner that any
portion of the debenture loans companyld be taken into
consideration in ascertaining
1039
the net wealth of the assessee. it agreed with the wealth-
tax officer and the appellate assistant companymissioner that
the shareholders reserve was the asset of the companypany. it
opined that the amounts in the special reserve account were
number includible in the companypanys net wealth. but as
mentioned earlier the high companyrt fully accepted the
conclusions reached by the wealth-tax officer. before companysidering the points arising for decision it is
necessary to refer to the relevant provisions of the act. net wealth is defined in s. 2  m  of the act thus
net wealth means the amount by which the aggregate value
computed in accordance with the provisions of this act of
all the assets wherever located belonging to the assessee
on the valuation date including assets required to be
included in his net wealth as on that date under this act
is in excess of her aggregate value of all the debts owed by
the assessee on the valuation date other than-

debts which under section 6 are number to be taken into
account. section 3 is the charging section. it says
subject to the other provisions companytained in this act
there shall be charged for every assessment year companymencing
on and from the first day of april 1957 a tax  hereinafter
referred to as wealth-tax  in respect of the net wealth on
the companyresponding valuation date of every individual hindu
undivided family and companypany at the rate or rates specified
in the schedule. section 4 prescribes what all assets should be taken into
consideration in companyputing the net wealth. section 5
provides for certain exemptions. those exemptions are number
relevant for our present purpose. then we companye to s. 6
which is important for our present purpose. the portion of
that section which is material for our present purpose reads

in companyputing the net wealth of an individual
who is number a citizen of india or of an
individual or a hindu undivided family number
resident in india or resident but number
ordinarily resident in india or of a companypany
number resident in india during the year ending
on the valuation date-

the value of the assets and debts
located outside india and
1040
shall number be taken into account. explanation i.
explanation 2.-a companypany shall be deemed to be
resident in india during the year ending on
the valuation date if--
 a  it is a companypany formed and registered
under the companypanies act 1956 or is an
existing companypany within the meaning of that
act or
 b  during that year the companytrol and
management of its affairs is situated wholly. in india. number that we have before us the material facts and the rele-
vant provisions of the act we shall proceed to examine the
question of law referred to the high companyrt for its opinion. companying to question number 1 the companytention of the companypany was
that under law it was companypelled to build up a special
reserve. it companyld number deal with the same except in
accordance with the provisions of the agreement. hence the
same cannumber be companysidered as the asset of the companypany. this
is a wholly untenable companytention. numberpart of the assets of
the companypany had been acquired by the government. between
the government and the companypany there was only an agreement. the government companyld number have acquired the companypany before
the purchase date viz. january 1 1972. even after that
date only an option is given to the government to acquire
the companypany. the government companyld number be companypelled to
acquire the companypany. the agreement had fixed the
consideration to be paid for the acquisition of the companypany. till the companypany was acquired the amounts shown in the
special reserve were the assets of the companypany. once we
come to the companyclusion that they were number the assets of the
government which companyclusion to our mind is obvious then it
follows that they are the assets of the companypany. it is number
the case of he companypany that these assets belonged to some
third party. every item of asset must belong to someone. the question is to whom did it belong ? the obvious answer
is that it belonged to the companypany. it is number the case of
the companypany that the asset in question came within any of
the exemptions mentioned in the act. number companying to the second question formulated for the opinion
of the high companyrt which relates to the amounts in share-
holders account the companytention of the companypany was that the
amount belonged to the shareholders and therefore it was
number an item of the assets of the companypany. this again is an
unacceptable companytention. a companypany is a different legal
entity from its shareholders. the shareholders have no
rights in the
1041
assets of the companypany except when dividends are declared or
when the assets of the companypany are distributed on
liquidation. until a companypany in its general meeting accepts
the recommendation of the director and declares dividends
numberpart of the profits of the companypany becomes debt due to
the shareholders. in kesoram industries and companyton mills
ltd. v. companymissioner of wealth-tax  central  calcutta 1
this companyrt ruled that until the companypany in its general body
meeting accepted the recommendation of its directors and
declared the dividends the report of the directors in that
regard was only a recommendation. and the same be withdrawn
or modified. in that case the companypany in its general body
meeting had number declared dividends before the relevant
valuation date. hence this companyrt held that on the valuation
date numberhing had happened beyond mere recommendation by the
directors as to the amount that might be distributed as
dividends. companysequently there was numberdebt owed by the company-
pany to the shareholders on that date. hence the proposed
dividend was number deductible in companyputing the net wealth of
the appellant companypany. the fact that a separate
shareholders reserve had to be maintained by the companypany
because of its agreement with the government did number change
the character of the asset. this takes us to the last question. as already mentioned
the debenture loans were raised in united kingdom. all the
debentures holders were residents in united kingdom. the
specialities were in the united kingdom. the debts were
payable in the united kingdom. those debenture loans had
only a floating charge on the assets of the companypany. no
particular portion of the assets were specially charged. the meaning of a floating charge is explained in halsburys
laws of england. 3rd edn. vol. 6 p. 472 paragraph 914 thus

the terms floating security and floating
charge mean a security or charge which is number
to be put into immediate operation but is to
float so that the companypany is to be allowed to
carry on its business. it companytemplates for
instance that book debts may be extinguished
by payment and other book debts may companye in
and take the place of those that have
disappeared. while a specific chance is one
that without more fastens on ascertained and
definite property or property capable of being
ascertained and defined a floating charge
moves with the property which it is intended
to affect until some event occurs or some
act is done which causes it to settle and
fasten on the subject of the charge within its
reach and grasp. it is of the essence of a
floating charge that it remains dormant
 1  59 i.t.r. 767. 17---l172supci/73
1042
until the undertaking charged ceases to be a
going companycern or until the person in whose
favour the charge in created intervenes. his
right to intervene may be suspended by
agreement but if there is numbersuch agreement
he may exercise his right whenever he pleases
after default. quite clearly the debts in question were located in united
kingdom. dealing with the business debts this is what is
stated in halsburys laws of england 3rd edn. vol. 15 p.
58 paragraph ii 5
simple companytract debts including those owing
under bills of exchange and promissory numberes
are situate where the debtor resides. a
debtor companypany may for this purpose be
resident in any companyntry where it has a branch
office. a speciality debt is in general an asset
situate where the instrument is physically
situate. in particular a judgment debt is
situate where the judgment is recorded. a
debt secured by mortgage of land is in
character primarily a debt with an accessory
right to resort to the land for payment number
an estate in the land measured by the amount
of the debt its locality as an asset of the
mortgage is therefore to be determined prima
facie under the rules relating to debts.


civil appellate jurisdiction civil appeal number 19 of 1965.
appeal by special leave from the judgment and order dated
january 23 1962 of the allahabad high companyrt in special
appeal number 532 of 1960.

p. rana for the appellant. k. ramamurthi d. p. singh r. k. garg and s. c.
agarwal for the respondent. the judgment of the companyrt was delivered by
shah j. the respondent akbar ali khan was appointed in july
1942 a naib tahsildar in the united provinces civil service
and was companyfirmed in that post on numberember 1 1943. in
april. 195 1 the respondent was selected for permanent
promotion to the post of tahsildar and was placed in
accordance with r. 12 of the subordinate revenue executive
service  tahsildars  rules 1944 on probation for a period
of two years. on a report dated april 29 1953 from the
accountant general of u.p. that the respondent had drawn
excess travelling allowance in respect of certain journeys
the state government directed the deputy companymissioner
hardoi to hold an inquiry after taking into companysideration
the explanation of the respondent. on september 27 1956
the government of u.p. directed that the respondent be
apprised of the grounds for holding an inquiry and that he
be given an opportunity to show cause why his probation be
number terminated. the explanation submitted by the respondent
with the companyments of the deputy companymissioner the
commissioner of the division and the board of revenue were
forwarded to the government. on august 13 1957 the
respondent was informed that the governumber of u.p. agreeing
with the board had ordered that the probation of the
respondent be terminated and that he be reverted to the
post of naib tahsildar. it was further recited that the
respondent should number be companysidered for promotion for a
period of seven years from the date of reversion. the
respondent submitted a memorial to the governumber on october
12 1957. after companysidering the memorial the governumber
passed an order cancelling that part of the order which
related to the stoppage of promotion of the respondent and
confirmed the termination of probation because in the view
of the governumber the respondent had during the probation number
made sufficient use of his opportunities and had failed to
give satisfaction. the respondent then presented a petition before the high
court of judicature at allahabad under art. 226 of the
constitution challenging the orders dated august 13 1957
and december 1 1958 on the grounds that on the expiry of
the period of probation the respondent must be deemed to
have been companyfirmed as a tahsildar and that since the
respondent was subject to punishment without affording him
opportunity to render his explanation in respect of the
charge against him the order was invalid. in the view of
tandon j. under r. 12 of the subordinate revenue executive
service  tahsildars  rules 1944 power to revert companyld be
exercised either during or at the end of the period of
probation and if numberorder was passed extending the period
of probation the respondent companyld number on the expiry of the
period for which he
was originally appointed any longer be regarded as on
probation. the learned judge accordingly held that the
order terminating the probation of the respondent was
erroneous and his reversion being in the nature of a penalty
imposed without companyforming to the requirements of art. 311
of the companystitution was liable to be quashed. in appeal under the letters patent against the order of
tandon j. quashing the orders dated august 13 1957 and
december 1 1958 the high companyrt following their earlier
judgement in chief companyservator of forests u.p. nainital v.

a. lyall 1  held that the order passed by tandon j.
that the respondent had ceased to be a probationer on the
expiry of two years companyld number be sustained. but the high
court held that the two parts of the order dated august 13
1957 were based on the same finding recorded in the letter
of the board of revenue and companyld number be dissociated and
since the governumber had passed an order terminating the
probation and had simultaneously therewith imposed upon the
respondent punishment without companyplying with the
requirements of art. 311 of the companystitution the entire
order was liable to be set aside. the high companyrt observed
by this letter  dated december 1
1958  therefore the government for the
first time made an attempt to companyvert that
order of punishment companytained in the letter
dated 13th august 1957 into an order under
rule 14 of the subordinate revenue executive
service  tahsildars  rules 1944. we do number
think that by putting down this view in this
subsequent letter dated 1st december 1958
the character of the original order passed on
13th august 1957 companyld be retrospectively
altered. when that order was passed on 13th
august 1957 it was an order of
punishment. in the view of the high companyrt the governumber by his later
order sought to companyvert the earlier order of punishment into
an order under r. 14 of the subordinate revenue executive
service  tahsildars  rules 1944 but the governumber had no
power to companyvert an order of punishment retrospectively
into an order under rule 14 number companyld he appropriate to
himself the function of subsequently interpreting the
earlier order and laying down that the order was an order
under the rule and number an order of punishment. with special
leave the state of uttar pradesh has appealed to this companyrt. it is necessary in the first instance to refer to the
relevant rules of the subordinate revenue executive service
 tahsildars  rules 1944. by r. 12 it is provided
every listed candidate on appointment in or
against
 1   1961 a. l. j. it. 458. 82 5
a substantive vacancy shall be placed on
probation. the period of probation shall be
two years
by r. 13 it is provided that every listed candidate whether
appointed in a substantive vacancy or number shall be required
to pass such tests in departmental subjects and the
languages of the province and to undergo such training as
the governumber may from time to time prescribe. rule 14
provided
if it appears at any time during or at the
end of the period of probation that a person
appointed- on probation has number made
sufficient use of his opportunities or has
failed to pass the departmental examination
completely or if he has otherwise failed to
give satisfaction he may be reverted to his
substantive appointment
provided that the board may extend. the
period of probation to three years. an
extension beyond this period shall require the
sanction of the governumber. every extension
whether granted by the board or the governumber
shall specify the exact date up to which it is
granted. rule 15 provided for companyfirmation of a probationer at the
end of the period of probation if he had passed the
departmental examination for tahsildars companypletely and the
commissioner reported that he was fit for companyfirmation and
that his integrity was unquestionable. the respondent was posted as a tahsildar and placed on
probation for two years. the initial period of probation
was liable to be extended by the board of revenue or by the
governumber there is numberrule that on the expiry of the period
of probation the probationer shall be deemed to have been
confirmed in the post which he is holding as a probationer. if a probationer was found number to have made sufficient use
of his opportunities or had failed to pass. the departmental
examination companypletely or if he had otherwise failed to
give satisfaction he may be reverted to his substantive
appointment again companyfirmation in the appointment at the
end of the period of probation companyld only be made if the
probationer had passed the departmental examination for
tahsildars companypletely and the companymissioner reported that
he was fit for companyfirmation and that his integrity was
unquestionable. it is companymon ground in this case that the
respondent had number passed the departmental examination
before 1955. he had therefore number qualified himself for
confirmation. the scheme of the rules is clear companyfirmation in the post
which a probationer is holding does number result merely from
the expiry of the period of probation and so long as the
order of companyfirmation is number made the holder of the post
remains a probationer. it has been held by this companyrt that
when a first appointment or promotion is made on probation
for a specified
2sup. ci/66-7
period and the employee is allowed to companytinue in the post
after the expiry of the said period without any specific
order of companyfirmation he companytinues as a probationer only and
acquires numbersubstantive right to hold the post. if the
order of appointment itself states that at the end of the
period of probation the appointee will stand companyfirmed in
the absence of any order to the companytrary the appointee will
acquire a substantive right to the post even without an
order of companyfirmation. in all other cases in the absence
of such an order or in the absence of such a service rule
an express order of companyfirmation is necessary to give him
such a right. where after the period of probation an
appointee is allowed to companytinue in the post without an
order of companyfirmation the only possible view to take is
that by implication the period of probation has been
extended and it is number a companyrect proposition to state that
an appointee should be deemed to be companyfirmed from the mere
fact that he is allowed to companytinue after the end of the
period of probation. see chief companyservator of forests u.p. nainital v. d. a. lyall 1  sukhbans singh v. the state of
punjab 2  and the accountant general madhya pradesh
gwalior v. beni prasad bhatnagar 3 . the ground on which tandon j. decided the petition cannumber
therefore be sustained. but the high companyrt held that the
respondent had been subjected to reduction in rank in
violation of the guarantee under art. 311 of the
constitution. in the view of the high companyrt the order dated
august 13 1957 determining the probation and withholding
promotion for a period of seven years from the date of
reversion being a companyposite punitive order companyld number be
made by the governumber without giving to the respondent
reasonable opportunity of showing cause against the action
proposed to be taken in regard to him. that view is
strongly pressed upon us for acceptance. the proceeding
against the respondent it is true companymenced on a report
which charged him with having submitted travelling allowance
bills in respect of journeys number performed by him. but it
is clear from the letter dated september 27 1956 that the
inquiry made against the respondent was only for the purpose
of affording him an opportunity to show cause why his
probation should number be terminated forthwith. the governumber
of u.p. after companysidering the explanation submitted by the
respondent by order dated august 13 1957 terminated the
probation of the respondent and further directed that he
should number be companysidered for promotion for a period of
seven years from the date of reversion. the second part of
the order it appears was number given effect to for even
before december 1 1958 the respondent was posted as an
officiating tahsildar. by the second order dated december
1 1958 the governumber of u.p. cancelled the stoppage

c.a. 259 of 1963 decided on feb. 24 1965.  2  a.i.r. 1962 s.c. 1711

c.a. 548 of 1962 decided on jan. 231964.
or promotion and only companyfirmed the order in so far as it
related to termination of probation. we are unable to agree
with the high companyrt that the first limb of the order dated
august 13 1957 was punitive in character. the inquiry
against the respondent was held for the purpose of
determining his probation. under r. 14 of the subordinate
revenue executive service  tahsildar  rules 1944 the
governumber is authorised to revert a person appointed on
probation if it appears at any time that the person has number
made sufficient use of his opportunities or has failed to
pass the departmental examination companypletely or has
otherwise failed to give satisfaction. an officer who has
submitted travelling allowance bills in respect of journeys
number undertaken by him may number unreasonably be regarded as
one who has failed to give satisfaction. it cannumber be
assumed merely because an inquiry is directed to ascertain
whether a person appointed on probation has failed to give
satisfaction that it is intended to hold an inquiry with a
view to impose punishment against that person. inquiry
against the respondent which was companymenced for ascertaining
whether he should be companytinued on probation or whether his
probation should be terminated did number change its character
merely because the governumber made an order which he companyld number
make in that inquiry. there is numberhing to show that the
scope of the inquiry was at any time extended. the order
withholding promotion was one which the governumber was in the
inquiry incompetent to pass and apparently the order was
number given effect to and when presumably his attention was
drawn to the irregularity that part of the order was
cancelled. the high companyrt assumed that in the circumstances of the case
under r. 14 numberinquiry companyld be made against the respondent
before termination of probation and that the governumber held
an inquiry under r. 55 3  of the civil services
 classification companytrol and appeal  rules and in making
that inquiry the state authorities did number act in companyformity
with the rules and the companystitutional safeguards.but the
assumption made by the high companyrt cannumber be accepted. in our
judgment the inquiry was companymenced under r. 14 of the
subordinate revenue executive service  tahsildars  rules
1944 and never lost that character. reversion to a sub-
stantive appointment can be directed under r. 14 in the
conditions mentioned therein and for ascertaining the
existence or otherwise of those companyditions the appointing
authority may hold some inquiry. mere holding of an inquiry
is therefore number a ground for holding that the order which
followed as a result of the inquiry was number made under r.
14.
the high companyrt also held that inquiries under r. 14 of the
subordinate revenue executive service  tahsildars  rules
1944 and r. 55 3  of the civil services  classification
control and appeal  rules which apply to the provincial
services apply to different
82 8
situations. rule 55 3  at the material time dealt with
probationers. and provided
this rule shall also number apply where it is
proposed to terminate the employment of a
probationer whether during or at the end of
the period of probation or to dismiss remove
or reduce in rank a temporary government
servant for any specific fault or on account
of his unsuitability for the service. in such
cases the probationer or temporary government
servant companycerned shall be apprised of the
grounds of such proposal given an opportunity
to show cause against the action to be taken
against him and his explanation in this
behalf if any shall be duly companysidered
before orders are passed by the companypetent
authority. clauses  1   2  deal with the dismissal removal or
reduction in rank of a member of a service but those
clauses are expressly made inapplicable by the first
sentence of cl.  3  of r. 55 to termination of employment of
a probationer and by the second part the procedure to be
followed in the inquiry for determination of probation is
prescribed. rule 14 of the subordinate revenue executive
service  tahsildars  rules 1944 companyfers power upon the
appointing authority to terminate probation in certain
eventualities. under that rule an inquiry may be made if
the appointing authority thinks it fit to do so and to such
an inquiry r. 55 3  which primarily deals with the
procedure to be followed before an order is passed
determining probation may apply. we are therefore of the view that the high companyrt was in
error in holding that the order made by the governumber
determining the probation of the respondent infringed the
protection of art. 311. the governumber initially passed an
order determining the probation and also passed an order
stopping promotion. the latter part of the order which the
governumber was incompetent to pass under r. 14 did give rise
to a justifiable grievance which the respondent companyld set up
but after that order was cancelled the respondent had no
cause for grievance. it cannumber be said that by terminating
the probation any penalty was imposed and if that be the
correct view the opinion expressed by the high companyrt that by
passing the order dated december 1 1958 the governumber was
seeking to companyvert the earlier order of punishment into an
order under r. 14 of the subordinate revenue executive
service  tahsildars  rules 1944 retrospectively cannumber be
accepted. the order terminating probation was made under
r. 14 and companytinued to retain that character. the vice in
the second part of the order did number either before or after
it was cancelled affect the validity of the order
terminating the respondents probation.


criminal appellate jurisdiction criminal appeal number69
of 1 975 . from the judgment and order dated 13th may 1974 of
the allahabad high companyrt in criminal appeal number 269 of 1973.

r. sharma dalveer bhandari h.m. singh and miss
rachna joshi for the appellant

k garg v j. francis and n.m. popli for the
respondents. the judgment of the companyrt was delivered by
chancrachud c.j. this is an appeal by the state of

p. against the judgment of a learned single judge of the
allahabad high companyrt setting aside the order of companyviction
and sentence passed by the learned sessions judge fatehpur
against the four respondents. respondents 1 and 2 ram sagar
yadav and shobha nath alias pujari were companyvicted by the
learned sessions judge under section 304. part 2 of the
penal companye and were sentenced to rigorous imprisonment for
seven years. respondent 1 was also companyvicted under section
220 of the penal companye for keeping a person in companyfinement
corruptly and was sentenced to rigorous imprisonment for
five years respondents 3 and 4 were companyvicted under section
304 part 2 of the penal companye and were sentenced to rigorous
imprisonment for three years. respondent l ram sagar yadav was the station house
officer of the hussainganj police station district
fatehpur while the remaining three respondents were
attached to that police station as companystables. on the
morning of august 29 1969 respondents 3 and 4 went to
village haibatpur arrested the deceased brijlal and brought
him to the police station at about 1  .   0 a.m. brijlal died
the same day at about 6.00 p.m. due to the injuries which
were caused to him between the time that he was brought to
the police station and the forenumbern of august 29.
the case of the prosecution is that the respondents
wanted to extort illegal gratification from brijlal in
connection with a companyplaint which was filed against him by
one faheeman faqirin for cattle trespass. respondent 2
shobha nath had succeeded in obtaining a sum of rs. 100
from brijlal with an assurance that numbersteps will be taken
against him in that companyplaint. respondent 2 demanded a
further sum of rs. 200 from brijlal for hushing up the case. which the latter refused to pay. instead on august 7 1969
he sent a companyplaint  exhibit ka-2  to the superintendent of
police fatehpur companyplaining that a bribe was being
demanded from him by respondent 2 a policeman of the
hussainganj police station. that companyplaint was forwarded by
the superintendent of police to respondent i for inquiry and
report. being incensed by the audacity of brijlal in
complaining against a policeman under his charge respondent
i sent respondents 3 and 4 to bring brijlal to the police
station in order that he companyld be taught a proper lesson. that is the genesis of brijlals arrest. apart from faheeman
faqirins companyplaint that brijlals bullock had damaged her
crop there was numbercomplaint or charge against him. we have heard this appeal at reasonable length and
both shri m.r. sharma who appears on behalf of the
appellant and shri r.k. garg who appears on behalf of the
respondents have taken us through the relevant evidence and
the judgments of the high companyrt and the sessions companyrt. upon
a companysideration of that evidence we find it impossible to
sustain the judgment of the high companyrt. ii has totally
overlooked crucial evidence led by the prosecution in
support of its case and with respect taking an unrealistic
view of unequivocal facts it has number even adverted to the
reasons given by the trial companyrt in support of its
conclusion that the respondents are guilty of the offences
of which it companyvicted them. the record of the case is disproportionately bulky to
the narrow point which is involved in the case. it is number an
unusual experience that the wood is missed for the trees
when a judge is companyfronted with a jumbled-up mass of data
relevant and irrelevant. it is necessary in such cases to
find out the central point of the case and to companycentrate
upon evidence which bears upon that point. petty details
which befog the real issue and minumber companytradictions in the
evidence which are inevitable when a story is narrated under
the stress of a grave crime ought number to be permitted to
tilt the scales o justice. the more a judge gets bogged down
in superfluous details the greater is the likelihood of his
straying away from evidence which can clinch the issue. in
the instant case the high companyrt missed or mistook the
salient features of the case and in the result embacked
upon a hair-splitting exercise while appreciating the
evidence. we do number propose to discuss more than is strictly
necessary since it is quite clear that upon the evidence led
by the prosecution only one companyclusion is possible which
is that the respondents inflicted injuries upon brijlal
while he was in their custody thereby causing his death. brijlal was hale and hearty on the morning of august
29 1969. he was ploughing his field when respondents 3 and
4 reached haibatpur in order to arrest him. they took him on
foot to the hussaniganj police station which is about 3 km
away from haibatpur. they reached the police station at
10.00 a.m. two hours later brijlal was taken in a police
van to the companyrt of the learned additional district
magistrate for obtaining remand. shri r.c. nigam the
presiding officer of the companyrt had finished the winding
list of the remand applications at the end of which the
moharir of the
court informed him that a remand order had remained to be
passed against an accused who was brought from the
hussainganj police station and that the accused companyld number be
produced in companyrt since he was lying in the verandah in a
badly injured companydition. shri nigam  p.w. 5  says in his
evidence that since the accused companyld number be brought to the
court-room he himself went to the verandah where the
accused was lying and he asked him his name. the accused was
unable to respond at first since his companydition was very
serious but on repeated inquiries the accused told shri
nigam that his name was brijlal. on being questioned as to
how he came to receive the injuries brijlal replied that
the darogah of hussainganj and the companystables had beaten
him very badly. shri nigam made a numbere of the statement
made by brijlal on the remand application  exhibit ka-l . that application bears shri nigams signature and the thumb
impression of brijlal. shri nigams evidence is of a crucial character since
it establishes  beyond any doubt that brijlal had
extensive injuries on his person and that at the earliest
opportunity he involved the policemen of the hussainganj
police station as the authors of those injuries it is as
transparent as any fact can be that the injuries which
were found on the person of brijlal were caused to him at
the hussainganj police station. the few and simple steps in
the logical process leading to that companyclusion are that
brijlal had numberinjuries on his person when he was arrested
at haibatpur in the morning or when he was brought to the
police station at about 10.00 a.m and that when he was
sent for remand he had a large number of injuries on his
person which had induced a state of shock. we are unable to
see what other explanation can reasonably be given of this
chain of facts except that the injuries were caused to
brijlal by the policemen attached to the hussainganj police
station. who from amongst them is or are responsible for
causing the injuries has undoubtedly to be companysidered. but
there is numberescape from the companyclusion that brijlal was
assaulted while he was in custody of the respondents at the
hussainganj police station. the evidence of laxmi narain p.w. number 17 who was one
of the companystables attached to the hussainganj police station
has an important bearing on the guilt of the respondents an
aspect which has escaped the attention of the high companyrt. laxmi narain says that when he went to the police station at
about 10.45 a.m. on august 291969 respondent 1 the
station house officer and the other three respon-
dents were present at the police station that brijlal was
lying in the lock-up of the police station shrieking in
pain and that when brijlal was handed over to his custody
for being taken to the magistrate there were a number of
injuries on his arms and legs. according to laxmi narain
and that is undisputed respondent 1 also accompanied him
and brijlal to the magistrates companyrt. it seems to us
surprising that respondent i was numberhere on the scene in the
magistrates companyrt especially in the light of the fact that
brijlals was an unusual case in which the prisoner for
whom remand was to be obtained was in a precarious companydition
due to the injuries suffered by him. it was respondent i
who being the s.h.o. had the custody and care of brijlal. instead of making himself available to the magistrate for
explaining how brijlal came to be injured he resorted to
the expedient of deputing laxmi narain to face the
magistrate. laxmi narain has also stated in his evidence
that brijlal told the magistrate that the darogah and the
constables of the hussainganj police station had assaulted
him. it is numberorious that remand orders are often passed
mechanically without a proper application of mind. perhaps
the magistrates are number to blame because heaps of such
applications are required to be disposed of by them before
the regular work of the day begins. shri nigam has to be
complimented for the sense of duty and humanity which he
showed in leaving his seat and going to the verandah to see
an humble villager like brijlal. it is obvious that he was
led into passing an order of remand on the basis of the
usual statement that the offence of which the accused was
charged was still under investigation. what is important is
that brijlal had number companymitted any offence at all for which
he companyld be remanded and far from being an accused he was
in the position of a companyplainant. respondent i was the
architect of his remand and the motive for obtaining the
remand order was to keep brijlal in custody so as to prevent
him from disclosing to his people who beat him and where. after obtaining the remand order brijlal was sent to
the fatehpur district jail at 3.40 p.m. sheo shanker sharma

w.8 who was the assistant jailor of the fetehpur jail
says that when he examined brijlal at about 3.45 p.m. while
admitting him to the jail he found that there was swelling
on his hands legs and knees. brijlal was unable to get up
and on being questioned he told sharma that the policemen
belonging to the police station arrested him h
from his field took him to the police station and companymitted
marpit on him as a result of which the was unable to
stand. finding that brijlals companydition was serious he
called the jail doctor. dr. s. c. misra p w. 21 went to the district jail
at about 5.20 is p.m. he found that there were 19 injuries
on the various parts of brijlal s person. on being
questioned brijlal told him in a faltering voice that he
had been beaten by the policemen. dr. misra says that
brijlals companydition was precarious but that he had neither
any fever number any symptoms of pneumonie. the evidence of dr
misra proves that brijlal died on account of the injuries
received by him and that the suggestion made by the defence
that he died on account of some kind of a fever or on
account of the pneumonic companydition of his lungs is utteiy
baseless. the companygestion in his lungs was the result of the
beating administered to him. it is well-settled that as a matter of law a dying
declaration can be acted upon without companyroboration.  see
khushal rao v. the state of bombay 1 harbans singh v.state
of punjab 2  and gopalsingh v. state of m.p.   3  there is
number even a rule of prudence which has hardened into a rule
of law that a dying declaration cannumber be acted upon unless
it is companyroborated. the primary effort of the companyrt has to
be to find out whether the dying declaration is true. if it
is numberquestion of companyroboration arises. it is only if the
circumstances surrounding the dying declaration are number
clear or companyvincing that the companyrt may for its assurance
look for companyroboration to the dying declaration. the ease
before us is a typical illustration of that class of eases
in which the companyrt should number hesitate to act on the basis
of an uncorroborated dying declaration. brijlal had no
reason for involving the policemen falsely for having
assaulted him. there was numberpossibility of anyone tutoring
him for the simple reason that he was in the exclusive
custody of the policemen of husssainganj police station. it
is the respondents who were in a position to exert influence
over him. numberone else had access to him which number only
excludes the possibility of his being tutored but which
also excludes the possibility that he was assaulted by any
one else. indeed the circumstances of the case leave no
doubt that the dying declaration
 1  1958 scr 552.  2  19621 supp. 1 scr 104
 3  119721 3 scc 268.
made by brijlal to shri nigam is true in every respect. we
consider it safe to accept the statement made by brijlal to
shri nigam that he was beaten by the darogah and the
constables of the hussainganj police station. the only question which remains for companysideration is
as to the identity of the persons belonging to the
hussainganj police station who participated in the assault
on brijlal. respondent i is directly and specifically
implicated in the dying declaration. he was the darogah
of that police station. laxmi narain says in his evidence
that at 10.45 a.m. when brijlal was brought to the police
station by respondents 3 and 4 respondent i was present. it
is difficult to believe that the police companystables would
beat an accused so mercilessly in the police station without
the companynivance companysent or companyllaboration of the station
house officer. the police station of hussainganj is number so
large that the station house officer would number knumber what is
happening there during his presence. the possibility of any
other officer being a darogah is removed by the evidence
of s.i. bajrang bahadur singh p.w. 19 who says that at
the relevant time there was numberother second officer at the
hussainganj police station except him. any doubt lurking about the involvement of respondent
i in the incident is removed by his own companyduct. though he
was unquestionably present at the police station at the
material time he prepared a false record in order to show
that he had gone for the purpose of an identification parade
to anumberher place. we agree with the leaned sessions judge
that the record was thus prepared by respondent 1 falsely in
order to support the defence of alibi. that indeed was his
defence at the trial. he also prepared false record to show
that brijlal was involved in a dacoity case and was brought
to the police station for that reason. there was numbersuch
charge against brijlal and yet respondent  as the s.h.o. authorised or allowed respondents 3 and 4 to go haibatpur
for arresting brijlal. the true reason for arresting him was
that the respondent were incensed at the companyplaint made by
brijlal against respondent 2 for extorting a bribe. in so far as respondent 2 is companycerned he is truly
the cause of the assault on brijlal. it was he who had
extorted a bribe from brijlal and was attempting to get some
money from him. brijlal sent a companyplaint on august 7 1969
to the superintendent of police fatehpur companyplaining
against respondent 2. that companyplaint having
been referred for inquiry and report to the hussainganj
police soltion respondents hatched a companyspiracy to put
brijlal under arrest bring him to the police station and
assault him. in so far as respondents 3 and 4 are companycerned it is
they who arrested brijlal on a false charge of dacoity and
brought him to the police station at 10 a.m. on august 29.
shortly thereafter companystable laxmi narain found that
brijlal was lying in the lock-up in a badly injured
condition and was shrieking in agony. in the light of these findings it is unnecessary to
refer to the evidence of p.ws. 6. 7 and 9 who are
respectively the nephew the daughter and the wife of
brijlal. we agree with the learned sessions judge that these
persons went to the police station immediately after brijlal
was taken there under arrest. it is number however possible
to say with a reasonable amount of certainty that they saw
the respondents assaulting brijlal. they reached the police
station quite some time after brijlal was taken there and
it would be too much of a companyncidence to suppose that they
arrived at the police station precisely at the time when
brijlal was being beaten. they might have heard the shrieks
of brijlal who was writhing in pain. but standing outside
the police station as they were it companyld number have been
possible for them to see who was assaulting brijlal. the
limited relevance of their evidence is for showing apart
from the other circumstances stated above that brijlal was
lying injured in the police station. for these reasons we allow this appeal set aside the
judgment of the high companyrt and affirm that of the sessions
court. it is to be greretted that the learned sessions
judge companyvicted the respondents under section 304 instead of
convicting them under section 302 of the penal companye. the
distinction between murder and culpable homicide number
amounting to murder is often lost sight of resulting in
undue liberality in favour of undeserving culprits like the
respondent-police officers except in cases companyered by the
five exceptions mentioned in section 300 of the penal companye
culpable homicide is murder if the act by which the death is
caused is done with the intention of causing death or if
the act falls within any of the three clauses of section
300 namely 2ndly 3rdly and 4thly. in this case the
injuries suffered by brijlal would appear to fall under the
clause 2ndly of section 300 since the act by which his
death was caused was done with the intention of causing such
bodily injury as the respondents knew to be likely to cause
his death. however we will number pursue that matter
any further since the state did number file an appeal against
the judgment of the learned sessions judge asking that the
respondents should be companyvicted under section 302 of the
penal companye and since the prosecution did number lead sufficient
evidence through the medical officer in order to bring out
the true nature of the injuries suffered by brijlal. before we close we would like to impress upon the
government the need to amend the law appropriately so that
policemen who companymit atrocities on persons who are in their
custody are number allowed to escape by reason of paucity or
absence of evidence. police officers alone and numbere else
can give evidence as regards the circumstances in which a
person in their custody companyes to receive injuries while in
their custody. bound by ties of a kind of brotherhood they
often prefer to remain silent in such situations and when
they choose to speak they put their own gloss upon facts
and pervert the truth. the result is that persons on whom
atrocities are perpetrated by the police in the sanctum
sanctorum of the police station are left without any
evidence to prove who the offenders are. the law as to the
burden of proof in such cases may be re-examined by the
legislature so that hand-maids of law and order do number use
their authority and opportunities for oppressing the
innumberent citizens who look to them for protect on.


civil appellate jurisdiction review petition number 249
of 1984.
in
special leave petition  c  number 13618 of 1983
chamber matter-by circulation
the order of the companyrt was delivered by
chinnappa reddy j. this application for review is
numberhing
short of an abuse of the process of the companyrt and waste of
the time of this companyrt time which has number become so dear
and precious because of the daily mounting arrears. no
ground for seeking a review is mentioned or even hinted at
in the petition. in the first paragraph of the petition it
is stated this is an application for review of the order
dated 9.12.83 whereby this honble companyrt was pleased to
dismiss the above special leave to appeal  civil . the said
order discloses an error apparent on the face of the record
as will be clear from perusal of the various grounds and
facts mentioned in the petition for special leave to appeal. it is submitted that since the order is unsustainable in
view of the facts and circumstances of the case this
honble companyrt may be pleased to review the order. in the
second paragraph we are told that numberdetailed grounds have
been taken  though in point of fact number a single ground is
even mentioned  as limitation is about to expire and if so
advised further set of grounds would be submitted for the
consideration of the honble companyrt the petition was filed
on 9.1.1984 and numberhing has been done though more than six
months have passed since then. the offer to file detailed
grounds remains an unredeemed promise. possibly he was
advised to file numberfurther grounds as there was numbere to be
submitted. good words were number to be thrown away after bad.