PETITIONER: <NAME> Vs. RESPONDENT: GANGOTRIBAI DATE OF JUDGMENT23/02/1993 BENCH: <NAME>, JAGDISH SARAN (J) BENCH: <NAME>, JAGDISH SARAN (J) JEEVAN REDDY, B.P. (J) VENKATACHALA N. (J) CITATION: 1994 AIR 466 1995 SCC Supl. (1) 37 ACT: HEADNOTE: JUDGMENT:

ORDER

1. The appellant, <NAME>, made an application before Addl. <NAME>, Hinganghat, District <NAME> in State of Maharashtra for a declaration that he was a tenant of Survey Nos. 7, 8 and 9 of Village Anatargaon. That application was registered as Revenue Case No. 12. Appellant, <NAME>, claimed to be a tenant by virtue of a lease granted in his favour by <NAME> and <NAME>, daughters of <NAME> through his second wife <NAME>. On the other hand, <NAME>, the first wife of <NAME> filed an application registered as Revenue Case No. 1 before the Addl. <NAME> for a declaration that <NAME> and <NAME> were not tenants, the right which they claimed in Revenue Case No. 12. In addition to these two revenue cases, there were two other cases registered as Revenue Case Nos. 2 and 4 which arose out of references made by the civil court for deciding the claim of <NAME>, <NAME> and <NAME> who claimed to be tenants of the same lands through <NAME>. These applications were heard and decided by a common order made by the Addl. <NAME> who accepted <NAME>'s claim of being the tenant of these lands. Against the common order, made by the Addl. <NAME>, appeals were filed to the Special Deputy Collector (Land Reforms), <NAME>. In appeal, it was held that the owner was <NAME> and not <NAME> and <NAME> and, therefore, the claim made by <NAME> as tenant of these lands was rejected; and the two references made by the civil court were remanded to the Addl. <NAME> for inquiry and fresh decision in accordance with law. Thereafter, three revisions arising out of these revenue cases were filed before <ORG> by <NAME>. These revisions were dismissed.

2. The appellant, <ORG>, then filed three Writ Petition Nos. 677, 679 and 760 of 1974 against the common order made by <ORG> rejecting the three revisions. <ORG> by a common order dated 20-8-1980 passed in these writ petitions has rejected all the writ petitions.

3. The said <ORG> has filed Civil Appeal No. 244 of 1982 by special leave against <ORG> order only insofar as it relates to dismissal of Writ Petition No. 677 of 1974. Against the common order of <ORG> dismissing Writ Petition Nos. 679 and 760 of 1974, <ORG> has filed special leave petitions which are barred by 4125 days i.e. by more than 11 years.

4. The first question is whether there is any ground to condone the delay in filing the special leave petitions by which <ORG> common order dated 20-8-1980 rejecting Writ Petition Nos. 679 of 1974 and 760 of 1974 has been challenged.

5. We do not find any cogent ground given in the application for condonation of delay which in law can constitute sufficient cause to explain the inordinate delay in filing of the special leave petitions. The applications for condonation of delay (I.A. Nos. 1 and 2 of 1992) in filing the special leave petitions are, therefore, dismissed resulting in the dismissal of the special leave petitions as time barred.

6. The question now is of the effect of the dismissal of the special leave petitions on the tenability of Civil Appeal No. 244 of 1982. The facts stated above giving rise to this Civil Appeal clearly indicate that after dismissal of the special leave petitions resulting in finality of the common order dated 20-8-1980 relating to dismissal of Writ Petition Nos. 679 and 760 of 1974, correctness of that order relating to dismissal of the Writ Petition No. 677 of 1974 cannot be examined for the obvious reason that interference in this appeal is bound to result in the making of conflicting orders regarding tenancy rights in the same lands. This alone is sufficient to require dismissal of Civil Appeal No. 244 of 1982.

7. Consequently, the above SLPs as well as Civil Appeal No. 244 of 1982 are dismissed. No one appears for the other side. No costs.


JUDGMENT <NAME>, J.

1. Briefly, the facts of the present case are that a notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the 1961 Act"), was issued and despatched on February 24, 1970, relating to the assessment year 1961-62 to the petitioner by the Income-tax Officer, Sangrur. No return was filed by the petitioner in response to the notice. The Income-tax Officer, therefore, issued another, notice on October 10, 1973, under Section 142(1) of the aforesaid Act in which he was intimated to appear on November 23, 1973. The counsel for the petitioner appeared on November 24, 1973, and got the case adjourned to December 10, 1973, for filing a reply. The petitioner filed a reply dated December 9, 1973, supported by an affidavit stating therein that the alleged notice under Section 148 was not served upon him. He further stated that no proceedings were competent against him under Section 148 of the 1961 Act, as notice was not served upon him within eight years. The petitioner was required by the Income-tax Officer, respondent No. 2, to appear before him on March 18, 1974, when he was ordered to accept notice under Section 148 . Counsel for the petitioner refused to acknowledge the receipt of the notice. The petitioner also submitted his written reply regarding the aforesaid matter. On May 13, 1974, he has been served with a final order dated March 21, 1974, passed under Section 144 of the 1961 Act, whereby the income of the petitioner has been assessed at Rs. 48,400. He had also been served with notice dated March 19, 1974, under Section 271 to show cause as to why an order imposing a penalty be not passed against him. The petitioner challenged the order passed under Section 144 of the Act and the notice dated March 19, 1974. At the time of motion hearing, the motion Bench admitted the petition to <ORG> on the point of interpretation of the word "issue" occurring in Section 148 of the 1961 Act.

2. In order to decide the question, it is necessary to notice some of the sections of the 1961 Act. Section 147 empowers the Income-tax Officer, who has reason to believe .that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year or inconsequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, subject to the provisions of sections 148 to 153 , to assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned. Section 148 relates to issue of notice where income has escaped assessment, Section 149 to time-limit for notice and Section 151 to sanction for issue of notice. The aforesaid sections are as follows :

"148. (1) Before making the assessment, reassessment or recomputation under Section 147 , the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 139 ; and the provisions of this Act shall, so far as may be, apply accordingly, as if the notice were a notice issued under that sub-section.

(2) The Income-tax Officer shall, before issuing any notice under this section, record his reasons for doing so."

"149. (1) No notice under Section 148 shall be issued,--(a) in cases falling under Clause (a) of Section 147-

(i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under Sub-clause (ii);

(ii) for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year;

(b) in cases falling under Clause (b) of Section 147 , at any time after the expiry of four years from the end of the relevant assessment year.

(2) The provisions of Sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151 .

(3) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident under Section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year."

"151. (1) No notice shall be issued under Section 148 after the expiry of eight years from the end of the relevant assessment year, unless the Board is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice.

(2) No notice shall be issued under Section 148 after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice."

3. Before taking action under Section 147 , the Income-tax Officer is required to follow the procedure under the subsequent sections. Under Section 148 , he is to serve on the assessee a notice before making the assessment, reassessment or recomputation. Section 149 prescribes the period in which the notice under Section 148 can be issued. The question for determination is: whether the words "issue of notice" used in Section 148 will include service thereof or not. It is contended by the learned counsel for the petitioner that the two words, namely, "serve" and "issue", used in sections 148 and 149 are interchangeable words and the word "issue" in a larger sense also will include "service". He has further argued that <ORG> interpreted the word "issue" in <CITATION> ,  53 ITR 100 (<ORG>), wherein the same interpretation was taken. On the other hand, the learned counsel for the respondents has argued that the two words have been used in the two sections in different contexts and the word "issue" will mean only "send".

4. We find force in the contention of the learned counsel for the petitioner. The provisions of sections 147 , 148 , 149 , 150 and 151 of the 1961 Act are in pari materia with those of Section 34 of the 1922 Act, In <NAME> case, <ORG> was interpreting Section 4 of the Indian Income-tax (Amendment) Act, 1959, by which the notice issued under Clause (a) of Subsection (1) of Section 34 of the 1922 Act before the commencement of the aforesaid amending Act, and assessment, reassessment or settlement made, or other proceedings taken in consequence of such notice, could not be challenged on the ground that the notice had been issued or reassessments were made after the prescribed period of limitation, as given in subsection (1) of Section 34 of that Act. <NAME>, as he then was, while speaking for <ORG>, observed as follows :

" Section 4 of the amending Act was enacted for saving the validity of notices issued under Section 34(1) of the Act. When that section used a word interpreted by courts in the context of such notices it would be reasonable to assume that the expression was designedly used in the same sense. That apart, the expressions 'issued' and 'served' are used as interchangeable terms both in dictionaries and in other statutes. The dictionary meaning of the word ' issue' is 'the act of sending out, put into circulation, delivery with authority or delivery.' Section 27 of the General Clauses Act, 1897 (X of 1897), read thus :

'Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.' It would be seen from this provision that <ORG> used the words 'serve', 'give' arid 'send' as interchangeable words. So too, in sections 553, 554 and 555 of the Calcutta Municipal Act, 1951, the two expressions 'issued to' or 'served upon' are used as equivalent expressions. In the legislative practice of our country the said two expressions are sometimes used to convey the same idea. In other words, the expression 'issued' is used in a limited as well as in a wider sense. We must, therefore, give the expression 'issued' in Section 4 of the amending Act that meaning which carries out the intention of the legislature in preference to that which defeats it. By doing so we will not be departing from the accepted meaning of the expression, but only giving it one of its meanings accepted, which fits into the context or setting in which it appears."

5. It is the principle of law that when certain words are judicially interpreted, it will be assumed that the legislature knew the meanings of those words, while using them in subsequent statutes. In this view I am supported by the observations of Viscount <NAME> in <NAME> v. <ORG>, [1933] AC 402 (HL), wherein it was observed as follows :

"It has long been a well-established principle to be applied in the consideration of the Act of Parliament that where a word of doubtful meaning has received a clear judicial interpretation, the subsequent statute which incorporates the same word or the same phrase in a similar context, must be construed so that the word or phrase is interpreted according to the meaning that has previously been assigned to it."

6. Thus, it will be assumed that while enacting the 1961 Act, the legislature knew that the words "serve" and "issue" were being used interchangeably according to the judicial interpretation. In spite of the knowledge it preferred to use the words in the aforesaid Act. Mr. <NAME>, the learned counsel for the revenue, has argued that in the 1961 Act, the two words have been used in two different sections. According to him before making the assessment, reassessment or recomputation under Section 147 , it is the duty of the Income-tax Officer to serve a notice on the assessee as required by Section 148 , whereas he can assume jurisdiction after issuance of the notice within the prescribed period under Section 149 even though the same may not be served upon the assessee. He also submits that by dividing the provisions of Section 34 of the 1922 Act in the 1961 Act, the intention of the legislature has become clear. We express our inability to accept the contention of the learned counsel for the revenue. A reading of Sections 148 and 149 clearly shows that the Income-tax Officer cannot assume jurisdiction to make assessment, reassessment of recomputation unless the notice has been issued and served within the time-limit prescribed under the aforesaid sections. The same question came up before <ORG> of <ORG> in <CITATION> ,  96 ITR 141 (Guj), <NAME>, while speaking for the court, observed as follows:

" Sections 148 , 148 and 149 of the Income-tax Act of 1961 confer the power of reassessment on the Income-tax Officer. This scheme of power was originally comprehended in the provisions of Section 34 of the Act of 1922. The division of the provisions contained in Section 34 of the 1922 Act into sections 147 , 148 and 149 in the Act of 1961 does not in any way indicate that the legislature intended to depart from or materially alter the position as it emerged from the provisions of Section 34 of the old Act regarding notice of reassessment. <ORG> held in <ORG> in <CITATION> ,  58 ITR 559 (Guj), that the words, 'service of notice' or 'issuance of notice ' in Section 34 have no fixed connotation but are interchangeable. The same meaning should be given to the words ' issue of notice' in Section 148 and 'service of notice' in Section 149 .

Under the Act of 1961 also there are no two distinct and separate stages of issue of notice and service of notice. Notice of reassessment is issued to the assessee when it is served on him. A notice of reassessment issued against the assessee before limitation but served on the assessee after limitation would be without jurisdiction, void and ineffective."

7. We are respectfully in agreement with the above observations. Similar view was taken by a learned single judge of <ORG> in <CITATION> ,  86 ITR 611 (Cal). Mr. <NAME> has placed reliance on a <ORG> judgment of this court in <CITATION> ,  61 ITR 194 (Punj). In that case the question referred to this court was : whether on the facts and in the circumstances of the case the service of the notice under Section 34 on the assessee was invalid at law as copy of the notice was not affixed at any conspicuous place in the court-house or at any conspicuous place in the income-tax office. The matter for decision before <ORG> was absolutely different. The learned counsel cannot derive any benefit from that case. In view of the aforesaid discussion, we are of the opinion that the words "issue" and "serve" are interchangeable and that the word "issue" has been used in Section 148 of the 1961 Act in the same sense in which the word "serve" has been used.

8. It is stated that an appeal has been filed against the order dated March 21, 1974, of the Income-tax Officer and the same is still pending. The writ petition was admitted to interpret the word "issue" as occurring in Section 148 of the 1961 Act only. The appeal will be decided by the appellate authority in accordance with law. The writ petition is disposed of accordingly with no order as to costs.

<NAME>, J.

9. I agree.


JUDGMENT <NAME>, J.

1. This is a reference under section 256(1) of the Income-tax Act, 1961, made at the instance of the assessee. The question referred to us for our determination in the reference is as follows :

"Whether, on the facts and in the circumstances of the case, in computing the income of the assessee, the sum of Rs. 4,400 was rightly added ?"

2. The relevant facts lie within a narrow compass. The relevant assessment year is 1962-63, for which the relevant previous year is the accounting year March 25, 1961, to March 31, 1962. The assessee is a registered firm doing business mainly in cloth. The assessee secured a licence for importing automobile spare parts. The assessee then entered into a contract to import and sell to <ORG> 3,100 capacitors at a profit of 50 per cent. on C. I. F. value. There was a further condition in the contract that the purchaser was to bear all the expenses, including customs duty, etc. Pursuant to this agreement, the assessee placed an order for capacitors with a foreign exporter and the goods, namely, capacitors, were eventually imported. But it was found that the goods did not conform to some of the specifications in the licence and the customs authorities confiscated the goods but gave an option to the assessee to pay a penalty of Rs. 4,400 and clear the goods. The assessee exercised that option and cleared the goods by paying the penalty. The assessee debited the amount of the penalty to the trading account. In valuing the closing stock, the penalty was included. It was in the next year that the sale of the goods to <ORG> took place. The penalty was paid in the accounting year relevant to the assessment year. The Income-tax Officer concerned disallowed the claim of the assessee for deduction of the amount of penalty and added back the amount of penalty. The Income-tax Officer found, on verification, that the penalty as such had not been recovered by the assessee from <ORG> but the amount of penalty, it appears, was taken into account in determining the price at which the said goods were sold to <ORG>. On an appeal by the assessee to the Appellate Assistant Commissioner, he held that the penalty was levied on the appellant and the mere fact that the appellant had billed the vendee in such a manner that the penalty was recovered from the vendee did not change the character of a disallowable item into an allowable one. The Appellate Assistant Commissioner further pointed out that the bill sent to <ORG> did not specifically mention the basis on which it was prepared. The Appellate Assistant Commissioner agreed with the view of the Income-tax Officer that the assessee's claim in respect of penalty was not one which could be allowed under section 28 of the Income-tax Act, 1961. The assessee then preferred a second appeal to <ORG>. The <ORG> came to the conclusion that the assessee had contravened some of the conditions or specifications of the licence and the penalty was levied upon the assessee and not the purchaser. The assessee had rightly debited the penalty to the trading account and the assessee was not right in contending that the debit in respect of the penalty in the trading account was wrongfully made by the assessee. What the purchasers, <ORG>, had paid to the assessee was not the penalty but the sale price of the goods purchased by them which had been fixed by taking into account the amount of penalty. In view of these findings, the <ORG> agreed with the conclusion of the Appellate Assistant Commissioner that the amount of penalty could not be allowed as a deduction and upheld the order passed by the Income-tax Officer. The question set out above has been referred to us from the decision of the <ORG>.

3. The submission of Mrs. <NAME>, learned counsel for the assessee, is that in this case, on the facts found, the assessee must be regarded as a mere nominal licence-holder and the penalty was really levied on <ORG> to whom the goods had been sold as aforesaid. It was argued by her that, in these circumstances, the assessee should be allowed to claim the amount of penalty paid by the assessee as a deduction in the computation of profits under section 28 of the Income-tax Act, 1961. She placed strong reliance on the decision of a Division Bench of this court in <CITATION> .  67 ITR 667. We shall deal with this case after setting out our own views. In the present case, the facts found by the <ORG> clearly show that it was the assessee who had got the import licence. It was the assessee who imported the goods in question, and it was the fault of the assessee if the goods in question imported did not conform to the specifications of the licence. In these circumstances, there is no escaping the conclusion that the penalty was levied on the assessee for the default of the assessee itself and not on the ground of any other person's default. Nor is this a case in which the assessee can be regarded in any sense as a nominal licence-holder. It is not as if the assessee gave its licence to <ORG> for importing the goods in question and <ORG> imported the goods. The licence was utilised by the assessee-firm itself and that fact cannot be altered by the circumstance that they had agreed to sell the goods to be imported by them to <ORG>. It is well settled that if an assessee has to pay a penalty to the customs authorities in respect of goods imported by the assessee on account of its own default, the amount of that penalty cannot be deducted in the computation of taxable profits of the assessee.

4. Coming to the case of Pannalal Narottamdas & Co. [1968] 67 ITR 667 (Bom) cited by Mrs. <NAME>, the facts in that case were altogether different. In that case, in the course of its business, the assessee had purchased bills of lading and other shipping documents from certain parties in respect of some consignments of goods imported by them from a foreign country. When the goods arrived in India and were sought to be cleared through the customs by the assessee on the basis of the documents purchased by it, it was found that the imports were unauthorised and the goods were liable to be confiscated and a penalty was liable to be imposed under section 167(8) of the Sea Customs Act, 1878. The assessee paid the penalty for saving the goods from being confiscated. The <ORG> took the view that the assessee was entitled to plead that it had purchased the documents of title in good faith and had paid consideration thereon, and, thereafter, it had to pay the penalties in order not to lose the goods which had become its property and, in these circumstances, the penalty could be legitimately regarded as part of the cost of the goods. It was held by <ORG> that, on the facts and circumstances, the actual cost of the goods to the assessee was not only what it had paid to the importers but in addition thereto what it had to pay by way of penalty in order to save the goods from being confiscated and lost to it. It is significant that the observations of <ORG> set out at page 672 of the aforesaid report show that <ORG> clearly took the view that in cases where penalty had to be incurred because of the fault of the assessee himself, as for instance, by reason of his having carried on his business in an unlawful manner or in contravention of certain rules and regulations, the penalty paid by the assessee for such conduct thereof could not be regarded as wholly laid out for the purpose of the business, and, in support of this conclusion, the decision of <ORG> in <ORG> v. CIT [196l] 41 ITR 350, was cited. This decision, in our view, does not advance the argument of Mrs. <NAME>, and, in fact, the aforesaid observations pointed out by us lend considerable support to the view which we have taken.

5. The question referred to us is, therefore, answered in the affirmative and in favour of the <ORG>.

6. The assessee to pay the costs of this reference to the Commissioner.


JUDGMENT

1. The petitioner was appointed as Assistant Engineer in <ORG> of the Punjab Government on 15 July, 1968. He was, thereafter, given an option to join <ORG>) [hereinafter referred to as PWD (B&R)] of the said Government. He accepted the offer and resumed his duties in the new Department on 14 January, 1969. In 1972, the PWD [B&R] invited applications for direct recruitment for the post of Assistant Engineer. The petitioner applied for one of them and he was formally appointed as a direct recruit in the said Department on. 18 August, 1972. On 30 September/6 October, 1972,<ORG> passed formal order relieving him from the Department which in fact ought to have been done on 14 January, 1969 when the petitioner had opted to join the PWD [B&R]. It appears that on his appointment in the PWD [B&R] as a direct recruit, he was sent on deputation to <ORG> [Engineering Department] on 7 October, 1972.

2. In March, 1978, the petitioner made a request to <ORG> to absorb him in their service by giving him the benefit of service in <ORG> right from 15 July 1968. By their letter of 17 June, 1978, <ORG> informed him that they were not agreeable to do so. On the other hand, the <ORG> informed him that since the absorption was at his request, it will affect his past service rendered in the Punjab State and he should give his consent for being placed at the bottom of the gradation list of officers of his category in <ORG>. However, within a few days thereafter, i.e., 30 June, 1978, the <ORG> sent another letter changing its earlier stand and stated that the petitioner's seniority on absorption shall be fixed as per the service rules which inter alia provides for appointment of an officer to the service by transfer from <ORG> or <ORG>. The letter further stated as follows:

...Such an appointment for obvious reasons, is not to be treated as a direct appointment for the purpose of determining seniority. In short, <NAME> will be entitled to count past service (in his parent State) in the matter of fixation of his seniority on absorption in <ORG>....

3. Against this decision of <ORG>, two writ petitions were filed by the employees affected by it. They were dismissed as being premature since by that time the seniority list was not prepared. On 9 February, 1979, <ORG> passed an order to appoint the petitioner as Assistant Engineer [Civil] Class II in its <ORG> on B & R side by transfer from the PWD [B & R] and it stated that the appointment is also subject to the provisions of <ORG>, Class II P.W.D. Rules, 1965. Against this transfer order, another writ petition was filed by some of the aggrieved employees. This writ petition was also dismissed since no seniority list was prepared, with a direction to the <ORG> to fix the seniority of the petitioner.

4. On 14 January, 1980, a notification was issued by the <ORG> determining the seniority in accordance with Rule 12.5 of the Punjab Service of Engineers, Class II] P.W.D. Rules, 1965 giving him seniority w.e.f. 7 October, 1972. The notification stated that the <ORG> had considered all the circumstances of the case and had also kept the public interest in view in fixing the seniority with effect from that date.

5. Against the fixation of his seniority w.e.f. 7 October, 1972, the petitioner made a representation on 15 January, 1980. While the said representation was pending, the petitioner preferred an application before <ORG>, Chandigarh Bench challenging the order fixing his seniority on the ground that he has not given seniority on the basis of his past service from 1968. The <ORG> dismissed his application holding that he was not entitled to his past service being counted. Against the seniority given to the petitioner from 7 October, 1972, a writ petition was filed before <ORG> by the aggrieved employees and this was later on transferred to the <ORG> and numbered as T.C. No. 5/80. The <ORG> decided the said application on 17 September, 1987 against the petitioner holding that it was not permissible to give the petitioner seniority w.e.f. 7 October, 1972 since the petitioner was absorbed in the service at his own request; hence his seniority should have been counted from the date of his absorption, i.e., 17 June, 1978. Against the said decision of the <ORG>, both <ORG> and the petitioner preferred Special Leave Petitions in this Court. By its decision dated 1 September, 1988, this Court held that under Rule 12.5, the <ORG> had power to give retrospective seniority and hence the seniority given to the petitioner w.e.f. 7 October, 1972 was valid. Thus, this Court by the said decision, confirmed the validity of the seniority given by the <ORG> to the petitioner from 7 October, 1972.

6. It appears that notwithstanding this decision, the petitioner continued to press his representation dated 15 January, 1980 made against the notification dated 14 January, 1980 giving him seniority from 7 October, 1972 and requesting for his seniority from 15 July, 1968. It appears that on this representation, the Home Secretary of <ORG> on 14 May, 1992, put up a note to the Advisor to the Administrator recommending the counting of seniority of the petitioner as Senior Divisional Engineer from 15 July, 1968. On 25 May, 1992, the Advisor to the Administrator, wrote on this note "Please discuss", Thereafter, the Advisor discussed the matter with the Home Secretary and wrote on the said note as follows:

Discussed with <NAME>

Since the matter is sub-judice we may not take any decision on the matter till the finalization of the <ORG> cases.

In other words, the question of counting of the period of service of the petitioner from 15 July, 1968 to 7 October, 1972 remained undecided and it remains undecided till today.

7. In the meanwhile, it appears that on his posting on deputation in <ORG> on 7 October, 1972, the petitioner was sent on deputation by the <ORG> to <ORG>. In <ORG>, he held current duty-charge as Executive Engineer from the 4 October, 1977. Subsequently on 23 December, 1980 he was appointed there as ad hoc Executive Engineer and became regular Executive Engineer there on 26 September, 1931. When he was holding the posts as current duty-charge as Executive Engineer and as ad hoc Executive Engineer in <ORG>, his substantive post was that of Assistant Engineer. On 11 May, 1984, he was transferred back to <ORG> of <ORG> as Executive Engineer. In this connection, it may be noted here that he became eligible to the post of Executive Engineer in his parent Department [Engineering Department of <ORG>] on 7 October. 1980 i.e., after service as Assistant Engineer for eight years counted from 7 October, 1972. He was appointed to the said post on 23 December, 1980 on ad hoc basis for six months. On 15th October, 1981, the promotion was regularised. Again, he became eligible to hold the post of Superintending Engineer there after seven years of service as Executive Engineer under Rule 9, on 15th October, 1988. However, in the said Department the first vacancy in the post of Superintending Engineer, after he became eligible to the said post occurred only on 1st December, 1988. He was appointed to the said post initially on ad hoc basis with effect from that date. The said appointment was regularised with effect from that date later on. It is not disputed that thereafter, the petitioner has been promoted in his parent Department as Chief Engineer in due course as per the Rules.

8. A relevant intermittent development may now be taken note of here. The petitioner continued on deputation to <ORG> till 11th May, 1984 when he was repatriated to the parent cadre in <ORG> of <ORG>. In 1986, he was sent on deputation to a different organisation viz., <ORG> Punjab, hut he was again reverted to the parent Department in 1987. In the meanwhile, on 1st January, 1987, the post of Superintending Engineer fell vacant in the <ORG>.

9. The claim of the petitioner to seniority and to the posts of Executive Engineer and Superintending Engineer is based upon [i] his service as A.E. in <ORG> of the Punjab Government from 15th july, 1968, [ii] his officiation as in-charge Executive Engineer in <ORG> w.e.f. 4th October, 1977 or at least from 23rd December, 1980 when he was regularly appointed there to the said post, and [iii] the vacancy in the post of Superintending Engineer which arose in <ORG> on 1st January, 1987.

10. All these grounds of claim to the seniority and promotion are thoroughly misplaced and unknown to service law. As the acts narrated above show, although the petitioner was appointed on 15th July, 1968 as Assistant Engineer in <ORG> of <ORG>, he had opted subsequently to join the P.W.D. [B & R] w.e.f. 14th January, 1969. On that day itself, he had severed his connections with <ORG>. What is further, he applied for direct recruitment, and was appointed as a direct recruit to the post of Assistant Engineer in the said P.W.D. [B & R] <ORG> on 18th August, 1972. Hence his service as Assistant Engineer whether in <ORG> or the P.W.D. [B & R] prior to 18th August, 1972 was completely wiped out. There was no need of any formal order either from <ORG> or from the P.W.D. [B & R] to relieve him from his earlier service. However, it appears that <ORG> passed an order on 6th October, 1972 relieving him from the said <ORG> which order ought to have been passed by the <ORG> on 14th January, 1969 itself. When he started his fresh career as a direct recruit in the P.W.D. [B & R] of <ORG>, that <ORG> sent him on deputation to the Engineering <ORG> of <ORG> on 7th October, 1972. On his own request in March, 1978, <ORG> absorbed him in their service by their letter dated 17th June, 1978 which clearly specified that his seniority will rank at the bottom of the officers in his cadre. For reasons which are unknown, the <ORG> changed its stand thereafter on 30th June, 1978, and decided to give him seniority from 7th October, 1972 which was ultimately upheld by this Court being permissible under Rule 12.5 of the Service Rules. Hence, his parent <ORG> from that date became the Engineering <ORG> of <ORG> and continued to be so. While he was in the Engineering <ORG> of <ORG>, he was sent on reputation to <ORG>. There he held acting charge of Executive Engineer for some time and thereafter got promoted to the post of Executive Engineer but subsequently he was repatriated to his parent <ORG>. As stated above, he was again sent on deputation to <ORG>.

11. The petitioner's seniority has therefore, to be counted in his parent Department which is <ORG> of <ORG>, and he has also to earn his promotions in the said Department according to the rules and as and when the appointments are made to the vacancies which become available in that Department. He can neither count his seniority on the basis of his service prior to his fresh career as a direct recruit nor can he claim his promotion on the basis of the post of posts that he had held in the organisations to which he was deputed. However, in spite of the clear position in law, he has been pursuing his misplaced claim for counting his seniority prior to his fresh career of Assistant Engineer as a direct recruit and for promotions on the basis of the promotions which he had earned in the organisation where he was sent on deputation. For this purpose, he is relying upon certain nothings either of the Chief Engineer or the Home Secretary of <ORG>. Although it is not known how he came in possession of the said nothings, it was improper on his part to produce these notings in the Court proceedings, assuming that he had come in possession of them authorisedly. As a responsible officer he ought to know that notings in the departmental files did not create any rights in is favour. It is the orders issued by the competent authorities and received by him which alone can create rights in his favour. This is apart from the fact that even those notings did not spell out any order in his favour. In the circumstances, the authorities on which the learned Counsel for the petitioner relied are inapplicable to the facts of the present case.

12. We, therefore, dismiss the Special Leave Petition as being devoid of any substance. We would have been justified in saddling the petitioner with costs. However, we refrain from doing so since the petitioner continues to be in service holding the office of the Chief Engineer and is obviously misguided by his over enthusiasm to assert his alleged right.


<NAME>, J.M.

The short but interesting question arising out of this appeal is whether the following amounts of income can be said to have been derived from the industrial undertaking for the purpose of claiming deduction under section 80-I :

Rs.

Rs.

Rs.

(i)

(i) Sale of import licenses Sale of import licenses 3,93,740 3,93,740

(ii)

(ii) Sales-tax refund Sales-tax refund 8,28,010 8,28,010

(iii)

(iii) Claims from Insurance & Transport Claims from Insurance & Transport 7,79,642 7,79,642

(iv)

(iv) Duty drawback Duty drawback 1,02,301 1,02,301

(v)

(v) Difference in exchange Difference in exchange 7,73,407 7,73,407

(vi)

(vi) CCS CCS 2,88,740 2,88,740

(vii)

(vii) Amount received against IPRS Amount received against IPRS 6,29,369 6,29,369

2. The aforesaid amounts were included by the assessed in the profits of the industrial undertaking for claiming the deduction under section 80-I for assessment year 1992-93. However, the assessing officer was of the view that the words "derived from" used by the legislature in section 80-I has restricted meaning as compared to the expression "attributable to". Reliance was placed by him on the decision of <ORG> in the case of <CITATION> (1978) 113 ITR 84 (SC). Applying this legal position he was of the view that the aforesaid amounts of income could not be said to be income derived from the industrial undertaking. Accordingly the claim of the assessed to that extent was disallowed.

3. The matter was carried before the Commissioner (Appeals), who has allowed the claim of the assessed after following the decisions of Madras High Court in the case of <CITATION> (1981) 128 ITR 571 (Mad) and in the case of <CITATION> . (1987) 167 ITR 917 (Mad). Aggrieved by the same, the revenue is in appeal before the <ORG>.

4. The learned Departmental Representative on behalf of the revenue has vehemently assailed the order of the Commissioner (Appeals) by contending that the meaning of the words "derived from" has to be understood in the restricted sense as held by <ORG> in the case of <ORG> (supra). According to him, there must be a direct nexus between the income and the industrial undertaking. Proceeding further it was submitted that if the source of the income is something else than the industrial undertaking, then such income cannot be said to have derived from industrial undertaking. In this connection, he relied on the latest decision of <ORG> in the case of <CITATION> (1999) 237 ITR 579 (SC), wherein it has been held that income from the sale of import entitlements could not be treated as income derived from industrial undertaking since source of such income was the <ORG> scheme itself and not the industrial undertaking. Accordingly, it was argued by him that in the present case there was no direct nexus between the income and the industrial undertaking and, therefore, assessing officer was justified in excluding such income from the income of industrial undertaking for the purpose of computing deduction under section 80-I.

5. On the other hand the learned counsel for the assessed submitted before us that the word "from" has been used to single out the industrial undertaking from non-industrial undertaking and, therefore, if there is any connection between the income and the industrial undertaking then deduction under section 80-I must be allowed. He also tried to distinguish the decision of <ORG> in the case of <ORG> (supra) by submitting that in that case merely a right had accrued to the assessed under the scheme which had no value in itself. If the said entitlement was not sold then no income would accrue to the assessed. Hence there was no direct connection with the activity of industrial undertaking in that case but in the present case the items disputed have direct connection with the activity of the manufacturing and sale of manufactured goods. Proceeding further it was submitted by him that if any expenditure goes to the trading, manufacturing or profit and loss account of the assessed in any year and deduction is allowed for the same in computing the income of the industrial undertaking then reimbursement of such expenses would have direct connection with industrial undertaking and accordingly such income cannot be excluded while computing the profits derived from industrial undertaking. Consequently, it was argued by him that sales-tax refund, duty drawback as well as claim for insurance and transport must be held to be income derived from industrial undertaking. Proceeding further he drew our attention to the various schemes i e., cash subsidy scheme and International Price Reimbursement Scheme and argued that these are the trading receipts in view of the decision of the <ORG> in the case of <CITATION> (1997) 226 ITR 253 (SC) having originated from the industrial activity of export of the goods manufactured by assessed. According to him, the profits do not accrue on mere manufacturing but accrue on sale thereof. Therefore, if on the basis of such sales any incentive is received then it must be held to have derived from industrial undertaking. Proceeding further, it was submitted that the difference in exchange was also directly related to the activity of the industrial undertaking. At this stage, a query was raised from the <ORG> as to whether foreign exchange was utilised for operational activity of the assessed or for acquisition of capital asset. The learned counsel for the assessed was not able to answer this factual aspect and, therefore, submitted that if the <ORG> think fit than the matter may be restored for verification to the assessing officer. Regarding the income from sale of import entitlement he had nothing to say in view of the decision of the <ORG> in the case of <ORG> (supra).

6. Rival contentions of the parties as well as the case law referred to by them have been considered carefully. The controversy before us centers around the interpretation of the words 'derived from' used by legislature in section 80-I. This issue came up for consideration for the first time before <ORG> in the case of <CITATION> (1948) 16 ITR 325 (PC). The question before the court was whether the interest of arrears of rent payable in respect of land used for agricultural purposes could be treated as agricultural income. The meaning of the words "derived from" was also considered by <ORG> in the case of <CITATION> (1955) 27 ITR 1 (SC). In that case A was shareholder of various tea companies whose 60 per cent income was exempt from tax as agricultural income. The assessed also claimed 60 per cent of the dividend income as exempt from tax being agricultural income. The court was concerned with the interpretation of the words "revenue derived from land". It was held that the income must have direct association or relation with the land so that it may fall within the scope of the words "revenue derived from land". Dividend income was out of investment of funds in shares and, therefore, the same could not be treated as agricultural income. Again in the case of <ORG> (supra), <ORG> has held that the expression "attributable to" is wider in import than the expression "derived from". It was further held that whenever the legislature intended to give restricted meaning it has used the expression "derived from". The latest decision of <ORG> on this issue is in the case of <ORG> (supra) wherein it has been held that there must be direct nexus between the income and the activity of the industrial undertaking. The question before the court was whether the income from the sale of import entitlements could be said to have derived from the industrial undertaking. In this connection, following observations were made by their Lordships:

"We do not think that the source of the import entitlements can be said to be the industrial undertaking of the assessed. The source of the import entitlement can, in the circumstances, only be said to be <ORG> of <ORG> where under the export entitlements become available. There must be, for the application of the words "derived from", a direct nexus between the profits and gains and the industrial undertaking. In the instant case, the nexus is not direct but only incidental. The industrial undertaking exports processed sea food. By reason of such export, <ORG> applies. there under, the assessed is entitled to import entitlements, which it can sell. The sale consideration there from cannot, in our view, be held to constitute a profit and gain derived from the assessed's industrial undertaking."

7. In view of the above discussion, it is held that there must be direct nexus between the income and the industrial undertaking meaning thereby, the source of income must be the industrial undertaking. If the source of the income is other than the industrial undertaking than it cannot be said that such income was derived from the industrial undertaking.

8. In view of the above legal position let us examine the items of dispute before us. For the sake of convenience we first take up the item of duty drawback. In order to appreciate the contentions of the parties, we would like to refer the provisions of section 75(1) of Customs Act, 1962 under which duty drawback is allowed. The same is reproduced as below:

"75. Drawback on imported materials used in the manufacture of goods which are exported.-(1) Where it appears to <ORG> that in respect of goods of any class or description manufactured in India being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under section 51 by the proper officer a drawback should be allowed of duties of customs chargeable under this Act on any imported material of a class or description used in the manufacture of such goods, <ORG> may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section (2)."

We are informed that similar provisions are also made in Central Excise Act . Since in the present case duty drawback was received under the Customs Act , we are referring to the provisions of section 75(1) of Customs Act, 1962 only.

The perusal of section 75(1) clearly shows that the duty drawback is given by way of incentive to boost the export of goods manufactured in India. If any imported goods on which custom duty has been levied, has been used in the manufacture of any goods of any class or description and such manufacture goods have been exported out of India, the custom duty paid on imported goods is given back to the manufacturer by way of rebate. This duty drawback is given only to manufacturers making export as is apparent from sub-section (2) of section 75 . In other words, it is nothing but reimbursement of duty already paid. Whenever such duty is paid, it directly affects the profits of industrial undertaking in as much as it is debited to Manufacture & Profit and Loss account. Such payment of custom duty increases the cost of manufacturing but when the same is received back as drawback, it nullifies the affect of aforesaid increase in the cost of manufacturing. Therefore, in our opinion, the duty drawback is inextricably linked with the production cost of the goods manufactured by assessed. Accordingly, it is held that duty drawback is the trading receipt of the industrial undertaking having direct nexus with the activity of such industrial undertaking and accordingly, the same forms part of the income derived from such industrial undertaking. The order of Commissioner (Appeals) is, therefore, upheld with reference to this item.

9. For the similar reasons we are of the view that assessed is entitled to succeed in respect of claims received from insurance company and transporters. The reasons is obvious. The payment of freight charges to the transporter as well as the premium to the insurance company is directly connected with the activity of the industrial undertaking affecting the profits of the business and consequently, refund thereof has a direct nexus with such business activity. The details furnished before us clearly shows that amount received from transporters was on account of shortage of rubber and tyres transported. Further the claim from insurance company was on account of the damage of stock due to flood. So, in our view, there is direct nexus between the amount received from the transporter/insurance companies and the activity of the industrial undertaking. Accordingly it is held that such receipts form part of the profits derived from industrial undertaking. The order of Commissioner (Appeals) is, therefore, upheld on this aspect of the issue.

10. As far as income from sale of import entitlement is concerned, the issue is squarely covered against the assessed by the decision of <ORG> in the case of <ORG> (supra). Respectfully following the same it is held that the amount received on the sale of import entitlement shall not form part of profits derived from industrial undertaking.

11. As far as difference in foreign exchange is concerned, it is not clear from the facts of the case whether such foreign exchange was utilised in the field of capital or revenue. Therefore, order of Commissioner (Appeals) is set aside on this issue and the matter is restored to the file of assessing officer who shall ascertain the facts in this regard. He is directed to allow the claim of the assessed if it is found that foreign exchange was utilized in the revenue field. However, if it is found that it was utilised in the capital field then the assessing officer may not include the same in the business profits derived from industrial undertaking.

12. As far as sales-tax refund is concerned, the relevant provisions of Sales Tax Act under which refund was granted and the relevant facts which led to such refund were neither placed before the lower authorities nor before us. The only submission of the learned counsel for the assessed is that like duty drawback it is also reimbursement of the amount of sales-tax paid by the assessed. According to him, the payment of sales-tax is debited to the P&L account like custom duty or excise duty which affects the cost of production and, therefore, any amount refunded against such payment would be trading receipt and thus it would have a direct nexus with the activity of industrial undertaking. However, we do not find such submissions supported by any material or evidence. Normally sales-tax is paid by the dealer/manufacturer after collecting the same from customers. In such cases question of debiting the sales-tax payment to P&L account simply does not arise. However, if sales-tax collected and paid are transferred to P&L account it would not affect either the profit or loss of such undertaking. However, sometimes, the assessed may challenge the levy of sales-tax itself in writ petition before <ORG> and subsequently, may get the refund. Such cases have been considered by the courts as cases of unjust enrichment in as much as taxes are paid after collecting the same from the customers. In such cases, the sale-tax refund may constitute business receipts in view of the decision of <ORG> in the case of <CITATION> (1973) 87 ITR 542 (SC), but the same, in our opinion, cannot be considered as profits derived from industrial undertaking because there is no direct link between the activity of such undertaking and receipt of sales-tax. Further, copy of profit and loss account appearing at page 20 of the paper book does not show that any amount of sales-tax was debited to P&L account. It is also not the case of the learned counsel for the assessed that sales-tax paid on raw material is given back against the export/local sales of the goods manufactured out of such raw material as in the case of duty drawback. Therefore, the sales-tax refund cannot be considered at par with the duty drawback unless it is established that payment of sales-tax enhance the cost of production and same is received back by way of reimbursement. We are not aware of the circumstances under which the refund was granted to the assessed. The law is well-settled that whenever any deduction/relief is claim, the onus lies on the assessed to prove that the conditions for claiming such relief are fulfillled. Reference can be made to the decision of <ORG> in the case of <CITATION> . (1951) 19 ITR 191 (SC). Since such onus has not been discharged, the claim of the assessed regarding sales-tax refund is rejected. However, it is clarified that in some other appropriate case, the <ORG> may decide the issue in the light of sales-tax provisions and relevant material /evidence which may be brought before it. The decision of <ORG> reported as <ORG> case (supra) and <ORG> case (supra) relied upon by the learned Commissioner (Appeals) are quite distinguishable inasmuch as the <ORG> decided the issue in view of the wordings "attributable to" which are wider in scope than the words "derived from" as held by the <ORG> in the case of <ORG> (supra). In view of the above discussion, the order of Commissioner (Appeals) is reversed on this aspect of the issue and the order of assessing officer is restored. Consequently, it is held that the sales-tax refund was rightly excluded from the profits of the industrial undertaking for the purpose of deduction under section 80-I .

13. As far as cash compensatory support (hereinafter referred to as the CCS) is concerned, we find merit in the appeal of the revenue. The perusal of the scheme raised before us shows that CCS is a kind of subsidy given to a person who export goods either purchased or manufactured by him under a scheme formulated by <ORG>. Unlike duty drawback it is not reimbursement of any expenditure on input incurred by the assessed. Further for claiming such subsidy, the person need not carry on any industrial undertaking since it is available to any person making export out of India. It is simply an incentive granted to an exporter under a scheme. Therefore, it cannot be said that there is any nexus between the subsidy received and the activity of the industrial undertaking. The source of the subsidy is the scheme framed by the government and not the industrial undertaking. Hence the decision of <ORG> in the case of <ORG> (supra) would apply squarely to the present issue. It has been held in that case that receipts on sale of import entitlements had nexus with the scheme of government and not the industrial undertaking and, therefore, deduction under section 80HH could not be allowed. Respectfully following the same, it is held that CCS cannot form part of profits derived from industrial undertaking. The order of Commissioner (Appeals) is, therefore, reversed on this aspect of the issue and order of assessing officer is restored.

14. Now coming to International Price Reimbursement Scheme (IPRs), we find that a scheme was formulated by <ORG> under which exporters of engineering goods were allowed reimbursement of part of the price paid in the domestic market in respect of certain kinds of iron steel so that such exporters could compete in the international market. Payment of purchase price in respect of raw material certainly affects the profits of an industrial undertaking and, therefore, reimbursement thereof would directly affect such profits. In these circumstances, one can form the view that there is a direct nexus with the activity of the industrial undertaking. However, it has to be borne in mind that such reimbursement would not have been available to the assessed but for the scheme formulated by <ORG>. Therefore, the immediate source of such receipt has to be traced to such scheme and consequently, the decision of <ORG> in the case of <ORG> (supra) would apply, which is binding on us. Hence, the issue is decided in favor of the revenue. The order of Commissioner (Appeals) is, therefore, reversed on this aspect of the issue and the order of assessing officer is restored.

15. The next issue relates to the addition of Rs. 1,82,29,686 made by assessing officer on account of valuation of stock which has been deleted by Commissioner (Appeals).

16. The assessed was engaged in the manufacture and sale of cycle tyres and tubes as well as trading of fans, sewing machine etc. The assessed had been valuing the closing stock at market price. However, in the year under consideration the assessed changed the method of valuing the closing stock from market value to cost. The assessed was asked to explain as to why such change should not be disallowed. It was explained by the assessed that the method followed in the current year was a recognised method of valuation and the change was bona fide one since it was going to be followed regularly. Certain case laws were relied on by the assessed. After considering the explanation of the assessed, the assessing officer found the change as bona fide one and the same was permitted. Having done so, he went on to observe that it is the duty of the assessing officer to determine the true profit of the year. Reliance was placed on the decision of <ORG> in the case of <CITATION> . (1991) 188 ITR 441 (SC). He has also referred to the decision of Delhi High Court in the case of <CITATION> (1975) 99 ITR 574 (Del) for the proposition that opening stock cannot be valued in a manner different from the valuation of closing stock. Accordingly, the assessing officer worked out the loss to the revenue due to change in the method of valuation. Considering this fact, he reduced the opening stock by 25 per cent. As a consequence thereof, the net addition of Rs. 1,82,29,686 was made.

17. The matter was carried before the Commissioner (Appeals) before whom it was contended that in the case of change in the method of valuation, the opening stock cannot be disturbed because the closing stock of the preceding year has to be taken as opening stock of next year as per the settled position of law. In this regard three judgments were relied on, namely, decision of <ORG> in the case of <CITATION> . (1988) 173 ITR 347 (AP), the decision of Karnataka High Court in the case of <CITATION> . (1988) 174 ITR 616 (Karn) and the decision of <ORG> in the case of <CITATION> (1993) 202 ITR 789 (Bom). The Commissioner (Appeals) agreed with this contention of the assessed and further strengthened the same by referring to the decision of Hon'ble Supreme Court in the case of <CITATION> (1953) 24 ITR 481 (SC) wherein it has been held that valuation of closing stock must be taken as opening stock in the succeeding year. Following this legal position, the Commissioner (Appeals) deleted the addition made by assessing officer. Aggrieved by the same, the revenue is in appeal before the <ORG>.

18. After hearing both the parties, we do not find any merit in the appeal of the revenue. There is no dispute of the fact that the change in the method of valuation of closing stock was bona fide one and the same has been accepted by the assessing officer also. Having accepted the same, the question before the assessing officer was whether he could disturb the value of opening stock. In our opinion, the answer to this question is in the negative. It is settled position of law that value of the closing stock has to be taken as value of the opening stock of the succeeding year. Reference can be made to the judgment of the Honble <ORG> in the case of <NAME> (supra). This position has not been disturbed by any decision of <ORG> till date. The decision of Delhi <ORG> in the case of <ORG> (supra) and the decision of <ORG> in the case of <ORG> (supra) are distinguishable in as much as in none of the cases, there was change in the method of valuing the stock. Those were the cases where the method of valuing the stock was itself defective and contrary to the recognized principles of valuation. Accordingly, it was held that assessing officer was duty bound to adopt the correct method of valuation and in such process the opening stock as well as closing stock could be correctly valued in the similar manner. But there is no case available where there is a bona fide change in the method of valuation and the courts have allowed to disturb the opening stock which was done according to the recognised principles of valuation. On the contrary, the three decisions relied upon by the learned Commissioner (<NAME>) covers the issue before us. These decisions are in the cases of <ORG> (supra), <ORG> (supra) and <ORG> (supra). Therefore, in our opinion, the Commissioner (<NAME>) was justified in deleting the addition. Consequently, the order of Commissioner (<NAME>) is upheld on this issue.

19. In the result, appeal of the revenue is partly allowed.


JUDGMENT <NAME> and <NAME>, JJ.

1. The defendant No. 1 is the zemindar of a certain mouza called <ORG> now in the district of Birbhum. Defendants Nos. 2 and 3 are the patnidars and plaintiff is the dar-patnidar of the said mouza. Subsequently to the creation of these tenures the Government resumed the chowkidari chakran lands of the mouza under Bengal Act VI of 1870, and made a transfer of the same to defendant No. 1 under Section 50 of the said Act on several dates in 1898, 1899 and 1900 at a total jama of 215 rupees, and defendant No. 1 made raiyati settlements of the said lands with defendants Nos. 4 to 18 who are in possession. The plaintiff brings this suit on the allegation that the defendant No. 1 having transferred all his rights in respect of the mouza to the patnidars, and the patnidars having similarly transferred all their rights to the dar-patnidar, subject of course to the payment of the respective head rents, she as dar-patnidar was entitled to khas possession of the said lands at the jama payable to the Collector. She prays that she may recover khas possession and that proper deeds of transfer may be executed in her favour by defendant No. 1. The Subordinate Judge gave a decree for recovery of possession with mesne profits from date of decree, but left to a future suit the determination of the terms on which the plaintiff was to hold the lands. On appeal, the District Judge of Birbhum has upheld the decree of the Subordinate Judge, and in second appeal it is contended on behalf of defendant No. 1--(i) that the suit has been wrongly framed; it ought to have been one for the specific performance of a contract pure and simple without any prayer for possession, and that it should be dismissed on this ground alone; and (ii) that the suit is barred by limitation.

2. In support of the first plea the learned vakil for the appellant contends that defendant No. 1 had no title in the disputed lands before the transfer by the Collector, and he could not therefore have made any valid transfer of the same at the time of the patni, nor on the same ground could the patnidar transfer any title to the dar-patnidar; that the jural relation created by the patni and the dar-patni leases in respect of the disputed land was no more than that of a mere agreement to grant, contingent upon a subsequent transfer, and this agreement must be specifically enforced before the plaintiff could have a title which would entitle her to treat defendant No. 1 or his lessees as trespassers and to sue for recovery of possession. He relies upon two cases as supporting his contention: <CITATION> (1907) I.L.R. 34 Calc. 564 and <CITATION> (1906) I.L.R. 33 Calc. 596. It is conceded that the former case has been dissented from in a later case, that of <NAME> v. <NAME> (1908) I.L.R. 35 Calc. 346 and the latter case distinguished by one Judge and dissented from by another in the case of <CITATION> (1906) I.L.R. 34 Calc. 109 and it is contended that a reference ought to be made to a Full Bench in consequence of this conflict. The second ground depends upon the decision of the first. The learned vakil for the respondent contends that the suit is rightly conceived, in that it does contain a prayer for specific relief by way of execution of a proper deed of settlement and contains a further prayer for consequential relief by way of possession, so that even if the right view of the law were that enunciated in the case of <CITATION> (1907) I.L.R. 34 Calc. 564 there is no defect in the form of the suit and no reference to a Full Bench is necessary: he also contends that if that view is not right still his suit is well conceived, in that he prays for recovery of possession as his main relief and the other reliefs as ancillary thereto.

3. We have carefully considered the plaint and we have no doubt it is rightly conceived in either view of the law we do not think that the joining of the two prayers for execution of a deed of transfer and for recovery of possession is in any way repugnant to any rule of law. In the case of <NAME> valid <NAME> v. <NAME> (1893) I.L.R. 18 Bom. 537 Sir <NAME> C.J. held that a claim to possession on the contract might be barred by Section 43 of the Civil Procedure Code, as not included in a previous suit for specific performance, but a suit for possession based on the deed of sale executed as a result of the suit for specific performance was a different cause of action and was not so barred. <ORG> in the case of <CITATION> (1898) I.L.R. 22 Mad. 24 held that a separate suit for possession would be barred as the right to possession arose at the same time as the right to the conveyance. Although Sir <NAME> in the Bombay case held that the conveyance gave a fresh cause of action for a suit for possession, he also held that there was a claim to possession on the contract which was barred by Section 43 of the Civil Procedure Code, so that there is no conflict between the said two cases as to there being a cause of action for possession on the contract, which ought to be impleaded in the suit for specific performance. In this view of the cases, it is not necessary in this case to consider whether there is a fresh cause of action on the conveyance and a fresh suit for recovery of possession would be maintainable. It is sufficient to say that in this case the prayers are rightly joined and both: the above cases support this view.

4. The suit therefore is not liable to be dismissed on the ground' that there is no cause of action for recovery of possession.

5. It is contended, however, that had the parties gone to trial on the issue of specific performance the defendant No. 1 would have been in a position to prove by evidence that he had given notice of refusal long before. The question of limitation in a suit for specific performance was not considered in the Court of first instance, but it is clear from the judgment of the lower <ORG> that the plaintiff did put in documentary evidence to show that the demand and refusal were within time, and there appears to have been no reason why the defendant No. 1 should not have put in rebutting evidence showing a previous refusal if there was one. The necessity for bringing a suit for specific performance as a condition precedent to any relief was never pressed until the case was being argued before us and we do not think that any such question arose in the lower <ORG> or that the lower <ORG> committed any error of law in deciding as it did on the materials before it. The question of limitation and the question of privity of contract were decided on the facts by the lower <ORG>, and the appellant now wishes to have a remand to make a new case on the facts as regards limitation to a suit for specific performance, because it is possible that if <ORG> decided that such a suit was imperative such a defence might have been open to him in the Court of first instance. This we cannot allow. Another contention upon which it is sought to obtain a reference to <ORG> in this case is that if a suit for specific performance is imperative, and if this is regarded as such a suit the conditions on which the transfer is to be made must be decided in the suit itself. It does not appear to us that this question was raised in any form in the lower <ORG>, but it is admitted by the learned pleader for the respondent that the conditions on which the transfer should be made are laid down in <NAME> v. <NAME> (1900) 4 C.W.N. 814 as a matter of law, and we are of opinion that the learned Judge in the Court below should in any case, whatever view of the law be taken, decide the conditions in this suit on the principles laid down in that decision. We think that all that is necessary is to remand the case to him now for that purpose upholding the judgments and decrees in other respects and dismissing the appeals.

6. It is admitted that the same result will follow the analogous appeals Nos. 1093, 1094, 1199, 1200.

7. We allow no costs in these appeals but the appellants must pay the costs in the lower <ORG>.


PETITIONER: <ORG>. Vs. RESPONDENT: SMT. SHANTI MISRA, ADULT DATE OF JUDGMENT10/10/1975 BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. ALAGIRISWAMI, A. GOSWAMI, P.K. CITATION: 1976 AIR 237 1976 SCR (2) 266 1975 SCC (2) 840 CITATOR INFO : RF 1991 SC2156 (7) ACT: Motor Vehicle Act , ss. 110A to 110F- Limitation in case of accident before constitution of <ORG> and application for compensation filed beyond 2 months of the constitution of the <ORG>. HEADNOTE: Section 110A(3) of the Motor Vehicles Act, 1939 before its amendment in 1970, provided that no application for compensation arising out of an accident of the nature specified in s. 110(1) shall be entertained by the Claims <ORG> unless it is made within 60 days of the occurrence of the accident. Under its proviso, the Claims <ORG> has power to excuse any delay in filing the application if it was satisfied that the applicant was prevented by sufficient cause. S. 110F bars the jurisdiction of <ORG>, as soon as the Claims <ORG> is constituted. As a result of an accident in September, 1966, the husband of the respondent died. The limitation for filing a suit is 2 years from the date of accident under Art. 82  Limitation Act 1963. On 18th March, 1967, the State Government constituted the Claims <ORG> under s. 110 . The respondent filed an application for compensation on July 8, 1967. The <ORG> and <ORG> held that the <ORG> could entertain the application. Dismissing the appeal to this Court, ^ HELD: (1) The change in law effected by the introduction of ss. 110A to 110F in 1956 was only a change of forum, that is, a change of adjectival or procedural law and not of substantive law. Such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum, because, though he has a vested right of action, he has no vested right of forum. The expressions "arising out of an accident" occurring in s. 110A(1) and "over the area in which the accident occurred" in s. 110A(2) , and the absence of express words making the new forum available only to causes of action arising after the creation of the <ORG>, show that the change of forum was meant to operate retrospectively irrespective of when the accident occurred. [270E-G] (2) The underlying principle of the change of law was to enable the claimants to have a cheap remedy of approaching the Claims <ORG>s on payment of a nominal court-fee instead of an ad valorem amount in <ORG>. Pending suits are not to be affected, but the <ORG> wanted the cheap remedy to be available as soon as a <ORG> was constituted by the State Governments, in all cases, irrespective of the date of the accident, provided the remedy of going to the court was not barred on the date of the constitution of the <ORG>. [271C-E] (3) Therefore, if the accident had occurred within 60 days prior to the constitution of the <ORG> then it could be said that an application to the <ORG> was the only remedy. If such an application could not be made. within 60 days, then the <ORG> has the power to condone the delay under the proviso. But if the accident occurred more than 60 days before the constitution of the <ORG>, it could be contended either, (a) that such a case will be a fit one where the <ORG> would be able to condone the delay under the proviso. But if the accident occurred more than 60 days before the cons to entertain such an application and the remedy of going to <ORG> in such a situation was not barred under s. 110F . [270H-271B] (4) Since the change of forum is retrospective it could not be contended that recourse to suit would still be available under the old law of limitation [273B-C] 267 (5) But, taking recourse to the proviso to s. 110A(3) for excusing the delay in applying to the <ORG> is not correct. Section 5 of the Limitation Act, 1963, or the proviso to s. 110A(3) of the Act, are meant to condone the default of the party on the ground of sufficient cause. But if a party is not able to file an application for no fault of his, but because the <ORG> was not in existence, it will not be a case where it can be said that the applicant was prevented by sufficient cause from making the application in time within the meaning of the proviso. However, the application would not be barred under s. 110A(3) , because, (a) though time had started running for the filing of the suit, but since before it expired the forum was changed, for the purpose of the changed forum, time could not be deemed to have started running before the remedy of going to the new forum is made available;. and (b) though generally the law of limitation which is in vogue on the date of the commencement of the action Governs it a new law of limitation providing a longer period cannot revive a dead remedy, and similarly a new law of limitation providing for a shorter period cannot suddenly extinguish a vested right of action by providing a shorter period of limitation. [271E-272C] Since there is a change of forum, the reasonable view to take would be that the application can be filed within a reasonable time of the constitution of the <ORG>, which ordinarily and generally, would be the time of limitation mentioned in sub-s. (3); and if the application could not be made within that time from the date of the constitution of the <ORG> in a given case, the further time taken may be held to be reasonable on the facts of that case, or the delay can be condoned under the proviso to that section. [273E] Therefore, in the present case, the jurisdiction of <ORG> is ousted as soon as the Claims <ORG> was constituted and the filing of the application before the <ORG> was the only remedy available to the respondent. Since the law was not clear on the point, the time of about four months taken in approaching the <ORG> after its constitution can be held to be either reasonable time or the delay of about two months could be condoned under the proviso to s. 110A(3) . [273F] <CITATION> AIR 1965 Pun. 102.; M/s. V. C. K. Bus Service (P) Ltd. Coimbatore and <CITATION> , A.I.R. 1965 Mad. 149. Palani Ammal and others v. <ORG> Salem and others, I.L.R.2 Mad. 145: <CITATION> . 1967 Guj. 495. <CITATION> , A.I.R. 1969 Raj. 316: <CITATION> , A.I.R. 1969 Delhi 3; <ORG> v. <NAME>, 4 I.A. 127; <NAME> v. <NAME>, I.T.R. 41 Cal. 1125 and Rajah Meherban-I-Doston Sri Raja Row V. K. M. Surya Row Bahadur, <CITATION> and five others, I.L.R. 34 Mad. 645. referred to. Observations contra in <CITATION> . AIR 1961 M.P. 295; <CITATION> , AIR 1964 M.P. 133 and <CITATION> . <NAME> and others, AIR 1970 Patna 172, disapproved. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 210 of 1975.

From the Judgment and order dated the 13th October, 1971 of <ORG> in Special Appeal No. 114 of 1969.

<NAME> and <NAME> for the Appellant. <NAME>, <NAME> and <NAME> for Respondents Nos. 1-3.

The Judgment of the Court was delivered by UNTWALIA, J.-This is an appeal by certificate of fitness granted by <ORG>. The question of law which falls for determination in this appeal is whether an application for compensation filed under section 110A of the Motor Vehicles Act, 1939 (for brevity, the Act), arising out of an accident which occurred more than 60 days before the constitution of <ORG> under section 110 could be entertained by the <ORG> or the remedy of the aggrieved person was to institute a civil suit.

On the 11th September 1966 occurred an accident in which <NAME>, husband of respondent no. 1 and father of respondents 2 and 3 met his death due to collision between his motor cycle and a truck owned by appellant no. 2 and insured with appellant no. 1. A cause of action accrued to the respondents 1, 2 and 3 (hereinafter called the respondents) to claim compensation as legal representatives of the deceased under the Indian Fatal Accidents Act , 1855. A suit could be brought under Article 82 of the Limitation Act , 1963 within two years of the occurrence of the accident. But in the mean-time <ORG> constituted <ORG> under section 110 of the Act, by a notification published in the Gazette of the 18th March, 1967. The respondents filed an application under section 110A on the 8th July, 1967. The appellants objected to the jurisdiction of the <ORG> to entertain the application. The <ORG> over-ruled the. Objection and held that it had jurisdiction to entertain the application. The appellants filed a writ application in <ORG> which was allowed by a learned single Judge. In appeal filed by the respondents there was a difference of opinion between the two judges constituting <ORG>. On reference to a third Judge the ultimate view taken by <ORG> was that the <ORG> had jurisdiction to entertain this application. Hence this appeal.

The Act was amended by Central Act 100 of 1956 with effect from the 16th February 1956. The original section 110 was deleted and new sections 110 to 110F were introduced. The Claims Tribunals however, were not constituted by the State Governments at one and the same time. They were constituted with different dates for different areas. Until and unless <ORG> were constituted the provisions of the new sections introduced in the year 1956 could not be availed of. But as soon as <ORG> was constituted the jurisdiction of <ORG> was barred by section 110F which reads as follows:

"Where <ORG> has been constituted for any area, <ORG> shall have jurisdiction to entertain any question relating to any claim for compensation which may be adjudicated upon by <ORG> for that area, and no injunction in respect of any action taken or to be taken by or before <ORG> in respect of the claim for compensation shall be granted by <ORG>."

But difficulties arose in giving full effect to the bar of jurisdiction of <ORG> because of the language of section 110A providing for the filing of an application for compensation. There could not be any debate or dispute that if an accident occurred after the constitution of <ORG>, the only remedy of the claimant was to file an application under section 110A . The jurisdiction of <ORG> in such a case was ousted in express language. Suits which had been instituted prior to the constitution of <ORG> remained unaffected and had to proceed to disposal in <ORG>s. In a third type of case also there could not be much scope for debate where an accident had occurred prior to the constitution of the <ORG> and the remedy of the suit was barred on the date of such constitution. A barred remedy under no circumstances was meant to be revived under section 110A . But the difficulty arose in cases where accidents had occurred prior to the constitution of <ORG>, the remedy of action in <ORG> was alive but no suit had been filed. In such cases the vested right of action was not meant to be extinguished. The remedy of either an application under section 110A or a civil suit must be available; surely not both. Majority of <ORG> have expressed the view that in such a situation the only remedy available was that of filing an application before the <ORG> and the jurisdiction of <ORG> was barred. <CITATION> and another;(1) M/s V. C. K. Bus Service (P) Ltd. Coimbatore and <CITATION> .(2) Palni Ammal and others v. <ORG>, Salem and others;(3) <CITATION> kalaji and others;(4) <CITATION> (5) and <CITATION> (6). A contrary view was taken by <ORG> in <CITATION> and others(7); <CITATION> (8). In the first case of Madhya Pradesh observations were obiter dicta because on facts it was a case of a pending suit. Similar obiter dicta were made by a Bench of <ORG> following the Madhya Pradesh decisions in the case of <CITATION> (9). The question falls for determination in this Court for the first time and we have to decide which of the two views is correct.

We shall now read section 110A as it stood at the relevant time:

"110A. (1) An application for compensation arising out of an accident of the nature specified in sub- section (1) of section 110 may be made-

(a) by the person who has sustained the injury;

or

(b) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

(c) by any agent duly authorised by the person injured for all or any of the legal representatives of the deceased, as the case may be;

Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application. (2) Every application under sub-section (1) shall be made to <ORG> having jurisdiction over the area in which the accident occurred, and shall be in such form and shall contain such particulars as may be prescribed.

(3) No application for compensation under this section shall be entertained unless it is made within sixty days of the occurrence of the accident: Provided that <ORG> may entertain the application after the expiry of the said period of sixty days if it is satisfied that the applicant was prevented by sufficient cause from making the application in time."

A period of six months was substituted in place of sixty days in sub- section (3) by Act, 56 of 1969 with effect from 2-3-1970.

On the plain language of sections 110A and 110F there should be no difficulty in taking the view that the change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. It is well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. Otherwise the general rule is to make it retrospective. The expressions "arising out of an accident" occurring in sub- section (1) and "over the area in which the accident occurred", mentioned in sub-section (2) clearly show that the change forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred To that extent there was no difficulty in giving the answer in a simple way. But the provision of limitation of 60 days contained in sub-section (3) created an obstacle in the straight application of the well-established principle of law. If the accident had occurred within 60 days prior to the constitution of the <ORG> then the bar of limitation provided in sub-section (3) was not an impediment. An application to the <ORG> could be said to be the only remedy. If such an application, due to one reason or the other, could not be made within 60 days then the <ORG> had the power to condone the delay under the proviso. But if the accident occurred more than 60 days before the constitution of the <ORG> then the bar of limitation provided in sub-section (3) of section 110A on its face was attracted. This difficulty of limitation led most of the High courts to fall back upon the proviso and say that such a case will be a fit one where the <ORG> would be able to condone the delay under the proviso to sub- section (3), and led others to say that the <ORG> will have no jurisdiction to entertain such an application and the remedy of going to <ORG> in such a situation was not barred under section 110F of the Act. While taking the latter view <ORG> failed to notice that primarily the law engrafted in sections 110A and 110F was a law relating to the change of forum.

In our opinion in view of the clear and unambiguous language of sections 110A and 110F it is not reasonable and proper to allow the law of change of forum give way to the bar of limitation provided in sub-section (3) of section 110A . It must be vice versa. The change. Of the procedural law of forum must be given effect to. The underlying principle of the change of law brought about by the amendment in the year 1956 was to enable the claimants to have a cheap remedy of approaching <ORG> on payment of a nominal court fee where as a large amount of ad valorem court fee was required to be paid in <ORG>. It is legitimate to think that the legislature did not think it necessary to affect the pending suits but wanted the cheap remedy to be available as soon as the <ORG> was constituted by the State Governments, in all cases, irrespective of the date of the accident, provided the remedy of going to the <ORG> was not barred on the date of the constitution of the <ORG>. Then, how is the difficulty of limitation in such cases to be solved is the question.

In our opinion taking recourse to the proviso appended to subsection (3) of section 110A for excusing the delay made in the filing of the application between the date of the accident and the date of the constitution of the <ORG> is not correct. Section 5 of the Limitation Act, 1963 or the proviso to sub-section (3) of the section 110A of the Act are meant to condone the default of the party on the ground of sufficient cause. But if a party is not able to file an application for no fault of his but because the <ORG> was not in existence, it will not be a case where it can be said that the "applicant was prevented by sufficient cause from making the application in time" within the meaning of the proviso. The time taken between the date of the accident and the constitution of the <ORG> cannot be condoned under the proviso. Then, will the application be barred under sub-section (3) of section 110A ? Our answer is in the negative and or two reasons:

(1) Time for the purpose of filing the application under section 110A did not start running before the constitution of the <ORG>. Time had started running for the filing of the suit but before it had expired the forum was changed. And for the purpose of the changed forum, time could not be deemed to have started running before a remedy of going to the new forum is made available.

(2) Even though by and large the law of limitation has been held to be a procedural law, there are exceptions to this principle. Generally the law of limitation which is in vogue on the date of the commencement of the action governs it. But there are certain exceptions to this principle. The new law of limitation providing a longer period cannot revive a dead remedy. Nor can it suddenly extinguish vested right of action by providing for a shorter period of limitation. In Delhi and <ORG> v. <ORG>

Orchard(1) Sir Barnes Peacock delivering the judgment on behalf of the Board said at page 135:

"Indeed, if the construction put upon the Act by <ORG> at Bombay, and by <ORG> in the Punjab, is correct, a judgment creditor could not, after the three years, have enforced a judgment which was in force in the Regulation Provinces when Act XIV of 1859 was passed, or a judgment which was in force in the Punjab at the time when the Act was extended to that province, however diligent he might have been in endeavouring to enforce his judgment, and however unable, with the use of the utmost diligence, to get at the property of his debtor. Such a construction would cause great inconvenience and injustice, and give the Act an operation which would retrospectively deprive the creditor of a right which he had under the law as it existed in the Regulation Provinces at the time of the passing of the Act, and in the Punjab at the time of the introduction of it."

<CITATION> (2), <NAME>, C.J. delivering the judgment on behalf of the majority of the full Bench said at page 1141:

"Here the plaintiff at the time when the amending Act was passed had a vested right of suit, and we see nothing in the Act as amended that demands the construction that the plaintiff was thereby deprived of a right of suit vested in him at the date of the passing of the Amending Act . It is not (in our opinion) even a fair reading of section 184 and the third Schedule of the Bengal Tenancy Act, as amended, to hold that it was intended to impose an impossible condition under pain of the forfeiture of a vested right, and we can only construe the amendment as not applying to cases where its provisions cannot be obeyed."

The majority of the <ORG> of <ORG> in Rajah Sahib Meharban-I-Doston Sri Raja Row V. K. M. Surya Row Bahadur, <CITATION> subba Row and five other (1) has taken the same view following the <ORG> decision in <NAME> case at page 650. Amendment of the law of limitation could not destroy the plaintiff's right of action which was in existence when the Act came into force. We are conscious of the distinction which was sought to be made in the application of these principles. It was said that the right could not be destroyed but recourse to suit would be available under the old law of limitation. We,however, think that giving retrospective effect to the change of law in relation to the forum, in the context of the object of the change, is imperative. That being so the principles aforesaid for overcoming the bar of limitation will be applicable.

Apropos the bar of limitation provided in section 110A(3) , one can say, on the basis of the authorities aforesaid that strictly speaking the bar does not operate in relation to an application for compensation arising out of an accident which occurred prior to the constitution of <ORG>. But since in such a case there is a change of forum, unlike the fact of the said cases, the reasonable view to take would be that such an application can be filed within a reasonable time of the constitution of the <ORG>, which ordinarily and generally would be the time of limitation mentioned in sub-section (3). If the application could not be made within that time from the date of the constitution of the <ORG>, in a given case, the further time taken in the making of the application may be held to be the reasonable time on the facts of that case for the making of the application or the delay made after the expiry of the period of limitation provided in subsection (3) from the date of the constitution of the <ORG> can be condoned under the proviso to that sub-section. In any view of the matter, in our opinion, the jurisdiction of <ORG> is ousted as soon as <ORG> is constituted and the filing of the application before the <ORG> is the only remedy available to the claimant. On the facts of this case, we hold that the remedy available to the respondents was to go before <ORG> and since the law was not very clear on the point, the time of about four months taken in approaching the <ORG> after its constitution can be held to be either a reasonable time or the delay of less than 2 months could well be condoned under the proviso to sub-section (3) of section 110A .

For the reasons stated above, we dismiss this appeal with costs to respondents 1, 2 and 3.

<ORG> dismissed.