PETITIONER: INDIAN OIL CORPORATION Vs. RESPONDENT: <ORG>. DATE OF JUDGMENT06/04/1988 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) RANGNATHAN, S. CITATION: 1988 AIR 1340 1988 SCR (3) 426 1988 SCC (3) 36 JT 1988 (2) 212 1988 SCALE (1)965 CITATOR INFO : RF 1989 SC 973 (9) ACT: Arbitration Act , 1940: Sections 30 and 33-Award of Arbitrator-Reasoned Award-What is-Arbitration clause requiring arbitrator to give reasoned award-Whether arbitrator required to give detailed reasons-Sufficiency of reasons depends on facts of the case-<ORG> not to sit in appeal over award and review reasons. HEADNOTE: % In respect of sale of raw petroleum coke by petitioner to respondent there were three agreements, providing for sale, petitioner's right to shift raw petroleum coke at the risk and expense of the respondent in case of failure of Respondent to shift the same as agreed, and the Respondent's liability to pay interest on the value of stock not uplifted. There was default in payment and petitioner stopped supplies to respondent, filed a suit and obtained an order of attachment of stocks of raw petroleum coke, to the extent of Rs.6 crores, of the Respondent. The respondent filed an appeal as also an application for stay of the suit under Section 34 of the Arbitration Act. Meanwhile the petitioner terminated the agreement. Thereafter the respondent filed a suit and the <ORG> passed an order for restoration of supplies. On an appeal by the petitioner, this <ORG> stayed the order of restoration of supplies, and recorded the compromise terms, pursuant to which all proceedings were withdrawn by the parties. The petitioner's claim were referred to an Arbitrator, who passed an interim award, according to which the petitioner was not entitled to any interest nor any shifting charges. The petitioner challenged the said award, when it was filed in <ORG>. The <ORG> dismissed the petition and this special leave petition is against the <ORG>'s order. It was contended before this <ORG> that the Arbitrator has failed to give a reasoned award and so it is bad in law. Dismissing the special leave petition, this <ORG>, ^ HELD: 1. It is obligatory in England now after the Arbitration 427 Act, 1979, that the award should give reasons. The purpose of Section 12 of the Act requiring the tribunal to furnish a statement of reasons if requested to do so before it gave its decision is to enable the person whose property or whose interests were affected, to know, if the decision was against him, what the reasons were. [435B-C] 'Law of Arbitration' by Justice <NAME>. First Edition 1983 pp. 320 and 321, referred to. 2.1 In India, there has been a trend that reasons should be stated in the award. The reasons that are set out must be reasons which will not only be intelligible but also deal with the substantial points that have been raised. When the arbitration clause required the arbitrator to give a reasoned award, the sufficiency of the reasons depend upon the facts of the particular case. He is not bound to give detailed reasons. [435C-D] 2.2 The <ORG> does not sit in appeal over the award and review the reasons. The <ORG> can set aside the award only if it is apparent from the award that there is no evidence to support the conclusions or if the award is based upon any legal proposition which is erroneous.[435D-E] 2.3 The award in question is unassailable. According to the Arbitrator, because of the letter dated 18th October, 1982 of the petitioner addressed to the Respondent stating that if the outstandings and interest are not paid, further supplies would not be made, has been acted upon by the petitioner, which had not delivered any coke to the respondent, or made any offer to do so, the petitioner was not entitled to the interest in respect of the period from 18th October, 1982 onwards, nor to shifting charges in respect of any shifting on or after 18th October, 1982. On this reasoning, he had given the award. How the Arbitrator has drawn inference is apparent from the reasons. No proposition was stated in the aforesaid reasons, which could be objected to as an error of law. The reasons given by the Arbitrator meet the requirements of a reasoned award. It is apparent that the arbitrator has not acted irrelevantly and unreasonably. [432E-G; 434G-H] 2.4 Arbitration procedure should be quick and that quickness of the decision can always be ensured by insisting that short intelligible indications of the grounds should be available to find out the mind of the arbitrator for his action. This was possible in the instant case where the arbitrator has spoken his mind, and he is clear as to how he acted 428 and why he acted in that manner.[434H; 435A] <CITATION> ., AIR, 1923 P.C. 66; <CITATION> , 4 JT 1987 3 S.C. 239; <CITATION> ,  Suppl. S.C.R. 489; <CITATION> ,  3 SCR 12 and <CITATION> ,  2 SCR 903, referred to Bremer Handelsgesellschaft v. <NAME>,  2 Lloyd's Law Reports 130, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 4557 of 1988.

From the Judgment and Order dated 21.3.88 of <ORG> in Appeal No. 306 of 1988.

<NAME>, <NAME> and <NAME> for the Petitioner.

<NAME>, <NAME>, <NAME>, <NAME>, <NAME> and Mrs. <NAME> for the Respondents.

The Judgment of the <ORG> was delivered by <NAME>, J. This petition under Article 136 of the Constitution challenges the judgment and order of <ORG> of <ORG> dated 21st March, 1988. The petitioner in this case on 23rd June, 1961, had agreed to sell to the predecessor of respondent raw petroleum coke. There was a second agreement on 22nd April, 1971. The said agreement was arrived at between the parties whereunder it was provided that in case the respondent failed to lift raw petroleum coke as agreed, the petitioner would have right to shift raw petroleum coke at the risk and expense of the respondent. There was a third agreement providing that in case of delay in payment, the respondent would pay interest at 4 per cent over the <ORG> borrowing rate, on the value of the stock not uplifted. It appears that on 5th August, 1982, the respondent wrote a letter to the petitioner showing inability to pay the arrears of the price against delivery of raw petroleum coke. On 4th October, 1982 there was a stock of about 13,760 M.T.S. Of saleable raw petroleum coke lying at Gauhati Refinery. The petitioner on 18th October, 1982 wrote to the respondent that unless the outstandings as on 1st September, 1982 and interest were paid, the petitioner would not make further supplies. Thereafter the petitioner filed Suit No. 2187 of 1982 for payment and for attachment before judgment. On 21st December, 1982, it appears that there was an order of attachment of stocks of raw petroleum coke to the extent of Rs.6 crores of the respondent. The order was confirmed after notice. Respondent filed Appeal No. 858 of 1983. Thereafter respondent on 20th ostler, 1983 filed an application for stay of the suit under section 34 of the Arbitration Act, 1940 (hereinafter called 'the Act'). The petitioner on 11th July, 1983 terminated the agreement with effect from 31.8.83. The respondent thereafter filed Suit No. 122 of 1983 and applied for an order compelling the petitioner to make supplies. The learned District Judge passed an order on 28th April, 1984 for restoration of supplies. On 7th May, 1984 in petitioner's appeal viz., Civil Appeal No. 2476 of 1984, this <ORG> stayed the above order. On 24th May, 1984 this <ORG>'s order setting aside the order of the learned District Judge dated 28th April, 1984 and recorded the compromise terms. Pursuant to the compromise, all proceedings were withdrawn by the parties. On 11th December, 1984 matter relating to the petitioner's claims in respect of interest on stocks held from 1st October, 1982 onwards and expenses of shifting raw petroleum coke from 1st October, 1982 upto 31st August, 1983, were referred to arbitration of <NAME>, a former Chief Justice of India. On 21st August, 1986 an interim award was passed by the learned arbitrator. Interim award was filed in <ORG> and the petitioner challenged the said award. The learned single Judge of the High <ORG> dismissed the petition challenging the interim award. <ORG> of <ORG> upheld the order of the learned single Judge. Hence this petition under Article 136 of the Constitution.

The main contention urged before us was that it was necessary in the present trend of law for the learned arbitrator to have given a reasoned award. The Arbitration Act , 1979 in England so enjoins. The arbitrator, according to the petitioner has failed to do so. Hence the award was bad and as such the decision of <ORG> was wrong and leave should be granted from the said decision and the matter be referred to <ORG> as several cases are pending on this point.

The learned single Judge of <ORG> in his decision had observed that the award was undoubtedly not an elaborately reasoned award setting out all the reasons which prompted the learned arbitrator to arrive at the conclusion he did reach, but it was a speaking award. The learned Judge however, held that it was not necessary to examine this aspect since even if it was a speaking order, it was not bad in law. It is true that the law as it stands upto date since the decision of <CITATION> ., A.I.R. 1923 P.C. 66 that it was not necessary that all awards should be speaking awards. See in this connection the observations of this Court in <CITATION> , 4 JT 1987 3 S.C. 239.

Previously the law both in England and India was that an arbitrator's award might be set aside for error of law appearing on the face of it, though the jurisdiction was not lightly to be exercised. Since question of law could always be dealt with by means of a special case this is one matter that could be taken into account when deciding whether the jurisdiction to set aside an award on this ground should be exercised or not. The jurisdiction was one that existed at common law independently of statute. In order to be a ground for setting aside the award, an error in law on the face of the award must be such that there could be found in the award, or in any document actually incorporated with it, some legal proposition which was the basis of the award and which was erroneous. See Halsbury's Laws of England, 4th edition. paragraph 623, page 334. The law has undergone a sea change in England. It is obligatory in England now after the Arbitration Act , 979, that the award should give reasons.

In the instant case. the arbitrator has set out the history in the interim award. The arbitrator has stated that the agreement dated 22nd April. 1970 provided that I.C.L.. will uplift all available coke produced at the Gauhati Refinery by which name also the Noonmati Refinery was called. the said upliftment being so regulated that the quantity uplifted every week was equivalent to the production of coke at the refinery in the previous week and that whereas it was thereby further provided that the upliftment by I.C.L. shall also be as regulated that the accumulated quantity of coke in the refinery coke yard does not fall below 2500 tons and does not exceed 4500 tons. The other history of the matter, it was recited that the order dated 24th May, 1984 was passed by consent of the parties by this Court that the claim of <ORG> for interest on stocks said to have been held in the Gauhati Refinery from 1st October, 1982 onwards and its claim for expenses of shifting the coke from 1st October, 1982 upto 3 1st August, 1983 would be referred to the arbitration of a retired Judge of <ORG> mutually acceptable to the parties. Two preliminary issues, the arbitrator framed were, namely, (1) Is the claimant entitled to charge any interest on unlifted stock of raw petroleum coke in view of its letter dated October 18, 1982? and (2) Is the claimant entitled to any shifting charges in view of its letter dated 18th October, 1982? The gist of the letter dated 18th October, 1982 is set out in the arbitration agreement. The arbitrator in his award pro- to observe as follows:

"And whereas it is not in dispute between the parties that since the said letter of 18th October, 1982, <ORG> had not delivered or offered to deliver any raw petroleum coke for <ORG> Now, therefore, having heard counsel for the parties and perused the documents and statements filed by them, the despatch and receipt of none of which is disputed, and having considered thereafter, I adjudge, hold and award as follows: The letter dated 18th October, 1982 is no bar to <ORG> claim for shifting charges and interest in respect of the period from 1st October, 1982 to 17th October, 1982. Because of the said letter which has been admittedly acted upon by <ORG> which had not delivered any coke to <ORG> Or made any offer to do so <ORG> is not entitled to the interest claimed in respect of the period from 18th October, 1982 onwards nor to shifting charges in respect of any shifting done on or after 18th October, 1982."

The aforesaid grounds are the reasons of the arbitrator for making the award. The award is that <ORG> is not entitled to any interest nor any shifting charges. The reasons for the said conclusion are the aforesaid three factors mentioned by the arbitrator. How the arbitrator has drawn inference is apparent from the reasons. It is to be noted that this Court has been insisting on the arbitrators to give some indications to indicate how the mind of the arbitrator acts. This Court in the case of <CITATION> ,  Suppl. S.C.R. 489 was concerned with the decision of the Collector of <ORG>. This Court observed that where an authority makes an order in exercise of a quasi-judicial function, it must record its reasons in support of the order it makes. This Court observed further that every quasi-judicial order must be supported by reasons.

<CITATION> ,  3 SCR 12 where this Court was concerned with an award under section 10A of the Industrial Disputes Act, 1947. This Court observed that there was a need for a speaking order where considerable numbers are affected in their substantial rights. It was further reiterated that in such a situation a speaking order may well be a facet of natural justice or fair procedure. <CITATION> ,  2 SCR 903, this Court reiterated that it was an implied term of the arbitration agreement that the arbitrators must decide the dispute in accordance with the ordinary law and they cannot decide disputes on the basis of their personal knowledge. The proceedings, it was held, before the arbitrators were quasi- judicial proceedings and they must be conducted in accordance with the principles of natural justice. It was, therefore, obligatory to give reasons. As mentioned hereinbefore there has been since then trend that reasons should be stated in the award and the question whether the reasons are necessary in ordinary arbitration agreement between the parties has been referred to <ORG>.

In this case, however, we are in agreement with <ORG> that reasons were stated in the award. We have set out hereinbefore the three grounds, namely, (1) The letter dated 18th October, 1982 is no bar to <ORG> claim for shifting charges and interest in respect of the period from 1st October, 1982 to 17th October, 1982. (2) The inference drawn from the contents of the letter and (3) Because of the said letter which has admittedly been acted upon by <ORG>, and which had not delivered any coke to <ORG> Or made any offer to do so. For these reasons, the arbitrator held that <ORG>, is not entitled to interest claimed in respect of the period from 18th October, 1982 onwards nor to shifting charges from 18th October, 1982. These are the reasons for giving the award. No error of law was pointed out in those reasons. Indeed no proposition of law was stated in the aforesaid reasons, which could be objected to as an error of law. There was, however, no error of fact. It was a possible view to take. It could not be urged that it was an impossible view to take. The arbitrator has made his mind known on the basis of which he has acted that, in our opinion, is sufficient to meet the requirements even if it be reasons should be stated in the award. It is one thing to say that reasons should be stated and another thing to state that a detailed judgment to be given in support of an award. Even if it be held that it is obligatory to state the reasons, it is not obligatory to give a detailed judgment. This question was considered by <ORG> in England in <ORG> v. <NAME>, [1981] 2 <ORG>. There Lord <NAME> speaking for the court at pages 132 and 133 of the report observed as follows:

"It is of the greatest importance that trade arbitrators working under the 1979 Act should realize that their whole approach should now be different. At the end of the hearing they will be in a position to give a decision and the reasons for that decision. They should do so at the earliest possible moment. The parties will have made their submissions as to what actually happened and what is the result in terms of their respective rights and liabilities. All this will be fresh in the arbitrators' minds and there will be no need for further written submission by the parties. No particular form of award is required. Certainly no one wants a formal "Special Case". All that is necessary is that the arbitrators should set out what, on their view of the evidence, did or did not happen and should explain succinctly why, in the light of what happened, they have reached their decision and what that decision is. This is all that is meant by a "reasoned award".

For example, it may be convenient to begin by explaining briefly how the arbitration came about- "X sold to Y 200 tons of soyabean meal on the terms of GAFTA Contract 100 at US. $Z per ton c.i.f. Bremen. X claimed damages for non-delivery and we were appointed arbitrators". The award could then briefly tell the factual story as the arbitrators saw it. Much would be common ground and would need no elaboration. But when the award comes to matters in controversy, it would be helpful if the arbitrators not only gave their view of what occurred, but also made it clear that they have considered any alternative version and have rejected it, e.g., "The shippers claimed that they shipped 100 tons at the end of June. We are not satisified that this is so", or as the case may be. "We are satisfied that this was not the case". The arbitrators should end with their conclusion as to the resulting rights and liabilities of the parties. There is nothing about this which is remotely technical, difficult or time consuming.

It is sometimes said that this involves arbitrators in delivering judgments and that this is something which requires legal skills. This is something of a half truth. Much of the art of giving a judgment lies in telling a story logically, coherently and accurately. This is something which requires skill, but it is not a legal skill and it is not necessarily advanced by legal training. It is certainly a judicial skill, but arbitrators for this purpose are Judges and will have no difficulty in acquiring it. Where a 1979 Act award differs from a judgment is in the fact that the arbitrators will not be expected to analyse the law and the authorities. It will be quite sufficient that they should explain how they reached their conclusion, e.g., "We regarded the conduct of the buyers, as we have described it, as constituting a repudiation of their obligations under the contract and the subsequent conduct of the sellers, also as described, as amounting to an acceptance of that repudiatory conduct putting an end to the contract". It can be left to others to argue that this is wrong in law and to a professional Judge, if leave to appeal is given, to analyse the authorities. This is not to say that where arbitrators are content to set out their reasoning on questions of law in the same way as Judges, this will be unwelcome to the <ORG>. Far from it. The point which I am seeking to make is that a reasoned award, in accordance with the 1979 Act, is wholly different from an award in the form of a special case. It is not technical, it is not difficult to draw and above all it is something which can and should be produced promptly and quickly at the conclusion of the hearing. That is the time when it is easiest to produce an award with all the issues in mind." See the observations in <ORG>, 20th Edn., page 291 Reasons for the Award and the decision referred to therein. "

In a case of this nature, issues are simple, points are fresh and facts are clear, the reasons given by the arbitrator, in our opinion, meet the requirements of a reasoned award. It is apparent that the arbitrator has not acted irrelevantly or unreasonably. Arbitration procedure should be quick and that quickness of the decision can always be ensured by insisting that short intelligible indications of the grounds should be available to find out the mind of the arbitrator for his action. This was possible in the instant case. In the instant case the arbitrator has spoken his mind, and he is clear as to how he acted and why he acted in that manner.

The purpose of section 12 of the English Tribunal and Inquiries Act which required the statutory tribunal to furnish a statement of the reasons if requested to do so before it gave its decision was to enable a person whose property or whose interests were affected to know if the decision was against him what the reasons were. Justice <NAME> in his Law of Arbitration, First Edition 1983, pages 320 and 321 states that the provision was read as meaning that proper and adequate reasons must be given. The reasons that are set out must be reasons which will not only be intelligible but also deal with the substantial points that have been raised. When the arbitration clause required the arbitrator to give a reasoned award and the arbitrator does give his reasons in the award, the sufficiency of the reasons depend upon the facts of the particular case. He is not bound to give detailed reasons. The <ORG> does not sit in appeal over the award and review the reasons. The <ORG> can set aside the award only if it is apparent from the award that there is no evidence to support the conclusions or if the award is based upon any legal proposition which is erroneous.

Judges in that light, the award in question was unassailable in the instant case.

In the aforesaid view of the matter, we are of the opinion that <ORG> was right in the view it took. The special leave petition fails and is accordingly dismissed.

G.N. Petition dismissed.


JUDGMENT <NAME>, J.

1. This appeal under Section 378 . has been filed by the State of U.P. against the judgment and order dated 3rd October, 1981 passed by the then Sessions Judge in ST. No. 108 of 1980 whereby he acquitted all the three accused of all the charges framed against them.

2. In brief, the facts of the prosecution case giving rise to this appeal were as under:

<NAME> <NAME>, son of <NAME>, lodged a report at <ORG> station Gobardhan Mathura on 13.1.1981 at 8-45 P.M. and the local <ORG> registered a case at case crime No. 13 under Section 302 I.P.C. The informant alleged in his report that on 13.1.1981 at about 6-30 P.M. he accompanied by his father <NAME> (deceased), his uncle <NAME>, servant <NAME>, son of <NAME>, and one <NAME> were proceeding towards Gobardhan along with several cattle through a canal road. Accused <NAME>, his son <NAME> and his brother <NAME> met the informant and others on the canal road and wanted to know their destination. The informant replied that they were going to Gobardhan and did business of cattle. The informant's sister <NAME> was married to <NAME> who left her on account of bringing inadequate dowry. Ultimately, the informant settled her second marriage but <NAME> and others did not put any question as to why he had settled her second marriage.

3. Accused <NAME> instigated his brother and son to kill the informant and others and he himself opened fire with a view to kill <NAME> but he missed his aim. The informant and his companions took a turn and raised alarm. <NAME> also opened fire and shot <NAME> at his neck. <NAME> sustained firearm injuries on his neck, fell down and died on the spot. On hue and cry, all the three accused took about turn and ran away. The informant left the dead body of his father in the supervision of his servant <NAME> and <NAME>.

4. He got a report prepared by one <NAME> and accompanied by his uncle and others reached Police station and lodged the FIR.

5. After registration of the case, <NAME> left the <ORG> station and reached the village in question on the same night at about 10-00 P.M. and searched the assailants. Since there was no light available, he did not prepare inquest report. Next day at about 7-00 A.M., Panchayatnama and other papers were prepared by the I.O. He sealed the dead body and handed over to constable <NAME> who took the dead body to mortuary. The I.O. interrogated <NAME>, <NAME>, <NAME> and others and after inspection prepared site plan. He collected blood stained earth on 14.1.1981. All the accused were arrested by the <ORG> and were interrogated. After completing investigation, the I.O. submitted charge sheet against all the three accused named in the FIR.

6. Accused <NAME> was charged under Section 302 I.P.C. and the remaining two accused were charged under Section 302 read with Section 34 of the Penal Code. Accused <NAME> was charged under Section 307 I.P.C. also. They all pleaded not guilty and claimed to be tried.

7. In order to bring home the charges against the accused, the prosecution examined <NAME>, the informant, <NAME>, brother of the deceased, <NAME> who was said to be eyewitness of the murder, <ORG> head constable <NAME> and <ORG> constable <NAME> filed their respective affidavits, P.W.6 Dr. <NAME>, the then C.M.O., Mathura, was examined to prove the post-mortem report which was prepared by Dr. <NAME>. He led secondary evidence as Dr. <NAME> had left the country and had gone to Libia, <NAME> of the case was also examined and P.W.8 Constable <NAME> also filed affidavit.

8. All the three accused admitted their inter se relationship as well as this fact that informant's sister was married to <NAME>. <NAME> further admitted that he did not bring his wife but he did not demand dowry. They pleaded that the witnesses are related to each other and <NAME> was servant of <NAME>.

9. Accused examined <NAME> as D.W.1 and <NAME> as D.W. 2, Assistant Record Keeper, S.P. office, Mathura to prove that one <NAME> was also killed in the plots of village Doserash on 13.1.1981 and an entry was made in the G.D. dated 14.1.1981 of <NAME>. One court witness <NAME>, Inspector Commercial Taxes, <ORG>, Bahaz, district Bharatpur was examined who disclosed that <ORG> used to collect 5% as commercial tax on the sale of cattle except cow.

10. After appraisal of the evidence on record led by the parties learned <NAME> concluded that how the assailants came to know that the deceased and others were going to Gobardhan along with their cattle through canal road and the light was not sufficient to identify the assailants. The prosecution witnesses were partisan and as such, he gave benefit of doubt and acquitted all the three accused.

11. Aggrieved by the judgment and order passed by learned <NAME> Judge, the <ORG> has come up in appeal.

12. We have heard learned A.G.A. and <NAME>, learned Counsel for accused-respondents at length and perused the record carefully.

13. Learned Additional Government Advocate has contended that there was motive to the accused to commit murder as <NAME> had left his wife and the informant had settled her second marriage. It was further urged that about 6-30 P.M. on 13.1.1981, there must have been sufficient light to identify the real assailants. The assailants were relatives of the informant and others and as such, there was no difficulty in recognizing them at about sun set. Moreover, the informant and his companions talked to the assailants. It was further submitted that the prosecution examined <NAME> and <NAME>, who are son and brother of the deceased respectively. It is true that they were related to the deceased but there was no question of doubting their presence at the scene of incident. <NAME> was a resident of district Alwar and was an independent witness and as such, learned Judge erred in rejecting his testimony also. He was not justified in extending benefit of doubt to all the three accused who committed murder of <NAME> in furtherance of their common intention. The incident was reported to the <ORG> promptly within two hours of the incident at the <ORG> station situate at a distance of six kilometers. In this view of the matter, the learned Judge committed error in appraisal of the evidence led by the prosecution and this appeal has to be allowed and accused are liable to be convicted.

14. On the other hand, learned Counsel for the accused-respondents urged vehemently that about at 6-30 P.M. in the month of January there must have been complete darkness and as such, it was not possible for the witnesses to identify the real assailants. It was submitted that on the same night <NAME>, a hardened criminal of the area, was also killed and an entry was made in General Diary at P.S. Gobardhan on 14.1.1981, which was proved by <NAME>. The murder of the informant's father was committed at an unknown place by the dacoits who killed <NAME> also and the accused were rightly acquitted by the trial court.

15. We have given our anxious consideration to the submissions made on behalf of the parties and perused the entire record, including oral and documentary evidence led by the parties. We have gone through the impugned judgment also. The learned Judge was of the view that there was no motive for the accused to commit murder of <NAME> and the murder did not take place at the place and in the manner as alleged by the prosecution. The trial Judge further found that it was the month of January and on account of complete darkness at the scene of alleged murder it was not possible for the informant or other witnesses to identify the real culprits and as such, he found that the prosecution could not bring home the charge against any accused beyond all shadow of doubt.

16. We are fully aware of the law on the point that there is no embargo on <ORG> to appreciate the evidence afresh but interference in the order of acquittal should be made for compelling reasons. Generally, the order of acquittal shall not be interfered with because the presumption of innocence of the accused is further strengthened by the acquittal. The golden thread which runs through the web of administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favorable to the accused should be adopted. The paramount consideration of the court is to ensure that miscarriage of justice is prevented. ( <CITATION> 2006 (56) ACC 219).

17. When we analyze and scrutinize the evidence in the light of aforesaid proposition of law, we find that the trial Judge committed error in appraisal of the evidence led by the prosecution and the prosecution had succeeded in establishing the guilt of the accused beyond reasonable doubt. Admittedly, Smt. <NAME>, sister of <NAME>, was married to accused <NAME>, son of <NAME>. The deceased (<NAME>) was father-in-law of <NAME> and the informant is brother-in-law of <NAME>. The third accused <NAME> is real brother of <NAME> and uncle of accused <NAME>. It is thus clear that the parties were closely related to each other and were well known since marriage of Smt. <NAME> with <NAME>. It is further undisputed that after marriage of Smt. <NAME> with <NAME>, he left her and she was living in her <NAME>. Prior to the murder of <NAME>, <NAME> had settled second marriage of Smt. <NAME> but <NAME> was not performed. Smt. <NAME> had not been divorced by her husband. In this view of the matter, it is crystal clear that the accused had a motive to teach a lesson to his father-in-law and members of his family as they had settled second marriage of his wife, who had not been divorced by her husband. This action on the part of the informant must not have been relished by the accused. It is therefore incorrect to say that the accused had no motive. It will not be out of place to mention that motive has no significance in cases, which are based on direct evidence of eyewitnesses.

18. In the instant case, it is quite clear from the medical evidence coupled with eyewitness account that <NAME> was done to death as a result of gun shot injuries on his neck on 13.1.81 at about 6-00 P.M. The doctor who conducted autopsy found that death had taken place about one day prior to the examination which was done at 5-30 P.M. on 14.1.1981. It is noteworthy that the doctor found one gunshot wound of entry trachea deep on the front of neck. There were fractures of third and fourth cervical vertebrae and laceration at the level of third and fourth cervical vertebrae. Moreover, trachea was punctured through and through just below thyroid cartilage. We therefore hold that <NAME> had his unnatural death as a result of gun shot injury on his neck on 13.1.1981 at the time as alleged by the prosecution.

19. So far as the complicity of the three accused in the crime is concerned, the prosecution examined <NAME>, <NAME> and <NAME>. As mentioned above, the prosecution version is that <NAME> did business of sale and purchase of cattle and he used to bring cattle from Rajasthan. On the impugned date also, <NAME> along with others were bringing the cattle to Gobardhan market for sale. They were coming to Gobardhan along with cattle through canal road. The accused met them in the way and made an enquiry. The deceased replied that they were going to Gobardhan to sell cattle. After having heard this reply and recognizing the deceased and <NAME> exhorted his son and he himself opened fire. He, however, missed his target. The informant and others took turn and raised alarm. In the meantime, <NAME> opened fire and shot at the neck of <NAME> who sustained injuries, fell down and succumbed on the spot. On the alarm, all the three accused took about turn and ran away and the witnesses did not chase them on account of fear. <NAME> and <NAME> are no doubt son and brother of the deceased respectively. They wholeheartedly supported the prosecution story and stated in unambiguous words that first shot was fired by <NAME> who missed his aim. It was <NAME> who. fired the fatal shot at the neck of the deceased and thereafter all the three culprits ran away. They were cross-examined extensively on behalf of the accused but nothing could be elicited to show that they have not spoken the truth. <NAME> denied the suggestion of the defence that one <NAME> Jatav was also killed at the scene of incident by dacoits and the murder of <NAME> was committed by unknown miscreants. The prosecution placed reliance on the testimony of <NAME> also, who is a co-villager of the informant and is Brahman by caste. He too fully corroborated the testimony of other witnesses regarding participation of the three accused in the crime. He claimed to have seen the accused in his village as they had their relatives in his village. We find nothing in his cross-examination also to discard or disbelieve his testimony.

20. So far as sufficiency of light is concerned, we find that incident of murder took place on 13.1.1981 at about 6-30 P.M. Admittedly, the sun had set in but there was light in which the culprits could be identified. It may not be out of place to mention that even after sunset, one gets natural light and the persons known to each other may be identified correctly without any difficulty. In the case in hand, the parties were close relatives and were known to each other for the last several years. Moreover, they had a talk with each other regarding cattle and their destination and as such, it cannot be inferred that on account of complete darkness at the time of alleged murder, the witnesses could not identify the real assailants. It is noteworthy that the informant is an illiterate rustic villager and he affixed thumb impression on his written report. It is therefore not possible to conclude that the informant mentioned the exact time of incident. The scribe of the report used the word at about 6-30 P.M. In this view of the matter, we are unable to subscribe the view of the trial Judge that on account of complete darkness, it was not easy for the witnesses to recognize the culprits.

21. There were three accused who faced trial for committing murder of <NAME>. Accused <NAME> and <NAME>, who are father and son respectively, were assigned the specific role of firing and exhortation also. We, however, find that neither role of exhortation/instigation was assigned in the FIR nor any overact was shown on the part of the third accused <NAME>, son of <NAME>, who is brother of <NAME>. The witnesses examined on behalf of the prosecution did not utter a single word about role played by him except that he was accompanying <NAME> and others. He was allegedly carrying a lathi. He, however, did not cause any injury to the deceased or to the witnesses. We are, therefore, of the opinion that his involvement in the crime had not been proved by reliable and convincing evidence and he was rightly given benefit of doubt.

22. In view of the aforesaid discussion and the reasons given above, we hold that the order of acquittal recorded by the trial Judge against accused-respondents <NAME> and <NAME> is not sustainable in law and is liable to be set aside. So far as the acquittal of accused-respondent <NAME> is concerned, we see no valid reason to disturb his acquittal.

23. The appeal is, accordingly, partly allowed. The acquittal of accused-respondent <NAME> is affirmed but acquittal of <NAME> and <NAME> is set aside. Accused <NAME> is found guilty and convicted of the offence punishable under Section 302 I.P.C. Accused <NAME> is convicted under Section 302 read with Section 34 of the Penal Code. We do not intend to hear learned Counsel for the accused on the quantum of sentence to be awarded as we are inclined to impose the lesser penalty prescribed under the law. Both father and son are, therefore, sentenced to undergo imprisonment for life thereunder.

24. Both <NAME> and <NAME> are on bail. A copy of this judgment shall be sent to <NAME>, Mathura who will get both the accused arrested and lodged in Jail within a period of six weeks. He will intimate to this Court within eight weeks about compliance of the order from the date of receipt of a copy of the judgment.

25. A copy of this judgment shall be certified to the court of Sessions Judge, <NAME> also for information and necessary entries. The lower court record shall also be transmitted.


JUDGMENT <NAME>, J.

1. In a suit for ejectment instituted on September 8, 1958 the plaintiff who is the respondent before us now made an application under Section 13(5) of the Delhi and Ajmer Rent Control Act, 1952 (Act No. XXXVIII of 1952). He prayed for an order to be made on defendant-tenant to deposit all the arrears of rent and future monthly rent in accordance with law by the 15th of the following month. The arrears of rent were claimed to be Rs. 722/7/-upto the 30th June 1960. The original rent was stated to be Rs. 64/8/- and with effect from August 1, 1959 the rent was claimed at Rs. 70.95 np.

2. This application was resisted by the tenant who in his reply dated August 1, 1960 stated that the rate of rent had continued to be at Rs. 64-8-0 and only Rs. 516/- was due at the rate of Rs. 64/8/- as arrears upto June 30, 1960. He added that he was prepared to deposit it.

3. The Subordinate Judge 1st Class, Delhi, passed orders on the application on August 1, 1960. The relevant portion of the order ran thus:

"As regards the application under Section 13(5) of the Rent Control Act the defendant has no objection to deposit the arrears of rent and future rent month by month at the rate of Rs. 64/8/- per month. It is clear that under Section 13(5) an order can only be passed at the rate at which the rent was being last paid and no increase can be taken into consideration. I order accordingly."

4. On December 13, 1960 the plaintiff applied to the Sub-Judge stating that the defendants had defaulted in the deposit of rent for the month of September 1960 which was due to be deposited by the 15th October 1960 and also rent for the month of October 1960 which was to be deposited by the 15th November, 1960. He prayed that the defence of the defendant against ejectment should therefore be struck out.

5. Contesting this application the defendant pleaded that no valid order has been made under Section 13(5) and in any case no default had been made by him.

6. The learned Subordinate Judge rejected both these pleas and had held that there had been default in complying with the order made under Section 13(5) and ordered the defence to be struck off.

7. Against this order the tenant appealed. <ORG> (the Senior Sub-Judge, Delhi) agreed with the Trial Judge that a valid order had been made under Section 13(5) and that the tenant had defaulted in making payments in accordance with the order. The <ORG> also rejected the tenant's contention that the Trial Judge had a discretion in the matter and should have exercised that discretion in favour of the tenant by extending the time for payment of the rent, Relying on a decision of <ORG> in <NAME> v. <NAME>, Civil Revn. No. 583 of 1958 D/- 23-10-1962 (Punj) the learned Senior Sub-Judge held that the <ORG> could not in any circumstances extend the time for payment fixed in the order under Section 13(5) and could not condone the default. On this view he dismissed the appeal.

8. The tenant then approached <ORG> with a petition under Section 35 of the Delhi and Ajmer Rent Control Act, 1952. One of the grounds taken before <ORG> was that the appellate court had ignored Section 57 of the Act of 1958. <ORG> however dismissed the application summarily.

9. The present appeal has been filed against <ORG> order, after obtaining special leave of this Court.

10. The main contention urged in support of the appeal is that if the appellate court had taken into consideration Section 57 of the 1958 Act it might have rejected the plaintiff's prayer for striking out the defences. Section 57 of the 1958 Act provides in its second subsection that in spite of the repeal of 1952 Act all suits and proceedings pending under that Act would be disposed of in accordance with its own provisions but subject to the proviso that "in any such suit or proceeding for fixation of standard rent or for the eviction of a tenant from any premises to which Section 54 does not apply, the <ORG> or other authority shall have regard to the provisions of the 1958 Act. The true scope and effect of this provision in Section 57 of the 1958 Act had to be considered by this <ORG> in <CITATION> . 392 of 1963 D/- 29-8-1963 : . It was held by a majority of the <ORG> that the only way of harmonising the substantive provisions in the section with the proviso is to accept the view that the words "shall have regard to the provisions of this Act" merely mean that "where the new Act has slightly modified or clarified the previous provisions, those modifications and clarifications should be applied."

11. To apply the principle laid down in <NAME>'s case, C. A. No. 392 of 1963 D/- 29-8-1963 : is necessary now to compare the provisions of Section 13(5) of the old Act with those in Section 15 Sub-sections 1 to 7 of the new Act. It appears clear to us on such comparison that the provisions are substantially similar with only slight modifications. One modification is that while under Section 13(5) the application by the landlord had to be "for an order on the tenant-defendant to deposit month by month rent at a rate at which it was last paid" in all suits for ejectments Section 15 of the new Act makes a distinction between cases where the recovery of possession is sought on, the ground of arrears of rent having been left unpaid within two months of the service of notice of demand and other ejectment proceedings. In the first class of cases the Controller can make an order for payment of rent at the rate at which it was last paid while in the other class of cases the Controller may make an order for payment at the rate at which it was legally recoverable. The other notable difference is that under Section 13(5) of the old Act failure of the tenant to deposit the arrears of rent within 15 days of the date of the order or to deposit the rent for any month by the 15th of the next following month made it incumbent on the <ORG> to strike out the defence against ejectment. The language was that on the failure of the tenant to do these things "the <ORG> shall order the defence against ejectment to be struck out." In the new Act Section 15(7) deals with this matter of failure of the tenant to make the payment or deposit as required by the Act and runs thus:--

"If a tenant fails to make payment or deposit as required by this section the Controller may order the defence against eviction to be struck out and proceed with the hearing of the application."

12. The change of the words from "The <ORG> shall order the defence against ejectment to be struck out" to the words "the Controller may order the defence against eviction to be struck out' is clearly a deliberate modification in law in favour of the tenant. Under the old Act the <ORG> had no option but to strike out the defence if the failure to pay or deposit the rent is proved; under the new Act the Controller who takes the place of the <ORG> has a discretion in the matter, so that in proper cases he may refuse to strike out the defence.

13. On this comparison of the provision of Section 13(5) of the old Act with those in Section 15 of the new Act we have not doubt that this is a case of slight modification by the new Act of the previous provisions in the same matter and so on the authority in the decision in <NAME>'s case C. A. No. 392 of 1963 D/- 29-8-1963 : the provisions as modified by Section 15(7) have to be applied to the present suit. The result on such application would be that the Court would not be bound to strike out the defence against ejectment but may or may not do so on a consideration of the circumstances.

14. That the Sub-Judge "who made in original order or the Senior Sub-Judge, who confirmed it on appeal, did not take the provisions of Section 15(7) into consideration is clear. It is not disputed that though the rents for September 1960 and October 1960 were not paid by the tenant within the time as required by the <ORG>'s order they were paid on December 6, 1960. It appears reasonable to think; that when the Subordinate Judge was dealing with the landlord's application for striking out the defence against ejectment in June 1962 he would have taken this fact of payment of rent into consideration in exercising his discretion in the matter if he had under Section 57 of the new Act paid regard to the provisions of Section 15(7) of that Act. The Senior Sub-Judge, who heard the appeal, would also have taken this fact of payment of rent in December 1960 into consideration if he had paid due regard to the provisions of Section 15(7) of the new Act, as he-was bound to do under Section 57 . It was in these circumstances that the tenant made his application to the High <ORG> under Section 35 of the 1952 Act. That Section provides that "the High <ORG> may, at any time, call for the re-cord of any case under this Act for the purpose of satisfying itself that a decision made therein is according to law and may pass such order in relation thereto as it thinks fit."

15. The true scope of Section 35 of the Delhi and Ajmer Rent Control Act, 1952 was considered by this <ORG> in <CITATION> . It appears that in that case <ORG> had interfered with at plain finding of fact so that the question of the nature of mistake of law under which <ORG> may properly exercise its revisional powers did not strictly arise for consideration. Even so, that question appears to have been argued before the <ORG> and the <ORG> gave its decision. Mr. Justice <NAME> speaking for the majority stressed the distinction between appeal and revision and stated that the phrase "according to law" in Section 35 of the Act referred to the decision as a whole and was not to be equated with errors of law or of fact simpliciter. The majority also expressed its concurrence with the observations of <ORG>, in <CITATION> , with regard to the scope of Section 25 of the Provincial Small Cause <ORG>s Act. These observations seem to suggest that generally speaking it is only where the unsuccessful party had not had a proper trial according to law that a <ORG> could interfere. As instances of this were mentioned cases where the <ORG> which had no jurisdiction or in which the <ORG> had based its decision on evidence which should not have been admitted or cases where the unsuccessful party had not been given a proper opportunity of being heard or the burden of proof had been placed on the wrong shoulders. It is important to notice however that the learned Chief Justice took care to say that these instances were not intended to exhaust the circumstances which might justify interference.

16. There can be no doubt that the statement of the law in <NAME> case, continues to be binding authority so long as it is not replaced by any different statement on a re-consideration of the matter by this <ORG>. We are of opinion however that the present case comes within the scope of Section 35 as indicated in <NAME> case. Where the law requires the <ORG> to have regard to certain provisions, and the <ORG> does not pay that regard it cannot but be said that the trial has not been according to law. Section 57 of the Act of 1958 made it the duty of the <ORG> to have regard to the provisions of 1958 Act in certain circumstances. Neither the Subordinate Judge, who passed the original order nor the Senior Subordinate Judge, who heard the appeal from it, carried out this statutory duty. This is, therefore, in our opinion, clearly a case in which the trial had not been in accordance with law.

17. Mr. <NAME> emphasised that apparently the attention of the <ORG> had not been drawn to the provisions of Section 57 . Even if this be so, this does not alter the position. While it is true to say that <ORG> dispose of cases on the basis of the submissions made by Counsel, it is not possible to say that the omission of Counsel absolves a <ORG> from the duty of following clear provisions of law. We do not think that the omission of the tenant's Counsel to draw the <ORG>'s attention to the provisions of Section 57 can be a reason for the High <ORG> to refuse to interfere. In our opinion, this was a proper case in which the High <ORG> ought to have exercised its powers under Section 35 of the 1952 Act and made an order set-ting aside the order made by the <ORG> below striking out the tenant's defence against ejectment.

18. Accordingly, we allow the appeal, set aside the order passed by the <ORG> below and order that the plaintiffs application for striking put the tenant's defence against ejectment be rejected. In the peculiar circumstances of the case we order the parties to bear their own costs. We hope the suit will be dealt with expeditiously by the Act.


PETITIONER: <NAME> Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT: 27/02/1962 BENCH: <NAME>, K. BENCH: <NAME>, K. AIYYAR, T.L. VENKATARAMA SINHA, <NAME> P.(CJ) <NAME>, <NAME> <NAME>, J.R. CITATION: 1962 AIR 1281 1962 SCR Supl. (3) 436 CITATOR INFO : RF 1963 SC1742 (54) RF 1963 SC1760 (24) R 1964 SC 925 (23) R 1967 SC1512 (19,48,66) R 1970 SC1589 (5) RF 1971 SC 152 (8) R 1977 SC1459 (6) RF 1984 SC 420 (13) RF 1986 SC 649 (25,28) RF 1990 SC 781 (67) RF 1990 SC1927 (70) ACT: Railway--Suit for recovery of cess--Limitation-- Maintainability--Consignee, if liable-- Indian Limitation Act , 1908(IX of 1908), Arts. 149,120.50--Constitution of India, Arts 265, 372--Ordinance No. 39 of 1944--Ordinance 6 of 1947, s.3--Coal Production Fund Rules, 1944, rr.6, 3, 3(a), 3(b)--Supreme Court Rules,1950, as amended, O. XVIII, r.2. 437 HEADNOTE: The appellant, <ORG>, despatched by rail three consignments of coal to appellant <NAME> from <ORG> to Indore. The appellant <NAME> took deli- very of the coal after paying the freight, but by, mistake the cess payable as surcharge was not 'recovered from him at the time of delivery of goods. On April 15, 1953, <ORG> representing <ORG> filed a suit before the Civil judge <NAME>, for the recovery of the mid cess. Since important questions of interpretation of the Government of India Act, 1935 and the Constitution were involved, <ORG> withdrew the case to its own file for trial. The appellants inter alia, pleaded then the levy was illegal and the suit was barred by limitation. <ORG> decreed the suit and held that it was within time and the appellants were liable to pay the cess against which the present appeals were preferred. It was urged by the appellants (1) that art. 149 of the Indian Limitation Act did not apply and the suit was governed by art. 120 of the Limitation Act ; (2) that the tax could not be sustained under Art. 265 of the Constitution; (3) that the excise duty could not be levied on the consignee; (4) that the purpose of the Ordinance had exhausted and <ORG> could no longer levy the tax; (5) that under the statutory rules only the consignee was liable to pay. Held that art. 149 of the Indian Limitation Act read with art. 120 of the said Act applied to the present case and the suit was within time. <NAME> v. Janki Prasad A.I.R. 1942 Pat. 87, Secretary of <ORG> for India v. <NAME>, (1893) 1. L.R. 20 Cal 51; <CITATION> for India (1941) 9 I.T.R. 673 and Government of India v. <NAME>, (1955) 27 I.T.R. 356, held inapplicable. The repealing Ordinance, being a temporary one, expired after it fulfilled its purpose. As it had continued the life of the original Ordinance which was a permanent one, in respect of past transaction, the expiry of its life could not have any effect on that law to the extent saved. The repealed to ordinance, to the extent saved, continued to have force under Art. 372 of the Constitution and it could not be said that the coal cess was levied without authority of law within the meaning of Art. 265 of the Constitution. <CITATION> , (1957) S.C.R. 634, relied on. The Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within 438 the country. Subject always to the legislative competence of the taxing authority the said tax can be levied at a convenient stage so long as the character of the impost, is not lost. 'The method of collection does not affect the essence of the duty but only relates to the machinery of collection for administrative convenience, whether in a particular case the tax ceases to be in essence an excise duty and the rational conncction between the duty and the person on whom it is imposed ceased to exist is to be decided on a fair construction of the provisions of a particular act. In re the Central Proviaces and Berar Act . No. XIV of 1938, (1939) F.C.R. 18, <CITATION> , (1942) F.C.R. 90 and Governor General in Council v. <ORG>, (1945) L.R. 72 1. A. 91 applied. In view of s. 3 of the repealing Ordinance it could not be said that the purpose of the Ordinance had been exhausted In the present case r. 3(a) of the Coal Production Fund Rules 1944, had no application and the only rules applicable was r. 3 (b). Rule 6 does not say that if the consignee does not pay the consignor is liable to pay and it does not purport to enlarge the statutory liability of the consignor or the consignee, as the case may be. Held, further, that a point of law not taken in the state- ment of case cannot ordinarily be allowed to be urged at the time of hearing of the appeal. JUDGMENT:

CIVIL APPELLATE JURISDIICTION: Civil Appeals Nos. 183, 184 of 1959.

Appeals from the judgment and decree dated September 5, 1954, of <ORG> in M.C. case No. 214 of 1954.

<NAME> and <NAME> for the appellant (in C. A. No. 183 of 1959) and respondent No. 2 (in C. A. No. 184 of 1959).

<NAME> and <NAME> for the appellant in O.A. No. 184 of 1959) and Respondent No. (In C. A No. 183 of 1959). <NAME>, Solicitor-General of Y. Kumar and <NAME> for respondent No. 1. (in both-the appeals).

1962. February 27. The Judgment of the Court was delivered by <NAME> J.-These two appeals by certificates are filed against the judgment and decree of <ORG>, Jabalpur, by the two defendants in Civil Suit No. 1 of 1957, a suit filed by <ORG>, owing and representing the <ORG> trations, Now Delhi; against the said defendants for the recovery of coal cess amounting to Rs. 81-4-0 and costs. The material facts may be briefly stated. Under Ordinance No. 39 of 1944, <ORG> was authorised to levy and collect as a cess on all coal and coke despatched from collieries in British India a duty of excise at such rate, not exceeding Rs. 1-4-0 per ton. In exercise of the power conferred on <ORG> under s. 5 of the Ordinance, the said Government made rules ; and r. 3 thereof, the duty of excise imposed under the Ordinance on coal and coke shall, when such coal and coke is despatched by rail from collieries or coke plants, be collected by <ORG> by means of a surcharge on freight, and such duty of excise shall be recovered either from the consignor or the consignee, as the case may be. On January 1, 1947, February 1, 1947 and February 7/9, 1947, the second defendant, namely the <ORG> fields, despatched by rail to the first defendant three consignments of coal from Junner-Deo to Indore. The freight for the three consignments was payable at the destination station i. e. Indore. The first defendant duly paid the freight and took delivery of the coal but by some mistake the cess payable as surcharge on the three consignments was not recovered from the first defendant at the time of delivery of the goods. Under s. 55(5) of the Indian Railways Act <ORG> can recover the freight or any balance thereof left unrecovered by way of suit. On April 15, 1953, <ORG>,, representing the <ORG> Administrations, filed Civil Suit No. 126 of 1953 in <ORG>, II Class, at Chhindwara, for the recovery of the said cess. <ORG> withdrew the case and took it on its own file for trial on the ground that important questions of interpretation of the Government of India Act, 1935, and the Constitution were involved, and it was numbered as Civil Brit No. 1 on 1957. The defendants inter alia pleaded that the levy was illegal and the suit was barred by limitation. <ORG> held that the suit was within time under Art. 149 of the Limitation Act and that the defendants were liable to pay the cess and decreed the suit. The first defendant filed Civil Appeal No. 183 of 1959 and the second defendant filed Civil Appeal No. 184 of 1959 against the said decree.

At the outset we may take up two of the points, which were not mentioned in the statement of case, raised by Mr. <NAME>. learned counsel for the appellant in Civil Appeal No. 183 of 1959. The said points are : (1) Coal cess is a fee and not a tax or duty and (2) the first defendant i.e., the consignee, was a non-resident and, therefore, the Ordinance not having extra-territorial operation could not reach him. These two contentions do not find place in the statement of case as they should. Under Order XVIII r. 2 of the Supreme <ORG> Rules, each party shall lodge his case within the time prescribed therein, and, under r. 3 thereof, the said case shall consist of two parts, and Part II, which is relevant now, says that it shall set out the propositions of law to be urged in support of the contentions of the party lodging the case. The object of the statement of case is not only to enlighten the <ORG> on the questions that would be raised before it, but also Co enable the opposite party to know before hand the arguments he would have to meet and to prepare his case that the statement of case should be complete and full is also emphasized by the fact that, under the Schedule of Fees, a decent fee is prescribed to the junior and senior advocates for preparing the same. But we regret to observe that sufficient care is not being taken in the preparation of the statement of case as contemplated by the said Rules. If the rules should serve the purpose they were intended for, it is necessary that counsel should, at the time of preparing the case, read their brief thoroughly, decide for themselves the questions that will be raised and express them clearly therein. Any dereliction of this obvious duty cannot easily be overlooked. This <ORG>, therefore, ordinarily will not allow counsel at the time of hearing an appeal to raise questions not disclosed in the statement of case. There axe no exceptional circumstances in this case for us to depart from that salutary practice, and we, therefore., cannot allow the appellant to raise these two questions before us.

The first question is whether the suit is barred by limitation. The coal cess should have been collected at the time of the delivery of the three consignments, namely, January 9, 1947, February 8, 1947., and February 18, 1947, respectively. The suit was filed on April 24. 1953, that is, more than six years from the date of amount was payable. It is contended that the suit was, therefore, barred ,under Art, 120 of the Limitation Act . <ORG> held the suit was within time under Art. 149 , read with Art. 50 , of the Limitation Act . The said Articles read

----------------------------------------------------------- Description of suit Period Time from which of limi- period begins to tation. run.

149.Anysuitby or on Sixty When the period behalf of the Central years of limitation Government or any would begin to State Government run under this except a suit before Act against a <ORG> like suit by a in the exercise of its private person.

original Jurisdic--

tion.

50. For the hire of ani- Three When the hire mals, vehicles, boats years becomes payable. or house-hold furni-

<ORG>.

120. Suit for which no Six When the right period of limitation years to sue accrues. is provided else-

where in this sche-

dule.

----------------------------------------------------------- <ORG> held that the suit was of the character of a suit contemplated by Art. 50 and therefore <ORG> could file the suit within 60 years from the date the freight became payable. Mr. <NAME> contends that a private person cannot file a suit like the suit filed by <ORG> to recover a statutory cess and, therefore, Art. 149 does not avail the <ORG> and that in the circumstances the suit is governed only by Art. 120 of the Limitation Act , which prescribes a period of six years from the date the right to sue accrues. The argument of the- learned counsel appears to be plausible, but, in our view, has no merits. It mixes up the question of maintainability of the suit with that of limitation prescribed under the Act. For a. suit described in Art. 149 a period of limitation of 60 years is prescribed and the period would begin to run as it would "against a like suit by a private person". The article does not posit that such a suit should have been maintainable at the instance of a private party: it assumes its maintainability and, on that basis, refers' to the appropriate, article of the Limitation Act for the limited purpose of ascertaining the starting point of limitation. The statute of limitation assumes the existence of a cause of action and does not define it or create one. To state it differently, if a private party had filed a suit for the recovery of a statutory duty, what would be the article of the Limitation Act applicable to such a suit? Article 50 , which prescribes the period of limitation for a suit to recover the hire of animals, vehicles, boats or household furniture, cannot obviously apply to a suit for the recovery of a statutory cess filed at the instance of a private party. There is no other specific article in the Limitation Act applicable to such a suit and,. therefore, it would be governed only by the residuary Article 120. Under the said article, time runs from the time when the right to sue accrues. It follows that when such a suit is filed by <ORG>, the period of limitation of 60 years should be computed when the right to sue accrues. The right to sue accrued in the present case when the defendants refused to pay the cess when demanded. The decisions relied upon by the learned counsel in support of his contention, namely, <NAME> v. <NAME> Secretary of State for India <NAME> v. Secretary of State for India(3) and <ORG> of India v. <NAME> (1) have. no bearing on the question raised in the present case, as none of those cases related to a suit filed by <ORG> to recover amount due to it from defendants therein (1) A.I.R. 1942 Pat. 87.

(3) (1941) 9 I.T.R. 673.

(2) (1893) I.L.R. 20 Cal. 51.

(4) (1955) 27 I.T.R. 356.

We, therefore, hold that the suit was clearly well within time and was not barred by limitation.

The next contention raises the question of validity of the levy. The argument of the learned counsel may be summarized thus: Ordinance 39 of 1944 was a temporary Ordinance, and that it was repealed by Ordinance 6 of 1947; that the saving clause in the latter Ordinance applying s. 6 of the General Clauses Act to the repealed Ordinance fell with the expiry of the repealing Ordinance on January 1, 1947, with the result that there was no law when the Constitution came 'into force so as to be continued 'under Art. 372 thereof and, therefore, the duty, if any, payable under Ordinance 39 of 1944 could neither be levied nor recovered after the Constitution came into force, as there was no longer any authority of law to sustain the said tax within the meaning of Art. 265 of the Constitution. To appreciate the contention it would be necessary to read the material parts of the relevant provisions.

Ordinance 39 of 1944 Section 2 . Imposition and Collection of excise and <ORG> duties.-

(1) With effect from such date is <ORG> may, notification in-

the Official Gazette, appoint in this behalf, there shall be levied and collected as a cess for the purposes of this Ordinance, on all coal and coke despatched from collieries in British India a duty of excise at such rate, not exceeding one rupee and four annas per ton, as may from time to time be fixed by <ORG> by notification in the Official Gazette.

The Repealing ordinance. Ordinance 6 of 1947.

Section 2 . The Coal Production Fund Ordinance shall be repealed, and for the avoidance of doubts it is hereby declared that the provisions of Section 6 of the General Clauses Act, 1897 (X of 1897) shall apply in respect of such repeal.

General Clauses Act , 1897 (X of 1897). Section 6 . Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto, made or hereafter to be made, then unless a different intention appears, the repeal shall not :

(c) affect any right privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed.

(e) affect any legal proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment and any such legal proceedings or remedy may be instituted, continued or enforced as if the Regulating Repealing Act or Regulation had not been passed.

Section 30 . In this Act, the expression Central Act , wherever it occurs shall be deemed to include an Ordinance made and promulgated by the Governor-General Constitution of India Article 372. (i) Notwithstanding the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the laws in force in the territory of India immediatel y before the commencement of this Constitution shall continue in force therein Until altered or repealed or amended by a competent <ORG> or other competent authority.

On August 26, 1944, the Governor-General of India, in exercise of the powers vested in him under a. 72 of the Ninth Schedule to the Government of India Act, 1935, read 'with India & Burma (Emergency Provisions) Act, 1940 promulgated the Coal Production Fund Ordinance 1944 (39 of 1944). to constitute a fund for the financing of activities for the improvement of production, marketing and distribu- tion of coal and coke. This Court in <CITATION> (1) held that the deletion of the words "for the space of not more than six months from its promulgation" from s. 72 of the 9th Schedule of the Government of India Act, 1935, by s.1(3) of The India and Burma (Emergency Provisions) Act, 1940, had the effect of equating Ordinances which were promulgated between June 27, 1940, and April 1, 1946, with Acts passed by <ORG> without any limitation of time as regards their duration, and therefore continuing in force until they were repealed. It follows from this decision that the Ordinance promulgated on August 26, 1944. was a permanent one and would continue to be in fore till it was repealed. The second Ordinance, that is repealing, Ordinance, was promulgated on April 26, 1947, and the repeal took effect from May 1, 1947. But in express term it declared that the provisions of s.. 6 of the General Clauses Act , 1897 (X of 1897) shall apply in respect of the repeal. Without the said express provision, s.6, read with s.30, of the General Clauses Act , might have achieved the said result, but ex abundanti cautela and to place the matter beyond any controversy. s.6 of the General Clauses Act was expressly made applicable to the repeal. Under s.6 (1) .S.C.R.,634 of General Clauses Act , so far it is material to the present case, the repeal did not affect the right of the railway to recover the freight or the liability of the defendants to pay the same, and the remedy in respect of the said right and liability. The result was that Ordinance 39 of 1944 and the rules made thereunder must be held to continue to be in respect of the said right and liability, accrued or incurred before the said Ordinance was repealed and the remedies available thereunder. But the life of the repealing Ordinance had expired on November 1, 1917. What was the effect of the expiry of the repealing Ordinance on the said liability continued after repeal in respect of past transactions? The repealing Ordinance, being a temporary one, expired after it fulfilled its purpose. As it had continued the lift, of the original Ordinance, which was a permanent one, in respect of past transactions, the expiry of its life could not have any effect on that law to the extent saved. The decisions relating to the repeal of a temporary Ordinance with a saving clause have no bearing in the present Context, for in that case the repealed Ordinance, in so far as it was kept alive, could not have a larger lease of' life than the repealed and the repealing Ordinances possessed. If so, it follows that the repealed Ordinance, to the extent saved, continued to have force under the Art. 372 of the Constitution until it was altered, repealed or amended by competent <ORG>. It cannot, therefore, be said that the coal cess was levied or collected without the authority of', law. It is when contended that the excise duty not legally be levied on the consignee , who had nothing to do with the manufacture or production of coal. The argument confuses of the incidence of taxation with the machinery provided for the collection thereof. The or an excise duty has been considered by <ORG> and <ORG>. In re the Central Provinces and Berar Act No. XIV of 1938(1), which was a special reference by the Governor-General to <ORG> under is. 213 of the Government of India Act, 1935. <NAME>, O.J., described "excise duty" thus:

But its primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption."

In dealing with the contention advanced on behalf of <ORG> that an excise duty was a duty which may be imposed on home-produced goods at any stage from production to consumption, the learned Chief Justice observed:

"This is to confuse two things the nature of excise duties and the extent of the federal legislative power to impose them."

After referring to <NAME> and <NAME>'s Commentaries, the learned Chief Justice proceeded to state:

".......... a brief examination of those duties shows that in practically all cases it is the producer or manufacturer from whom the duty is collected. But there can be no reason in theory why an excise duty should not be im. posed even on the retail sale of an article, if the taxing Act so provides. Subject always to the legislative competence of the taxing authority, a duty on home-produced goods will obviously be imposed at the stage which the authority find to be the most convenient and the most lucrative, wherever it may be: but that is a matter of the machinery of collection, and does not affect the essential nature of the tax. The ultimate incidence of an excise duty, a typical indirect tax, must (1) [1939] F.C.R. 18, 40, 41, 107.

<NAME>

always be on the consumer, who pays as he consumes or expends : and it continues to be excise duty, that is, a duty on home-produced or home-manufactured goods, no matter at what stage it is collected."' <NAME>, J., made the following pertinent remarks ,,And this, in my opinion, is as it should be, for if the proper import of an "excise duty" is that it is a tax on consumption, there is no reason why the <ORG> should not have the power to levy and collect it at any stage before consumption, namely, from the time the commodity is produced or manufactured up to the time it reaches the consumer."

<ORG> again, in <CITATION> and in the context of a question that arose under the Madras General Sales Tax Act, 1939, restated the scope of an excise duty. Therein the learned Chief Justice observed:

"There is in theory nothing to prevent <ORG> from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, des- troyed, or given away. A taxing authority will not ordinarily impose such a duty, be- cause it is much more convenient administra- tively to collect the duty (as in the case of most of the Indian Excise Acts) when the commodity leaves the factory for the first time, and also because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example, been destroyed in the factory itself. It is the fact of manufacture which (1) [1942] F.C.R. 90, 101.

attracts the duty,, even though it may, be collected later...........

<ORG>, in Governor-General in <ORG> v. <ORG> (1), approved the views expressed by <ORG> in regard to excise duties. In that case, Lord <NAME>, speaking for the <ORG>, observed:

"An exhaustive discussion of this subject, from which their Lordships have obtained valuable assistance, is to be found in the judgment of <ORG> in In re the Central Provinces Berar Act No. XIV of 1935 (2). Consistently with this decision their Lordships are of opinion that a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods. Here, again, their Lordships find themselves in complete accord with the reasoning and conclusions of <ORG> in the <NAME> case(3)."

Adverting to the decision of <NAME> with approval, Lord <NAME> made the following observations in pointing out the difference between excise tax and sales tax:

"The two taxes, the one levied on a manufacturer in respect of his goods, the other on a vendor in respect of his sales, may, as is there pointed out, in one sense overlap. But in law there is no overlapping The taxes are separate and distinct imposts. If in fact they overlap, that may be because the taxing authority, imposing a duty of excise finds it convenient to impose that duty at the moment when the exciseable article leaves the (1) (1945) L.R. 72 I.A. 91, 103. 101 (3) [ 1942] F.C.R. 90. 101 [1939] F.C.R. 18, factory or workshop for the first time on the occasion of its sale. But that method of collecting the tax it; an accident of administration; it is not of the essence of the duty of, excise, which is attracted by the manufacture itself.

With great respect, we accept the principles laid down by the said three decisions in the matter of levy of an excise duty and the machinery for collection thereof. Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It in' an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The, method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience. Whether in a particular case the. tax ceases to be in essence an excise duty, and the rational connection between the duty and the person on whom it is imposed ceased to exist, is to be decided on a fair construction of the provisions of a particular Act.

In this case, a perusal of the provisions of the Ordinance clearly, demonstrates that the duty imposed is in essence an excise duty and there is a rational connection between the said tax and the person on whom it-is imposed. Section 2 of Ordinance 39 of 1944 clearly shows that the tax is an excise duty on the manufacture or production, of coal or coke. Section 5(2) thereof confers in express terms a power on <ORG> to make rules, Inter alia, to provide for the manner in which the duties imposed by the Ordinance shall be collected and the persons who shall be. liable to pay the duty. Rule 3 of the Rules made by <ORG> provides for the recovery of excise duty on the coal produced; under the said rule it would be collected by <ORG> by means of a surcharge on freight and such duty of excise shall be recovered from the consignor, if the freight charges are being prepaid, at the time of consignment or from the consignee, if the freight charges are collected at the destination of the consignment. The machinery provided for the collection of the tax is, in our view, a reasonable one. Having regard to the nature of the tax, that is, the tax being an indirect one to be borne ultimately by the consumer, it cannot be said that there is no rational connection between the tax and the consign. When the consignor pays., it cannot be denied that it is the most convenient stage for the collection of the tax, for it is the first time the coal leaves the possession of the consignor. The fact that the consignee is made to pay, in the contingency contemplated by r.3(b) of the rules cannot affect the essence of the tax, for the consignor, if he had paid the freight, would have passed it on to the consignee and instead the consignee himself pays it. <ORG> was legally competent to evolve a suitable machinery for collection without disturbing the essence of the tax or ignoring the rational connection between the tax and the person on whom it is imposed. We hold that the machinery evolved under the Rules for collection of the duty satisfies the said conditions and therefore the exigibility of the tax at the destination point in the hands of the consignee cannot legitimately be questioned. Another facet of the contention of Mr. <NAME> is that the purpose of the Ordinance had worked itself out and, therefore, <ORG> could no Ionizer levy or collect the tax. The purpose of the Ordinance was to constituted a fund for the financing of activities for the improvement of production, marketing and distribution of coal. Section 3 of the repealing Ordinance provided that the unexpended balance, if any, at, the credit of <ORG> constituted under the aforesaid Ordinance shall be applied to such purposes connected with the coal industry, as <ORG> may direct. The validity of this Ordinance has not been questioned. It, therefore, follows that the purpose of the Ordinance has not been exhausted, for under s.3 of the repealing Ordinance, <ORG> is authorized to apply <ORG> to such purposes connected with the coal industry. There is, therefore, no force in this argument. The last contention is raised by the appellant in Civil Appeal No. 184 of 1959. <ORG> held him also liable for the payment of the cess on the ground that he was the person who entered into contract with <ORG> for the carriage of the goods and that the collection of freight was in respect of his goods and that he was the main contracting party. The was given against him on the basin that he was under a contractual obligation to pay the amount. Mr. <NAME>, appearing for this appellant, contends that the consignments were on F.O.R. basis and that under the statutory rules only the consignee is liable and that <ORG> was wrong in giving, a decree against him As we have already pointed out earlier, under r.3 of <ORG> Rules, 1914, <ORG> is empowered only to collect the cess by means of a surcharge on freight from, (a) the consignor, if the freight charges are being prepaid at the time of consignment, and

(b) from the consignee, if the freight charges are collected at the destination of the consignment. In the present case, r.3(a) has no application, for the freight charges were not prepaid at the time of consignment, and therefore the only rule applicable where under <ORG> earn seek to recover the cess is r.3(b) i.e., the consignee. has to pay it. The rule does not empower <ORG> to recover the tax, in the circumstance of the cast,, from the consignor. Learned Solicitor General seeks to sustain the decree of <ORG> on the basis of r.6, which reads :

"Refunds and Recoveries :-(1) Where the amount of excise duty due under these rules has not been collected either wholly or in part or where the amount collected is in excess of the amount due, <ORG> shall deal with the under charges or overcharges, as the case may be, on the same principles as apply to undercharges and overcharges in regard to Railway freight charges."

It is suggested that, under this rule in the case of an undercharge, <ORG> can collect the deficit either from the consignor on consignee. The rule does not say that if the consignee does not pay the consignor is,, liable to pay. The rule does not purport to enlarge the statutory liability of the consignor of the consignee, as the case may be and, therefore, it must be understood to provide only for the recovery of undercharges from persons statutorily' liable to pay in accordance with the principles governing the railway freight charges ca. In the result, Civil Appeal No. 183 of 1959 is dismissed with costs of the first respondent, and Civil Appeal No. 184 of 1959 is allowed with costs to be paid by the first respondent.

C. A. 183 of 1959 dismissed.

C. A. 184 of 1.959 allowed.