PETITIONER: <ORG> AND ORS. ETC. Vs. RESPONDENT: B.M. VIJAYA SHANKAR AND ORS. DATE OF JUDGMENT14/02/1992 BENCH: <NAME>, <NAME> BENCH: <NAME>, <NAME> OJHA, <NAME> (J) PANDIAN, <NAME>J) KULDIP SINGH (J) SHETTY, <NAME> (J) CITATION: 1992 AIR 952 1992 SCR (1) 668 1992 SCC (2) 206 JT 1992 (4) 348 1992 SCALE (1)451 ACT: Service Law-Karnataka Public Service <ORG>- Recruitment to <ORG> <ORG>-Competitive Examinations- General Instructions (I) (XII) and (XIII)-Instructions to candidates not to write Roll Numbers anywhere in the Answer Sheet except on the space provided on the front page-Breach of instruction by some candidates-Non-evaluation of answer sheets by <ORG>-Action of <ORG> held not arbitrary-Failure to provide hearing opportunity to candidates held not violative of natural justice-Directions given to grant relaxation in age and chance to avail. Natural justice-Rule of hearing-Exceptions-Rule is construed strictly in academic disciplines-It should be construed more strictly in competitive examinations. HEADNOTE: The Karnataka Public Service <ORG> conducted competitive examinations for <ORG>. Clause (I) of the General Instructions to the candidates provided that the candidates should write their roll number only on the front page of the answer books in the space provided for it and not anywhere else inside the answer sheet. Clause (xii) provided that the candidates must abide by the instructions and clause (xiii) provided that failure to abide by the instructions will render them liable to expulsion from examination or such other punishment as the <ORG> may deem fit. Some of the candidates violated the instructions and entered their roll numbers inside the answer books. Consequently their answer books were not got evaluated by the <ORG>. The candidates challenged the action of the <ORG> before <ORG> which directed the <ORG> to get their answer books evaluated by holding that (i) no penalty was provided for breach of the instructions and (ii) the failure of the <ORG> to afford any opportunity to the candidates to explain their bonafide and innocence was arbitrary. Against the decision of the <ORG> the <ORG> and 669 the <ORG> filed appeals in this <ORG>. Allowing the appeals and setting aside the order of the <ORG>, this <ORG>, HELD: 1. The <ORG> faulted in inferring that no penalty was provided for breach of instructions requiring a candidate not to write his role number inside the answer book. The expression `such other punishment as the <ORG> may deem fit to impose' in clause (xiii) of the General Instructions read with clause (xii) provides action for breach of that which is, clearly specified. Provisions attempting to infuse discipline in competitive examinations cannot be construed with same yardstick as a provisions in penal statutes. Direction not to write roll number was clear and explicit. Once it was violated the issue of bonafide and honest mistake did not arise. [671C, G-H, 672A, 673D] 1.1. However, the <ORG> did not impose any penalty on the candidates because neither their examination was cancelled nor were they debarred from taking any examination conducted by the <ORG>. The only action taken was that those answer books in which roll number had been written inside were not subjected to evaluation. Therefore the action of the <ORG> could not be characterised as arbitrary. [672B-C] 2. Natural justice is a concept which has succeeded in keeping the arbitrary action within limits and preserving the rule of law. But with all the religious rigidity with which it should be observed, since it is ultimately weighed in balance of fairness, the courts have been circumspect in extending it to situations where it would cause more injustice than justice. Absence of any expectation of hearing in matters which do not affect any interest and call for immediate action, such as the present one, where it would have delayed declaration of list of other candidates which would have been more unfair and unjust are rare but well recognised exceptions to the rule of natural justice. [672F-H; 673C-D] 2.1. Even though the procedure of affording hearing is as important as decision on merits yet urgency of the matter, or public interest at times require flexibility in application of the rule as the circumstances of the case and the nature of the matter required to be dealt may serve interest of justice better by denying opportunity of hearing and permitting the person concerned to challenge the order itself on merits not for lack of hearing to 670 establish bonafide or innocence but for being otherwise arbitrary or against rules. [672G-H] 2.2. Rule of hearing has been construed strictly in academic disciplines. It should be construed more strictly in such cases where an examinee is competing for <ORG> post. Present case can safely be placed in a category where natural justice before taking any action stood excluded as it did not involve any misconduct or punishment. Therefore the <ORG> in issuing the directions approached the matter technically and completely misdirected itself in this regard. [673E-F, 673H, 673G] JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 369- 393 of 1991.

From the Judgment and Order dated 13.9.1990 of <ORG>, Bangalore, in Application Nos. 875, 4243, 4632, 1978 to 1980, 2974, 676, 677, 4483, 1499, 2022,1500,2023, 3357, 1865, 1781, 1684, 3484, 3479, 2724, 2080, 3926, 4113, 4279, 3527 and 4553 of 1990.

WITH Civil Appeal Nos. 825-826 and 394-397 of 1991. <NAME>, <NAME>, <NAME>, <NAME>, Ms. <NAME>, <NAME>, <NAME>, Ms. <NAME>, <NAME>, <NAME>, <NAME> and <NAME> for the appearing parties.

The Judgment of the Court was delivered by <NAME>, J. Does the rule of natural justice has no exception ? Is denial of opportunity of hearing, in every circumstance, arbitrary? The State of Karnataka and <ORG>, through these appeals, seek answer to these questions. They are aggrieved by directions, issued by <ORG>, to get the answer books of candidates evaluated who in the competitive examinations conducted by the commission for <ORG> for categories `A' and `B' post, were guilty of writing their roll numbers not only on the front page of the answer books, in the space provided for it, but even at other places in disregard of instructions issued by the <ORG>. Basis for the direction was failure of the <ORG> to afford any opportunity to the candidates to explain their bonafide and innocence therefore it was arbitrary and it entailed grave consequences for those who were aspirants for entering into public service.

Power and authority of the <ORG> to hold examinations, regulate its working and functioning take action against erring candidates guilty of misconduct are all provided for by the rules and instructions issued in exercise of power conferred by the Statutes. The claim of the candidates that they did not vest any right in the <ORG> to take such action was negatived by the tribunal. But it faulted in inferring that no penalty was provided for breach of instructions requiring a candidate not to write his roll number inside the answer book. Relevant clause (1) of the Instructions to Candidates is extracted below:

"Before commencing your answers please write your register number and other particulars in the space provided above. Do not write your name or register number or sign any where in the answer book or on any loose sheets, such as precis sheets,maps, graph papers, etc.' It is not disputed and it was found, even by the tribunal that it was printed on the first page of every, answer book. Its observance was mandatory and its disregard was punishable is clear from instruction (xii) and (xiii) of General Instructions to the candidates which are extracted below:

"(xii) The candidates must abide by such instructions as may be specified on the cover of the answer book or any further instructions which may be given by the Supervisor/Invigilator of the Examination.

(xiii) If the candidates fail to do so or indulge in disorderly or improper conduct, they will render themselves liable to expulsion from examination and or such other punishment as the <ORG> may deem fit to impose."

Is the expression, 'such other punishment as the commission may deem fit to impose' vague and thus arbitrary?

We do not think so.Read with clause (xii) it presents no difficulty. It provides action for breach of that which is, clearly, specified. It cannot be characterised as vague. And then any capricious exercise of power can always be assailed. More important than this is that provisions attempting to infuse discipline in competitive to be conducted by the <ORG> cannot be construed with same yardstick as a provision in penal statutes. Moreover the <ORG> did not impose any penalty on the candidates. Their examination was not cancelled nor they were debarred from taking any examination conducted by the <ORG> for that year or any year, in future. Their marks in papers, other than those in which they were found to have acted in disregard of instructions were declared. The only action taken was that those answer books in which roll numbers had been written inside were not subjected to evaluation. In our opinion there was nothing, basically,wrong in it. The <ORG> did not treat it as misconduct. The action could not be termed as arbitrary. Nor it was abuse of power which could be corrected by judicial review.

Such instructions are issued to ensure fairness in the examination. In the fast deteriorating standards of honesty and morality in the society the insistence by the <ORG> that no attempt should be made of identification of the candidate by writing his roll number anywhere is in the larger public interest. It is well known that the first page of the answer book on which roll number is written is removed and a fictitious code number is provided to rule out any effort of any approach to the examiner. Not that a candidate who has written his roll number would have approached the examiner. He may have committed a bonafide mistake. But that is not material. What was attempted to be achieved by the instruction was to minimise any possibility or chance of any abuse. Larger public interest demands of observance of instruction rather than its breach.

Was natural justice violated ? Natural justice is a concept which has succeeded in keeping the arbitrary action within limits and preserving the rule of law. But with all the religious rigidity with which it should be observed, since it is ultimately weighed in balance of fairness, the courts have been circumspect in extending it to situations where it would cause more injustice than justice. Even though the procedure of affording hearing is as important as decision on merits yet urgency of the matter, or public interest at times require flexibility in application of the rule as the circumstances of the case and the nature of the matter required to be dealt may serve interest of justice better by denying opportunity of hearing and permitting the person concerned to challenge the order itself on merits not for lack of hearing to establish bonafide or innocence but for being otherwise arbitrary or against rules. Present is a case which, in our opinion, can safely be placed in a category where natural justice before taking any action stood excluded as it did not involve any misconduct or punishment.

Competitive examinations are required to be conducted by <ORG> in strict secrecy to get the best brain. Public interest requires no compromise on it. Any violation of it should be visited strictly. Absence of any expectation of hearing in matters which do not affect any interest and call for immediate action, such as the present one, where it would have delayed declaration of list of other candidates which would have been more unfair and unjust are rare but well recognised exceptions to the rule of natural justice. It cannot be equated with where a student is found copying in the examination or an inference arises against him for copying due to similarity in answers of number of other candidates or he is charged with misconduct or misbehavior. Direction not to write roll number was clear and explicit. It was printed on the first page of every answer book. Once it was violated the issue of bonafide and honest mistake did not arise. Its consequences, even, if not provided did not make any difference in law. The action could not be characterised as arbitrary. It was not denial of equal opportunity. The reverse may be true. The tribunal appears to have been swayed by principles applied by this <ORG> where an examinee is found copying or using unfair means in the examination. But in doing so the tribunal ignored a vital distinction that there may be cases where the right of hearing may be excluded by the very nature of the power or absence of any expectation that the hearing shall be afforded. Rule of hearing has been construed strictly in academic disciplines. It should be construed more strictly in such cases where an examinee is competing for <ORG> post. The very nature of the competition requires that it should be fair, above board and must infuse confidence. If this is ignored then, as stated earlier, it is not only against public interest but it also erodes the social sense of equality. The tribunal in issuing directions approached the matter technically and has attempted to make out much where it would have been better part of discretion to refuse to interfere. The tribunal completely misdirected itself in this regard. In our opinion its order cannot be maintained.

Before concluding we express our unhappiness on the letter of First member of <ORG> sent to this court that the Special Leave Petitions were filed without authority against the decision of the <ORG> by the Chairman and the secretary. We do not make any comment on it but we shall be failing in our duty if we do not place it on record that but for the action of the Chairman and the Secretary incalculable harm would have been caused to the institution.

In the result these appeals succeed and are allowed. The order passed by the tribunal is set aside. The claim petition filed by the candidates shall stand dismissed, except to the extent indicated below.

Claim petitions were allowed on 13th September 1990. Nearly one and half years have elapsed since then. Many of the candidates might not have availed of their chance in the meantime. They might have become over age. therefore, we consider it necessary to direct that the <ORG> shall grant relaxation of age and of chance to be availed, if there is any restriction in this regard, to those candidates whose answer books were not evaluated for the reason that they had violated the instructions and entered their roll numbers inside the answer books. We were informed that there were large number of such candidates. Therefore, this decision will apply to respondents as well as others who appeared in the examination. Relaxation shall be for one chance only to be availed of in the next examination.

The appeal nos. 394-397/91 have been filed by the selected candidates. Since the appeal of the <ORG> has been allowed it is not necessary to pass any order in these appeals. They shall stand disposed of accordingly.

parties shall bear their own costs.

T.N.A. Appeals allowed.


PETITIONER: <NAME> AND ANOTHER Vs. RESPONDENT: THE STATE OF MADHYA PRADESH. DATE OF JUDGMENT: 14/05/1954 BENCH: <NAME>, <NAME> (CJ) BENCH: <NAME>, <NAME> (CJ) MUKHERJEA, <NAME>, VIVIAN BHAGWATI, <NAME>, T.L. VENKATARAMA CITATION: 1954 AIR 465 1955 SCR 313 CITATOR INFO : R 1957 SC 478 (11) R 1957 SC 510 (14) RF 1957 SC 896 (12) R 1960 SC 475 (4,9,13,16) RF 1961 SC 4 (4,15) R 1961 SC 705 (17) R 1961 SC1602 (12) F 1961 SC1731 (13) RF 1964 SC 381 (38) R 1965 SC1107 (60) R 1966 SC1788 (10,14) RF 1967 SC 212 (27) RF 1967 SC 669 (21) RF 1968 SC1232 (15,53,82,95) RF 1970 SC 564 (185) RF 1973 SC 106 (147) RF 1973 SC1461 (227,450,566,1847,1848,1998) R 1974 SC 366 (56) E&D 1974 SC 543 (13) R 1974 SC1660 (18) R 1978 SC 851 (39) RF 1978 SC1296 (12) E 1980 SC 350 (4) R 1982 SC1126 (10,11) RF 1983 SC1019 (29,30) F 1987 SC1802 (9) R 1990 SC 560 (13,31) RF 1991 SC 672 (29) ACT: Constitution of India- Art. 19(1)(f) and (g)- Cotton Textile, (Control of Movement) Order, 1948, cl. 3- Promulgated under s. 3 of Essential Supplies (Temporary Powers) Act, 1946-PermitRequirement of-to dispose of or transport cotton textiles-Whether violation of Art. 19(1)(f) and (g)- Essential Supplies (Temporary Powers) Act, 1946 (XXIV of 1946) ss. 3, 4,6-Whether ultra vires the <ORG> on ground of delegation Of legislative powers-s. 6-Whether repeals or abrogates-pre-existing laws-Effect of the section -Delegation-Essential power of legislation- Whether can be, delegated-Principles underlying it- Requirements.of permit by clauses 3 and 4 of the Control Order--Whether in conflict with ss. 27 , 28 , 41 of the Railway Act. 381 HEADNOTE: Clause 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by <ORG> under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, does not deprive a citizen of the right to dispose of or transport cotton tex- B tiles purchased by him. It requires him to take a. permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this respect cannot be regarded as an A unreasonable restriction on the citizen's right under sub-clauses (f) and (g) of article 19(1) of the Constitution. The policy underlying the Control Order is to regulate the transport of cotton textiles in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or a refusal of a permit is to be governed by the policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of power there is ample power in Courts to undo the mischief. Messrs. <CITATION> (( S.C.R. 803) distinguished. It was settled by the majority judgment in the Delhi Laws Act case ('S.C.R. 747) that the essential powers of legislation cannot be delegated. The <ORG> must declare the policy of the law and the legal principles which are to control any -given cases and must provide a standard to guide the officials or the body in power to execute the law. The <ORG> has laid down such a principle in the Act and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at given prices. The preamble and the body of the sections in the Essential Supplies (Temporary Powers) Act, 1946, sufficiently formulate the legislative policy and the ambit and the character of the Act is such that the details of that policy can only be worked out by delegating that power to a subordinate authority within the framework of that policy. Therefore section 3 of the Act is not ultra vires the <ORG> on the ground of delegation of legislative power. Section 4 of the Act enumerates the classes of persons to whom the power could be delegated or sub-delegated by <ORG> and it is not correct to say that the instrumentalities have not been selected by the <ORG> itself. Accordingly section 4 of the Act is not ultra vires on the ground of excessive delegation of legislative powers. <NAME> v. <ORG> ( A.C. 708) applied. 382 The requirements of a permit by clause 3 and the provisions of clause 4 of the Central Order which empower the Textile Commissioner to direct a carrier to close booking or transport of cloth apparel, etc., are not in conflict with sections 27 , 28 and 41 of the Railways Act. These clauses merely supplement the relevant provisions of the Railways Act and do not supersede them.' Section 6 of the Act does not either expressly or by implication repeal any of the provisions of the preexisting laws ; nor does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means that the repealed statute must be regarded as if it had never been on the statute book. The effect of section 6 is not to repeal those laws or abrogate them but simply to by-pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act, 1946 or the orders made thereunder. Even assuming that the existing law stands repealed by implication, such abrogation or repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under - section 3 . Accordingly there is no delegation involved in the provision of section 6 and it cannot be held uncon- stitutional on that ground. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 7 of 1953.

Appeal by Special Leave from the Judgment and Order of the High Court of Judicature at Nagpur dated the 15th. September, 1952, in Criminal Case No. 45 of 1951 from <ORG> Hoshangabad, in Criminal Case No. 75 of 1949.

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

<NAME>, Advocate-General of Madhya Pradesh (<NAME> and <NAME>, with him) for the respondent. 1954. May 14. The Judgment of the Court was delivered by <NAME> facts giving rise to this appeal are these: The appellant, <NAME>, and his wife, Smt. <NAME>, were arrested at Itarsi, by <ORG> on the 29th November, 1948, for contravention of section 7 of the Essential Supplies (Temporary Powers) Act, 1946, read with clause (3) of the Cotton Textiles (Control of Movement) Order., 1948, having been found in possession of new cotton cloth " weighing over six maunds which cloth, it was alleged,was being taken by them from Bombay to Kanpur without any permit. After various vicissitudes through which the chalan passed the case was eventually withdrawn by <ORG> to itself on the 3rd of September,'1951, as it involved a decision of constitutional issues. By its order dated the 15th September, 1952, <ORG> upheld the provisions of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, as constitutional. It also upheld the constitutionality of the impugned Order. Section 6 of the Act was held to be inconsistent with the provisions of the Railway Act but it was held that its unconstitutionality did not affect the prosecution in this case. <ORG> directed that the prosecution should proceed and the records sent back to <ORG> for being dealt with in accordance with law. Leave to appeal was given both to the appellants and the respondent and requisite certificates under articles 132 and 134 of the Constitution were granted. This appeal along with the connected appeal No. 6 of 1953 is before us on the basis of the said certificates.

Mr. <NAME>, who appeared in this and the connected appeal, urged the following points for our consideration and decision:

(1) That sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, and the provisions of the Cotton Cloth Control Order contravened the fundamental right of the appellants guaranteed by article 19(1)(f) and (g) of the Constitution;

(2) That section 3 of the Essential Supplies (Temporary Powers) Act, 1946, and in particular section 4 were ultra vires, the <ORG> on the ground of excessive delegation of legislative power;

(3) That section 6 having been found ultra vires, section 3 was inextricably connected with it and that both the sections should have been declared ultra vires on that ground; and (4) That the impugned Control Order contravened existing laws, viz., the provisions of section 27 , 28 and 384  41 of the Indian Railways Act, and was thus void in its entirety.

The respondent challenged the judgment of <ORG> that section 6 of the Act was unconstitutional. In our judgment, none of the points raised by Mr. <NAME> have any validity. On the other hand, we are of the opinion that <ORG> was in error in declaring section 6 of the Act unconstitutional.

Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, provide as follows:-

"3. (1) The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for socuring their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide-

(a) for regulating by licences, permits or otherwise the production or manufacture of any essential com- modity;.........

(d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity;

4. <ORG> may by notified order direct that the power to make orders under section 3 shall,in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by-

(a) such officer or authority subordinate to the Central Government, or

(b) such State Government or such officer or authority subordinate to a State Government as may be specified in the direction."

Section 6 runs thus:

"6. Any order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act."

Under powers conferred by section 3 <ORG> promulgated on 10th September, 1948, Cotton Textiles (Control of Movement) Order, 1948. Section'2 of this order defines the expressions "apparel," " carrier," " hosiery," " cloth " and " textile commissioner." Section 3 of the order runs as follows:-

"3. No person. shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel except under and in accordance with-

(i) a general permit notified in the Gazette of India by the Textile Commissioner, or

(ii) a special transport permit issued by the Textile Commissioner."

Section 8 provides that the Textile Commissioner may, by notification in <ORG>, prescribe the manner in which any application for a special transport permit under this Order shall be made. <ORG> has prescribed forms for application for obtaining permits and the conditions under which permits can be obtained. The first question canvassed by Mr. <NAME> was that the provisions of section 3 of the Control Order infringed the rights of a citizen guaranteed in subclauses (f) and (g) of article 19(1) of the Constitution. These sub-clauses recognise the right of a citizen to dispose of property and to carry on trade or business. The requirement of a permit to transport by rail cotton textiles to a certain extent operates as a restriction on the rights of a person who is engaged in the business of purchase and sale of cotton textiles. Clause (5) of article 19 however permits such restrictions to be placed provided they are in the public interest. During the period of emergency it was necessary to impose control on the production, supply and distribution of commodities essential to the life of the community. It was for this reason that the <ORG> passed the Essential Supplies (Temporary Powers) Act  authorising <ORG> to make orders from time to time controlling the production, supply and distribution of essential commodities. Clause 3 of the Control Order does not deprive a citizen of the right to dispose of or transport cotton textiles purchased by him. It requires him to take a permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this regard cannot be regarded as an unreasonable restriction on the citizen's right under sub-clauses (f) and (g) of article 19(1). If transport of essential commodities by rail or other means of conveyance was left uncontrolled it might well have seriously hampered the supply of these commodities to the public. Act XXIV of 1946 was an emergency measure and as stated in its preamble, was intended to provide for the continuance during a limited period of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities. The number of commodities held essential are mentioned in section 2 of the Act, and the requirement of a permit to transport such commodities by road or rail or other means of transport cannot, in any sense of the term, be said, in a temporary Act, to be unreasonable restriction on the citizen's rights mentioned in clauses (f) and (g) of article 19(1). <ORG> was therefore right in negativing the contention raised regarding the invalidity of the Control Order as abridging the rights of the citizen under article 19(1) of the Constitution.

Mr. <NAME> further argued that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or to grant a permit, and that on grounds similar to those on which in <CITATION> (1), this Court declared void section 4(3) of the Uttar Pradesh Coal Control Order, section 3 of the Control Order in question should also be declared void. This argument again is not tenable. In the first place, the appellants never applied for a permit and made no efforts to obtain one. If the permit had been applied for and refused arbitrarily they might then have had a right to attack the law on (1) A.T.R. 1954 S.C. 225 ;  S.C.R. 80o3.

the ground that it vested arbitrary and unregulated power in the textile commissioner. The appellants were not hurt in any way by any act of the textile commissioner as they never applied for a permit. They were transporting essential goods by rail without a permit and the only way they can get any relief is by attacking the section which obliges them to take a permit before they can transport by rail essential commodities. It may also be pointed out that reference to the decision of this <ORG> in <NAME> case(1) is not very opposite and has no bearing on the present case. Section 4(3) of the Uttar Pradesh Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licences in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Section 4(3) of the Uttar Pradesh Coal Control Order was in these terms: " <ORG> may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. Provided that every power which is under this Order exercisable by <ORG> shall also be exercisable by the State Coal Controller, or any person authorized by him in this behalf In the present Control Order there is no such provision as existed in the Uttar Pradesh Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to <ORG> is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion

(i) A.I.R. 1954 S.C. 225; [1954] S.C.R. 803.

cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief Presumably, as appears from the different forms published in the Manual, there are directions and rules laid down by <ORG> for the grant or refusal of permits.

The next contention of Mr. <NAME> that section 3 of the Essential Supplies (Temporary Powers) Act, 1946, amounts to delegation of Legislative power outside the permissible limits is again without any merit. It was settled by the majority judgment in the Delhi Laws Act case (1) that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The <ORG> must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to <ORG> in exercising its powers under section 3 . Delegation of the kind mentioned in section 3 was upheld before the Constitution in a number of decisions of their Lordships of <ORG>, vide <NAME> v. The <NAME> (2), <NAME> v. The <NAME> (3), and <NAME> v. <ORG> (4)and since the coming into force of the Constitution delegation of this character has been upheld in a number of decisions of this Court on principles enunciated by the majority in the Delhi Laws Act case (1). As already. pointed out, the preamble and the body of the sections sufficiently formulate the legislative policy and the ambit and character of I I)  S.C.R. 747.

(2) 7 A.C. 829.

(3) 9 A.C. II7.

(4) [I938] A.C. 708.

the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Mr. <NAME> could not very seriously press the question of' the invalidity of section 3 of the Act and it is unnecessary therefore to consider this question in greater detail. Section 4 of the Act was attacked on the ground that it empowers <ORG> to delegate its own power to-make orders under section 3 to any officer or authority subordinate to it or <ORG> or to any officer or authority subordinate to <ORG> as specified in the direction given by <ORG>. In other words, the delegate has been authorized to further delegate its powers in respect of the exercise of the powers of section 3 . Mr. <NAME> contended that it was for the <ORG> itself to specify the particular authorities or officers who could exercise power under section 3 and it was not open to the <ORG> to empower <ORG> to say what officer or authority could exercise the power. Reference in this connection was made to two decisions of <ORG> of the United States of America-<ORG> v. <NAME> (1) and <NAME> v. United States (2). In both these cases it was held that so long as the policy is laid down and a standard established by a statute, no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the <ORG> is to apply. These decisions in our judgment do not help the contention of Mr. <NAME> as we think that section 4 enumerates the classes of persons to whom - the power could be delegated or sub-delegated by <ORG> and it is not correct to say that the instrumentalities have not been selected by the <ORG> itself. The decision of their Lordships of <ORG> in <NAME>'s case (3), completely negatives the contention raised regarding the invalidity of section 4 .

(1) 293 US 388. (3) [1938] A.C. 708.

(2) 295 U.S. 495.

In that case the Lt.Governor in <ORG> was-given power to vest in a marketing board the powers conferred by section 4A(d) of the Natural Products Marketing (British Columbia) Act, 1936. The attack on the Act was that without constitutional authority it delegated legislative power to the Lt.Governor in <ORG>. This contention was answered by their Lordships in these terms: " The third objection is that it is not within the powers of '<ORG> to delegate so-called legislative powers to the Lt.-Governor in <ORG>, or to give him powers of further delegation This objection appears to their Lordships subversive of the rights which <ORG> enjoys while dealing with matters falling within the classes of subjects in relation to which the Constitution has granted legislative powers. Within its appointed sphere <ORG> is as supreme as any other <ORG>; and it is unnecessary to try to enumerate the innumerable occasions on which <ORG>, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act." The next contention that the provisions of the Textile Control Order operate as an implied repeal of sections 27 , 28 and 41 of the Indian Railways Act and are therefore invalid is also not well founded. The requirement of a permit by clause (3) and provisions of clause (4) of the Order which empower the Textile Commissioner to direct a carrier to close the booking or transport of cloth, apparel, etc., are not in direct conflict with sections 27 , 28 and 41 of the Railways Act. The Railways Act does not exclude the placing of a disability on a railway administration by the <ORG> or any other authority. This clause merely supplements the relevant provisions of the Railways Act and does not supersede them. Similar observations apply to clause (5) which enables the Textile Commissioner to place an embargo on the transport of certain textiles from one area to another. There is nothing in the provisions of the order which in any way overrides or supersedes the provisions of the different sections of the Railways Act referred to above.

The last contention of Mr. <NAME> that section 6 having been declared invalid, section 3 is inextricably mixed with it and should also have been declared invalid is also not valid, because apart from the grounds given by <ORG> for holding that the two sections were not so interconnected that the invalidity of one would make the other invalid, <ORG> was in error in holding that section 6 was unconstitutional. Section 6 of the Act cited above declare, that an order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. In other words it declares that if there is any repugnancy in an order made under section 3 with the provisions of any other enactment, then notwithstanding that inconsistency the provisions of the Order will prevail in preference to the provisions of other laws which are thus inconsistent with the provisions of the Order. In the view of <ORG> the power to do something which may have the effect of repealing, by implication, an existing law could not be delegated in view of the majority decision of this Court in In Re: Delhi Laws Act (1), where it was held that to repeal or abrogate an existing law is the exercise of an essential legislative power. The learned Judges of <ORG> thought that the conferment of power of the widest amplitude to make an order inconsistent with the pre- existing laws is nothing short of a power to repeal. In our opinion the construction placed on section 6 by <ORG> is not right. Section 6 does not either expressly or by implication repeal any of the provisions of pre-existing laws; neither does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means as if the repealed statute was never on the statute book. It is wiped out from the statute book. The effect of section 6 certainly is not to repeal any one of those laws or abrogate then;. Its object is simply to by-pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) (I) [1951) S.C.R, 747.

Act, 1946, or the orders made thereunder. In other words, the orders made under section 3 would be operative in regard to the, essential commodity covered by the Textile Control Order wherever there is repugnancy in this Order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By-passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the order made under section 3 it does not operate in that field for the time being. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. Conceding, how- ever, for the sake of argument that to the extent of a repugnancy between an order made under section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any Act of the delegate, but the repeal is by the legislative Act of the <ORG> itself. By enacting section 6 <ORG> itself has declared that an order made under section 3 shall; have effect notwithstanding any inconsistency in this order with any enactment other than this Act. This is not a declaration made by the delegate but the <ORG> itself has declared its will that way in section 6 . The abrogation or the implied repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3 . The power of the delegate is only to make an order under section 3 . Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the <ORG> has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsistency therewith contained in any enactment other than this Act. <ORG> being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre-existing law and no exception could be taken on the ground of excessive delegation to the Act of the <ORG> itself. There is no delegation involved in the provisions of section 6 at all and that section could not be held to be unconstitutional on that ground, The result therefore is that in our opinion the provisions of sections 3, 4 and 6 of the Essential Supplies (Temporary Powers) Act, 1946, are constitutional and. the impugned order is also constitutional. Accordingly' this appeal is dismissed, and <ORG> is directed to proceed expeditiously with the case in accordance with law. Appeal dismissed.


JUDGMENT

1. The question whether an agreement with reference to the payment of maintenance operates as a release of the right of the party entitled to maintenance to have the amount raised is one of construction of the particular instrument.

2. There is nothing whatever in Exhibit I to suggest that the plaintiff had agreed to release her right to increased maintenance if circumstances entitled her to it.

3. The expression that the maintenance is to be paid to her for her life cannot be construed as involving such a release. <CITATION> . l7 M. 392 is a precisely similar case, though the report does not show that the agreement was for the payment of the maintenance for the life of the party there as in fact it was.

4. The concluding part of paragraph 8 of Exhibit I does not refer to the right to maintenance but to the respondent's claim to certain properties about which the parties had a dispute.

5. We dismiss the appeal with costs.


JUDGMENT <NAME>, J.

1. This appeal by special leave is directed against a judgment, dated October 3, 1968, of <ORG> and Haryana.

2. The farts leading to this appeal are that the appellants are partners of a firm, <ORG>, <ORG>

3. By a Notification, dated May 15, 1956, <ORG> levied a profession tax under Section 61(1)(b) of the Punjab Municipal Act, 1911. Initially, the tax was Rs. 15/ per annum and was levied on all the partners of the said firm.

4. By a Notification, dated July 4, 1958, the annual tax for trade, profession or calling for the owner of a factory registered under the Indian Factories Act , to Rs. 200/- per annum and each of the six partners of the said firm were assessed to annual tax of Rs. 200/- by <ORG>.

5. On October 30, 1960, the appellants filed a suit for permanent injunction restraining the defendant <ORG> from realising the profession tax demanded by it per letters Nos. 15 to 20, dated May 31, 1960, amounting to Rs. 1,200/-.

6. The appellants challenged the validity of the assessment contending that construed in the light of the definition given in Section 2(40) of the Punjab General Clauses Act, the term "person" occurring in Section 6(1)(b) of the Punjab Municipal Act, 1911, includes a 'firm' and since the trade carried on by the 'firm' is one, the tax could be levied only on the firm, and not on the partners individually. On these premises, it was pleaded that <ORG> in levying the tax on the individual partners had exceeded its statutory powers under Section 61(1)(b) of the Municipal Act.

7. The trial court dismissed the suit. On appeal by the plaintiffs, the Additional District Judge, <NAME>, reversed the judgment of the trial court and decreed the suit.

8. <ORG> carried a further appeal to <ORG>. The learned single Judge who heard the appeal, affirmed the judgment and decree of the first appellate court, on the reasoning which may be summed up as under :

The term "person" in Section 61(1)(b) of the Municipal Act, interpreted in the light of the definition given in Section 2(40) of the Punjab General Clauses Act, includes a 'partnership'. Under Clause (b) of Section 61(1) of the Municipal Act, the basis on which the liability to pay tax arises, is the trade, profession or business; and if the trade and business is one carried on by several persons collectively in partnership, then the partnership alone, and not the individual partners, are liable to pay the tax; that the liability on the partners will fall twice which is not contemplated by the scheme and language of the Municipal Act, even though all the partners are jointly and severally liable to any tax for the partnership business.

9. In support of his conclusion that the tax was on trade and not on persons, the learned Judge by way of analogy, referred to Clauses (a), (c), (d), (e) and (f) of Sub-section (1). He also referred to two Madras derision in <CITATION> 7 Mad 74 and <NAME> v. President of <ORG> ILR 14 Mad 140; and fund himself in entire agreement with the reasoning of the learned Judges in those cases.

10. Aggrieved, <ORG> preferred a Letters Patent Appeal The Appellate Bench of <ORG> held that to import the definition of the term "person" occurring in Section 2(40) of the Punjab General Clauses Act into Section 61(1)(b) of the Municipal Act, will be repugnant to the subject. In the opinion of the Bench, under the scheme of the statute in question, the tax cannot be levied on a firm or factory as such but only on the individual owners of the factory or of the firm. On this reasoning, the Bench reached the conclusion "that under Section 61(1)(b) of the Act, it is the individual who is to be assessed and is liable to pay the tax mentioned therein and so the assessment as well as the demand of the tax from each of the plaintiffs does not suffer from any legal infirmity". The B;nch further he'd ' that since the <ORG> in imposing the tax on the appellants herein has not acted out side the provisions of the statute, it would, on the basis of the judgment of <ORG> in Firm <NAME> (deceased) represented by <CITATION> , which also dealt with the provisions of the Municipal Act, fellow that the impugned assessment could only be questioned under the provisions of Sections 84 and 86 of the Act, and the jurisdiction of <ORG> in respect of tax levied or the assessment made in excluded". In the result, the appeal was allowed and the trial court's dismissing the suit was restored.

11. Before us, Mr. <NAME>, learned counsel for the plaintiff- appellants, has adopted the reasons given by the learned Single judge of <ORG>. In support of his contentions, he relied upon the aforesaid Madras decisions. His argument is that if the interpretation placed by <ORG> of <ORG> is allowed to stand, it will lead to anamolous and unconstitutional results. Mr. <NAME> concedes that the individual partners are also 'persons' within the meaning of Clause (b) of Section 61(1) He, how ever, maintains that the firm, also, is a 'person' within the contemplation of this provision and as such, liable to be taxed; that if in respect of the une trade, which is being carried on by the firm, apart from each of the individual partners, the firm, also is separately assessed to Rs. 200/- per annum, not only the incidence of the tax will fall twice, the total liability therefore will far exceed the ceiling of Rs. 250/- per annum fixed by Article 276(2) of the Constitution. In these premises, it is contended that an interpretation of Section 61(1)(b) , which may lead to unconstitutional or irrational results should be eschewed.

12. With regard to the question of jurisdiction, it is contended that since <ORG> had in the exercise of its powers clearly acted beyond its jurisdiction, the suit was maintainable in <ORG>.

13. Section 61(1)(b) of the Municipal Act, so far as material for this case, reads as under :

Subject to any general or special orders which <ORG> may make in this behalf, and the rules, any committee may, from time to time for the purposes of this Act, and in the manner directed by this Act, impose in the whole or any part of the municipality any of the following taxes, namely :

(1) (a) ...

(i) to (iii) ...

(b) a tax on persons practising any profession or art or carrying on any trade or calling in the municipality.

Explanation -A person in the service or person holding an office under <ORG> or <ORG> or a local or other public authority shall be deemed to be practising a profession within the meaning of this sub section.

14. From a plan reading of the extracted provision, it is clear that a tax leviable under Clause (b) is, in terms, a tax on "persons". The expression "persons" undoubtedly includes natural persons. The class of such taxable persons has been indicated by the <ORG> with reference to their occupational activity. Thus, in order to be authorised a tax under Clause (b) of Section 61(1) must satisfy two conditions : First, it must be a tax on persons. Second, such persons must be practising any profession or act or carrying on any trade or calling in the municipality.

15. There can be dispute that the appellants are "persons" and as such, satisfy the first condition. Even the learned Counsel for the appellants has candidly conceded that the individual partners are also ''persons" within the meaning of the said Clause (b). Controversy thus becomes narrowed down into the issue : Whether persons collectively doing business in partnership, in the municipality, fulfil the second condition ? That is to say, such persons "carry on any trade or ceiling in the municipality" within the contemplation of Clause (b) ?

16. In our opinion, for reasons that follow, the answer to this question must be in the affirmative.

17. "Partnership" as defined in Section 4 of the Indian Partnership Act, 1932 is the relation between persons who have agreed to share the profits of a business carried on by all or any of them for the benefit of all. The Section further makes it clear that a firm or partnership is not a legal entity separate and distinct from the partners. Firm is only a compendious description of the individuals who compose the firm. The crucial words in the definition of 'partnership' are these that have been underlined. They hold the key to the question posed above. They show that the business is carried on by all or any of the partners In the instant case, admittedly, all the plaintiff appellants are carrying on the business in partnership. All the six partners are sharing the profits and losses. All the six partners are jointly and severally responsible for the liabilities incurred or obligations incurred in the course of the business Each partner is considered an agent of the other. This being the position, it; Is not possible to hold that each of the six partners is not carrying on a trade or calling within the purview of Clause (b) of Section 61(1) of the Municipal Act. At the most it can be said that each of these six persons in severally as well as collectively carrying on a trade in the Municipality. There is nothing in the language of Section 61 or the scheme of the Municipal Act which warrants the construction that persons who are carrying on a trade in association or partner ship with each other cannot be individually taxed under Clause (b) of Section 61(1) . On the contrary, definite indication is available in the language and the scheme of this statute that such partners can be taxed as persons in their individual capacity. As noticed already, Clause (b) makes it clear in no uncertain terms that this is a tax on 'persons'. Its incidence falls on individuals, who belong to a clase practising any profession or art; on carrying on a trade or calling in the municipality. To hold that persons who are collectively carrying on a trade in the municipality cannot be taxed individually, could be to read into the statute words which are not there. There are no words in Clause (b) or elsewhere in the statute which expressly or by necessary implication, exclude or exempt persons carrying on a trade collectively in the municipality from being taxed as individuals. To attract liability to a tax under this clause, it is sufficient that the person concerned is carrying on a trade in the municipality, irrespective of whether such trade is being carried on by him individually or in partnership with others. Thus, both the conditions necessary for levying a tax under Clause (b) of Sub-section (1) of Section 61 of the Municipal Act existed in this case. The appellants are 'persons' and they are carrying on a trade in Chheharta Municipality.

18. In the view we take, we do not think it necessary to go further into the question whether the definition of person' given in Section 2(40) of the Punjab General Clauses Act, can be imported into the statute under consideration so as to include a contractual firm, also, within the purview of the expression "persons" used in Clause (b) of Section 61(1) . Indeed, the entire effort to import the definition of 'person' given in the General Clauses Act , into Section 61(1)(b) of the Municipal Act is directed to find a foundation for the argument, that the construction adopted by <ORG> could lead to double taxation and even unconstitutional results. But in the instant case, nothing of this kind has happened. The firm has not been assessed. No question of double taxation or exceeding the Constitutional ceiling of Rs. 250/- fixed by Article 276(2) of the Constitution, arises on the facts of the present case. The arguments advanced on behalf of the appellants on this aspect of the matter are merely hypothetical, and speculative.

19. This takes us to the second question, whether <ORG> had jurisdiction to hear and determine the suit.

20. Section 84(1) of the Punjab Municipal Act provides that "an appeal against the assessment or levy of any tax under this Act, shall lie to the Deputy Commissioner or to such other officer as may be empowered by <ORG> in this behalf". Then, there is a proviso to this sub section which says (hat when the Deputy Commissioner or such other officer, as aforesaid, is or was, when the tax was imposed, a member of the <ORG>, the appeal shall lie to the Commissioner of the <ORG>. Sub-section (2) is important. It provides :

84(2). If, on the hearing of an appeal under the section, any question as to the liability to, or the principle of assessment of, a tax arises, on which the officer hearing the appeal entertains reasonable doubt. He may, either of his own motion or on the application of any person interested, draw up a statement of the facts of the case and the point on which doubt is entertained, and refer the statement with his own opinion on the point for the decision of <ORG>.

21. Section 84 mandates that "to objection shall be taken to any valuation or assessment, nor shall the liability of any person to be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act."

22. From a conjoint reading of Sections 84 and 86 , it is plain that the Municipal Act, gives a special and particular remedy for the person aggrieved by an assessment of tax under this Act, irrespective of whether the grievance relates to the rate or quantum of tax or the principle of assessment. The Act further provides a particular forum and a specific mode of having this remedy which is analogous to that provided in Section 66(2) of the Indian Income tax Act, 1922 Section 86 forbids in clear terms the person aggrieved by an assessment from seeking his remedy in any other forum or in any other manner than that provided in the Municipal Act.

23. It is well-recognised that there a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in a particular form in a particular way it must be sought in that form and in that manner, and all other forums and modes of seeking it are excluded. Construed in the light of this principle, it is clear that Sections 84 and 86 of the Municipal Act bar, by inevitable implication, the jurisdiction of <ORG> where the grievance of the party relates to an assessment or the principle of assessment: under this Act.

24. In the view we take, we are fortified by the decision of this Court; in <CITATION> , wherein Sections 84 and 86 of this very Punjab Municipal Act, 1911 came up for consideration. There in, <ORG>, Ludhiana, imposed a terminal tax on Sambbar salt and assessed the appellant, therein, to a sum of Rs. 5,893/ towards that tax at the rate of Rs. 10/- per maund under item 69 of the Government Notification by which the terminal tax was imposed. The assessee filed a suit against <ORG> in <ORG>, contending that <NAME> ought to have been assessed at the rate of 3 pies per maund under item 68, that he had been illegally assessed under item 69 at the: higher rate, and claimed refund of the amount paid by him, with interest. The <ORG>, inter alia, contended that <NAME> was not common salt, and <ORG> had no jurisdiction to entertain the suit. The trial court held that <NAME> was not common salt within the meaning of item 68 of the schedule, that the imposition of tax on it under item 69 of the Schedule,, was illegal, and, therefore, <ORG> had jurisdiction to hear and determine the suit by virtue of Section 9 of the CPC.

25. On appeal, <ORG> held that <ORG> has as jurisdiction, and dismissed the suit.

26. The assessee came in appeal to this Court by certificate granted by <ORG>, and contended that since the impugned levy was not made: under the Municipal Act but in derogation thereof, <ORG> had jurisdiction to entertain and determine the suit.

27. Delivering the judgment of the Court, <NAME> (as he then was) repelled this contention, observing that the rate of the tax to be levied depends upon the character of the salt, and it was not possible to say that in. ascertaining this fact that the authorities concerned travelled outside the pro vision of the Municipal Act, even if they wrongly applied item 69 of the schedule that the mistake in applying the wrong item of the Schedule to the tax: could be corrected only in the manner prescribed by the Act, and the aggrieved person cannot file a suit in <ORG> in that regard, <ORG>'s jurisdiction having been excluded by the provisions of Sections 84 and 86 of the: Act.

28. The Court distinguished that class of cases where <ORG> in levying a tax or committing an Act, clearly acts outside or in abuse of its powers under the Municipal Act, and explained that it is only in such cases, the bar to the jurisdiction of <ORG> would not apply Can the case before us be said to belong to that class of cases where <ORG> in levying a Tax Act s beyond or in abuse of its powers under the Act ? The answer to this question must be in the negative. By no stretch of imagination, can it be said in the facts and circumstances of the case, that in assessing the appellants, individually, and not collectively, to the tax in question, <ORG> abused its powers under the Act. We have already discussed and held that in levying this tax, The municipal Committee did not travel beyond or act contrary to the provisions of Section 6(1)(b) of the Act. In short, the present case is one where <ORG> acted "under the Act". It follows, therefore, that <ORG>'s jurisdiction to entertain and decide the suit was barred even if the dispute raised therein related to the principle of assessment to be followed.

29. For the foregoing reasons, the appeal fails and is dismissed with costs.


<NAME>

1. This has come up before us exercising jurisdiction over matrimonial causes under Section 17 of the Indian Divorce Act (Act IV of 1869), hereinafter referred to as the Act, for confirmation of a decree nisi passed by the learned Additional District Judge, 24 Parganas, dissolving the marriage.

2. It was a wife's petition under Section 10 of the Act. The grounds were adultery with the other aggravated circumstance, viz., cruelty. The petitioner has two minor children, born out of the wedlock living with her. The learned Judge passed the decree mentioned above and also directed custody of the children to the petitioner. The husband (respondent) was further directed to pay a monthly sum of Rs. 250/- to the wife (petitioner) as alimonv pending the suit.

3. I have reviewed the entire evidence. All pertinent facts are brought out to prevent the blinding of our eyes. The parties profess Christian religion. They were legally married. They were of Indian domicile at the date of the presentation of the petition They last resided within the jurisdiction of the <ORG> below. There is no collusion between the parties. The petitioner has not been in any manner consistently accessory to or conniving at the adultery. There is no proof of connubial intercourse after the adultery, which would be a prima facie evidence of condonation. The petitioner has not slumbered in sufficient comfort and there is no unreasonable delay in presenting the petition. It is not a motion on behalf of the guilty party being adulterous herself.

Neither the petitioner is guilty of cruelty to the respondent or of separating herself from him or oi any wilful neglect or misconduct towards him. The husband on the other hand is held to be cruel. The said cruelty is such, as without adultery it would have entitled the wile a divorce from bed and board (a mensa et toro). The notice was properly served. Statutory six months have elapsed from August 1, 1961, the date of signing of the decree by the learned Judge but the records were only sent up by him to this Court on an application being moved by the petitioner specially for that purpose and not earlier. I regret to record that the said state of affairs is not very much creditable to the Court concerned.

4. The guilt of adultery in the present case is held to be proved, but circumstantially. There is a letter of the husband to the wife in the present case (Ext. 4) admitting the adultery but this letter stands in isolated glory. There is no other letter. There is no other item of the conduct of-the husband which is admitted and which is consistent with the contents of the said letter. Hence we would have to consider whether the proof by circumstantial evidence would be sufficient in such cases.

5. It is not necessary that there should be direct evidence of adultery; as it is not easily available, rather direct proof is very rare. It has been pointed out in a number of cases that rarely the parties are surprised in a direct act of adultery (Rayden on Divorce, 7th Edn. pp. 135, 136). But circumstantial evidence must be sufficiently strong and conclusive. Association coupled with opportunity, illicit affection, undue familiarity, guilty attachment are some of the instances which create an inference upon which the <ORG> can act. There is an old legal maxim in Scotland which runs as follows : "Solus cum sole in suspecto loco non presumitur dicere pater noster", which being translated means that when a man and a woman are found together under suspicious circumstances, it cannot be presumed that they are saying their prayers. It would also be difficult to ascribe the theory of "platonic love" in such circumstances hut then again the circumstances must be such as would lead "the guarded discretion of a reasonable and just man to the conclusion" or "fair inference as a necessary conclusion". (See the observations of Sir <NAME>, determined in the Consistory <ORG> of London, in the classic case of <NAME> v. <NAME>, (1810) 161 ER 648. Though the said discretion is held to be unfettered in some cases but the same must not be exercised capriciously but cautiously and with utmost care.

6. In the case of an adultery, no higher proof of a fact is demanded than that it is established beyond all reasonable doubt. ( <CITATION> , (1823) 37 ER 1049). "But what is reasonable doubt, is always difficult to decide and varies in practice according to the nature of the case and the punishment which may be awarded", Lord <NAME> pronounces in <ORG> v. <ORG>, 1951 (1) All ER 124. In my opinion, Lord <NAME>'s dictum in <NAME> v. <NAME>, (1945) 2 All ER 190 that the same strict proof is required in the case of matrimonial offence as required in connection with criminal offence has been widely expressed. Tn my judgment the correct approach has been laid down by <NAME> in <NAME> v. <NAME>, (1950) 1 All ER 804 that the <ORG> should not be irrevocably committed to the view that a charge of adultery must be regarded as a criminal charge. The statute lays down a standard and puts adultery on the same footing as Cruelty, desertion or unsoundness of mind. The rule as to the standard of proof, laid down at p. 138 by Lord <NAME> in <ORG> in the case of <ORG>,. (1951) 1 All ER T24 (supra) has been accepted by their Lordships in the Supreme <ORG> in the case of <NAME> v. <NAME>, . Their Lordships observed that the said rule should be followed by the Indian <ORG>s under Section 7 of the Act. It is held that it is the duty of the <ORG>s to pronounce a decree, only when it is satisfied that the case has been proved beyond reasonable doubt as to the commission of a matrimonial offence. The evidence must be clear and satisfactory beyond mere balance of probabilities. In that eventuality the provisions o; Section 14 of the Act would be taken to be satisfied. The evidence in the present case satisfies the above tests.

7. I am not unmindful of the general notions that the proceeding under Section 17 of the Act has no exact parallel in other countries; that the petition for divorce is not of the nature of an undefended civil suit; that such cases are not to be decided on ground of sympathy; and that it is also not enough for one of the parties to come forward and say exactly following the terms of the Act but it seems to me repugnant that <ORG> should be so little in accord with the common notions of mankind that it should require the evidence to displace fantastic suggestions. As so often occurs in human affairs, however, the difficulty lies in drawing the line. But the <ORG>, while exercising its discretion in matrimonial causes, must have regard not only" to the rights and liabilities of the matrimonial persons wronged and of the wrongdoer respectively inter se but also to the interest of society and public morality, and to discourage vice and immorality.

8. Reluctant as I am, as a matter of general principle, to dissolve a union, unless it becomes impossible to allow it to continue and there are compelling circumstances in favour of dissolution; in all the circumstances of this case I think I should be going far beyond any other authorities and should be ignoring altogether the paramount consideration applicable to such cases, viz., the interest of public morality. I find that there is sufficient legal evidence to support the decree,

9. For all these reasons I am of opinion that the decree nisi should be confirmed and I order accordingly. There will be no order for costs.

<NAME>, J.

10. I agree.

<NAME>, J.

11. I agree.


PETITIONER: THE COMMISSIONER OF INCOME-TAX,BOMBAY CITY, BOMBAY Vs. RESPONDENT: BIPINCHANDRA MAGANLAL AND <ORG> DATE OF JUDGMENT: 17/11/1960 BENCH: <NAME>, J.C. BENCH: <NAME>, J.C. DAS, S.K. HIDAYATULLAH, M. CITATION: 1961 AIR 1040 1961 SCR (2) 493 CITATOR INFO : R 1965 SC1977 (11) RF 1966 SC 870 (11) R 1973 SC1034 (21) F 1977 SC 560 (7) R 1978 SC1099 (4,7) ACT: Income-tax-Profit and assessable income-Difference between -Smallness of profit--How determined- Indian Income-tax Act , 1922 , SS. 10 (2) (VII) second proviso, 66(1). HEADNOTE: The respondent company purchased certain machinery for Rs. 89,000 and sold it for the same value, but in the books of account the written down value of the machinery was shown in the year of account as Rs. 73,392. The Income Tax Officer in computing the assessable income of the company added the difference, i.e. Rs. 15,608, between the actual value and the written down value to the profit of the company. The Income Tax Officer also passed an order under S. 23A of the Income Tax Act, and directed that the undistributed portion of the assessable income, shall be deemed to have been distributed amongst the shareholders as dividend. Appeals against the order of the Income-tax Officer proved unsuccessful and <ORG> referred the following question to <ORG> under s. 66(1) :- "Whether the sum of Rs. 15,608 should have been included in the assessee company's "profit" for the purpose of deter- mining whether the payment of a larger dividend than that declared by it would be unreasonable." <ORG> answered the question in the negative. On appeal by special leave, <NAME>, that the view taken by <ORG> was correct. 494 By the fiction in S. 10(2)(Vii) second proviso, read with s.2(6C), what is really not income is, for the purpose of computation of assessable income, made taxable income: but on that account, it does not become commercial profit, and if it is not commercial profit, it is not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable. "Smallness of profit" should not be equated with "smallness of assessable income" but should be determined in accordance with commercial principles. <CITATION> , (1949) XVII I.T.R. 493, <CITATION> , (1950) XVIII I.T.R. 762 and <CITATION> ., (1959) XXXV I.T.R. 183, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 761 of 1957. Appeal by special leave from the judgment and order dated February 24, 1955, of the former <ORG> in I.T.R. 48/X of 1954.

<NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for the respondent. 1960. November 17. The Judgment of the Court was delivered by <NAME>, J.-The Income Tax Appellate Tribunal, Bombay Bench "A", referred under s. 66(1) of the Indian Income Tax Act, 1922-hereinafter referred to as the Act-the following question:

"Whether the sum of Rs. 15,608 should have been included in the assessee Company's "profit" for the purpose of determining whether the payment of a larger dividend than that declared by it would be unreasonable ?" <ORG> answered the question in the negative. Against the order of <ORG>, with special leave under Art. 136 of the Constitution, this appeal is preferred.

M/s. Bipinchandra Maganlal & Co., Ltd.-hereinafter referred to as the Company-is registered under the Indian Companies Act , The Company is one in which the public are not substantially interested within the meaning of s. 23A Explanation of the Act. Its paid-up capital at the material time was Rs. 20,800 made up as follows:

20 shares of Rs. 50 each fully paid up and 1980 shares of Rs. 50 each, Rs. 10 being paid up per share.

In December 1945, the <ORG> purchased certain machinery for Rs. 89,000 and sold it sometime in March, 1947, for the price for which it was originally purchased. In the books of account of the <ORG>, the written down value of the machinery in the year of account 1946-47 (April 1, 1946 to March 31, 1947) was Rs. 73,392. The trading profits of the <ORG> as disclosed by its books of account for the year 194647 were Rs. 33,245. At the General Meeting held on October 21, 1947. the <ORG> declared a dividend of Rs. 12,000 for the year of account. In assessing tax for the year of assessment 1947-48, the Income Tax Officer computed the assessable income of the <ORG> for the year of account 1946-47 at Rs. 48,761 after adding back to the profit of Rs. 33,245 returned by the <ORG>, Rs. 15,608 realised in excess of the written down value of the machinery sold in March, 1947. The Income Tax Officer passed an order under s. 23 A of the Act that Rs. 15,429 (being the undistributed portion of the assessable income of the <ORG> as reduced by taxes payable) shall be deemed to have been distributed as dividend amongst the shareholders as at the date of the General Meeting, and the proportionate share of each shareholder shall be included in his total income. Appeals preferred against his order to the Appellate Assistant Commissioner and <ORG> proved unsuccessful, but <ORG> at the instance of the <ORG> referred the question set out hereinbefore to <ORG> at Bombay under a. 66(1) of the Act. Section 23A(1) of the Act as it stood at the relevant time (in so far as it is material) was as follows: "Where the Income Tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company upto the end of the sixth month after its accounts for that previous year are laid before the company in general meeting are less than 60% of the assessable income of the company of that previous year, as reduced by the amount of income-tax and super-tax payable by the company in respect thereof, he shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the undistributed portion of the assessable income of the company of that previous year as computed for income-tax purposes and reduced by the amount of income-tax and super-tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the share-holders as at the date of the general meeting aforesaid..............

Clearly, by s. 23A , the Income Tax Officer is required to pass an order directing that the undistributed portion of the assessable income of any company (in which the public are not substantially interested) shall be deemed to have been distributed as dividends amongst the shareholders if he is satisfied that (i) the company has not distributed 60% of its assessable income of the previous year reduced by the Income-tax and super-tax payable, (ii) unless payment of a dividend, or a larger dividend than that declared, having regard to (a) losses incurred by the company in the earlier years or (b) the smallness of the profits made in the previous year, be unreasonable. The total assessable income of the <ORG> for the year of account was Rs. 48,761 and the tax payable thereon was Rs. 21,332: 60% of Rs. 27,249 (assessable income reduced by the income tax and super-tax due) exceeded the dividend declared by Rs. 4,458. The first condition to the exercise of jurisdiction by the Income Tax Officer under S. 23A was therefore indisputably fulfilled. But the Income Tax Officer had still to be satisfied whether having regard to the smallness of the profit (there is no evidence in this case that loss was incurred by the <ORG> in earlier years), it would be unreasonable to distribute dividend larger than the dividend actually declared. The Income Tax Officer did not expressly consider this question: he rested his decision on the rejection of the contention raised by the <ORG> that the difference between the price of the machinery realised by sale and the written down value in the year of account could not be taken into account in passing an order under S. 23A . He, it seems, assumed that if that difference be taken into account, distribution of larger dividend was not unreasonable, and the <ORG> proceeded upon the footing that the assumption was correctly made.

Counsel for the <ORG> submits in support of the appeal that the expression " smallness of profit " means no more than smallness of the assessable income, and that in any event, in the computation of profits, the amount realised by sale of the machinery in the year of account in excess of its written down value was liable to be included in considering whether the condition relating to "smallness of profit" was fulfilled.

At the material time, s. 2(6C) of the Act defined "income" as inclusive amongst others of any sum deemed to be profits under the second proviso to cl. (vii) of sub-s. (2) of s.

10. By s. 10 , in the computation of profits or gains of an assessee under the head "Profits and gains of business, profession or vocation" carried on by him, the amount by which the written down value of any building, machinery or plant which has been sold, discarded or demolished. or destroyed exceeds the amount for which the building, machinery or plant is actually sold or its scrap value is to be allowed as a deduction. This allowance is however subject to an exception prescribed by the second proviso to el. (vii) sub-s. (2) of s. 10 that where the amount for which any building, machinery or plant is sold exceeds the written down value, so much of the  excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profit of the previous year in which the sale took place. In computing the profits and gains of the Company under s. 10 of the Act, for the purpose of assessing the taxable income, the difference between the written down value of the machinery in the year of account and the price at which it was sold (the price not being in excess of the original cost) was to be deemed to be profit in the year of account, and being such profit, it was liable to be included in the assessable income in the year of assessment. But this is the result of a fiction introduced by the Act. What in truth is a capital return is by a fiction regarded for the purposes of the Act as income. Because this difference between the price realized and the written. down value is made chargeable to income tax, its character is not altered, and it is not converted into the assessee's business profits. It does not reach the assessee as his profits: it reaches him as part of the capital invested by him, the fiction created by s. 10(2)(vii) second proviso notwithstanding. The reason for introducing this fiction appears to be this. Where in the previous years, by the depreciation allowance, the taxable income is reduced for those years and ultimately the asset fetches on sale an amount exceeding the written down value, i.e., the original cost less depreciation allowance, the <ORG> is justified in taking back what it had allowed in recoupment against wear and tear, because in fact the depreciation did not result. But the reason of the rule does not alter the real character of the receipt. Again, it is the accumulated depreciation over a number of years which is regarded as income of the year in which the asset is sold. The difference between the written down value of an asset and the price realized by sale thereof though not profit earned in the conduct of the business of the assessee is nationally regarded as profit in the year in which the asset is sold, for the purpose of taking back what had been allowed in the earlier years.

A company normally distributes dividends out of its business profits and not out of its assessable income.

There is no definable relation between the assessable income and the profits of a business concern in a commercial sense. Computation of income for purposes of assessment of income tax is based on a variety of artificial rules and takes into account several fictional receipts, deductions and allowances. In considering whether a larger distribution of dividend would be unreasonable, the source from which the dividend is to be distributed and not the assessable income has to be taken into account. The <ORG> has not provided in s. 23A that in considering whether an order directing that the undistributed profits shall be deemed to be distributed, the smallness of the assessable income shall be taken into account. The test whether it would be unreasonable to distribute a larger dividend has to be adjudged in the light of the profit of the year in question. Even though the assessable income of a company may be large, the commercial profits may be so small that compelling distribution of the difference between the balance of the assessable income reduced by the taxes payable and the amount distributed as dividend would require the company to fall back either upon its reserves or upon its capital which in law it cannot do. For instance, in the case of companies receiving income from property, even though tax is levied under s. 9 of the Act on the bona fide annual value of the property, the actual receipts may be considerably less than the annual value and if the test of reasonableness is the extent of the assessable income and not the commercial profit, there may frequently arise cases in which companies may have to sell off their income producing assets. The <ORG> has deliberately used the expression "smallness of profit" and not "smallness of assessable income" and there is nothing in the context in which the expression "smallness of profit" occurs which justifies equation of the expression "profit" with "assessable income". Smallness of the profit in s. 23A has to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. This view appears to have been taken by <ORG> in India without any dissentient opinion, see <CITATION> , Bombay City (1), <CITATION> (2) and Commissioner of income <CITATION> . (3).

By the fiction in s. 10(2)(vii) second proviso, read with s. 2(6C) , what is really not income is, for the purpose of computation of assessable income, made taxable income: but on that account, it does not become commercial profit, and if it is not commercial profit, it is not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable. In our judgment, <ORG> was right in holding that the amount of Rs. 15,608 was not liable to be taken into account in considering whether having regard to the smallness of the profit made by the Company, it would be unreasonable to declare a larger dividend.

The appeal therefore fails and is dismissed with costs.

Appeal dismissed.

(1) (1940) XVII I.T.R. 493.

(2) (1950) XVIII I.T.R. 762.

(3) (1959) XXXV I.T.R. 183.