JUDGMENT <NAME>, J.

1. This is an appeal from the judgment of Mr. Justice <NAME>. On June 26, 1942, the defendants sold to the plaintiffs 33 bales of piecegoods or 36 bales, three bales more according to the option of the defendants. In all delivery was given of 22 bales between July 3, and August 21, 1942. The defendants, according to the plaintiffs, failed to give delivery of the remaining 11 bales, and the plaintiffs have fled this suit for damages for non-delivery of the 11 bales. Mr. Justice <NAME> who tried the suit held that the defendants had committed a breach of the contract and that they had failed to give delivery of the 11 bales; and he referred the suit to the Commissioner to assess the damages on the basis that the breach had taken place on November 12, 1942, and that damages should be assessed at the difference between the market rate prevailing on that date and the contract rate. The plaintiffs' case was that they had made various demands for delivery. They proved two oral demands in October, 1942, and they also proved that a tender was made for the remaining eleven bales on November 12, 1942, which tender was refused by the defendants. On this evidence the learned Judge came to the conclusion that the contract had been broken on November 12, 1942.

2. In this appeal the first question that arises is whether there was any breach of the contract on the part of the defendants. Under Section 35 of the Indian Sale of Goods Act, 1930, it is obligatory upon the buyer to apply for delivery and the seller is not bound to deliver the goods unless there is an application for delivery on the part of the buyer. Mr. <NAME> has contended that in this case there was no application for delivery by the buyer within reasonable time and, therefore, there was no breach on the part of the seller as the seller was not bound to deliver the remaining 11 bales.

3. The terms of the contract have been reduced to writing; and we may point out, with respect to the learned Judge below, that he has fallen into error in admitting parole evidence with regard to negotiations antecedent to the contract and also with regard to the subsequent conduct of the parties. Once the parties reduce the terms of their contract into writing, the <ORG> can only look at the writing alone in order to construe what the terms of the contract were. It is hardly necessary to say that what the terms of the contract between the parties were cannot be ascertained by allowing parole evidence as to what transpired antecedent to the contract or what the parties did -subsequent to the contract. Now on the construction of the contract two points have been placed before us; and as far as we can see, whatever view we may take as to the construction does not materially affect the question that we have got to decide. The contract sets out various particulars in different columns. It first mentions the number of bales and then the quality of the bales; and then under the heading "Delivery" it mentions various places, Indore, Ujjaa and Bombay; and then the prices of various bales are mentioned. At the foot of the contract appears:

Mill Delivery, Shipment Ready, Less 3/4% per cent discount and Re. 1 per bale, Railway Receipt through Bank.

Now Mr. <NAME> has contended that on a true construction of, this contract the goods were to be delivered at the various places mentioned in the contract at the mills. Mr. <NAME> argues that the column "Delivery" makes it clear that the place of delivery was the different places mentioned under that column and delivery is further localised by stating; that not only is it to be at the particular place but at the mill itself. On the other hand, Sir <NAME> contends that when you look at all the particulars of the contract carefully, it is clear that the place of delivery of the goods was at Calcutta. Sir <NAME> particularly emphasizes the expression "Shipment Ready" in the contract. It is common ground that the goods that were sold were not forward goods but ready goods. But the expression "Shipment" has to be carefully noticed because, if the buyer had to take delivery at the various places mentioned in the contract, there was no need to state in the contract the expression "Shipment". "Shipment" is not used in its proper etymological sense, but it can only mean in this case "despatch" or "rail" and the contract undoubtedly casts an obligation upon the seller to despatch or rail the goods. Further it is to be noted that payment is to be made by the buyer through a bank when he obtains the railway receipt. If the obligation was upon the buyer's take delivery at the various places mentioned in the contract, it is difficult to understand how lie could pay for these goods against railway receipts through a bank in Calcutta. The various places mentioned under the column "Delivery", coupled with the phrase "Mill Delivery", seem to indicate that the prices fixed are ex-mill and that the buyer is liable to pay for extra charges incurred for despatching the goods from the various places to Calcutta. "We do not agree with Mr. <NAME> that the expression R/R through bank merely deals with the mode of payment. This provision has got to be taken into consideration with all the other provisions in the contract in order to arrive at a true conclusion as to whether under the contract goods were to be delivered at Calcutta or at the various places mentioned in the contract. We therefore agree with the learned Judge who took the view that under the contract the delivery of the goods had to be made at Calcutta.

4. Now on the question whether the buyer made an application for delivery not not, there is evidence on the record which has been accepted by the learned Judge. <NAME>, the munim of the plaintiff, gave evidence and he stated that the contract was reduced to writing at Calcutta and duly signed and after the contract was signed, he told the representative of the defendants that he had bought ready goods and therefore early delivery should be given of these goods and the representative of the defendants agreed that a quick and early delivery would be given; and further on, in cross-examination., he repeated practically the same evidence by saying that he, demanded that as the contract was for ready goods they should be delivered immediately and the defendants' representative said that they would be so delivered as and when the railway waggons were made available. Mr. <NAME> has made a grievance of the fact that in the plaint the fact that an application for delivery was made on June 26, 1942, has not been clearly set out. It is true that when a buyer sues a seller for damages for non-delivery, application for delivery on his part is a part of the cause of action and must be explicitly stated, but when we turn to paragraph 3 of the plaint, we do find an averment that the defendants had failed to give delivery of the remaining goods in spite of the repeated requests made in that behalf by the plaintiffs, in our opinion this averment, although perhaps not as specific as one might have desired, is sufficiently clear to cover the application for delivery relied upon by the plaintiff's at the trial on the date on which the contract was made, namely June 26, 1942.

5. We might point out that we do not agree with the contention of Sir <NAME> that when goods which are to be delivered are ready goods, no application for delivery is necessary on the part of the buyer tinder Section 35 of the Indian Sale of Goods Act. Section 35 makes 110 distinction between the sale of ready goods and of forward goods; and <ORG> in <CITATION> (1935) 37 Bom. L.R. 538, P.C. has laid down that the buyer can only be relieved from his statutory obligation to apply for delivery by an express stipulation to the contrary.

6. Assuming that there was an application for delivery on the part of the buyer on June 26, 1942, it is not disputed that the defendants failed to make delivery of the eleven bales and thereby committed a breach of the contract. What we have next to consider is: what is the date of the breach of the contract? and what is the due date on which the contract should have been performed ? Now under this contract, as I have pointed out, no time is fixed for delivery of the goods sold; and under Section 36 , Sub-clause (2), of the Indian Sale of Goods Act , where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time. Therefore the law implies a reasonable time within which the contract is to be performed when the contract itself is silent as to the time of performance. In our opinion once a reasonable time is implied within the meaning of Section 36 , Sub-clause (2)3 the contract becomes a contract to be performed at, a fixed time as much as if the parties themselves have fixed a specific time. In the one case it is the act of parties which determines the time when the contract is to be performed; in the other case it is by implication of law that the time is determined.

7. In this case Sir <NAME> has relied on the fact that although the contract was arrived at on June 26, 1942, 22 bales were delivered between -July 3, and August 21, 1942. Nothing happened in September and, as I have pointed out, there were oral demands in October, 1942; and finally a tender for a sum of Rs. 7,300 to cover the delivery of the remaining bales was made on November 12, 1942. Sir <NAME> has argued that the contract must be deemed to be alive till November 12, 1942, and the breach took place when there was a final refusal to perform the contract on November 12, 1942. Now in <CITATION> (1945) 47 Bom. L.R. 719, we very recently held that a party to the contract cannot extend the time for the performance of the contract by a unilateral act and that there must be an agreement to extend the time. Now in this case no agreement to extend the time is either pleaded or attempted to be proved. It is true that in. that particular case the time for delivery was fixed; but I see no reason in principle to distinguish between a contract where the time for delivery is fixed and a contract where the time for delivery is, not fixed. If the time for the performance of a contract or the time for delivery is fixed, it cannot be extended by the unilateral act of a party.

8. Equally so time cannot be extended in the case of a contract where the law implies a reasonable time for the performance of the contract. In the first case, when the fixed time has expired there would be a breach; in the latter case, when the reasonable time implied by the law has expired, equally so there would be a breach unless either in the one or in the other case there is an agreement between the parties to extend the time for the performance of the contract. Sir <NAME> has contended that there is a distinction in law between a contract where the time for delivery is fixed and a contract where such a time is not fixed and, according to Sir <NAME>, the latter contract does not come; to an end by efflux of reasonable time implied by the law, but there must be-a definite refusal on the part of one of the parties to perform the contract. It is only then that there is a breach of the contract. In this case, according to Sir <NAME>, both the parties to the contract considered the contract to be alive till November 12, 1942, and it was only on November 12 that the seller definitely refused to perform the contract and therefore, according to-Sir <NAME>, the breach took place on November 12, 1942. In support of this contention Sir <NAME> has relied on two English cases. The first is <NAME> v. <NAME> and <NAME> [1920] 1 K. B. 693. This is the judgment of Mr. Justice <NAME>. Now, in the first place, it is to be noted that the observations of Mr. Justice <NAME>, although deserving of the greatest respect, are on the facts of that case purely obiter. Mr. Justice <NAME> was dealing with a ease of a contract where the time for delivery was fixed; but he did observe (p. 696):

If there is no fixed time the measure is the difference between the contract price and the market price at the time of refusal to deliver.

It is also to be noted that these observations of the learned Judge were based on the clear language of Section 51 , Sub-clause (3), of the English Sale-of Goods Act , 1898, which provided:

Where there is an available market for the goods in question the measure of damages is prima fade to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver.

It is to be noted that our Sale of Goods Act has no section which corresponds, to Section 51 , Sub-clause (3), of the English Act . Even so, notwithstanding the clear language of Section 51 , Sub-clause (3), of the English Sale of Goods Act , 1893, <ORG> in England in <NAME> v. <ORG>  2 K. B. 369 doubted the correctness of the opinion expressed by Mr. Justice <NAME> in <NAME> v. <NAME> and <NAME>  1 K. B. 693. Lord Justice <NAME> actually went to the length of saying, contrary to the view expressed by Mr. Justice <NAME>, (p. 378) :

It is difficult to see why it should be said that that the contract for delivery at times which can be determined by a jury is not a contract for delivery at fixed times. It seems to me that a meaning could be given to the words, 'if no time was fixed,' by reading them as referring to a contract such as to deliver goods on demand or to deliver goods as required by the purchaser. It might well be argued that that would give a meaning to the words in question.

Therefore the view that Lord Justice <NAME> took was that under the English section when a reasonable time is implied by the law, the contract becomes a contract where the time for delivery is fixed. Sir <NAME> in his wellknown text-book on the Sale of Goods Act has expressed the opinion, after setting out the provisions of Sections 50 and 51 of the English Sale of Goods Act, that Section 73 of the Indian Contract Act and the illustrations thereto, though the language is slightly different, are declaratory of the common law and in substance the same as Sections 50 and 51 of the English Sale of Goods Act. Now with great respect to the learned author, when we turn to Section 73 of the Indian Contract Act, there is nothing in the language of the section corresponding to Section 50 (3) or Section 51(3) of the English Sale of Goods Act, and even the illustrations to that section, which, as is well known, cannot possibly control the language of the section itself but merely afford a guide to the construction, do not in our opinion carry the matter any further. Illustrations (e) and (d) to Section 73 of the Indian Contract Act, which are relied upon, really do not deal with the question of reasonable time at all. Illustration (e) is a case of anticipatory breach and it is not clear from the illustration whether the breach took place within the reasonable time or not. Illustration (d) also does not indicate whether the promise was broken within the reasonable time or not. Even assuming that a refusal on the part of the seller to perform was necessary in a contract like this, which was a contract to be performed within a reasonable time, it is clear on the evidence that after the application for delivery was made on June 26, 1942, admittedly there was a failure to give delivery to the extent of 11 bales and, therefore, there was a failure to perform the contract which must be taken to mean the same thing as refusal to perform the contract. I fail to see why any more explicit refusal is necessary than a refusal to comply with the application for delivery made on the part of the buyer. But in our opinion there is no difference in law between a contract where the time is fixed by the act of the parties and a contract where no time is fixed and by implication of the law the contract is to be performed within a reasonable time. (If that be so, after the plaintiffs had made the application for delivery on June 26, 1942, the breach of the contract took place within a reasonable time of June 26. Now what is a reasonable time is a question of fact and in England it would be determined by the jury. Unfortunately the learned Judge did not apply his mind to this aspect of the case and, therefore, we have received no help or guidance from his judgment on this point. But fortunately there is sufficient evidence on record from which we can come to the conclusion as to what a reasonable time for the performance of this contract should be. "Reasonable time" must in each case depend upon the particular circumstances, the nature of the commodity, the question of transport, the times during which the contract was entered into and so on. It is in evidence that the first consignment of 2 bales was despatched on July 1, 1942, and reached Calcutta on July 8, 1942, which is within twelve days of the entering into the contract. There is no suggestion that if the seller was so minded, all the bales could not have been despatched at the same. time. The evidence shows that both the parties relied on the fact that the sale was of ready goods and they should be despatched as early as possible. Taking all the evidence into consideration, we are of the opinion that reasonable time in this case would be a fortnight after June 26, 1942.

9. We might point out that in a Bombay case, which was also a case for the sale of piecegoods, Mr. Justice <NAME> considered one week as a reasonable time for delivery of the goods. That case is <CITATION> (1921) 24 Bom. L.R. 140. The case is also instructive from another point of view. In that ease the contract was for delivery of seventy-five sales for ready and twenty-five bales for September delivery. Forty-eight bales were delivered between September 17, 1920, and October 21, 1920; and although the delivery of these forty-eight bales extended right up to October 21, 1920, still Mr. Justice <NAME> held that the date of breach was eight days after September 13, 1920, with regard to the contract for the sale of ready goods. The learned Judge said that the forty-eight bales which were delivered must be appropriated to the ready contract; and with regard to the balance, he awarded damages on the basis that the breach had taken place within a week of September 13, 1920. In this case also although the delivery of 22 bales had taken place from July 3, 1942, to August 21, 1942, these deliveries to 'the extent that they are after a fortnight from the date of the contract, namely, June 26, 1942, cannot be referable to this contract. As pointed out by Mr. Justice <NAME> in a case reported in the same volume- <CITATION> deliveries are referable to a separate transaction and not to the contract in suit.

10. Therefore we hold that there was a breach on the part of the defendants, that the due date of the performance of the contract was July- 10, 1942 and that the damages must be assessed on the basis of the date of breach being July 10, 1942.

11. We will, therefore, vary the decree of the learned Judge below by substituting the date July 10, 1942, for November 12, 1942, as the date on which the breach took place. The learned Judge's order with regard to the reference to the Commissioner will stand.

12. The learned Judge has awarded to the plaintiffs the costs of the suit, Mr. <NAME> contends that if the date of the breach was July 10, 1942, then no damages would be found in favour of the plaintiffs. If he is right, then inasmuch as no decree would be passed in favour of the plaintiffs, the plaintiffs would not be entitled to the costs of the suit. Therefore, in our opinion, the proper order with regard to the costs of the suit would be that the costs of the suit and further directions should be reserved till the Commissioner has made his report.

13. The appellants came to this <ORG> contending, in the first place, that there was no breach and, secondly, that the learned Judge was wrong in fixing November 12, 1942 as the date of the breach. They have failed on the first and succeeded on the second.

14. Under the circumstances we think the proper order to make with regard to the costs of this appeal is that each party should bear their own costs.


ORDER (1) These are two connected revisions preferred against the orders made by the learned Ex-Officio First Class Magistrate, <NAME>, in M. C. Nos. 36 of 1957 and 2 of 1958 and the opinion of the learned Subordinate Judge of Tirunelveli in C. M. P. 2 of 1958.

(2) The facts are short: There has been a land dispute regarding possession between <NAME> and <NAME>. The Ex-officio First Class Magistrate, <NAME>. on account of the complicated questions of law, which arose, proceeded under S. 146(1) Crl. P. C. This section has been newly introduced and states that if the magistrate is of opinion that none of the parties was them in such possession, or is unable to decide as to which of them was then in such possession, of the subject of dispute, he may attach it and draw up a statement of the facts of the case and forward the record of the proceeding to a civil court of competent jurisdiction to decide the question whether any and which of the parties was in possession of the subject of dispute at the date of the order as explained in sub-s. (4) of S. 145, and he shall direct the parties to appear before the civil court on a date to be fixed by him.

In this case that procedure was adopted and the learned subordinate, <NAME> on receipt of the reference perused the evidence on record and took further evidence produced by the parties respectively, considered the effect of all such evidence, and decided the question of possession so referred to it. The learned Subordinate Judge has sent his findings to the magistrate. The magistrate on receipt of these proceedings has disposed of the matter under S. 145 in conformity with the decision of the civil court. That decision was that the counter petitioner was possession of the lands in dispute on the relevant date and which conclusion was on a consideration of all the circumstance of the case and after preferring the affidavits fired on behalf of the counter petitioner to those of the petitioner.

(3) Two applications are now preferred, first against the order of the magistrate dismissing the petition and secondly against the opinion of the learned Subordinate Judge transmitted to the magistrate and in conformity of which the magistrate has decided the case.

(4) So far as the merits of the case are concerned, the revision petitioner has no case. On acceptable and relevant evidence it has been found that the counter petitioner was in possession of the lands in dispute on the relevant date prescribed under Ss. 145 and 146 Crl. P. C. This finding is of course subject to adjudication in the civil court. I am unable to see how the conclusion set out can be held to be not in accordance with the evidence in the case. Therefore, the dismissal of the petition was quite proper.

(5) In regard to the revision which is sought to be preferred against the proceedings of the learned Subordinate Judge, one has only to look at S. 146(1)(d), which lays down that no appeal shall lie from any finding of the civil court given on a reference under this section nor shall any review or revision of any such finding be allowed. In other words, the parliament in the exercise of its undoubted and unquestionable power has limited the revisional powers of this court to this extent, viz., that the case of findings given under S. 146 Crl. P. C. no revision shall lie and has thereby provided against mischievous consequences and duplicated wasteful court work (6) This point also is concluded by authority--vide <CITATION> , .

(7) This restriction is but proper because the findings get merged in the decision of the magistrate and all the grounds that can be urged against the finding can be urged against the finalised decision and if there is no such restriction there will be multiplicity of proceedings and possible conflicting revisional orders reducing the whole thing to an absurdity. This wise restriction has been conceived in the best public interests and involves no invasion of the fundamental right or diminution of the paternal and supervisory jurisdiction of this court.

(8) This provision is akin to and an improvement on the old system of the Hindu Pandits and Muslim Muftis who furnished opinions to the courts expounding the Hindu and Muslim law applicable to the cases referred to them and courts gave decisions in accordance with those expositions. (For an interesting discussion of this topic see Rt. Hon'ble Sir <NAME>, sometime <ORG>, Background to Indian law, (<ORG>) pages 4-5).

(9) The objective of <ORG> as to harmoniously combine the intimate revenue knowledge of the Executive magistrate in actual touch with the locality, with the sound legal knowledge of the fundamental principles of jurisprudence regarding title and possession by the munsif.

(10) Therefore, this civil revision petition also has got to be dismisseAd and it is hereby dismissed.

(11) Revision dismissed.


PETITIONER: <ORG>. Vs. RESPONDENT: THEIR WORKMEN DATE OF JUDGMENT: 02/05/1963 BENCH: <NAME>, P.B. BENCH: <NAME>, P.B. WANCHOO, K.N. GUPTA, K.C. DAS CITATION: 1964 AIR 719 1964 SCR (3) 506 CITATOR INFO : R 1969 SC 983 (9) R 1973 SC1227 (21) ACT: Industrial Dispute-Dismissal of workman after domestic enquiry-Failure of enquiry officer to record finding-Power of Industrial Tribunal-If can discard the enquiry and decide on merits. HEADNOTE: The appellant dismissed one of its workmen on a domestic enquiry held by its Manager who did not record any findings, took some of the evidence in the absence of the workman and found him guilty of misconduct under Rule 14 (c) (i) and (viii) of the Standing Orders. <ORG> held that the dismissal was unjustified and directed the appellant to reinstate the employee. The respondent Union's case was that the dismissed workman, who was the Organising Secretary of the union, was dismissed by the appellant mala fide with the purpose of victimising him for his trade union activities. The dispute centered round the question whether the strike which the dismissed workman was charged as having instigated was really instigated by him or was the spontaneous result of the treatment meted out by the appellant to another workman who was sick and fainted on the day the strike started. The case of the appellant was that this latter workman was not present on that day at all. This was belied by the record and <ORG> without attaching any importance to the domestic enquiry held by the Manager dealt with the merits of the dispute itself and found in favour of the respondent, holding that the management was unjustified in dismissing the workman on the report of the Manager which was neither fair nor honest. On behalf of the appellant reliance was placed on the decision of this Court in <CITATION> and it was contended that <ORG> was in error in interfering with the decision of the management. Held <ORG> was right in discarding the domestic enquiry. Although this Court has consistently 507 refrained from interfering with the conclusions of domestic enquiries in industrial matters unless one of the four tests laid down in <CITATION> was satisfied, the essential basis on which this view is founded is that the domestic enquiry must be conducted fairly and properly in conformity with the principles of natural justice. The evidence on which the charges are sought to be proved against the workman must normally be led in his presence. The procedure of recording statements of witnesses ex parte and thereafter producing the witnesses for cross-examination, unless there are compelling reasons to do so, must be discouraged. Departmental enquiries under Art. 311 of the Consti- tution where the question of motive is hardly relevant do not stand on the same footing as those in industrial enquiries where the question of bona fides or mala fides of the employee is often in issue. <CITATION> , (1958) 1 L.L.J. 260, explained. <CITATION> ,  2 S.C.R. 943; M/s. Ke.8oram <CITATION> ,  Vol. 2 S.C.R. 809, and <CITATION> ,  Supp. I S.C.R. 266, referred to. The failure of the Manager to record any findings after holding the enquiry was a serious infirmity in the enquiry and it is not for this Court to go into the evidence to decide whether the dismissal was justified. It is the duty of the enquiry officer in an industrial enquiry to record clearly and precisely his conclusions and to indicate briefly the reasons therefor so that <ORG> can judge whether they arc basically erroneous or perverse. Although <ORG> should not as a normal procedure allow evidence to be led by one party in absence of the other or admit evidence after the case has been fully argued unless both the parties agree, the mere calling for the authenticated record to see whether the workman was the Organising Secretary could not amount to a breach of the rule. 508 JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 705 of 1962.

Appeal by special leave from the Award dated September 19, 1961 of <ORG>, West Bengal in Case No. VIII-42 of 1961.

<NAME>, Solicitor-General of India and <NAME>, for the appellant.

<NAME> and <NAME>, for the respondents. 1963. May 2. The judgment of the <ORG> was delivered by <NAME> appeal arises out of an industrial dispute between the appellant, <ORG>, and the respondents, its workmen. The dispute was in regard to the, dismissal of the appellant's employee, <NAME>. The respondents alleged that the said dismissal was unjustified, whereas, according to the appellant, the said employee had been properly and validly dismissed. The dispute which was referred to <ORG>, West Bengal, for its adjudication was whether the said dismissal was justified, and to what relief, if any, was the workman entitled? The Tribunal has held that the dismissal was unjustified and so, it has directed the appellant to reinstate the said employee to his old post within a month from the date of the publication of the award. It has also ordered that the period starting from the date of the dismissal till the date of reinstatement should be treated as leave without pay and as such, should be counted towards the length of service. It is against this award that the appellant has come to this <ORG> by special leave.

The respondent's case was that <NAME> had been dismissed by the appellant mala fide with the motive of victimising him for his trade union activities. <NAME> was the Organising Secretary of the Union and since he supported the Union's demands very strongly, the appellant wanted to get rid of him. It appears that <NAME> had been working as a weaver for some years past. He was confirmed in service with effect from April 12, 1954. On September 19, 1960, he went on a week's leave. When he returned on September 26, 1960, he was asked to work on machine producing twill, though, normally, he was assigned work on a plain machine. <NAME> was not accustomed to work on the complicated machine which produces twill and so, he requested the management that he should be asked to do his usual work on a plain machine. This request was, however, turned down Being unaccustomed to work on the machine producing twill, <NAME> met with an accident on September 27, 1960, and was grantedmedical leave for a week ending on Saturday, October 1, 1960. On October, 3 1960, when he resumed duty, he again requested the management that he should be permitted to work on the plain machine, but when his request was turned down, he told the management that he would work on the twill machine in the second shift which starts from I P.M. On that day, another employee <NAME> who was ailing and had been on leave, asked for further leave which was refused and he fell unconscious while he was going to operate his machine. As a result, 700 weavers of the -appellant stopped work and the weaving section could not resume work at 1 P. M. The management then declared a lock-out on October 5, 1960 which continued until October 29, 1960.

On October 3, 1960, the management served a charge sheet on <NAME> in which it was alleged that <NAME> had wilfully disobeyed the lawful and reasonable order of his superior and had acted in a manner subversive of discipline. The case against him was that he had moved from one place to another in <ORG> and incited workers of the said department to go on strike. The management alleged that by his conduct, <NAME> had committed misconduct under Rule 14(c) (i) and

(viii) of the Standing Orders. <NAME> was called upon to offer his explanation within 24 hours after receipt of the charge-sheet.

After <NAME> gave his explanation, an enquiry was held. At the initial stages of the enquiry, <NAME> appeared, but, later, he did not take part in the proceedings. The appellant contends that <NAME> deliberately refrained from taking part in the proceedings, whereas according. to the respondents, the enquiry was conducted unfairly, and so, it became impossible for <NAME> to participate in it. This enquiry was conducted by the Manager himself After the enquiry was over, the Manager decided that <NAME> was guilty of the charge, and so, dismissed him on November 21, 1960. The respondents' case was that the dismissal was purely vindictive and was not justified at all.

On the other hand, the appellant's case was that <NAME> had been working in the weaving department both on plain looms and on looms that produce twill. When he returned to duty on October 3, 1960, the departmental Overseer, Mr. <NAME> asked <NAME> to go to his loom; but he refused to obey his orders. The appellant further alleged that <NAME> moved inside the weaving department and incited the workers to stop work. The appellant also pleaded that a proper enquiry had been held against <NAME> and it was as a result of the said enquiry that he was dismissed for misconduct under Rule 14 (c)(i) & (viii) of the Company's Standing Orders. Regarding the incident of <NAME>, the appellant alleged that <NAME> was absent on October 3, 1960 and, therefore, no question of his working on any machine arose on that day. In other words, the appellant's contention was that the Union's version that the strike was spontaneous because <NAME> fainted, was untrue and the strike was in substance, the result of the instigation of <NAME>.

Before the <ORG>, some oral evidence was led by the parties and reliance was placed by the appellant on the proceedings of the enquiry itself. The <ORG> held that the management had deliberately suppressed the fact that <NAME> had gone to the mill on October 3, and prayed for extension of leave which was refused, and so, the <ORG> came to the conclusion that the strike could not have been instigated by <NAME>. The <ORG> further commented on the fact that after the enquiry was held, no finding was recorded by the Manager who held the enquiry, and it appeared to the <ORG> that the conclusions on which the management presumably acted in dismissing <NAME> were of such a character that "no person acting fairly and honestly could have reached them". The <ORG> also held that <NAME> was not used to work on a twill loom, and so, his request that he should be allowed to work on a plain loom was not unjustified. Its conclusion, therefore, was that a grave charge had been unjustly framed against <NAME> and that showed want of good faith and Vindictiveness. On these findings, the <ORG> answered the question in favour of the respondents and directed reinstatement of <NAME>.

On behalf of the appellant, the learned Solicitor General has strenuously urged before us that the appellant has held a proper domestic enquiry and has dismissed <NAME> because the management thought that the enquiry disclosed the fact that the charges framed against <NAME> had been established. He contends that it is firmly established by decisions of this <ORG> that <ORG> will not interfere with the action of the management in dismissing its employee after holding an enquiry into his alleged misconduct unless it is shown that the management has not acted in good faith; or that the dismissal amounts to victimisation or unfair labour practice, or where the management has been guilty of a basic error, or violation of a principle of natural justice, or when on the materials, the finding is completely baseless or perverse, vide <CITATION> . (1). There is no doubt that this <ORG> has consistently refrained from interfering with the conclusions reached. by the enquiry officer who Conducts domestic enquiries against industrial employees unless one of the four tests laid down in the case of <ORG> (1) is satisfied, because we have generally accepted the view that if the enquiry is fairly held and leads to the conclusion that the charge framed against the employee is proved, <ORG> should not sit in appeal over the finding recorded at the said enquiry and should not interfere with the management's right to dismiss a workman who is found guilty of misconduct.

It would be noticed that the essential basis on which this view is founded is that the enquiry conducted by the management before a domestic tribunal must be a fair and just enquiry and in bringing home to the workman the charge framed against him, principles of natural justice must be observed. Normally, evidence on which the charges are sought to be proved must be led at such an enquiry in the presence of the workman himself. It is true that in the case of departmental enquires held against public servants, this Court has observed in the <CITATION> (2) that if the deposition of a witness has been recorded by the enquiry officer in the absence of the public servant and a copy thereof is given to him, and an opportunity is given to him (1) (1958) 1 I-L. J. 260.

(2) [1963] 2 S. C. R. 943.

to cross examine the witness after he affirms in a general way the truth of his statement already recorded, that would conform to the requirements of natural justice; but as has been emphasised by this Court in <CITATION> (1), these observations must be applied with caution to enquiries held by domestic <ORG> against the industrial employees. In such enquiries, it is desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence. Recording evidence in the presence of the workman concerned serves a very important purpose. The witness knows that he is giving evidence against a particular individual who is present before him, and therefore, he is cautious in making his statement. Besides, when evidence is recorded in the presence of the accused person, there is no room for persuading the witness to make convenient statements, and it is always easier for an accused person to cross-examine the witness if his evidence is recorded in his presence. Therefore, we would discourage the idea of recording statements of witnesses exparte and then producing the witnesses before the employee concerned for cross- examination after serving him with such previously recorded statements even though the witnesses concerned make a general statement on the latter occasion that their statements already recorded correctly represent what they stated. In our opinion, unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the presence of the workman who stands charged with the commission of acts constituting misconduct.

In this connection, it is necessary to point out that unlike domestic enquiries against public servants to which Art. 311 of -the Constitution applies, in industrial enquiries, the question of the bona fldes or mala fides off the employer is often at issue. 'If it (1)  Vol. 2 S. C. R. 809.

is shown that the employer was actuated by a desire to victimise a workman for his trade union activities, that itself may, in some cases, introduce an infirmity in the order' of dismissal passed against such a workman. The question of motive is hardly relevant inenquiries held against public servants, vide UnionTerritory of Tripura v. <NAME> (1). That is another reason why domestic enquiries in industrial matters should be held with scrupulous regard for the requirements of natural justice. Care must always be taken to see that these enquiries are not reduced to an empty formality.

Take the present case where, after the enquiry was held, the Manager who held the enquiry has not recorded any findings, and so, we do not know what reasons weighed in his mind and how he appreciated the evidence led before him. The learned Solicitor-General contends that there was hardly any need to record any findings or to make a formal report in the present case, because the Manager who held the enquiry was himself competent to dismiss the employee. We are not impressed by this argument. The whole object of holding an enquiry is to. enable the enquiry officer to decide upon the merits of the dispute before him, and so, it would be idle to contend that once evidence is recorded, all that the employer is expected to do is to pass an order of dismissal which impliedly indicates that the employer accepted the view that the charges framed against the employee had been proved. One of the tests which <ORG> is entitled to apply in dealing with industrial disputes of this character is whether the conclusion of the enquiry officer was perverse or whether there was any basic error in the approach adopted by him. Now, such an enquiry would be impossible in the present case because we do not know how the enquiry officer approached the question and what conclusions he C. R. 266.

reached before he decided to dismiss <NAME>. In our opinion, therefore, the failure of the Manager to record any findings after holding the enquiry constitutes a serious infirmity in the enquiry itself. The learned Solicitor-General suggested that we might consider the evidence ourselves and decide whether the dismissal of <NAME> is justified or not. We are not prepared to adopt such a course. If industrial adjudication attaches importance to domestic enquiries and the conclusions reached at the end of such enquiries, that necessarily postulates that the enquiry would be followed by a statement containing the conclusions of the enquiry officer. It may be that the enquiry officer need not write a very long or elaborate report ; but since his findings are likely to lead to the dismissal of the employee, it is his duty to record clearly and precisely his conclusions and to indicate briefly his reasons for reaching the said conclusions. Unless such a course is adopted, it would be difficult for <ORG> to decide whether the approach adopted by the enquiry officer was basically erroneous or whether his conclusions were perverse. Indeed, if the argument urged before us by the learned Solicitor- General is accepted, it is likely to impair substantially the value of such domestic enquiries. As we have already observed, we must insist on a proper enquiry being held, and that means that nothing should happen in the enquiry either when it is held or after it is concluded and before the order of dismissal is passed, which would expose the enquiry to the criticism that it was undertaken as an empty for- mality. Therefore, we are satisfied that <ORG> was right in not attaching any importance to the enquiry held by the Manager in dealing with the merits of the dispute itself on the evidence adduced before it.

It is well settled that if the enquiry is held to be unfair, the employer can lead evidence before the <ORG> and justify his action, but in such a case) the question as to whether the dismissal of The employee is justified or not would be open before the <ORG> and the <ORG> will consider the merits ,if the dispute and come to its own conclusion without having any regard for the view taken by the management in dismissing the employee. If the enquiry is good and the conduct of the management is not mala fide or vindictive, then, of course, the <ORG> would not try to examine the merits of the findings as though it was sitting in appeal over the conclusions of the enquiry officer. In the present case, the <ORG> has come to the conclusion that the dismissal of <NAME> was not effected in good faith and has been actuated by a desire to victimise him for his trade union activities. That is a conclusion of fact which cannot be said to be perverse, and so, it is not open to the,appellant to challenge its correctness of the merits before us.

There is one point to which we ought to refer before we part with this appeal. It appears that the main dispute between the parties was whether the strike on October 3, 1960, was spontaneous, or had been instigated by <NAME>. The respondents contended that the treatment given by the management to <NAME> caused this strike and 700 weavers struck work spontaneously, whereas the appellant urged that <NAME> was not present on the said date, and so, the story that his request for leave was not acceded to and he had to work is altogether false and the strike had really been instigated by <NAME>. On this point, the <ORG> has made a categorical finding against the appellant and in doing so, it has relied upon the minutes of the <ORG> meeting held on October 3, 1960, at 3 P.M. with the Manager himself in the chair. These minutes show that when an enquiry was made as to why the strike had commenced, it was definitely reported to the Committee that <NAME> who had gone on leave, had extended his leave and after the expiry of the extended leave, he reported or October 3, and pleaded that he was still unwell and should be given still further leave, but "nobody paid any heed to his prayer", and so, presumably he had to resume duty. The minutes further show that the Labour Officer informed the members of the Com- mittee that <NAME> had produced a certificate of fitness on September, 22, 1960 and after discussion, it was unanimously decided to refer his case to the <ORG>'s Medical Officer on whose recommendation the leave should be considered. These minutes, therefore, clearly prove that <NAME> had gone to the <ORG> on October 3, had asked for further leave, and his request for further leave was not granted. We ought to add that these minutes have been signed by the joint Secretary on the employer's side and the joint Secretary on the employees' side, and their correctness cannot be impeached. It is in the light of these statements that the plea made by the appellant before the <ORG> had to be considered by it.

The plea specifically made was that <NAME> was absent on October 3, and, therefore, there was no question of his working on any machine. This plea would seem to suggest that <NAME> was absent from the <ORG> and that undoubtedly is not true. The learned Solicitor-General invited us to consider this plea in the light of the statement made by one of the witnesses in the domestic enquiry. This statement was that <NAME> and the witness had gone to the Labour Officer for extension of leave to <NAME> and the Labour Officer had granted leave. This statement would show that leave had been granted to <NAME> in the morning of October 3, but as 'we have already seen, the Labour Officer himself told the members of <ORG> at 3 P.M. on the same day that leave had not been granted to <NAME> because he had produced a certificate of fitness dated September 22, and <ORG> had resolved that <NAME>'s case should be referred to the <ORG>'s Medical Officer on whose recommendation action should be taken. Thus, there can be not doubt that even if the plea made by the appellant is liberally construed and is read in the light of the statement made by one of the witnesses at the domestic enquiry, <ORG> was right in holding that the stand taken by the appellant was wholly untrue and that <NAME> had not been given leave on October 3. That being so, if <ORG> took the view that the refusal of the management to give leave to <NAME> exasperated the workmen, we cannot hold that its conclusion is erroneous or that its propriety can be successfully challenged before us. The incident in regard to <NAME> forms the main background of the strike and the anxiety of the appellant was to show that <NAME> was not present on that date. Therefore, once <ORG> came to the conclusion that the version given by the appellant was untrue, it naturally changed the complexion of the whole of the charge-sheet framed by the appellant against <NAME>. That is why <ORG> came to the conclusion that the conduct of the appellant in dismissing <NAME> showed lack of good faith and appeared to have been in spired by the desire to victimise <NAME> for his trade union activities.

The learned Solicitor-General commented on the fact that the <ORG> had allowed the respondents to call for the register of trade unions after the arguments had been heard before it. It appears that both the parties appeared before the <ORG> on January 19, 1961, when arguments were heard and the award was reserved. The <ORG> then filed an application praying that the trade union record may be called for, and the <ORG> ordered that the record be called for. The grievance made by the learned Solicitor-General is that it is improper to have allowed additional evidence to be called for after the arguments had been heard. We do not think there is any force in this argument, because the only purpose for which the record was called for by the <ORG> was to show that <NAME> was the Organising Secretary of the <ORG>. Since that fact was presumably disputed by the appellant in arguing the case before the <ORG>, the <ORG> urged that the record kept by the Registrar of Trade <ORG>s would show that the appellant's plea was not well founded. If, in such circumstances, the <ORG> sent for the record to satisfy itself 'that the record showed that <NAME> was the Organising Secretary of the <ORG>, we do not think any serious grievance can be made by the appellant about the conduct of the <ORG>. It is perfectly true that in dealing with industrial matters, the <ORG> cannot allow evidence to be led by one party in the absence of the other, and should not accept the request of either party to admit evidence after the case has been fully argued unless both the parties agree. In the present case, however, what the <ORG> has done, is merely to send for authenticated record to see whether <NAME> was the Organising Secretary of the <ORG> or not.

The result is, the appeal fails and is dismissed with costs.

Appeal dismissed.


JUDGMENT <NAME>, J.

1. Special leave limited to the question whether the statements taken from the witnesses under s. 161 of the Criminal Procedure Code, in the course of investigation in the connected case under the Arms Act , should not have been supplied to the accused for the purpose of his defence in the trial and whether the result of the trial has been materially affected thereby, was granted by this Court on 19th November 1956, in the petition for special leave to appeal from the judgment and order dated 26th September 1956, of <ORG> in Criminal Appeal No. 407 of 1956. As a result, this appeal now comes up for final disposal.

2. On 12th December 1955, <NAME> deceased, borrowed a mare from <NAME> (<NAME> 5) for the purpose of going to Lakhewali Mandi and rode that animal. Late that night, his body was found on the boundary of a field within the area of Nand Garh, evidently having been murdered and the mare was missing. The father of the deceased made a report at the Police Station Muktsar where the complaint was recorded at 6 a.m., the next day. <NAME> (<NAME> 26), who was the <ORG> Officer, Muktsar, at that time, took up the investigation and proceeded to the spot where he found near the body a bottle, containing a small quantity of liquor and a spent cartridge. It was further proved in the case by the evidence of <NAME> (P.W. 10) and <NAME> (<NAME> 11) that on the evening of the disappearance of <NAME> they had seen the appellant drinking liquor in a field near Nand Garh and they had also been invited to join the drink. The further evidence is that of <NAME> 14 who had seen the appellant at about 2 p.m. on 12th September 1955, riding the mare which had been lent to the deceased that day. At about 5 p.m., on 14th September the appellant, riding a mare without a saddle came to the shop of <NAME> (<NAME> 20) in the village of Ghanga Kalan and asked the witness to prepare some food for him. At about that time a <ORG> was being held in the village of Ghanga Kalan and the Sarpanch and the members of the <ORG> had assembled. <NAME> (P.W. 23) was on his way to the house of <NAME> (<NAME> 19) for attending the meeting of the village <ORG> when he saw the appellant sitting outside the shop of <NAME> holding the reins of the mare at which he became suspicious at the presence of a stranger in the village in such circumstances. The matter was reported to the other members of the <ORG>, where upon <NAME> (<NAME> 19), <NAME> (<NAME> 24) and <NAME> (<NAME> 23) went to the shop of <NAME> and questioned the appellant suspecting that the mare was stolen. On this the appellant tried to pull something out from the fold of his trousers but was prevented from doing any harm and was seized. A country made pistol, P. 16, for firing twelve-bore shot gun cartridges together with four live cartridges were then taken from him who thereafter confessed that he had stolen the mare after shooting a <NAME> of Nand Garh. The fact of the capture of the accused was thereafter recorded in the <ORG> records and the witness took the appellant to the Police Station of Jalalabad where the report of (P.W. 19) <NAME> was recorded and a case registered against the accused under Section 19(f) of the Arms Act at 8-30 p.m. on 14th September 1956. Information was given to the Sub-Inspector of Muktsar on 15th September regarding the arrest of the accused who had already been sent up to the judicial lock up. During the course of the investigation of the case of murder by the Sub-Inspector of Muktsar the cartridge recovered near the place where the dead body was found was sent along with the pistol seized from the accused for examination and the opinion of Dr. <NAME> (P.W. 3) was to the effect that the cartridge recovered at the spot was fired from that pistol. There were parallel investigations by <NAME> (P.W. 25) and <NAME> (<NAME> 26) regarding the cases registered in their respective Police Stations. <NAME> (P.W. 25) investigated the offence under Section 19 (f) of the Arms Act , while <NAME> (P.W. 26) proceeded with the investigation of the offence of murder and robbery. At this stage it may be mentioned that P.W. 25 examined during the course of the investigation of the complaint recorded in his police station, <NAME> (P.W. 20), <NAME> (<NAME> 23), <NAME> (<NAME> 24) and another person <NAME> who is not now examined in this case. <NAME> <NAME>, who investigated the case of murder, apparently did not examine these witnesses.

3. As result of enquiries so made, charge-sheets were filed against the accused before the Court of the 1st Class Magistrate of Muktsar by the respective Police officers. The institution of the proceedings under Section 19 (f) of the Arms Act was on 30th January 1956, whereas the committal proceedings relating to the offence under Section 302 of the Indian Penal Code etc., were begun by the examination of P. W. 1, Dr. <NAME>, on 3rd December 1955. The trial of the offence under Section 19 (f) ended by the conviction of the accused on 16th March 1956, by which he was sentenced to undergo nine months' rigorous imprisonment. The commitment proceedings ended on 3rd April 1956, though the first witness for the prosecution had been examined on 3rd December 1955. An appeal against the conviction under Section 19 (f) of the Arms Act was pending before the Additional Sessions Judge of Ferozepore when the murder trial commenced. The learned Sessions Judge found the appellant guilty of the offence of murder and sentenced him to the extreme penalty of the law on 1st August 1956. In appeal to <ORG>, along with the Reference under Section 374 of the Code of Criminal Procedure, the death sentence was confirmed, with a slight modification regarding the sentence under the minor charges.

4. The appellant denied his guilt throughout and stated that the prosecution story was false, including the circumstances under which he was arrested and produced at the <ORG> Station of Jalalabad. His statement was that he was arrested by the <ORG> at the house of his maternal uncle in connection with some other murder case and was sent to <ORG> at Ferozepore after being detained at Jalalabad for 3 or 4 days.

5. As stated already, since special leave is limited to the question adverted to at the beginning of this judgment, the credibility or otherwise of the witnesses examined on behalf of the prosecution cannot be gone into at this stage, for the reason that under Article 136 of the Constitution, ordinarily this court will not entertain an appeal on facts. At the time of granting leave there was a direction that the statements of witnesses examined under Section 161 by the Sub-Inspector of Police of Jalalabad should be called for and made available at the time of the hearing and this has been complied with by copies of such statements having been placed before us, and what we have to decide is whether, granting that these statements were not made available to the defence at the time of the hearing in <ORG> when these witnesses were called by the prosecution, there has been an infraction of any rule of law and procedure and even if that is so, whether any prejudice has been caused to the accused which cannot be cured by Section 537 of the Code of Criminal Procedure.

6. According to the learned counsel for the appellant, P. WS. 19, 20, 23 and 24 were, to use a common expression, 'stock witnesses' put up by the prosecution to speak to facts and circumstances which they did not actually witness but were merely persons who would be made to depose whatever the police wanted to be put on record. Such being the case, if the statements recorded by the Sub-Inspector of Police of Jalalabad regarding the confession to the <ORG> and the circumstances under which the accused was apprehended were available to the defence, cross-examination would have elicited discrepancies which would brand them as untrustworthy. It does not appear that any application whatever was made on behalf of the appellant during the Sessions trial for the supply of the copies of the statements of the witnesses recorded in the Arms Act case, although the records of that case must have been before the court at the time of the trial, since the Sessions Judge disposed of the appeal against the conviction in the Arms Act case simultaneously with convicting the appellant of the offence of murder, i. e., both were disposed of on 1-8-1956, by the same Sessions Judge. From the judgment of the 1st Class Magistrate which is on the record before us it is seen that P. W. 19 and P. W. 24 (<NAME> and <NAME>) were examined before him, but there is nothing to show that P. W. 20 (<NAME>) and P. w. 23 (<NAME>) were so examined in that case. Before the Committing Magistrate in addition to P. WS. 19 and 24, <NAME> was a witness, while <NAME> was tendered for cross-examination. It wag the same Magistrate <NAME>, 1st Class Magistrate, (<NAME>) who convicted the appellant of the offence under the Arms Act on 16-3-1956, and who passed the order of committal on 3-4-1956, and as such it is clear that in the Committing Court the entire records of the investigation by the Sub-Inspector, Jalalabad, were available at the time of the enquiry.

7. The argument of Mr. <NAME>, counsel for the appellant, is that since the defence, according to him, was not aware of what P. Ws. 19, 20, 23 and 24 were to depose at the time the trial in <ORG> began, the principle that the accused must be made aware beforehand of the case which he has to meet, has been violated. There is no provision in the Code of Criminal Procedure that copies of statements recorded under Section 161 in a connected case should be made available to the defence though there is nothing prohibiting it and in the instant case it would have been better to have done so especially since the statements of these witnesses were not recorded by the Sub-Inspector of Muktsar apart from what they had stated before the Sub-Inspector of Jalalabad, copies of which could have been given to the defence. <ORG> in '<NAME> v. Emperor I L R (1948) Mad 1 : (A I R 1947 P C 67) (A) has laid down that if a trial is conducted substantially in the manner prescribed by the Code of Criminal Procedure but some irregularity occurred in the course of such conduct, the irregularity can be cured under Section 537 of the Code, and nonetheless so because the irregularity involves a breach of one of the very comprehensive provisions of the Code . Such being the case, where it. was established that the statements of witnesses recorded by a police officer during the course of the investigation were made available only at a late stage of the trial, no prejudice was caused to the accused even though the defence did not get them earlier. Their Lordships referred to two earlier cases, namely 'Baliram v. Emperor' ILR (1945) Nag 151 : (A I R 1945 Nag 1) ( <CITATION> ' where the respective courts had refused to supply to the accused copies of statements made by witnesses to the police and had held that such a breach of the proviso to Section 162 was a matter of gravity. In the circumstances of the case before <ORG> it was held that no prejudice had been caused to the defence by the late supply of the notes of examination of the witnesses by the police officer. This court in case ' <CITATION> elaborately discussed the question of the applicability of Section 537 and came to the conclusion that in judging a question of prejudice, as of guilt, courts must act with a broad vision and look to the substance and not to technicalities, and their main concern should be to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and dearly and whether he was given a full and fair chance to defend himself. The discussions are at pp. 1153, 1183 and 1189 (of S C R): (at pp. 122, 134-135 and 137 of A I R) and need not be reiterated here. We can have no doubt whatever that in the circumstances of this case the accused had a fair trial. Having perused the statements given to the police officer in the Arms Act case, we are not able to find any serious discrepancies between those statements and what had been deposed to at the present trial. But Mr. <NAME> compared the statements of the witnesses with each other and brought to our notice that some of the later ones verbatim repetitions of what the earlier witnesses had stated and that being the case he contends that he could have cross-examined the four witnesses above named and elicited the fact that they were adherents of the police. There is no special rule or direction provided in the Code of Criminal Procedure affording guidance for police officers in recording statements of witnesses and usually what is done is that when a succeeding witness gives practically an identical story as to what a previous witness has stated, it is a matter of common knowledge that the words used by the police officer would be similar or identical.

8. The fact that the cross-examining counsel in the <NAME> case did not have in his hands the copies of the statements of the witnesses in the connected Arms Act case, would not have made any difference. It is seen from the record that the committal proceedings which began on 3-12-1955, ended only in April, 1956, while in the Arms Act case which began on 31-1-1956, the judgment was delivered on 16-3-1956, and both proceedings were before the same Magistrate. We have no doubt, therefore, that the statements of witnesses recorded by the Sub-Inspector of Jalalabad were before the court when the <NAME> trial was going on and if a request had been made, there is no doubt whatever that copies would have been given to the accused. After the completion of the hearing of this appeal, we called for the entire records of the proceedings from the <NAME> Judge and satisfied ourselves that the records in the Arms Act case were before the <NAME> Court when the murder trial was in progress. If the accused's counsel wanted copies of them, he would have got them and hence we feel that no prejudice has been caused at all.

9. It is the contention of the learned counsel for the appellant that even without an express request the court should give the copies before the trial began and for this purpose various provisions of the Code , as amended, were brought to our notice ; we may refer to them without any elaboration. Sub-clause (3) of Section 161 is to the effect that a police officer making an investigation under Chapter XIV which relates to information to the police and their powers to investigate, may reduce into writing any statement made to him in the course of the examination under that section and if he does so, he shall make a separate record of the statements of each of such persons whose statements he records. This Sub-section inserted by the Code of Criminal Procedure [ (Amendment) Act , (II of 1945), has not undergone any change in 1955 but Section 162 has undergone considerable changes. Whereas there were two provisos in the unamended section, the Act as it now stands, contains only one proviso to Sub-section (1). In short, the essential change is, that at present, according to the proviso it is open to the prosecution with the permission of the <ORG> to use such a statement in order to contradict a witness in the manner provided by Section 145 of the Evidence Act though before the amendment, the prosecution could not make use of any such statement to contradict a witness but could only use any part of the statement other than that used by the defence to contradict a witness, for explaining any matter referred to in cross-examination at the time of re-examination.

10. There is also the fact that before the amendment the accused had to request the <ORG> to refer to the statements made to the police officer and furnish him with a copy thereof in order that the same may be used for contradicting the witness, but as it now stands, no such request is necessary because there is, as will be shown later, a provision to the effect that copies should be given earlier. Section 173 relates to the report of the police officer and Sub-section (4) is practically a, new provision. There is also a new Sub-section (5) added. Sub-section (4) is to the following effect :

"After forwarding a report under this section, the officer in charge of the police station shall, before the commencement of the inquiry or trial, furnish or cause to be furnished to the accused, free of cost, a copy of the report forwarded under Sub-section (1) and of the first information report recorded under Section 154 and of all other documents or relevant extracts thereof, on which the prosecution proposes to rely, including the statements and confessions, if any, recorded under Section 164 and the statements recorded under Sub-section (3) of Section 161 of all the persons whom the prosecution proposes to examine as its witnesses."

It is clear from this new sub-section that when the police officer after completing the investigation sends his report to the Magistrate, copies of the statements and documents referred-to should be furnished to the accused. The object of this provision is to put the accused on notice of what he has to meet at the time of the inquiry or trial. The unamended Sub-section (4) had only laid down that a copy of the report forwarded to the Magistrate, shall, on application, be furnished to the accused before the commencement of the inquiry or trial. There was no compulsion to furnish him with copies of the statements, documents etc.

11. We may now refer to the new provision inserted in the Code as Section 207-A relating to the procedure to be adopted in proceedings instituted on police report relating to enquiry into a case triable by <ORG>. Sub-clauses (3) and (4) are as follows :

"(3) At the commencement of the inquiry, the Magistrate shall, when the accused appears or is brought before him, satisfy himself that the documents referred to in Section 173 have been furnished to the accused and if he finds that the accused has not been furnished with such documents or any of them, he shall cause the same to be so furnished."

"(4) The Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged; and if the Magistrate is of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution he may take such evidence also."

Sub-section (4) makes a radical change in the manner of recording evidence in <ORG>, for it lays down that only witnesses to the actual commission of the offence, as may be produced, by the prosecution need be examined by a Committing Magistrate. Other witnesses, who support the prosecution story in diverse particulars, need not be examined by <ORG>. Sub-section (4) of Section 173 , read with Sub-section (3) of Section 207A makes ample provision for the defence to be in possession of all the statements and documents before the inquiry begins, but no where is it stated either in Section 173 (4) or Section 207A (3) that the statements in connected cases should be supplied to the accused. In this connection we may also refer to Section 2-51 (A) inserted in chap. XXI, relating to the trial of Warrant Cases by Magistrates. Sub-section (1) of Section 251 (A) corresponds to Section 207A (3). Even here there is no reference to the statements in connected cases.

12. In chap. XXIII relating to trials before <ORG> from Section 286 , onwards, the procedure is laid down for the trial to close of cases for prosecution and defence. No where is there in this Chapter any direction, or rule to the effect that in a <ORG> trial the defence is to be supplied with copies of statements taken under Section 161 , The reason, in our opinion, is that such statements should have been given under Section 207-A in the initial stage of the inquiry before <ORG>. Therefore, we cannot say that there has been any non-observance of a mandatory rule guiding the conduct of the trial in the <ORG> Court; but the contention is that since the initiation of the prosecution is before <ORG>, the non-compliance of Section 207-A would vitiate even the trial before the <ORG> Court. A close examination of this argument reveals its untenability. In the Code of Criminal Procedure (Amendment) Act , Section 116 lays down the savings, where Sub-section (3) (Sub-clause (c)--Ed.) says among others that Section 207-A or Section 251-A of the principal Act as amended by that Act, shall not apply to or affect any inquiry or trial before a Magistrate in which the Magistrate has begun to record evidence prior to the date of such commencement and which is pending on that date and such inquiry or trial shall be continued and disposed of as if this Act had not been passed. As stated already, the first witness for the prosecution in the committal stage was examined on 3rd December 1955, i.e., before the commencement of the Amending Act on 1st January 1956. The inquiry was pending in <ORG> at the time the Act came into force. It was not possible to apply Section 207-A at a time when it was not on the statute book and, therefore, it is an impossibility to invoke that provision in the instant case but Mr. <NAME> contends that Sub-clause (a) of Section 116 does not refer to Section 174 , Sub-section (4) and, therefore, there has been a violation. The short answer to this is that even this provision has not been made to have retrospective effect and the stage at which the report of the police to the Magistrate had to be sent had long ago passed. In these circumstances, we are of the opinion that no provisions of the amended Code relating to the supply of copies of statements recorded under Section 161 (3) can apply to the present case. But in view of the fact that even if they are applicable, we are satisfied that there is no prejudice caused to the accused, as stated already, and we do not think it necessary to express any final opinion on this question.

13. On an examination of the records in this case and of the prosecution evidence in the Arms Act case, we feel satisfied that no prejudice has been caused to the accused by his not having been supplied with the statements of witnesses recorded by the police during the investigation of the Arms Act case, when the <NAME> trial was going on and hence the appeal is dismissed.


Court No. - 4 Case :- WRIT - C No. - 68359 of 2009 Petitioner :- <NAME> @ <NAME> Lal S/O Sri Rajwa Respondent :- <NAME> Lal S/O Sri Punna Petitioner Counsel :- Prahalad Kr. Khare Hon'ble Krishna Murari,J.

<NAME>, learned counsel appearing for the petitioner states that due to inadvertence the writ petition has been filed although the second appeal ought to have been filed against the order impugned in this petition. He wants to withdraw the writ petition. The prayer made is allowed. The writ petition stands dismissed as withdrawn.

Office is directed to return the certified copy of the orders enclosed along with the writ petition within a week after obtaining photostat copies of the same to be retained on record.

Order Date :- 4.1.2010 Sh


JUDGMENT <NAME>, C.J.

1. This reference as originally presented to us seemed to confront us with a very formidable problem, but when the matter is analysed a little as it happens in most matters that arise under the Income-tax Act , really the question that we have to decide is a very simple one.

2. The facts on which the reference is based may be briefly stated. The assessee company holds shares of <ORG> and in the year of assessment, 1939-40, the year of account toeing April 1938 to March 1939, it received dividends in respect of those shares amounting to Rs. 6,36,279. <ORG> was subjected to tax in respect of the Income represented by that dividend in the sum of Rs. 1,17,987. Therefore, in the assessment of the assessee company, by reason of Section 16(2) , Income-tax Act and by the process of what is known as grossing up, the dividend income was shown as Rs. 8,04,266, being made up of the net dividend received by the assessee company and by the tax paid by <ORG> on the income represented by that dividend. It also appears that under Section 18(5) the assessee company was given credit for the tax paid by <ORG>, viz., in the sum of Rs. 1,17,987.

The assessee company then made an application under Section 48 for refund under Section 49-A on the ground that its dividend income had been subjected to double taxation in India and in the U. K. and it was entitled to relief in respect of double taxation.

The taxing department on a calculation of the income of the assessee company on the basis of Rs. 8,04,266 came to the conclusion that the assessee company was entitled to relief in the sum of Rs. 35,136-12-0. In the meanwhile, what had happened was that <ORG> had been given relief in respect of double taxation and the assessee's share of that relief was Rs. 47,474, and <ORG>, as it had come to the conclusion that the assessee company was only entitled to relief in the sum of Rs. 35,186-13-0, deducted this amount from the sum of Rs. 47.474 and made a claim against the assessee company in the sum of Rs. 12,287-4-0. It is in respect of this amount that this reference has been made.

3. A preliminary objection was taken by Mr. <NAME> that no appeal lies to the <ORG> and therefore no reference is competent to this Court, and for that purpose Mr. <NAME> referred to the notification issued under Section 49-A , which is notification No. 50, dated 25-9-1948, and Clause (6) of that notification provides that an application for refund under these rules may He to the Appellate Assistant Commissioner of Income-tax from any order of the Income-tax Officer disallowing the claim for refund wholly or In part, and Mr. <NAME>'s contention is that a special appeal is provided by this notification to the Appellate Assistant Commissioner and no further appeal is provided to the <ORG> and no reference lies under this notification to <ORG>.

Mr. <NAME> draws our attention to the relevant provisions of the Act with regard to appeals. Section 30 provides for an appeal to the Appellate Assistant Commissioner; Section 31 provides for hearing of the appeal; and Section 33 provides fur an appeal by an assessee objecting to an order passed by an Appellate Assistant Commissioner under Section 28 or, Section 31 , and it is pointed out that in Section 30 no appeal is provided under Section 49-A , but the only appeal is under Ss. 48, 49 or 49F of the Act, and therefore the contention is that as Section 30 does not provide for an appeal to the Appellate Assistant Commissioner, and as an appeal to the <ORG> lies against an order made by the Appellate Assistant Commissioner, an order made under Section 49A is not appealable to the <ORG>.

Now, the fallacy underlying this argument is that an application for a refund is not made under Section 49-A but under Section 48 . Chapter 7 of the Act deals with refunds and Section 49-A and the other sections deal substantively with the reliefs to which the assessee is entitled by way of refund. Section 48 is procedural and it provides for an application for refund, and Section 30 of the Act provides for an appeal against an order made by the Income-tax Officer under Section 48 . Mr. <NAME> says that looking at the order of the Income-tax Officer, the order was made under Section 49A .

The proper way to describe the legal position would be that an application was made by the assessee under Section 48 for relief under Section 49-A and an order was made by the Income-tax Officer on that application. Therefore, clearly, the order of the Income-tax Officer would be under Section 48 , although it would be in respect of a relief claimed under Section 49-A . If the order was made under Section 48 , then an appeal would lie to the Appellate Assistant Commissioner and an appeal under Section 33 would lie to the <ORG> and a reference would be maintainable against the decision of the <ORG> under the relevant provisions of the Act. Therefore, in our opinion there is no substance in that contention of Mr. <NAME>.

4. Coming to the merits of the case, what is urged by Mr. <NAME> is that under Section 16(2) for the purpose of grossing up the rate at which tax is to be paid by the company is to be taken, into consideration, and inasmuch as <ORG> was liable to pay tax at the appropriate rate and that tax amounted to Rs. 1,17,937, that was the only figure that could be taken into consideration for the purpose of grossing up under Section 18 (2).

It is then urged that once that was done, under Section 18(5) what the assessee was entitled to be credited with was the amount of tax which was added under Section 16 (2), and therefore Mr. <NAME>'s contention is that even though <ORG> may have subsequently got a refund of Rs. 47,474, the credit to which he is entitled is in the sum of Rs. 1,17,987 and no amount can be deducted from that. It is therefore, urged that when <ORG> called upon him in substance to refund the sum of Rs. 47,474, they were acting contrary to law.

In the alternative it is urged that if <ORG> is entitled to take into consideration not the sum of Rs. 1,17,937 but the tax actually paid by <ORG> which is Rs. 70,513, then in grossing up also under Section 16(2) the amount by which the income of the assesses should be increased is not Rs. 1,17,987 but Rs. 70,513.

In our opinion, on the question submitted to us no question arises either as to the grossing up under Section 16(2) or the credit to which the assessee company was entitled under Section 18(5) . The assessment of the assessee company has been completed and Mr. <NAME> does not suggest that in assessing the assessee company the provisions of Section 16 (2) and Section 18(5) have not been properly complied with.

We are now at the stage of an application for refund, and the question that we have to consider is not whether the assessee was properly assessed or whether the provisions of Section 16(2) and Section 18 (5) were properly complied with, but what is the relief he is entitled to under Chapter 7 which deals with reliefs and which reliefs can be obtained by an application for refund under Section 48 .

5. Now, for this purpose, the relevant section that we have to consider is Section 49-C . Sub-section (1) of that section provides:

"Where a share-holder has received a dividend from a company which has obtained the relief referred to in Section 49 or granted under Section 49(A) or under the Indian and Burma (Income-tax Belief) Order 1936, he shall be deemed in respect of such dividend himself to have obtained such relief at the rate at which such relief has been granted in resoect of Income-tax only to the company for the financial year preceding the year In which the dividend was paid."

6. Therefore, in this case, inasmuch as <ORG> obtained relief in respect of double income-tax in the' sum of Es. 47.474, the assessee company under the provisions of this section must be deemed to have received the relief Itself. Then we come to Sub-section (2):

"If the rate at which the share-holder is deemed under Sub-section (1) to have obtained relief exceeds the rate at which he would have been entitled to relief had such relief been given direct to him by or under the said sections or Order, any excess shall be recovered from him either as an addition to the tax payable by him on any assessment made on him under Section 23 or Section 34 or by setting it off against any relief due to him under Section 48 ."

In respect of this very Income the relief to which the assessee company is entitled by reason of its having suffered double taxation is only Rs. 35,186-12-0. or, in other words, the rate at which it is entitled to relief is less than the rate at which <ORG> was entitled. Whereas <ORG> was entitled to relief in respect of double taxation on this dividend Income of Rs. 47,474, the assessee company is entitled only to Rs. 35,186-12-0, and therefore the assessee having obtained relief in excess to the extent of Rs. 12,287-4-0, this excess is being recovered under Section 49-C (2).

Therefore, what we are concerned with on this reference is not any question arising under Section 16 (2) or under Section 18(5) , but it is a Question of Section 490 (2) and the scheme of Section 49-C is Clear. An assessee is deemed to have received relief at the rate at which the company of which he is the share-holder has received it in respect of the dividend income. But that is not the actual relief to which he is entitled, and if it is found that the actual relief to which he is entitled is less than what the company obtained, then the law provides for his having to make good the difference between the relief which he is deemed to have received under Section 49-C (1) and the relief to which he is actually entitled under Section 49C(2) .

The nature of the relief obtained by <ORG> and by the assessee company is the same. <ORG> obtained relief in respect of double taxation. The assessee company is also claiming relief in respect of double taxation. It so happens that the rate at which <ORG> was entitled to relief was higher than the rate at which the assessee company is entitled, and therefore the assessee company was given credit in a larger amount than it was entitled to if the assessee company itself in the first instance had made an application for relief in respect of double taxation.

The position may be put this way. If the assessee company had made an application in its own rights without reference to what had happened to <ORG>, it would have got relief in respect of double taxation in the sum of Rs. 35,186-12-0. The assessee company would have-been entitled to be paid that refund, but then it is found that in respect of the same income relief has already been given and relief has been given in a larger amount and in respect of that relief the assessee company has been given credit.

Therefore, <ORG> recovers from the assessee company that amount to which it is not entitled in respect of the particular relief which it is claiming. As the assessee company is only entitled to Rs. 35,186-12-0, the credit given to it in respect of the same relief in a higher amount is unjustified and the excess is being recovered on that ground.

The whole contention of Mr. <NAME> is that its income is not Rs. 8,04.266, but it is Rs. 7,56,793, because by the proper process of grossing up its income should have been less by Rs. 47,474. In our opinion that contention is entirely fallacious. The very assessment of the assessee company was on the basis of its dividend income being Rs. 8,04,266. It is difficult to understand how, when the assessment was made on the basis of that income and when relief in respect of double taxation is claimed on the basis of that income, it la open to the assessee to say: "Because on the basis of that income I got only relief to the extent of Rs. 35.186, I am entitled to claim relief to a much larger extent because credit was already given to me in the sum of Rs. 47,474 to which under the rules of double taxation I was not entitled."

7. The result, therefore, is that in our opinion the <ORG> was right in the conclusion it came to. We will answer the question after reformulating It as follows: .

"Whether on the facts of the case the Income-tax Officer was right in first setting off Rs. 47,474 (being the double income-tax relief obtained by the assessee company through <ORG> in respect of that company's dividend) against Rs. 35,187 (being the double income-tax relief to which it was actually entitled)?"

8. We answer the question in the affirmative.

9. Assessee to pay the costs.

10. Answer accordingly.