PETITIONER: THE BOARD OF TRUSTEES OF THE PORT OF BOMBAY AND ORS. Vs. RESPONDENT: M/S SRIYANESH KNITTERS DATE OF JUDGMENT: 30/07/1999 BENCH: U.CBanerjee, B.N.Kripal JUDGMENT:

KIRPAL, J.

The common question involved in these appeals is whether the appellant - Board of Trustees of the Port Trust constituted under the Major Port Trusts Act , 1963 (for short the MPT Act) have a general lien for their dues over the present or future consignments imported by the importers at the Bombay Port when the said dues are in respect of the past imports made by the said importers.

The respondents in these appeals are importers who had imported various consignments of woollen rags from time to time. After the arrival of these consignments at the Bombay Port a dispute arose between the respondents and the custom authorities as to whether the imported goods were woollen rags or woollen garments. After considerable period of time the imported goods were confiscated by the custom authorities but the importers secured orders to get the goods released on payment of fine. During this period the imported goods remained at the docks till the order of confiscation was passed.

In respect of the period during which the goods remained at the docks the appellants issued notices to the respondents demanding demurrage charges. With the exporters denying the liability the <ORG> authorities instituted various suits to recover wharfage and demurrage charges. We are in these appeals not concerned with the suits.

After the aforesaid suits had been instituted acrylic fibre was imported by the respondents. When the consignment arrived in Bombay Port the respondents filed bills of entry for clearance of the goods for home consumption. When necessary permission was granted by the custom authorities the appellant Board was called upon to release the goods. These goods were not released by the appellant as it demanded payment in respect of wharfage and demurrage which was due from these respondents in respect of earlier consignments of woollen rags which had been imported by them. This refusal of the appellants to allow the removal of the goods was based on a circular dated 2nd October 1979 which had been issued by the appellants. The said circular, inter alia, stated as follows:

<ORG> of the Port of Bombay have been advised that under Section 171 of the Indian Contract Act, 1872, they have a general lien which they can exercise on the goods which came into their custody of importers, exporters, owners, consignee who have for any reason whatsoever not paid the <ORG> charges such as wharfage, crainage, storage demurrage or any other dues in respect of any earlier consignment/s imported/exported or sought to be exported by them.

In the circumstances this department will exercise a lien for General Balance of account in respect of wharfage, crainage, storage, demurrage and other dues of <ORG> against the importers/exporters, owners of consignees of the goods taken charge of by <ORG>.

The respondents then filed writ petitions under Article 226 of the Constitution of India in <ORG> seeking a declaration that the aforesaid circular was ultra virus of MPT Act and was violative of Articles 14, 19, 265 and 300A of the Constitution of India. The relief which was sought was that the appellants herein should withdraw or cancel the circular and deliver the consignments of goods imported by the respondents and detained under the Circular. During the pendency of the writ petition a single judge of <ORG>, by an interim order, directed the release of the consignments of acrylic fibre on the undertaking of the respondents to give a bank guarantee for an amount due which may be claimed by the appellants in respect of the suits filed in the court.

The contention of the respondents before <ORG> was that the appellants were not entitled to claim general lien under Section 171 of the Contract Act, inter alia, for the reason that there was no existing contractual relationship between the appellants and the respondents. They also contended that the MPT Act was a complete code in itself and it was not permissible for the appellants to rely on the provisions of the Contract Act so as to claim a general lien. The appellants herein contended that they were entitled to exercise general lien as provided by Section 171 of the Contract Act as they were wharfingers to whom acrylic fibre had been bailed.

The single judge by judgment dated 24th November, 1982 allowed the writ petition and granted the relief sought for. The appellants were directed to withdraw or cancel the circular dated 2nd October, 1979 and it was, inter alia, held that the appellants herein could not in law claim general lien under Section 171 of the Contract Act. The appellants then filed LPA before <ORG>, but without any success. <ORG> held as under:

(a) There is no right of general lien in favour of <ORG> under the provisions of <ORG> Act.

(b) <ORG> does not have a right of general lien under Section 171 of the Indian Contract Act.

(c) The right of <ORG> flows only from the provisions of <ORG> Act and thus the claim for a general lien by reason of a possessory bailment has been negatived by the Learned Judges.

(d) The general lien in favour of <ORG> is excluded by the provisions of <ORG> Act which is a complete code itself and is comprehensive in respect of collection and recovery of charges.

The learned Additional Solicitor General first contended that the appellants had a general lien under the provisions of the MPT Act on the acrylic fibre which had been imported in respect of the earlier dues. For this submission reliance was sought to be placed primarily on Sections 59 and 61 of the MPT Act. Section 59 and sub-section (1) of Section 61 , which are relevant, read as follows:

59. <ORG>s lien for rates - [1] For the amount of all rates (leviable under this Act) in respect of any goods, and for the rent due to the <ORG> for any buildings, plinths, stacking areas, or other premises on or in which any goods may have been placed, the <ORG> shall have a lien on such goods and may seize and detain the same until such rates and rents are fully paid.

[2] Such lien shall have priority over all other liens and claims, except for general average and for the ship-owners lien upon the said goods for freight and other charges where such lien exists and has been preserved in the manner provided in sub-section (1) of Section 60 , and for money payable to the Central Government (under any law for the time being in force relating to customs, other than by way of penalty or fine.]

61. Sale of goods after two months if rates or rent are not paid or lien for freight is not discharged - [1] A Board may, after the expiry of two months from the time when any goods have passed into its custody, or in the case of animals and perishable or hazardous goods after the expiry of such shorter period not being less than twenty-four hours after the landing of the animals or goods as the Board may think fit, sell by public auction (or in such case as the Board considers it necessary so to do, for reasons to be recorded in writing, sell by tender, private agreement or in any other manner], such goods or so much thereof as, in the opinion of the Board, may be necessary -

(a) if any rates payable to the Board in respect of such goods have not been paid, or

(b) if any rent payable to the <ORG> in respect of any place on or in which such goods have been stored has not been paid, or ( c) if any lien of any ship-owner for freight or other charges of which notice has been given has not been discharged and if the person claiming such lien for freight or other charge has made to the <ORG> an application for such sale.

Plain reading of Section 59 shows that in respect of any goods which are imported the <ORG> has a lien for the amount of all rates leviable under the Act and for the rent due to it and it also has a lien on such goods and the <ORG> may seize and detain the same until such rates are paid. It is clear that it is only in respect of the amount due qua the goods imported and existing there that the <ORG> has alien under Section 59 . Under Section 61 (1), in exercise of its lien, the <ORG> is empowered to sell the said goods for realisation of the amount due to it. Reading the two sections together it is clear that the goods which can be sold in exercise of its lien are only those in respect of which amount is due and payable to the <ORG>. The words such goods in Section 61 (1) has reference to those goods in respect of which rates due to the <ORG> have not been fully paid.

Coming to the facts of the instant case the amount which was claimed by the appellants was in respect of the consignment of woollen rags. There can be little doubt that in respect of the amount claimed by the <ORG> the provisions of Sections 59 and 61 (1) would have been applicable with regard to the said consignment of woollen rags. But the contention now is that it is in respect of the said dues, relatable to woollen rags, that the <ORG> has a general lien on the subsequent consignment of acrylic fibre. This contention is clearly untenable because, as we have already observed, Sections 59 and 61(1) give a lien on those goods in respect of which amount is claimed or due under Section

59. The <ORG> was not demanding or claiming lien on acrylic fibre on the ground that any amount in respect of acrylic fibre was due. Once it appears that the lien referred to in Sections 59 and 61(1) is only those goods in respect of which amount is due it is clear that the said provisions do not contemplate a general lien as contended by the appellants. <ORG>, in our opinion, was right in coming to the conclusion that the lien conferred on the <ORG> under Section 59 of the MPT Act was not a general lien but was a lien on specific goods.

It was then contended on behalf of the appellants that as wharfingers they are entitled to a general lien under Section 171 of the Contract Act. In this connection it was submitted that <ORG> erred in coming to the conclusion that the MPT Act was a complete code in itself and that Section 171 of the Contract Act was not applicable.

The MPT Act is not, in our opinion, an exhaustive and comprehensive code and the said Act has to be read together with other acts wherever the MPT Act is silent in respect of any matter. The MPT Act itself refers to other enactments which would clearly indicate that the MPT Act is not a complete code in itself which ousts the applicability of other acts. The preamble of the Act does not show that it is a codifying Act so as to exclude the applicability of other laws of the land. Even if it is a codifying Act unless a contrary intention appears it is presumed not to be intended to change the law. [See Bennions Statutory Interpretation, Second Edition page 444] Furthermore where codifying statute is silent on a point then it is permissible to look at other laws. In this connection it will be useful to refer to the following observation of <ORG> in <ORG> Vs. Secretary of State for the Environment and others [(1984)] 2 All ER 358 at page 363]:

Planning law, though a comprehensive code imposed in the public interest, is, of course, based on land law. Where the code is silent or ambiguous, resort to the principles of private law (especially property and contract law) may be necessary so that the courts may resolve difficulties by application of common law or equitable principles. But such cases will be exceptional. And, if the statute law covers the situation, it will be an impermissible exercise of the judicial function to go beyond the statutory provision by applying such principles merely because they may appear to achieve a fairer solution to the problem being considered. As ever in the field of statute law it is the duty of the courts to give effect to the intention of <ORG> as evinced by the statute, or statutory code, considered as a whole.

In <ORG> Vs. Union of India ([1969] 2 SCR 481 ) it was held that cognate and pari -materia legislation should be read together as forming one system and as interpreting and enforcing each other. <CITATION> ( 6 SCR 129} it was held that Code of Civil Procedure has to be read along with the Limitation Act . <CITATION> ( 1958 SCR 580) at page 590 it was held that Prevention of Corruption Act should be read along with the Evidence Act . In <NAME> Vs. Mst. <NAME> ( 1 SCR 253) it was held that the Code of Civil Procedure has to be read along with the Court Fees Act . In <NAME> Vs. <NAME> ([1975) 1 SCR 534) this Court observed that the Companies Act should be read along with the Transfer of Property Act .

From the aforesaid decisions it clearly follows that it is permissible to read the provisions of the two Acts together when the same are complementary to each other. In fact some provisions of the MPT Act themselves show that other laws are applicable.

It is an Act which makes provision for the constitution of port authorities and vests the administrative control and management of such ports in such authorities and provides for matters connected therewith. To the extent provisions of the said Act are applicable, there can be little doubt that any provision which is in conflict therewith contained in any other Act would not apply. The enactment of MPT Act does not ipso facto exclude the operation of other laws which may be applicable. Wherever a departure from the general law has to be made the Act specifically provides for the same. This is evident from the following provisions:

{a} Section 29 (2) provides that the provisions of the Industrial Act 1947 or any other law for the time being in force will not apply to the claim for compensation made by an employee whose services are transferred to the <ORG>.

{b} Section 47 of the MPT Act provides for compensation payable in certain cases where use of any private wharf etc. is rendered unlawful. Sub-section (3) provides for the manner in which the compensation is to be determined and in the absence of agreement arbitration is contemplated. Clause (i) of Section 47(3) , however, specifically states that the Arbitration and Conciliation Act , 1996 shall not apply to the arbitrations under the said section. The said provision makes the general law of arbitration contained in the Arbitration and Conciliation Act inapplicable.

{c } Section 68 of the MPT Act is important as it provides that notwithstanding the provisions contained in Section 45 of the Indian Contract Act, 1872 in case of Port Trust security payment would be made to joint promise in accordance with the provisions contained in Section 68 of the MPT Act and not in accordance with Section 45 of the Indian Contract Act. Thus Section 68 makes a specific departure from the provisions of Section 45 of the Indian Contract Act.

{d} Sections 70 and 71 of the MPT Act make specific departure of the provisions contained in the Negotiable Instruments Act , 1881 regarding endorsements to be made on Port Trust security and the effect thereof.

The aforesaid sections of the MPT Act clearly show that the said Act is not exhaustive or comprehensive code and it envisages joint reading with other relevant statutes. Whenever any departure has to be made from other laws specific provision to that effect has been made in the MPT Act.

<ORG> has rightly come to the conclusion that the MPT Act and Sections 59 and 61 in particular do not give to the appellants the general lien which it is claiming. In other words it is because the MPT Act does not provide for a general lien that the appellants are relying on the provisions of Section 171 of the Contract Act. This, in our opinion, is permissible. It is not possible to hold that the MPT Act ousts the applicability of the provisions of Section 171 of the Contract Act under which the <ORG> is claiming a right of general lien as a wharfinger. The general lien of the type contemplated by Section 171 in respect of the past dues is not provided for by the MPT Act.

There is another aspect which is relevant. Section 171 of the Contract Act only enables the retention of goods as security. On the other hand in respect of current dues in respect of existing goods in their possession the <ORG> not only has a lien under Section 59 of the MPT Act but it also has the power to sell the said goods and realise its dues by virtue of Section 61 of the MPT Act. The procedure for exercising this power of sale of the goods in respect of which the <ORG> has lien is contained in the said section. Before selling the goods no order of any court or other judicial authority is required. On the other hand the general lien contemplated by Section 171 of the Contract Act only enables the retention of the bailed goods as a security. Their retention does not give any power to sell the goods, unlike the power contained in Section 61 of the MPT Act. If payment is not made by the consignee to the wharfinger, in a case where Section 171 of the Contract Act applies, the wharfinger can only retain the goods bailed as security and will have to take recourse to other proceedings in accordance with law for securing an order which would then enable the goods to be sold for realisation of the amounts due to it. It may in this connection, be necessary for the wharfinger to file a suit for the recovery of the amount due to it and Section 131 of the MPT Act clearly provides that such a remedy of filing a suit is available to the <ORG>. The added advantage of sale given by Section 61 of MPT Act in respect of current dues cannot be regarded as whittling down the right of general lien contained in Section 171 of Contract Act in respect of old dues.

Having come to the conclusion that the MPT Act does not oust the provisions of Section 171 of the Contract Act what we have now to see is whether the appellants can claim any relief or benefit under the said section. Section 171 of the Indian Contract Act, 1872, reads as follows:

171 General lien of bankers, factors, wharfingers, attorneys, and policy-brokers - Bankers, factors, wharfingers, attorneys of <ORG> and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.

This section is in two parts. The first part gives statutory right of lien to four categories only, namely, bankers, factors, wharfingers and attorneys of <ORG> and policy-brokers subject to their contracting out of Section 171 . The second part of Section 171 applies to persons other than aforesaid five categories and to them Section 171 does not give a statutory right of lien. It provides that they will have no right to retain as securities bailed to them unless there is an express contract to that effect. Whereas in respect of the first category of person mentioned in Section 171 section itself enables them to retain the goods as security in the absence of a contract to the contrary but in respect of any other person to whom goods are bailed the right of retaining them as securities can be exercised only if there is an express contract to that effect.

The appellants in the present case are contending that they are wharfingers and the goods which were imported and off loaded at the port were with them as bailee. The submission of the learned counsel for the appellants was that in the absence of a contract to the contrary as bailee of the goods now imported, namely, acrylic fibre the said consignment could be retained by the appellants as security for the amount due to them towards wharfage and demurrage charges in respect of the earlier consignment of woollen rags. While considering this contention we have also to examine whether the claim for wharfage and demurrage could be covered by the expression general balance of account occurring in Section 171 of the Contract Act.

Wharf is defined in <NAME> dictionary of English, Second Edition, as being a broad plain place, near some creek or haven, to lay goods and wares on that are brought to on from the water. In <NAME> dictionary wharf is defined as a structure of masonry or timber erected on the shore of a harbor, river, or the like, alongside which vessels may lie to load or unload cargo, passengers etc.; also, any landing place for vessels, as a pier or quay. <NAME>, Second Edition, defines wharf as a landing stage built especially along the shore for loading or unloading vessels. The MPT Act contains an inclusive definition of wharf in Section 2 (za) and provides that wharf includes any wall or stage and any part of the land or foreshore that may be used for loading or unloading goods, or for the embarkation or disembarkation of passengers and any wall enclosing or adjoining the same.

Wharfinger is not defined in the Act but in Jowitts dictionary of English Law wharfinger is defined as the occupier of wharf and it is further stated that as a rule, wharfingers have a general lien for the balance of their account. In Ramanatha Aiyars The law Lexicon wharfinger is defined as meaning the occupier of a wharf or a person who owns a wharf.

The appellants are the owners of the wharf at Bombay where the consignments of the respondents were discharged. The services which are provided by the appellants in respect thereof as wharfingers are, inter alia, contained in Section 42 of the MPT Act which reads as follows:

42. Performance of services by Board or other person

- [1] A Board shall have power to undertake the following services -

[a] landing, shipping or transshipping passengers and goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the <ORG>;

[b] receiving, removing, shifting, transporting, storing or delivering goods brought within the Boards premises;

[c] carrying passengers by rail or by other means within the limits of the port or port approaches, subject to such restrictions and conditions as the Central Government may think fit to impose;

[d] receiving and delivering, transporting and booking and despatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa, as a railway administration under the Indian Railways Act 1890 ; (and) [e] piloting, hauling, mooring, remorring, hooking, or measuring of vessels or any other service in respect of vessels.

[2] A <ORG> may, if so requested by the owner, take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the <ORG> may specify.

[3] Notwithstanding anything contained in this section, the Board may, with the previous sanction of <ORG>, authorise any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon.

[4] No person authorised under sub-section (3) shall charge or recover for such service any sum in excess of the amount {specified by the Authority, by notification in the Official Gazette}.

[5] Any such person shall, if so required by the owner, perform in respect of goods any of the said services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify.

[6] The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of a bailee under sections 151 , 152 and 161 of the Indian Contract Act, 1872 .

[7] After any goods have been taken charge of and a receipt given for them under this section, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given or to the master or owner of the vessel from which the goods have been landed or transhipped.

Reading of the aforesaid section shows that the services required to be performed by the <ORG> is not only of loading and unloading of the cargo but would also include storing and delivering of goods. Under sub-section (2) if the <ORG> is requested by the owner to take charge of the goods then it is required to give a receipt in such form as the <ORG> may specify. Sub-section (6), inter alia, states that responsibility of any such person who takes charge of such goods shall be that of a bailee under Sections 151 , 152 and 161 of the Contract Act. Sub-section (7) absolves the person to whom receipt is given of any liability for any loss or damage which may occur to the goods. The responsibility of the <ORG> for the loss of goods is provided for in Section 43 of the MPT Act which reads as follows:

43. Responsibility of <ORG> for loss, etc. of goods

- [1] Subject to the provisions of this Act, the responsibility of any Board for the loss, destruction or deterioration of goods of which it has taken charge shall, -

(i) in the case of goods received for carriage by railway, be governed by the provisions of the Indian Railways Act , 1890 ; and (ii) in other cases, be that of a bailee under sections 151 , 152 and 161 of the Indian Contract Act, 1872 , omitting the words in the absence of any special contract in section 152 of that Act;

{Provided that no responsibility under this section shall attach to the Board -

(a) until a receipt mentioned in sub-section (2) of section 42 is given by the Board; and

(b) after the expiry of such period as may be prescribed by regulations from the date of taking charge of such goods by the <ORG>.} [2] A <ORG> shall not be in any way responsible for the loss, destruction or deterioration of, or damage to, goods of which it has taken charge, unless notice of such loss or damage has been given within such period as may be prescribed by regulations made in this behalf {from the date of taking charge of such goods by the <ORG>} under sub-section (2) of section 42 .

Section 45 stipulates that all rates and other charges payable under the MPT Act for storage of goods shall be payable to the <ORG> or to such person or persons appointed by the <ORG>. Section 48 enables the authority to issue notification, from time to time, providing for scales of rates for services performed by <ORG> or other person and the same reads as follows:

48. Scales of rates for services performed by Boards or other person - {[1] The Authority shall from time to time, by notification in the Official Gazette, frame a scale of rates at which, and a statement of conditions under which, any of the services specified hereunder shall be performed by a Board or any other person authorised under Section 42 at or in relation to the port or port approaches

(a) transhipping of passengers or goods between vessels in the port or port approaches; (b) landing and shipping of passengers or goods from or to such vessels to or from any wharf, quay, jetty, pier, dock, berth, mooring, stage or erection, land or building in the possession or occupation of the <ORG> or at any place within the limits of the port or port approaches; (c) cranage or portage of goods or any such place; (d) wharfage, storage or demurrage of goods on any such place; (e) any other service in respect of vessels, passengers or goods, [2] Different scales and conditions may be framed for different classes of goods and vessels.

For the use of property belonging to <ORG> including for leasing of land or sheds by owners of goods imported or intended for export or for any other use of land, building etc. Section 49 enables the authority to fix the scale of rates in respect thereof.

Reading the aforesaid and other provisions of the MPT Act it is abundantly clear that the appellants are wharfingers who not only provide space at the port for the loading and unloading of the goods but also provide for the storage of the goods till the same are removed. We may here notice that in exercise of the powers conferred by Section 126 read with Sections 42 and 43 of the MPT Act <ORG> issued a notification dated 1st February 1975 notifying the Port of Bombay (Responsibility for Goods) Regulations, 1975. The said regulations, inter alia, provide that a receipt referred to in sub-section (2) of Section 42 shall be given in the form annexed to the said regulations. The said form, which is a receipt contemplated by Section 42 (2), gives particulars of the goods which are unloaded and stored in a shed or open area of berth or a warehouse.

Whether the issuance of such a receipt would amount to an agreement or concluded contract coming into being between the appellants and the respondents is wholly immaterial because the receipt evidences the goods coming into the possession of the appellants and under Section 42 (6) the appellants would be regarded as a bailee thereof to whom the provisions of Sections 151 , 152 and 161 of the Contract Act become applicable. It is because of this the relationship of bailor and bailee comes into existence when the <ORG> is required to store the imported goods.

At this juncture it is appropriate to deal with the conclusion of <ORG> to the effect that with the issuance of the receipt under Section 42 (2) the contract, if any, is between the ship owner and the port trust and not between the consignee who is true owner of the goods and <ORG>. In coming to this conclusion <ORG> has placed reliance on the decision of this Court in The Trustees of the Port of Madras by its Chairman Vs. <NAME> and <NAME>. ( Supp. 2 SCR

915). In that case the question which arose was as to who was responsible for idle labour charges. Labour was supplied by the <ORG> authorities but their services were not fully utilised and the question arose as to whether it was the consignee or the ship owner who was liable to pay the said charges. This Court held that the <ORG> took charge of the goods on behalf of the ship owner and not on behalf of the consignee and whatever services were performed at the time of landing of the goods or on their removal were rendered to the ship owner and, therefore, the charges were rightly leviable not on the consignee but on the streamer agents. The service of providing the labour was, in that case, therefore, to the owners of the streamer and not to the consignee and it is for that reason the liability was held not to be that of the latter. This decision has no relevance to the point in issue which has to be decided in the present case.

Section 2 (o) contains the definition of owner. In relation to goods the said section states that the word owner includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods. By referring to this sub-section this <ORG> in <ORG> and <NAME>. Vs. <ORG> ( 1 SCC 142) held that in the case of imports the liability to pay demurrage, on the endorsement being made on the bill of lading, would be that of the consignee. This is in consonance with the provisions of the Bills of Lading Act , 1856. The preamble of this Act provides that by custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner and, therefore, it is expedient that such rights should pass with a property. Section 1 of the Bills of Lading Act provides that rights under bills of lading vest in the consignee or endorsee and reads as under:

1. Rights under bills of lading to vest in consignee or endorsee - Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods herein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.

The provisions of Section 2 (o) of the MPT Act regards, in relation to goods, the consignee as the owner thereof. Reading the same along with the Bills of Lading Act the consignee of the goods named in the bill of lading or every endorsee of the bill of lading, for the purpose of MPT Act is regarded as the owner of the goods and it is from that owner that the appellant is entitled to recover charges under the MPT Act in respect of the said goods. <ORG> was not right in holding that the contract was between the ship owner and <ORG>. The correct position is that the contract is between <ORG> and the holder of the bill of lading which, in this case, would be the consignee. It is the consignee which is the bailor with <ORG> being the consignee.

It was then argued by <NAME> that under Section 171 of the Contract Act the lien is available only in the absence of a contract to the contrary. He contended that the MPT Act was a special statute which provides not only the services of wharfingers to be provided by the <ORG> but also for various other services to be provided by it. In respect of these services the <ORG> is entitled to impose and recover rates/charges for the services rendered. Chapter VI provides for the scale of rates and the matters connected therewith including the exercise by the <ORG> for its lien and for recovery of the charges due to it by sale of goods. In this context it was submitted that Chapter VI of the MPT Act is a contract to the contrary between the parties.

We are unable to accept this submission. As has already been held earlier the general lien contained in Section 171 of the Contract Act is not covered by the provisions of Chapter VI of the MPT Act. The MPT Act no doubt deals with lien in respect, inter alia, of the goods imported but it does not deal with the general lien of the type we are concerned with in this case, namely, amounts due in respect of earlier consignments for which payment has not been made. The contract to the contrary as envisaged in Section 171 of the Contract Act has to be specific. The MPT Act including Chapter VI no where provides that the general lien under Section 171 of the Contract Act would not be available to the wharfingers in case where the MPT Act is applicable. It was also contended on behalf of the respondents that even if Section 171 of the Contract Act applies the appellants can exercise their lien under Section 171 of the Contract Act for the recovery of their dues for the services rendered by them as wharfingers only and not for any other services provided by them as detailed in the MPT Act. It was contended that wharfage is the money paid for landing goods at a wharf or for shipping and taking goods into a boat or barge. The general lien of wharfinger as understood under Section 171 of the Contract Act would limit to the charges due to a wharfinger for the services rendered as a wharfinger and not otherwise. On this premise it was submitted that once the appellant takes charges of the goods from the ship owner it does not act as a wharfinger but acts in another capacity which may be that of warehouse owner, <NAME> etc. and, therefore, lien cannot be claimed in respect of demurrage etc. but, at best, can be claimed only for wharfage charges.

Attractive as it may appear, we do not find any merit in the aforesaid submission. The first part of Section 171 of the Contract Act identifies five categories of persons who can have a general lien and retain the goods bailed to them. Wharfinger is one of them. The submission of the learned counsel for the respondents does not take into account the fact that Section 171 of the Contract Act enables these five categories to retain as security the goods bailed to them in respect of general balance of account. The general balance of account has to be of the amount legally due to bankers, factors, wharfingers, attorneys and policy brokers. The appellants come in the category of wharfingers, namely, the owners of the wharf. The duties which they are required to perform are provided in the statute itself, namely, Section 42 of the MPT Act. In other words the services which are undertaken under Section 42 have to be paid for and any amount due in respect thereof will be regarded as general balance of account There is no reason to give a restricted meaning to the expression general balance of account to mean only wharfage charges which, according to the respondents, would imply the charges for loading or unloading of goods, and would not include demurrage. Once goods are taken charge of by the appellants as a wharfingers then in respect of the services rendered, as contemplated by Section 42 , if there is any amount which is due and payable to it the same would be regarded as general balance of account in respect of which it has a general lien over the goods bailed to it.

In our opinion the circular dated 2nd October, 1979 issued by the appellants was valid and the appellants could retain the goods which were in their possession as bailees as security for realisation of the amount of wharfage, demurrage and other charges which were due to them. We accordingly allow these appeals and set aside the judgment of <ORG> with the result that the writ petitions filed by the respondents in <ORG> stand dismissed. The appeals are allowed with costs throughout.


CASE NO.: Appeal (civil) 2254 of 2005 PETITIONER: <ORG> RESPONDENT: <NAME> & Ors. DATE OF JUDGMENT: 20/09/2005 BENCH: <NAME> & <NAME> JUDGMENT:

J U D G M E N T W I T H CIVIL APPEAL NO. 2253 OF 2005 S.B. SINHA, J :

<ORG> was a tenant in the premises in question wherefor an agreement of tenancy was entered into by and between the father of the First Respondent and <ORG> for a period of ten years from 15.12.1965. On or about 24.12.1974, another deed of lease was executed by the mother of the Respondent No. 1 in favour of <ORG> for a period of five years expiring on 31.7.1979. On or about 30.12.1976, the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of <ORG>) Ordinance, 1976 (which was replealed and replaced by the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of <ORG>) Act, 1977) was promulgated whereby and whereunder right, title and interest of <ORG> in relation to its undertakings in India stood transferred to and vested in <ORG>. <ORG>, however, in exercise of its power conferred upon it under Section 9 of the said Act directed that the said undertakings shall, instead of continuing to vest in <ORG>, vest in <ORG>, a <ORG>. company with effect from 30.12.1976. <ORG> was later on amalgamated with the Appellant herein in terms of Sub-section 3 of Section 7 of the said Act. The Appellant herein, thus, was at the liberty to renew the period of lease for a period of further five years with effect from 1.8.1979 on the same terms and conditions as contained in the deed of lease dated 24.12.1974. The Appellant herein exercised its option of renewing the lease with effect from 24.4.1979. On the expiry of the said period, an eviction proceeding was initiated by the First Respondent against the Appellant by filing a suit which was marked as O.S. No. 737 of 1985. The said suit for eviction was decreed. An appeal preferred thereagainst was dismissed. The Regional Manager of the Appellant herein thereafter sent a requisition to the Special Deputy Collector for acquisition of the land for the purpose of continuing the business wherefor a notification was published on 15.10.1985. However, the said notification lapsed. On or about 3.6.1989, a fresh notification was issued under Section 4(1) of the Land Acquisition Act (for short "the Act"). The First Respondent filed a detailed objection on 20th July, 1989 contending that there existed no public purpose for acquisition of the said land and in any event, other suitable lands are available therefor. Upon giving an opportunity of hearing to the Respondents, the Collector is said to have conducted an enquiry and submitted his Report to the Government on or about 28.8.1989. A declaration thereafter was issued under Section 6 of the Act on 25.9.1989. Questioning the said notification, the First Respondent herein filed a writ petition in <ORG> which was marked as W.P. No. 16012 of 1989. Although, the Deputy Collector and the Appellant filed their counter affidavits in the said proceedings, no counter affidavit was filed by the State of Andhra Pradesh.

A learned Single Judge of <ORG> allowed the said writ petition. An appeal thereagainst was filed before this Court marked as Civil Appeal No. 910 of 1998 and by an order dated 19.8.1998 the judgment of <ORG> was set aside and the matter was remitted to <ORG> on the ground that several other contentious issues have been raised. The parties were, however, granted liberty to file additional pleadings. Pursuant to or in furtherance of such liberty, the First Respondent herein raised additional grounds by filing a Miscellaneous Application which was marked as WPMP No. 27633 of 2003 contending inter alia therein that there had been a total non-application of mind on the part of the <ORG> Government both before issuing the notification under Section 4(1) and the declaration under Section 6 of the Act. A counter-affidavit was filed by Respondent Nos. 2 and 3 affirmed by one <NAME>, Special Deputy Collector, Land Acquisition (General) both for himself as also the <ORG> in the said Miscellaneous Application.

It is not in dispute that <ORG> upon satisfying itself directed the <ORG> to produce the records relating to the case. An affidavit affirmed by one <NAME> was filed on 7th November, 2003 stating that the records were not readily traceable in view of shifting of <ORG> within the premises of the Secretariat Buildings twice in four years. An apology was also tendered for non-production of records. By reason of the impugned judgment, the writ petition has been allowed. The Appellant being aggrieved thereby are before us. We may, however, notice that the Appellant herein had prayed for twelve weeks of time to vacate the premises which was granted by an order dated 19th December, 2003.

Mr. <NAME>, learned senior counsel appearing on behalf of the Appellant and Mr. <NAME>, learned senior counsel appearing on behalf of the <ORG> inter alia raised the following contentions:

(i) Having regard to the scheme of the Act if a public purpose is established, the declaration made would be conclusive in terms of Section 6(3) of the Act in respect of both the need and the public purpose.

(ii) In view of the provision contained in Section 3(f)(iv) of the Act, the Respondents could not contend that the purpose for which the notification under Section 4(1) of the Act was issued, was not public purpose.

(iii) Once the owner of the land has been given an opportunity to file his objections which were considered by the Collector; and if the recommendation made by him is accepted by the Government, the owner is not entitled to be afforded any further opportunity of hearing.

(iv) It is not open to the owner of the land to challenge the proceedings on the ground that the Government has not assgined reasons for rejecting the objection.

(v) On the facts and circumstances of this case when the acquisition proceedings have been done in accordance with law, the submission on behalf of the Respondents that the same has been exercised for a colourable exercise of power is not tenable in law.

(vi) Even if the acquisition has the effect of nullifying a decree passed by a civil court, the same would not be a ground for quashing the acquisition proceedings.

Dr. <NAME>, learned senior counsel appearing on behalf of the First Respondent would, on the other hand, submit:

(i) Although the Act is an imperial legislation, it has essentially three broad components:

(a) The acquisition for a public purpose.

(b) Payment of compensation

(c) By taking appropriate due process both while determining suitability for the public purpose and other acquisitory and compensatory aspects.

(ii) The purpose although may a public purpose within the meaning of <CITATION> of the Act and a declaration is made under Section 6 thereof, it would not be correct to contend that the acquisition would be beyond the pale of judicial review.

(iii) Since by reason of the provisions of the Act, the owner is deprived of his right to property, the provisions thereof must be strictly construed.

(iv) Section 5-A of the Act being the heart of the Act gives the citizen to avail of the only opportunity to make submissions both on the public purpose and the suitability of the acquisition in respect of his land, and, thus, being a valuable right which is akin to a fundamental right, the procedures laid down therein must be strictly complied with.

(v) Section 5-A consists of two parts, viz., hearing of objections by the Collector and decision of the Government on the objections on the basis of the Collector's Report and both the parts must be strictly complied with.

(vi) Ideally, reasons are required to be assigned while passing an order under Section 5-A of the Act but even if the same is not required to be assigned, reasons for order must exist on the record.

(vii) There exists a difference between a subjective satisfaction clause, where the Government has to be satisfied, and a dispositive clause, where the Government has to decide on the basis of submissions made to it. In the latter case, there is an even stricter scrutiny to consider whether a determination has been properly made after due consideration.

(viii) Where the Court feels that the appropriate scrutiny requires that records be examined in land acquisition cases, such records must be made available.

The main question which fell for its consideration before <ORG> was whether the objections raised by the Appellant objecting to the acquisition of land on various grounds have been considered by the Government.

It is not in dispute that Section 5-A of the Act confers a valuable right in favour of a person whose lands are sought to be acquired. Having regard to the provisions contained in Article 300A of the Constitution of India, the <ORG> in exercise of its power of 'eminent domain' may interfere with the right of property of a person by acquiring the same but the same must be for a public purpose and reasonable compensation therefor must be paid.

Indisputably, the definition of public purpose is of wide amplitude and takes within its sweep the acquisition of land for a corporation owned or controlled by the <ORG>, as envisaged under Sub-clause (iv) of Clause (f) of Section 3 of the Act. But the same would not mean that the <ORG> is the sole judge therefore and no judicial review shall lie. [ <CITATION>  (1995) Supp (1) SCC 596] .

The conclusiveness contained in Section 6 of the Act indisputably is attached to a need as also the purpose and in this regard ordinarily, the jurisdiction of the court is limited but it is equally true that when an opportunity of being heard has expressly been conferred by a statute, the same must scrupulously be complied with. For the said purpose, Sections 4 , 5-A and 6 of the Act must be read conjointly. The court in a case, where there has been total non-compliance or substantial non-compliance of the provisions of Section 5-A of the Act, cannot fold its hands and refuse to grant a relief to the writ petitioner. Sub-section (3) of Section 6 of the Act renders a declaration to be a conclusive evidence. But when the decision making process itself is in question, the power of judicial review can be exercised by the court in the event the order impugned suffers from well- known principles, viz., illegality, irrationality and procedural impropriety. Moreover, when a statutory authority exercises such enormous power it must be done in a fair and reasonable manner.

It is trite that hearing given to a person must be an effective one and not a mere formality. Formation of opinion as regard the public purpose as also suitability thereof must be preceded by application of mind as regard consideration of relevant factors and rejection of irrelevant ones. The <ORG> in its decision making process must not commit any misdirection in law. It is also not in dispute that Section 5-A of the Act confers a valuable important right and having regard to the provisions contained in Article 300A of the Constitution of India has been held to be akin to a fundamental right.

In State of Punjab and Another Vs. <NAME> and Others [(1980) 2 SCC 471], it was held :

"Hearing him before depriving him is both reasonable and pre-emptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons"

This Court in Om Prakash and Another Vs. State of U.P. and Others [(1998) 6 SCC 1] held, thus:

"21. Our attention was also invited by <NAME>, learned Senior Counsel for the appellants to a decision of a two-Judge Bench of this Court in the case of <CITATION> wherein <NAME>, J. dealing with the question of exercise of emergency powers under Section 17 of the Act observed in para 16 of the Report that save in real urgency where public interest did not brook even the minimum time needed to give a hearing, land acquisition authorities should not, having regard to Articles 14 and 19, burke an inquiry under Section 17 of the Act. Thus, according to the aforesaid decision of this Court, inquiry under Section 5-A is not merely statutory but also has a flavour of fundamental rights under Articles 14 and 19 of the Constitution though right to property has now no longer remained a fundamental right, at least observation regarding Article 14 , vis-`-vis, Section 5-A of the Land Acquisition Act would remain apposite."

The said decision has been cited with approval in <ORG> Vs. <NAME> and Others [(2004) 8 SCC 453].

Recently, this Court in <ORG> Vs. <NAME> [(2004) 8 SCC 14] observed:

"35. At this stage, it is relevant to notice that the limited right given to an owner/person interested under Section 5-A of the Act to object to the acquisition proceedings is not an empty formality and is a substantive right, which can be taken away for good and valid reason and within the limitations prescribed under Section 17(4) of the Act. The object and importance of Section 5-A inquiry was noticed by this Court in the case of <CITATION> wherein this Court held thus: (SCC p. 342, para 7) "7. Section 5-A embodies a very just and wholesome principle that a person whose property is being or is intended to be acquired should have a proper and reasonable opportunity of persuading the authorities concerned that acquisition of the property belonging to that person should not be made. ... The legislature has, therefore, made complete provisions for the persons interested to file objections against the proposed acquisition and for the disposal of their objections. It is only in cases of urgency that special powers have been conferred on the appropriate Government to dispense with the provisions of Section 5-A :""

Such an opportunity of being heard is necessary to be granted with a view to show that the purpose for which the acquisition proceeding is sought to be made is not a public purpose as also the suitability of land therefor. [See <ORG> Vs. <NAME> and Others, (1992) 2 SCC 168, State of Tamil Nadu and Another Vs. <NAME> and Others, (1991) 4 SCC 224, <NAME> and Others Vs. State of Haryana and Others, (1988) 4 SCC 534 and <NAME> and Another Vs. <ORG> and Another, (1976) 3 SCC 719].

In <NAME> and Another Vs. The Chief Election Commissioner, New Delhi and others [(1978) 1 SCC 405], this Court observed:

"43. Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has many colours and shades, many forms and shapes and, save where valid law excludes it, applies when people are affected by acts of authority. It is the hone of healthy government, recognised from earliest times and not a mystic testament of judge-made law. Indeed, from the legendary days of <NAME>  and of <NAME>'s <NAME>  the rule of law has had this stamp of natural justice which makes it social justice. We need not go into these deeps for the present except to indicate that the roots of natural justice and its foliage are noble and not new-fangled. Today its application must be sustained by current legislation, case-law or other extant principle, not the hoary chords of legend and history. Our jurisprudence has sanctioned its prevalence even like the Anglo-American system."

Even a judicial review on facts in certain situations may be available. In <ORG> Vs. <NAME> [(2005) 3 SCC 241], this Court observed:

"34It is now well settled that a quasi-judicial authority must pose unto itself a correct question so as to arrive at a correct finding of fact. A wrong question posed leads to a wrong answer. In this case, furthermore, the misdirection in law committed by <ORG> was apparent insofar as it did not apply the principle of res ipsa loquitur which was relevant for the purpose of this case and, thus, failed to take into consideration a relevant factor and furthermore took into consideration an irrelevant fact not germane for determining the issue, namely, that the passengers of the bus were mandatorily required to be examined. <ORG> further failed to apply the correct standard of proof in relation to a domestic enquiry, which is "preponderance of probability" and applied the standard of proof required for a criminal trial. A case for judicial review was, thus, clearly made out.

35. Errors of fact can also be a subject-matter of judicial review. ( <CITATION> for <ORG>.) Reference in this connection may also be made to an interesting article by <NAME>, Q.C. titled "Judicial Review, Appeal and Factual Error" published in 2004 Public Law, p. 788."

Section 5-A of the Act is in two parts. Upon receipt of objections, the Collector is required to make such further enquiry as he may think necessary whereupon he must submit a report to the appropriate <ORG> in respect of the land which is the subject matter of notification under Section 4(1) of the Act. The said Report would also contain recommendations on the objections filed by the owner of the land. He is required to forward the records of the proceedings held by him together with the report. On receipt of such a Report together with the records of the case, the <ORG> is to render a decision thereupon. It is now well-settled in view of a catena of decisions that the declaration made under Section 6 of the Act need not contain any reason. [See <NAME> Vs. <ORG> and Others,  and <ORG> Vs. <NAME> and Others, ].

However, considerations of the objections by the owner of the land and the acceptance of the recommendations by the <ORG>, it is trite, must precede a proper application of mind on the part of the <ORG>. As and when a person aggrieved questions the decision making process, the court in order to satisfy itself as to whether one or more grounds for judicial review exists, may call for the records whereupon such records must be produced. The writ petition was filed in the year 1989. As noticed hereinbefore, the said writ petition was allowed. This Court, however, interfered with the said order of <ORG> and remitted the matter back to it upon giving an opportunity to the parties to raise additional pleadings.

Contention of Mr. <NAME> to the effect that for long the additional ground relating to non-application of mind on the part of the <ORG> had not been raised and, thus, it might not be necessary for the <ORG> to file a counter-affidavit does not appeal to us. When a rule nisi was issued the <ORG> was required to produce the records and file a counter-affidavit. If it did not file any counter-affidavit, it may, subject to just exceptions, be held to have admitted the allegations made in the writ petition.

In view of the fact that the action required to be taken by <ORG> is distinct and different from the action required to be taken by the Collector; when the ultimate order is in question it was for the <ORG> to satisfy the court about the validity thereof and for the said purpose the counter-affidavit filed on behalf of a Collector cannot be held to be sufficient compliance of the requirements of law. The job of the Collector in terms of Section 5-A would be over once he submits his report. The Land Acquisition Collector would not know the contents of the proceedings before the <ORG> and, therefore, he would be incompetent to affirm an affidavit on its behalf.

Furthermore, the <ORG> is required to apply its mind not only on the objections filed by the owner of the land but also on the Report which is submitted by the Collector upon making other and further enquiries therefor as also the recommendations made by him in that behalf. The <ORG> Government may further inquire into the matter, if any case is made out therefore, for arriving at its own satisfaction that it is necessary to deprive a citizen of his right to property. It is in that situation production of records by the <ORG> is necessary.

In <NAME> (supra), whereupon Mr. <NAME> placed strong reliance, this Court observed:

"50. No reasons or other facts need be mentioned in the Section 6 declaration on its face. If the satisfaction is challenged in the court, the Government can show the record upon which the Government acted and justify the satisfaction expressed in the Section 6 declaration."

It was, thus, for the <ORG> to justify its action by production of record or otherwise.

The counter-affidavit filed on 30th October, 2003 was also affirmed by a Special Deputy Collector. A presumption having regard to the passage of time can be raised that he was not the Collector who had made enquiry under Section 5-A of the Act and given an opportunity of hearing to the owner of the land. It has not been averred by him as to who had authorized him to affirm the affidavit on behalf of the State or how he was acquainted with the fact of the matter. In terms of the Rules of Executive Business, he is not authorized to act on behalf of the State. We have noticed hereinbefore, that only when <ORG> directed production of records a Principal Secretary to the Government affirmed an affidavit wherein it was not stated that the records are lost but it was merely stated that they were not readily traceable.

The <ORG> in a situation of this nature expects that the authorities of the State would take due care and caution in preserving the records in relation whereto a lis is pending before a court of law.

The <ORG> was also a party in Civil Appeal No. 910 of 1998. It is also relevant to note that even at that point of time, the <ORG> did not choose to prefer any appeal before this Court against the judgment and order passed by a learned Single Judge of <ORG> dated 27.3.1997. The learned counsel appearing on behalf of the Appellant herein accepted that the satisfaction required to be arrived at is not a subjective one but based on objective criteria.

Submission of Mr. <NAME> to the effect that the circumstances pointed out in the counter-affidavit filed in WPMP No. 27633 of 2003 should be held to be substitute for the reasons which the State must be held to have arrived at a decision, cannot be countenanced. When an order is passed by a statutory authority, the same must be supported either on the reasons stated therein or the grounds available therefor in the record. A statutory authority cannot be permitted to support its order relying on or on the basis of the statements made in the affidavit de'hors the order or for that matter de'hors the records.

<CITATION> [AIR 1952 SC 16], it is stated :

"We are clear that public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind; or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself."

Yet again in <NAME> (supra), this Court observed :

"The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of <NAME>, <NAME> in <NAME>."

Referring to <NAME> (supra), it was further observed :

"Orders are not like old wine becoming better as they grow older."

[The said decisions have been followed by this Court in <NAME> Vs. <NAME> and Others [(2004) 2 SCC 65].

Although assignment of reasons is the part of principles of natural justice, necessity thereof may be taken away by a statute either expressly or by necessary implication. A declaration contained in a notification issued under Section 6 of the Act need not contain any reason but such a notification must precede the decision of the appropriate Government. When a decision is required to be taken after giving an opportunity of hearing to a person who may suffer civil or evil consequences by reason thereof, the same would mean an effective hearing.

The Act is an expropriatory legislation. This Court in State of Madhya Pradesh and Ors. Vs. <NAME> and Ors. [1966 (3) SCR 557] observed that in such a case the provisions of the statute should be strictly construed as it deprives a person of his land without consent. [See also <NAME> and Ors. Vs. State of Rajasthan and Ors., 1967 (1) SCR 120 and <CITATION> ., ].

There cannot, therefore, be any doubt that in a case of this nature due application of mind on the part of the statutory authority was imperative.

It is not a case where this <ORG> is required to go into the question of malice either in fact or in law or the question of colourable exercise of power by the State any other statutory authority.

In view of our findings aforementioned, it is not necessary for us to go into the other questions raised by the parties.

For the reasons aforementioned, we are of the opinion that the impugned judgment suffers from no legal infirmity. These Appeals are, therefore, dismissed. No costs.


JUDGMENT <NAME>, J.

1. Section 144 of the Code of Civil Procedure cannot, in terms apply as no decree was varied or reversed but only an order under Order XXI, Rule 90, refusing to set aside a sale in execution, was reversed by <ORG>. '

2. Assuming that Section 151 of the Code of Civil Procedure allows an order for restitution in appropriate cases even though it does not fall under Section 144 of the Code of Civil Procedure, such an order cannot be made on the analogy of Section 144 unless the auction-purchaser was a party before <ORG> which set aside the sale in the proceedings instituted for setting it aside.

3. The mere fact that the decree-holder was a party to those proceedings will not suffice as the <ORG> auction-purchaser is not the representative of the decree-holder. <NAME> v. <NAME> (1907) I.L.R., 30 Mad., 507 which held otherwise has been disapproved of in <CITATION> (1911) I.L.R., 34 Mad., 417 to both of which decisions the present learned Chief Justice was a party.

4. The <NAME> says, that the 'auction-purchaser need not at all be a party to any proceedings for confirmation of or setting aside the sale.' The petition for restitution does not expressly state that the <ORG> auction-purchaser was a party to the proceedings taken to have the auction sale set aside. No records have been produced before us to establish that fact. We therefore cannot hold that Section 151 empowers the <ORG> to pass an order for restitution against a person not shown to be a party to and so bound by the order of the Appellate <ORG> setting aside the sale.

5. The appeal is dismissed with costs.


PETITIONER: <ORG>. MADURAI Vs. RESPONDENT: COMMISSIONER OF INCOME-TAX, <NAME> DATE OF JUDGMENT: 25/04/1967 BENCH: <NAME>, J.C. BENCH: <NAME>, J.C. RAMASWAMI, V. CITATION: 1968 AIR 124 1967 SCR (3) 798 ACT: Income-tax Act , 1922 , ss. 34(1)(b) , 66-Finance Act, 1956, proviso 2, Paragraph D-Notice to reopen assessment on the ground of "excessive relief" but reduction of rebate on super tax on the ground "assessed at too low a rate"-Duty to enquire whether proceedings validly initiated- "Rate" in s. 34(1) if means fraction of total income- Reference-Duty to decide all aspects of the question of law referred even though not specifically argued before the <ORG>. HEADNOTE: The Income-tax Officer issued a notice to the assessee for reopening the assessment for the year 1956-57 on the ground that "excessive relief" within the meaning of s. 34(1)(b) of the Income-tax Act, 1922 had been granted to the assessee. Rejecting the contention of the assessee that the income had not been the subject of "excessive relief" and therefore the proceedings were unauthorised and that the amount deemed to have been distributed under orders under s. 23A could not be taken into consideration for the purpose of reducing the rebate of super-tax admissible under proviso 2 to paragraph D of the Finance Act, 1956, the Income-tax Officer ordered that the rebate of super-tax granted be reduced. The Appellate Assistant Commissioner held that only a part of the amount of dividend deemed to have been declared by the assessee could be taken into consideration in withdrawing the rebate of super-tax. On appeal by the Commissioner, the <ORG> held that the case of the assessee did not fall within any of the situations contemplated by s. 34(1) (b), but confirmed the order of the Appellant Assistant Commissioner. On the question "whether the setting aside of the assessment under s. 34(1) (b) was correct in law" <ORG> was of the opinion that the claim of the department to initiate proceedings under s. 34(1)(b) on the ground that excessive relief was allowed could not be sustained, but held that the proceedings under the section could be initiated on the ground that the income profits and gains of the asses-see were " assessed at too low a rate". <ORG> did not 'record its decision on the plea of the assessee that in a proceeding to re-assess income initiated on a notice that income had been subject to "excessive relief", the Income-tax Officer was incompetent to re-assess income on the footing that income was assessed at too low a rate. In appeal to this Court the assessee contended that (i) <ORG> was in error in enlarging the scope of the enquiry and entering upon a question never mooted before the <ORG> and (ii) by the use of the expression "assessed at too low a rate" it was intended that the jurisdiction of the Income-tax Officer would be attracted only when the wrong fraction had been applied in the determination of super-tax and not when the computation of tax depended on other factors. HELD : (i) The case must be remanded to <ORG> to determine whether the proceedings were validly initiated on the notice issued against the asscssee. [807B] 799 The scope of the enquiry arising out of the arguments before the <ORG> was not whether the assessment was proper, but, whether the Income-tax Officer was in the circumstances of the case competent to initiate the proceeding under s. 34(1) (b) of the Income-tax Act for bringing to tax the excessive -rebate granted to the assessee. The question referred to <ORG> had to be reframed accordingly- The question, as framed by the <ORG>, though defective, included that enquiry. <ORG> was, therefore, bound to decide all aspects of that question and it was wrong in making the assumption that because a particular aspect of the question of law raised was not specifically argued before the <ORG> <ORG> could not deal with it. [S02D-E; 806F-H; 807A-B] <NAME>, Income-tax Officer, Companies Circle I (1) and <CITATION> . 48 I.T.R. 182 (S.C.), referred to. (ii) <ORG> was right in holding that the rebate of tax and the reduction of such rebate were essentially matters of measure or Standards of rate. The expression rate in s. 34(1) does not mean a fraction of total income; it is often used in the sense of standard or measure. Provided the tax is computable by the application of a prescribed standard or measure, though not directly related to taxable income, it may be said that the tax is computed at a certain rate. The aim and object of the Finance Act , 1956, is to prescribe the standard or measure of income-tax or super-tax, and an assessee escaping some of its provisions and failing to pay the full measure of tax is "assessed at too low a rate". [806B-C] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2453 of 1966. Appeal from the judgment and order dated August 9, 1963 of <ORG> in T.C. No. 152 of 1961. <NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for the respondent. The Judgment of the Court was delivered by <NAME>, <NAME> <ORG> (Private) Ltd.-hereinafter called "the <ORG>"-the public are not substantially interested within the meaning of S. 23A of the Indian Income-tax Act, 1922. In dealing with the assessment of income of the <ORG> for the assessment years 1946-47 to 1951-52, the Income-tax Officer, Central Circle, Madras, passed orders under s. 23A of the Income-tax Act, 1922, and directed that the total income of the <ORG> as determined in the years of assessment less tax payable be deemed to have been distributed amongst the shareholders of the <ORG> as on the relevant dates of the General Body Meetings. The following table sets out the relevant details Assessment Amount of divi- Date of order passed year. dend deemed to under s. 23A deeming have been dec- dividend to have been declared.

lared.

1946-47 46,563 March 18,1952 1947-48 43,959 - do- 1948-49 47,829 - do- 1949-50 97,875 - do- 1950-51 92,591 - do- 1951-52 25,899 March 30, 1955 3,54,716

On July 7, 1955 the Company in a general meeting resolved that the amount of Rs. 3,54,716/- which was under the orders of the Income-tax Officer deemed to have been distributed as ;dividend amongst the shareholders pursuant to orders under s. 23 A of the Income-tax Act , be distributed as dividend to the shareholders, and in pursuance of that resolution proportionate part of the dividend due to each shareholder was credited to his account.

The Income-tax Officer completed the assessment of the Company for the year 1956-57 and determined Rs. 5,69,396/as its total income. The Income-tax Officer computed the supertax payable by the Company under the Finance Act , 1956, at the rate of six annas and nine pies in the rupee of the total income and granted a rebate at the rate of four annas in the rupee in accordance with the provisions of Cl. D proviso (i) (b) & (ii) ,of the Schedule to that Act. Sometime thereafter the Income-tax Officer being of the opinion that excessive relief had been granted to the Company within the meaning of S. 34 (1) (b) of the Income- tax Act, issued a notice on January 31, 1959 for reopening the assessment for the year 1956-57. The Company filed its return of income in compliance with the notice and contended that the proceedings commenced by the, Income-tax Officer were unauthorised, because the income of the Company had not been the subject of "excessive relief" within the meaning of S. 34(1)(b), and that actual distribution of dividends already deemed to have been distributed in accordance with the orders passed under s.'23A cannot be taken into consideration for the purpose of reducing the rebate of super-tax admissible under the proviso 2 to Paragraph D of the Finance Act, 1956. The Income-tax Officer rejected the contentions and ordered that the rebate of super-tax to the extent of Rs. 80,978/- be withdrawn.

In appeal to the Appellate Assistant Commissioner it was held that in the circumstances of the case, assessment could be reopened under S. 34(1) (b) on the ground that the income had' been made the subject of "excessive relief", but only Rs. 77,600/and not the whole amount of Rs. 3,54,716/- which was deemed to be distributed under orders under s. 23A could be taken into consideration as dividend distributed by the <ORG> during the previous year relevant to the assessment year 1956-57. The Commissioner of Income-tax appealed to <ORG>. He, contended that in the circumstances of the case the amount of Rs. 3,54,716/- was liable to be taken into consideration for the purpose of withdrawing the rebate of supertax admissible under the Finance Act , 1956. The <ORG> held that the case of the <ORG> "did not fall within any of the situations contemplated by s. 34(1)(b) " and the <ORG>'s income had not been the subject of excessive relief as the rebate of super-tax originally granted was out of the tax otherwise computable and not from the assessed income. But the <ORG> confirmed the order of the Appellate Assistant Commissioner directing that Rs. 77,600/- be taken into account in withdrawing rebate of super-tax.

The <ORG> then referred three questions to <ORG> at Madras :

"1. Whether the <ORG> was justified in disposing of 'the appeal as it did.?

2. Whether the <ORG> was right in law in entertaining the assessee's contention relating to the applicability, of s. 34(1) (b) under Rule 27 of the Appellate <ORG> Rules ?

3. Whether the setting aside of 'the assessment under s. 3 4 (I ) (b) was correct in law ? "

<ORG> decided in favour of the <ORG> on the first two questions. In considering the third question <ORG> observed that the plea of the <ORG> that re- assessment proceedings under s. 34 (I) (b), on the ground of "excessive relief cannot be initiated, must be accepted. The Court then proceeded to consider whether allowance of rebate to which the assessee was not entitled, did not amount to assessing income at too low a rate, and observed that "there can be no question that the rebate of tax rate and a reduction of such rebate is essentially the arithmetic of rate. Reading however the provisions of the Finance Act , 1956, as a whole in the perspective that its chief aim and object is to prescribe the rate of income-tax and super-tax, it seems to us that an assessee escaping some of its provisions and failing to pay the full measure of tax is assessed at too low a rate". <ORG> accordingly held that proceedings under s. 34(1) (b) could be initiated when rebate in the payment of super-tax was -ranted to the assessee without reducing it in the circumstances set out in the second proviso to Part 11 of the First Schedule Paragraph D in the Finance Act , 1956, on the ground that the income, profits and gains of the <ORG> were assessed to tax at too low a rate. <ORG> answered the third question in favour of the Commissioner. Against the order passed by <ORG> on the third question, this appeal is preferred by the, <ORG>. The Commissioner of Income- tax has not challenged the correctness of the decisions on Questions I & 2.

We are unable to agree with counsel for the assessee that the first question raised an enquiry not only as to the correctness of the procedure followed by the <ORG>, but also to the right of the Income-tax Officer to initiate a proceeding under S. 34(1) (b) to bring to tax rebate which was not reduced. In terms, the first question relates to a matter of procedure : and in the answer recorded to that question it is not implied that the Income-tax Officer had no power to initiate the proceeding under S. 3  4 ( 1 ) (b). The third question raised by the <ORG> was defective. The true scope of the enquiry arising out of the argument before the <ORG> was not whether the order of assessment was proper. but whether the proceeding for re-assessment was properly initiated under S. 34(1) (b). That is how <ORG> also understood the question. We therefore re-frame the question as follows :

"Whether the Income-tax Officer was in the circumstances of the case competent to initiate the proceeding under s. 34 (I) (b) of the Indian Income-tax Act for bringing to tax the excessive rebate granted to the assessee ?"

Section 34(1) (b) of the Indian Income-tax Act , as it stood at the relevant time, provided "If-

(a)

(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profit% or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act or that excessive loss or depreciation has been computed, he may in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under subsection (2) of section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section It was held by <ORG> in <NAME>, Income-tax Officer, Companies Circle I (1) <CITATION> .(1) that "the relief referred to in s. 34(1) (b) of the Income-tax Act , 1922, can only be such relief as is granted to the assessee by reason of his income, profits and (rains being chargeable to tax. It is, therefore, referable to the various kinds of relief afforded to the assessee under the Act in respect of his income, profits and gains, such, for instance, as are granted under ss. 15A, 15C, 49A, 49B, 49C, 49D and 60 of the Act." This Court affirmed the judgment of <ORG> in <NAME>, Income-tax Officer, Companies Circle I (1) and <CITATION> . 2 In Simplex Mills(2) case advance tax paid by the assessee for the assessment year 1952-53 was found refundable and the Income-tax Officer allowed interest on the tax paid under s. 18A(5) of the Incometax Act, 1922, as it then stood. The Act was amended by the Income-tax (Amendment) Act , 1953, with retrospective effect from April 1, 1952, and it was found that interest allowed to the Company was excessive. The Income-tax Officer then initiated a proceeding under s. 34 (1 ) (b) to reassess the tax on the ground that income for that year had been under-assessed and had been made the subject of excessive relief. <ORG> rejected the claim of the Income-tax Officer, and this Court held that the original assessment could not be reopened under s. 34 , because it could not be said either that there was under- assessment of the income, or that excessive relief was granted. In the light of that judgment, <ORG> opined that the claim of the <ORG> to initiate a proceeding under s. 34(1) (b) on the -round that excessive relief was allowed could not be sustained. But <ORG> held that a proceeding for reassessment could be initiated on the ground that income had been assessed at too low a rate. Counsel for the Company contends that <ORG> was in error in proceeding to enlarge the scope of the enquiry and in entering upon a question which was never mooted before the <ORG>.

Section 2 of the Finance Act, 1956, provides insofar as it is material, that :

(1) 48 I.T.R. 980.

(2) 48 1.T.R. 182 (S. C.) .lm15 "Subject to the provisions of sub-sections (2), (3), (4) and (5), for the year beginning on the 1st day of April, 1956,-

(a) income-tax shall be charged at the rates specified in Part I of the First Schedule.........

(b) rates of super-tax shall, for the purposes of section 55 of the Indian Income-tax Act, 1922 (XI of 1922) . . ., be those specified in Part 11 of the First Schedule.................

Part 11 of the First Schedule specifies the rates of super- tax.

Clause D provides :

"In the case of every company-

on the whole of total income Rate Six annas and nine pies in the rupee. Provided that- (i)

(ii) a rebate at the rate of four annas per rupee of the total income shall be allowed in the case of any company which satisfies condition (a), but not condition (b) of the preceding clause; and

(iii) Provided further that-

(i) the amount of the rebate under clause (i) or clause (ii), as the case may be, of the preceding proviso shall be reduced by the sum, if any, equal to the amount or the aggregate of the amounts, as the case may be, computed as here-

under :-

(a) on the amount representing the face value of any bonus shares or the amount of any bonus issued to its share-holders during the previous year with a view to increasing the paid-up capital, except to the extent to which such bonus shares or bonus have been issued out of premiums received in cash on the issue of its shares; and at the rate of two annas per rupee.

(b) in addition, in the case of a Company referred to in clause (ii) of the preceding proviso which has distributed to its shareholders during the previous year divi- dends in excess of six per cent of its paid-up capital, not being dividends payable at a fixed rate-

on that part of the said divi-......at the rate dends which exceeds 6 per cent. of two annas but does not exceed 10 per per rupee.

cent. of the paid-up capital;

on that part of the said divi- at the rate of' dends which exceeds 10 per cent three annas of the paid-up capital; per rupee.

Paragraph-D read with s. 2(b) of the Finance Act, 1956 fixes the rate of super-tax payable by Companies for the purpose of s. 55 of the Indian Income-tax Act. From the super-tax declared payable, in certain conditions rebate is granted, and that rebate is also related to the total income of the assessee. By the second proviso, part of the rebate may be withdrawn, if the Company has in the previous year issued bonus shares or bonus or has distributed dividend in excess of six per cent. of its paid-up capital. The super-tax and the rebate admissible are both related to the total income, whereas the reduction of rebate is related to the face value of the bonus shares or of the value of bonus or the amount of dividends distributed. Super-tax payable by a Company is therefore determined as a fraction of the total income, reduced by a percentage of the value of the bonus shares or bonus or dividends distributed.

Counsel for the Company contends that the expression "too low a rate" used in s. 34(1) (b) must, having regard to the context in which the expression is used and in the scheme of the Indian Income-tax Act , be regarded merely as the fraction which determines tax liability of the assessee, but when in computing super-tax liability, the Income-tax Officer has after determining the amount by applying the fraction to reduce the resultant by reference to a factor unrelated to total income, it cannot be said that tax is charged at a certain rate. Counsel says that the <ORG> has not used the expression "assessed at too low an amount" but the expression used is "assessed at too low a rate" therefore says counsel for the Company the jurisdiction of the Income-tax Officer will be attracted only when the wrong fraction has been applied in the determination of super-tax, and not when the computation of tax depends on other factors. We are unable to accept this contention. The assumption that the expression "rate" has been used in s. 34(1) as meaning -a fraction of total income is, in our judgment, not warranted. By the use of the expression "rate" in the context in which it occurs, undoubtedly a relation between the taxable income and the tax charged is intended, but the relation need not be of the nature -of proportion or fraction. The expression "rate"' is often used in the sense of a standard or measure. Provided the tax is computable by the application of a prescribed standard or measure, though not directly related to taxable income, it may be called tax computed at a certain rate. We agree with <ORG> that the rebate of tax and the reduction of such rebate are essentially matters of measure or standards of rate. The chief aim and object of the Finance Act , 1956, is to prescribe the standard or measure of income-tax and super- tax and it seems that an assessee escaping some of its provisions, and failing to pay the full measure -of tax is assessed at too low a rate.

But the view we have taken is not sufficient to dispose of the appeal. It may be recalled that the question arising out of the order of the <ORG> was about the competence of the Income-tax Officer, to initiate proceedings under S. 34 (I) (b). It is true that it was not argued before the <ORG> on behalf of the <ORG> that on the notice served by the Income-tax Officer proceedings for reassessment could only be initiated on the ground that income had been the subject of excessive relief, and not on any other ground. But the <ORG> did contend that the initiation of the reassessment proceeding was invalid, and the plea, that the initiation was invalid because the notice was defective was only tin aspect of the plea raised by the <ORG>. The question is -originally raised by the <ORG>, and as reframed by us, includes that enquiry.

Counsel for the Company did argue before <ORG> that in a proceeding to reassess income initiated on a notice that income has been subject to excessive relief, the Income-tax Officer was incompetent to reassess income on the footing that income was assessed at too low a rate, but <ORG> did not record their decision on that plea : they merely suggested that it will be open to the Company to raise the question when the matter is again taken up for consideration. If however the question arising out of the order of the <ORG> was, as correctly pointed out by <ORG>, one about the "validity of initiation of proceeding under s. 34(1) (b)", <ORG> was bound to decide all aspects of that question raised before them, before recording an answer : if they did not, the <ORG> would be powerless to enter upon an enquiry of any other aspect of the question after answer to the question is recorded by <ORG>. We are unable to agree with the assumption made by <ORG> that because a particular aspect of the question of law raised was not specifically argued before the <ORG>, <ORG> cannot deal with that aspect.

We are, in the state of the record before us, unable to record an answer to the question, and the case must be remanded to <ORG> to determine whether the proceedings were validly initiated on the notice issued against the <ORG>. The notice which was served upon the <ORG> is not included in the paper book prepared for use in this <ORG>. The notice must of necessity be part of the record of the Income-tax Officer, even if it be not on the record of the <ORG>. It will be open to <ORG>, in determining the contention raised by the <ORG>, to call for a supplementary statement of the case relating to the form and contents of the notice and the validity thereof from the <ORG>. After receiving the supplementary state- ment, if any, <ORG> will proceed to dispose of the third question in the light of the reasons set out by us in this judgment.. Costs of this appeal will be costs in <ORG>.

Y.P. Appeal remanded. SupCI/67-8


JUDGMENT S.K. Sen, J.

1. This revisional application was filed by the petitioners <NAME> and five others for quashing the proceedings against them pending in the Court of <NAME>, Magistrate, First Class, Suri. The facts are briefly as follows:

2. On 26th December 1958 one Sheikh <NAME> lodged a first information report at Nanoor P. S. against 17 persons including the six petitioners, alleging that in the early morning of that day, a bullock belonging to one <NAME> had damaged gram plants belonging to one <NAME>., that the bullock had been seized by <NAME>. and <NAME> for impounding; that <NAME> asked for the release of the bullock and there was a quarrel, whereupon fifteen or sixteen persons including the six petitioners assaulted <NAME>. and <NAME> and rescued the bullock. The police after investigation submitted charge-sheet against eight accused persons under Section 147 , 324 and 325 of the Indian Penal Code. On the 1st of May 1959, when the Magistrate was to peruse police papers for considering whether a charge or charges should be framed against the persons sent up the informant filed a petition stating that there was a prima facie case against the six petitioners and that the police wrongfully refused to send them up. The learned Magistrate then perused the police papers and heard both sides, and he decided that there was prima facie evidence against the six petitioners also; and so by an order dated 15th July 1959 he summoned these six petitioners under Section 147 of the Indian Penal Code. It is against that order that the petitioners have come up.

3. Mr. <NAME> appearing for the petitioners has urged that the learned Magistrate had no jurisdiction to summon the petitioners who had not been sent up by the police along with the charge-sheet.

4. The learned Magistrate in the course of his order dated 15th July 1959 observed that when a Magistrate takes cognizance under Section 190 (1) (b) of the Criminal Procedure Code on a police report, he takes cognizance of the offence and not merely of the particular persons named in the charge-sheet and, therefore, the Magistrate can issue process against other persons who appear to him on the basis of the report and other materials placed before him to be concerned in the commission of the offence. In the particular case, after perusing the statements under Section 161 of the Criminal Procedure Code, the learned Magistrate observed that more than one witness having named the six persons as concerned in the unlawful assembly which assaulted the men on the side of the informant and rescued the bullock, prima facie there was a good case under Section 147 of the Indian Penal Code against the six petitioners; and so he summoned them. The view taken by the learned Magistrate finds support in the observations made in the case <NAME> v. Emperor, 26 Cri LJ 181: (AIR 1924 Sind 71), which is a Full Bench case of <ORG>, Sind. Though the case comes from Sind, the learned Judges of the Full Bench made a lucid exposition of the relevant law, and the case has been quoted as a leading case in <NAME> Commentary on the Criminal Procedure Code . It was observed in that case as follows :--

"Under Section 190 of the Criminal Procedure Code, a Magistrate takes cognizance of an offence and not of the offender... .The fact that the <ORG> in a report submitted under Section 173 of the Criminal Procedure Code have not mentioned all the parties concerned in the offence which has been sent up for enquiry, does not debar a Magistrate from taking action against persona other than those mentioned in the <ORG> report. Once a Magistrate has taken cognizance of a case and proceeds to deal with the evidence brought before him, it is his duty to see that justice is done with regard to any other person that may be suspected of being concerned in the offence. His action against such persons would fall under Section 190 , Clause (b) and not Clause (c) of the Code ."

5. Mr. <NAME> has sought to distinguish the case by pointing out that in the case which the Full Bench of the Judicial Commissioners of Sind were considering, the evidence had been recorded by the Magistrate, and on the basis of that evidence the Magistrate considered that there was a good Prima facie case against certain other persons not sent up with the charge-sheet and the learned Magistrate summoned those persons. Mr. <NAME> has urged that when the Magistrate has recorded evidence in Court, he can for the purpose of doing complete justice between the parties summon any other person who appears to be concerned in the offence. In this connection Mr. <NAME> has referred to <NAME>, J.'s decision in <CITATION> , where it was held in connection with a transferee Magistrate that such a Magistrate could issue process against any other person not summoned by the Magistrate who took cognizance of the case, if on the evidence before him the transferee Magistrate Was satisfied that such other person was concerned in the offence. Mr. <NAME> .has urged that the Magistrate, whether the original Magistrate who takes cognizance of the offence or a transferee Magistrate, gets jurisdiction to summon other accused not originally summoned or not sent up by the police with the charge-sheet, only after the evidence had been recorded in Court; and that by merely looking at the police papers the Magistrate cannot summon person not sent up with the charge-sheet.

6. It is true that under the procedure for the trial of the warrant cases before the amendment of the Criminal Procedure Code in 1955 the Magistrate had to record the evidence before he could decide whether there was a prima facie case against anybody, including also the persons sent up by the police along with the charge sheet. The Magistrate could not act on the basis of the statements recorded by the police under Section 161 of the Criminal Procedure Code. For framing charge against the accused sent up as well as for deciding whether any other additional persons were concerned in the offence, the Magistrate had to act on the evidence which he himself had recorded. But the amendment of the Criminal Procedure Code by the Amending Act of 1955 has introduced a substantial change in the powers of the Magistrate in this connection. Under Section 251A of the Criminal Procedure Code the Magistrate after consideration of the documents referred to under Section 173 and hearing the prosecution and the defence, has to decide whether a charge has been prima facie established against any of the accused, and if he is satisfied on that point, he will frame a charge. Thus, before examination of any witness, by perusing the statements recorded by the police under Section 161 of the Criminal Procedure Code and the other documents referred to under Section 173 like the first information report and the dying declaration, if any, and the medical report, the Magistrate has to decide whether there is a prima facie case against the persons sent up by the police along with the charge-sheet. It is clear that, at the same time, the Magistrate can also decide on the basis of the same materials whether there is a prima facie case against other persons not sent up by the police, and if the Magistrate is so statisfied certainly the Magistrate is entitled to summon them and place them on trial along with tne other persons sent up by the police. The Magistrate takes cognizance of the offence on the police report or charge-sheet; for as has been repeatedly held in many decided cases, the Magistrate takes cognizance of the offence and not of the offender, and having taken cognizance of the offence on the police report, if he summons additional persons not sent up by the police, he is still ndt taking cognizance under Clause (c) of Section 190(1) but acting under the cognizance which he has already taken under Clause (b). Therefore, the same procedure tor the trial remains applicable. The competence of the Magistrate to summon additional persons as accused without examination of witnesses in Court, therefore, follows from the altered procedure under the Amended Criminal Procedure Code . Mr. <NAME> has referred to a decision of <ORG> of this Court in Kashemali Gomasta v. The <ORG>, Crl. Revn. No. 226 of 1960 D/- 12-9-1960 (Cal) in support of his contention that a Magistrate has no jurisdiction to summon accused not sent up by the police. But a perusal of that case shows that police submitted a cleat final report, that is, did not find any offence established against anybody. In such a case there was no charge-sheet on which the Magistrate could take cognizance under Clause (b) of Section 190(1) of the Criminal Procedure Code. Therefore merely on a naraji petition and on a perusal of the police papers the Magistrate could not take cognizance. He must treat the naraji petition as a complaint and examine the complainant on oath, and only then he would have jurisdiction to summon persons against whom he may consider that there is a prima facie case. The case cited, therefore, does not support the proposition that even when the Magistrate has taken cognizance of a case on a charge-sheet submitted by the police, the Magistrate cannot after examination of the statements recorded under Section 161 of the Criminal Procedure Code summon additional accused. Mr. <NAME> has also referred to the decision, <CITATION> , , where also the Magistrate without examination of the complainant on oath on his naraji petition proceeded to take cognizance of a case, and the procedure was held to be bad. There also it appears that the investigating officer had submitted a final report stating that the complainant's case was altogether false. In the circumstances, when the complainant filed a naraji petition, the Magistrate was not entitled to take cognizance without examination of the complainant on oath under Section 200 of the Criminal procedure Code. This decision also does not help to establish the proposition urged by Mr. <NAME>. We must, therefore, hold that the learned Magistrate was right in the view he took, that he was entitled to summon additional accused against whom he considered that there was good evidence, after perusal of the statements recorded by the police under Section 161 of the Criminal Procedure Code and the other documents referred to in Section 173 of the Criminal Procedure Code.

7. This Rule is, therefore, discharged.

<NAME>, J.

8. I agree.