CASE NO.: Appeal (crl.) 1293 of 2006 PETITIONER: Mrs. <NAME> RESPONDENT: Mrs. M. S. Sampoornam DATE OF JUDGMENT: 11/12/2006 BENCH: <NAME> & <NAME> Panta JUDGMENT:

J U D G M E N T [Arising out of S.L.P. (Crl.) No. 2639 OF 2004] Lokeshwar Singh Panta, J.

Leave granted.

This appeal by special leave, directed against the order dated 10.2.2004 of <ORG> at Madras, involves a question with regard to the scope of the powers of the Magistrate under Section 243 of the Code of Criminal Procedure, 1973 [hereinafter referred to as ` Cr.P.C .']. It arises out of these circumstances.

A complaint has been preferred by Mrs. <NAME>, complainant-respondent herein, against Mrs. <NAME>, appellant herein, and her husband for the offence under Section 138 of the Negotiable Instruments Act, 1881 [for short "the Act"] before the Judicial Magistrate, Tambaram, Chennai, alleging that the appellant along with her husband jointly signed and issued a cheque No. 037296 for discharging their liability. On presentation of the said cheque, it was dishonoured for 'insufficient funds'. Though the notice was served upon both the accused persons yet no reply has been sent by them. Thereafter, observing all the formalities as contemplated under the Act, the complainant- respondent had preferred C.C. No. 439/1998 on the file of the Judicial Magistrate, Tambaram, Chennai, against the appellant and her husband. The accused appeared before the Magistrate and filed an application under Section 245 of . raising inter alia preliminary objections that:- (1) the accused has not signed the cheque nor issued it to the complainant-respondent; (2) the cheque, in question, was drawn from the individual account of the accused and therefore, as alleged by the complainant, the accused and her husband could not have jointly signed and issued the cheque; (3) the signature on the cheque may be sent for expert opinion to ascertain bona fide of the same; and (4) neither the appellant nor her husband owe any debt to the respondent. The Judicial Magistrate dismissed the said application on the ground that the genuineness of the signature could be questioned only at the time of trial of the complaint. Thereafter, the trial was commenced and the evidence of the respondent was recorded. The banker of the appellant during the cross-examination deposed that he has not verified the signature before returning the cheque, in question, as dishonoured. In these circumstances, during the trial of the case the appellant preferred an application under Section 243 of ., requesting the Magistrate to send the cheque in question for expert opinion to ascertain the correctness and genuineness of the appellant's signature appearing thereon. The Magistrate, however, dismissed the application on the ground that it was not mandatory that every disputed document or signature has to be sent to an Expert for opinion, that the original document filed in the court cannot be sent out for any reason and that every document filed before the court should be safe till the disposal of the litigation. Feeling aggrieved by this order, the appellant preferred a Criminal Revision Case No. 335 of 2002 under Section 397 read with Section 401 of Cr. P.C in <ORG> at Madras. The Revision Petition came to be dismissed by the impugned order. Hence, this appeal by the appellant.

We have heard <NAME>, learned counsel appearing for the appellant-accused and <NAME>, learned counsel appearing for the respondent and examined the material on record.

Learned counsel for the appellant contended that <ORG> has failed to appreciate the legal position that no offence can be established against the appellant by the respondent unless the respondent proves on record that the cheque, in question, bears the signature of the appellant. According to the learned counsel, the appellant cannot be debarred from entering upon her defence and produce her evidence without deciding the genuineness of the signature on the cheque, in question and the dismissal of the application by the Magistrate has caused miscarriage of justice to the appellant.

On the other hand, the learned counsel appearing on behalf of the respondent contended that the Magistrate has exercised his jurisdiction judiciously as the application filed by the appellant was with the sole object to protract the trial. He submitted that <ORG> has recorded a well-reasoned order in dismissing the revision petition filed by the appellant and this <ORG> in exercise of its jurisdiction under Article 136 of the Constitution of India should not lightly interfere with the said order.

We have given our anxious and thoughtful consideration to the respective contentions of the learned counsel for the parties.

It is not in dispute that the appellant at the initial stage of her appearance before the Magistrate had filed an application under Section 245 . in which she had categorically denied her signature on the cheque and its delivery to the respondent besides raising other preliminary objections in opposition to the complaint filed by the respondent under Section 138 of the Act. From the record, it appears that the said application was dismissed by the Magistrate on the ground that the genuineness of the signature can be questioned only at the time of trial. The appellant accepted the correctness of the said order of the Magistrate. During the trial, the respondent was examined as P.W. 1 on 22.09.1999 and PW-3, the officer of the <ORG>, was examined on 22.11.2000. It is thereafter that the appellant had filed the application under Section 243 . praying to send the cheque, in question, for ascertaining the bona fide and genuineness of her signature appended thereon. The Trial Magistrate as well as <ORG> have observed that Section 243 . deals with summoning of defence witnesses and cause any document or thing to be produced through him. But in the present case, the accused has filed a petition without naming any person as witness or anything to be summoned which is to be sent for hand-writing expert for examination.

To appreciate the reasoning recorded by <ORG> in its impugned order, it is useful to refer to the provisions of Section 243 of ., which reads as under:- "243. Evidence for defence.(1) The accused shall then be called upon to enter upon his defence and produce his evidence; and if the accused puts in any written statement, the Magistrate shall file it with the record.

(2) If the accused, after he had entered upon his defence, applies to the Magistrate to issue any process for compelling the attendance of any witness for the purpose of examination or cross-examination, or the production of any document or other thing, the Magistrate shall issue such process unless he considers that such application should be refused on the ground that it is made for the purpose of vexation or delay or for defeating the ends of justice and such ground shall be recorded by him in writing:

Provided that, when the accused has cross-examined or had the opportunity of cross-examining any witness before entering on his defence, the attendance of such witness shall not be compelled under this section, unless the Magistrate is satisfied that it is necessary for the ends of justice.

(3) The Magistrate may, before summoning any witness on an application under sub-

section (2), require that the reasonable expenses incurred by the witness in attending for the purposes of the trial be deposited in Court."

Section 243 (2) is clear that a Magistrate holding an inquiry under the Cr.P.C . in respect of an offence triable by him does not exceed his powers under Section 243(2) if, in the interest of justice, he directs to send the document for enabling the same to be compared by a hand-writing expert because even in adopting this course, the purpose is to enable the Magistrate to compare the disputed signature or writing with the admitted writing or signature of the accused and to reach his own conclusion with the assistance of the expert. The appellant is entitled to rebut the case of the respondent and if the document viz. the cheque on which the respondent has relied upon for initiating criminal proceedings against the appellant would furnish good material for rebutting that case, the Magistrate having declined to send the document for the examination and opinion of the hand-writing expert has deprived the appellant of an opportunity of rebutting it. The appellant cannot be convicted without an opportunity being given to her to present her evidence and if it is denied to her, there is no fair trial. 'Fair trial' includes fair and proper opportunities allowed by law to prove her innocence. Adducing evidence in support of the defence is a valuable right. Denial of that right means denial of fair trial. It is essential that rules of procedure designed to ensure justice should be scrupulously followed, and courts should be jealous in seeing that there is no breach of them. We have not been able to appreciate the view of the learned Judge of <ORG> that the petitioner has filed application under Section 243 . without naming any person as witness or anything to be summoned, which are to be sent for handwriting expert for examination. As noticed above, Section 243(2) . refers to a stage when the prosecution closes its evidence after examining the witnesses and the accused has entered upon his defence. The appellant in this case requests for sending the cheque, in question, for the opinion of the hand-writing expert after the respondent has closed her evidence, the Magistrate should have granted such a request unless he thinks that the object of the appellant is vexation or delaying the criminal proceedings. In the circumstances, the order of <ORG> impugned in this appeal upholding the order of the Magistrate is erroneous and not sustainable. For all the foregoing reasons, we allow this appeal and set aside the order of <ORG> dated 10.02.2004 passed in Criminal Revision Case No.335 of 2002 by which the order dated 15.11.2001 of the Judicial Magistrate made in Crl. M. P. No.341 of 2001 in C.C. No. 439 of 1998 dismissing the application of the appellant under Section 243 . was affirmed. Accordingly, Crl. M. P. No.341 of 2001 in C.C. No.439 of 1998 on the file of the Judicial Magistrate, Tambaram, Chennai, shall stand allowed. The learned Magistrate shall take appropriate steps for obtaining the report of handwriting expert on the point whether the signature in the cheque is that of the accused and shall proceed with the trial of the case in accordance with law. Since the case is very old, further proceedings shall be taken with utmost expedition. We make it clear that any observation made in this order shall not be construed as an expression of opinion on the merits of the case and the same shall be decided by the Magistrate on its own merit.


PETITIONER: STATE OF UTTAR PRADESH & ANR. Vs. RESPONDENT: SRI C.S. SHARMA DATE OF JUDGMENT: 01/05/1967 BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. VAIDYIALINGAM, C.A. CITATION: 1968 AIR 158 1967 SCR (3) 848 ACT: Civil Services (Classification, Control and Appeal) Rules, r. 55, Sub rr. (1) and (3)--Difference in nature of enquiries under the two subrules--Enquiry under sub-r. (1) relates to misconduct affecting character of a Government servant--Full opportunity to defend himself necessary- Enquiry vitiated when officer not given opportunity to produce his defence witnesses. HEADNOTE: The respondent was a Sales-tax Officer under the Uttar Pradesh Government. Inquiries against him in respect of some charges of corruption were first made by the Assistant Commissioner of Sales-tax who examined some witnesses. The enquiry was then passed on to the Commissioner who neither examined the witnesses against the respondent himself nor gave an opportunity to the respondent, despite the latter's repeated 'requests to produce his defence witnesses. On orders of dismissal being passed after the enquiry the respondent filed a writ petition before <ORG> which succeeded. The <ORG> appealed. It was conceded on behalf of the <ORG> that the enquiry was under sub- (1) or r. 55 of the Civil Services (Classification Control and Appeal) Rules. The distinction between 'sub:ft. (1) and (3) was considered. HELD: The third sub-rule deals with the unsuitability of an officer for the service or with a charge for any specific fault. This fault means a fault in the execution of his duties and not a misconduct such as taking scribe etc. which are charges of a more serious nature affecting the character of the individual concerned. The collocation of the words any specific fault' or 'on account of unsuitability for service' give the clue to the distinction between the third sub-rule and the first sub-rule. [852B-C] Sub-rule (1) of r. 55 is the general rule for enquiries when the conduct of a person is inquired into for misconduct. A person cannot the charged with criminal conduct without affording him adequate opportunity to clear his character. If therefore the procedure under the first sub-rule had to be followed adequate opportunity had to be given to the respondent to lead evidence on his own behalf to clear himself. No such opportunity having been given the enquiry could not be said to comply with the elementary principles of natural justice and <ORG> rightly held that the enquiry was vitiated. [851 F-G; 852 853 F-G] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1260 of

966. Appeal from the judgment and decree dated July 10. 1962 <ORG>. Lucknow Bench in Special Appeal No. 551 of 1960.

<NAME> and <NAME>, for the appellants. <NAME>, <NAME> and <NAME>, for the respondent.

The Judgment of the Court was delivered by <NAME>, J. This is an appeal by the State of Uttar Pradesh against the judgment and order of <ORG>, October 24, 1962, confirming_ in special appeal the decision of a learned Single Judge dated July 10, 1962. By that order <ORG> has set aside the order of dismissal made by <ORG> against the respondent <NAME> on the ground that he did not have a fair enquiry before the Commissioner of Sales Tax when certain charges against him were inquired into. The facts of the case are as follows. The respondent <NAME> was appointed as a Sales Tax Officer in January 1949 and was transferred on April 1, 1950 to Hathras where he re- mained till the end of September 1952. An enquiry was made with reference to certain allegations against him during his period of stay at Hathras. On October 3, 1952, he was transferred to Lakhampur Kheri and was ordered not to visit Hathras until allowed by the authorities. It appears that in November 1952, an ex-parte inquiry was made by the Assistant Commissioner and the proceedings were submitted with a preliminary report to 'lie Commissioner. On the basis of this report an order of suspension was passed against him on February 18,1953 and he was placed for inquiry before the Commissioner. A set of charges was delivered to him on April 15, 1953; then a supplementary charge-sheet was issued on July 8, 1953. <NAME> asked for the inspection of the record of the preliminary inquiry as also the report, but he was told to submit his explanation to the charges first before inspection could be allowed. He submitted his explanation and in compliance with the directions contained in the charge-sheet issued to him, he submitted a list of three. defence witnesses whom he wished to examine in support of his case. He requested that the witnesses against him should be examined vivavoce in his presence before he was asked to meet that evidence and also wished to be heard in person. On October 31, 1953, <NAME> submitted the list of witnesses above-mentioned. On the same day the Commissioner informed <NAME> that he would be permitted to produce the witnesses mentioned in his letter in due course. In another communication he was told that another date would be fixed for hearing the witnesses in his defence. It is not necessary to describe the charges here because many of them, though found against him by the Commissioner, were not accepted by <ORG>. The order of dismissal was based upon three allegations which are allegation No. 5 in charge No. 1 and allegations No. 1 and 3 in charges Nos. 2 and 3 respectively. The Commissioner in his report found him guilty of these charges and also of other allegations which <ORG> did not accept. We shall refer to these charges presently after completing the narration of events which took place before the Enquiring Officer.

After the inquiry opened, the Commissioner did not examine the witnesses afresh, but their previous statements. recorded at the earlier enquiry, were tendered in evidence and <NAME> was asked to cross-examine them. <NAME> duly cross-examined those witnesses and then the question arose whether he would be allowed to lead his defence or not. In the first application which he had made giving the list of witnesses he had named three witnesses and had also added that they were to be examined in relation to a specific charge about a car owned by him. Oil February 2, 1954, he made an application for 20 (lays' extension of time for giving the list of witnesses he wished to examine in his defence. Third February had been fixed for summerising of the. witnesses against him but no date till then. ,,.,Lis fixed for the examination of his defence witnesses. His application of February 2, 1954 was rejected by the Commissioner on February 6, 1954, without fixing a date for the examination of the witnesses or for giving him an opportunity to give evidence in his own behalf. Not knowing that he would not be even any further opportunity. <NAME> submitted a list of four witnesses oil February 10, 1954, but stated that he could not give the addresses of some of the witnesses because he did not know where they were. On February 24, 1954, he again stated that he wanted to examine defence witnesses and to examine himself. No order was how- ever, made on these applications. On April 8, 1954, the Commissioner made his report recommending the dismissal of <NAME> and the order of <ORG> was made after due opportunity to show cause why he should not be dismissed. In reply to the show cause notice <NAME> complained that he had not been allowed to lead evidence on his own 'behalf that is one of the contentions in the present case.

The charges against him which have been held proved against him and to which we have referred were as follows "You accepted the accounts of <NAME> without due verification.." Charge No. 2, Allegation No. I "<NAME> had been declared non-assessable for 1948-49 and for three quarters of 1949-50 by your predecessor. The Judge (Appeals) had also declared the dealer unassessable in an appeal against Your orders. Still you assessed the dealers for the first three quarters to harass him.

Ultimately you declared the dealer unassessable."

"You accepted Rs. 5001- from <NAME> of the firm Noor Mohammed <NAME> as bribe through Chhotey Lal vakil."

In, addition to these charges there was a charge against him that he was in possession of a car which his means did not allow him to purchase andin respect of which he had made a reply that he had received this car from his father- in-law. This was charge No. 4 and inrelation to this charge apparently he had cited the first list ofthree witnesses for the examination in his defence. This charge was not accepted by <ORG> when the matter reached it.

After the order of dismissal was made, <NAME> filed a writ petition in <ORG> asking that the order made against him be quashed and his allegations were that the enquiry against him was made by a Commissioner who was biased against him; that the witnesses for the enquiry were not examined viva voce in his presence but were only tendered for crossexamination and lastly that no adequate opportunity was given to him for summoning his defence witnesses or to examine himself. <ORG> in the two orders which were made, reached the conclusion that the enquiry was defective, but different reasons were given 'by the learned Single Judge and <ORG>. We need not go into this matter elaborately because in our opinion the appeal here must be dismissed because' we are satisfied that no adequate opportunity was afforded to <NAME> to lead his defence which the principles of natural justice required.

The first question is whether this inquiry was made under sub-rule (1) or (3) of r. 55 of the Civil Services (Classification, Control and Appeal) Rules. It is an admitted fact that <NAME> was a temporary employee and therefore his case would fall to be governed by sub-rule (3) of r. 55 if it could be said that the enquiry which was being made was for a specific fault or on account of his unsuitability for service. Sub-rule 1 ) of r. 55 is a general rule for enquiries where the conduct of a person is inquired into for misconduct but sub-rule (3) says that that subrule shall not apply where it is proposed to terminate the employement of a probationer, or to dismiss, remove or reduce in rank a temporary government servant for any specific fault or on account of his unsuitability for the service. Sub-rule (3) says that in such cases, the probationer or temporary government servant concerned shall be apprised of the grounds of such proposal, given an opportunity to show cause against the action to be taken against him, and his explanation in this behalf, if any. shall be duly considered before orders are passed by the competent authority. If the third sub-rule applied, it is obvious that the kind of enquiry made complied with its requirements. The first sub-

rule, however,- provides for a full-blooded enquiry which is the counter-part of a regular trial : witnesses have to be examined in support of the allegations, opportunity has to be given to the delinquent, officer to cross-examine them and to lead evidence in his defence. In our judgment the present case was governed by the first sub-rule and not the third sub-rule. The third sub-rule deals with the unsuitability of an officer for the service or with a charge for any specific fault. This fault means a fault in the execution of his duties and not a misconduct such as taking bribe etc. which are charges of a more serious nature, affecting the character of the individual concerned. The collocation of the words "any specific fault" or "on account of unsuitability for service" give the clue of the distinction between the third sub-rule and the first sub- rule. An officer who is, for example, habitually lazy or makes mistakes frequently or is not polite or decorous may be considered unsuitable for the service. Another officer who makes a grievous default in the execution of his work may be charged for the specific individual fault, that is a dereliction or defect in the execution of that duty. Where there is an allegation that an officer is guilty of a misconduct such as accepting bribe or showing favours, the matter is not one of specific fault in the execution of his work but something more. That matter will fall to be governed by the first sub-rule because you cannot charge a man with criminal conduct without affording him adequate opportunity to clear his character. Mr. <NAME> fairly pointed out that the <ORG> had appointed the enquiring officer to take action under r. 55(1) and it is thus quite clear that <ORG> viewed the matter also in this light. It, therefore, follows that if the procedure under the first subrule had to be followed, adequate opportunity had to be given to <NAME> to lead evidence on his own behalf to clear himself of serious charges which were levelled against him and give evidence on his own behalf. It is obvious that he has not been able to lead his defence or to give evidence on his own behalf. The question is whether he has to thank himself or the omission proceeded because of some action on the part of the enquiring officer. Considering the whole matter we are satisfied that the enquiring officer was to blame and we shall now show why we think so.

Throughout the enquiry, as late as February 24, 1954, <NAME> had again and again given indication that he would lead evidence in his defence. At first he had given a list of three witnesses which he later amplified to four leaving out one from the original list and adding two new names. He had also stated that he wanted to examine himself in his defence. The learned Commissioner who was holding the enquiry on more than one occasion stated that he would be afforded this opportunity and also that a date would be fixed for the examination of the defence wit-

nesses. It is true that <NAME> was playing for time and on the 2nd of February (before the date of hearing came) he put in an application that he would like an adjournment of 20 days before he submitted a final list of witnesses with their addresses. This application was rejected on February 6, but between February 6, and April 8, when the report was made, two long months passed and it was possible for the Commissioner to have fixed a date, on which, if he was so minded, <NAME> could bring his witnesses in support of his case or tender himself for examination. No action was taken between February 6, 1954 and April 8, 1954 to enable <NAME> to lead his defence, if any, in support of his part of the case. This omission in our judgment was sufficient to vitiate the whole proceeding because no enquiry of this type in which there are charges of a criminal nature, can be said to be properly conducted when the defence of the officer is either frustrated or ruled out.

It was submitted by Mr. <NAME>,that the witnesses were being summoned by him to clear himself of the charge of owning a car without having the visible means to afford it and this charge was not accepted by <ORG>. This is true enough, but <ORG> came on the scene much later. In so far as the enquiring officer was concerned, he had accepted the allegation against <NAME> and even if the original list be considered, <NAME> was entitled to lead evidence with regard to the car itself. It is possible that if a date had been fixed, he would, not only have led evidence with regard to the car, but would have brought witnesses to clear himself of other charges, but no such opportunity was clearly afforded to him. Further before the case closed, the Commissioner had before him a list of four witnesses and fair play demanded, that he should have fixed a date and left it to <NAME> to procure attendance of his witnesses on that date, but if no date was fixed, <NAME> was not expected to bring hi,, witnesses day after day in the hope that the Commissioner would examine them any day. The enquiry cannot be said to comply with the elementary principles of natural justice and therefore we have no hesitation in accepting the decision of <ORG> that the enquiry was vitiated.

We may not omit to state that there was an allegation against the Commissioner that he was biased against <NAME>. It does appear that the Commissioner, in one of his letters, stated that he had heard witnesses and satisfied himself that <NAME> was definitely corrupt. This statement of the Commissioner showed that :he approached the case with a feeling that <NAME> was guilty although the State <ORG> cannot be said to share this bias of the Commissioner. We would have said something more about this, if the occasion had demanded this, but as we are upholding the order of <ORG> on the ground that no reasonable 8 54 opportunity was afforded to <NAME> to lead his evidence, it is not necessary to say whether an officer in the position of the Commissioner, who on the basis of secret enquiries behind the 'back of ,delinquent officer has reached the conclusion that there are good grounds for holding that the officer is corrupt, should himself ,conduct the enquiry. That matter may be left for consideration in another case. On the whole, therefore, we think that the ends of justice will be served in maintaining the order made by <ORG>. The enquiry, if <ORG> so decides, must proceed before an officer who will examine the witnesses in support of the charge in the manner laid down by this Court and afford <NAME> an opportunity -of leading his defence, if any.

The appeal, therefore, fails and is dismissed with costs.

<ORG> Appeal dismissed.


<NAME>, J.

1. This application under Article 226 of the Constitution is directed against the failure on the part of the respondents to give effect to the order dated 15th May, 1985 passed by the Collector of Customs (Appeals) and consequent withholding of the refund amounting to Rs. 6,04,733.47 P. The petitioner has also claimed interest as the said sum was not refunded by the respondents.

2. The facts are in a narrow compass. The petitioner carries on business, inter alia, as Publishers and Printers. The petitioner publishes the daily news paper "<ORG>" from Patna. It owns a Press. Under the Import Policy of the Government of India for the year 1983-84, printing machinery including Photo-Composing/Type-setting Machines and Systems and ancillaries thereof such as Key Boards are importable under the Open General Licence Scheme under Appendix 2 of the said import policy.

3. <ORG> duty was leviable on such Photo-Composing/Type-Setting Machines and ancillaries thereof including Display Screen, Type-Setting Unit and Key Board as and at the rates prescribed therefor, at the relevant time, under Heading No. 84.34 of the First Schedule to the <ORG> Tariff Act , 1975 (hereinafter referred to as "the said Act") read with Notification Nos. 114/80-Cus. and 110/84-Cus. both issued by the Central Government in exercise of powers conferred upon it by Section 25 of the <ORG> Act, 1962.

4. The petitioner in or about March 1984 entered into a contract with one <ORG>, U.S.A. for import of 2 Photo-Composing Machines equipped with Display, Screens, Engligh/Devnagri Key-Board, Type-Setting Unit, with standard equipment and 4 VDIOff-Line Key Boards c.i.f. <ORG>.

5. Thereupon the petitioner duly opened an irrevocable letter of credit in favour of the foreign seller, whereupon the foreign seller airfreighted the aforesaid goods, c.i.f. Calcutta. Upon the arrival of the said goods at the Airport in Calcutta, the petitioner in or about August/ September, 1984 filed Bill of Entry for home consumption before respondent No. 1, Assistant Collector of <ORG>, Air Cargo Complex (Import). In the said Bill of Entry the petitioner classified the aforesaid goods as falling under the Heading No. 84.34 of the First Schedule to the said Act and claimed benefit of the Exemption Notification Nos. 114/80-Cus. and 110/84-Cus. in respect of payment of duty therefor.

6. However by an order dated February 8, 1985 the respondent No. 1 classified the 4 VDI Offline Key Boards in the aforesaid consignment (hereinafter referred to as "the said goods") as allegedly falling under Tariff Heading No. 84.51/55(2) of the First Schedule to the said Act and thus denied the benefit of the said Exemption Notification Nos. 114/80-Cus. and 110/84-Cus. By the said order the respondent No. 1 assessed and demanded from the petitioner an additional sum of Rs. 6,04,733.47 P. in respect of the said goods as alleged additional <ORG> duties thereof.

7. As the petitioner was in urgent need of the said goods and as already more than 7 months had elapsed since the said goods had arrived at the Calcutta Airport and were incurring warehouse charges, the petitioner had no option but to make payment of the said additional sum of Rs. 6,04,733.46 P along with the admitted duties of <ORG> payable in respect of the said goods and obtained clearance thereof.

8. Being aggrieved by the said order dated February 8, 1985 passed by the said Assistant Collector the petitioner preferred an appeal under Section 128 of the <ORG> Act, 1962 before the Collector of <ORG> (Appeals) Calcutta.

9. By an order dated May 15, 1985 the Collector of Customs (Appeals) Calcutta (hereinafter referred to as "the said Collector") accepted the contentions of the petitioners and allowed its appeal against the said purported order dated February 8, 1985 passed by the respondent No. 1. The said Collector set aside the said order dated February 8, 1985 passed by the respondent No. 1 and directed that consequential benefit, subject to verification with the original records, should be granted to the petitioner.

10. Immediately upon receipt of the said order dated May 15, 1985 passed by the said Collector the petitioner on or about July 8, 1985 filed an application before the respondent No. 1 for refund of the said extra sum of Rs. 6,04,733.47 P. realised from the petitioner and which had become refundable to the petitioner in terms of the said order dated May 15, 1985 passed by the said Collector.

11. In the meantime the petitioner came to know from <ORG>, New Delhi that an appeal being Civil Appeal No. 1482 of 1985-B-2 had been filed by the respondent No. 1 before the said <ORG> against the said order dated May 15, 1985 passed by the said Collector. In or about March 1986 the petitioner duly filed its opposition to the said appeal petition before the <ORG>.

12. Although the said appeal was filed before the <ORG> against the said order dated May 15, 1985 passed by the said Collector, no stay of the operation of the said order dated May 15, 1985 passed by the said Appellate Collector has been granted by the <ORG>.

13. Under the aforesaid circumstances the petitioner has asked for refund of the said sum of Rs. 6,04,733.47 P. with interest.

14. An affidavit has been filed on behalf of the respondents. The grounds taken are as follows :

(a) The no writ lies solely for the reliefs claimed in the writ application. The Courts in India have categorically laid down that an application claiming only refund is not maintainable under the writ jurisdiction.

(b) That the proceedings relating to the purported refund is pending before <ORG> and only that <ORG> is the proper authority to consider the question of refund. <ORG> has always refused to consider the question of refund in such circumstances as the jurisdiction as that of the <ORG>.

(c) The <ORG> Authorities have already preferred the Appeal before <ORG> under the <ORG> Act , 1962 and the same is pending before it. The said Act does not require that the <ORG> authorities should refund the money in the interim period or should give any security during the said period. The same principle is also laid down under the Code of Civil Procedure and that is the general principle of law. The petitioner's claim claiming refund as an interim relief is wholly contrary to the said law and principle.

(d) The Order of the Appellate Collector of <ORG> and/or the Collector of <ORG> (Appeal) is not final under the <ORG> Act , 1962, as there is an appeal therefrom to <ORG>. Moreover, the <ORG> Act , 1962 has only made the order of <ORG> as final so far as the statutory adjudication is concerned. In the circumstances, the petitioner cannot now enforce the order of the Appellate Collector, <ORG> and/or the Collector of <ORG> (Appeal) since the Appeal before the <ORG> is pending.

15. Mr. <NAME> Learned Counsel appearing on behalf of the respondents has submitted that it is no doubt true that under the order dated 15th May, 1985 passed by the Collector of <ORG> (Appeal) the petitioner is entitled to refund but in view of the fact that the matter is pending before the <ORG>, the order has not become final and accordingly at this stage no refund can be issued. Further, if refund is issued, the revenue will be prejudiced if ultimately the appeal succeeds. He has also submitted that there is no specific provision which entitles the assessee to claim refund immediately after the order of the Appellate Collector is passed allowing refund to the assessee. The main contention is that it is only after the dispose of the appeal by the Appellate <ORG> the question of grant of any refund to the petitioner would arise. He has also reiterated the grounds taken in the affidavit-in-opposition.

16. On the other hand, it is contended by Mr. <NAME>, Learned Counsel appearing for the petitioner that the petitioner is entitled to refund as the order dated 15th May, 1985 has not been stayed by the <ORG>. Mere filing of appeal cannot prevent the petitioner from getting the refund nor does the filing of the appeal operate as stay. He has submitted that there is no provision which entitles the respondents not to give effect to the order of the Appellate Collector, simply because the appeal is pending against such order. He has also submitted that the grounds taken in the affidavit have no substance at all.

17. I have considered the rival contentions. It is now well settled that if any amount is collected illegally and without authority of law, <ORG> can direct the refund of the amount so collected. In this case the Appellate Collector held that no duty can be levied on the subject goods. Accordingly the collection of duty on the said goods was unauthorised. The petitioner was, therefore, entitled to the refund and since the refund has been withheld, without there being any order of <ORG> or Tribunal staying the operation of the order allowing refund, the petitioner has moved this Court under Article 226 of the Constitution of India. In my view this application is maintainable.

18. The contention that the <ORG> is the proper authority to consider the question of refund and <ORG> cannot consider the question of refund cannot be accepted on the facts of this case. In this case the appellants authority has already directed that consequential benefits should be granted to the petitioner i.e. to say that the petitioner would be entitled to the refund of the duty paid on the subject goods. The legality of the order of the Appellate Collector is not an issue in this writ application. The only question which calls for consideration is whether the petitioner is entitled to get the refund during the pendency of the appeal preferred by the department against the order of the Appellate Collector.

19. There is no specific provision in the <ORG> Act which authorises the <ORG> authority to withhold the refund during the pendency of appeal before <ORG>. Under the Income Tax Act , 1961 a specific provision has been made under Section 241 giving power to the authorities to withhold refund, where an order giving rise to a refund is the subject matter of appeal or further proceeding or where any other proceeding under that Act is pending, if the grant of the refund is likely to adversely affect the revenue. Such refund can be withheld till such time as the Commissioner may determine. Since in the <ORG> Act there is no such specific provision, the <ORG> authorities cannot withhold the refund due to the assessee on the ground that a proceeding is pending before the <ORG>.

20. Although the <ORG> authorities cannot withhold the refund in absence of any specific provision to that effect, the question is when an appeal is pending before the <ORG>, whether the <ORG> can grant stay of the order passed by the Appellate Collector and as a consequence thereof direct withholding of the refund.

21. <ORG> in the case of <CITATION> reported in (1969) 71 ITR 815 was considering the question whether <ORG> has the power to stay recovery or realisation of the penalty imposed by the Departmental authorities on an assessee during the pendency of appeal before it. There <ORG> held that there can be no manner of doubt that by the provisions of the Act or the Rules powers have not been expressly conferred upon <ORG> to stay proceeding relating to the recovery of penalty or tax due from an assessee. <ORG> held as follows :

"The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by <ORG>. Indeed, the <ORG> had been given very wide powers under Section 254(1) , for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income Tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if <ORG> is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before has no right to even move an application when an appeal is pending before <ORG> under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income Tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective. The powers which have been conferred by Section 254 on <ORG> with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective.

It is well-known that <ORG> is not a Court but it exercises judicial powers. The Tribunal's powers in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of <ORG> under the Civil Procedure Code."

22. In <NAME> v. <NAME> (12 Ch.D. 438) this is what <NAME> said about the powers of <ORG> to grant stay at page 443 :

"It appears to me on principle that the <ORG> ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is thus, that the successful party in the litigation, that is, the ultimately successful party, is to reap the fruits of that litigation, and not obtain merely a bar on success. That principle, as it appears to me, applies as such to the <ORG> of first instance before the first trial, and to the <ORG> of Appeal before the second trial, as to the <ORG> of last instance before the hearing of the final appeal."

" Section 255(5) of the Act does empower <ORG> to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion <ORG> must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when Section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before <ORG>. It could well be said that when Section 254 confers appellate jurisdiction it impliedly grants the power of doing all such acts or employing such means as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory."

23. Sections 129B and 129C(6) of the Customs Act, 1962 are similar to Sections 254(1) and 255(5) of the Income Tax Act. 1961 which were considered by <ORG> in the said decision.

24. Section 129E of the <ORG> Act provides that where in an appeal under the <ORG> Act , the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of the <ORG> authority or any penalty levied under the <ORG> Act , person desirous of appealing against such decision or order, shall pending the appeal, deposit with the proper officer duty demanded or penalty levied. But the <ORG> may dispense with such deposit subject to such condition as it may deem fit to impose so as to safeguard the interest of revenue. In other words, the <ORG> has been given specific power by the <ORG> Act only to dispense with payment of duty or penalty. Implication of this provision is that in the event the <ORG> dispenses with the deposit of the penalty or duty, this will operate as stay of the recovery of penalty or duty being the subject matter of the appeal. Similar provision has not been made where the Collector of <ORG> prefers an appeal against an order passed by any authority under the <ORG> Act .

25. Under the Income Tax Act the <ORG> has the power to stay realisation of the disputed demand or penalty till the disposal of the appeal pending before it, without there being any specific provision to that effect. Under the Customs Act , as indicated earlier, the Appellate <ORG> can dispense with the payment of the disputed duty or penalty till the disposal of the appeal pending before it. The same principle will apply when an appeal is preferred by the department and an application is made for stay of the operation of the order appealed from. Where the department is appellant and makes an application for stay of the operation of the order appealed from, the <ORG> has to consider such application in the light of surrounding facts and circumstances. The power of the <ORG> to stay the operation of the order appealed from whether the appellant is the assessee or the <ORG> is discretionary. But that is a judicial discretion which has to be exercised on objective facts and upon consideration of matters relevant to the exercise of such discretion. The power of stay by the <ORG> cannot be exercised in a routine way or as a matter of course in view of the "special nature of taxation" and revenue laws. <ORG> in <NAME> (supra) held as follows :

"It will only be when a strong prima facie case is made out that the <ORG> will consider whether to stay the recovery proceedings and on what conditions, and the stay will be granted in most deserving and appropriate cases where the <ORG> is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal."

26. In this case the appeal was filed by the <ORG> long time ago i.e. sometimes in March- 1986. Since then no application was filed by the revenue before the Tribunal for stay of the operation of the order of the Appellate Collector allowing the refund. The contention of the revenue that because an appeal is pending the order appealed from has lost finality and therefore no refund can be issued, cannot be accepted. Mere filing of an appeal cannot operate as stay of the order appealed from. If this contention is accepted the revenue will suffer more than the assessee. If the assessee cannot claim refund during the pendency of the appeal without there being any stay from <ORG>, the revenue cannot also on the same principle oppose any application of the assessee for stay of the realisation of the demand disputed in appeal. In my view the contention raised on behalf of the revenue has no substance. An assessee is entitled to the refund on the basis of the order of the Appellate Collector, unless such order is stayed by <ORG>. Admittedly in this case there is no stay nor was any stay asked for by the revenue. The respondents acted illegally in withholding the refund on the sole ground that an appeal has been preferred by the department against such order and the appeal is pending. I am, therefore, of the view that the petitioner shall be allowed the refund on the basis of the order of the Appellate Collector as no stay has been obtained by the revenue.

27. The other contention which has been raised is as regards payment of interest. There is no specific provision under the Customs Act unlike the Income Tax Act for payment of interest on the delayed refund. But where the refund is due to the petitioner which has been illegally withheld, the assessee is entitled to interest as he was deprived of the use of the money. Interest is the compensation for the loss a person suffer because of deprivation of the money which he is otherwise entitled to have. In the case of <CITATION> referred in (1987) 11 ECC 191, I held that where the collection made by the respondents is unauthorised, interest has to be paid on the refund. Interest is the return or compensation for the use or retention of another's money. Since the respondents have retained and enjoyed the benefit of such money so long, they have to pay interest.

28. I am, therefore, of the view that the petitioner shall be entitled to interest on the refund from the date of the order of the Appellate Collector till the date of payment.

29. For the reasons aforesaid this application is allowed. The petitioner shall be granted the refund as may be due on the basis of the order of the Collector of <ORG> (Appeal) dated 15th May, 1985 with interest @ 12% per annum from the date of that order till the date of payment. The refund shall be allowed within six weeks from the date of communication of the operative part of this judgment and order. The petitioner however shall furnish a bond incorporating an undertaking to the effect that in the event the appeal is allowed by the <ORG>, the petitioner shall refund the entire sum inclusive of interest which shall be paid to the petitioner in terms of this orders "Let a signed copy of the operative part of this judgment be handed over to the advocate for the petitioner upon his undertaking to apply for and obtain the certified copy of the judgment and the order."


JUDGMENT <NAME>, J.

1. This appeal has been brought up by Special Leave by the Special Land Acquisition Officer, <ORG> <NAME> District. The lands acquired under the present proceedings were originally <ORG> lands. They had been granted to the Respondents subject to the condition that if it becomes necessary for <ORG> to take possession of the lands for any public purpose then no compensation will be paid to them. Despite that condition the <ORG> notified these lands for acquisition under Section 4 of the Land Acquisition Act. During the land acquisition proceedings, the Respondents claimed compensation for the lands in question. The Land Acquisition Officer valued the compensation payable to the Respondents at Rs. 19,265.37 paise but he declined to make an Award in respect of the same in view of the condition attached to the original grant. Thereafter the matter was referred to the Additional District Judge <NAME> under Section 18 of the Land Acquisition Act, at the instance of the Respondents. The learned District Judge came to the conclusion that the Respondents were entitled to get the compensation determined by the Land Acquisition Officer. Aggrieved by that decision, the Appellant went up in revision to <ORG>. <ORG> following the decision of that Court in <CITATION> (1964) 2 Mys LJ 287 dismissed the revision petition. The decision in <NAME> case, (supra) has been substantially affirmed by this Court in <CITATION> : .

2. Mr. <NAME>, the learned Counsel for the State of Mysore, contends that the Land Acquisition Officer had not assessed the compensation payable for the rights of the Respondents in the lands acquired. According to him the Land Acquisition Officer merely estimated the value of the lands acquired. He contends that the Respondents are not entitled to the entire value of the lands acquired, but that they are entitled only to the value of their rights in those lands as held by this <ORG> in <NAME> case (1964) 2 Mys LJ 287 (supra). We have gone through the Award made by the Land Acquisition Officer. The Land Acquisition Officer appears to have valued the rights of the Respondents in the lands acquired. Whether the valuation made by him is correct or not cannot be gone into these proceedings. The appellant is bound by the valuation made by the Land Acquisition Officer. The view taken by the Land Acquisition Officer that the Respondents are not entitled to any compensation in respect of the lands acquired cannot be sustained in view of this <ORG>'s decision in <NAME> case (supra).

3. In the result this appeal tails and the same is dismissed with costs.