PETITIONER: <NAME> Vs. RESPONDENT: THE PRESIDING OFFICER & ANR. DATE OF JUDGMENT: 18/11/1996 BENCH: <NAME>, B.N. KIRPAL ACT: HEADNOTE: JUDGMENT:

J U D G M E N T J.S. Verma, J.

The appellant was employed as a technician with <ORG> Madras Fertilizers Ltd. - Respondent No.2. He was dismissed from service after a domestic inquiry on November 18, 1981 on proof of misconduct. The appellant challenged his dismissal before <ORG>. <ORG> found the domestic inquiry to be defective and permitted the management to prove the misconduct before it. On the basis of the evidence adduced before <ORG> it came to the conclusion that the punishment imposed was justified as the misconduct. was duly proved. <ORG>'s order is dated December 11, 1985. Appellant then filed a writ petition before <ORG> which was dismissed by <ORG>. The writ appeal filed by the appellant was also dismissed by <ORG> of <ORG>. Hence this appeal by special leave.

The leave granted in this appeal is confined only to the question: whether the dismissal will take effect from the date of the order of <ORG> namely, December 11, 1985 or it would relate to the date of the order of dismissal passed by the employer, namely, November 18,1981. The only point involved for decision is apparently concluded by the decision of the <ORG> Bench in <NAME> Vs. <ORG> <ORG> Calcutta 1964 (2) SCR 104. However, this point appears to have been raised on behalf of the appellant on the basis of certain observations made in <ORG> Vs. <ORG> .1980 (2) SCR 146, which appear to be contrary.

Reference may be made first to the decision in <NAME>. This point arose directly before <ORG> and such a contention was rejected, making a distinction between a case where no domestic inquiry had been held and another in which the inquiry is defective for any reason and <ORG> on its own appraisal of evidence adduced before it reaches the conclusion that the dismissal was justified. It was held that in a case where the inquiry was found to be defective by <ORG> and it then came to the conclusion on its own appraisal of evidence adduced before it that the dismissal was justified the order of dismissal made by the employer in a defective inquiry would still relate to the date when that order was made. In that decision it was stated thus:

" If the inquiry is defective for any reason, <ORG> would also have to consider for itself on the evidence adduced before it whether the dismissal was justified. However, on coming to the conclusion on its own appraisal of evidence adduced before it that the dismissal made by the employer in a defective inquiry would still relate back to the date when the order was made .......In the present case an inquiry has been held which is said to be defective in one respect and dismissal however to justify the order of dismissal before <ORG> in view of the defect in the in the inquiry. It has succeeded the <ORG> will relate back to the date on which the respondent passed the order of dismissal. The contention of the appellant therefore that dismissal in this case should take effect from the date from which the labour courts award came into operation must fail."

(Pages 113 & 114 ) In our opinion the authoritative pronouncement by <ORG> in Kalyani puts the matter beyond doubt.

We may now refer to the decision by a three-Judge Bench in <ORG>. <NAME>, J. speaking for the three- Judge Bench observed at page 215 (S.C.R) as under:

"<NAME> (1963 (1) LLJ 679) was cited to support the view of relation, back of the Award to the date of the employer's termination orders. We do not agree that the ratio of <NAME> corroborates the proposition propounded. Jurisprudentially, approval is not creative but confirmatory and therefore relates back. A void dismissal is just void and does not exist. If the <ORG>, for the first time, passes an order recording a finding of misconduct and thus breathes life into the dead shell of the Management's order, predating of the nativity does not arise. The reference to <NAME> in <NAME> enlightens this position, The latter case of <CITATION> Court, <ORG> (supra) specially refers to <NAME>`s case and <NAME>`s case and holds that where the Management discharges a workmen by an order which is void for want of an enquiry or for blatant violation of rules of natural justice, the relation-back doctrine cannot be invoked. The juris- prudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, and an order, which may suffer from some defects but is not still born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which is granted, cannot be obfuscated.

We agree that the law stated in D.C. Roy (supra) is correct but now that the termination orders are being set aside, the problem does not present itself directly..."

(Page 215) (emphasis supplied) Apparently these observations appear to strike a discordant note, even though <NAME> is referred there-in.

The basis of the observations is that "A void dismissal is just dismissal and does not exist". In other words, the reason for making these observations is that a void order does no come into existence until by a subsequent judicial resuscitation it comes into being inasmuch as a void order is still born. Is this assumption jurisprudentially correct?

It is significant that the <ORG> decision in <NAME>, by which the three-Judge Bench was bound, is referred in <ORG> and attempt made to indicate that there is no difference in the view taken therein. It is also significant that agreement is expressed with the decision in <NAME> Vs. The Presiding Officer, <ORG>, Indore & Ors., 1976 (3) SCR 801, to which <NAME> was a party and in which <NAME> has been expressly followed. It has now to be seen whether the above observations in <ORG> are in consonance with <NAME> and <NAME> and also conform to the juristic basis indicated therein.

The above extract from <ORG> which contains ratio of the decision clearly indicates that the above observations in <ORG> are not in conformity with <ORG>. In <ORG> it was held that the defect found in the domestic inquiry is nullified by proof of misconduct on the basis of evidence adduced before <ORG> so that there is no ground available for <ORG> is whether the order of punishment should be set aside on any ground and when <ORG> ultimately reaches the conclusion that even though the inquiry was defective, there is material to justify in the punishment awarded, it rejects the challenge to the order of punishment which continues to operate. It is not as if the order of punishment becomes effective only on rejection of the challenge to its validity. Unless set aside by competent court on a valid ground, the order of punishment made by the employer continued to operate. The operation of the order of punishment made by the employer does not depend on its confirmation by <ORG> to make it operative. Unless set aside by a component authority, the order of punishment made by the employer- continues to be effective Obviously this is the ratio of the decision in <ORG>.

The decision in <NAME> is by a two-judge Bench to which <NAME>, J. is a party. Therein also it was held that the award of <ORG> relates back to the date when the order of dismissal was passed by the employer when it found the inquiry to be defective but reaches the conclusion on the evidence adduced before it that the dismissal was justified. After referring to <NAME> it was held in <NAME> as under:

"These observations directly cover the case before us because though <ORG> in the instant case, found that the inquiry was defective as it infringed the principles of natural justice it come to the conclusion after considering the evidence induced before it that the dismissal was justified. The award of <ORG> must therefore relate back to the date when the order of dismissal was passed on the termination of the <ORG> inquiry".

(Page 805) We may now refer to the juristic principle on which the above quoted observations in <ORG> appears to be based. There is a very useful discussion of the topic under the heading "Void and Voidable" at pages 339 to 344 in Administrative Law by <NAME>, Seventh Edition. The gist of the discussion in <NAME> is as under:

"...Here also there is a logical difficulty, since unless an order of the court is obtained there is no means of establishing the nullity of the list. It enjoys a presumption of validity, and will have to be obeyed unless a court invalidates it. In this sense every unlawful administrative act, however invalid is merely voidable. But this is no more than the truism that in most situations the only way to resist unlawful action is by recourse to the law. In a well- known passage Lord <NAME> said: An order, even if not made in good faith is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders." (Pages 341 & 342) "`Void' is therefore meaningless in any absolute sense. Its meaning is relative, upon the court`s willingness to grant relief in any particular situation. If this principle of legal relativity is borne in mind, confusion over `void' of voidable' can be avoided."

(Pages 343 & 344) (emphasis supplied) With great respect, we must say that the above quoted observations in <ORG> at page 215 are not in line with the decision in Kalyani which was binding or with <NAME> to which the learned Judge, <NAME>, J. was a party. It also does not match with the underlying juristic principle discussed in <NAME>. For these reasons, we are bound to follow the <ORG> decision in Kalyani which is the binding authority on the point.

We may now refer to later decisions of this Court in <NAME> Vs. <ORG>, U.P. Lucknow & Anr., 1990 Supp. (1) SCR 411, and <NAME> Vs. <ORG>, 1995 Supp. (4) SCC 157. In <NAME>, <NAME> and <NAME> were followed by a two-judge Bench and similar view taken that the order of dismissal takes effect from the date on which it was originally passed and not from the date of <ORG> when <ORG>, after holding the domestic inquiry to be defective reaches the conclusion on the evidence adduced before it that the punishment awarded was justified. However, in <NAME> the observations in <ORG> were relied on for taking different view without any reference to either <NAME> or <NAME> which appear to have been overlooked. In these circumstances the decision in <NAME> cannot be treated as an authority on the point. Both these decisions were by two-judge Bench.

As a result of the aforesaid decision it must be held that the only point involved for decision in the appeal is concluded against the appellant by the <ORG> decision of this Court in Kalyani and the observations to the contrary in <ORG> are, therefore, per incurium and not binding. The order of punishment in the present case operated from November 18, 1981 when it was made by the employer and not from December 11, 1985, the date of <ORG> award. The appellant is, therefore, not entitled to any relief.

The appeal is, accordingly, dismissed. No costs.


THE HONBLE SRI JUSTICE U. DURGA PRASAD RAO M.A.C.M.A No.623 of 2009 20-01-2015 <ORG>,Rep. by its Manager, <NAME>..... Appellant <NAME> and others.. Respondents Counsel for Appellant: <NAME> Counsel for Respondents 1 & 2 : Sri Ch. <NAME>. <Gist: >Head Note: ? Cases referred: 1) AIR 1992 Supreme Court 1593 2) 2004 ACJ 1 (SC) 3) 2010 (4) ALD 586 THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO M.A.C.M.A. No.623 of 2009 JUDGMENT:

Challenging the Award dated 11.09.2008 in M.V.O.P.No.639 of 2007 passed by the Chairman, <ORG>-cum- District Judge, <NAME> (for short the <ORG>), the 2nd respondent in <ORG> preferred the instant <ORG>.

2 a) On factual side, on 03.04.2007 at about 2.30p.m, when the deceased <NAME> @ Babu was proceeding as pillion rider on Hero Honda Motorcycle CD 100 SS bearing No.AP 27B 4365 and when they reached opposite to Padmaja Hospital, one auto bearing No.AP 7W 8516 being driven by its driver at high speed and in a rash and negligent manner dashed the motorcycle from behind and thereby the deceased and rider of the motorcycleR.Veeranjaneyulu fell down and received injuries. Immediately they were admitted in Government Hospital, Vinukonda where the deceased succumbed to injuries. It is averred that the accident was occurred due to fault of the driver of the offending auto and due to abrupt death of deceased, the claimants lost their breadwinner and became destitutes. With these averments, the claimants filed M.V.O.P.No.639 of 2007 under Section 163-A and 166 of Motor Vehicles Act,1988 against respondents 1 and 2, who are the owner and insurer of the offending auto and claimed Rs.5,00,000/- as compensation.

b) Respondent No.1 remained ex parte. c) Respondent No.2/Insurance Company filed counter denying all the

material averments made in the petition and urged to put the claimants in strict proof of the same.

d) During trial, PWs.1 and 2 were examined and Exs.A1 to A8 were marked on behalf of claimants. RWs.1 to 3 were examined and Exs.B1 to B5 were marked on behalf of respondents.

e) The <ORG> on appreciation of both oral and documentary evidence on record, has awarded total compensation of Rs.3,47,000/- with costs and interest at 7% p.a under different heads as follows:

Loss of income or dependency Rs.3,12,000-00 Loss of consortium Rs. 15,000-00 Loss of estate Rs. 15,000-00 Transportation and funeral expenses Rs. 5,000-00 ------------ -------- Total Rs.3,47,000-00 -------------------- Hence, the appeal by Insurance Company. 3) The parties in this appeal are referred as they stood before the <ORG>. 4) Heard arguments of Sri <NAME>, learned counsel for

appellant/ Insurance Company and <ORG>, learned counsel for respondents 1 and 2/claimants. Though notice to R3/owner of the auto was served but there is no representation on his behalf, hence treated as heard.

5 a) Challenging the award, learned counsel for appellant firstly argued that though the <ORG> came to a right conclusion that the driver had driving licence to drive only non-transport auto but drove the passengers auto, however, instead of exonerating the appellant/Insurance Company, erroneously directed it to pay compensation and recover from the insured. He argued that such a right is vested with only <ORG> under Article 142 of the Constitution of India but not on the <ORG> and <ORG>. In this context, he relied upon the following decision:

i) <CITATION> . He further argued that pay and recovery principle laid down in <CITATION> is not necessary to be followed in every case. On this aspect he relied upon the decision reported in <ORG>, Tirupati, Chittoor District vs. <NAME> and others .

b) Nextly, he argued that the <ORG> erred in fixing the notional income of the deceased as Rs.3,000/- p.m without there being any proper evidence and thereby compensation was unduly escalated.

6) Per contra, learned counsel for respondents/ claimants supported the award.

7) In the light of above rival arguments, the point for determination in this appeal is:

Whether the award passed by the <ORG> is factually and legally sustainable?

8) POINT: The first argument of the appellant is concerned, it is true that as per Ex.B.2the driver possessed learners licence to driver non- transport auto rickshaw by the date of accident. The crime vehicle was a transport auto rickshaw. Hence, he was not having effective driving licence. Having regard to it and relying upon the decision of <ORG> in <NAME> case (2 supra), the <ORG> held that it is not a case of driver not having licence at all and there was no gross violation of the terms of the policy and further the violation was not a material violation of the terms of the policy. The <ORG> thus directed <ORG> to pay and recover the compensation. The above finding of the <ORG> is now challenged in this appeal on the ground that pay and recovery can be ordered by <ORG> under Article 142 of the Constitution of India and the same cannot be ordered by the <ORG> and further even assuming that such power is vested with <ORG>s, the same is a discretion but not mandatory in every case as per the dictum laid down in <NAME> case (2 supra). I am afraid, this argument is not correct. In <NAME> case (2 supra), the <ORG> was dealing with wide spectrum of defence pleas of Insurance Companies basing on the deficiencies in driving licences. Such deficiencies are:

a) Fake driving licenses of the driver. b) Driver not having licence whatsoever. c) No renewal of driving licence as on the date of accident. d) License granted for one class or description of vehicle but vehicle

involved in accident was of different class or description.

e) Driver holding only a learners licence. a) The Apex Court after discussing various issues involved in this

regard, held that an Insurance Company in order to succeed in its defence pleas touching the driving licence issues must:

(i) Firstly establish that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicle by a duly licensed driver or one who was not disqualified to drive at the relevant time.

(ii) Secondly, the breach which was committed by the insured was so fundamental as is found to have contributed to the cause of the accident.

Even upon establishing the above conditions by the Insurance Company, the <ORG> can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the <ORG>.

b) In the light of above decision, when the facts and evidence in the instant case are perused, as rightly observed by the <ORG>, it is not a case of driver not holding licence at all. It cannot be said that his possessing a different licence was the fundamental cause for the accident. Therefore, the <ORG> rightly directed <ORG> to pay and recover the compensation. Sofaras the argument of appellant that such power was vested only with <ORG> under Article 142 of the Constitution of India is concerned, in <NAME> case (2 supra), <ORG> held that the <ORG> has necessary power and jurisdiction to decide disputes inter se between insurer and insured and further held as follows: Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with Sub-section (7), as interpreted by this Court above, the <ORG> can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal.

c) In view of the above clarification, the contrary argument of the appellant cannot be appreciated. Hence the cited decisions will not improve his case.

9) Sofaras quantum of compensation is concerned, the <ORG> having regard to the recitals in Ex.A.1FIR to the effect that the deceased was running a rice mill on lease, fixed the notional income of the deceased as Rs.3,000/- p.m and accordingly, computed compensation. I see no irregularity in it as contended by the appellant. So at the outset, I find no merits in the appeal.

10) In the result, this M.A.C.M.A. is dismissed by confirming the award passed by the <ORG> in M.V.O.P.No.639 of 2007. No costs in the appeal.

As a sequel, miscellaneous petitions pending if any shall stand closed. _________________________ <NAME>, J Date: 20.01.2015


G.A. 2602 OF 2010 APOT 453 of 2010 A.S. 4 OF 2008 IN THE HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction Original Side THE OWNERS & PARTIES IN THE VESSEL M.V. EUGENIE VERSUS <ORG> . For the Appellants : Mr. <NAME> with Mrs. <NAME>, Advocates For the Respondent : Mr. <NAME>, Sr.Advocate

Before :

Hon'ble Justice <NAME> And Hon'ble Justice Dr. <NAME> Date : 14th September, 2010 THE COURT : There shall be an order in terms of prayer (a) of the application.

This is an application for stay of operation of the order by which the learned single Judge has rejected the application of the defendant for dismissal of the Admiralty Suit. In view of the nature of the order impugned, there is no scope of passing any order of stay of operation of the order at this stage.

We, therefore, dispose of this application by directing the learned advocate for the appellants to prepare 8 copies of informal paper book containing all relevant papers used before the learned single Judge along with the Memorandum of Appeal and the order impugned within 3 weeks from today. In default, the appeal will stand dismissed. Filing of Index and all formalities are dispensed with.

The application is, thus, disposed of. Certified photostat copy of this order be made available to the parties upon compliance of usual formalities.

( BHATTACHARYA, J.) ( SAMBUDDHA CHAKRABARTI, J.) Rsg.

AR(CR)


JUDGMENT <NAME>, J.

1. This appeal is by the Income-tax Officer, Group Circle 11(1), Ahmedabad, by certificate granted under Article 133(1)(c) by <ORG> against its Judgment June 23, 1970, allowing the application filed by the respondent assessee and issuing a writ of mandamus quashing and setting aside the notice dated September 12, 1969, issued by the Income-tax Officer under Section 148 of the Income-tax Act.

2. The respondent who is a Hindu undivided family is an assessee owning two house properties: one in Ahmedabad and the other in Bombay. During the relevant assessment year 1965-66 both the properties were occupied by the respondent. The Income-tax Officer treated the properties as self-occupied properties. The respondent claimed that a sum of Rs. 4,052 being the municipal taxes be deducted in determining the annual valuation of the properties under Section 23(2) of the Income-tax Act. The Income-tax Officer allowed the claim. The order of assessment was made by the Income-tax Officer on March 14, 1966. Subsequently after a lapse of over 3 years the Income-tax Officer by a letter dated July 15, 1969 called upon the respondent assessee to show cause why the amount of municipal taxes allowed as deduction should not be added back on the ground that it was wrongly allowed. The respondent on July, 13, 1969 replied that the Income-tax Officer was not competent to reopen the assessment under Section 147 and that the municipal taxes were validly allowed as a deduction in computing the income from self-occupied properties. Not satisfied with the explanation the Income-tax Officer issued a notice dated September 12, 1969, to the respondent under Section 148 stating that whereas he had reason to believe that the income of the respondent chargeable to tax for the assessment year 1965-66 had escaped assessment within the meaning of Section 147 , he proposed to re-assess the income for the said assessment year and required the respondent to file a return of his income within 30 days from the date of receipt of the notice. The respondent then filed a writ under Article 226 of the Constitution for a writ in the nature of mandamus for quashing the notice dated September 12, 1969 issued by the Income-tax Officer. <ORG> by its Judgment dated June 23, 1970 in Special Civil Application No. 1372 of 1969 allowed the application and issued the writ of mandamus quashing the notice dated September 12, 1969. On an application filed by the appellant <ORG> granted a certificate and the appeal is thus before us.

3. It is not in dispute that for determining the annual value of the house which is in the occupation of the owner Section 23(2) of the Income-tax Act is applicable and that the assessee is not entitled to deduct the sum of Rs. 4,052 being the municipal tax. The Income-tax Officer when he assessed the tax for the year 1965-66 was aware of the fact that the property was self-occupied but erroneously thought that the assessee was entitled to deduction of the municipal taxes. Sub- sequently when the assessments were scrutinised in the office of Comptroller and Auditor-General of India, that office pointed out to the Income-tax Officer that on a true interpretation of Section 23(2) , the deduction of municipal taxes in respect of self-occupied properties was not admissible. On receipt of this intimation from <ORG> the Income-tax Officer treated the intimation as 'Information' within the meaning of Section 147(b) and in consequence of this in-formation he was satisfied that he had reason to believe that the income of the respondent for the assessment year 1965-66 had escaped assessment and therefore proceeded to issue the impugned notice under Section 148 read with Section 147(b) of the Income-tax Act.

4. The only question that arises for consideration in this appeal is whether the intimation which the Income-tax Officer received from <ORG> would constitute 'information' within the meaning of Section 147(b) . Section 147(b) provides:

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 chargeable to tax has escaped assessment for any assessment year, he may assess or reassess such income for the assessment year concerned.

5. Sub-section (b) of Section 147 enables the Income-tax Officer to assess or reassess the income if in consequence of information in his possession he has reason to believe that income chargeable to tax has escaped assessment. Two conditions are necessary for invoking the Sub-section: (1) the officer should receive information after the original assessment; (2) in consequence of such information he should have reason to believe that income has escaped assessment. The 'information' may be of facts or of law. The 'information' of a fact may be from external source. The fact that the Income-tax Officer with

6. <CITATION> 35 I.T.R. 1., the Income-tax Officer omitted to bring to assessment for the year 1945-46, the sum of Rs. 93,604 representing interest on arrears of rent due to the assessee in respect of agricultural land on the ground that the amount was agricultural income. <ORG> held that interest on arrears of rent payable in respect of agricultural land was not agricultural income. As a result of the decision the Income-tax Officer initiated re-assessment proceedings under Section 34(1)(b) of the Income-tax Act. <ORG> held that the word 'information' in Section 34(1)(b) included information as to the true and correct state of the law and so would cover information as to relevant judicial decisions. Section 34(1)(b) of the Income-tax Act, 1948, which the court was dealing with had a similar provision the material words being, "The Income-tax Officer has in consequence of information in his possession reason to believe,".

7. <CITATION> . 70 I.T.R. 74., the first assessment of the appellant firm was made on the Officer's information that the assessee wa a partner and that the interest was received by him in the capacity of a partner, but after the <ORG> gave its decision in subsequent proceedings the Income-tax Officer came to know that the interest was not received by the appellant in the capacity of a partner but in its capacity of financier. In the circums-tances, this Court held that the information received from the decision of the <ORG> and <ORG> in assessment proceedings would be 'information'.

8. <CITATION> . 72 I.T.R. 376. this Court was considering the question whether the opinion of <ORG> if <ORG> would amount to 'information 'within Section 59(b) of the Estate Duty Act.After citing the decision in <CITATION> 35 I.T.R. 1. under Section 34(1) of Income -tax Act,this Court reiterated the view taken in that case and observed that the opinion expressed by the Board of <ORG> as to valuation was clearly 'information'.

9. The authorities cited above make it clear that a subsequent decision of <ORG> I.T.R 1), <ORG> (70 I.T.R.74) and the opinion of <ORG> 72 I.T.R . 376 as to the state of law would be 'information' under Section 147(b) . While conceding this position Mr. <NAME>, the learned Counself, submitted that a note by <ORG> that the I.T.O.'s view of law that the assessee is entitled to deduct the municipal taxes is erroneous, would not amount to'information' especially when the I.T.O. was aware of the fact that the houses were self-occupied. The fact that the I.T.O. was aware of the fact that the houses were self- occupied and that he could have with diligence found that the assessee would not be entitled to the exemption will not preclude the officer from using the auditor's note as fresh 'information'.

10. This Court in <CITATION> .67 I.T.R.11. disagreed with the view taken by <ORG> that the information in consequence of which proceedings of reassessment were intended to be started could have been gathered by the Income-tax Officer in charge of the assessment in the previous years from the disclosures made by the two Hindu undivided families and would not be 'information'. This court held:

Jurisdiction of the Income-tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information, must, it is true, have come into the possession of the Income-tax Officer after the previous assessment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected.

11. The <ORG> further observed that 'information' means instruction or knowledge derived from an external source. But the words "external source" cannot be construed as implying that the source must be outside the record. The 'information' may be gathered from the assessment record itself.

12. The plea of the learned Counsel that the audit report is not 'information' remains to be considered. A few decisions of <ORG> on this point may now be referred to. <CITATION> 84 I.T.R.584. <ORG> held that the scrutiny note of the Revenue Audit and the letter of the Inspecting Assistant Commissioner constituted 'information' within the meaning of Section 147(b) from an "external source" and the assessments were, therefore, valid. The Income-tax Officer treated the income derived by way of interest from bank deposits as "earned income" and accepted the assessee's claim of expenditure on the salary paid to her daughter-in-law. Subsequently, the revenue audit staff working under the Comptroller and Auditor-General of India, while scrutinising these assessments, brought to the notice of the department that the Income-tax Officer had wrongly treated the "interest income" as "business income" and also that the Income-tax Officer had wrongly allowed the assessee's claim with regard to the salary paid to her daughter-in-law. The Income-tax Officer acted upon this note and reopened the original assessment. A Bench of <ORG> relying on the reasoning of this Court in 72 I.T.R. 376 that the opinion expressed by <ORG> in appeal under the Estate Duty Act would be 'information' held that the note of the revenue audit under the Comptroller and Auditor-General of India would be 'infor- mation'. The same view was expressed in <CITATION> . 102. by <ORG>. <NAME> speaking for the court held that the note put up by the Audit to the effect that the assessment ought to have been made on the reconstituted firm for the entire income of the two periods and therefore the Income-tax Officer committed an error, was instruction or knowledge derived from an external source and would constitute 'information'. <CITATION> 99 I.T.R. 148., a Bench of <ORG> held that when subsequent to the assessment <ORG> and the Revenue Audit pointed out that as a question of fact the payment of interest by the petitioner was made to his own account in the Provident Fund and as a question of law the money so paid did not vest in the Government but continued to belong to the petitioner and therefore, the income of the petitioner had escaped assessment, it would be 'information' available to the Income-tax Officer.

13. We feel that the view of <ORG> in 84 I.T.R. 584 and 99 I.T.R. 148 and that of <ORG> in 85 I.T.R. 102 is correct. Ample support is derived for that view from the law laid down by this Court in <CITATION> . 67 I.T.R. 11.where it was held that the expression 'information' in the context would mean instruction or knowledge derived from an external source concerning fact or particulars or as to law relating to a matter bearing on the assessment. It is not disputed that the decisions of courts of law and <ORG> would be 'information' of law. This Court, as already pointed out in 72 I.T.R. 376 has held that the opinion of <ORG> as regard the valuation of securities for the purpose of Estate Duty would be information.

14. <ORG> was correct in its view that it would be information of law if it is stated by a person, body or authority competent and authorised to pronounce upon the law and is invested with authority to do so. In applying this principle the Court erred in holding that Audit department is not an authority competent and authorised to declare the correct state of law or to pronounce upon it. <ORG> is the proper machinery to scrutinise the assessments of the Income-tax Officer and point out the errors, if any, in law.

15. For the reasons stated we are unable to accept the conclusion arrived at by <ORG>. We allow this appeal and hold that the Income-tax Officer in the circumstances is entitled to reopen the assessment under Section 147(b) of the Income-tax Act. The appeal is allowed with costs.


PETITIONER: <ORG> Vs. RESPONDENT: UNIED BANK OF INDIA & ORS. DATE OF JUDGMENT: 08/08/2000 BENCH: S.RAJENDRA BABU & SHIVARAJ V. PATIL JUDGMENT:

L...I...T.......T.......T.......T.......T.......T.......T..J RAJENDRA BABU, J. :

This petition is filed against the judgment passed by <ORG> affirming a decree passed by the learned Single Judge of <ORG> for a sum of Rs.1015.50 lakhs on application of the respondent for judgment upon admission as provided under Order XII, Rule 6 of the Code of Civil Procedure. The facts leading to the suit are as follows:

<ORG> subcontracted construction of students' dormitories/dining hall for <ORG> Iraq. Respondent Nos. 1 to 3 functioned as consortium to finance the said project. Certain disputes having arisen petitioner filed suits against the respondent Banks that the debits raised are illegal etc. <ORG> (<ORG>) filed a suit for recovery of certain sums of money and an application made therein under Chapter XIII-A of the Original Side Rules and <ORG> rejected the same and Respondents 1 and 3 Banks and <ORG> were also impleaded by an amendment in the said suit. Respondent No.1 filed a suit for recovery of certain sum of money with certain other reliefs and in that suit, application for judgment upon admission was allowed. Appeal thereon being unsuccessful, this petition is filed.

The application filed by <ORG> for judgment on admission covers only a part of the suit claim. The <ORG> relied upon (I) Balance Sheet of the petitioner for year ending 31st March, 1989 with reference to Schedules 'C', 'D' and 'E'; (ii) Minutes of the meeting of Board of Directors held on 30th May, 1990 which noticed the discussion at the meeting and issues that could be deemed to have been settled as result thereof. (iii) letter dated 4th June, 1990 communicating the resolution and minutes of the meeting of the Board of Directors held on May 30, 1990.

In the said minutes in the meeting held on 30th May, 1990, it was mentioned as follows:-

"IT WAS RESOLVED THAT :

In consideration of <ORG>, Connaught Circus Branch, New Delhi, having agreed to the continuation of the previously sanctioned aggregate credit limits amounting to Rs.17.45 crores and in consideration of the <ORG> having agreed to continue the operation of the various borrowing accounts with outstanding dues, as stated hereinbelow in detail, the Company agrees to duly execute a fresh set of documents as required by the <ORG> there against.

That Mr. <NAME>, the Managing Director of the Company be and is hereby authorised to execute the said documents and the official seal of the Company be affixed thereon.

It is also resolved that the Company disputes the amount of Rs.3,08,01,000 debited to its Cash Credit Account on 01.08.89 which along with interest stands at Rs.3,60,62,579 as on 31.03.90.

That the company accepts its liability as per details stated hereinbelow:

Natures Present Sanctioned Amount Due (Rs. In lakhs) (Rs. In lakhs) Cash Limit/OD 65.00 101.16 Inland Guarantee 401.31 23.18 <ORG> 1082.60 793.73 Jordan Guarantee 209.30 101.85 Term Loan 5.00 Nil Loan Account Nil 16.88 --------- --------- 1745.07 1036.80 ======= =======

That, also due to fluctuations in Exchange Rate there has been difference in amount due under Jordan Guarantee amounting to about Rs.21 lakhs which is not reflected in details shown above."

A copy of the aforesaid resolution was sent to the plaintiff with the following note as indicated in the letter dated 4th June, 1990:

"a) We do not confirm the debit entry of Rs.3,60,62,579/- representing your share of the invoked guarantee with interest upto 31.3.90 which has been effected by you unauthorisedly against the illegal payment made by <ORG>. We are enclosing a copy of the reply given to the Legal Notice received by us from them. The reply is self-explanatory. You will agree that before effecting the said payment consisting of such a large amount, a reference ought to have been made to us.

b) The loan account of <ORG> amounting to Rs.4,03,820 is not accepted and is totally denied. We have repaid your <ORG> the Convertible was loan for Baghdad along with interest in full. The debit in your ledger is on account of the <ORG> not giving effect to the reduced interest rate as directed by <ORG>. At their request a copy of the <ORG> circular was given to them and had also been sent to you.

c) That fresh documents are executed against the consideration of permitting us to operate the sanctioned limits there against as they stand. The debit entry of Rs.3,60,62,579 and entries for interest thereon will have no bearing on the actual amount due as confirmed by us in our Board Resolution.

d) Almost two years ago an unofficial freeze was imposed on our Inland Guarantee limits for reasons never communicated to us. Thus, you had denied fresh Guarantees for Bid Bonds etc. to tender for new works and the company's huge fleet of Construction equipments and trained personnel perforce thereby remained idle since the last one and a half year."

The petitioners filed an affidavit-in-opposition to contend that:

1. That the defendant No.1's suit is barred by limitation;

2. That the resolution dated 30.5.90 was passed subject to a condition that the inland guarantee limit would be resumed and that as the condition was not fulfilled, the resolution was no binding;

3. That the defendant No.1's suit was liable to be stayed under Section 10 CPC because the matter in issue in the suit was also directly and substantially in issue in the previous suits filed by others

4. That the suit of the defendant No.1 is bad for misjoinder of parties.

The defendants further contended that, insofar as resolution dated 30.5.90 and a letter dated 4.6.1990 are concerned, they are to the effect that they are matters of record and save what are matters of record and save what would appear from the letter dated 30.5.1990 all allegations to the contrary are disputed and denied. It is categorically denied that there is any admission of liability by the first respondent to the Petitioner to the extent of Rs.10,15,80,090 as on 30th March 1990 or that since the said alleged admission of the liability the claim of the Petitioner has increased and it is now more than Rs.24 crores, as wrongly alleged, if at all.

At the time of hearing it appears it was contended: 1. that the amount claimed by the plaintiff from the defendants was part of the consortium agreement under which <ORG>, <ORG> and <ORG> agreed to advance money to defendant No. 1 in the proportion of 50:25:25. It was stated that <ORG> has filed a suit against the defendants for recovery of all the amounts advanced by the consortium to the defendant No.1 and that suit was still pending, therefore, they were estopped from filing that suit and making an independent claim against the defendant No.1. 2. That in the suit filed by <ORG> an application had been moved by <ORG> for final judgment under Chapter XIII-A on the basis of the same documents which were sought to be relied upon by the plaintiff. The trial judge had rejected the same. 3. That payments had been made subsequent to the admission and loan was recalled only in 1993 just prior to the filing of the suit. 4. That several claims have been included in the suit in respect of which another suit has been filed in <ORG> and, therefore, the amount could not be recovered. 5. The claim of the plaintiff had been covered by a counter guarantee issued by <ORG> and the extent of payment made by it to the plaintiff and the suit was for the reason not maintainable at the instance of defendant No. 1.

6. That the defendants in the suit had filed a separate suit in which he had claimed for certain reliefs which would nullify the claim made by the plaintiff in the suit.

The learned trial judge found that there is an unequivocal admission of the contents of the documents and what is denied is the extent of admission and the increase of the liability admitted. The learned trial judge took the view that the pre- requisites of Order XII, rule 6 CPC had been satisfied in this case and that on a plain reading of the resolution of the <ORG> dated 30.5.90 there could be no doubt that the Petitioner had made a clear, unambiguous and unconditional acknowledgement of its liability to the <ORG>. The language of the resolution would show that the extent of the admission in the resolution is for Rs.10,15,80,000/-, if not for Rs.10,36.80 lakhs. The figure of Rs.1015.80 lakhs is firm admission being the figure arrived at after deducting Rs.21 lakhs claimed by the defendants by reason of fluctuation of the exchange rate and that was the amount claimed by the Petitioner in the suit. This admission made in the course of the <ORG> of Directors' resolution had not been explained by the Petitioner in the affidavit-in-opposition but on the other hand had reiterated the same. The arguments raised before the trial court were considered to be contrary to the pleadings raised in the case. Therefore, the application was allowed.

On appeal, <ORG> noticed these very facts and also noted that discrepancy, if any, between the appellant's particulars and the particulars in respect of which a judgment was sought on admission was not made the subject-matter of challenge either in the affidavit-in- opposition before the trial Judge or in the arguments thereof and characterized the same as a point of accounting discrepancy which could not be raised at the stage of appeal and dismissed the same.

Learned Counsel for the appellant contended that Order XII Rule 6 comes under the heading 'admissions' and a judgment on admission could be given only after due opportunity to the other side to explain the admission, if any, made; that such admission should have been made only in the course of the pleadings or else the other side will not have an opportunity to explain such admission; that even though, the provision reads that the court may at any stage of the suit make such order as it thinks fit effect of admission, if any, can be considered only at the time of trial; that the admission even in pleadings will have to be read along with order VIII Rule 5(1) of <ORG> and <ORG> need not necessarily proceed to pass an order or a judgment on the basis of such admission but call upon the party relying upon such admission to prove its case independently; that during pendency of other suits and the nature of contentions raised in the case, it would not be permissible at all to grant the relief before trial as has been done in the present case; that the expression 'admissions' made in the course of the pleadings or otherwise will have to be read together and the expression 'otherwise' will have to be interpreted ejusdem generis'.

As to the object of the Order XII Rule 6, we need not say anything more than what the legislature itself has said when the said provision came to be amended. In the objects and reasons set out while amending the said rule, it is stated that "where a claim is admitted, the court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled." We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which, it is impossible for the party making such admission to succeed.

The next contention convassed is that the resolutions or minutes of meeting of the <ORG>, resolution passed thereon and the letter sending the said resolution to the respondent bank cannot amount to a pleading or come within the scope of the Rule as such statements are not made in the course of the pleadings or otherwise. When a statement is made to a party and such statement is brought before the <ORG> showing admission of liability by an application filed under Order XII Rule 6 and the other side has sufficient opportunity to explain the said admission and if such explanation is not accepted by the <ORG>, we do not think the trial court is helpless in refusing to pass a decree. We have adverted to the basis of the claim and the manner in which the trial court has dealt with the same. When the trial judge states that the statement made in the proceedings of the <ORG> meeting and the letter sent as well as the pleadings when read together, leads to unambiguous and clear admission with only the extent to which the admission is made is in dispute. And the court had a duty to decide the same and grant a decree. We think this approach is unexceptionable.

Before the trial judge, there was no pleading much less an explanation as to the circumstances in which the said admission was made, so as to take it out of the category of admissions which created a liability. On the other hand, what is stated in the course of the pleadings, in answer to the application filed under Order XII Rule 6 CPC, the stand is clearly to the contrary. Statements had been made in the course of the Minutes of the Board of Directors held on 30th May, 1990 to which we have already adverted to in detail. In the pleadings raised before the Court, there is a clear statement made by the respondent as to the undisputed part of the claim made by them. In regard to this aspect of communicating the resolution dated 30th May, 1990 in the letter dated 4th June, 1990 what is stated in the affidavit-in-oppostion in application under Order XII Rule 6 CPC is save, what are matters on record and save what would appear from the letter dated 30th May, 1990 all allegations to the contrary are disputed and denied. This averment would clearly mean that the petitioner does not deny a word of what was recorded therein and what is denied is the allegation to the contrary. The denial is evasive and the learned judge is perfectly justified in holding that there is an unequivocal admission of the contents of the documents and what is denied is extent of the admission but the increase in the liability is admitted.

Even without referring to the expression 'otherwise' in Rule 6 of Order XII CPC, we can draw an inference in the present case on the basis of the pleadings raised in the case in the shape of the applications under that Rule and the answering affidavit which clearly reiterates the admission. If that is so, interpretation of the expression 'otherwise' becomes unnecessary.

The learned counsel for the appellant relied on a decision of this Court in <NAME> Vs. <NAME> & Others, 1956 S.C.R.451, as to when an admission becomes relevant. In <NAME> (supra) which is locus classicus on the subject states that merely because a written admission made in a different context, such admission may not become relevant if the party making it has a reasonable explanation of that. But that is not the position in the present case at all. Learned counsel for the appellant further adverted to the decision in <NAME> & Anr. Vs. <NAME> and Anr., 1999 (8) SCC 396 in which the court was concerned with a case of the effect of not filing a written statement and whether a decree could be passed only on that basis. That was a suit for specific performance and it was held it could not be granted without even writing a detailed judgment and adverted to various provisions of Code of Civil Procedure and reference was made to Order XII Rule 6 by way of analogy and referred to the dictum in <CITATION> , 1959 SCR 111, to state that Order XII Rule 6 should be read along with proviso to Rule 5 of Order 8 CPC. In that case, what was noticed was that in cases governed by Section 42 and Section 43 of Specific Relief Act, 1877, the court is not bound to grant declaration prayed for on the mere admission of the claim by the defendant if the court has reason to insist upon a clear proof apart from admission. The result of a declaratory decree confers status not only on the parties but for generations to come and so it cannot be granted on a rule of admissions and, therefore, insisted upon adducing evidence independent of the admission. That is not the position in the present case at all. We fail to see how this decision can be of any use to the petitioner. The decision in re <ORG>, AIR 1974 Calcutta 170 pertains to the manner in which the balance sheet should be read and has no bearing on the case. The decision in <CITATION> . <ORG>, 1974 M.P.75, is to the effect that the Rule is wide enough to afford relief not only in cases of admissions in pleadings but also in the case of admission de hors pleadings. <CITATION> ., AIR 1988 Delhi 153, and <ORG> vs. <ORG>, AIR 1962 J & K 66 cannot have any relevance because the facts in arising cases and the present case are entirely different.

Learned counsel for the Petitioner contended that admissions referred to in Order XII, Rule 6 CPC should be of the same nature as other admissions referred to in other rule preceding this Rule. Admissions generally arise when a statement is made by a party in any of the modes provided under Sections 18 to 23 of the Evidence Act, 1872. Admissions are of many kinds : they may be considered as being on the record as actual if that is either in the pleadings or in answer to interrogatories or implied from the pleadings by non- traversal. Secondly as between parties by agreement or notice. Since we have considered that admission for passing the judgment is based on pleadings itself it is unnecessary to examine as to what kinds of admissions are covered by Order XII, Rule 6 CPC.

We are not impressed with the contention of the learned counsel for the appellant that there is no admission for the purpose of Order XII Rule 6 at all, nor that the admission if any is conditional because we cannot spell out any conditions stated therein nor the dismissal of application filed by <ORG> in the suit has any relevance. Therefore, we are of the view that this case deserves to be dismissed with advocates' fees quantified at Rs. 10,000/-.


<NAME>, J.

1. <ORG> through its Secretary has filed the above Writ Petition to issue a Writ of Declaration declaring the ceiling on the wages of the employees with regard to entitlement for Bonus in Section 2(13) of the Payment of Bonus Act as illegal and unconstitutional and consequently direct the respondents 1 and 2 not to impose ceiling on the wages of the employees Class III and IV Categories with regard to entitlement for Bonus and direct the respondents 2 and 3 to pay arrears of bonus for the period from 1986 to 1993.

2. The case of the petitioner <ORG> is briefly stated hereunder: The petitioner <ORG> is <ORG> of the UCO Bank Employees' <ORG> which is a registered Trade Union and has been recognised by the third respondent. Most of the employees of the third respondent were getting bonus until they crossed the limit of Rs.2,500/-. The Secretary of the petitioner Union who is the deponent of the affidavit filed in support of the above writ petition was getting bonus till 1986 and thereafter became eligible as a result of the ceiling on wages at Rs.2,500/-. <ORG> of which the petitioner <ORG> is an affiliate made representations to <ORG> for amendment of Section 2(13) to remove the ceiling so as to make all employees particularly Class IV and III eligible to get bonus. Since nothing has been done so far by the Government, the <ORG> was constrained to approach this Court by way of the present writ petition.

3. Joint Director, <ORG>-first respondent herein, has filed a counter affidavit disputing various averments made by the petitioner. Section 2(13) of the Payment of Bonus Act, 1965, defining 'Employees' by which employee drawing more than 2,500 rupees would be ineligible for bonus. <ORG> may from time to time revise the eligibility limit and calculation ceiling taking into account the economic situation prevailing in the country, capacity to pay, etc. These ceilings were last revised in the year 1985. Further, the Payment of Bonus Act , 1965 envisages minimum statutory bonus of 8.33 per cent and a maximum of 20 per cent. The scheme of payment of Bonus to persons employed in certain establishments is on the basis of profit or productivity. The Government can revise a ceiling on salary or wage for entitlement of bonus depending on the conditions prevailing in the country. <ORG> while amending Section 2 (13) by Act 67 of 1985, substituted the words as "two thousand and five hundred rupees" for the words "one thousand and six hundred rupees". The amendment is with reference to salary or wages earned by the employees and not with reference to class III or IV employees. Section 10 of the Payment of Bonus Act, 1965 provides for payment of statutory minimum bonus of 8.33 percent and maximum of 20 per cent.

4. In the light of the above pleadings, I have heard Mr. <NAME>, learned counsel for the petitioner Employees' Association; Mr. <NAME>, learned Additional Solicitor General for respondents 1 and 2 and Mr. <NAME> for third respondent.

5. Mr. <NAME>, learned counsel for the petitioner <ORG>, by drawing my attention to Section 2(13) of the Payment of Bonus Act, 1965, would contend that the ceiling imposed therein is bad, unjustified, unrealistic and violative of Article 14 of the Constitution of India. He also contended that there is no such ceiling under Gratuity Act , Workmen Compensation Act and other Social Welfare Legislation. On the other hand, Mr. <NAME>, learned Additional Solicitor General, appearing for respondents 1 and 2, after pointing out the history of the enactment, contended that it is a legislation policy and it is for the <ORG> which alone can prescribe and increase the ceiling. He also contended that inasmuch as the Payment of Bonus Act is self contained, the same cannot be compared with the other legislation and the judicial decisions arising from those enactments. According to him, it must be left to the wisdom of the <ORG>. Mr. <NAME>, appearing for the third respondent, adopted the argument of the learned Additional Solicitor General.

6. In order to appreciate the rival contentions, it is useful to refer the definition "employee"

in Section 2(13) of the Payment of bonus Act, 1965 (hereinafter referred to as "the Act").

" Section 2(13) "employee" means any person (other than an apprentice) employed on a salary or wage not exceeding three thousand and five hundred rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work of hire or reward, whether the terms of employment be express or implied;"

Section 12 of the Act is also relevant which speaks about calculation of bonus with respect to certain employees.

" Section 12 . Calculation of bonus with respect to certain employees.- Where the salary or wage of an employee exceeds two thousand and five hundred rupees per mensem, the bonus payable to such employee under Section 10 or, as the case may be, under Section 11 , shall be calculated as if his salary or wage were two thousand and five hundred rupees per mensem."

It is to be noted that at the time of enactment of the Act in 1965, the ceiling of a salary or wage was fixed at Rs.1,600/-, it was subsequently enhanced to Rs.2,500/-, and by Amendment Act 34/1995, the ceiling was raised to Rs.3,500/- with effect from 1-4-93. It is clear that after filing of the writ petition, the ceiling was increased from Rs.2,500/- to Rs.3,500/-. Mr. <NAME>, learned counsel for the <ORG> has contended that having included skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work in any industry, the eligibility criteria and fixing ceiling is unrealistic and unjustified. He further emphasized that the persons incharge of supervisory or managerial or administrative work undoubtedly get salary or wages more than the ceiling prescribed, accordingly they are forced to out of the pension benefit, which cannot be sustained. It is also stated that there is no ceiling to claim gratuity under the Payment of Gratuity Act , 1972 or compensation under Workmen Compensation Act .

7. Now I shall consider decisions cited by Mr. <NAME> in support of his claim that ceiling provided under Section 2(13) of the Act is bad and irrational. The first decision is in the case of <ORG> v. S.B.I., (1989 Supp. (1) S.C.C. 236). The grievance of the petitioners therein is that the instant Pension Plan governing the employee of the erstwhile <ORG> is outdated and does not provide reasonable pension required for survival. Before <ORG>, the submission was twofold: Firstly, the ceiling of Rs.1,300/- is unrealistic and secondly the calculation of pension at 50 per cent of the basic salary is uncalled for as it introduces a second ceiling. <ORG> has accepted the first contention, namely, that the ceiling of Rs.1,300/- is unrealistic. After holding that once it is realised that pension is a right and not a bounty, it would not be proper to leave the quantum of pension at the discretion of the Trustees in each case, <ORG> opined that the figure of Rs.1,300/- in the proposed Rule 20 (1) (a) should be replaced by the figure of Rs.2,400/-. First of all, the said decision deals with payment of pension under <ORG> Employees Pension and Gratuity Fund Rules and Regulations. On the other hand, we are dealing with bonus under a statute, namely, Payment of Bonus Act , 1965. Even in the said decision, <ORG> has altered the amount in the proposed rule. In such a circumstance, I am of the view that the said decision is not helpful to the petitioner's claim.

8. The next decision relied on by Mr. <NAME> is in the case of <CITATION> , . In that case the tenants of residential buildings were paying monthly rent exceeding Rs.400/- excepted from the protection of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. After holding that there is no justification at all for picking out the class of tenants of residential buildings paying a rent of more than four hundred rupees per month to deny them the rights conferred generally on all tenants of buildings residential or non-residential by the Act, that the tenants of non-residential buildings cannot be said to be in a disadvantageous position as compared with tenants of residential buildings and that the argument based on protection of the weaker section of the community is entirely inconsistent with the protection given to tenants of non-residential buildings who are in a position to pay much higher rents than the rents which those who are in occupation of residential buildings can ever pay, <ORG> struck down Section 30(ii) of the Act as violative of Article 14 of the Constitution of India.

9. <CITATION> , , <ORG>, while considering Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, has held that law should be just to all sections of the society and it should not be unjust to one and give disproportionate benefit to the other.

10. He also relied on M/s <NAME> v. State of J and K , wherein Their Lordships have held that in granting largess, the Government action must satisfy test of reasonableness and public interest.

11. Among these decisions, the decisions, namely, and (cited supra) arose under Rent Control Act, whereas (cited supra) is with reference to grant of largess by the <ORG>. Mr. <NAME>, learned Additional Solicitor General, by pointing out that unless those provisions are in pari materia with Payment of Bonus Act ,1965, the same cannot be cited as a binding decision for the issue in question. In this regard, he very much relied on a recent decision of <ORG> in <CITATION> . The following conclusion of Their Lordships is relevant: (para 5) "5......It is true that the courts while construing a provision of an enactment often follow the decisions by the courts construing similar provision of an enactment in pari materia. The object behind the application of the said rule of construction is to avoid contradiction between the two statutes dealing with the same subject. But in the present case, what we find is that the Madhya Bharat Land Revenue and Tenancy Act contains one integrated scheme providing for remedy to a pucca tenant claiming restoration of possession under Section 91 and 93 of the Act. The Madhya Bharat Land Revenue and Tenancy Act was repealed by the M.P. Land Revenue Code. In the repealing Act i.e. M.P. Land Revenue Code we do not find any provision like Section 93 of the Act. We are, therefore, of the view that Sections 91 , 92 and 93 of the Act are not in pari materia with the provision of Section 250 of the M.P. Code. It is not a sound principle of construction to interpret a provision of an enactment following the decisions rendered on a similar provision of an enactment when two statutes are not in pari materia....."

11(a). <CITATION> ., reported in (2001) 3 <ORG> Cases 135, the <ORG> has held thus: (para 19) "19. We have considered the arguments of both the parties. In our view it is clear that the interpretation has to be on the basis of the expression "agricultural produce" as set out in Section 2(a) of the said Act. In so determining decisions based on different statutes, statutes such as sales tax laws can be of no assistance. All the cases relied upon by Mr. <NAME> are cases under the taxing statutes where the interpretation has been given on the basis of the terms as defined in those statutes."

12. <CITATION> have held thus: (paras 12 and 13) "12. <CITATION> 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> it was held that Code of Civil Procedure has to be read along with the Limitation Act . <CITATION> , it was held that Prevention of Corruption Act should be read along with the Evidence Act . <CITATION> . Chhoitaka Bibi it was held that the Code of Civil Procedure has to be read along with the Court Fees Act . <CITATION> this Court observed that the Companies Act should be read along with the Transfer of Property Act .

13. 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..."

13. <CITATION> ((2001) 7 <ORG> Cases 71), <ORG> has considered the issue relating to interpretation of Statutes. The following conclusion is relevant (para 13) "13. We have considered the submission made by the parties. The settled principles of interpretation are that the court must proceed on the assumption that the legislature did not make a mistake and that it did what it intended to do. The court must, as far as possible, adopt a construction which will carry out the obvious intention of the legislature. Undoubtedly, if there is a defect or an omission in the words used by by legislature, the court would not go to its aid to correct or make up the deficiency. The court could not add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result. The court cannot aid the legislature's defective phrasing of an Act, or add and mend, and, by construction, make up deficiencies which are there."

14. <CITATION> , the following conclusion is pressed into service: (para 52) "52. There is no provision in the Act which negates the power of <ORG> to grant pardon. <ORG> has power to grant pardon at any stage of the proceedings. The power under Section 307 cannot be denied merely because no commitment of the case is made to <ORG>. Learned Solicitor-General, in our view, rightly contends that the other statutes are only an external aid to the interpretation and to rely upon the omission of a provision which is contained in another different enactment, it has to be shown that the two Acts are similar which is not the position here. The scheme of the two Acts is substantially different as has been earlier noticed by us...."

15. <CITATION> have arrived at the following conclusion: (para 23) "23. We find that Kantilal Trikamlal case supports the view taken in Getty Chettiar case . Added to this, Section 2(15) of the Estate Duty Act, defining "property" came up for consideration in Kantilal Trikamlal case (cited supra). We may state here itself that the words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pari materia legislation or it is specifically so provided in one statute to give the same meaning to the words as defined in the other statute. The aim and object of the two legislations, namely, the Gift Tax Act and the Estate Duty Act are not similar."

16. All the above decisions of <ORG> make it clear that the words and expression defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pari materia legislations. Further, it is clear that the other statutes are only an external aid to the interpretation and to rely upon the omission of a provision which is contained in another different enactment, it has to be shown that the two Acts are similar. It is also clear that it is permissible to read the provisions of the two Acts together when the same are complementary to each other. It is also stated that the <ORG> while construing a provision of an enactment often follow the decisions by the courts construing similar provision of an enactment in pari materia. The object behind the application of the said rule of construction is to avoid contradiction between the two statutes dealing with the same subject. But, in the present case we are concerned with the ceiling prescribed for Payment of Bonus to the Employees. The cases relied on by Mr. <NAME> are cases under Tamil Nadu Buildings (Lease and Rent Control) Act and Bombay Rent Control Act where the interpretation has been given on the basis of the terms as defined in those statutes. Accordingly, as rightly argued by the learned Additional Solicitor General, those principles cannot be applied to the present case.

17. Another decision very much relied on by the learned Additional Solicitor General is in the case of <CITATION> (2001 (1) CTC 309). Before <ORG>, one of the contentions of the petitioner was that the bonus, which the <ORG> has directed the Management to pay was in the nature of deferred wages, that impugned legislation had the effect of freezing wages, and that <ORG> not being vested with the power to reduce the wages, the legislation is invalid on that account as well. On behalf of <ORG>, it was contended before <ORG> that the power of legislation is plenary and it is open to the law maker to amend or repeal existing legislation so long as it acts within its field of legislative competence, and that such power extends to taking away vested rights. It was further submitted that in matters of economic policy, the <ORG> has wide latitude and is to be allowed play at the joints. While construing the amendment made in the <ORG> <ORG> of India Act , <ORG> has concluded thus: (para 28 and 39) "28. The legislation with which we are concerned in this case has already been set out. The amendment made by the impugned enactment is to the <ORG> <ORG> of India Act and other enactments concerning other public sector <ORG>s. By Section 7(1) of the <ORG> <ORG> of India Act, the <ORG> was vested with the power to change the conditions of service of those of its employees, who had earlier served in the Imperial <ORG>. Those employees cannot assert that they have a vested unalterable right in their terms and conditions of the employment. So far as other employees are concerned, by Section 43 of the Act, the <ORG> is empowered to determine the terms and conditions of service. The <ORG> <ORG> of India Act , as also the other Acts amended by this amending Act, are not beyond the pale of the legislative power of the <ORG>. <ORG> has undoubted power to legislate on the topic of bonus and <ORG> is not precluded from legislating on that topic in enactments other than the Payment of Bonus Act . The principles, including custom, on basis of which bonus is payable, are capable of being altered by legislation.

39. The argument that the impugned legislation is invalid on the ground that it has expropriated the wages of the workmen bonus, according to petitioner being deferred wages, is wholly untenable. Bonus, after the enactment of the Payment of Bonus Act is a statutory right. The bonus though calculated on basis of wages, can no longer be termed as a deferred wage, though that description had been given to it by the <ORG> prior to the enactment of the Bonus Act . While bonus may form part of wages for purpose of some of the other enactments governing employees, the right to receive bonus and the extent is as regulated or permitted under the Bonus Act ...."

It is settled that in matters of economic policy, the <ORG> must have a larger area in which to make its decisions without the supervision of the <ORG>, as the <ORG> is the better Judge of what the policy should be in relation to matters of economic. Likewise, <ORG> has power to legislate on the topic of bonus. The <ORG> having legislated that bonus to the employees of <ORG> shall be payable only in accordance with and to those eligible under the Payment of Bonus Act , it is no longer open to the employees to claim bonus on the basis of custom de hors the provisions therein. Likewise, bonus after the enactment of Payment of Bonus Act , 1965, is a statutory right. The right to receive bonus and extent is as regulated or permitted under the Bonus Act .

18. To sum up, after the enactment of the Payment of Bonus Act , the right to receive bonus and the extent is as regulated or permitted under the Bonus Act . There is no scope for claiming bonus de hors the provisions therein. Though in other enactments, the differential treatment or ceiling is found to be bad, in view of the fact that those enactments cannot be compared with the Payment of Bonus Act , those decisions are not helpful to the case on hand. The reference made to the Rent Control legislation of the State of Tamil Nadu and Bombay, Payment of Gratuity Act , Workmen Compensation Act are not in pari materia with section 2(13) of the Payment of Wages Act. In such a circumstance, it is not fair principle of construction to interpret a provision of enactment following a decision rendered in a similar provision of the enactment when the statutes are not in pari materia. The cases relied on by Mr. <NAME> are cases under different statutes where the interpretation has been given on the basis of the terms given in those statutes. It is also settled law that it is permissible to read the provisions of two Acts together when the same are complementary to each other. It is true that in <CITATION> (2002 (1) LLJ 918, a Division Bench of <ORG> has held that prescribing wage ceiling of Rs.1,600/- per month under Payment of Wages Act , 1936 had become obsolete and unreal and issued appropriate direction for change in the Act. In our case, I have already referred to the fact that at the time of enactment of Bonus Act , the ceiling was fixed at Rs.1,600/- and the same was increased to Rs.2,500/- and again by Act 34/1995, it was further increased to Rs.3,500/-. Likewise, the figure mentioned in Section 12 of the Act also increased periodically. I have already held that Section 12 speaks about computation of bonus. In the light of the fact that <ORG> is very well aware of the grievance of persons concerned and it increases the ceiling limit then and there, I am of the view that while holding that the impugned legislation is valid, no direction is required to be given by this Court. I hold that Section 2(13) of the Payment of Bonus Act, 1965 defining an employee is constitutional and the same is valid in law. The Bonus Act envisages minimum statutory bonus of 8.33 per cent and a maximum of 20 per cent. The scheme of payment of bonus to persons employed in certain establishments is on the basis of profit or productivity. <ORG> may from time to time revise the eligibility limit taking into account the economic situation prevailing in the country, capacity to pay etc. Inasmuch as the ceiling limit was increased to Rs.3,500/- in 1995, this Court hopes that <ORG> may revise the eligibility limit, more particularly, in view of increased salary/wage payable to Class III and IV employees. With the above observation, I hold that Section 2(13) defining an employee in the Payment of Bonus Act , 1965 is constitutional, valid in law and the same is not liable to be struck down. Accordingly, the Writ Petition fails and the same is dismissed. No costs. Consequently, both the <ORG>., are closed.


IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.24004 of 2009 SRI KANT MAHTO @ LOTHA, SON OF LATE RAM SAWRUP MAHTO, RESIDENT OF VILLAGE KHANPURA, P.S. BHAGWANGANJ, DISTRICT PATNA VERSUS STATE OF BIHAR -----------

3. 05.11.2009 Heard learned counsel for the petitioner and learned counsel for the <ORG>.

Initially, the case was instituted under Section 395 of the Indian Penal Code but subsequently Section 412 of the I.P.C. has been added in this case.

Learned counsel for the petitioner accepts that petitioner is involved in more than six cases from before.

Case diary was called for and after going through the case diary, learned counsel for the <ORG> submits that petitioner is absconding in many cases out of the same. It is informed that charges have been framed in the case and the case is at the stage of trial.

In the circumstances, specially considering the criminal antecedent of the petitioner, this <ORG> is not inclined to allow petitioner on bail. The application is dismissed.

<NAME> (<NAME>, J.)


IN THE <ORG> KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN FRIDAY, THE 4TH DAY OF JULY 2014/13TH ASHADHA, 1936 Crl.MC.No. 3586 of 2014 ---------------------------------- [CRL.A.NO.189/2014 OF THE 1ST ADDITIONAL SESSIONS COURT, PALAKKAD, C.C. 133/2007 OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT - II, PALAKKAD] .......... PETITIONERS/APPELLANTS: ----------------------------------------- 1. <NAME>, AGED 55, S/O.SAITH, CHIRAYIL HOUSE, MATTANCHERY, KOCHI. 2. <NAME>, AGED 55, S/O.MOIDEENKUTTY, BUNGLAW PARAMBIL HOUSE, MATTANCHERY, KOCHI. BY ADVS.SRI.K.R.VINOD, MS.JENCY SUSAN JOSE, SRI.V.SRI NATH. RESPONDENT: --------------------- STATE OF KERALA, REP.BY THE PUBLIC PROSECUTOR, <ORG> KERALA - 682 031. BY PUBLIC PROSECUTOR <NAME>. THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 04-07-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Prv. CRL.M.C. NO.3586/2014: APPENDIX PETITIONERS' ANNEXURES: ANNEXURE-A1: THE ORDER OF THE LEARNED JUDICIAL FIRST CLASS MAGISTRATE COURT-II, PALAKKAD DATED 24.04.13 IN M.C NO.84/12. ANNEXURE-A2: THE COPY OF THE APPEAL MEMORANDUM IN CRL.APPEAL NO.189/2014 FILED BY THE PETITIONERS BEFORE THE HON'BLE 1ST ADDITIONAL SESSIONS COURT, PALAKKAD. ANNEXURE-A3: A COPY OF THE DELAY CONDONATION PETITION NUMBERED AS CRL.M.P.NO.1600/2014 FILED BY THE PETITIONERS IN CRL.APPEAL NO.189/2014 BEFORE THE HON'BLE 1ST ADDITIONAL SESSIONS COURT, PALAKKAD. RESPONDENT'S ANNEXURES: NIL. //TRUE COPY// P.A. TO JUDGE. Prv. K. RAMAKRISHNAN, J. ------------------------------------------------------------------ Criminal M.C. No.3586 of 2014 --------------------------------------------------------------------- Dated this the 4th day of July, 2014 O R D E R

This criminal miscellaneous case is filed by the petitioners, who are appellants in Crl.Appeal No.189/2014 pending before the 1st Additional Sessions Court, Palakkad, for staying the recovery proceedings initiated against them in M.C.No.84/2012 in C.C. 133/2007 on the file of <ORG>, Palakkad, under Section 482 of the Code of Criminal Procedure (hereinafter called `the Code').

2. It is alleged in the petition that, petitioners are the counter petitioners in M.C.84/2012 in C.C.133/2007 on the file of <ORG>, Palakkad. They were sureties for the accused in that case and since the accused did not appear, the bail bond was forfeited and proceedings under Section 446(1) of the Code of Criminal Procedure was initiated against them and the Crl.M.C.No.3586/ 2014 learned magistrate imposed the entire bond amount of 25,000/- each as penalty against the petitioners. Aggrieved by the same, they filed Crl.Appeal 189/2014 along with delay condonation application as Crl.M.P.1600/2014 before the <ORG> court, palakkad, and the delay petition is now posted to 29.07.2014. In the meantime, recovery proceedings have been initiated and they have no other remedy, except to approach this court, seeking the following relief:

(a) Direct the Hon'ble 1st Additional District and Sessions Judge, <NAME>, to consider and dispose off Annexure-A3 delay condonation petition numbered as Crl.M.P.No.1600/2014 in Crl.Appeal No.189/2014 as expeditiously as possible and pass appropriate orders in the stay petition filed by the petitioners.

(b) To issue any other order or direction appropriate in the circumstances of the case.

3. Considering the nature of relief claimed in the petition, this court felt that, the petition can be disposed of at the admission stage itself, after hearing the learned counsel for the petitioner and learned Public Prosecutor. Crl.M.C.No.3586/ 2014

4. The learned counsel for the petitioner submitted that, though the appeal was field along with delay condonation application, on 26.05.2014, without considering the delay application, it was posted to 29.07.2014 by <ORG> and the execution proceedings have been initiated and they are likely to be arrested and remanded or their property will be preceded against for the recovery amount. They have got far chances of success in the appeal.

5. The application was opposed by the learned Public Prosecutor.

6. It is an admitted fact that the petitioners stood as sureties for releasing the accused in C.C.133/2007 on the file of <ORG>, Palakkad, and since he did not appear, his bail bond was cancelled and proceedings under Section 446(1) of the Code of Criminal Procedure was initiated against them and as per Annexure-1 order, the learned magistrate had Crl.M.C.No.3586/ 2014 imposed the entire bond amount of 25,000/- each as penalty. It is also seen from the order that, they did not appear in spite of notice issued. The petitioners challenged the same by filing Crl.Appeal No.189/2014 along with Crl.M.P.1600/2014 to condone the delay of 399 days in filing the appeal before <ORG>, Palakkad. It is averred in the petition that, the appeal was filed on 26.05.2014, but without passing any orders in the delay petition, the case was adjourned to 29.07.2014. In the meantime, revenue recovery proceedings have been initiated against the petitioners for realisation of the amount. It may be mentioned here that, when an appeal is filed with delay condonation application, where state alone is a party in a criminal proceedings, the court should have considered that application and disposed of as expeditiously as possible as without condoning the delay, no effective orders can be passed in the appeal. In this regard, an oral report was called from the concerned court by telephonic Crl.M.C.No.3586/ 2014 message, and it is revealed that the application filed with delay condonation application on 26.05.2014 and it is posted to 29.07.2014. So pendency of the delay condonation application to a longer date, when <ORG> alone is the party is not a good practice. However, considering the fact that, without condoning the delay, no order of stay could be obtained by the petitioner, this court feels that, as a matter of interim arrangement, they can be directed to deposit some amount and that can be taken for the purpose of staying the proceedings for a time being, till the appeal is disposed of by <ORG>. So the petition is disposed of as follows:

If the petitioners deposits 4,000/- each before the Judicial First Class Magistrate Court-

II, Palakkad, towards penalty amount imposed, then the execution proceedings initiated for recovery of the amount is directed to be kept in abeyance, till the appeal is disposed of by the Crl.M.C.No.3586/ 2014 Sessions Judge. The Sessions Judge is directed to expedite disposal of the delay petition and also the appeal filed by the petitioner, against the proceedings initiated under Section 446(1) of the Code of Criminal Procedure, immediately.

With the above direction and observation, the criminal miscellaneous case is disposed of. Office is directed to communicate this order to the concerned courts, immediately for necessary further action.

Sd/-

<NAME>, JUDGE // True Copy // P.A. to Judge ss


HIGH COURT OF JAMMU AND KASHMIR AT JAMMU CIMA No. 304 OF 2012 <ORG>. Petitioners <NAME> and ors Respondent !Mr. <NAME>, Advocate ^Mr. <NAME>, Advocate. HONBLE MR. JUSTICE <NAME>, JUDGE Date: 30.12.2014 :J U D G M E N T :

1. This is insurers appeal against judgment and award in a Motor Accident Claim case.

2. Heard. I have perused the record.

3. I may state, briefly, the facts leading to this appeal.

(a) On 07.06.2008, deceased, <NAME>, was traveling by a tractor bearing chassis No. 92466, Engine No. 918003 (for short the offending tractor). Respondent No. 5, <NAME>, was on the wheel. The offending tractor met with accident and turned turtle near a place called Gordhan. The deceased died in this accident. 2

(b) Legal representatives of the deceased, respondents 1 to 3 herein, preferred a claim for compensation under section 166 of the Motor Vehicles Act ( for short the Act) before <ORG>, Jammu ( for short the <ORG>) against owner and driver of the offending tractor, herein respondents 4 & 5 and the insurer, herein appellant. They alleged that the accident occurred due to negligence of the driver of the offending tractor.

(c) Respondents 4 & 5 did not contest the claim. The appellant/insurer, however, defended its liability mainly on the ground that the terms and the conditions of the policy of insurance had been violated inasmuch as the deceased was traveling by the offending tractor as unauthorized passenger, whose risk was not covered under the policy and the offending driver at the time of accident was not holding a valid and effective driving licence for the reason that the licence held by him was not renewed and did not authorize him to drive tractor fitted with a trolly, which falls in the category of a transport vehicle.

(d) <ORG> after completing the inquiry and appraisal of the evidence found that the 3 accident had occurred due to rash and negligent driving by the driver of the offending tractor and the deceased died as a result thereof. <ORG>, therefore, awarded compensation of Rs. 4,93,000/ to the claimants under following heads:

1. Loss of dependency= Rs. 4,68000/

2. Funeral expenses = Rs. 5,000/

3. Loss to estate = Rs. 10,000/

4. Loss of consortium = Rs. 10,000/ Total: Rs. 4,93,000/

(e) In regard to the defence taken by the appellant/insurer, <ORG> held that the deceased was traveling as a labourer with the offending tractor. <ORG> took note that the policy of insurance covered the legal liability for one person engaged in operation and maintenance of the vehicle and held further that a labourer falls in that category and risk to his life is covered under the policy. <ORG> further held that the driving licence of the driver of the offending tractor was valid for driving light motor vehicle, light transport vehicle, public service vehicle and heavy goods vehicle but was not renewed after 29.12.2006. On this score, <ORG> concluded that the insurer has succeeded in proving that driving licence of the offending driver was not effective as on the date 4 of accident. <ORG>, therefore, while relying upon <CITATION> , AIR 2011 SC 1234, directed that the award shall be satisfied by the insurer with a right to recover the awarded amount from the insured/owner of the offending vehicle.

4. Emphasis in the submissions of Mr. <NAME>, learned counsel for the appellant, was against the pay and recover aspect of the impugned judgment and award. Mr. <NAME> submitted that the appellant/ insurer having succeeded in proving breach of a condition of the policy of insurance, learned <ORG> should not have foisted liability to satisfy the award on the insurer. Mr. <NAME> submitted that a <ORG> or Claims <ORG> has no jurisdiction to foist liability of satisfying the award on the insurer with liberty to recover the amount from the insured. Mr. <NAME> also sought to assail the finding of the learned <ORG> that the deceased having been engaged as a labourer with the offending tractor, risk to his life was covered under the insurance policy and that licence of the offending driver was valid for driving a light transport vehicle. In support of his contention that the deceased was traveling as unauthorized passenger, Mr. <NAME> sought to draw support from the evidence rendered by respondent, <NAME>, who is wife of the deceased 5 and <NAME> and submitted that the tractor having been attached with a trolly and deceased having been engaged as a labourer, risk to life of a labourer was not covered under the insurance policy.

5. Per contra, Mr. <NAME>, learned counsel for the respondents/claimants supported the award. Mr. <NAME>, while reading out the policy of insurance issued by the appellant, pointed out that it inter alia covered legal liability in respect of one person engaged for operation/maintenance of the tractor. He submitted that a person engaged as a labourer with a tractor cannot be taken as a person other than one having been engaged for operation/ maintenance of the tractor.

6. Having read and analyzed the evidence led by both the sides before the learned <ORG>, I am not persuaded, as I find no valid reason, to disagree with the conclusion recorded by the learned <ORG> on various issues of fact. Learned <ORG> has correctly examined the driving licence of the offending driver and found that it authorized him to drive light motor vehicle, light transport vehicle, public service vehicle and heavy goods vehicle. At the same time, learned <ORG> has rightly noticed that the licence was not renewed after 6 29.12.2006 and therefore, not valid and effective as on the date of the accident. Likewise, I am not persuaded to disagree with the finding recorded by the learned <ORG> that a person having been engaged as a labourer with a tractor would fall within the definition of a person meant for operation and maintenance of the tractor for the reason that his role would be loading, unloading and fitting of trollies and ploughs to the tractor, which are the activities connected with operation of a tractor. I have noticed that there is nothing in the evidence led before the learned <ORG> that the offending tractor at the time of accident was being used for any commercial purpose. Learned <ORG> has correctly taken note that the policy of insurance covered legal liability of the insured in respect of one person engaged for operation/maintenance of the tractor and held the deceased to be a person falling in that category.

7. Last question, but not the least, however, is, whether the learned Tribunal had the jurisdiction and was legally right in foisting the liability on the appellant/insurer to satisfy the award with liberty to recover the awarded amount from the insured/owner?

8. It is now well settled that in an appropriate case, where the insurer has issued the policy of insurance 7 but has succeeded in defending its liability by proving breach of a specified condition of the policy of insurance in terms of section 149(2) of the Act, the insure can still be directed to satisfy the award and to recover the awarded amount from the insured. In <ORG> v. <NAME> / AIR 2004 SC 1531 <ORG> has observed that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time. <ORG>, however, has hastened to add in paragraph 102 of the reporting that (SC): 102. the <ORG> and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under subclause

(ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act . However, in the event, having regard to the limited scope of inquiry in the proceedings before the <ORG> it had not been able to do so, the insurance company may initiate a separate action therefore against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the 8 insurer at a subsequent stage or for one reason or the other, the insurer was not given opportunity to defend at all. Such a course of action may also be resorted when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage. The view taken by <ORG> in <NAME> has been referred to with approval lately in <CITATION> AIR (2011) SC 1234.

9. What prevailed with the learned <ORG> in directing the appellant/insurer to satisfy the award and recover the awarded amount from the owner of the offending vehicle is stated in the penultimate paragraph of the impugned judgment and award which reads: Adverting to facts of present case petitioner are dependants of the deceased who was a poor labourer. If they are asked to run after the registered owner of the offending vehicle for recovery of the amount of compensation, it will amount to adding insult to their injury. Interests of justice will be met, if respondent No. 3, insurer is asked to pay the amount of compensation to the petitioners and thereafter recover the same from respondent No. 2, the owner of the vehicle in question.

10. I agree with the view taken by the learned <ORG> as I find no good reason to disagree. Besides, I find another good reason for upholding the order of the learned <ORG>. On reading of the impugned judgment and award, it is seen that even though the appellant/insurer had succeeded in proving and 9 learned <ORG> held that the driving licence of the offending driver, having not been renewed after 29.12.2006, was not valid and effective at the time of accident, neither has the appellant proved nor the learned <ORG> accorded consideration to the fact as to whether the breach of a specified condition of the policy of insurance was on the part of the insured/owner. To defend its liability under section 149(2) of the Act the insurer has to prove not only the breach of a specified condition of the policy of insurance but also that the breach had been on the part of the insured. The insurer has to prove by leading evidence that there was conscience breach on the part of the insured. This legal position is discernible in <NAME> (supra) where their Lordships have held that the insurance companies with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish breach on the part of the owner of the vehicle; the burden of proof wherefore would be on them. There is not even a whisper in the evidence led by the appellant/insurer that the owner of the offending tractor was aware of the fact that the driver had not got his licence renewed.

11. The insurance company in this case having failed to establish that breach of insurance policy, that is, 10 driving licence of the offending driver being not renewed as at the time of accident, was on the part of the owner of the offending tractor, I have my reservation in regard to <ORG> allowance to the appellant/insurer to recover the awarded amount from the insured. However, this aspect of the impugned judgment and award having not been assailed, I would prefer not to devolve upon the same any more. Nonetheless I would say that appellants grievance cannot be taken as well founded and hold that this is a fit case where the insurer should satisfy the award and avail the benefit of recovery as allowed by the learned <ORG>.

12. For all that said and discussed above, I hold that this appeal has no merit and dismissed the same.

13. Record of the <ORG> be remitted back along with a copy of this order.

( <NAME>) Judge Jammu:

30.12.2014 <NAME>