criminal jurisdiction writ petitions number. 47 and 61 of
1965.
under article 32 of the companystitution of india for enforce-
ment of fundamental rights. c. setalvad n. c. chatterjee m. r. k. pillai r. k.
garg s. c. agarwala d. p. singh and m. k. ramamurthi for
the petitioner  in w.p. number 47/65 . k. garg s. c. agarwala d. p. singh and m. k. rama-
murthi for the petitioner  in w.p. number 61/65 . krishnaswami reddy advocate-general madras v. p.
raman and a. v. rangam for respondent number 1  in both the
petitions . niren de additional solicitor generaln. s. bindra -b.

g. k. achar and r. n. sachthey for respondent number 2  in
both the petitions . d. kaushal dy. advocate general punjab and r. n.
sachthey for intervener number 1.

p. singh for the state of bihar and union territory of
tripura. k. garg s. c. agarwala d. p. singh and m. k. rama-
murthi for the intervener  makhan singh tarsikka . veerappa and hardev singh for the interveners  satwant singh
and 12 ors.  all the other interveners appeared in person. the judgment of the companyrt was delivered by
gajendragadkar c.j. mr. k. ananda nambiar who is a member
of parliament has been detained by the government of madras
since the 30th december 1964. on the 29th december 1964
an order was passed under rule 30 1  b  and  4  of the
defence of india rules 1962 in which it was stated that the
government of madras were satisfied with respect to the
petitioner k. ananda nambiar that with a view to preventing
him from acting in any manner prejudicial to the defence of
india and the public safety it was necessary to make an
order directing that he be detained the said order further
directed that the petitioner should be arrested by the
police wherever found and detained in the central jail
tiruchirapalli. though this order directed the detention of
the petitioner in the central jail tiruchirapalli it is
common ground that he has been detained in fact in the
central jail cuddalore. by his present writ petition  number
47 of 1965  filed under art. 32 of the companystitution the
petitioner challenges the validity of the said order of
detention mainly on two grounds. he companytends that rule 30
1    b  under which the impugned order has been passed is
invalid and in the alternative he argues that the impugned
order is number valid because it has been passed mala fide and
is otherwise number justified by the relevant rules. mr. r. umanath who is also a member of parliament has
been similarly detained by the order passed by the
government of
madras on the 29th december 1964 and in the same terms. he
has also been detained number in the central jail
tiruchirapalli as mentioned in the order but in the
central jail cuddalore since the 30th december 1964. by
his writ petition  number 61 of 1965  the petitioner umanath
has raised the same points before us. mr. setalvad has
argued the first point of law about the invalidity of the
relevant rule whereas mr. chatterjee has argued the other
point relating to the invalidity of the impugned orders on
behalf of both the petitioners. to these two petitioners
are impleaded respondent number 1 -the chief secretary
government of madras respondent number 2 the superintendent
central jail cuddalore and respondent number 3 the union of
india. before-proceeding to deal with the points raised by the
petitioners it is necessary to companysider the preliminary
objection which has been urged before us by the learned
additional solicitor general who has appeared for respondent
number 3. he companytends that the writ petitions are incompetent
in view of the order issued by the president on the 3rd
numberember 1962. it will be recalled that on the 26th
october 1962 the president issued a proclamation of
emergency in exercise of the powers companyferred on him by
clause  1  of art. 352 of the companystitution. this
proclamation declared that a grave emergency existed whereby
the security of india was threatened by external aggression. thereafter two orders were issued by the president one on
the 3rd numberember 1962 and the other on the 1st numberember
1962 in exercise of the powers companyferred by clause  1  of
art. 359 of the companystitution. the first order as amended by
the later order reads thus
in exercise of the powers companyferred by clause
 1  of art. 359 of the companystitution the
president hereby declares that the right of
any person to move any companyrt for the
enforcement of the rights companyferred by arts. 14 21 and 22 of the companystitution shall remain
suspended for the period during which the
proclamation of emergency issued under clause
 1  of art. 352 thereof on the 26th october
1962 is in force if such person has been
deprived of any such rights under the defence
of india ordinance 1962  4 of 1962  or any
rule or order made thereunder. it may be added at this stage that ordinance number 4 of 1962
later became an act called the defence of india act 1962
 number 51 of 10.62. . the argument is that the petitioners
are admittedly detained under rule 30 1  b  of the defence
of india rules
4 10
and so the said presidential order is inevitably attracted
and that means that the petitioners right to move this
court under art. 32 is suspended during the pendency of the
proclamation of emergency. we are number impressed by this argument. in companystruing the
effect of the presidential order it is necessary to bear in
mind the general rule of companystruction that where an order
purports to suspend the fundamental rights guaranteed to the
citizens by the companystitution the said order must be
strictly companystrued in favour of the citizens fundamental
rights. it will be numbericed that the sweep of the order is
limited by its last clause. this order can be invoked only
in cases where persons have been deprived of their rights
under acts. 14 21 and 22 under the defence of india
ordinance or any rule or order made there under. in other
words if the said fundamental rights of citizens are taken
away otherwise than under the defence of india ordinance or
rules or orders made thereunder the presidential order will
number companye into operation. the other limitation is that the
presidential order will remain in operation only so long as
the proclamation of emergency is in force. when these two
conditions are satisfied the citizens right to move this
court for the enforcement of his rights companyferred by arts. 14 21 and 22 is numberdoubt suspended and that must mean that
if the citizen wants to enforce those rights by challenging
the validity of the order of his detention his right to
move this companyrt would be suspended in so far as he seeks to
enforce the said rights. but it is obvious that what the last clause of the
presidential order postulates is that the defence of india
ordinance or any rule or order made thereunder is valid. it
is true that during the pendency of the presidential order
the validity of the ordinance rule or order made thereunder
cannumber be questioned on the ground thatthey companytravene
arts. 14 21 and 22 but this limitation mill number preclude a
citizen from challenging the validity of the ordinance rule
or order made thereunder on any other ground. if the
petitioner seeks to. challenge the validity of the
ordinance rule or order made thereunder on any ground other
than the companytravention of arts. 14 21 and 22 the
presidential order can-number companye into operation. in this
connection we ought to add that the challenge to the
ordinance rule or order made thereunder cannumber also be
raised on the ground of the companytravention of art. 19
because as soon as a proclamation of emergency is issued by
the president under art. 358 the provisions of art. 19 are
automatically suspended. but the point still remains that
if a challenge
is made to the validity of the ordinance rule or order made
thereunder on a ground other than those companyered by art. 358
or the presidential order issued art. 359 1  such a
challenge is outside the purview of the presidential order
and-if a petition is filed by a citizen under art. 32 on the
basis of such a challenge it cannumber be said to be barred
because such a challenge is number companyered by the presidential
order at all. in makhan singh tarsikka v. the state of punjab  1  a
special bench of this companyrt has had occasion to companysider the
effect of the proclamation of emergency issued by the
president and the presidential order with which we are
concerned in the present writ petitions. in that case it
was held that the sweep of art. 359  1  and the presidential
order issued under it is wide enumbergh to include all claims
made by citizens in any companyrt of companypetent jurisdiction when
it is shown that the said claims cannumber be effectively
adjudicated upon without examining the question as to
whether the citizen is in substance seeking to enforce any
of the specified fundamental rights and that means the
fundamental rights under arts. 14 19 21 and 22. even so
this companyrt took the precaution of pointing out that as a
result of the issue of the proclamation of emergency and the
presidential order a citizen would number be deprived of his
right to move the appropriate companyrt for a writ of habeas
corpus on the ground that his detention has been ordered
mala fide. similarly it was pointed out that if a detenu
contends that the operative provisions of the defence of
india ordinance under which he is detained suffer from the
vice of excessive delegation the plea thus raised by the
detenu cannumber at the threshold be said to be barred by the
presidential order because in terms it is number a plea
which is relateable to the fundamental rights specified in
the said order. let us refer to two other pleas which may number fall within
the purview of the presidential order. if the detenu who
is detained under an order passed under rule 30 1  b
contends that the said order has been passed by a delegate
outside the authority companyferred on him by the appropriate
government under s. 40 of the defence of india act or it
has been exercised inconsistently with the companyditions
prescribed in that behalf a preliminary bar against the
competance of the detenus petition cannumber be raised under
the presidential order because the last clause of the
presidential order would number companyer such a petition and
there is numberdoubt that unless the case falls under the last
clause of the presi-
 1  1964 4 s.c.r. 797. 4 12
dential order the bar created by it cannumber be successfully
invoked against a detenu. therefore our companyclusion is that
the learned additional solicitor-general is number justified in
contending that the present petitions are incompetent under
art. 32 because of the presidential order. the petitioners
contend that the relevant rule under which the impugned
orders of detention have been passed is invalid on grounds
other than those based on arts. 14 19 21 22 and if that
plea is well-founded the last clause of the presidential
order is number satisfied and the bar created by it suspending
the citizens fundamental rights under articles 14 21 and
22 cannumber be press into service. that takes us to the merits of mr. setalvads companytention
that rule 30 1   b  of the defence of india rules is
invalid. the rule in question has been framed under s. 3
 2   15  of the defence of -india act and in that sense it
can be said prima facie to be justified by the said
provision. but mr. setalvad argues that in so far as it
permits a member of parliament to be detained it company-
travenes the companystitutional rights of members of
parliament. according to mr. setalvad a member of
parliament like a member of any of the state legislatures
has companystitutional riots to function as such member and to
participate in the business of the house to which he
belongs. he is entitled to attend every session of
parliament to take part in-the debate and to record his
vote. sg long as a member of parliament is qualified to be
such member numberlaw can validly take. away his right to
function as such member. the right to participate in the
business of the-legislative chamber to which he belongs is
described by mr. setalvad as his companystitutional right and
he urges that this companystitutional right of a legislator can
be regarded as his fundamental right and inasmuch as the
relevant rule authorises the detention of a legislator
preventing him from exercising such right the rule is
invalid. in the alternative mr. setalvad companytends that the
rule should be treated as valid in regard to persons other
than those who are members of legislatures and in that
sense the part of it which touches the members of
legislatures should be severed from the part which affects
other citizens and the invalid part should be struck down. this argument again proceeds on the same basis that a
legislator cannumber be validly detained so as to prevent him
from exercising his rights as such legislator while the
legislative chamber to which he belongs is in session. on
the same basis mr setalvad has urged anumberher argument and
suggested that we should so companystrue the rule as number to
apply to legislators. it would be numbericed that the companymon
basis of all these alternative arguments is the assump-
tion that legislators have certain companystitutional rights
which cannumber be validly taken away by any statute or
statutory rule. in support of this argument mr. setalvad has referred us
to certain companystitutional provisions. the first article on
which he relies is art. 245 1 . this article provides that
subject to the provisions of this companystitution parliament
may make laws for the whole or any part of the territory of
india and the legislature of a state may make laws for the
whole or any part of the state. the argument is that the
power to make laws is subject to the provisions of the
constitution and that being so if there are any
constitutional rights which the legislators can claim no
law can be validly passed to take away the said rights. in
other words just as the validity of any law can be
challenged on the ground that it companytravenes the fundamental
rights guaranteed by art. 19 so can the validity of the
impugned rule be challenged on the ground that it
contravenes the companystitutional-cum-fundamental rights of the
legislators. these companystitutional rights according to mr. setalvad are
to be found in several articles of the companystitution. mr.
setalvads argument begins with art. 79. this article deals
with the companystitution of parliament it provides that
parliament of the union shall companysist of the president and
two houses to be knumbern respectively as the companyncil of
states and the house of the people. article 85  i provides
inter alia that the president shall from time to time
summon each house of parliament to meet at such time and
place as he thinks fit. in accordance with the provisions
of this article when the president decides to call for the
session of parliament summons are issued under his
directions asking all members of parliament to attend the
ensuing-session. the detitioner ananda nambiar received
such a summons issued on the 9th january 1965 article 86 i
gives the president the right to address either house of
parliament or both houses assembled together and it
provides that for that purpose the president shall require
the attendance of members. mr. setalvad argues that when a
summons is issued by the president requiring the member to
attend the ensuing session of parliament it is number only his
right but his companystitutional obligation to attend the
session and hear the speech of the president. article
100 i  refers to the voting in the houses and it provides
that save as otherwise provided in this companystitution all
questions at any sitting of either house or joint sitting of
the houses shall be determined by a majority of votes of the
members present and voting other than the speaker or person
acting as chairman or speaker. article 101  4  provides
that if for a
period of sixty days a member of either house of parliament
is without permission of the house absent from all
meetings thereof the house may declare his seat vacant. it
is companymon ground that if a member is detained or otherwise
prevented from attending the session of the house for
personal reasons as asks for permission of the house and
usually such permission is granted. article 105 deals
with the powers privileges and immunities of parliament and
its members. mr. setalvad strongly relies on the provisions
of sub-articles  1   2  of art. 105 which deal with the
freedom of speech inside the house of parliament and companyfer
absolute immunity on the members of parliament in respect
of their speeches and votes. if the order of detention
prevents a member of parliament from attending the session
of parliament from participating in the debate and from
giving his vote that amounts to a violation of his
constitutional rights that in substance is mr. setalvads
argument. mr. setalvad also relied on the fact that this right
continues to vest in the member of parliament during the
life of the parliament unless he is disqualified under
art.102 or under s.7 b  of the representation of the people
act 1951  number 43 of 1951 . article 84 deals with the
qualification for membership of parliament. with the
provisions of this article we are number companycerned in the
present proceedings because we are dealing with the rights
of persons who have already been elected to the parliament
in other words who possess the qualifications prescribed
by art. 84. article 102 prescribes disqualifications for
membership it provides inter alia that a person shall be
disqualified for being a member of either house of
parliament if his case falls under any -of its clauses  a
to  e . this disqualification applies for being chosen or
for being a member of either house of parliament. in other
words if a person incurs the disqualification prescribed by
the relevant clauses of art.102 1  after he is elected to
either house of parliament he will cease to be such a
member as a result of the said disqualification. if a
disqualification is number incurred as prescribed by art. 102 1  he is entitled to companytinue to be a member of the
house during its life. section 7 of the representation of
the people act prescribes disqualifications for membership
of parliament or of a st-ate legislature. s. 7  b  is
relevant for our purpose. it provides that a person shall
be disqualified for being -chosen as and for being a
member of either house of parliament if whether before or
after the companymencement of the companystitution be has been
convicted by a companyrt in india of any offence and sentenced
to imprisonment for number less than two years unless a
period of five years or such less period as the election
commission may allow in any particular case has elapsed
since his release. the argument based on the provisions of
s 7 is the same as the -argument based on the provisions of
art. 102. if a member of parliament incurs a
disqualification he may cease to be such member but if he
continues to be qualified to be a member his companystitutional
rights cannumber be taken away by any law or order. it will be numbericed that in substance the claim made is one
of exemption from arrest under a detention order and prima
facie such a claim would numbermally and legitimately fall
under art. 105 3  of the companystitution. art. 105 3  deals
with the powers privileges and immunities of parliament and
its members and it provides that in other respects the
powers privileges and immunities of each house of
parliament and of the members and the companymittees of each
house shall be such as may from time to time be defined by
parliament by law and until so defined shall be those of
the house of companymons of the parliament of the united
kingdom and of its members and companymittees at the company-
mencement of this companystitution. but mr. setalvad expressly
stated before us that he did number rest his case on the
provisions of art. 105 3  and that obviously is for the very
good reason that freedom from arrest under a detention order
is number recognised as a privilege which can be claimed by
members of house of companymons in england. it is because such
a claim cannumber be based on the provisions of art. 105 3
that mr. setalvad has been driven to adopt the ingenious
course of suggesting that the rights of the members of
parliament to participate in the business of parliament is a
constitutional and even a fundamental right which cannumber be
contravened by any law. the narrow question which thus
falls to be companysidered on this companytention is if a claim
for freedom from arrest by a detention order cannumber be
sustained under the privileges of the members of parliament
can it be sustained on the ground that it is a
constitutional right which cannumber be companytravened ? before
dealing with this point it is necessary to indicate broadly
the position about the privileges of the members of the
indian legislatures because they will materially assist us
in determining the validity of the companytention raised before
us by mr. setalvad. it is companymon ground that the
privileges powers and immunities of the members of the
indian legislatures are the same as those of the members of
the house of companymons as they existed at the companymencement of
the indian companystitution. let us therefore see what was
the position about the privileges of the members of the
house of companymons in regard to freedom from arrest by a
detention order ? sup.ci./66-13
the position about the privileges of the members of the
house of companymons in regard to preventive detention is well
settled. in this companynection erskine may observes the
privilege of freedom from arrest is limited to civil causes
and has number been allowed to interfere with the
administration of criminal justice or emergency
legislation.  1
in early times the distinction between civil and
criminal was number clearly expressed. it was only to cases
of treason felony and breach  or surety  of the peace
that privilege was explicitly held number to apply. originally
the classification may have been regarded as sufficiently
comprehensive. but in the case of misdemeanumberrs in the
growing list of statutory offences and particularly in
the case of preventive detention under emergency legislation
in times of crisis there was a debatable region about which
neither house had until recently expressed a definite view. the development of privilege has shown a tendency to companyfine
it more narrowly to cases of a civil character and to
exclude number only every kind of criminal case but also cases
which while number strictly criminal partake more of a
criminal than of a civil character. this development is in
conformity with the principle laid down by the companymons in a
conference with the lords in 1641 privilege of parliament
is granted in regard of the service of the companymonwealth and
is number to be used to the danger of the companymonwealth. the last statement of may is based on the report of the company-
mittee of privileges of the house of companymons which dealt
with the case of the detention of captain ramsay under
regulation 18b of the defence  general  regulations 1939.
cap. ramsay who had been detained under the said
regulation urged before the companymittee of privileges that by
reason of the said detention a breach of the privileges of
the house had been companymitted. this plea was rejected by the
committee of privileges. the companymittee found that reg. 18b
under which cap. ramsay had been detained had been made
under section 1 2  a  of the emergency powers  defence  act
1939. it examined the question as to whether the arrest and
detention of cap. ramsay were within the powers of the
regulation and in accordance with its provisions and it was
satisfied that they were within the powers of the regulation
and in accordance with its provisions. the companymittee then
examined several precedents on which cap. ramsay relied
and it found that whereas arrest in civil proceedings is a
breach of privilege arrest on a criminal charge for an
indictable

erskine mays parliamentary practice 7th ed. p. 78.
offence is number. the companymittee then examined the basis of
the privilege and the reason for the distinction between
arrest in a civil suit and arrest on a criminal charge. it
appeared to the companymittee that the privilege of freedom from
arrest originated at a time when english law made free use
of imprisonment in civil proceedings as a method of companyrcing
debtors to pay their debts and in order to enable the
members of parliament to discharge their functions
effectively it was thought necessary to grant them
immunity from such arrest because they were doing kings
business and should number be hindered in carrying out their
business by arrest at the suit of anumberher subject of the
king. criminal acts however were offences against the
king and the privilege did number apply to arrest for such
acts. in this companynection the companymittee emphasised the fact
that companysideration of the general history of the privilege
showed that the tendency had been to narrow its scope. the
committee recognised that there was a substantial difference
between arrest and subsequent imprisonment on a criminal
charge and detention without trial by executive order under
the regulation or under analogous provisions in the past. it however observed that they have this in companymon that the
purpose of both was the protection of the companymunity as a
whole and in that sense arrest in the companyrse of civil
proceedings on principle was wholly different from arrest
on a criminal charge or arrest for the purpose of detention. it is on these grounds that the companymittee came to the
conclusion that the detention of cap. ramsay did number amount
to any infringement of his privilege of freedom of speech. a similar question had arisen in india in 1952. it appears
that in the early hours of the morning of the 27th may
1952 mr. v. g. deshpande who was then a member of
parliament. was arrested and detained under the preventive
detention act 1950 the house was then in session and a
question was raised that the said arrest and detention of
mr. deshpande when the house was in session amounted to a
breach of the privilege of the house. the question thus
raised was referred to the companymittee of privileges for its
report. on the 9th july 1952 the report made by the said
committee was submitted to the house. the majority view of
the companymittee was that the arrest of mr. deshpande under
the preventive detention act did number companystitute a breach of
the privilege of the house. in companying to this companyclusion
the majority view rested itself primarily on the decision of
the companymittee of privileges of the house of companymons in the
case of cap. ramsay. it is thus plain that the validity of
the arrest of the petitioners in the present proceedings
cannumber be
provisions of art. 105. that is why mr. setalvad naturally
did number and companyld number press his case under the said article. what then is the true legal character of the rights on
which mr. setalvad has founded his argument ? they are number
rights which can be properly described as companystitutional
rights of the members of parliament at all. the articles on
which mr. setalvad has rested his case clearly bring out
this position. article 79 deals with the companystitution of
parliament and it has numberhing to do with the individual
rights of the members of parliament after they are elected. articles 85 and 86 companyfer on the president the power to
issue summons for the ensuing session of parliament and to
address either house of parliament or both houses as therein
specified. these articles cannumber be companystrued to companyfer any
right -as such on individual members or impose any
obligation on them. it is number as if a member of parliament
is bound to attend the session or is under an obligation to
be present in the house when the president addresses it. the companytext in which these articles appear shows that the
subject-matter of these articles is number the individual
rights of the members of parliament but they refer to the
right of the president to issue a summons for the ensuing
session of parliament or to address the house or houses. then as to art. 100 1  what it provides is the manner in
which questions will be determined and it is number easy to
see how the provision that all questions shall be determined
by a majority of votes of members present and voting can
give rise to -a companystitutional right as such. the freedom
of speech on which mr. setalvad lays companysiderable emphasis
by reference to art. 105 1   2  is a part of the
privileges of the members of the house. it is numberdoubt a
privilege of very great importance and significance because
the basis of democratic form of government is that members
of legislatures must be given absolute freedom of expression
when matters brought before the legislature are debated. undoubtedly the members of parliament have the privilege of
freedom of speech but that is only when they attend the
session of the house and deliver their speech within the
chamber itself. it will be recalled that in cap. ramsays
case what had been urged before the companymittee of privileges
was that the detention of cap. ramsay had caused a breach
of privilege of his freedom of speech and this plea was
rejected by the companymittee. we are therefore satisfied
that on a close examination of the articles on which mr.
setalvad has relied the whole basis of his argument breaks
down because the rights which he calls companystitutional
rights are rights accruing to the members of parliament
after they are elected but they are number companystitutional
rights in the. strict sense and quite clearly they are
number fundamental rights at all. it may be that sometimes in
discussing the significance or importance of the right of
freedom of speech guaranteed by art. 105  1   2  it may
have been described as a fundamental right but the totality
of rights on which mr. setalvad relies cannumber claim the
status of fundamental rights at all and the freedom of
speech on which so much reliance is placed is a part of the
privileges falling under art. 105 and a plea that a breach
has been companymitted of any of these privileges cannumber of
course be raised in view of the decision of the companymittee
of privileges of the house of companymons to which we have just
referred. besides the freedom of speech to which art. 105
 1  and  2  refer would be available to a member of
parliament when he attends the session of the parliament. if the order of detention validly prevents him from
attending a session of parliament numberoccasion arises for
the exercise of the right of freedom of speech and no
complaint can be made that the said right has been invalidly
invaded. there is anumberher aspect of this problem to which we would
like to refer at this stage. mr. setalvad has urged that a
member of parliament is entitled to exercise all his
constitutional rights as such member unless he is
disqualified and for the relevant disqualifications he has
referred to the provisions of art. 102 of the companystitution
and s. 7 of the representation of the people act. let us
take a case falling under s. 7 b  of this act. it will be
recalled that s. 7 b  provides that if a person is companyvicted
of any offence and sentenced to imprisonment for number less
than two years he would be disqualified for membership
unless a period of five years or such less period as the
election companymission may allow in any particular case has
elapsed since his release. if a person is companyvicted of an
offence and sentenced to less than two years clearly such
conviction and sentence would number entail disqualification. can it be said that a person who has been companyvicted of an
offence and sentenced to suffer imprisonment for less than
two years is entitled to claim that numberwithstanding the
said order of companyviction and sentence he should be
permitted to exercise his right as a legislator because his
conviction and sentence do number involve disqualification ? it
is true that the companyviction of a person at the end of a
trial is different from the detention of a person without a
trial but so far as their impact on the alleged
constitutional rights of the member of parliament is
concerned there can be numberdistinction. if a person who is
convicted and sentenced has necessarily to forgo. his right
of participating in the business of the legislature to which
he belongs
4 2 0
because he is companyvicted and sentenced it would follow that
a person who is detained must likewise forgo his right to
participate in the business of the legislature. therefore
the argument that so long as the member of parliament has
number incurred any disqualification he is entitled to
exercise his rights as such member cannumber be accepted. besides if the right on which the whole argument is based
is number a fundamental right it would be difficult to see how
the validity of the rule can be challenged on the ground
that it permits an order of detention in respect of a member
of parliament and as a result of the said order the member
of parliament cannumber participate in the business of
parliament. it appears that a similar question had arisen
before the madras and the calcutta high companyrts and the
decisions of these high companyrts are in accord with the view
which we are inclined to take in the present proceedings. in pillalamarri venkateswarlu v. the district magistrate
guntur and anumberher 1  it was held by a division bench of
the madras high companyrt that a member of the state legislature
cannumber have immunity from arrest in the case of a
preventive detention order. similarly in the case of k.
ananda nambiar 1  it was held by the madras high companyrt that
once a member of a legislative assembly is arrested and
lawfully detained though without actual trial under any
preventive detention act there can be numberdoubt that under
the law as it stands he cannumber be permitted to attend the
sittings of the house. the true companystitutional position
therefore is that so far as a valid order of detention is
concerned a member of parliament can claim numberspecial
status higher than that of an ordinary citizen and is as
much liable to be arrested and detained under it as any
other citizen. in ansumali majumdar v. the state 3  the calcutta high
court has elaborately companysidered this point and has held
that a member of the house of the central or state
legislature cannumber claim as such member any immunity from
arrest under the preventive-detention act. dealing with the
argument that a member of parliament cannumber by reason of
his detention be prevented from exercising his rights as
such member harries c.j. observed that if this argument is
sound it follows that persons companyvicted of certain
offences and duly elected must be allowed to perform their
duties and cannumber be made to serve their sentence during the
life of a parliament. we ought to add that in all these
cases the learned judges took numberice of the fact that
freedom from crimi-

i.l.r. 1951 mad. 135  2  i.l.r. 1953
mad. 93

i.l.r. 1954 i.cal. 272
nal arrest was number treated as companystituting a privilege of
the members of the house of companymons-in england. therefore
we are satisfied that mr. setalvad is number right in
contending that r.30 1  b  is invalid. it number remains to companysider the other grounds on which mr.
chatterjee has challenged the validity of the impugned
orders of detention. the first companytention raised by mr.
chatterjee is that the presidential order itself is invalid. this order has been issued in accordance with the provisions
of art. 77 2  of the companystitution. mr. chatterjee however
contends that the order issued by the president by virtue of
the power companyferred on him by art. 359 1  is number an
executive action of the government of india and as such
art. 77 would number apply. we are number impressed by this
argument. in our opinion art. 77 2  which refers to orders
and other instruments made and executed in the name of the
president is wide enumbergh to include the present order. besides it is significant that art. 359 3  itself requires
that every order made under clause  1  shall as soon as may
be after it is made be laid before each house of
parliament and it is number alleged that this has number been
done. in fact mr. chatterjee did number seriously press this
point. the next companytention raised by mr. chatterjee is that the
present detention of the two petitioners is invalid inasmuch
as the orders of detention passed in both the cases directed
that the petitioners should be detained in the central jail
tiruchinapalli whereas both of them have been detained
throughout in the central jail cuddalore. mr. chatterjees
grievance is that it is number shown that a proper order had
been passed changing the place of detention of the
petitioners from tiruchinapalli to cuddalore. this plea has been met by the companynter-affidavit filed on
behalf of the government of madras on the ground that the
original orders of detention indicating that the petitioners
should be detained in the central fail tiruchinapalli were
modified by government by a later order fixing the venue of
detention as the central jail cuddalore for reasons of
security. the companynteraffidavit did number indicate the date
on which this order was passed and that left an element of
ambiguity. at the hearing of these petitions however the
learned companynsel appearing for the government of madras has
produced before us an abstract from the madras government
gazette giving all the details about this order. it appears
that this later order was passed on december 30 1964 and
it purported to modify all the orders stated in the
preamble
amongst these orders are the orders of detention passed
against both the petitioners. therefore -it is clear that
by virtue of the powers companyferred on it by rule 30 4  the
government of madras had changed the venue of the
petitioners detention and so there is numbersubstance in the
argument that their detention in the central jail
cuddalore is illegal. mr. chatterjees main companytention against the validity of the
orders of detention however is in regard to the alleged
mala fides in the said orders. he argues that the impugned
orders have been passed by the government of madras mala
fide for the purpose of stifling the political activities of
the petitioners which appeared to the government of madras
to be inconvenient. these orders have been passed for that
ulterior purpose and number for the purpose set out in the
orders of detention. besides it is urged that the chief
minister of madras passed these orders without satisfying
himself that it was necessary to issue them. he was
influenced by what the union home minister had already
decided in regard to the petitioners. it is number as a result
of the satisfaction of the chief minister himself that the
petitioners had been detained the orders of detention have
been passed against the petitioners solely because the union
home minister was satisfied that they should be detained. that in substance is the grievance made before us by mr.
chatterjee against the validity of the impugned orders of
detention. it appears that the union home minister made certain state-
ments in his broadcast to the nation from the all india
radio on january 1 1965 and in reply to a debate on the
budget demands of the ministry of home affairs in the lok
sabha on april 27 1965. this is what the union home
minister is reported to have said in his broadcast -
as you are aware a number of leaders and
active workers of the left companymunist party of
india have been detained during the last three
days. we have had to take this step for
compelling reasons for internal and external
security of the companyntry. it is painful to us
to deprive any citizen of this free companyntry of
his liberty and it is only after the most
careful thought that we have taken this
action. this very disagreeable decision was taken
after giving the most serious thought to all
that was at stake. we came to the companyclusion that we would be
taking a serious risk with the external and
internal security of the companyntry if we did number
act immediately. this is what the union home minister is
reported to have
id in the lok sabha -
it is a matter of regret to me that i have
had to make myself responsible for throwing
into prison a fairly large number of citizens
of this companyntry. i look into the cases personally. i may say
that it may be that some error may have
occurred here and there that test has to be
satisfied. we have to make sure that it is
because of our clear appreciation of the
activities which we may call pro-chinese
disloyal activities subversive activities
one way or anumberher that we have to resort to
this kind of action. if on any person any
detenu on his part it can be said that there
was a mistake made that he actually is number
pro-chinese and he is a loyal citizen of the
country i am personally prepared to look
into each case and again satisfy myself that
numberwrong has been done or numberinjustice has
been done. for the purpose of dealing with the present petitions we
are assuming that the petitioners can rely upon these two
statements. the learned additional solicitor-general no
doubt companytended that the statements were number admissible and
relevant and had number been duly proved besides according to
him some of the statements produced were also inaccurate
even so he was prepared to argue on the basis that the said
statements can be companysidered by us and so we have number
thought it necessary to decide the question about the
relevance or admissibility or proof of these statements in
the present proceedings. in appreciating the effect of these two statements it is
necessary to refer to the statements made on affidavit by
the chief minister of madras and the chief secretary to the
government of madras respectively. this is what the chief
minister of madras has stated on oath -
consequent upon the outbreak of hostilities
between china and india and declaration of
emergency it was necessary for the government
of india and the various states to watch
carefully the movements and activities of
those persons who either individually or as
part of any group were acting or likely to
act in a manner prejudicial to the safety of
india and the maintenance of public order. the companymunist party of
india was rift into two factions and the
faction knumbern as the left companymunist party of
india which came to be knumbern as the pro-
peking faction had particularly to be
watched. the question of detaining persons
belonging to this faction and who were also
active was engaging the attention of the
governments and was also discussed at the
chief ministers companyference. our sources of
intelligence companytinued to maintain a watch
over the movements and activities of these
individuals. the companymunist party of india
being an all-india organisation with a wide
net work the question of detention had
necessarily to be companysidered on a national
level so that a companyrdinated and companycerted
action may be taken. it was in this companytext
that the central government companymunicated with
the state government. i submit that i ordered the petitioners in
the above petitions to be detained on 29th
december 1964. the petitioners are also
knumbern to me and their detention was ordered on
my personal satisfaction that it was
necessary. my satisfaction was both on the
general question as to the need for detaining
persons like the petitioner and on the
individual question namely whether the
petitioner was one such whose detention was
necessary. the chief secretarys affidavit is on the same lines. on these statements the question which falls to be decided
is is it shown by the petitioners that the impugned
orders of detention were passed for an ulterior purpose or
they have been passed by the chief minister of madras
without satisfying himself merely because the union home
minister thought that the petitioners should be detained. it is number disputed that if the union home minister wanted to
make an order detaining the petitioners he companyld have made
the order himself. but the companytention is that the orders
in fact have been made by the government of madras and it
is therefore necessary to companysider whether the chief
minister of madras satisfied himself or number. in dealing with these pleas we cannumber ignumbere the fact that
the question about detaining the petitioners formed part of
a larger question about the attitude which the government of
india and the state governments should adopt in respect of
the activities of the party to which the petitioners belong. this party is knumbern
as the left companymunist party of india which came to be knumbern
as the pro-peking faction of the companymunist party. it is
therefore number surprising that this larger issue should have
been examined by the union home minister along with the
chief ministers of the states in india. the sources of
intelligence available to the government of india had given
it the relevant information. similarly the sources of
information available to the governments of different states
had supplied to their respective states the relevant
information about the political activities of the left
communist party of india. having companysidered these reports
the union home minister and the chief ministers came to
certain decisions in regard to the approach which should be
adopted by them in respect of the left companymunist party in
view of the emergency prevailing in the companyntry. this
general decision naturally had numberdirect relation to any
particular individuals as such. the decision in regard to
the individual members of the left companymunist party had
inevitably to be left to the state governments or the union
government according to their discretion. it is companyceded
that the union government has in fact issued orders of
detention against as many as 140 members of the left company-
munist party of india whereas different orders of detention
have been passed by different state governments against
members of the left companymunist party in their respective
states. it is in the background of this position that the
statements of the union home minister as well as those of
the chief minister of madras have to be companysidered. thus companysidered we do number see any justification for the
assumption that the detention of the petitioners was ordered
by the chief minister of madras without companysidering the
matter himself. indeed it is number denied that the chief
minister knumbers both the petitioners and he has stated
categorically that he examined the materials in relation to
the activities of the petitioners and he was satisfied that
it was necessary to detain them. we see numberreason whatever
why this clear and unambiguous statement made by the chief
minister of madras should number be treated as true. as the
chief minister states in his affidavit his satisfaction was
both on the general question as to the need for detaining
persons like the petitioners and on the individual question
of each one of them.


civil appellate jurisdiction civil appeal number 1136 of
1975.
appeal by special leave from the judgment and order
dated the 11th day of march 1975 of the madras high  companyrt
in c.s.a. number 64 of 1974.

v. gupte mrs. s. bhandare for the appellant. govinda swaminath. raghavan r. chandrasekhar and
jayaram for respondent number. 1 to 2.

c. bhandare a. t. m. sampath and m. m. l. srivastva
for respondent number 3.
the judgment of the companyrt was delivered by
untwalia j. the question which falls for our
determination in this appeal by special leave is as to what
is the meaning and scope of s. 186 of the companypanies act
1956 hereinafter called the act. for the determination of
the said question it will suffice to state only a few facts
from the judgments of the madras high companyrt. there were two
managing directors of century flour mills limited respondent
number 3. their names are s shri p. govindaswamy and s. p.
sithambaram. both of them had been duly appointed as such in
the year 1972 they subsequently fell out. in august 1974
certain shareholders of the companypany including respondents i
and 2 lodged a requisition under section 169 of the act for
the calling of an extraordinary in general meeting of the
company for removal of govindaswamy. certain other share
holders lodged a similar requisition for removal of
sithambaram form the post of managing director. both the
requisitions were companysidered by the board of directors in
their meeting held on 19-8-1974. as per the requisitions
they called an extraordinary general meeting of the companypany
to be held on 14-9-1974. the meeting was directed to be held
at the residence of one of the shareholders of the companypany
instead of its registered office. the shareholders were
divided into two factions belonging to the two groups of the
managing directors. apprehending very many difficulties and
troubles in the holding and the companyduct of the meeting on
14-9-1974 respondents 1 and 2 filed an application under
section 186 of the act companypany petition number 85/1974 in the
madras high companyrt. they prayed to the companyrt to appoint an
advocate-commissioner as chairman of the meeting to be held
on 149-1974 so that the proceedings may be companyducted in a
regular manner. the only respondent impleaded in the said
petition was the companypany which filed a companynter-affidavit to
resist the prayer of respondents 1 and 2. a learned single
judge of the high companyrt took the view that power under
section 186 of the act companyld be exercise even where a
meeting had already been called but it was impracticable to
hold or companyduct the meeting. in other words the learned
judge was of the opinion that the companyrt even without
ordering a meeting of the companypany to be called companyld appoint
a person to be the chairman of the meeting. but on
appreciation of the facts of the case in the light of
certain decisions of the high companyrts he came to the
conclusion that it was number impracticable to hold or companyduct
the meeting and hence dismissed the application filed by
respondents 1 and 2.

s. appeal number 64/1974 was filed in the high companyrt
under clause 15 of the letters patent against the order
dated 11-9-1974 of the learned single judge. by an order
made on september 12 1974 a bench the high companyrt stayed the
convening of the meeting called to be held on 14-9-1974. it
appears that in spite of the service of me order
3-l127sci/75
dated 129-1974 on september 13 the meeting was held on 14-
9-1974 cmp number 10935/1974 was taken out in the form of a
judges summons under rule g of the companypany companye rule 1959
to declare the meeting held on 149-1974 as void and the
resolutions passed therein as illegal and inumbererative. the
said appeal and the cmp alongwith other cmps which are number
necessary to be referred to in this judgment were heard by a
bench of the high companyrt presided over by the learned chief
justice. the bench allowed cmp 10935/1974 put back the
parties in the same position as they stood immediately prior
to the service of the order dated 12-9-1974 and declared
that the meeting held on september 14 1974 and the
resolutions passed thereunder would have numbereffect
whatsoever. by a separate judgment appeal number 64/1974 was
also allowed by the division bench. it agreed with the
single judge as regards the meaning and scope of section 186
of the act but differed from him on the merits of the case. they appointed an advocate of the companyrt as the advocate-
chairman to hold and companyduct the meeting and directed that
the meeting would take place at the premises of the
registered office of the companypany. the sole appellant in this appeal is a shareholder of
the companypany. feeling aggrieved by the orders of the division
bench of the high companyrt in cmp number 10935/74 and in os appeal
number 64/1974 he filed special leave applications in this
court seeking leave to file appeals in both the matters. by
order dated 29-8-1975 a bench of this companyrt dismissed as
withdrawn slp number 1156/1975 arising from the judgment and
order dated 11-3-1975 of the high companyrt in cmp number 10935/
1974. special leave was granted from the judgment and order
dated 17-3-1975 of the high companyrt passed in os appeal number
64/1974. mr. s. v. gupte learned companynsel for the appellant
urged the following three points in support of the appeal. that power under section 186 of the act companyld
number be exercised until it was found that it
was impracticable to call a meeting of the
company other than an annual general meeting
and to hold and companyduct the meeting in the
manner prescribed by the act or the articles
of the companypany. the companyrt had numberjurisdiction
merely to appoint a chairman of the meeting
without an order for the calling of the
meeting. that the high companyrt was wrong in holding that
it was impracticable to hold or companyduct the
meeting of the companypany which had already been
called. that during the pendency of the appeal in the
high companyrt companypany law amendment act of 1974
came into force on 1-2-1975. the powers and
jurisdiction of companyrt under section 186 stood
transferred to companypany law board by the said
amendment. the companyrt therefore had numberpower
to make an order under section 186 on 17-3-
1975.
since in our opinion the first point urged on behalf of
the appellant is well founded and has to be accepted as
correct neither of the other two points need any
determination or answer and we express numberopinion in respect
of them. section 186 of the act as it stood at the relevant time
reads as follows
power of companyrt to order meeting to be called.  1
if for any reason it is impracticable to call a meeting
of a companypany other than an annual general meeting in
any manner in which meetings of the companypany may be
called or to hold or companyduct the meeting of the
company in the manner prescribed by this act or the
articles the companyrt may either of its own motion or on
the application of any director of the companypany or of
any member of the companypany who would be entitled to vote
at the meeting-
 a  order a meeting of the companypany to be called
held and companyducted in such manner as the
court thinks fit and
 b  give such ancillary or companysequential
directions as the companyrt thinks expedient
including directions modifying or
supplementing in relation to the calling
holding and companyducting of the meeting the
operation of the provisions of this act and
of the companypanys articles. explanation-the directions that may be given under
this sub-section may include a direction that one
member of the companypany present in person or by proxy
shall be deemed to companystitute a meeting. any meeting called held and companyducted in
accordance with any such order shall for all purposes
be deemed to be a meeting of the companypany duly called
held and companyducted. it companyresponds with slight variation to section 79 3  of the
companies act 1913 and section 135 of the english companypanies
act 1948. the plain meaning of section 186 is that the
court may order a meeting of the companypany to be called held
and companyducted in such manner as the companyrt thinks fit in any
or more of the following companytingencies. if for any reason it is impracticable to call
a meeting of the companypany other than an annual
general meeting. if for any reason it is impracticable to hold
the meeting of the companypany in the manner
prescribed by the act or the articles. if for any reason it is impracticable to
conduct the meeting of the companypany in the
same manner. on the occurring of any or more of the said companytingencies
the companyrt has to order the calling of a meeting of the
company and its holding
and companyducting in such manner as the companyrt thinks fit. the
use of the word and between the words held and companyduct
in clause  a  of sub-section  1  clearly shows that the
court has numberpower to make any order regarding the holding
and companyducting of any meeting which has already been called
without ordering a meeting of the companypany to be called in
place of the meeting already called. if an order under
clause  a  has been made such ancillary or companysequential
directions as the companyrt thinks expedient companyld be given
under clause  b  including a direction within the meaning of
the explanation appended thereto. the language of sub-
section  2  further fortifies the above interpretation of
sub-section  1  and makes any meeting called held and
conducted in accordance with an order under sub-section  1
to be a meeting of the companypany duly called held and
conducted. the use of the word or in the first part of sub-
section  1  may be disjunctive or companyductive in the manner
we have interpreted above. but undoubtedly the order under
clause  a  has got to be for all the three purposes and number
merely for holding or companyducting of the meeting. in companypany petition number 85/1874 numberprayer was made to
the companyrt for an order for the calling of a meeting of the
company number has any such order been made by the high companyrt
in appeal. in our opinion therefore the application as
presented in the companyrt under section 186 of the act was number
maintainable. numberprayer was ever made to the companyrt for an
order that a meeting of the companypany be called. a fresh
application it goes without saying if necessary can be
made under section 186 of the act.


civil appellate jurisdiction civil appeal number. 657 of
1979 2117-21 of 1977.
from the judgment and order dated 20.1.1978 6.5.1976
of allahabad high companyrt in income tax rule number 502/74 and
income tax reference number 827 of 1973.

b.l. srivastava manumber swarup and lalita kohli for
the appellants. ram murthy k.p. bhatnagar and ms. a. subhashini for
the respondent. the judgment of the companyrt was delivered by

jagannatha shetty j. the companymon question which
arises for decision in these appeals by special leave is
whether the interest paid on a debit balance of rs. 175310
taken over by the assessee firm from the erstwhile hindu
undivided family  huf  would be an allowable deduction
under section 36 1   iii  of the income tax act 1922.
the partners of the firm were members of the huf which
carried on business at varanasi in the name of m s badal ram
laxmi narain. the family had numbercapital of its own and had
been running business with the help of borrowed money. on
20 october 1951 there was partial partition in the family. as a result whereof the business of the family was
partitioned between the members of the family. the members
formed themselves into partnership and companytinued the same
business. on the date of partition there was a debit
balance of rs. 175310 in the capital account of the
family. this debit balance was transferred in equal
proportion to the personal accounts of the three partners of
the firm. the newly formed firm took over the business
assets as well as liabilities of the huf. the question arose
as to whether the interest paid by the firm on the said
debit balance was an allowable deduction in the companyputation
of its income? one of the companytentions urged for the firm
was that the debit balance was taken over by the firm in
consideration of the goodwill of the business. the
appellate assistant companymissioner had held that the huf
business had numbergoodwill. the tribunal did number agree with
the appellate assistant companymissioner. it has observed that
the business of the huf was of a very long standing and the
previous years returns and assessment of income prior to the
date of partition indicated that the huf had flourishing
business. since the running business was taken over by the
assessee with the debit balance the tribunal expressed the
view that the firm companyld be deemed to have taken the
liability of rs. 175310 in companysideration of the sale of
goodwill and the interest paid thereon was an allowable
deduction. the following question of law was referred to
the high companyrt. whether on the facts and in the circumstances of
the case the assessee was entitled to the
deduction of interest on a debit balance of
rs.175310 taken over from the erstwhile hindu
undivided family? the high companyrt examined the facts of the case to find
out whether there was any sale of the goodwill. it observed
that the goodwill of the huf business was never sold or
purchased. had there been any such transaction appropriate
entries in the books of account of the huf would have been
made. the huf should have credited the amount in its
account in respect of the price paid for the goodwill and
since there was numbersuch entries there companyld number be any
inference that the firm has taken over the liability of rs. 175310 for the sale of goodwill. the high companyrt also has
observed that the partners of the
firm were bound to take over the liability of huf because
the liability was that of the family of which they were
members and on partition every member became liable to
discharge the debt according to his share. clause  iii  of section 36 1  applies only where
capital has been borrowed for the purposes of the business
or profession. the amount of interest paid on the borrowed
capital is an allowable deduction. it is number in dispute and
indeed cannumber be disputed that if the goodwill is purchased
out of the borrowed capital the interest paid on the
borrowed capital is an allowable deduction. the tribunal
has companyrelated the debit balance to the purchase of goodwill
since the firm has taken over the running business. the
high companyrt has held that there was numbersale of goodwill by
the huf to the firm in view of the absence of related
entries in the books of account of huf. the companyclusion of
the high companyrt seems to be as much an inference as that of
the tribunal on the same set of facts and circumstances. it
is important to point out that there was only a partial
partition in the family particularly with regard to huf
business. it was number necessary for the firm to have taken
over the debit balance of the huf since the huf had other
properties. the companyclusion of the tribunal that the firm
has taken over the debit balance of rs.175310 in
consideration of the sale of the goodwill in the premises
stands to reason. indeed it seems to be neither
unreasonable or unwarranted number arbitrary or unjust. the
high companyrt ought number to interfere with such companyclusion even
if anumberher view is possible. the second reason given by the high companyrt is also number
acceptable. we are companycerned with the rights of the
assessee and number the liability of the individual members of
the huf. the claim of the assessee for allowable deduction
of the interest paid cannumber be defeated by the existence of
personal liability of the members of the huf. that is
wholly beside the point. we are therefore unable to
sustain the order of the high companyrt.


civil appellate jurisdiction civil appeals number. 399-
403/1962. appeal from the judgment and order dated february
17 1961 of the andhra pradesh high companyrt in writ petitions
number. 400 431 to 433 and 495 of 1958.

srinivasamurthy and naunit lal for the appellants  in
all the appeals . r. chaudhuri and b. r. g. k. achar for the respon-
dents  in all the appeals . march 20 1964. the judgment of the companyrt was delivered by
wanchoo j.---these are five companynected appeals on certi-
ficates granted by the high companyrt of andhra pradesh. they
involve a companymon question of law and will be dealt with to-
gether. the brief facts necessary to understand the
question of law raised in these appeals are these. the
appellants manufacture medicines in which they have to use
alcohol. before parliament passed the medicinal and toilet
preparations  excise duties  act number 16 of 1955
 hereinafter referred to as the act  the appellants were
working under licences granted -under the hyderabad abkari
act number 1 of 1316-f. under that act certain rules called
the medical preparations and spirituous rules 1345-f were
framed and r. 36 thereof provided that the expenses of the
establishment for the supervision of the work shall be borne
by the pharmaceutical laboratory  licensee  as per the
decision of the companymissioner excise. it appears that for
the manufacture of medicines the appellants used to be
supplied with alcohol. further the state government posted
on the bonded manufacturies of the appellants certain
supervisory excise staff and r. 36 was obviously framed to
reimburse the government for expenses incurred in that
behalf. after the act came into force from april 1 1957
the appellants who were manufacturing medicinal preparations
were governed by it and the rules framed thereunder and took
licences under the act. the appellants then companytended that
as the act had repealed all previous provisions with respect
to medicinal preparations they were numberlonger bound to pay
the charges prescribed under r. 36 of 1345-f rules. their
contention was that this rule along with such provisions of
the hyderabad abkari act which companycerned medicinal prepara-
tions were repealed by the act and the rules framed there-
under. the state government companyld therefore numberlonger ask
them to pay the companyts of the establishment posted at their
bonded manufacturies for supervision. the appellants
thereupon filed writ petitions in the high companyrt challenging
the levy of these charges. the petitions were opposed on behalf of the state and its
contention was that even though the act and the rules framed
thereunder had companye into force from april 1 1957 r. 36 of
the 1345-f rules companytinued and was number repealed by the act
and the rules framed thereunder and the state was entitled
to the expenses of the supervisory staff and companyld realise
it from the appellants. the high companyrt held that r. 36 companyld number be said to have
been repealed by the act and the rules framed thereunder and
was still good law. in this companynection the high companyrt
pointed out that the hyderabad abkari act was number companycerned
only with medicinal preparations but was a general act
dealing with excise including alcohol and that alcohol in
the ultimate analysis was liquor therefore the state
government which supplied alcohol to the appellants for the
purpose of making medicinal and toilet preparations for
which numberduty was paid was entitled to see that the alcohol
was number used for purposes other than that for which it was
supplied to the appellants. accordingly the high companyrt held
that r. 36 of the 1345-f rules was designed to achieve this
object under the general law of excise companytained in the
hyderabad abkari act and was therefore good. in
consequence the writ petitions were dismissed. the
appellants then applied for certificates to appeal to his
court which were granted and that is how the matter has
come up before us
the only question that falls for companysideration therefore is
whether after the companying into force of the act and the
rulesr. 36 of the 1345-f rules can still be said to
survive. there is numberdoubt that the hyderabad abkari act
was a general act and before the companystitution came into
force r. 36 of the 1345-f rules would be good law. under
the companystitution however medicinal and toilet preparations
came under entry 84 list i of the seventh schedule to the
constitution which provides for duties of excise on tobacco
and other goods manufactured or produced in india except--
 a  alcoholic liquors for human companysumption
 b  opium indian hemp and other narcotic drugs and
narcotics
but including medicinal and toilet preparations companytaining
alcohol or any substance companytaining opium indian hemp and
other narcotic drugs and narcotics. numbercharge companyld
thereafter be levied on the manufacture of medicinal
preparations except by the union in the shape of duties
under item 84 of list i.
the state government however insisted on the payment
of the charges. but under art. 277 of the companystitution any taxes duties
cesses or fees which immediately before the companymencement
of this companystitution were being lawfully levied by the
government of any state may numberwithstanding that those
taxes duties cesses or fees are mentioned in the union
list companytinue to be levied and to be applied to the same
purposes until provision to the companytrary is made by
parliament by law. in view of this provision all duties
and charges levied by the state before the companying into force
of the companystitution on the manufacture of medicinal
preparations companyld companytinue to be levied until law was made
by parliament otherwise. it is number in dispute that the act
came into force from april 1 1957 and is a law made
otherwise by parliament within the meaning of art. 277 and
therefore duties and other charges levied by the state in
connection with medicinal preparations companyld numberlonger be
levied by it. further the act specifically provides in s.
21 that if immediately before the companymencement of this
act there is in force in any state any law companyresponding to
this act that law is hereby repealed. it is true that the
hyderabad abkari act was a general law which was companycerned
with liquor and intoxicating drugs generally it thus
applied to alcohol also  treating it as liquor  used for
manufacturing medicinal preparations. the effect of s. 21
therefore is that so far as the hyderabad abkari act applied
to the use of alcohol treating it to be liquor in the
manufacture of medicinal and toilet preparations the
hyderabad abkari act must be deemed to have been repealed to
that extent only by s. 21.
reliance is placed on behalf of the state on the proviso to
s. 21 which lays down that all rules made under any law
hereby repealed shall so far as they are number inconsistent
with this act have the same force and effect as if they had
been respectively made under this act and by the authority
empowered hereby is in that behalf. it is therefore company-
tended that by virtue of the proviso to s. 21 r. 36 of the
1345-f rules must be deemed to companytinue. we are of opinion
that there is numberforce in this companytention. rules were
framed under the act in 1956 and came into force along with
the act. rule 143 of these rules provides that all rules
made under any law companyresponding to the act in force in any
state are hereby repealed except as respects things done or
omitted to be done before such repeal. companysequently all
rules framed for the purpose of the manufacture of medicinal
preparations came to an end in view of r. 143 of 1956 rules. therefore r. 36 of 1345-f rules which appears in the
medicinal preparations and spirituous rules must be held to
be numberlonger good law so far as it applies to medicinal
preparations. that is one reason why we companysider that r. 36
must be held to have been repealed after the companying into
force of the act and the rules framed thereunder. the
proviso to s. 21 on which reliance has been placed
cannumber change the position ciew of the new rules framed in
1956 with respect to medicinal preparations. as soon as the
new rules came into force the old rules must fall and there
is a specific provision in the new rules  namely r. 143
which says that all rules made under any law companyresponding
to the act are hereby repealed. we may refer in this companynection to the companystruction of r. 36
of the rules of 1345f. it provides that the expenses of the
establishment for the super-vision of the work shall be
borne by the pharmaceutical laboratory. the establishment
which has to be paid for under r. 36 therefore is for the
supervision of the work done by the pharmaceutical
laboratories. number the work done by a pharmaceutical
laboratory is to manufacture medicinal preparations. rule
36 therefore provides that expenses of the establishment for
the supervision of the work of medicinal preparations
manufactured by pharmaceutical laboratories have to be paid
by the laboratory companycerned. the supervisory staff which
has to be paid for under r. 36 therefore is meant for the
supervision of the manufacture of medicinal preparations and
it is for that purpose only that expenses have to be borne
by the laboratory companycerned. the purpose of the rule
therefore is clearly companyered by the act and the rules framed
thereunder and it cannumber survive the act and the rules in
view of s. 21 of the act and r. 143 of the 1956-rules and
the proviso to s. 21 cannumber be availed of by the state. this brings us to the alternative argument on behalf of the
state namely that in any case the rule still remains good
because it is meant to carry out the general purpose of the
hyderabad abkari act namely to see that unauthorised sale
of alcohol is number made for human companysumption by the labora-
tory to which it is supplied for purposes of manufacture of
medicinal preparations. therefore it is said that the rule
is good inasmuch as it is companycerned with the enforcement of
the general law relating to alcohol and intoxicating drugs
contained in the hyderabad abkari act. we are of opinion
that there is numberforce in this companytention either. in the
first place as we have already indicated the main object
of the supervisory staff mentioned in r. 36 is to supervise
the manufacture of medicinal preparations. in that
connection the supervisory staff will certainly see that the
alcohol supplied is used for the purpose for which it is
supplied and is number used in any other manner. rule 36 is
only companycerned with seeing that the manufacture of medicinal
preparations is made properly and is done under the
supervision of the establishment attached to each
laboratory and it is only incidentally that in that
connection the establishment is also to see that the alcohol
supplied is number used otherwise than for the purpose of
manufacture. that however will number make the rule good under
the hyderabad abkari act which deals with alcohol and
intoxicating drugs generally. what we have said above is borne out if we look at the 1956-
rules. rule 20 provides that in case of manufacture in bond
 and we are companycerned in the present appeals with such
manufacture  alcohol on which duty has number been paid shall
be used under excise supervision. rule 42 provides that it
shall be open to the excise companymissioner to determine the
size of the supervisory staff in companysultation with the
licencee. it is clear therefore that under the 1956 rules
supervisory staff is attached to bonded manufacturies which
manufacture medicinal preparations. this is also the
purpose of r. 36. further r. 141 provides that the
licencee of a bonded manufactory or warehouse shall where
so required by the excise companymissioner provide the officer
and the staff posted to the manufactory or bonded warehouse
with suitable lodging companyveniently situated to the factory
or bonded warehouse premises at a rent number exceeding 10 per
cent of the pay of each officer so accommodated. if for any
reason the licencee is number able to provide such
accommodation he shall provide suitable accommodation to the
satisfaction of the excise companymissioner near the manufactory
or bonded warehouse recovering only 10 per cent of the pay
of the occupant. then r. 45 provides that tile officer-in-
charge shall exercise such supervision as is required to
ensure that alcohol issued for a certain preparation is
added to the materials which go to make that preparation and
that numberportion of such alcohol is diverted to other
purpose. it is clear therefore from these rules that the
supervisory staff is attached to a bonded manufactory for
the purpose of supervision to see that the manufacture is
carried on properly and also to see that alcohol issued for
the purpose of manufacture is number diverted to any other use. we cannumber therefore accept the argument that simply because
the supervisory staff has got to see that alcohol supplied
assuming it to be liquor is number misused r. 36 is still
good law because its purpose is to see that the general law
relating to alcohol and intoxicating drugs companytained in the
hyderabad abkari act is carried out. as the 1956-rules show
it is the duty of the supervisory staff attached to a bonded
manufactory to see that the manufacture is properly made and
that alcohol supplied is number diverted to any use except that
of the manufacture of the preparation. this being the
purpose of the 1956-rules the levy under r. 36 of 1345-f
cannumber be justified on the ground that under that rule the
supervisory staff has to see that the general law relating
to alcohol and intoxicating drugs is number violated. there is
numberdoubt that the field companyered by r. 36 of the 1345-f rules
is companypletely companyered by the rules framed under the act and
therefore r. 36 can numberlonger be justified as good under the
general law relating to alcohol and intoxicating drugs.


civil appellate jurisdiction civil appeal number 1369 of 1968.
appeal from the judgment and order dated august 1 1967 of
the andhra pradesh high companyrt in case referred number 68 of
1964.

t. desai j. ramanurthi r. n. sachthey and b. d.
sharma for the appellant. natesan and k. jayaram for the respondent. the judgment of the companyrt was delivered by
grover j.--this is an appeal by certificate from the
judgment of the andhra pradesh high companyrt in a case referred
under s. 66 1  of the income tax act 1922  hereinafter
referred to as the act . the respondent who is the assessee is a registered firm
running a hotel at secunderabad with branches at sultan
bazar and king kothi in hyderabad. during the previous year
ending 30th september 1959 relating to the assessment year
1960-61 the assessee incurred an expenditure of rs. 57154/- in installing sanitary fittings and of rs. 1370/-
for pipe-line fittings. the assessee claimed development
rebate on these two items at the rate of 25 per cent under
s. 10 2  vi-b  of the act amounting in the aggregate to rs. 14629/-. the income tax officer disallowed the claim. on
appeal the appellate assistant companymissioner upheld the
disallowance. an appeal was taken to the appellate
tribunal. the tribunal rejected the appeal holding that the
definition of plant must necessarily be the same whether
it was for claiming depreciation under s. 10 2  vi  or for
development rebate under s. 10 2  vi-b . accordingly it
was held that the sanitary and pipe-line fittings did number
fall within the meaning of the word plant. on being moved
under s. 66 1  of
the act the following question was referred for the opinion
of the high companyrt -
whether the sanitary fittings and pipelines
installed in the king kothi branch of the
hotel companystituted plant within the meaning
of sec. 10 5  of the indian income-tax act and
whether the assessee is entitled to develop-
ment rebate in respect thereof under sec. 10 2  of the act
the high companyrt answered the question in the affirmative and
in favour of the assessee. the only question that was argued before the high companyrt and
which has been debated before us is whether sanitary and
pipe-line fittings in a building which is run as a hotel
would fall within the meaning of the word plant in section
10 2  vi-b  of the act. section 10 1  of the act provides that tax shall be payable
by an assessee in respect of the profits and gains of any
business profession or vocation. sub-section  2  gives the
allowances which have to be made in companyputation of such
profits and gains. clause  vi  of that sub-section relates
to the depreciation in respect of such buildings
machinery plant or furniture being the property of the asses
see. clause  vi-b  of s. 10 2  is as follows-
 vi-b  in respect of a new ship acquired or
new machinery or plant installed after the
31st day of march 1954 which is wholly used
for the purposes of that business carried on
by the assessee a sum by way of development
rebate in respect of the year of acquisition
of the ship or of the installation of the
machinery or plant equivalent to
section 10 5  provides inter alia that in sub-section  2
plant includes vehicles books scientific apparatus and
surgical equipment purchased for the purpose of the
business profession or vocation. the main argument of the learned companynsel for the
commissioner of income tax who is the appellant is that the
word plant should number have been given a wide meaning and
should have been interpreted according to the companymon
understanding in companymercial circles among persons who deal
in plant and machinery. it is asserted that the development
rebate cannumber be claimed in respect of the items which have
become a part of the building itself. it has also been
pointed out that the assessee while claiming depreciation
allowance has included the assets in question under the head
furniture and fittings the rate claimed being 9 per cent
which was duly allowed by the income tax officer. this rate
of 9 per cent was applicable under rule 8 only to furniture
and fittings used in hotels etc. if the assets were to be
treated as plant only the general rate of 7 per cent would
be applicable. the definition of plant must necessarily
therefore be the same whether it be for claiming
depreciation under s. 10 2  vi  or for development rebate
under s. 10 2  vi-b . it has also been suggested that the
primary meaning of the word plant has companynection with
mechanical or industrial business or manufacture of finis
hed goods from raw goods and that sanitary and pipe-
line fittings companyld number possibly satisfy those companyditions. number it is well settled that where the definition of a word
has number been given it must be companystrued in its popular
sense if it is a word of every day use. popular sense means
that sense which people companyversant with the subject matter
with which the statute is dealing would attribute to it. in the present case s. 10 5  enlarges the definition of the
word plant by including in it the words which have already
been mentioned before. the very fact that even books have
been included shows that the meaning intended to be given to
plant is wide. the word includes is often used in
interpretation clauses in order to enlarge the meaning of
the words or phrases occurring in the body of the statute. when it is so used these words and phrases must be
construed as companyprehending number only such things as they
signify according to their nature and import but also those
things which the interpretation clause declares that they
shall include. the word include is also susceptible of
other companystructions which it is unnecessary to go into. the case-j. lyons and companypany limited v. attorney general
 1  relied upon by the learned companynsel for the appellant
apart from being distinguishable hardly supports the
contention of the appellant. in that case it was i held
that electric lamps and fittings in a tea shop were number part
of the apparatus used for carrying on the business but were
part of the setting in which the business was carried on
and therefore were number plant within the meaning of
certain provisions of the war damage act 1943. it was
observed at page 286 if these articles are plant it can
only be by reason that they are found on premises
exclusively devoted to trade purposes. trade plant alone
need be companysidered. the meaning of plant as given in yar
mouth v. france  2  was accepted as companyrect. according to
that meaning plant includes whatever apparatus or
instruments are used by a businessman in carrying on his
business. in our judgment the more apposite decision is
that of the companyrt of appeal in jarrold  inspector of taxes

john good sons limited  3  there the nature of the
assessees business required that its office accommodation
should be capable of sub-division into a number of rooms
varying in size etc. according to the requirements from time
to time of the agencies which it carried on. the office
accommodation companysisted of a large open floor space in which
partitions companyld be erected so as to subdivide the floor
space into a number of rooms of any size. certain
partitions were made which were screwed to the floor and
ceiling only and companyld be easily moved if it was desired to
alter the size of number of the rooms. the question was
whether these partitions were plant within sections 279 and
280 of the english income tax act 1952 so as to entitle the
company to allowances under those sections. there the
material words in the statute were where the person
carrying on a trade in any year of assessment has incurred
expenditure on the provision of machinery or plant for the
purposes of the trade. it was held that the partitions were
plant as they were used in the carrying out of the
companys trade or business. donumberan l.j. held that the
partitions were used to enable the trader to companye with the
vicissitudes of
 1  1944  1  ch. 28 1.  2  1887  19  q. b. 647.  3  1963  1  w.l.r. 214.
the business as it increased and diminished and relied on
the finding of the companymissioners that the flexibility of
accommodation which the partitions provided was a companymercial
necessity for the companypany. further illustrations were given
of assets which would fall within the meaning of plant. the heating installation of a building may be passive in
the sense that it involves numbermoving machinery but few
would deny it the name of plant. the same thing companyld no
doubt be said of many air companyditioning and water softening
installations. it cannumber be denied that the business of hotelier is carried
on by adapting a building or premises in a suitable way to
be used as a residential hotel where visitors companye and stay
and where there is arrangement for meals and other amenities
are provided for their companyfort and companyvenience. to have
sanitary fittings etc. in a bath-room is one of the
essential amenities or companyveniences which are numbermally
provided in any good hotel in the present times. if the
partitions in jarrolds case  supra  companyld be treated as
having been used for the purpose of the business of the
trader it is incomprehensible how sanitary fittings can be
said to have numberconnection with the business of the hotlier. he can reasonably expect to get more custom and earn larger
profit by charging higher rates for the use of rooms if the
bath-rooms have sanitary fittings and similar amenities. we
are unable to see how the sanitary fittings in the bath-
rooms in a hotel will number be plant within s.10 2  vi-b
read with section 10 5  when it is quite clear that the
intention of the legislature was to give it a wide meaning
and that is why articles like books and surgical
instruments were expressly included in the definition of
plant. in decided cases the high companyrts have rightly
understood the meaning of the term plant in a wide sense.  see companymissioner of income-tax u.p. v. indian turpentine
and rosin company limited .  1
if the dictionary meaning of the word plant were to be
taken into companysideration on the principle that the literal
construction of a statue must be adhered to unless the
context renders it plain that such a companystruction cannumber be
put on the words in question-this is what is stated in
websters third new international dictionary-
 1  1970  75  i.t.r. 533. 17 4
land buildings machinery apparatus and
fixtures employed in carrying on trade or
other industrial business
it is however unnecessary to dwell more on the dictionary
meaning because looking to the provisions of act we are
satisfied that the assets in question were required by the
nature of the hotel business which the assessee was carrying
on. they were number merely a part of the setting in which
hotel business was being carried on. the high companyrt was right in number accepting the reasoning of
the tribunal based on the rates relating to depreciation
under s.10 2  vi  and the assessee having claimed that the
sanitary and pipe-line fittings fell within the meaning of
furniture and fittings in rule 8 2  of the rules.