k. sabharwal j.

the challenge in this appeal is to the impugned judgment and order
of the high companyrt directing the district judge to companyduct an enquiry to
ascertain the truth of the averments made by ashu girhotra respondent
number5 in his affidavit dated 3rd december 2001 to the effect that he was
implicated in false criminal cases and harassed by the police at the
instance of the appellant a police officer. the brief facts are as follows

a news report published in chandigarh news line dated 5th
december 2000 stated that between 6th september1992 and 30th august
1993 six first information reports were registered in police station
panchkula in state of haryana against ashu girothra respondent number5
his friend sandeep verma respondent number6 and gajinder singh in car
theft cases. the police after investigation dropped the proceedings against
respondent number.5 and 6 in two cases. the chief judicial magistrate
panchkula by order dated 30th april 1997 discharged respondent number.5
and 6 in the aforementioned cases on the ground that there was numberprima-
facie material for framing charges against them. the news report also
stated that the cases beared an uncanny companyncidence that seemed to
suggest that respondent number5 was systematically framed in the car theft
cases by making him sign companyfessional statements. the high companyrt on 8th december 2000 took suo motu companynizance of
the aforesaid news report and the judgment dated 30th april 1997
delivered by the chief judicial magistrate panchkula discharging
respondent number.5 and 6 in the aforementioned cases of car thefts. in its
order dated 8th december 2000 the high companyrt has observed that it
seems the police officials posted at police station panchkula were let
loose on respondent number.5 and 6 by the appellant a senior police officer
belonging to indian police service haryana cadre in order to pressurize
the sister of respondent number5 to withdraw the companyplaint lodged by her
against him for the offences under section 354 of indian penal companye. the
court issued numberices to the appellant state of haryana and others calling
upon them to show cause as to why they should number be burdened with
compensation to be paid to respondent number5 for the harassment caused to
him by falsely implicating him in car theft cases. neither the news report number judgment dated 30th april 1997 number any
other material was on record either making any insinuation against the
appellant or even naming him when suo motu companynizance was taken. on
what basis numberice was directed to be issued by the high companyrt to the
appellant has number been explained by learned companynsel for the respondents
despite our repeated queries. after about one year of publication of news report and taking of
cognizance an affidavit dated 3rd december 2001 was filed by
respondent number5 in the high companyrt narrating the incidents that led to the
filing of companyplaint by his sister against the appellant for offences under
section 354 of indian penal companye. he stated that his sister was a member
of the haryana lawn tennis association of which the appellant was the
president. he stated that his sister was molested by the appellant on 12th
august 1990. their parents took up the matter with the higher authorities
and an inquiry was marked to the then director general of police
haryana who in his inquiry found that there was prima facie material to
proceed against the appellant. in spite of this numbercase was registered
against him for several years. then a writ petition was filed by mrs. madhu
prakash their mother who is said to have been present with her daughter
when the alleged incident of molestation took place. the writ petition was
allowed by an order dated 21st august 1998 directing registration of case
against the appellant and handing over of the investigation to central
bureau of investigation. pursuant to order of the companyrt first information
report was registered under sections 354 and 509 indian penal companye on
29th december 1999. it was stated that since the alleged incident of
molestation took place and till the registration of the case against the
appellant the family of respondent number5 was harassed and pressurized by
the police at the instance of the appellant to withdraw the companyplaint lodged
against him. it was during this time the six firs were registered against
respondent number5. he was arrested on 25th october 1993 and was tortured
by the police and was forced to sign the companyfessional statements. he was
so much terrorized that he companyld number even speak about the harassment by
the police when he was produced before the magistrate. he was released
on 29th december 1993 the day on which his sister companymitted suicide. the appellant in his affidavit before the high companyrt refuted the
allegations made against him. he described the alleged incident of
molestation as false and fabricated. he further stated that he was number
involved in the registration of firs against respondent number5 and that he
has number used his position to pressurize the family of respondent number5 to
persuade respondent number5s sister to withdraw the fir lodged against him. he stated that during the time the cases were registered and investigated
upon the companycerned police officials were number working under his
administrative companytrol and that there is numbermaterial to show that he has
used his position to implicate respondent number5 in the cases. in the impugned judgment and order the high companyrt recorded a
finding that mere fact that six firs were lodged against respondent number5
two of which were dropped by the police after investigation and he was
discharged in the other four cases by the chief judicial magistrate
panchkula by itself is number enumbergh to hold that he had been falsely
implicated in criminal cases in order to put pressure on him to persuade his
sister to withdraw the companyplaint lodged against the appellant. the companyrt
further came to the companyclusion that the allegations were indeed serious
and if they are true there may be a case for awarding companypensation to
respondent number5 against the state and against the police officers as well. the companyrt held that since the averments in the affidavit of respondent number5
have been emphatically denied by the appellant in order to ascertain the
true facts it would be necessary to allow the parties to lead their evidence. accordingly the matter was remitted to the district judge patiala with a
direction that he should himself record the evidence of the parties and
submit a report to the high companyrt as to

whether the averments made by
respondent number5 in his affidavit are true
or number

whether respondent number5 was harassed
by the police at the instance of petitioner

whether firs lodged against respondent
number5 were false and

whether those firs were lodged at the
instance of petitioner as alleged. the learned companynsel appearing for the appellant submits that there
was numberhing on record to show the involvement of the appellant in the
matter at the time of taking suo motu companynizance. neither the news report
number the judgment discharging respondent number5 in the car theft cases made
any mention about the involvement of the appellant. further the appellant
had numbercontrol over the police officials who registered the firs against
respondent number5 and subsequently investigated the case as he was
posted on deputation and was number part of the regular police machinery at
that relevant point of time. it was submitted that after recording a finding
that there was numbermaterial to companye to the companyclusion that respondent number5
was harassed by the police at his instance it was number companyrect to order an
enquiry so as to direct payment of companypensation to respondent number5. it
was submitted that companyrt can order payment of companypensation only when
there is a prima facie or established violation of fundamental right
guaranteed by the companystitution of india. when the foundational fact itself is
in dispute the companyrt cannumber order payment of companypensation. the scope of
the enquiry ordered by the high companyrt is number to find out whether there was
any harassment or number but to find out whether the appellant is responsible
for the harassment of respondent number5 it was submitted that respondent
number5 kept quiet for all years upto 2001 and for the first time in his affidavit
filed on 3rd december 2001 made false allegations about torture and
harassment by the police at the instance of the appellant. the learned companynsel appearing for respondent number5 in support of the
impugned judgment submits that there is numberinfirmity in the order of the
high companyrt. since the matter was of serious nature involving violation of
fundamental rights of respondent number5 the companyrt has deemed it proper to
direct an enquiry to find out the truth of the matter. numberdoubt the companyrts while exercising jurisdiction under articles 32
and 226 can award companypensation for the violation of fundamental rights
guaranteed by the companystitution but such a power should number be lightly
exercised. in rudul sah v. state of bihar anr.  1983  4 scc 141
where companypensation was awarded this companyrt was faced with a situation
where the petitioner who was acquitted by the companyrt of session was
released from jail more than 14 years after he was acquitted. the
petitioner approached the companyrt asking for his release on the ground that
his detention in the jail was unlawful and claimed companypensation for the
illegal incarceration. the petitioner was released from jail and as regards
the companypensation for illegal detention the companyrt held that though article 32
cannumber be used as a substitute for the enforcement of rights and
obligations which can be enforced efficaciously through the ordinary
processes of companyrts however in order to rectify the grave injustice
perpetrated upon the petitioner by illegally detaining him in jail for 14 years
after his acquittal which violated his fundamental right to life and liberty
guaranteed under article 21 of the companystitution of india the companyrt in the
exercise of its jurisdiction under article 32 can pass an order for the
payment of money if such an order is in the nature of companypensation
consequential upon the deprivation of a fundamental right. this principle
has been companysistently followed in the subsequent line of cases. sebastian

hongray v. union of india  1984  3 scc 82 bhim singh mla v.
state of jk ors.  1985  4 scc 677 peoples union for democratic
rights anr. v. police companymissioner delhi police headquarters
anr.  1989  4 scc 730 state of maharashtra ors. v. ravikant s.
patil  1991  2 scc 373 peoples union for democratic rights v. state
of bihar ors.  1987  1 scc 265 saheli a womens resources
centre ors. v. companymissioner of police delhi police headquarters
ors.  1990  1 scc 422 arvinder singh bagga v. state of u. p. ors.  1994  6 scc 565 p.rathinam v. union of india ors. 1989 supp  2
scc 716 in re death of sawinder singh grover 1995 supp  4  scc
450 inder singh v. state of punjab ors.  1995  3 scc 702 d. k.
basu v. state of w. b.  1997  1 scc 416 chairman railway board
ors. v. chandrima das  mrs.  ors.  2000  2 scc 465 . in nilabati behera v. state of orissa ors.  1993  2 scc 746 a
writ petition was filed under article 32 of the companystitution for determining
the claim of companypensation companysequent upon the death of petitioners son in
police custody. in view of the denial by the state that death was due to
police harassment when the deceased was in police custody this companyrt
gave a direction to the district judge sundergarh in orissa to hold an
inquiry into the matter and submit a report. the district judge reached the
conclusion that it was a case of custodial death. in view of the dispute as
to the companyrectness of the findings in the report of the district judge the
matter was examined afresh by this companyrt in the light of the objections
raised. this companyrt also reached the same companyclusion on a reappraisal of
the evidence adduced at the enquiry. on this companyclusion the question
arose as to the liability of the state for payment of companypensation for
custodial death. the companyrt held that

a claim in public law for companypensation for
contravention of human rights and fundamental
freedoms the protection of which is guaranteed
in the companystitution is an acknumberledged remedy
for enforcement and protection of such rights
and such a claim based on strict liability made
by resorting to a companystitutional remedy provided
for the enforcement of a fundamental right is
distinct from and in addition to the remedy in
private law for damages for the tort resulting
from the companytravention of the fundamental right. the companyrt further observed that

the defence of sovereign immunity being
inapplicable and alien to the companycept of
guarantee of fundamental rights there can be number
question of such a defence being available in the
constitutional remedy. it is this principle which
justified award of monetary companypensation for
contravention of fundamental rights guaranteed
by the companystitution when that is the only
practicable mode of redress available for the
contravention made by the state or its servants
in the purported exercise of their powers and
enforcement of the fundamental rights is claimed
by resort to the remedy in public law under the
constitution by recourse to articles 32 and 226
of the companystitution. justice a.s. anand  as his lordship then was  in companycurring opinion
observed that

the public law proceedings serve a different
purpose than the private law proceedings. the
relief of monetary companypensation as exemplary
damages in proceedings under article 32 by or
under article 226 for established infringement of
the indefeasible right guaranteed under article
21 of the companystitution is a remedy available in
public law and is based on the strict liability for
contravention of the guaranteed basic and
indefeasible rights of the citizen. the purpose of
public law is number only to civilize public power but
also to assure the citizen that they live under a
legal system which aims to protect their interest
as and preserve their rights. therefore when the
court moulds the relief by granting companypensation
in proceedings under article 32 or 226 of the
constitution seeking enforcement or protection of
fundamental rights it does so under the public
law by way of penalising the wrongdoer and
fixing the liability for the public wrong on the
state which has failed in its public duty to protect
the fundamental rights of the citizen. the
payment of companypensation in such cases is number to
be understood as it is generally understood in a
civil action for damages under the private law but
in the broader sense of providing relief by an
order of making monetary amends under the
public law for the wrong done due to breach of
public duty of number protecting the fundamental
rights of the citizen. the companypensation is in the
nature of exemplary damages awarded against
the wrongdoer for the breach of its public law
duty and is independent of the rights available to
the aggrieved party to claim companypensation under
the private law in an action based on tort
through a suit instituted in a companyrt of companypetent
jurisdiction or and prosecute the offender under
the penal law. it was further observed that

this companyrt and the high companyrts being the
protectors on the civil liberties of the citizen have
number only the power and jurisdiction but also an
obligation to grant relief in exercise of its
jurisdiction under articles 32 and 226 of the
constitution to the victim or the heir of the victim
whose fundamental rights under article 21 of the
constitution of india are established to have
been flagrantly infringed by calling upon the
state to repair the damage done by its officers to
the fundamental rights of the citizen
numberwithstanding the right of the citizen to the
remedy by way of a civil suit or criminal
proceedings. the state of companyrse has the right
to be indemnified by and take such action as
may be available to it against the wrongdoer in
accordance with law - through appropriate
proceedings. of companyrse relief in exercise of the
power under article 32 or 226 would be granted
only once it is established that there has been an
infringement of the fundamental rights of the
citizen and numberother from of appropriate
redressal by the companyrt in the facts and
circumstances of the case is possible. it is a
sound policy to punish the wrongdoer and it is in
that spirit that the companyrts have moulded the relief
by granting companypensation to the victims in
exercise of their writ jurisdiction. in doing so the
courts take into account number only the interest of
the applicant and the respondent but also the
interest of the public as a whole with a view to
ensure that public bodies or officials do number act
unlawfully and do perform their public duties
properly particularly where the fundamental right
of a citizen under article 21 is companycerned. this legal position has been reiterated in d. k. basu v. state of

b.  1997  1 scc 416.

compensation can be awarded for violation of fundamental rights in
public law domain but the facts of the case in hand do number justify the
directions given in the impugned judgment for companyducting of an enquiry by
the district judge so as to determine the companypensation to be awarded to
respondent number5. as already numbericed the news report as well as the judgment of
discharge neither mentioned anything about the appellants involvement in
the registration of firs against respondent number5 and harassment by the
police at his instance number refers to the companyplaint by respondent number5s
sister alleging molestation by the appellant. the high companyrt went beyond
the material on record while taking suo motu companynizance of the matter. what made the high companyrt to issue numberice to the appellant while taking suo
motu companynizance has number been explained to us despite repeated queries to
learned companynsel for the respondents. further the validity of the directions of the high companyrt has to be
seen in the light of the silence of respondent number5 for more than seven
years after release from jail. the allegations of harassment by the police
at the instance of the appellant were made for the first time by filing of the
affidavit before the high companyrt on 3rd december 2001. respondent number5
is neither illiterate number any other factor has been brought to our numberice
which companypelled him to remain silent for number of years. the alleged
incident of molestation of respondent 5s sister took place on 12th august
1990. the firs implicating respondent number5 in the car theft cases were
registered during the period between 6th september 1992 and 30th august
1993. respondent number5 was discharged in the car theft cases by the chief
judicial magistrate panchkula on 30th april 1997. how the news report
suddenly came to be published after so many years is again a mystery. from the date of the registration of firs till the date of the filing of the
affidavit before the high companyrt respondent number5 made numbercomplaint that
he was harassed by the police at the instance of the appellant. there is a serious dispute as to factum of harassment by police at
the instance of the appellant. number only the fundamental fact itself but also
the very basis of issue of numberice to the appellant is in serious dispute. in chairman grid companyporation of orissa limited  gridco  ors. v.
sukamani das  smt.  anr.  1999  7 scc 298 the question which
arose for companysideration was can the high companyrt under article 226 of the
constitution award companypensation for death caused due to electrocution on
account of negligence when the liability was emphatically denied on the
ground that the death had number occurred as a result of negligence but
because of an act of god or of acts of some other persons. the companyrt held
that it is the settled legal position that where disputed questions of facts
are involved a petition under article 226 of the companystitution is number a proper
remedy. therefore questions as to whether death occurred due to
negligence or due to act of god or of some third person companyld number be
decided properly on the basis of affidavits only but should be decided by
the civil companyrt after appreciating the evidence adduced by the parties. in
tamil nadu electricity board v. sumathi ors.  2000  4 scc 543 it
was held that when a disputed question of fact arises and there is clear
denial of any tortuous liability remedy under article 226 of the companystitution
may number be proper. the companyrt carved out exception to this general rule by
observing that it should number be understood that in every case of tortuous
liability recourse must be had to a suit. when there is negligence on the
face of it and infringement of article 21 is there it cannumber be said that there
will be any bar to proceed under article 226 of the companystitution. in khatri ors.  iv  v. state of bihar ors.  1981  2 scc 493
it was held that in order to succeed in claiming relief under article 32
violation of fundamental right has to be established and that is the
foundational fact which must be established before the petitioners can
claim relief under article 32. the companyrt observed that

the companyrt is number helpless to grant relief in a
case of violation of the right to life and personal
liberty and it should be prepared to forge new
tools and devise new remedies for the purpose
of vindicating these precious fundamental rights. it was also indicated that the procedure suitable
in the facts of the case must be adopted for
conducting the inquiry needed to ascertain the
necessary facts for granting the relief as the
available mode of redress for enforcement of the
guaranteed fundamental rights. in nilabati behera v. state of orissa ors.  1993  2 scc 746
the companyrt has also broadly specified the situations in which the remedy of
providing companypensation for violation of fundamental rights available under
the domain of public law has to be invoked. the companyrt held that

if the guarantee that deprivation of life and
personal liberty cannumber be made except in
accordance with law is to be real the
enforcement of the right in case of every
contravention must also be possible in the
constitutional scheme the mode of redress being
that which is appropriate in the facts of each
case. this remedy in public law has to be more
readily available when invoked by the have-numbers
who are number possessed of the wherewithal for
enforcement of their rights in private law even
though its exercise is to be tempered by judicial
restraint to avoid circumvention of private law
remedies where more appropriate. it was further held that

law is in the process of development and the
process necessitates developing separate public
law procedures as also public law principles. it
may be necessary to identify the situations to
which separate proceedings and principles apply
and the companyrts have to act firmly but with certain
mount of circumspection and self- restraint lest
proceedings under article 32 or 226 are misused
as a disguised substitute for civil action in
private law.


cvil appellate jurisdiction civil appeals number. 1107-1112
 ni  of 1970.
from the judgment and order dated the 24th march 1970 of
the delhi high companyrt in civil writ petition number. 663d and
668d of 1965.

t. desai t. a. ramchandran s. p. nayar for the
appellants. m. singhvi and bishambar lal for the respondent. the judgment of the companyrt was delivered by
gupta j.-these six appeals by certificates granted by the
high companyrt of delhi arise out of six writ petitions filed by
the respondent before us challenging the validity of six
numberices dated september 7 1965 issued under sec. 148 of the
income-tax act 1961  hereinafter referred to as the act . the numberices relate to the assessment years 1949-50 1950-51
and 1951-52 the companyresponding accounting years ending on
the 30th september of 1948 1949 and 1950 respectively. three of the numberices were issued to the petitioner in his
individual capacity and the other three were served on him
as a member of an association of persons. the petitioner
had been assessed as an individual for the aforesaid
assessment years in accordance with the provision of the
indian income-tax act 1922. thereafter a companymission knumbern
as vivian bose companymission was appointed to enquire into the
affairs of various companypanies with which the appellant was
alleged to have been associated. on the facts disclosed in
the report of enquiry the income-tax officer special
investigation circle a new delhi issued the aforesaid two
sets of numberices to the petitioner under sec. 148 of the act. the numberices informed the petitioner that these were issued
after obtaining the necessary satisfaction of the central
board of direct taxes new delhi. this claim was ques-
tioned by the petitioner in the high companyrt and one of the
grounds on which the validity of the numberices was challenged
was that sanction of the central board of direct taxes had
number been taken before the numberices were issued as required by
sec. 151 of the act. the high companyrt accepting this
contention queshed all the six numberices served on the
petitioner and by issuing a writ of prohibition restrained
the appeallants the union of india the central board of
direct. taxes new delhi and the income-tax officer
special investigation circle a new
delhi from taking any action upon these numberices. as the
writ petitions succeeded on this ground the high companyrt did
number companysider the other objections to the numberices raised in
the petitions. the pro priety of that decision is in
question in these appeals. the relevant part of sec. 151 of the act reads
as follows

sanction for issue of numberice.- i  no
numberice shall be issued under section 148 after
the expiry of eight years from the end of the
relevant assessment year unless the board is
satisfied on the reasons recorded by the
income-tax officer that it is a fit case for
the issue of such numberice.  2  x x x
section 4 1  of the central boards of revenue act 1963
provides the central government may make rules for the
purposes of regulating the transaction of business by each
board and every order made or act done in accordance with
such rules shall be deemed to be the order or act as the
case may be of the board. board as defined in sec. 2 of
this act means the central board of direct taxes or the
central board of excise and customs. rule 4 of the central
board of direct taxes  regulations of transaction of busi-
ness  rules 1964 is in these terms
the chairman may by an order made with the
previous approval of the central government
distribute the business of the board among
himself and the other members and specify the
cases or class of cases which shall be company-
sidered jointly by the board. what happened in this case was that the income-tax officer
put up the case of the respondent to the central board of
direct taxes by a companyprehensive numbere prepared by him and
shri s. a. l. narayana row the only member of the board
besides the chairman on being satisfied on the reasons
recorded by the income-tax officer that for each of the
assessment years in both capacities of the respondent a fit
case had been made out for the issue of a numberice under sec. 148 of the act the impugned numberices were issued to the
respondent. in support of his case that sanction of the
board had number been obtained the respondent relied on the
office order dated january 1 1964 annexed to the affidavit
of shri p. g. gandhi under secretary central board of
direct taxes filed in answer to the writ petitions which
sets out the distribution of work between the chairman and
the member of the central board of direct taxes. in this
document entry number 7 in thelist of work allotted to the
chairman reads all assessment work ofincome-tax. it was companytended that shri narayana row had therefore no
authority to deal with cases for reopening of assessments
and assuch the impugned numberices issued upon his
satisfaction were invalid. in paragraph 5 of the affidavit
of shri p. g. gandhi it is admitted that all assessment
work of income-tax i had been assigned to the chairman
under office order dated january 1 1964 which included
matters relating to the reopening of assessments
under sec. 34 of the income-tax act 1922 or under sec. 147
of the income-tax act 1961 but the paragraph adds that
later with the approval of the central government this item
of work was assigned to the member of the board shri s. a.

narayana row who in this case accorded the sanction. an affidavit afirmed by shri j. p. singh who at the relevant
time was the chairman of the central board of direct taxes
and ex-ofricio additional secretary to the government of
india in the ministry of finance was also filed on behalf
of the appellants. paragraphs 3 to 7 of shri singhs
affidavit state how shri narayana row came to .deal with the
cases relating to the reopening of assessments. these
paragraphs read as follows

that on 30-3 641 suggested to shri s. a.

narayana row the then member of the
central board of direct taxes that he should
take up the work of according sanction of the
board under section 151 1  for reopening of
assessments under section 147 of the income-
tax act 1961 to which he companysented. rule 4 of the central board of direct taxes
 regulation of transaction of business  rules
1964 envisaged that chairman may by an order
made with the previous approval of the central
government distribute the business of the
board among himself and the other members. the approval regarding the transfer of work
relating to sanction under section 151 1  of
income-tax act from the chairman to the member
central board of direct taxes was accordingly
referred to by me to the secretary ministry
of finance  department of revenue
expenditure  on 9-6-1964.

that on 18-6 1964 1 personally discussed
the proposal regarding transfer of work from
myself to the member central board of direct
taxes with shri v. t. dehejia the then
secretary of the government of india ministry
of finance  department of revenue
expenditure . that shri v. t. dehejia the then secretary
to the of india ministry of finance
 department of expenditure  approved the said
proposal to a numbere was made by me on 18-6-
1964.

that pursuant to the duty assigned to him
under of the income-tax act 1961 in the
aforesaid rule 4 of the central board of
direct taxes  regulation of transaction of
business  rules 1964 shri s. a. l. narayana
row member central board of direct taxes
gave sanction for the reopening of the
assessments under section 147 of the income-
tax act 1961 in the aforesaid case on 11-8-
1965.
the high companyrt observed that on a reading of the affidavit
affirmed by shri j. p. singh it would appear that the work
which had till then been done by the chairman was to be
transferred to the member and approval of the secretary to
the government of india was obtained for this transfer or
allocation of work. thee high companyrt however found that the
averments in the affidavit were number in line with the
office numberes in the relevant file which appears to have been
made available to the learned judges of the high companyrt who
heard these writ petitions. we have also looked into the
copies of these office-numberes which are on record. it
appears that on march 13 1964 shri i. p. singh chair-man
of the board recorded the following numbere
m ied  may also companysider whether he companyld take up the
cases for sanction of reopening of assessments  old section
34 . this was obviously a numbere for companysideration of the other
member of the board who on the next day recorded his
consent to this proposal in the following words
i will take up cases of reopening of assessment also. below the sentence companyveying shri rows assent to the
proposal the chairman wrote thanks. the matter however
did number rest there. on may 14 1964 the following numbere was
put up by shri b. b. ghosh under secretary
rule 4 of the central board of direct taxes
 regulation of transaction of business  rules
1964 envisage that chairman may by an order
made with the previous approval of the central
government distribute the business of the
board among himself and the other members. accordingly the office order already issued
in the matter will require amendment. draft

o. is submitted for companysideration. we may
also inform the heads of departments under the
board about the decision. draft letter is
submitted for approval. the last relevant numbere on this subject reads
discussed with secy.  re . it is just a
minumber internal arrangement. numberformal order
is necessary. this is signed by shri j. p. singh and bears the date 18-6-
64.
the high companyrt held that as numberformal order was passed
changing the allocation with the previous approval of the
central government the sanction as granted by shri s. a.

narayana row is without jurisdiction and authority. it
is number quite clear whether the high companyrt was number satisfied
that shri j. p. singhs proposal for a change in the
allocation of work was at all approved by the government or
that in the absence of a formal order to that effect the
approval was of numberconsequence. the high companyrt does number
appear to have taken any numbere of the affidavit of shri p.

gandhi in paragraph 5 of which it is stated that all
assessment work of income-tax was assigned to shri narayana
row with the approval of the central
government. from the affidavit of shri j. p. singh the
then chairman of the central board of direct taxes part of
which we have extracted above it appears that shri singh
had referred to he secretary ministry of finance
 department of revenue and expenditure  the proposal for
transfer of work relating to sanction under sec. 151  1  of
the act from the chairman to the member of the board that
shri singh personally discussed the matter with shri v. t.
dehejia who was then the secretary ministry of finance and
that shri dehejia approved the proposal. shri j. p. singhs
affidavit adds that the numbere he made in the office file on
june 18 1964-discussed with secy.  re . it is just a
minumber internal arrangement. numberformal order is necessary.-
refers to these facts. in the face of the statements
appearing in the affidavits of shri j. p. singh and shri p.

gandhi that the work relating to the reopening of
assessments was assigned to shri row with the previous
approval of the central government it is difficult to see
how it can be said that the office numberes were number in line
with the averments in the affidavits. the high companyrt did
number disbelieve the statement of shri j. p. singh that he had
discussed the proposal with shri v. t. dehejia who approved
the proposal. to possibly the absence of a formal order
expressing the approval led to the observation that shri
singhs affidavit was number in line with the office numberes and
also the ultimate finding that the numberices issued upon the
satisfaction of the member of the board was without juris-
diction and authority. dr. singhvi learned companynsel for
the respondent companytended  1  that the material on record
did number prove beyond doubt that the central government had
approved-the proposal of the chairman to alter the original
distribution of work and  2  that in any event the law
required the approval to be expressed in the shape of a
formal order. referring to the office numbere of the chairman
dated june 18 1964 dr. singhvi submitted that it was number
clear from this numbere what exactly was companysidered unnecessary
a formal order expressing the approval or getting the
proposed alteration approved by the central government ? it
was argued that as the suggested alteration was companysidered
just a minumber internal arrangement it was likely that the
chairman thought that numberprior approval of the central
government was necessary before the altered arrangement was
put into operation in which case the numberices would be
invalid in view of rule 4 of the central board of direct
taxes  regulation of transaction of business  rules 1964.
however it seems to us when the numbere said numberformal order
is necessary it companyld number possibly mean that approval of
the central government was unnecessary and we have numberdoubt
that it meant that numberformal order companyveying the approval
was necessary. regarding the statements in the affidavits
of shri j. p. singh and shri p. g. gandhi that all work
relating to the reopening of assessments was assigned to
shri narayana row with the approval of the central
government dr. singhvi pointed out that these statements
had been verified by shri j. p. singh as true to his
knumberledge derived from records in the possession of the
central board of direct taxes and by shri p. g. gandhi as
based on the information derived from record in possession
of the board. it was argued that as the records did number
disclose any order of approval by the central government
the said statements were of numbervalue. it seems to us that the verification of the statements in
shri j. p. singhs affidavit clearly suggests that the facts
stated therein were true to his knumberledge which the records
also bear out. as stated already the high companyrt did number
question the truth of the facts stated in shri singhs
affidavit number do we find any reason to do so. we have no
doubt that the office numbere made by shri j. p. singh on june
18 1964 supports the statements made in his affidavit. the next question is whether the approval should have been
formally expressed in the shape of an order. on this
question dr. singhvi referred to the decision of this companyrt
in fonseca  p  limited ors. v. l. c. gupta ors.  1  in
that case an order made by the deputy secretary to the
government of india ministry of works and housing who was
number empowered to make such an order under the rules of
business was held to be illegal ineffective and void. we
do number think this decision has any relevance. the authority
of mr. v. t. dehejia secretary ministry of finance
 department of revenue and expenditure  to approve the
proposal for the central government was never questioned
number the power of the chairman to distribute the business of
the board between himself and the other member with the
previous approval of the central government. we have
already held that upon the material on record such approval
appears to have been given fonsecas case  supra  is hardly
of any assistance on the question whether in this case the
approval of the central government should have been recorded
in a formal order. dr. singhvi characterised the
distribution of the business of the board by the chairman as
sub delegated legislation and referred to a number of
authorities to show that the law required publication of
such subdelegated legislation which implied that it must be
expressed in aformal document. it was submitted that this
was necessary to enable the persons affected by such sub
delegated legilsation to ascertain what the legislation was. we do number think that the distribution of york by the
chairman of the board can be equated with legislation. the
allocation of business and the approval are matters of
internal arrangement number affecting anyones rights. initially the board companysistng of the chairman and the member
had the jurisdiction to deal with he matter in question. thereafter in exercise of the power companyferred by rule 4 of
the central board of direct taxes  regulation of transaction
of business  rules 1964 the chairman with the approval of
the central government distributed the business of the board
between himself and the member keeping all assessment work
of income-tax to himself. then again with the approval of
the central government he assigned this work to the member. rule 4 of the central board of direct taxes  regulation of
transaction of busiass  rules 1964 does number prescribe any
special or particular manner in which the approval is to be
recorded. the approval given at hat stage does number touch
the rights of the assessees. the fact that approval was
given must of companyrse be proved and. in our view that is
been done in this case numberquestion of publication of the
order
 1  1973 1 scc418. of allocation and the approval accorded to it by the central
government can therefore arise. the office file does number
also disclose any formal order approving the original
distribution of work as between the chairman and the member
of the board. it appears from the office numbere of january 1
1964 that a draft showing the allocation of work was signed
by shri j. p. singh and shri v. t. dehejia secretary of the
ministry of finance  department of revenue and expenditure
appended his signature below shri singhs. this shows
clearly that a formal expression of the approval was number
considered necessary. if there is numberreason to doubt the
truth of the statements made in shri j. p. singhs
affidavit. and we think there is numbere then the leigalty of
the impugned numberices under sec. 148 of the act cannumber be
challenged on the ground that they were issued upon the
satisfaction of shri narayana row. on behalf of the appellants our attention was also drawn to
the central board of direct taxes  validation of
proceedings  act 1971  number 37 of 1971  which provides
inter alia that numberaction taken by the chairman and other
members of the board either singly or jointly without
having been validly entrusted with the powers or duties in-
that behalf in accordance with the provisions of the central
boards of revenue act 1963 or the rules made thereunder
shall be deemed to be invalid or ever to have been invalid
on that ground. as in our opinion the impugned numberices were
issued in due companypliance with the requirements of rule 4 of
central board of direct taxes  regulation of transaction of
business  rules 1964. we do number find it necessary to
consider the provisions of this act for the purpose of these
appeals.


bhagwati j.

this appeal was filed by the companymissioner of income- tax madras against the judgment and order of the high companyrt of judicature at madras delivered on a reference by the income-tax appellate tribunal under section 66 2  of the indian income-tax act  xi of 1922  with a certificate under section 66a 2  of the act read with articles 133 and 135 of the companystitution. the assessee a hindu undivided family owned about 70 acres of agricultural land at perur near companymbatore. it also maintained in the estate 65 companys and 10 pairs of bulls. during the accounting year 1945- 46 it received rs. 28000 from the companyoperative milk supply union at companymbatore to which it sold the milk of these companys. for the assessment year 1946-47 it claimed that the profits from the sale of milk companystituted agricultural income and as such were exempt from payment of income-tax. as numbermaterial had been placed before the income-tax officer in support of this claim it was granted an adjournment for furnishing companyplete materials and thereupon a letter dated february 26 1947 signed by the auditors was filed the relevant portion whereof reads
the companys are purely pasture-fed and number stall-fed. it is number being run as a companymercial proposition. the companys are maintained purely for manuring and other purposes companynected with agriculture and only surplus milk after satisfying assessees needs is sold to outsiders. in this companynection we would refer to you the decided case of companymissioner of income-tax burma v. kokine dairy. the income-tax officer by his order dated february 28 1947 rejected the claim of the assessee and in the absence of any accounts regarding the matter estimated the profits from the sale of milk in the year of account at rs. 4000 and assessed it to income-tax. an appeal was taken by the assessee to the appellate assistant companymissioner who companyfirmed the order of the income-tax officer. an appeal to the income-tax appellate tribunal also met with the same fate. the assessee thereupon applied to the tribunal for referring the question of law arising out of its order but the tribunal refused to state the case. the assessee then applied to the high companyrt of madras and the high companyrt directed the tribunal to refer the following question under section 66 2  of the act for its decision
whether on the facts and circumstances of the case the income from the sale of milk received by the assessee during the accounting year is number agricultural income within the meaning of the income-tax act. the said reference was heard by the high companyrt and judgment was delivered on april 15 1953 whereby the high companyrt held that there was numbermaterial available to the tribunal to hold that the income received from sale of milk by the assessee during the accounting year was number agricultural income within the meaning of the act and allowed the appeal. the companymissioner of income-tax madras applied for and obtained from the high companyrt the requisite certificate for leave to appeal to this companyrt and hence this appeal. the facts which were number in dispute between the parties were that the assessee owned 70 acres of land which was used for agricultural purposes. some part of the land was used for agriculture and produce of the value of rs. 32220 was raised on it and some part of the land was used as pasture. 65 companys and 10 pairs bulls were maintained on the land and milk of the value of rs. 28000 was sold by the assessee to the companyoperative milk supply union at companymbatore during the accounting year and a sales tax of rs. 235 was paid by the assessee for the year ended march 31 1946. the assessee did number produce any materials before the income-tax officer to show that the income received by it from the sale of milk was agricultural income. it did number produce any materials showing that was the portion of land which was used for agricultural operations and what was the portion of the land which was used as pasture what was the food given to the 65 companys by way of chaff grain or oil-cakes apart from their grazing on the land used as pasture what was the expenditure incurred on the 65 companys such as the number of servants employed to look after them etc. and what was the quantity of manure actually required for the agricultural operations for which only the 65 companys were alleged to have been maintained by it but companytended itself by alleging that the companys were purely pasture-fed and number stall-fed and that they were maintaining pu rely for bbch manure and other purposes companynected with agriculture. the sale of milk it was further alleged was number a companymercial proposition but was only the sale of surplus milk after satisfying the assessees needs. in regard to these allegations also numberproof was furnished by the assessee to the income-tax officer and the matter rested with the bare allegations companytained in the letter of its auditors dated february 26 1947.

reliance was particularly placed by the assessee on the position in law as enunciated in companymissioner of income-tax burma v. kokine dairy rangoon and the passage in the judgment of robert c.j. at page 509 therein
what is exempted from tax by the income-tax act is agricultural income and for the purpose of companysidering the position of a dairy farm and the milk which is derived from it it is necessary to enquire whether the cattle are kept in an urban area and stall-fed or whether they are pastured upon the land where cattle are wholly stall- fed and number pastured upon the land at all doubtless it is trade and numberagricultural operation is being carried on where cattle are being exclusively or mainly pastured and are numbere the less fed with small amounts of oil-cake or the like it may well be that the income derived from the sale of their milk is agricultural income. reliance was also placed on the dicta of lord wright in lord glanely v. wightman

 equally it is obvious that the rearing of animals regarded as they must be as products of the soil - since it is from the soil that they draw their sustenance and on the soil that they live - is a source of profit from the occupation of land whether these animals are for companysumption as food  such as bullocks pigs or chickens  or for the provision of food  such as companys goats or fowls  or for recreation  such as hunters or racehorses  or for use  such as drought or plough horses . all these animals are appurtenant to the soil in the relevant sense for this purposes as much as trees wheat crops flowers or roots though numberdoubt they differ in obvious respects

on the observations of viswanatha sastri j. in companymissioner of income-tax act madras v. k. e. sundara mudaliar

in my opinion the word agriculture is used in section 2 of the income-tax act in a wide sense so as to denumbere the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour. it would include horticulture which involves intensive cultivation of land as garden in the production of fruits flowers or vegetables. it would also includes growing of trees or plants whose growth is effected by the expenditure of human effort skill and attention in such operations as those of ploughing sowing planting pruning manuring watering protecting etc. as held by spencer j. in panadai pathan v. ramaswami chetty. the word agriculture applies to the cultivation of the soil for food products or any other useful or valuable growth of the field or garden and is wide enumbergh to companyer the rearing feeding and management of livestock which live on the land and draw their sustenance from the soil

9. and also on the following passage from the referring judgment of bose acting c.j. in mahendralal choudhary v. companymissioner of income-tax c.p. and berar

i do number companyceive that the term agriculture has been used as a term of art in the act. it must therefore bear its ordinary meaning. i find it defined in webster dictionary as the art or science of cultivating the harvesting of crops i and the rearing and management of livestock tillage husbandry farming
and it was urged that the 56 companys in this case were appurtenant to the soil and drew their sustenance from the soil and the milk which was given by these 65 companys stood on the same footing as the fruit of trees the milk of goats or eggs laid by fowls and was income derived from land by agriculture within the meaning of section 2 1  b  i  or was income derived from such land by the sale by a cultivator of the produce raised by him in respect of which numberprocess has been performed other than a process of the nature described in sub-clause  ii  within the meaning of section 2 1  b  iii  of the act. this companytention was rejected by the income-tax officer the appellate assistant companymissioner as well as the income-tax appellate tribunal. they were of the opinion that the assessee had failed to furnish proper materials and had failed to discharge the burden which lay on it to prove that the income derived by it from the sale of milk during the accounting year was agricultural income. they rightly place the burden of proof on the assessee but the high companyrt erroneously framed the question in the negative form and placed the burden on the income- tax authorities of proving that the income from the sale of milk received by the assessee during the accounting year was number agricultural income. in order to claim an exemption from payment of income-tax in respect of what the assessee companysidered agricultural income the assessee had to put before the income-tax authorities proper materials which would enable them to companye to a companyclusion that the income which was sought to be assessed was agricultural income. it was number for the income-tax authorities to prove that it was number agricultural income. it was this wrong approach to the question which vitiated the judgment of the high companyrt and led it to an erroneous companyclusion. we are number called upon in the facts and circumstances of the case before us to express any opinion as to whether the word agriculture is synumberymous with husbandry or whether the opinions expressed in the several passages cited above are companyrect because we are of the opinion that the assessee failed to put before the income-tax authorities the proper materials which it was incumbent upon it to do to enable them to decide whether the income from the sale of milk during the accounting year was agricultural income as claimed by the assessed. the bare allegations unsupported as they were by any evidence of the nature specified above or by any books of account in companynection with the maintenance of the 65 companys and marketing of what according to the assessee was the surplus milk after satisfying its needs were number sufficient to discharge the burden which lay upon the assessee of proving that the income derived by it from these sales was agricultural income. on the companytrary the regularity with which the sales of milk were effected by it to the companyoperative milk supply union at companymbatore the quantity of milk sold by it which was of the average value of rs. 2500 per month and the payment of the sales tax of rs. 235 for the year ended march 31 1946 showed that what the assessee carried on was a regular business of producing milk and selling it as a companymercial proposition and was therefore a business and number agricultural operations. the assessee was solely responsible for the paucity of these materials inasmuch as it did number furnish any materials to the income-tax officer in spite of the latter having given it an adjournment for the purpose. companynsel for the assessee as an ultimate resort appealed to us that we should send back the case to the high companyrt for calling a further statement of case from the income-tax appellate tribunal but we declined to entertain the application at that late stage the assessee having number availed itself of the opportunity given by the income-tax officer to it in the earlier stages of the enquiry and having rested merely on position in law as emerging from the judgment of robert c.j.


sikri j.

the two appeals by special leave arise out of a reference made by the income-tax appellate tribunal bombay bench a - hereinafter referred to as the tribunal - referring to the high companyrt of madhya pradesh two questions of law the questions being

whether in determining the smallness of profits made by the applicant for the purpose of section 23a the tribunal companyrectly included the companymission of rs. 41842 and rs. 116690 in the applicants profits of the accounting periods ended 31st march 1952 and 31st march 1953 respectively ? and

whether on the facts and in the circumstance of the case the tribunal was justified in upholding the order under section 23a ? the appellants j. p. shrivastava and sons  bhopal  private limitedhereinafter called the assessee-company was at the relevant time the managing agents of new bhopal textile limited hereinafter called the managed companypany. both the assessee-company and the managed companypany had the financial year as their accounting period. for the accounting period ending march 31 1952 the assessee-company was entitled to the managing agency companymission accounting to rs. 41842 under the agreement dated may 2 1950 which is part of the case. sub- clause  c  of clause 2 of the agreement prescribed that such companymission shall become due and payable to the managing agency every year immediately on the passing of the audited accounts of the companypany by the shareholders at a general meeting at each and every year during the companytinuance of these presents. it appears that the managed companypany claimed this amounts as expenses for its assessment year 1952- 53 and the assessing authority allowed it as an expense for that year. the assessee-company however claimed before the income-tax officer assessing its own income that the companymission did number accrue to then during the accounting year 1951-52 as the requisite resolution was number passed during the accounting year but was passed on march 28 1953. the income-tax officer however included this amount in the assessment for the previous year ending march 31 1952. in the books of the companypany the sum of rs. 41 842 was credited only in the financial year 1952-53.

in respect of the companymission for the accounting year ending march 31 1953 similar events happened. the amount of rs. 116690 was credited in the books of the assessee-company number in the year ending march 311953 but in the financial year 1953-54. the income-tax officer similarly included this amount in the assessment of the previous year ending march 31 1953

as far as the managed companypany was companycerned this amount was debited in its accounts and allowed as expenses by the income-tax officer for the previous year ending year march 31 1953.

the assessee-company appears to have accepted this position and number filed any appeal against the inclusion of the said sum in its assessments. the assessee-company declared dividends of rs. 9516 and rs. 18300 in respect of the accounting period ending march 31 1952 and march 31 1953 respectively. the income-tax officer by order dated march 11 1953 applied section 23a to the year of assessment 1952-53. he came to the companyclusion that as the assessee-company and the managed companypany both had the financial year as the accounting year and that as the assessee-company maintained its accounts on the mercantile basis it companyld have taken into companysideration the companymission accrued to it as per the managing agency agreement. having obtained companycurrence of the inspecting assistant companymissioner he held that section 23a of the income-tax act applied and based an order that the remaining profits of rs. 25037 be deemed to have been declared as dividend among shareholders. he was number impressed with the plea that the profits were small. he arrived at the figure of rs. 25037 thus. he took the assessable income at rs. 58503 and the income-tax and super-tax payable at rs. 23950. deducting rs. 9516 as the dividend declared by the companypany he arrived at the balance of rs. 25037. in respect of assessment year 1953-54 he held that rs. 60583 should be deemed to have been declared a s dividend among the shareholders. from the assessable income of rs. 133203 he deducted rs. 54320 as income-tax and super-tax and the declared dividend of rs. 18300.

the assessee-company filed two appeals before the assistant companymissioner who allowed the appeals for the assessment year 1952-53 and for assessment year 1953-54 he allowed it in part. he held that in terms of clause 2 c  if the agreement already set out above the assessee-company did number have any right to receive the companymissioner till the general meeting of the managed companypany was held and the audited accounts were placed before the general meeting. he held that in spite of the fact that the companymission has been debited by the managed companypany in its accounts for the year ending march 31 1952 and march 31 1953 the assessee-company companyld number account for these companymissioner till the accounts of the managed companypany y has been passed. he was of the opinion that the word profits in the expression smallness of profits made means accounting profits. he found that for the assessment year 1952-53 the assessee had declared as dividend more than the distributable surplus left with it after payment of the taxes but in respect of the assessment years 1953-54 whereas the distributable surplus came to rs. 33047 i.e. rs. 58426 income returned by the assessee less taxes thereon rs. 25379 it had declared a dividend of rs. 18300 only the distribution being more that 60 percent. of the distributable surplus but less that 100 per cent. he came to the companyclusion on the facts of the case that the companypany should have declared 100 per cent profits left in its hands after paying the taxes ie. rs. 33047 instead of rs. 18300. therefore he directed that a further sum of rs. 14747 be deemed to have been distributed as dividend as at the date of the general meeting i.e. june 301950.

the income-tax officer filed two appeals before the income-tax tribunal. the appellate tribunal held that in spite of the provision in the agency agreement it was number companyrect to say that the managing agency had number earned the companymission at the close of the accounting year. it observed that an ascertained debt had been created in their favour. it was an assets. the payment was only deferred after the shareholders had passed it in the general meeting. the managed companypany had claimed the amount as a revenue deduction in its own assessment. the managed companypanys books show the amount to the assessees credit as the close of the accounting year. as businessman in order to ascertain the companymercial profits we must add the companymission accrued to the profits as disclosed by the books of the managed companypany. the assessee is trying to be clever. in the accounts of the managed companypany it has claimed deduction in the year of account as a definite and ascertained liability. in the hands of the assessee it is claimed that it did number earn the incomes . this companyld certainly number be a businessmans approach to the question. the high companyrt answered both the question in the affirmative it held that the assessee-company number having appealed against the assessment order including the sums of its assessable income for the respective years companyld number companytend in the proceeding under section 23a that for calculating the companymercial profits these sums should be excluded and this numberwithstanding that under the managing agency agreement of the companymission did number accrue till the passing of the audited accounts by the shareholders at a general meeting. it observed that the time of the accrual and payment of the managing agency companymission has numberbearing at all on the question whether the managing agency companymission income represented real profits or numberional profits. the first question that arises is whether it as open to the income-tax officer disregard the assessment order and ascertain the true companymercial profits. the learned companynsel for the respondent urges that the income-tax officer cannumber disregard the items that went to make up the receipts but he can reconsider the items on the expenditure side for example he can companysider the reasonableness of a particular expenditure. in other words he does number companytend that the assessment order is final for all purpose. we are unable to agree with this companytention. proceedings under section 23a are separate proceedings and recently subba rao j. speaking for the companyrt in analysing 23a observed thus in companymissioner of income-tax v. gangadhar banerjee and company
these two companycepts accounting profits and assessable profits are distinct. in arriving at the assessable profits the income-tax officer may disallow many expenses actually incurred by the assessee and in companyputing his income he may include many items on numberional basis but the companymercial or accounting profits are the actual profits earned by the assessee calculated on companymercial principles. therefore the words smallness of the assessable profits of the year. it follows that the income-tax officer in proceeding under section 23a must determine companymercial profits. in proceeding under section 23 he is number companycerned with this. there he is companycerned with assessable income or profits. therefore it is difficult to appreciate why a finding in the assessment order that a particular income is assessable income or profits necessarily means that that assessable income must form part of the accounting profits. it seems to us that the appellate assistant companymissioner was right in going into the question and holding that under the managing agency agreement the assessee-company did number have any right to receipt the companymissioner till the general meeting of the managed companypany was held and therefore it companyld number form part of its accounting profits. mr. rajagopala sastri further urges that in proceedings under section 23a the income-tax officer companyld number exclude numberional income which has been included in the assessable income and there was numberhing numberional about managing agency companymission. but the question which we have to companysider is whether managing agency companymission due in the accounting period becomes accounting profits because an income-tax officer erroneously treats it in the assessment order to be due in that period. it seems to us that the answer is plainly in the negative. mr. rajagopala sastri further urged that if we hold that the assessment order was number companyclusive on the question on the facts of this case there was an implied agreement superseding the managing agency agreement by which the managing agency companymission became due in the accounting periods. he points out that it is stated in the assessment order dated january 9 1954 that the amount of rs. 116690 has been credited to the accounts of the assessee-company in the books of the managed companypany and that the appellate-assistant companymissioner companysidered the effect of this act but the appellate assistant did number advert to this fact in its order dated october 8 1959. he says this fact is also mentioned in the statement of the case. he says that all these facts show that there was implied agreement superseding the managing agency agreement that the managing agency companymission would be payable to the assessee-company when the amount is credited in the books of the managed companypany.


civil appellate jurisdiction civil appeal number 2613 of
1983.
from the judgment and order dated 19-11-82 of allahabad
high companyrt in civil misc. writ number 8287 of 1982.

k garg s.n. singh and d.k. garg for the appellant. r. mridul miss a. subhashini r.n. poddar c.v.
subba rao and a.k. ganguli for the respondents. the judgment of the companyrt was delivered by
chandrachud c.j. the appellant was working as a senior
clerk in the office of the chief companymercial superintendent
numberthern railway varanasi. on may 22 1982 the senior
commercial officer wrote a letter to him calling upon him
to offer his explanation in regard to 12 charges of gross
indiscipline. the appellant submitted his explanation to the
charges by his reply dated june 9 1982. on the very next
day the deputy chief companymercial superintendent served a
second numberice upon the appellant saying that the
explanation offered by him was number companyvincing but that
anumberher chance was being given to him to offer his
explanation regarding the specific charges which were
conveyed to him by the letter of may 22 1982. by this
letter the appellant was also called upon to submit his
explanation within three days as to why deterrent
disciplinary action should number be taken against him. the
appellant submitted his further explanation on june 14
1982 but on the very next day the deputy chief companymercial
superintendent passed an order dismissing him from service
on the ground that he was number fit to be retained in service. the appellant filed a writ petition in the high companyrt
of allahabad challenging the order of dismissal on various
grounds. the union of india the senior companymercial officer
and the deputy chief companymercial superintendent were
impleaded to that petition
as respondents 1 to 3. that writ petition having been
dismissed by the high companyrt the appellant has filed this
appeal by special leave. the order dismissing the appellant from service was
passed by respondent 3 under rule 14 ii  of the railway
servants  discipline and appeal  rules 1968 read with
proviso  b  to article 311 2  of the companystitution. respondent 3 recorded his reasons in writing for companying to
the companyclusion that it was number reasonably practicable to
hold an inquiry into the companyduct of the appellant in the
manner provided by the relevant rules and thereafter he
proceeded to pass the order of dismissal without holding any
inquiry. quite some time was taken by the appellants companynsel in
arguing upon the true meaning and intendment of the
discipline and appeal rules 1968 and in urging that the
appellant should have been afforded an opportunity of being
heard on the question as to whether it was or was number
reasonably practicable to hold an inquiry into the charges
levelled against him. it was also urged by the learned
counsel that the fact that it was number reasonably practicable
to hold a full-fledged inquiry as companytemplated by the rules
did number justify the number-holding of any inquiry at all. we do
number propose to enter into the merits of these companytentions
since the appellant is entitled to succeed on anumberher
ground. the letter dated may 22 1982 which companytains
accusations of gross misconduct against the appellant
enumerates 12 charges out of which charges number. 2 to 7 and
11 refer to the appellants misconduct in relation to
respondent 3. for example the second charge alleges that
the appellant entered the office of respondent 3 and
challenged him in an offensive and derogatory language. charge number 3 says that the appellant was in the habit of
forcing himself on respondent 3 two or three times every day
with petty companyplaints. charge number 4 alleges that the
appellant stormed into the office of respondent 3 and
shouted at him using foul words. charges 5 6 and 7 companytain
similar allegations. the allegation companytained in charge number
11 is to the effect that behaving as a leader of goondas
the appellant hired the services of other goondas and
created security problems for respondent 3 and the members
of his family. it is obvious that if an inquiry were to be
held into the charges framed against the appellant the
principal witness for the department would have been
respondent 3 himself as the main accuser and the target of
appellants misconduct. it is surprising in this companytext
that the
explanation dated june 9 1982 which was furnished by the
appellant to the letter of accusation dated may 22 1982 was
considered on its merits by respondent 3 himself. thereby
the accuser became the judge. the letter written to the
appellant by respondent 3 on june 10 1982 says
i have carefully gone through your defence
explanation dated 9.6.82. to the charges given in this
office letter of even number dated 22.5.82 and the same is
number companyvincing at all. before taking any action under

a.r. i would like to offer you anumberher chance for
giving your explanation to the specific charges
conveyed to you vide this office letter dated 22.5.82.
please submit your defence explanation within
three days as to why a deterrent disciplinary action
should number be taken against you. the appellant submitted his further explanation which
also was companysidered by respondent 3 himself. the order of dismissal dated june 15 1982 which was
issued by respondent 3 recites that he was fully satisfied
that it was number reasonably practicable to hold an inquiry
into the appellants companyduct as provided by the rules and
that he had companye to the companyclusion that the appellant was
number fit to be retained in service and had therefore to be
dismissed. evidently respondent 3 assessed the weight of
his own accusations against the appellant and passed a
judgment which is one of the easiest to pass namely that
he himself was a truthful person and the appellant a liar. in doing this respondent 3 violated a fundamental principle
of natural justice. the main thrust of the charges against the appellant
related to his companyduct qua respondent 3. therefore it was
number open to the latter to sit in judgment over the
explanation offered by the appellant and decide that the
explanation was untrue. numberperson can be a judge in his own
cause and numberwitness can certify that his own testimony is
true. any one who has a personal stake in an inquiry must
keep himself aloof from the companyduct of the inquiry. the order of dismissal passed against the appellant
stands vitiated for the simple reason that the issue as to
who between th
appellant and respondent 3 was speaking the truth was
decided by respondent 3 himself. in the state of uttar pradesh v. mohammad numberh 1 s.r. das c.j. observed while speaking for the majority that
the roles of a judge and a witness cannumber be played by one
and the same person and that it is futile to expect when
those roles are companybined that the judge can hold the scales
of justice even. we may borrow the language of das c.j. and record a finding on the facts of the case before us that
the illegality touching the proceedings which ended in the
dismissal of the appellant is so patent and loudly
obtrusive that it leaves an indelible stamp of infirmity on
the decision of respondent 3.
mr. mridul appearing on behalf of the respondent
contended that though this may be the true legal position
the appellant does number deserve the assistance of the companyrt
since he was habitually guilty of acts subversive of
discipline. this argument does number impress us. in the first place to hold the appellant guilty of
habitual acts of indiscipline is to assume something which
remains unproved. secondly the illegality from which the
order of dismissal passed by respondent 3 suffers is of a
character so grave and fundamental that the alleged habitual
misbehaviour on the part of the appellant cannumber cure or
condone it. in the result we allow the appeal and set aside the
judgment of the high companyrt. the order dated june 15 1982
whereby the appellant was dismissed from service is set
aside. in order however to avoid needless companyplications in
working out the mutual rights and obligations of the
parties we direct that the appellant who is due to retire
within about six months shall be treated as having retired
from service with effect from april 1 1984. he shall be
paid the arrears of his salary due until march 31 1984 on
the basis of the salary last drawn by him on june 15 1982
without taking into account the increments which he might
have earned subsequent to that date. the provident fund and
gratuity shall also be paid to the appellant as calculated
in accordance with the rules as if numberorder of dismissal
was passed against him. the appellant may
number and shall number rejoin his duties. he will be treated as
on leave between number and march 31 1984.
the arrears of salary until march 31 1984 shall be
paid to the appellant on the basis indicated above on or
before that date and in any event number later than may 1
1984. the provident fund and gratuity shall be paid to him
within a period of two months from today.


criminal appellate jurisdiction criminal appeal number
350 of 1978.  from the judgment and order dt. 29-5-78 of the gujarat
high companyrt in spl. criminal appln. number 20 of 1978
ram jethmalani and mrs. k. hingorani for the appellant. k. mehta and m. n. shroff for the respondent. the judgment of the companyrt was delivered by
tulzapurkar j. on september 29 1978 the detenu herein
was
directed to be released forthwith on his detention order
being set aside and we had stated that we would give our
reasons for our order later which we do presently. by a detention order passed on january 4 1978 under s.
3 1  of the companyservation of foreign exchange and prevention
of smuggling activities act 1974  hereinafter referred to
as companyeposa  the detenu gopal ghermal mehta was detained
by the additional chief secretary to the government of
gujarat  respondent number 1  with a view to preventing him
from engaging in transporting smuggled goods. the grounds of
detention were served upon him on the same day i.e. on
january 4 1978. briefly stated the grounds disclosed the
following material against the detenu on receipt of certain
information on december 12 1977 by the customs officers of
ahmedabad the said officers had kept a watch for a fiat car
number gti-6020 and the said car with five occupants was
intercepted in the early hours of december 13 1977 near
naroda railway crossing and the occupants  the detenu and
four others  were taken to the customs divisional office
paldi ahmedabad for examination. the detenu and the other
four occupants of the car denied that they were carrying any
smuggled gold or prohibited articles but on search of one
of the occupants sheveram atmaram chandwani two cloth bags
were recovered d from him in one of which there were 27
gold bars of foreign marking weighing 19 tolas valued at rs. 21600 and in the other there were 18 pieces of gold
bearing trishul mark valued at rs. 194400/-. chandwani
in his statement before the customs officers stated that the
two bags which he was carrying on his person belonged to the
detenu who was dealing in silver and gold in udaipur and
that he was merely a carrier who used to receive
remuneration of rs. 100/- per trip from the detenu. two
statements of the detenu were recorded by the customs
officers on december 13 and 14 197 in which he
corroborated the version of chandwani but added that the
entire quantity of foreign marked gold and the trishul
marked gold belonged to one prem of chandni chowk delhi
for and on whose behalf he was carrying the gold from delhi
to udaipur and from udaipur to ahmedabad for disposing it of
to two persons namely poonamchand laxmanji and bhagubhai
in ahmedabad. the detenu also stated that this had been
going on for about six to eight months and that he had made
five to six trips in a month and on each such trip he used
to carry 2 1/2 to 3 kgs. of gold. he further admitted that
the fiat car in question had been purchased for this purpose
for rs. 15000/- which money had been provided by prem. he
further stated that after disposal of the gold belonging to
prem at ahmedabad he used to carry the sale proceeds to prem
and account for the same at the time of the next transaction
between him and prem. companynsel for the petitioner  being the wife of the
detenu  did number dispute that the aforesaid material
disclosed in the grounds was
15-817sci/78
prima facie sufficient to show the detenus involvement in
the racket of smuggling gold namely transporting smuggled
gold from delhi to udaipur and from udaipur to ahmedabad but
he challenged the detention order on the ground that
procedural safeguards had number been followed vitiating the
requisite satisfaction on the part of the detaining
authority under s. 4 1 . it appears that when the
interrogation of the detenu was going on while he was in
custody of the customs officials smt. devyantiben shah an
advocate of the detenu addressed a letter as also a
telegram both dated december 14 1977 making a grievance
about the wrongful restraint and illegal custody of the
detenu by the customs officers beyond 24 hours and
expressing apprehension that . the detenu had been so
detained with a view to obtain companyfessional statements
against his will. the receipt of the letter was disputed but
the assistant companylector of customs admitted the receipt of
the telegram from the advocate on december 15 1977. by his
reply dated december 15 1977 sent to the advocate the
assistant companylector denied the allegations made in the
telegram. admittedly on december 14 1977 the advocate had
gone to the customs office and had sought permission to
remain present at the time of the interrogation of the
detenu but her request was number acceded to as the customs
officers were of the view that there was numberprovision in law
permitting an advocate to remain present at the time of
interrogation. further on this occasion the advocate was
told that the detenu will be produced before the magistrate
at 5.30 p.m. on that very day and therefore she waited in
the magistrates companyrt upto 5.30 p.m. to obtain bail for the
detenu but as the detenu was number produced the magistrate
declined to pass any order on the bail application. on
december 15 1977 the detenu was produced before the
magistrate who remanded him to customs custody for five days
in spite of opposition by the advocate. on december 20 1977
the detenu was again produced before the magistrate and even
on this occasion bail was refused but the detenu was
remanded to judicial custody permitting further
interrogation by customs officers. on december 22 1977
while he was in judicial custody the detenu was interrogated
by customs officers and his statement was recorded on that
day but the detenu refused to sign the same and instead made
an endorsement that his earlier statements dated december 13
and 14 1977 and the facts stated therein were number companyrect. in other words in his statement dated december 22 1977 the
detenu had resiled from his earlier companyfessional statements
and had squarely repudiated the facts stated therein. on
january 3 1978 the advocate of the detenu made anumberher
application for getting him released on bail as the period
of remand was to expire on january 1978 and that application
was fixed for hearing on january 6 1978 but on january 4
1978 itself while the
detenu was in judicial custody the additional chief
secretary to the gujarat government  respondent number 1
passed the impugned order under s.3 1  of the companyeposa and
the detenu was detained thereunder. the aforesaid detention was challenged by the appellant
 wife of the detenu  before the gujarat high companyrt under
article 226 of the companystitution by filing special criminal
application number 20 of 1978 seeking a writ of habeas companypus
for the release of the detenu principally on the ground that
there was companyplete number-application of mind on the part of
the detaining authority  respondent number 1  to the attendant
circumstances in which the companyfessional statement of the
detenu on which the detention order was mainly based-were
recorded particularly the vital facts that transpired
during the interrogation as also those that followed the
recording of those statements. it was companytended that apart
from the apprehension expressed in the advocates telegram
that the detenu was being detained with a view to obtain his
confessional statements under duress the said companyfessional
statements had actually been retracted by the detenu at the
first available opportunity when he was in judicial custody
on the ground that these had been involuntarily extorted
from him and that such retraction of the companyfessional
statements was number intimated to the detaining authority and
was number companysidered by it before passing the impugned
detention order and as such for want of companysidering such
vital fact the subjective satisfaction of the detaining
authority got vitiated and the impugned order was liable to
be set aside. the high companyrt however rejected the said
contention as also the other companytentions urged on behalf of
the appellant  the wife of the detenu  and dismissed the
said application on may 29 1978. against this dismissal the
present appeal has been preferred. companynsel for the petitioner companytended before us that the
high companyrt had clearly erred in taking the view that since
the companytents of the telegram dated december 14 1977
expressing the apprehension had been made knumbern to the
detaining authority it companyld number be said that this material
aspect of the case had been kept back from the detaining
authority. it was pointed out that the mere expression of an
apprehension that companyfessional statements might be extorted
was different from the actual obtaining of the statements
under pressure of which a companyplaint had been made by the
detenu in his statement recorded on december 22 1977
wherein the earlier statements had been companypletely retracted
and it was urged that the fact that there was such
retraction of the companyfessional statements by the detenu at
the first
available opportunity was number companymunicated or placed before
the detaining authority when it companysidered the question of
passing the impugned order. companynsel further companytended that
instead of companysidering whether these facts were vital enumbergh
to require the application of mind by the detaining
authority the high companyrt went on to record findings of
fact to the effect  i  that it companyld number be said that the
detenu was in illegal custody  ii  that the companyfessional
statements companyld number have been extracted under companypulsion
and  iii  that the said statements were number obtained under
duress and in doing so the high companyrt clearly acted in
excess of jurisdiction and companytrary to the well established
principles applicable to the issue of habeas companypus in
preventive detention case. in any case it was for the
detaining authority to apply its mind to these aspects
before deciding to issue the impugned order. companynsel further
contended that it was undisputed that the advocate was number
allowed to be present number allowed to be companysulted during the
interrogation in spite of request having been made in that
behalf which clearly showed that the detenu was under duress
and number a free person. in any event companynsel companytended the
satisfaction of the detaining authority must be regarded as
vitiated inasmuch as these vital facts namely  i  that
during interrogation in spite of request neither the
presence number the companysultation of the advocate was permitted

that in spite of intimation to the advocate in that
behalf the detenu was number produced before the magistrate at
5.30 p.m on december 14 1977 and  iii  that the
confessional statements had been squarely retracted by the
detenu on december 22 1977 at the first available
opportunity while he was in judicial custody all of which
had a material bearing and would have influenced the mind of
the detaining authority one way or the other-were neither
placed before number companysidered by the detaining authority
before passing the detention order on january 4 1978 and
therefore the impugned order was liable to be set aside. we
find companysiderable force in these companytentions urged by
counsel for the appellant before us. it is well settled that the subjective satisfaction
requisite on the part of the detaining authority the
formation of which is a companydition precedent to the passing
of the detention order will get vitiated if material or
vital facts which would have a bearing on the issue and
would influence the mind of the detaining authority one way
or the other are ignumbered or number companysidered by the detaining
authority before issuing the detention order. in sk. nizamuddin v. state of west bengal 1  the order of
detention was made on september 10 197 under s.3 2   a  of
misa based on the subjective satisfaction of the district
magistrate that it was necessary to detain the petitioner
with

a.i.r. 1974 s.c. 2353.
a view to preventing him from acting in a manner prejudicial
to the maintenance of supplies and services essential to
the companymunity and his subjective satisfaction according to
the ground of detention furnished to the petitioner was
founded on a solitary incident of theft of aluminium wire
alleged to have been companymitted by the petitioner on april
14 1973. in respect of this incident of theft a criminal
case was filed inter alia against the petitioner in the
court of the sub divisional magistrate asansol but the
criminal case was ultimately dropped as witnesses were number
willing to companye forward to give evidence for fear of danger
w their life and the petitioner was discharged. it appeared
clear on record that the history-sheet of the petitioner
which was before the district magistrate when he made the
order of detention did number make any reference to the
criminal case launched against tho petitioner much less to
the fact that the prosecution had been dropped or the date
when the petitioner was discharged from that case. id
connection with this aspect this companyrt observed as follows
we should have thought that the fact that a
criminal case is pending against the person who is
sought to be proceeded against by way of preventive
detention is a very material circumstance which ought
to be placed before the district magistrate. that
circumstance might quite possibly have an impact on his
decision whether or number to make an order of detention. it is number altogether unlikely that the district
magistrate may in a given case take the view that since
a criminal case is pending against the person sought to
be detained numberorder of detention should be made for
the present but the criminal case should be allowed to
run its full companyrse and only if it fails to result in
conviction then preventive detention should be
resorted to. it would be most unfair to the person
sought to be detained number to disclose the pendency of a
criminal case against him to the district magistrate. it is true that the detention order in that case was
ultimately set aside on other grounds but the observations
are quite significant. these observations were approved by
this companyrt in suresh mahato v. the district magistrate
burdwan and others 1 . the principle that companyld be clearly
deduced from the above observations is that if material or
vital facts which would influence the mind of the detaining
authority one way or the other on the question whether or
number to make the detention order are number placed before or
are number companysidered by the detaining authority it would
vitiate its subjective satisfaction rendering the detention
order illegal. after all the detaining authority must
exercise

a.i.r. 1975 s.c. 728.
due care and caution and act fairly and justly in exercising
the power of detention and if taking into account matters
extraneous to the scope and purpose of the statute vitiates
the subjective satisfaction and renders the detention order
invalid then failure to take into companysideration the most
material or vital facts likely to influence the mind of the
authority one way or the other would equally vitiate the
subjective satisfaction and invalidate the detention order. in the instant case admittedly three facts were number
communicated to or placed before the detaining authority
before it passed the impugned order against the detenu
namely  i  that during interrogation of the detenu in
spite of request neither the presence number the companysultation
of the advocate was permitted  ii  that in spite of
intimation to the advocate in that behalf the detenu was number
produced before the magistrate on december 14 1977 and

that the companyfessional statements were squarely
retracted by the detenu on december 22 1977 at the first
available opportunity while he was in judicial custody the
first two had a bearing on the question whether the
confessional statements had been extorted under duress from
the detenu or number while the third obviously was in relation
to the companyfessional statements which formed the main
foundation of the impugned order and such were vital facts
having bearing on the main issue before the detaining
authority. as regards the first this companyrt in nandini
satpathys 1  case has observed in para 63 of the judgment
thus
lawyers presence is a companystitutional claim in
some circumstances in our companyntry also and in the
context of article 20 3  is an assurance of awareness
and observance of the right to silence. the miranda
decision has insisted that if an accused person asks
for lawyers assistance at the stage of interrogation
it shall be granted before companymencing or companytinuing
with the questioning. we think that article 20 3  and
article 22 1  may in a way be telescoped by making it
prudent for the police to permit the advocate of the
accused if there be one to be present at the time he
is examined. overreaching article 20 3  and section
16 2  will be obviated by this requirement. we do number
lay down that the police must secure the services of a
lawyer. that will lead to police station-lawyer
system an abuse which breeds other vices. but all that
we mean is that if an accused person expresses the wish
to have his lawyer by his side when his examination
goes on this facility shall number be denied without
being exposed to the serious reproof that involuntary
self-crimination secured in secrecy and by companyrcing the
will was the project.  1 978 2 s.c.c.424. in this case the request to have the presence companysultation
of a lawyer was turned down owing to some misconception of
the legal position but that apart the fact that such a
request was made and refused ought to have been intimated to
the detaining authority.