JUDGMENT Knox, Actg. C.J. and <NAME>, J.

1. The sole question which we have to consider is whether the decree, which was under execution in the <ORG> below, is a simple money decree, or whether provision is made in it for something more. The appellant relies upon a <ORG> ruling of this <ORG>, <CITATION> (1876) I.L.R. 3 All. 216, and contends that it is a simple money decree and no more. The circumstances under which the decree was obtained in <CITATION> (1876) I.L.R. 3 All. 216, and others and the case before us are very similar. In both cases the plaintiff had sued for a decree for sale. In both oases the dispute between them terminated in a compromise. In this case it was agreed that the plaintiff should realize his debt from his debtors by payment of a special sum within a special period and of the remainder by instalments. It further provided that if, after the payment of the first sum within the specified period, two successive instalments should remain in default, the plaintiff would be entitled to take out execution of the decree in a lump sum. After this follow the words which have given rise to this dispute and which we therefore quote here verbatim: "The property hypothecated in the bond remains hypothecated as before. The defendants have no power to transfer it. If any other person brings to sale the hypothecated property in satisfaction of the debt due by the defendants the plaintiff shall have power to take out execution of the decree without waiting for the instalments, and to cause the hypothecated property to be sold by auction." If this decree be compared with the decree which was before this <ORG> in <CITATION> (1876) I.L.R. 3 All. 216, it will be found that the terms hardly differ, and do not differ in any material point, beyond this, perhaps, that the decree before us is a little more positive in granting the right to enforce execution by sale. There is however, this very important difference between the present case and the case of <CITATION> (1876) I.L.R. 3 All. 216, that while in the latter the terms of compromise were not embodied in the decree, and all that the decree did was to refer back to it and provide for payment by instalments only, in the present case, the terms of compromise have been incorporated into the decree and made part and parcel of it. <CITATION> (1876) I.L.R. 3 All. 216, the learned Judges held themselves constrained by the terms of the decree and refused to look at what they considered might well have been the intention of the parties. In the present case we are under no such constraint. The terms of the decree before us undoubtedly go beyond the terms of an ordinary simple money decree and provide for sale under certain contingencies. It is true that the decree differs from a decree formally drawn up under Section 88 of the Transfer of Property Act. But we are satisfied that it was the intention of the parties and of the <ORG> that if default was made in payment of instalments, or if any other contingency mentioned in the decree arise, the decree-holder should be entitled to proceed to sell upon the decree as it stands. Reference was made to the case of <CITATION> (1895) I.L.R. 22 Cal. 813. That case has been distinguished in <CITATION> (1898) I.L.R. 26 Cal. 166. We do not agree with the <ORG> below in the view it took of the Allahabad case cited before it. We are, however, of opinion that in spite of this the <ORG> below came to a right conclusion.

2. We dismiss the appeal with costs.


PETITIONE<NAME>: <NAME>AMESHWA<NAME> Vs. <NAME>ESPONDENT: THE STATE OF <NAME>AJASTHAN. DATE OF JUDGMENT: 20/12/1951 BENCH: <NAME>, VIVIAN BENCH: <NAME>, VIVIAN FAZAL ALI, SAIYID CITATION: 1952 AI<NAME> 54 1952 SC<NAME> 377 CITATO<NAME> INFO : <NAME>F 1952 SC 159 (11) F 1953 SC 364 (25) <NAME>F 1954 SC 359 (4) F 1958 SC 143 (9) <NAME> 1958 SC 500 (9) <NAME> 1960 SC 961 (6) D 1965 SC 328 (7) F 1968 SC 832 (5,12) F 1972 SC2661 (10,11) <NAME> 1973 SC 469 (11) <NAME> 1977 SC 472 (13) <NAME> 1977 SC1579 (23) <NAME> 1983 SC 753 (7) F 1983 SC 911 (9) <NAME>F 1988 SC 139 (11) <NAME>F 1988 SC 672 (7) <NAME>F 1991 SC1463 (5) ACT: Indian Penal Code (XLV of 1860), s. 376- - Indian Evidence Act (I of 1872), s. 114 (b) 118, 133, 157-- Indian Oaths Act (X of 1873), ss. 5 , 6 , 13- -<NAME>ape on young girl--Necessity of corroboration of girl's testimony--Statement made to moth- er--Whether sufficient corroboration--<NAME>ule as to corrobora- tion--Nature and extent of corroboration necessary--Admis- sibility of statement made "at or about" the time of occur- rence--Admissibility of evidence of child under 12 years. HEADNOTE: An omission to administer an oath, even to an adult, goes only to the credibility of the witness and not his competency; so also an omission of the <O<NAME>G> or the authori- ty examining a child witness formally to record that in its opinion the witness understands the duty of speaking the truth though he does not understand the nature of an oath or affirmation, does not affect the admissibility of the evi- dence given by that witness. Though it is desirable that judges and magistrates should always record their opinion when a child is to be examined that the child understands the duty of speaking the truth, and state why they think so, whether a magistrate or judge was really of that opinion can be gathered from the circumstances when there is no formal certificate to that effect on the record. <CITATION> (A.I.<NAME>. 1946 P.C. 3), <NAME>, v. <NAME> (14 Beng. L,<NAME>. 294 F.N.), <NAME> v. <NAME> (1907) 10 O.C. 337) referred to. Though a woman who has been raped is not an accomplice, her evidence has been treated by the <O<NAME>G>s on somewhat similar lines, and the rule which requires corroboration of such evidence save in exceptional circumstances has now hardened into law. The rule laid down in King v. <NAME> (L. <NAME>. 1916, 2 K.B. 658) with regard to the admissibility of the uneorrobo- rated evidence of an accomplice is the law in India also so far as accomplices are concerned and it is not any higher in the case of sexual offences. The only clarification of the rule that is necessary for the purposes of India is where this class of offence is tried by a judge without the aid of a jury. In such cases it is necessary that the judge should give some indication in his judgment that he has had the rule of caution in his mind and should proceed to give reasons for considering it unnecessary to require corrobora- tion on the facts of the particular case before him and show why he considers it safe to convict without corroboration in that particular case. There is, however, no rule of law or 378 practice that there must in every case be corroboration before a conviction can be allowed to stand. The view that though corroboration should ordinarily be required in the case of a grown-up woman, it is unnecessary in the case of a child of tender years is not correct. The true position is that in every case of this type the rule about the advisability of corroboration should be present to the mind of the judge; whether corroboration is unnecessary is a question of fact in every case. <NAME> v. <NAME> (A.I.<NAME>. 1944 Nag. 363) not approved; <CITATION> (A.I.<NAME>. 1946 P.C. 3) followed. The nature and the extent of the corroboration that is required when it is not considered safe to dispense with it, must necessarily vary with the circumstances of each case and also according to the particular circumstances of the offence charged. It is however clear (i) that it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independ- ent evidence in the case, apart from the testimony of the complainant or accomplice, should itself be sufficient to sustain conviction; all that is required is that there must be "some additional evidence rendering it probable that the story of the accomplice (or the complainant) is true and that it is reasonably safe to act upon it," (ii) The inde- pendent evidence must not only make it safe to believe that the crime was committed but must in some way reasonably connect the accused with it; (iii) the corroboration must come from independent sources and thus ordinarily the testi- mony of one accomplice would not be sufficient to corrobo- rate that of another accomplice;(iv) the corroboration need not be direct evidence that the accused committed the crime; it is sufficient if it is merely circumstantial evidence of his connection with the crime. A previous statement of an accomplice or a complainant is admissible as evidence of conduct; it is also admissible as corroborg live evidence provided it fulfills the condi- tions laid down in see. 157 of the Evidence Act . The main test as to whether a previous statement was made "at or about the time when the fact took place", within the meaning of sec. 157, Evidence Act , is whether the state- ment was made as early as can reasonably be expected in the circumstances of the case and before there was an opportuni- ty for tutoring or concoction. Where a person was charged with having committed rape upon a girl eight years of age and the only evidence to corroborate the testimony of the girl connecting the accused with the crime was a statement made by her to her mother some four hours after the incident, that she had been raped by the accused: Held, that in the circumstances of the case the testimony of the mother was admissible as independent corroborative evidence and 379 the girl's previous statement was sufficient corroboration of the girl's testimony for convicting the accused. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 2 of 1951. This Was an appeal under art. 134 (1) (c) of the Constitution from the Judgment and Order of the High Court of Rajasthan (<NAME> and <NAME>) dated 16th October, 1950, in Criminal Appeal No. 63 of Samvat 2005, revising an order of acquittal of the Sessions Judge, <NAME>, in Criminal Appeal Case No. 200 of Sam vat 2004, and convicting the accused of an offence under sec. 376 of the Indian Penal Code . The material facts are stated in the judgment.

<NAME>, for the accused.

<NAME>, for the State of Rajasthan.

1951. December 20. <ORG> delivered judgment as fol- lows. <ORG> agreed.

<NAME> -The appellant <NAME> was charged with com- mitting rape on a young girl Mst. <NAME>, eight years of age. He was committed to Sessions and was convicted by the As- sistant Sessions Judge, <NAME>, and sentenced to one year's rigorous imprisonment and a fine of Rs. 250. An appeal was made to the Sessions Judge at Jaipur, that being the appropriate appellate tribunal in that area. The learned Sessions Judge held that the evidence was sufficient for moral conviction but fell short of legal proof because, in his opinion, the law requires corroboration of the story of the prosecution in such cases as a matter of precaution and the corroborative evidence, in so far as it sought to connect the appellant with the crime, was legally insuffi- cient though morally enough. He was satisfied however that the girl had been raped by somebody. Accordingly, he acquit- ted the accused giving him the benefit of the doubt.

The State of Sawal Jaipur and Gangapur appealed against the acquittal to <ORG> at Jaipur.

The learned <ORG> Judges held that the law requires corroboration in such cases but held that the girl's state- ment made to her mother was legally admissible as corrobora- tion and considering that sufficient they set aside the acquittal and restored the conviction and sentence. The <ORG> later granted leave to appeal under article 134 (1)(c) of the Constitution as the case involved questions of law of general importance.

The first point taken before us related to the admissi- bility of the evidence of the girl herself. Her age was stated to be seven or eight years at the time of the exami- nation by the learned Assistant Sessions Judge who recorded her testimony. He certified that she did not understand the sanctity of an oath and accordingly did not administer one to her. He did not certify that the child understood the duty of speaking the truth.

The proviso to section 5 of the Indian Oaths Act, 1873, prescribes that--"Provided that where the witness is a child under twelve years of age, and the <ORG> or person having authority to examine such witness is of opinion that, though he understands the duty of speaking the truth, he does not understand the nature of an oath or affirmation, the forego- ing provisions of this section and the provisions of section 6 shall not apply to such witness, but in any such case the absence of an oath or affirmation shall not render inadmis- sible any evidence given by such witness nor affect the obligation of the witness to state the truth."

The question is whether the opinion referred to must be formally recorded or whether it can be inferred from the circumstances in which the deposition was taken. The proviso quoted above must be read along with section 118 of the Evidence Act and section 13 of the Oaths Act. In my opinion, an omission to administer an oath, even to an adult, goes only to the credibility of the witness and not his competency. The question of competency is dealt with in section 118 . Every witness is competent unless the <ORG> considers he is pre- vented from understanding the questions put to him, or from giving rational answers by reason of tender years, extreme old age, disease whether of body or mind, or any other cause of the same kind. It will be observed that there is always competency in fact unless the court considers otherwise. No other ground of incompetency is given, therefore, unless the Oaths Act adds additional grounds of incompetency it is evident that section 118 must prevail.

Now the Oaths Act does not deal with competency. Its main object is to render persons who give false evidence liable to prosecution. It is true a subsidiary object is to bring home to the witness the solemnity of the occasion and to impress upon him the duty of speaking the truth, but in view of section 118 these matters only touch credibility and not admissibility. In my opinion, section 13 of the Oaths Act places this beyond doubt. It states--

"No omission to take any oath or make any affirmation......... and no irregularity whatever, in the form in which any one of them is administered, shall invali- date any proceeding or render inadmissible any evidence whatever.......... "

Section 5 is the main provision regarding the adminis- tration of oaths. The proviso only sets out the cases in which the oath is not to be administered. If, therefore, an omission to take the oath does not affect the admissibility of the evidence, it follows that irregularity of the kind we are considering which arises out of the proviso cannot affect the admissibility either. Section 118 remains and unless the judge considers otherwise the witness is compe- tent.

I do not think it will be useful to consider English authorities on the point because we are governed here by the terms of the various sections I have referred to. But a decision of <ORG> of <ORG> is in point. Their Lordships stated in <CITATION> (1) :--

(1) A.I.R. 1946 P.C. 3 at 5 " Section 13 , Oaths Act , is quite unqualified in its terms and there is nothing to suggest that it is to apply only where the omission to administer the oath occurs per incuriam. If that had been the intention of the <ORG>, it would have been simple to insert words in the section to that effect......... It may be observed that this question can no longer arise in India because in 1939 the <ORG> passed the Oaths (Amendment) Act (Act XXXIX of 1939) which settles the law in accordance with the Bengal and Oudh decisions referred to above."

The decisions to which their Lordships refer are and <NAME> v. Emperor(2). The decisions there were that the section being unqualified in terms did apply to a case where the <ORG> accepted the evidence of a child to whom the oath was not administered on the ground that the witness did not understand its nature. The principle of the decisions ap- plies here because, as their Lordships observe, the section is unqualified in its terms.

I would add however that it is desirable that judges and magistrates should always record their opinion that the child understands the duty of speaking the truth and state why they think that, otherwise the credibility of the wit- ness may be seriously affected, so much so, that in some cases it may be necessary to reject the evidence altogether. But whether the magistrate or judge really was of that opinion can, I think, be gathered from the circumstances when there is no formal certificate. In the present case, it is plain that the learned Judge had the proviso in mind because he certified that the witness does not understand the nature of an oath and so did not administer one but despite that went on to take her evidence. It is also an important fact that the accused, who was represented by counsel, did not object. Had he raised the point the Judge would doubtless have made good the omission. I am of opinion that Mst. <NAME> was a competent witness and that her evi- dence is admissible. In (1) 14 Beng. L.R. 294 F.N. (2) (1907) 10 O.C. 337 the <ORG> case which I have just cited, their Lord- ships said--

"It is not to be supposed that any judge would accept as a witness a person who he considered was incapable not only of understanding the nature of an oath but also the necessi- ty of speaking the truth when examined as a witness."

That is the very point here. One can presume that the learned Judge had that in mind from the fact that he exam- ined the child after referring to a fact which arises out of the proviso.

As regards her credibility, the learned trial Judge, who recorded her evidence and saw her in the box, has believed her, so has <ORG>; and it is important to note that the learned Sessions Judge who acquitted the accused has not disbelieved her. On the contrary he says he is morally convinced. All he says is that in the absence of corrobora- tion it will be unsafe to convict because <ORG> and other cases advise corroboration as a matter of pru- dence.

We were taken carefully through the evidence, as elabo- rately as in a court of first appeal. I am of opinion that the learned <ORG> Judges were fully justified in ac- cepting the evidence of <NAME> and in believing her mother Mst. <NAME>. I consider it unnecessary to recapitulate their reasons. After the careful analysis given by three Courts it is sufficient to say that I agree with the learned <ORG> Judges. We are left therefore with the questions of law.

The first question is whether the law requires corrobo- ration in these cases. Now the Evidence Act now here says so. On the other hand, when dealing with the testimony of an accomplice, though it says in section 114 (b) that the <ORG> may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars, it makes it clear in section 133 that-

"An accomplice shall be a competent witness against an accused person; and a conviction is not  illegal merely because it proceeds upon the uncorroborated testimony of an accomplice."

Now a woman who has been raped is not an accomplice. If she was ravished she is the victim of an outrage. If she consented there is no offence unless she is a married woman, in which case questions of adultery may arise. But adultery presupposes consent and so is not on the same footing as rape. In the case of a girl who is below the age of consent, her consent will not matter so far as the offence of rape is concerned, but if she consented her testimony will natural- ly be as suspect as that of an accomplice. So also in the case of unnatural offences. But in all these cases a large volume of case law has grown up which treats the evidence of the complainant somewhat along the same lines as accomplice evidence though often for widely differing reasons and the position now reached is that the rule about corroboration has hardened into one of law. But it is important to under- stand exactly what the rule is and what the expression "hardened into a rule of law" means.

In my judgment, this branch of the law is the same as in England and I am of opinion that the lucid exposition of it given by Lord <NAME>, the Lord Chief Justice of England, in The King v. <NAME>(1) cannot be bettered. In that case, <NAME> had been convicted of having committed acts of gross indecency with the two boys. (There the boys were accomplices because they were freely consent- ing parties and there was no use of force). The learned Chief Justice says at page 663 :-

"There is no doubt that the uncorroborated evidence of an accomplice is admissible in law...... But it has long been a rule of practice at common law for the judge to warn the jury of the danger of convicting a prisoner on the uncorroborated testimony of an accomplice or accomplices, and, in the discretion of the judge, to advise them not to convict upon such evidence; but the judge should point out to the jury that it is (1) [1916] 2 K.B, 658.

within their legal province to convict upon such unconfirmed evidence......

This rule of practice has become virtually equivalent to a rule of law, and since <ORG> came into operation this Court has held that, in the absence of such a warning by the judge, the conviction must be quashed...... If after the proper caution by the judge the jury nevertheless convict the prisoner, this Court will not quash the conviction merely upon the ground that the accom- plice's testimony was uncorroborated."

That, in my opinion, is exactly the law in India so far as accomplices are concerned and it is certainly not any higher in the case of sexual offences. The only clarifica- tion necessary for purposes of this country is where this class of offence is sometimes tried by a judge without the aid of a jury. In these cases it is necessary that the judge should give some indication in his judgment that he has had this rule of caution in mind and should proceed to give reasons for considering it unnecessary to require corroboration on the facts of the particular case before him and show why he considers it safe to convict without corrob- oration in that particular case. I am of opinion that the learned <ORG> Judges were wrong in thinking that they could not, as a matter of law, convict without corrobora- tion.

There is a class of cases which considers that though corroboration should ordinarily be required in the case of a grown-up woman it is unnecessary in the case of a child of tender years. <NAME>. v. Emperor(1) is typical of that point of view. On the other hand, <ORG> has said in <CITATION> (2) that as a matter of prudence a conviction should not ordinarily be based on the uncorroborated evidence of a child witness. In my opinion, the true rule is that in every case of this type the rule about the advisability of corroboration should be present to the mind of the judge. In a jury case he must tell the (1) A.I.R. 1944 Nag. 363. (2) A.I.R. 1946 P.C. 3 at 5.

<NAME>

jury of it and in a non-jury case he must show that it is present to his mind by indicating that in his judgment. But he should also point out that corroboration can be dispensed with if, in the particular circumstances of the case before him, either the jury, or, when there is no jury, he himself, is satisfied that it is safe to do so. The rule, which according to the cases has hardened into one of law, is not that corroboration is essential before there can be a con- viction but that the necessity of corroboration, as a matter of prudence, except where the circumstances make it safe to dispense with it, must be present to the mind of the judge, and in jury cases, must find place in the charge, before a conviction without corroboration can be sustained. The tender years of the child, coupled with other circumstances appearing in the case, such, for example, as its demeanour, unlikelihood of tutoring and so forth, may render corrobora- tion unnecessary but that is a question of fact in every case. The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them. There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed to stand.

I turn next to the nature and extent of the corrobora- tion required when it is not considered safe to dispense with it. Here, again, the rules are lucidly expounded by Lord <NAME> in <NAME>'s case(1) at pages 664 to 669. It would be impossible. indeed it would be dangerous, to formulate the kind of evidence which should, or would, be regarded as corroboration. Its nature and extent must necessarily vary with circumstances of each case and also according to the particular circumstances of the offence charged. But to this extent the rules are clear. First, it is not necessary that there should be inde- pendent confirmation of every material circumstance in the sense that the independent evidence in the case, apart from the testimony of the complainant or the (1) [1916] 2 K.B. 658, accomplice, should in itself be sufficient to sustain con- viction. As Lord <NAME> says--

``Indeed, if it were required that the accomplice should be confirmed in every detail of the crime, his evidence would not be essential to the case, it would be merely confirmatory of other and independent testimony."

All that is required is that there must be "some addi- tional evidence rendering it probable that the story of the accomplice (or complainant) is true and that it is reasona- bly safe to act upon it."

Secondly, the independent evidence must not only make it safe to believe that the crime was committed but must in some way reasonably connect or tend to connect the accused with it by confirming in some material particular the testi- mony of the accomplice or complainant that the accused committed the crime. This does not mean that the corrobora- tion as to identity must extend to all the circumstances necessary to identify the accused with the offence. Again, all that is necessary is that there should be independent evidence which will make it reasonably safe to believe the witness's story that the accused was the one, or among those, who committed the offence. The reason for this part of the rule is that--

"a man who has been guilty of a crime himself will always be able to relate the facts of the case, and if the confirmation be only on the truth of that history, without identifying the persons, that is really no corroboration at all...It would not at all tend to show that the party ac- cused participated in it."

Thirdly, the corroboration must come from independent sources and thus ordinarily the testimony of one accomplice would not be sufficient to corroborate that of another. But of course the circumstances may be such as to make it safe to dispense with the necessity of corroboration and in those special circumstances a conviction so based would not be illegal. I say this because it was contended that the mother in this case was not an independent source.

Fourthly, the corroboration need not be direct evidence that the accused committed the crime. It is sufficient if it is merely circumstantial evidence of his connection with the crime. Were it otherwise, "many crimes which are usually committed between accomplices in secret, such as incest, offences with females" (or unnatural offences) "could never be brought to justice."

Next, I turn to another aspect of the case. The learned <ORG> Judges have used Mst. <NAME>'s statement to her mother as corroboration of her statement. The ques- tion arises, can the previous statement of an accomplice, or a complainant, be accepted as corroboration ?

That the evidence is legally admissible as evidence of conduct is indisputable because of Illustration (j) to section 8 of the Evidence Act which is in these terms:

"The question is whether A was ravished. The facts that, shortly after the alleged rape, she made a complaint relating to the crime, the circumstances under which, and the terms in which, the complaint was made are relevant."

But that is not the whole problem. for we are concerned here not only with its legal admissibility and relevancy as to conduct but as to its admissibility for a particular purpose, namely corroboration. The answer to that is to be found in section 157 of the Evidence Act which lays down the law for India.

Section 157 states that---

"In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact at or about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved."

The section makes no exceptions, therefore, provided the condition prescribed, that is to say, "at or about the time etc. ," are fulfilled there can be no doubt that such a statement is legally admissible in India as corroboration. The weight to be attached to it is, of course, another matter and it may be that in some cases the evidentiary value of two statements emanating from the same tainted source may not be high, but in view of section 118 its legal admissibility as corroboration cannot be questioned. To state this is, however, no more than to emphasise that there is no rule of thumb in these cases. When corroborative evidence is produced it also has to be weighed and in a given case, as with other evidence, even though it is legally admissible for the purpose on hand its weight may be nil. On the other hand, seeing that corrobo- ration is not essential to a conviction, conduct of this kind may be more than enough in itself to justify acceptance of the complainant's story. It all depends on the facts of the case.

In the present case, Mst. <NAME> told 'her mother about the incident about four hours after it occurred. The reason for the delay was that her mother was not at home when she went there. She says that when she went home she lay down and went to sleep and that when her mother returned she asked her why she was sleeping and then she told her mother what had happened. Her mother tells much the same story. She says she had gone out to her field in the morning and did not return till about 4 p.m. When she reach home she found her daughter lying there weeping. She has been be- lieved by the learned trial Judge as also by <ORG> and has not been disbelieved by the learned Sessions Judge. All he says is that she is not an "independent" witness and is therefore not sufficient for corroboration. The first question is whether this delay fulfills the "at or about" condition. In my opinion, here also there can be no hard and fast rule. The main test is whether the statement was made as early as can reasonably be expected in the circumstances of the case and before there was opportu- nity for tutoring or concoction. It was suggested that the child could have complained to some women who were working in the neighbourhood, but that would not be natural in a child. She would be frightened and her first instinct would be to run home to her mother. <ORG> was satisfied on these points and so am I. Consequently, the matter does fall within the ambit of section 157 read with section 8 , Illustration (j).

The next question is whether the mother can be regard- ed as an "independent" witness. So far as this case is con- cerned, I have no doubt on that score. It may be that all mothers may not be sufficiently independent to fulfill the requirements of the corroboration rule but there is no legal bar to exclude them from its operation merely on the ground of their relationship. Independent merely means independent of sources which are likely to be tainted. In the absence of enmity against the accused there is no reason why she should implicate him falsely. It is true the ac- cused suggested that they were on bad terms but that has not been believed by anyone.

The third question is whether there is independent corroboration connecting the accused with the crime. The only corroboration relied on for that is the previous state- ment of the child to her mother. That might not always be enough but this rule can be waived in a given case just as much as the necessity for any corroboration at all. In the present case, the learned <ORG> Judges would have acted on the uncorroborrated testimony of the girl had they not felt pressed by the corroboration rule. Viewing all the circumstances I am satisfied that the <ORG> was right. I am satisfied that in this case, considering the conduct of the girl and her mother from start to finish, no corrobora- tion beyond the statement of the child to her mother was necessary. I am satisfied that the <ORG> was right in holding that that was enough to make it safe to act on her testimony.

I would dismiss the appeal and direct the appellant to surrender to his bail in accordance with the terms of his bond, serve out his sentence and pay the fine.

<NAME> agree. Appeal dismissed. Agent for the appellant: <NAME>. Agent for the respondent: <NAME>.


PETITIONER: <NAME> Vs. RESPONDENT: MRS. <NAME> AND ANR. DATE OF JUDGMENT20/03/1990 BENCH: <NAME>, R.M. (J) BENCH: <NAME>, <NAME>, K.J. (J) CITATION: 1990 AIR 1133 1990 SCR (2) 25 1990 SCC (2) 431 JT 1990 (1) 486 1990 SCALE (1)531 CITATOR INFO : RF 1992 SC1555 (2,5) ACT: Delhi Rent Control Act , 1958.' Section 21-Recovery of possession by landlord from tenant--Whether legal represen- tatives of landlord can initiate and continue proceedings for recovery. HEADNOTE: The petitioner-tenant was let out the demised premises by the landlord for a period of three years, with permission of Controller under section 21 of the Delhi Rent Control Act, the landlord died before the expiry of period of tenan- cy. After the expiry of the period, his legal representa- tives made an application for recovery of possession. This application was resisted by the tenant on the ground that proceedings for recovery of possession under section 21 could not be initiated and continued by legal representa- tives of the landlord who had obtained permission. Having failed before <ORG>, the petitioner has filed petition for special leave. It was contended on his behalf that 'landlord' in second part of section 21 , enti- tling him to claim vacant possession, should be confined to the person who had obtained permission on the premise that he "does not require the whole or any part of the premises for a particular period." Dismissing the special leave petition, this Court, HELD: (1) Section 21 is a self contained code. The purpose and objective of its enactment as provision of short duration tenancy or periodical tenancy in Rent Control Act of Delhi is unique amongst such legislations. What was unique of it was not short duration tenancy but a fresh look on eviction. [27G; 28G] <CITATION> ,  1 SCC 234, referred to. (2) Since section 21 is an exception to section 14 and it mandates restoration of possession, "notwithstanding any other law" it has to be construed strictly and against any attempt to frustrate it. [28G] 26 (3) Recovery of possession under section 21 is not hedged, by any inquiry or opportunity, if permission is not challenged on any of the exceptions which have been carved out by courts, obviously to uphold fairness and honesty the core of our jurisprudence. Right to get vacant possession is thus absolute. [29D] <CITATION> ,  1 SCC 52; V.S. Rahe v. Smt. Rem Chamben,  1 SCC 612; <CITATION> ,  1 SCC 234, referred to. (4) The expression "for the time being" in section 2(e) makes it clear that landlord has to be understood in presen- ti. That is anyone entitled to receive rent is the landlord. It does not visualise, past or future landlord. Therefore, the word "landlord" on plain reading of Section 21 does not warrant construction of the word in any other manner. [29G] (5) Constructionally, Section 21 is in two parts: one creation of short term tenancy and other its execution after expiry of time. Both stand on their own and operate inde- pendently. Non-requirement of premises for time being fur- nishes basis for entering into agreement for periodical tenancy. Truth of it or its genuineness are relevant consid- erations for granting permission. And the permission granted continues unabated, unaffected irrespective of variation in requirement. [30D-E] (6) Vacation is not linked with landlord but with time. Expiry of it obliges tenant to vacate. If he does not then whosoever is the landlord at the time of afflux of tenancy may approach Controller for putting him in vacant posses- sion. Death of landlord does not either shorten or enlarge period nor the consequences envisaged are altered or affect- ed. [30F] (7) The doctrine of actio personalies moritur cum per- sonna does not apply to Rent Control Acts. Its applicability was generally confined to actions for damages for defama- tion, seduction, inducing a spouse to remain apart from the other and adultery. [31D-C] Supreme <CITATION> , AIR 1973 SC 1104; <CITATION> ,  1 S.C.R. 313: Phool Rani v. <NAME>,  3 S.C.R. 769, referred to. (8) An action for eviction abates only if the cause of action does 27 not survive. The cause of action for granting permission was the nonrequirement by the landlord of the premises for the time mentioned in the agreement whereas cause of action for eviction is non-vacation by the tenant after the expiry of period. Therefore, it is immaterial who is the landlord at the time when the action for vacation arose. [31F-G] (9) Permission in the instant case was granted on state- ment of parties in regard to their necessity or non-require- ment of the premises. Such necessity to let out or non- requirement by the landlord could not be brought into those exceptions which invalidated permission. Therefore, death of the landlord was immaterial as even the reason for letting out did not die with death of landlord. [32A-B] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 7914 of 1989.

From the Judgment and Order dated 26.5.1989 of <ORG> in S.A.O. No. 296 of 1984.

<NAME> and <NAME> for the petitioner. Dr. <NAME>, <NAME>, <NAME> and <NAME> for the respondents.

The Judgment of the Court was delivered by <NAME>, J. Tenant inducted in 1979, for three years, 2by the landlord under a written agreement, in C-4/33, Saf- darjang Development Area, New Delhi, with permission of Controller under Section 21 of Delhi Rent Control Act (for brevity the 'Act') seeks leave of this Court on limited question of law if proceedings for recovery of possession under Section 21 of the Act could be initiated and continued by legal representatives of the landlord who had obtained permission but who died before expiry of period of tenancy. Answer of it shall depend, primarily, on construction of word 'landlord' used in Section 21 , a provision held to be self contained code in <CITATION> ,  1 SCC 234 and also the purpose and objective of its enactment as provision of short duration tenancy or periodi- cal tenancy in Rent Control Act of Delhi right from 1952, is unique amongst such legislations and is probably non exist- ent in any other State. It reads as under:

21. "Recovery of possession in case of tenancies for limited period:

(1) Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed manner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not, on the expiry of the said period, vacate such premises, then, notwithstanding anything contained in Section 14 or in any other law, the Controller may, or an application made to him in this behalf by the landlord within such time as may be prescribed, place the landlord in vacant possession of the premises or part thereof by evict- ing the tenant and every other person who may be in occupa- tion of such premises.

(2) while making an order under sub-section (1), the Con- troller may award to the landlord such damages for the use or occupation of the premises at such rates as he considers proper in the circumstances of the case for the period from the date of such order till the date of actual vacation by the tenant."

What it, undoubtedly, projects is the legislative aware- ness of acute crisis of houses in the <ORG>. To resolve the paucity of accommodation, on one hand, due to enormous influx of office personnel and business class as a result of rapid growth of social, economic and political activity and apprehension of house owners, on other, bulk of whom hail from middle class or service class, of loosing their houses if not for good then for substantial period due to develop- ment of strange phenomenon in big cities that allotted or rented houses are more economical than, even, own the legis- lature which is the best-judge of need of its people carved out an exception to usual rent control provisions of pro- tecting tenants from eviction What was unique of it was not short duration tenancy but a fresh look on eviction. Vacant possession was ensured, statutorily, without any notice, or termination of tenancy or the hazard of establishing bona fide need and comparative hardship etc. Since sec. 21 is an exception to Section 14 and it mandates restoration of possession, "notwithstanding any other law" it has to be construed strictly and against any attempt to frustrate it. Intensity of it can be appreciated better if its language, is compared with other provisions of recovery of possession even though those provisions, namely, secs. 14A, 14B, 14C and 14D, were introduced later. They also provide speedy remedy to recover possession. But the landlord cannot succeed unless he is able to prove circumstances mentioned in it. More than this the tenant has been given right to contest under Section 25B . Import of Section 21 on the other hand is altogether different. It enjoins Controller to place landlord in vacant possession after expiry of time without any right to tenant to contest it except to the limited extent that permission was vitiated by fraud as held in <CITATION> ,  1 SCC 52 or misuse of the provision by land- lord taking advantage of helpless situation of the tenant as held in V.S. Rahe v. Smt. Rem Chambeh,  1 SCC 612; or the permission really did not create genuine tenancy as held in <CITATION> , supra. Recovery of pos- session under Section 21 is not hedged, by any inquiry or opportunity, if permission is not challenged on any of those exceptions which have been carved out by courts, obviously, to uphold fairness and honesty the core of our jurispru- dence. Right to get vacant possession is, thus absolute. Purpose and objective of the Section having been ascer- tained, it may now be examined if the word "landlord" used in the second part of the Section which empowers landlord to make an application for recovery of possession is to be understood as the same landlord who made the application or his legal representatives as well. In other words, is there any justification for construing the word "landlord" in a narrow sense so as to restrict it, only, to the person who made the application and obtained permission. "Landlord" has been defined in Section 2(e) as under:

"2(e). 'landlord' means a person who, for the time being is receiving, or is entitled to receive, the rent of any prem- ises, whether on his own account or on account of or on behalf of, or for the benefit of, any other person or who would so receive the rent or be entitled to receive the rent, if the premises were let to a tenant."

Expression, "for the time being" makes it clear, that land- lord has to be understood in praesentii. That is anyone entitled to receive rent is the landlord. It does not visua- lise, past or future landlord. Therefore, the word "land- lord". on plain reading of Section 21 does not warrant construction of the word in any other manner. Basis for submission, however, that landlord in second part of Section 21 entitling him to claim vacant possession should be confined to the person who obtained permission was rounded on use of expression, "who does not require the whole or any part of the premises for a particular period." Attempt was made to personalise eviction proceedings by linking it with the person, due to whose non-requirement the permission was granted resulting in automatic exclusion of legal representatives. To put it interpretationally the word "landlord", in second part was urged to be understood in a manner different than it is defined in Section 2(e) . Can it be said that context or setting of Section 21 is such that the word "landlord" in second part of it should be understood in a different sense than that in definition clause? Not on prima facie reading of it which has already been adverted to. Neither on close analysis. What is visualised is occasion for short duration tenancy due to non-requirement of whole or part of premises by landlord for time being; method of its creation by writ- ten agreement entered with tenant, statutory status to it by permission obtained from Controller and execution by resto- ration of vacant possession if the tenant does not vacate after expiry of period. All condensed in one. Construction- ally it is in two parts one creation of short term tenancy and other its execution after expiry of time. Both stand on their own and operate independently. Non-requirement of premises for time being furnishes basis for entering into agreement for periodical tenancy. Truth of it on its genu- ineness are relevant considerations for granting permission. But it exhausts thereafter except to the limited extent pointed out in decisions referred earlier. And the permis- sion granted continues unabated, unaffected irrespective of variation in requirement. Necessity of landlord, again, does not entitle him to seek its revocation. Even his death cannot shorten the period. Similarly once period expires the agreement, the permission all cease to operate by operation of law. Nothing further is required. Vacation is not linked with landlord but with time. Expiry of it obliges tenant to vacate. If he does not then the landlord may approach Con- troller for putting him in vacant possession. Which land- lord? Obviously whosoever is the landlord at the time of afflux of tenancy. Death of landlord does not either shorten or enlarge period nor the consequences envisaged are altered or affected.

Use of expression notwithstanding any other law render it obligatory on tenant to vacate without questioning au- thority of landlord. Any other construction, may, as rightly observed by <ORG> lead to disastrous consequences. Even on principles of civil law the provision for recovery of possession being in nature of execution it could not be successfully resisted on the death of landlord due to whose non-requirement the permission was granted. Such narrow and unreaIistic construction of the word 'landlord' shall frus- trate entire purpose of Section 21 .

Maxim of actio personalies mortiur cum personna cannot apply, either, on principle or on facts. In Supreme <CITATION> , AIR 1973 SC 1104 this Court while dis- cussing applicability of the maxim held "whatever view one may take of the justice of the principle it was clear that it would not be applicable to actions based on contract or where tort feasers' Estate had benefitted from a wrong done. Its applicability was generally confined to actions for damages for defamation, seduction inducing a spouse to remain apart from the other and adultery." In <NAME> v. <NAME>,  3 SCR 769; a decision which was relied by petitioner in support of submission that an application filed for eviction of a tenant on bona fide need lapses on the death of landlord and it could not be continued by his legal representatives overruled in <NAME> and Ors. v. <NAME>,  1 SCR 313 it was observed that doctrine of actio personalis moritur cum personna, did not apply to Rent Control Acts. Even otherwise an action for eviction abates only if the cause of action does not survive. What is the cause of action for an application for vacant possession in Section 21 death of landlord or expiry of time for which tenancy was created. Obviously the latter, the failure' of tenant to honour his commitment to vacate the premises after expiry of time for which he was inducted with permission of Control- ler. The death of the person who obtained the permission has nothing to do with it. Permission was obtained because the landlord did not require the premises on the date when it was let out to tenant. That does not continue on the date when the tenant does not vacate the premises. The necessity of not requiring the premises, for some time, or for the duration the tenant was inducted was confined to the date when the permission was granted. It could not be taken further to the time when the question of vacation arose. The cause of action for granting permission was the non-require- ment by the landlord of the premises for the time mentioned in the agreement whereas cause of action for eviction is non-vacation by the tenant after the expiry of period. Therefore, it is immaterial who is the landlord at the time when the action for vacation arose.

Even on facts permission was applied for by the landlord as, premises was surplus to his need for a limited period of 3 years due to the reason that his son had gone abroad and he was expected to return after three years. Permission was granted for this reason on statement of parties. Such necessity to let out or non- requirement by the landlord could not be brought into those exceptions which invalidate permission. Therefore death of the landlord was immaterial as even the reason for letting out did not die with death of landlord.

In the result this petition for special leave fails and is dismissed. In the circumstances of the case the tenant is directed to suffer costs which we quantify at Rs.5,000. <NAME>

Petition dismissed.


<NAME>, J.

As questions referred to this court in all these references are common, at the request of the learned advocates, the references are heard together and are disposed of by this common judgment.

2. At the instance of the revenue , the following two questions of law have been referred to this court by the <ORG>, Ahmedabad Bench 'C', under the provisions of section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act').

"1. Whether, on the facts and in the circumstances of the case, the <ORG> was right in law in coming to the conclusion that the status of the assessee-company should be treated as public limited company?

2. Whether, on the facts and in the circumstances of the case, the <ORG> was right in law in coming to the conclusion that notwithstanding the provisions of section 2(18) of the Income Tax Act, 1961. The status of the assessee-company should be taken as a public limited company?"

3. The short question which has arisen in all these references is whether the assessee-company should be treated as a public limited company or in other words a "company in which the public are substantially interested" for the assessment years 1978-79 to 1980-81. For the said assessment years different references have been made and the said references, as stated hereinabove, are being disposed of together by this common judgment.

4. The facts and circumstances in which the above questions have arisen are as under :

5. The assessee-company was initially a private limited company within the meaning of the provisions of the Companies Act , 1956, and was being assessed as such. During the relevant assessment years, initially, the assessing officer had assessed the assessee as a public limited company because more than 25 per cent shares of the company were held by one or more body corporate. In the circumstances, the assessing officer, looking to the provisions of section 43A of the Companies Act, considered the assessee as a public limited company and assessed the company as a "company in which the public are substantially interested" as per the provisions of section 2(18) of the Act.

6. The Commissioner did not think the assessment to be proper and, therefore, he exercised his powers under the provisions of section 263 of the Act and after hearing the assessee, came to the conclusion that the company was not a "company in which the public are substantially interested" and he assessed the company as a private limited company. For doing so, he had considered the fact that, by virtue of the clauses incorporated in the articles of association of the assesseec-ompany, there was a restriction on the transfer of shares and as the shares of the assessee-company were not freely transferable, the Commissioner did not consider the assessee as a public limited company.

7. Being aggrieved by the order passed by the Commissioner, the assessee-company filed appeals for the relevant assessment years before the <ORG>. The <ORG> allowed the appeals by holding that the assessee-company was a public limited company. While allowing the appeals, the <ORG> had relied upon the judgment delivered by <ORG> in the case of <CITATION> (1971) 82 ITR 372 (SC). Moreover, the <ORG> came to the conclusion that, by virtue of the provisions of section 43A of the Companies Act, the status of the assessee-company had been changed and the company had become a public limited company. Thus, the orders passed by the Commissioner under the provisions of section 263 of the Act had been set aside and the orders of the assessing officer were restored.

8. We have heard learned advocate <NAME> for the revenue and learned advocate <NAME> for the assessee. We have also considered the relevant judgments cited by the learned advocates and have also gone through the relevant record including the articles of association of the assessee-company.

9. Learned advocate <NAME> appearing for the revenue has submitted that though the assessee-company had become a public limited company by virtue of the provisions of section 43A of the Companies Act, the assessee-company had become a public limited company only by virtue of a deeming fiction under the provisions of the Companies Act , but the assessee-company had retained the basic characteristic of a private limited company because, as per its articles of association, there was a restriction on the transfer of shares of the assessee-company. According to <NAME>, the Commissioner was right when he observed that the assessee-company had put up a restriction on the transfer of its shares by virtue of the clauses incorporated in its articles of association and, therefore, the assessee-company had retained the basic characteristic of a private limited company. He has referred to the relevant sections of the Act and the Companies Act and has submitted that the assessee-company was not a "company in which the public are substantially interested". He has relied upon the following judgments to substantiate his submissions..

(i) <CITATION> (supra);

(ii) <CITATION> . (1995) 214 ITR 700 (Mad); and

(iii) <CITATION> . (1989) 176 ITR 155 (SC).

10. On the other hand, learned advocate <NAME> has tried to justify the order passed by the <ORG> by submitting that the assessee-company had become a public limited company as more than 25 per cent of its shares were held by bodies corporate. He has further submitted that the restrictions on transfer of shares of the assessee-company referred to by the Commissioner in his order were in reality not restrictions imposed upon transfer of the shares of the assessee-company. He has submitted that in articles of association of practically all the companies such restrictions are always incorporated. So as to substantiate his submission, he too has relied upon the judgment delivered in the case of <ORG> (supra) by <ORG>.

11. Before dealing with the questions which have been referred to us, let us look at the provisions which are relevant for the purpose of answering the questions.

12. Section 2(18) of the Act, at the relevant time, defined "company in which the public are substantially interested", as under :

(18) "Company in which the public are substantially interested"--A company is said to be a company in which the public are substantially interested .

(a) if it is a company owned by the <ORG> or <ORG> (<ORG>) or in which not less than forty per cent of the shares are held (whether singly or taken together) by the <ORG> or the <ORG> or a corporation owned by that bank; or (aa) if it is a company which is registered under section 25 of the Companies Act, 1956 ; or (ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested:

Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1-4-1971, or on or after that date) as may be specified in the declaration; or Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1-4-1971, or on or after that date) as may be specified in the declaration; or

(b) if it is a company which is not a private company as defined in the Companies Act , 1956 , and the conditions specified either in item (A) or in item (B) are fulfilled, namely :

(A) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) were, as on the last day of the relevant previous year, listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act , 1956 , and any rules made thereunder., (B) (i) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by

(a) the Govenment, or

(b) a corporation established by a Central, State or Provincial Act , or

(c) any company to which this clause applies or any subsidiary company of such company where such subsidiary company fulfils the conditions laid down in clause (b) of section 108 (hereafter in this clause referred to as the subsidiary company), or

(d) the public (not being a director, or a company to which this clause does not apply);

(ii) the said shares were, during the relevant previous year, freely transferable by the holder to the other members of the public; and

(iii) the affairs of the company, or the shares carrying more than fifty per cent of its total voting power were at no time, during the relevant previous year, controlled or held by five or less persons.

Explanation I : In computing the number of five or less persons aforesaid,-

(i) the Government or any corporation established by a Central, State or Provincial Act or a company to which this clause applies or the subsidiary company of such company shall not be taken into account, and

(ii) persons who are relatives of one another, and persons who are nominees of any other person together with that other person, shall be treated as a single person.

Explanation 2: In its application to an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power, item (B) shall have effect as if for the words 'not less than fifty per cent' and 'more than fifty per cent' the words 'not less than forty per cent' and more than sixty per cent' had, respectively been substituted. "

Another relevant section is section 43A of the Companies Act. The relevant portion of the said section reads as under :

43A. (1) Save as otherwise provided in this section, where not less than twenty five per cent of the paid-up share capital or a private company having a share capital is held by one or more bodies corporate, the private company shall,-

(a) on and from the date on which the aforesaid percentage is first held by such body or bodies corporate, or

(b) where the aforesaid percentage has been first so held before the commencement of the Companies (Amendment Act , 1960), on and from the expiry of the period of three months from the date of such commencement unless within that period the aforesaid percentage is reduced below twenty-five per cent of the paid-up share capital of the private company become by virtue of this section a public company :

Provided that even after the private company has so become a public company its articles of association may include provisions relating to the matters specified in clause (iii) or sub-section (1) of section 3 and the number of its members may be or may at any time be reduced, below seven:

13. Some of the facts which are not in dispute are as under :

More than twenty-five per cent of the share capital of the assessee-company had been held by bodies corporate at the relevant time. It is also pertinent to note that for all the assessment years in question or for part thereof, there was a restriction, according to the articles of association of the company, with regard to transfer of shares of the assessee-company.

14. The relevant provisions of the articles of association, which pertain to transfer of shares are as under :

4. The company being a private company, the following provisions shall have effect, viz.,

(i) The right of transfer of shares of the company shall be restricted as hereinafter provided.

(ii) The number of members of the company (exclusive of persons who are in the employment of the company) is not to exceed fifty, but where two or more persons hold one or more shares in the company jointly, they shall for the purposes of this article, be treated as a single member.

(iii) Any invitation to the public to subscribe for any shares of the company is hereby prohibited.

34. No transfer of shares shall be registered unless a proper instrument of transfer duly stamped together with corresponding certificate of title of share or allotment letter thereof has been delivered to the company. The instrument of transfer of any share will be executed both by the transferor and transferee or by their duly constituted attorney/s and the transferor shall be deemed to remain the holder of such shares until the name of the transferee is entered in the register in respect thereof.

36. Subject to article 40 the Board may in their absolute discretion refuse to register any transfer of shares to a transferee of whom they do not approve not being member of the company. But the Board may, before the transfer is effected give permission in advance for a contemplated transfer and as such permission shall be binding upon the company.

37. A share may be transferred by a member or other person entitled to transferor to any member selected by the transferor, but save as provided by article 41 hereof no share shall be transferred to any person who is not a member unless such person is approved of by the <ORG> as one whom it is desirable in the interest of the company to admit to membership.

40. (1) On the death of a member, the survivor or survivors where the member was a joint holder, and his legal representatives where he was a sole holder, shall be the only person recognised by the company as having any title to his interest in the shares.

(2) Nothing in the above clause shall release the estate of a deceased joint holder from any liability in respect of any share which has been jointly held by him with other persons.

41. Any person becoming entitled to a share in consequence of the death or insolvency of a member shall, upon such evidence being produced as may from time to time be required by the <ORG>, have the right either to be registered as a member in respect of the share or instead of being registered himself, to make such transfer of the shares as the deceased or insolvent person could have made, but the <ORG> shall in either case have the same right to decline or suspend registration as they would have had in the case of a transfer of the shares by the deceased or insolvent person before his death or insolvency.

42. A person becoming entitled to a share by reason of death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not be entitled in respect of it to exercise any rights conferred by membership in relation to meetings of the company..

Provided that the Board may at any time give notice requiring any such person to elect either to be registered himself as a member or to transfer the share and the notice is not complied with within ninety days the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the shares until the requirements of the notice have been complied with.

43. Except where transfer is made pursuant to articles 36, 37 and 39 herein, no shares in the company shall be transferred unless and until the rights of preemption hereinafter conferred shall have been exhausted.

44. Every member or other person referred to in article 41 of these articles of association who intends to transfer shares (hereinafter referred to as "The Proposing Transferor") in which he is directly or indirectly concerned or interested shall give notice in writing to the <ORG> of his intention specifying details of shares to be sold and the proposed sale price. Such notice shall constitute the <ORG> his agent for the sale of the said shares, in one or more lots, at the discretion of the <ORG> to members of the company at a price to be agreed upon by the proposing transferor and the <ORG>, or in case of difference, at the price to be determined by the auditors of the company.

45. Upon the price fixed or determined as aforesaid the Board shall forthwith give notice to all the members of the company of the number and price of the shares to be sold and invite each of them to state in writing within twenty-one days from the date of the said notice whether he is willing to purchase any, and if so, what maximum number of the said shares.

46. At the expiration of the said period of twenty-one days, the Board shall allocate the said shares to or amongst the member or members who shall have expressed his or their willingness to purchase as aforesaid and (if more than one) so far as may be pro rata according to the number of shares already held by them respectively provided that no member shall be compelled or obliged to take more than the said maximum number of shares so notified by him as aforesaid. Upon such allocation being made, the proposing transferor shall be bound on payment of the said price to transfer the shares to the purchaser or purchasers and if he makes default in so doing, the Board may receive and give a good discharge for the purchase money on behalf of the proposing transferor and enter the name of the purchaser in the register of members as holder by transfer of the said share or shares purchased by him.

47. In the event of the whole or part of the said shares not being sold under article 44 within ninety days from the date of notice as aforesaid, the proposing transferor may subject to article 48 at any time thereafter within three months after the expiration of the said period of ninety days, transfer the shares not so sold to any person and at any price."

15. On the basis of the aforesaid facts and looking to the relevant provisions of law, we have to consider the question whether the assessee-company was a private limited company or it was a "company in which the public are substantially interested" during the relevant period. In the instant case, we are concerned with clause (b) of section 2(18) of the Act. As per the said sub-section, if a company, which is not a private company as defined in the Companies Act , 1956, and the conditions specified either in clause (A) or in clause (B) are fulfilled, the company can be said to be a "company in which the public are substantially interested". Clause (A) is not applicable and, therefore, we have to look at the provisions of clause (B). All conditions specified in clause (B) are required to be fulfilled so as to enable the assessee-company to be considered as a "company in which the public are substantially interested" or a public limited company as described by the <ORG> in its order. Condition (ii) specified in clause (B) is with regard to free transferability of the shares. The said sub-clause provides that during the relevant previous year, shares of the company should be freely transferable by the holder to the other members of the public. Thus, we have to examine whether it was open to the shareholders of the assessee-company to transfer the shares to any person of the public at the relevant time. If there was a restriction on transfer, it could be said that the shares of the company were not freely transferable during the relevant previous year.

16. Now, let us look at the provisions pertaining to transfer of shares in the articles of association of the assessee-company. According to clause 36 of the articles of association, <ORG> may in their absolute discretion refuse to register any transfer of shares in favour of a person who is not a member of the company. Thus, <ORG> of the assessee-company had a right to refuse any transfer in favour of a person who was not a shareholder. So far as clause 37 of the articles of association is concerned, it was open to a member to transfer the shares to any member selected by the transferor but the members had no right to transfer shares to a person who was not a member of the company and who was not approved by <ORG>. Thus, as per the provisions of the articles of association of the company, a shareholder had no right to transfer his shares to a person other than a shareholder of the company without getting a clearance from <ORG>. Clause 44 of the articles of association deals with a case where a member who wants to transfer his shares. He has to give a notice in writing to <ORG> of his intention of selling the shares. He has also to state the price at which he proposes to sell the shares. In such an event, <ORG> gets a right to sell the shares of the shareholder intending to dispose of his shares in favour of the existing shareholders. According to clause 45, <ORG> has to give notice to all the members of the company that at a particular price the concerned shareholder wanted to sell his shares and in that event it would be open to the existing shareholders to purchase shares of the company offered for sale by one of the members. In addition to the above condition, there are conditions also relating to fixation of price at which the shares can be sold if the price expected by the proposed transferor and the price fixed by <ORG> is not same. The said conditions incorporated in the clauses referred to hereinabove clearly denote that a shareholder cannot directly transfer his shares in favour of a member of the public. If only the existing shareholders are not inclined to purchase the shares of the proposed transferor, then only, as per the provisions of clause 47 of the articles of association, shares of the company can be transferred in favour of a member of the public. Thus, it is very clear that there is a restriction on transfer of shares as per the provisions of the articles of association of the assessee-company.

17. In case of a public limited company, its shares are freely transferable by its members to other members of the public. This is an essential element which is required to constitute a company in which the public are substantially interested. The clauses incorporated in the articles of association of the assessee-company clearly distinguish its case from the case decided by <ORG> in <ORG> (supra). The company with which the court was concerned, did not incorporate the restrictions which have been referred to hereinabove. Normally, in the articles of association of all companies, a provision is incorporated whereby <ORG> has a right to keep an unwanted element away from becoming a. shareholder of the company. Normally it is presumed that <ORG> would act in the interest of the company and would not permit an unwanted element to become a shareholder of the company. Refusing to transfer the shares, which is in favour of an unwanted element, is understandable but in normal circumstances, <ORG> would invariably permit a shareholder to transfer shares to another member of the public in a public limited company. That is not the case here.

18. In the instant case, there is a clear provision in the articles of association that before effecting any transfer of shares by any of the shareholders, the shareholder desirous of transferring his shares has to give a notice to <ORG>. He has to announce the price at. which he has to sell the shares. All the members of the company are asked whether they would like to purchase the shares. If everybody refuses to purchase the shares, then only the shareholder intending to transfer the shares is permitted to sell shares to the public. Even if the person to whom the shares are to be sold is not an unwanted element, by virtue of the provisions incorporated in the articles of association of the company, the person intending to purchase the shares would not be in a position to purchase the shares. This is nothing but a restriction on transferability of the shares.

19. Thus, it is very clear, in the instant case, that all the conditions incorporated in section 2(18)(b)(B) of the Act have not been fulfilled.

20. The word 'public' has not been defined under the Act. While dealing with the term "company in which the public are substantially interested", in <CITATION> (1961) 41 ITR 613 (SC), <ORG> has observed that, the word 'public' is used in contra-distinction to one or more persons who act in unison and among whom the voting power constitutes a block." Looking to the said meaning of the term 'public', it is very clear that when a shareholder of the company transfers his shares to another shareholder of the company, he is not transferring his shares to a member of the public. Thus, when a shareholder is constrained to transfer his shares to another shareholder, he is not freely transferring his shares to a member of the public. If a shareholder is permitted to transfer his shares to a person of his choice, who is not a shareholder of the company, without any unreasonable restriction, then only it can be said that the shares are freely transferable to a member of the public.

21. It is also pertinent to note the provisions of clauses 40, 41 and 42 of the articles of association of the company. In the event of death of a member, the heirs of the member inherit the shares of a shareholder. The legal heirs would get a limited right to get dividend and they would not get any other right as shareholders. The said clauses also not only put a restriction with regard to free transferability of the shares but it also restricts even transmission of the shares. According to the said clauses, it would not be open to a shareholder to bequeath his shares to someone of his choice.

22. The aforesaid conditions incorporated in the articles of association clearly restrict free transferability of the shares to other members of the public. In view of the said provisions, one cannot say that the assessee-company was a company in which public are substantially interested.

23. Submission of learned advocate <NAME> that as per the provisions of section 43A of the Companies Act, the assessee-company had become a public limited company is not of much substance for the reason that section 43A of the Companies Act deals with a situation when certain private companies are to be treated as public limited companies. For definition of the word 'company' one has to look at section 3(1) of the Companies Act. Clause (iii) of section 3(1) defines "private company" as under :

(iii) "private company" means a company which, by its articles,-

(a) restricts the right to transfer its shares, if any;

(b) limits the number of its members to fifty not including-

(i) persons who are in the employment of the company; and

(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and

(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member.

Upon perusal of clause (a) of the said definition it is clear that a "private company" is a company which by its articles restricts the right to transfer its shares. Even if a private limited company becomes a public limited company by virtue of the provisions of section 43A of the Companies Act, the basic characteristic of the private company as stated in the definition referred to hereinabove remains. In the instant case, the assessee-company had restricted the right of the shareholders to transfer the shares. Thus, the assessee-company had retained a very important characteristic of a private limited company and, therefore, it can be said that the assessee-company was not a public limited company. Even if one looks at the proviso to section 43A of the Act, it is very clear that even after a private company becomes a public limited company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 of the Companies Act. Thus, even after becoming a public limited company by virtue of the provisions of section 43A of the Companies Act, the public company retains the characteristics of a private limited company and, therefore, such a company may be a "company in which the public are substantially interested." In the instant case, we are concerned with the proceedings under the Act and we have to look at the provisions of section 2(18) of the Act. So a private company becoming a public company by virtue of the provisions of section 43A of the Companies Act may still not become a "company in which the public are substantially interested" due to restriction imposed on its shareholders upon transferability of its shares to the other members of the public.

24. In the course of arguments it has been submitted by the learned advocate appearing for the assessee that the assessee-company had resolved to make necessary changes in the articles of association to remove the restriction on transferability of its shares. It is an admitted fact that the shares of the assessee-company were not freely transferable during the entire period in question. <ORG> has held in case of <CITATION> . (supra) that the shares should be freely transferable for the entire previous year. In view of the fact that the shares. of the assessee-company were not freely transferable during the entire previous years in question, it cannot be said that the shares were freely transferable during the relevant years in question.

25. In the course of arguments, it has been submitted on behalf of the advocate appearing for the assessee that neither the <ORG> nor the Commissioner has referred to all the provisions incorporated in the articles of association of the assessee-company relating to transferability of its shares. In the circumstances, it has been submitted by him that this court should not look at the clauses which pertain to restriction on transfer of shares by the members of the company. We do not agree with the said submission made by learned advocate <NAME> because here the question is whether there was any restriction on transferability of the shares of the assessee-company. It is not in dispute that the articles of association of the assessee-company was considered by the Commissioner and by the <ORG>. Both the authorities had made reference to the provisions of the articles of association of the company. In that event, it cannot be said that this court cannot look at the other relevant provisions of the articles of association of the company especially when this court has to decide whether shares of the company were freely transferable during the period in question. In view of the fact that the articles of association of the company is on the record of this court and as it was duly referred to by the Commissioner and the <ORG>, we are of the view that this court can consider all the relevant clauses pertaining to imposition of restriction on transferability of shares of the assessee-company while deciding the question whether the assessee-company was a private limited company, or, the assessee-company was a "company in which the public are substantially interested."

26. In view of the facts stated above, we are of the view that the shares of the assessee-company were not freely transferable to the other members of the public and, therefore, it was neither a public limited company nor was it a "company in which the public are substantially interested."

27. As both the questions are interconnected, we answer both the questions by our common answer in the negative, that is, in favour of the revenue and against the assessee.

The references stand disposed of accordingly with no order as to costs.