JUDGMENT <NAME>, J.

1. This is an application of one <NAME>, an employee in <ORG> of the State of Uttar Pradesh, for the issue of a writ of mandamus directing the State of Uttar Pradesh, the District Magistrate of Mirzapur and the District Supply Officer of Mirzapur, not to terminate the services of the applicant without complying with Article 311 , Sub-clause (2) of the Constitution of India, and praying further that the notice of termination of service dated 26th April 1951 given by the District Magistrate, Mirzapur, be declared to be inoperative and bad in law. The facts disclosed in the affidavit submitted along with the application are as follows.

2. The applicant is employed as supply inspector in <ORG> at Mirzapur. On the 24th April 1951, the Hon'ble Sri <NAME>, Minister for Food and Civil Supplies, State of Uttar Pradesh visited the district of Mirzapur. At the instance of the said Minister, the applicant was served with a notice dated the 26th April 1951, under the signature of the District Magistrate, Mirzapur, notifying that the applicant's services were to be terminated on the expiry of one month's notice, that is, with effect from the 26th May 1951. The notice was in the following terms :

"All the posts in <ORG> are temporary posts and these have been extended from lime to time according to the requirements. The conditions of service of these posts stipulate that the services of the <ORG> are liable to termination with one month's notice.

2. Due to his bad reputation in the <ORG> organization it has been decided to retrench Sri <NAME>, Supply Inspector.

3. Article 311 of the Constitution of India requires that every person who holds any civil post under the <ORG> shall before dismissal or removal or reduction in rank be given an opportunity of showing cause against the action proposed to be taken in regard to him. It is not admitted that this provision has any application to the category of personnel in question, but assuming that it does, I am satisfied that in view of the person involved and the nature of reasons for retrenchment it does not seem reasonable to give the individual an opportunity to show cause why his services should not be terminated.

4. It is, therefore, ordered that the services of Sri <NAME>, Supply Inspector, shall be terminated after a month of the service of this notice.

One months's notice as stipulated in the condition of service is hereby given to him.

<NAME>, District Magistrate, Mirzapur.

April. 26, 1961."

3. The applicant alleges that his reputation was not bad as the previous quarterly reports would show, that he made a representation to the District Magistrate on the 10th May 1951 questioning the basis of the charge of bad reputation against him and that the District Magistrate thereupon ordered the withdrawal of the charge of bad reputation while confirming the previous order of termination of service. The case for the applicant is that Article 311 of the Constitution applies to his case and that <ORG> was not entitled to terminate his services without following the procedure laid down in Clause (2) of that Article. Clause (2) provides, "No such person as aforesaid (that is a person who is a member of a civil service of the <ORG> or an all-India service or a civil service of a <ORG> or holds a civil post under the <ORG> or a <ORG>) shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him."

There are three provisos to this clause under which the clause will not apply. One of these provisos (b) is "Where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to give to that person an opportunity of showing cause."

4. It is in order to bring proviso (b) into operation that in the notice it was mentioned that "in view of the person involved and the nature of reasons for retrenchment it does not seem reasonable to give the individual an opportunity to show cause why his services should not be terminated."

The case of the applicant with regard to this clause is that the reasons given in the notice, for saying that it is not reasonably practicable to give the individual an opportunity of showing cause, are not sufficient in law to bring the case under proviso (b) to Clause (2) of Article 311 of the Constitution.

5. The first point that is to be considered is whether the main Clause (2) of Article 311 at all applies to a case of this kind. It will be noticed that the applicant was a temporary employee whose contract of service laid down that his services were liable to termination with one month's notice. One month's notice was duly given to him and in accordance with the conditions of service, his services would terminate upon the expiry of the period specified in the notice. From the 26th May 1951 the applicant cannot claim to remain as an employee of the <ORG>. He would no longer after that date hold a "civil post"--it is conceded that he is not a member of the civil service of the <ORG> or of the <ORG>. Article 311 applies only to a case in which a person is dismissed or removed or reduced in rank. These are technical words used in cases in which a person's services are terminated for misconduct. They do not apply to cases in which a person's period of service determines in accordance with the conditions of his service. It is not so much a question of the post being held temporarily or it being of a permanent nature; the real question is whether a person's services are being dispensed with before his normal period of service has terminated by reason of misconduct on his part, or otherwise. If a person's services are sought to be terminated before the period of his service has expired, on account of some misconduct, then, whether the employee is temporary or permanent, the procedure prescribed in Article 311 has to be followed unless of course the case falls within any one of the three provisos to Clause (2). If, on the other hand, a person's services are sought to be terminated at the expiry of the term for which he was engaged, or at the expiry of the period of notice by which, in accordance with the conditions of his service, his services could be terminated, there is no question of dismissal, removal or reduction in rank and Article 311 does not come into operation.

6. Article 311 not being applicable to a case of this kind, it is not necessary to decide whether the reasons given in the notice, for not giving an opportunity to the applicant to show cause against the termination of his services, were sufficient or not, within the meaning of proviso (b) to Article 311(2).

7. We see no force in this application and dismiss it.

8. We certify that this case involves a substantial question of law as to the interpretation of the Constitution.


<ORG>, J.

1. These are two connected applications in revision by three men who were convicted of offences under Section 215, I.P.C . and sentenced each to rigorous imprisonment for a period of six months and a fine of Rs. 25. According to the judgment of the lower <ORG> there is evidence that a bullock was stolen from the house of one <NAME> and that the applicants agreed to take a sum of money to return the bullock. There is also evidence that they did in fact take the complainant to the jungle where they pointed out the bullock tied to a tree. It is urged in these circumstances that the facts do not warrant a conviction under Section 215 , I.P.C . It is said in the first place, that there is no proof that the bullock was stolen because the evidence is only to the effect that the bullock was tied up during the night and was missing next morning. It is urged that the applicant should not have been convicted unless it was proved as a positive fact that the bullock had been stolen. The words of the section are:

Whoever takes or agrees or consents to take any gratification under pretence or on account of helping any person to recover any moveable property of which he shall have been deprived by any offence punishable under this Code, shall, unless he uses all means in his power to cause the offender to be apprehended and convicted of the offence, be punished.

2. The question therefore before the Courts below was whether the owner of the bullock had been deprived of it by an offence punishable under the Indian Penal Code . It is argued that these words mean that the bullock must have been stolen. Learned Counsel suggests that "deprive" means "taken out of the possession of." I do not think that any such narrow interpretation can be placed upon that word. To deprive a person of any article may be either to take it away from him or to prevent him from getting possession of it if he would have! done so in the normal course of events. In the circumstances of this case, even if the bullock did stray at night, although there is no reason for thinking that it did, yet the person who tied it up in the jungle was, in my opinion, depriving the owner of possession of it because normally a bullock which went away would return to its owner in the ordinary course and by being tied up it would be prevented from so doing. Learned Counsel has suggested that a person who commits criminal misappropriation does not deprive the real owner of possession of property. I cannot see that there is any force in this contention and there is no ruling which supports it. A reference has been made to the cases in <NAME> v. Emperor (1914) 1 A.I.R. Lah. 551, <CITATION> (1932) 19 A.I.R. Pat. 241 and <CITATION> (1928) 15 A.I.R. All. 22 in which learned Judges have remarked that it must be proved that the deprivation of pos. session was the result of an offence under the Indian Penal Code and that there can be no inference merely from the disappearance of cattle that any such offence was committed. These were all cases in which the stolen cattle were never recovered and very likely it was not a fair inference in any of these cases that the cattle had ever been stolen or misappropriated. They had strayed and they were never found and there was therefore nothing whatsoever to suggest that any person had ever taken possession of them. The facts in the present case are entirely different. The bullock disappeared and was found three days later tied in the jungle where it was pointed out by the applicants.

3. It seems to me that the <ORG> below were entitled quite fairly to make the inference that the bullock had either been stolen or misappropriated dishonestly by some person. In either case some offence was committed and that offence prevented the owner from retaining or obtaining possession of his property so that he was deprived of possession of it. Reference has also been made to the case in <CITATION> (1931) 18 A.I.R. All. 710. It was certainly said in that case in which the facts were not dissimilar, that criminal misappropriation could not be presumed. I do not think however that in the present case there is any question of presumption. It is a question of inference from the facts and what inference may properly be made is not a question of law but a question for the conscience of the person who is supposed to make the inference. I think therefore that it cannot be said that the <ORG> below were so utterly wrong in coming to the conclusion that the owner was deprived of possession of the bullock by means of an offence under the Indian Penal Code that this Court should interfere in revision. It appears from the judgment that the applicants themselves promised to return the stolen bullock. It was not a case where they merely said that they would make their best endeavour to discover where the bullock was, nor a case where they ultimately failed to discover the property. From the evidence it appears that as soon as they received their money they took the owner direct to the jungle and pointed out the bullock tied up to a tree.

4. The second argument is that there is nothing in the record to show that the applicants had not used their best endeavours to cause the offenders to be apprehended and convicted of the offence. The applicants, I am informed, did not make any defence on this particular charge in the sense that they gave no explanation of how they discovered the bullock and there was nothing to show one way or the other that they knew or did not know who the offender was. In this connexion reference has again been made to <CITATION> (1928) 15 A.I.R. All. 22. I should like to point out that much inconvenience and error is caused by attempts to regard the dicta of learned Judges as statements of law. <CITATION> (1928) 15 A.I.R. All. 22 the learned Judges certainly made use of expressions from which it might be inferred that they were of opinion that nobody could be convicted of an offence under Section 215 , I.P.C . unless he knew who the offender was but they were discussing the particular facts of that case and I do not suppose for a moment that they meant to lay down as a general rule of law that knowledge of the offender was a necessary ingredient of that offence. There is not one word in the section that suggests that such knowledge is necessary. It may well be that a person who receives money for discovering stolen property may in the course of his investigations obtain information which if followed up would lead to the apprehension of the offender. If he withholds that information from the proper authorities it is obvious that it cannot be said that he used his best endeavour to cause the offender to be apprehended. The remarks of learned Judges should be read in connexion with the circumstances which they are discussing and the principles of law which they intend to lay down can be inferred only from the effective decisions at which they arrive.

5. It has been held by two Judges of <ORG> at Calcutta in <NAME> v. <NAME> (1933) 20 A.I.R. Cal. 599 that the burden of proving under Section 215 , I.P.C . that the accused person used his best endeavours or the means in his power to cause the offender to be apprehended and convicted of the offence is upon him. This also seems to be the conclusion to be drawn from the provisions of the Evidence Act . The clear meaning of the section in my judgment is that it is an offence to receive money for helping any person to recover property stolen or misappropriated and that there is an exception only in favour of a man who can show that he used all means in his power to cause the apprehension of the offender. Under the provisions of Section 105 , I.P.C . where a person is accused of any offence the burden of proving the existence of circumstances bringing the case within any special exception or proviso contained in the Code or in any law defining the offence is upon him and the <ORG> shall presume the absence of such circumstances. I therefore hold that the burden of proving that they had used jail means in their power to bring about the apprehension of the offenders was upon the applicants in the present case and it is quite clear that they never made any attempt to discharge that burden. The application is rejected.


PETITIONER: NEW INDIA ASSURANCE COMPAFIY Vs. RESPONDENT: SHRI SATPAL SINGH AND ORS. DATE OF JUDGMENT: 02/12/1999 BENCH: K.T.Thomas, M.B.Shah JUDGMENT:

THOMAS, J.

Leave granted.

A 10 year old girl met with her death in a truck accident. Her name was <NAME>. The accident occurred while she was travelling in the truck on 11.3.1990. She died on the spot. Her father, brother and sister made a joint claim for compensation under the Motor Vehicles Act , 1988 (for short the 'new Act). <ORG> before which the claim was made passed an award in a sum of Rs.25,000/~ to the claimants. The owner of the truck was found liable to pay the compensation amount. M/s. <ORG>, the insurer had been directed to make the amount good with interest, as the vehicle was then covered by an insurance policy issued by that company.

The claimants as well as <ORG> challenged the said award. The farmer was dissatisfied with the quantum of compensation awarded. <ORG> was aggrieved as the liability was imposed on them. <ORG> put forward a contention that the deceased <NAME> was a gratuitous passenger in the truck and hence no liability can be fastened with the insurer, but that contention was repelled.

<ORG> of <ORG> dismissed the appeal filed by <ORG> but allowed the other appeal by doubling the compensation amount. Hence this appeal by special leave at the instance of <ORG>. After hearing learned counsel for the appellant we felt that it is not necessary to send notice to the respondents to contest the appeal as there is no scope for absolving <ORG> from liability.

Learned counsel for the appellant ' banked on the decision of a three Judge Bench this Court in <NAME> and ors. Vs. <ORG> and ors. [1999 (1) SCC 403} to disclaim liability on the premise that the victim of the accident was gratuitous passenger in the vehicle covered by the insurance policy. But the said decision was rendered under Section 95 of the Motor Vehicles Act, 1939 (which can be referred to as 'the old Act' ). The aforesaid provision contained a rider in clause (ii) of the proviso to sub-section (1) which is abgent in the corresponding provision in the New Act. To pinpoint the said distinction we extract Section 95(1) of the old Act as under:

"95. Requirements of policies and limits of liability.- (1) In order to comply with the requirements of this Chapter, a policy of insurance may be a policy which-

(a) is issued by a person who is an authorised insurer or by a co-operative society allowed under section 108 to transact the business of an insurer, and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by 3 or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any. passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;

Provided that a policy shall not be required-

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employees of a person insured by the policy or in respect of bodily injury sustained by such an. employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act , 1923, in respect of the death of, or bodily injury to, any such employee-

(a) engaged in driving the vehicle, or

(b) it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it is a goods vehicle, being carried in the vehicle; or

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or

(iii) to cover any contractual liability."

As per ".the proviso when read .with its clause (ii) It is clear that the policy of insurance shall not be required to cover liability in respect of the death of or bodily injury to persons who wore gratuitous passengers of that vehicle. This Court, has' held in <CITATION> . pvt. Ltd. and anr. [AIR 1977 sc 1735 » 1977 (2) SCC 745) as under:

" Sections 95(a) and 95(b)(l) of the Motor Vehicles Act adopted the provisions of the .English Road Traffic Act, 1960, and excluded the liability or the insurance company regarding the risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury bo any person or damage to any property of -a third party caused by or arising out of the use of the vehicle in a public place. The plea that the words 'third party",are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to sub-section which provides that a policy shall not be required. ............ Therefore it is not required that a policy of insurance should cover risk to the passengers who are nob carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried out hire of reward is not required to be insured the plea of the counsel for the insurance-. company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act ."

in fact the said ratio has been approved by the three Judge <NAME> in <NAME> vs. <ORG> (supra). At .the same time learned Judges pointed out that the old Act is now repealed by the new <ORG> and Section 147 of the new Act correspondinq to Section 95 of the old Act has been siubstantially altered and hence the above interpretation ,of Section 95 of the old Act will govern the cases which have arisen under the old Act.

Proviso to Section 147 (1) of the. new Act 'shows that it is a recast by provision by placng the erstwhile clause (iii) as the present clause (ii) In- other words, clause (ii) of the proviso in Section 95(1) of the old Act is totally non-existent in the proviso to Section 147 (1) of the new Act.

Under Section 147 of the new Act, the policy must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub- section (2) -

(i) against any liability which may be incurred by him in respect of the death of or bodily {injury to any person, including owner of the goods or his authorised representative carried in the vehicle) or damage to any property of a third party - caused by or arising out of the use of the vehicle in a public place:

(ii) against the death of or bodily injury to any passenger of a public, service vehicle caused by or arising out of the use of the vehicle in a public place.

The proviso to the said sub-section is not relevant here a it pertains to death or bodily injury to the employee mentioned therein. Sub-section (2) provides that a policy of insurance shall cover any liability incurred in respect of any accident, up to the following limits, namely:-

(i). save as provided in clause (b) the amount of liability incurred;

(ii) in respect of damage to any proporty of a third party, a limit: of rupees six thousand:

Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

Hence, under sub-section (2), there is no upper limitation for the insurer regarding the amount of compensation awarded in respect, of death or bodily injury of a victim ot the accident, It is therefore, apparent that the limit contained in the old Act has been removed and the policy should insure the liability incurred and cover injury to any person including owner of the goods or his authorised representative carried in the vehicle. The <ORG> has also taken care even the policies which were in force on the date of commencement of the Act by specifically providing that any policy of insurance containing any limit regarding insurer's liability shall continue to be effective for a period of four months from commencement of the Act or till the date of expiry of such policy, whichever is earlier. This means, after the said period of four months a new insurance policy consistent with the new Act is required to be obtained.

The resuit is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter chat the vehicle is of any type or class. Hence the decisions rendered under the old Act vis-a-vis gratuitous passengers are of no avail while considering the liability of the insurance company in respect of any accident which occurred or would occur after the new Act came into force.

<ORG> of <ORG> has rightly repelled the contention of the appellant - insurance company on the aforesaid score. We therefore, dismiss these appeals.


PETITIONER: DEPUTY COMMISSIONER, SALES TAX (LAW) BOARD OF REVENUE(TAXES) Vs. RESPONDENT: PIO FOOD PACKERS DATE OF JUDGMENT09/05/1980 BENCH: <NAME>, R.S. BENCH: <NAME>, R.S. <NAME>, P.N. <NAME>, V.D. CITATION: 1980 AIR 1227 1980 SCR (3)1271 CITATOR INFO : R 1981 SC 976 (1) RF 1981 SC1014 (5) R 1986 SC 662 (31) R 1986 SC1809 (5) D 1987 SC1885 (8) RF 1988 SC 113 (5) R 1988 SC 992 (5) RF 1988 SC 997 (7,11) R 1988 SC1133 (2,3,5) R 1988 SC2237 (6) RF 1989 SC 516 (17,18) RF 1991 SC2222 (22) ACT: Kerala General Sales Tax Act, Section 5-A(1)(a) "consumes such goods in the manufacture of other goods for sale or otherwise", meaning of-Exigibility to tax of pineapple fruit. when processed into slices for the purpose of being sold in sealed cans. HEADNOTE: The respondent assessee, <ORG> carries on the business of manufacturing and selling canned fruit besides other products. The Pineapple purchased by the assessee is washed and then the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit is sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation. In its return for the year 1973-74 under the Kerala General Sales Tax Act, 1963 the assessee claimed that a turnover of Rs. 3,84,138-89 representing the purchase of pineapple fruit was not covered by Section 5-A(1)(b) of the Act. It was asserted that the pineapple was converted into pineapple slices, pineapple jam, pineapple squash and pineapple juice. The assessee maintained that by the conversion of pineapple fruit into its products no new commodity was created and it was erroneous to say that there was a consumption of pineapple fruit "in the manufacture of" these goods. The Sales Tax Officer did not accept the contention and completed the assessment on the finding that a manufacturing process was involved and that, therefore, the case fell within s. 5-A (1) (a). In revision before <ORG>, the assessee conceded that pineapple jam and pineapple squash would be covered by s. 5- A(1)(a), and in regard to pineapple juice the <ORG> found that s. 5-1(a) was attracted. The only question which remained was whether the preparation of pineapple slices fall within s. 5-A(1)(a). On that question two members of the <ORG> found in favour of the assessee, and the third member found in favour of the <ORG>. The <ORG> then applied in revision to <ORG> and <ORG>, has by its judgment dated 24th January, 1978, maintained the order of the <ORG>. Dismissing the appeal, by special leave, the court ^ HELD : 1. When pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans, there is no consumption of the original pineapple fruit for the purpose of manufacture within the meaning of Section 5A(1)(a) of the Kerala General Sales Tax Act, 1963 [1277 E-F] 2. Section 5-A(1)(a) of the Kerala General Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity. The goods purchased should be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods. 1272 There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experience a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity. [1274 F-H, 1275 A-B] In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineapple. The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. The pineapple slices continue to possess the same identity as the original pineapple fruit. [1275 G-H, 1276- <CITATION> ,  10 S.T.C. 827 (SC); Commissioner of Sales Tax, U.P., Lucknow v. <NAME> & Sons,  21 S.T.C. 17 (SC); followed. <ORG> v. <ORG>, 100 L.ed. 917; <ORG> v. United States, 52 L. ed. 336-338; quoted with approval. <CITATION> .,  11 STC 698, <CITATION> ,  15 STC 719; <CITATION> ,  17 STC 316 and <CITATION> .,  32 STC 623; held inapplicable. 3. The fact that the pineapple slices have a higher price in the market than the original fruit does not imply that the slices constitute a different commercial commodity. The higher price, is occasioned only because of the labour put into making the fruit more readily consumable and because of the can employed to contain it. It is not as if the higher price is claimed because it a different commercial commodity. [1277 A-B] 4. The fact that the pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit does not give to the canned pineapple slices a separate identity either. The distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired. [1277 B-C] 1273 5. Clause (1) (a) of Section 5-A of the Kerala General Sales Tax Act, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale.[1277 C-D] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2398 of 1978.

Appeal by Special Leave from the Judgment and Order dated 24-1-1978 of <ORG> at Ernakulam in T.R.C. No. 2 of 1976.

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

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

The Judgment of the Court was delivered by <NAME>, J. This appeal by special leave is directed against the judgment of <ORG> holding that the turnover of pineapple fruit purchased for preparing pineapple slices for sale in sealed cans is not covered by s.5-A(1)(a) of the Kerala General Sales Tax Act, 1963.

The respondent, Messrs. <ORG> ("the assessee"), carries on the business of manufacturing and selling canned fruit besides other products. In its return for the year 1973-74 under the Kerala General Sales Tax Act, 1963 the assessee claimed that a turnover of Rs. 3,64,138-89 representing the purchase of pineapple fruit was not covered by s. 5-A(1)(a) of the Act. It was asserted that the pineapple was converted into pineapple slices, pineapple jam, pineapple squash and pineapple juice. Section 5-A(1)

(a) of the Act provides:

"5-A. Levy of purchase tax-

(1) Every dealer who, in the course of his business, purchases from a registered dealer or from any other person any goods the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 5, and either-

(a) consumes such goods in the manufacture of other goods for sale or otherwise; or ........................................ shall, whatever be the quantum of the turnover relating to such purchase for a year, pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in section 5."

The assessee maintained that by the conversion of pineapple fruit into its products no new commodity was created and it was erroneous to say that there was a consumption of pineapple fruit "in the manufacture of" those goods. The Sales Tax Officer did not accept the contention and completed the assessment on the finding that a manufacturing process was involved and that, therefore, the case fell within s. 5-A(1)(a). In revision before <ORG>, the assessee conceded that pineapple jam and pine-apple squash would be covered by s. 5-A(1)(a), and in regard to pineapple juice the <ORG> found that s. 5-1(a) was attracted. The only question which remained was whether the preparation of pineapple slices fell within s. 5-A(1)(a). On that question two members of the <ORG> found in favour of the assessee, and the third member found in favour of the <ORG>, The <ORG> then applied in revision to <ORG> and <ORG> has, by its judgment dated 24th January, 1978, maintained the order of the <ORG>.

It appears that the pineapple purchased by the assessee is washed and then the inedible portion, the end crown, skin and inner core are removed, thereafter the fruit is sliced and the slices are filled in cans, sugar is added as a preservative, the cans are sealed under temperature and then put in boiling water for sterilisation. Is the pineapple fruit consumed in the manufacture of pineapple slices ?

Section 5-A(1)(a) of the Kerala General Sales Tax Act envisages the consumption of a commodity in the manufacture of another commodity. The goods purchased should be consumed, the consumption should be in the process of manufacture, and the result must be the manufacture of other goods. There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity.

A large number of cases has been placed before us by the parties, and in each of them the same principle has been applied: Does the processing of the original commodity bring into existence a commercially different and distinct article ? Some of the cases where it was held by this <ORG> that a different commercial article had come into existence include <CITATION> (where raw tobacco was manufactured into bidi patti), <CITATION> (raw hides and skins constituted a different commodity from dressed hides and skins with different physical properties), <CITATION> (raw tobacco manufactured into chewing tobacco) and <CITATION> , (paddy dehusked into rice). On the other side, cases where this <ORG> has held that although the original commodity has undergone a degree of processing it has not lost its original identity include <CITATION> (where hydrogenated groundnut oil was regarded as groundnut oil) and Commissioner of Sales Tax, U.P., Lucknow v. <NAME> and sons (where bristles plucked from pigs, boiled, washed with soap and other chemicals and sorted out in bundles according to their size and colour were regarded as remaining the same commercial commodity, pigs bristles).

In the present case, there is no essential difference between pineapple fruit and the canned pineapple slices. The dealer and the consumer regard both as pineapple. The only difference is that the sliced pineapple is a presentation of fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The additional sweetness in the canned pineapple arises from the sugar added as a preservative. On a total impression, it seems to us, the pineapple slices must be held to possess the same identity as the original pineapple fruit.

While on the point, we may refer to <ORG> v. <ORG>, where <ORG> held that dressed and frozen chicken was not a commercially distinct article from the original chicken. It was pointed out:

"Killing, dressed and freezing a chicken is certainly a change in the commodity. But it is no more drastic a change than the change which takes place in milk from pasturising, homogenizing, adding vitamin concentrates, standardising and bottling." It was also observed:

".................. there is hardly less difference between cotton in the field and cotton at the gin or in the bale or between cottonseed in the field and cottonseed at the gin, than between a chicken in the pen and one that is dressed. The ginned and baled cotton and the cottonseed, as well as the dressed chicken, have gone through a processing stage But neither has been "manufactured" in the normal sense of the word."

Referring to <ORG> v.

United States the Court said:

"Manufacture implies a change but every change is not manufacture and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary...................There must be transformation; a new and different article must emerge, having a distinctive name, character or use."

And further:

"At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been "manufactured". The comment applies fully in the case before us.

Although a degree of processing is involved in preparing pineapple slices from the original fruit, the commodity continues to possess its original identity, notwithstanding the removal of inedible portions, the slicing and thereafter canning it on adding sugar to preserve it. It is contended for the <ORG> that pineapple slices have a higher price in the market than the original fruit and that implies that the slices constitute a different commercial commodity. The higher price, it seems to us, is occasioned only because of the labour put into making the fruit more readily consumable and because of the can employed to contain it. It is not as if the higher price is claimed because it is a different commercial commodity. It is said that pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit. Here again, the distinction in the mind of the consumer arises not from any difference in the essential identity of the two, but is derived from the mere form in which the fruit is desired.

Learned counsel for the <ORG> contends that even if no manufacturing process is involved, the case still falls within s. 5-A(1) (a) of the Kerala General Sales Tax Act, because the statutory provision speaks not only of goods consumed in the manufacture of other goods for sale but also goods consumed otherwise. There is a fallacy in the submission. The clause, truly read, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale.

In the result, we hold that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is no consumption of the original pineapple fruit for the purpose of manufacture. The case does not fall within s. 5-A(1)(a) of the Kerala General Sales Tax Act. <ORG> is right in the view taken by it.

The appeal fails and is dismissed with costs.

S.R. Appeal dismissed.


JUDGMENT <NAME>, J.

1. Since an identical question of law arises for determination in each of these applications, preferred by the <ORG> under the Madras Agricultural Income-tax Act (V of 1955), to which we shall refer in the rest of this judgment as the Act, we shall dispose of the applications by a single judgment. In each of these cases the assessee claimed that the sum he paid his employee--in some cases that employee was designated the manager and in others as superintendent--as bonus in the relevant year of account was a permissible deduction under Section 5 (e) of the Act. That claim was upheld by the <ORG>, and the correctness of that decision was challenged by the <ORG>. The main contention of the learned Advocate-General who appeared for the petitioner, <ORG>, was that Section 5(1) of the Act was the only statutory provision under which the assessee was entitled to deduction of payments of bonus, and, as admittedly the claim of the assessee in each of these cases did not fall within the scope of Section 5(1) of the Act, the claim of the assessee should be negatived.

2. The relevant Sub-sections of Section 5 of Act V of 1955 are:

Section 5: The agriculiural income of a person shall be computed after making the following deductions namely:

* * * * * * * (e) any expenditure incurred in the previous year (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of the land; * * * * * * * (l) any sum paid to a worker as defined in the Plantations Labour Act , 1951 (Central Act LXIX of 1951), as bonus for services rendered where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus: Provided that the bonus is of a reasonable amount with reference to-- (i) the wages and conditions of service of such worker; (ii) the income from the land in the year in question; and (iii) die general practice in the land: Provided that no deduction shall be made under this section if it has already been made in the assessment under the Indian Income-tax Act , 192a (Central Act XI of 1922), or is allowable in assessing a person to tax under that Act. 3. To understand the scope of the statutory expression "worker", we have to refer to the relevant provisions of the Plantations Labour Act , LXIX of 1951. Section 2 (k) of Act LXIX of 1951, provides the statutory definition of worker: Worker means a person employed in a plantation for hire or reward whether directly or through any agency to do any work skilled, unskilled, manual or clerical but does not include-- (a) a medical officer at the plantation; (b) any person whose monthly wages exceed Rs. 300, or (c) a person employed in plantation primarily in managerial capacity notwithstanding that his monthly wages do not exceed Rs. 300. Plantation itself was denned in Section 2 (/) of Act LXIX of 1951:

Plantation means any land used or intended to be used for growing tea, coffee rubber or cinchona which admeasures twenty-five acres or more and whereon thirty or more persons are employed, or were employed on any day of the preceding twelve months, and in any State where the provisions of this Act have been applied by notification under Sub-section (4) of Section 1 to anv other class of plantations, means also any land used or intended to be used for growing the plant mentioned in such notification and whereon thirty or more persons are employed, or were emnloved on any day if the preceding twelve months.

The definition of "plantation " in Madras Act V of 1955 differs substantially from that in Central A ctLXIX of 1951. Section 2 (r) of Madras Act V of 1955 defines plantation:

Plantation means any land used for growing all or any of the following, namely, arecanut, tea, coffee, rubber, cinchona or cardamom.

4. Apart from the statutory requirement of the employment of thirty or more persons before a given piece of land is treated as a plantation for the purposes of Act LXIX of 1951, the position is, that while the land on which cardamom and arecanut are grown will be plantations within the meaning of Madras Act V of 1955, they will not be plantations within the meaning of Central Act LXIX of 1951, and even the labourers working on lands on which cardamom and arecanut are grown will not be workers within the meaning of Section 5 (I) of Act V of 1955. Those employed in work on any other class of agricultural or horticultural land will also, be obviously outside the scope of "workers", as that expression has to be understood in the context of Section 5(1) of the Act V of 1955.

5. To bring the claim for deduction within the scope of Section 5 (I) of the Act, what the assessee has to establish is: (i) That the payment was made in the relevant year of account, (ii) that the payment was to an employee who is a worker, as defined by Central Act LXIX of 1951, (iii) that the payment was made as a bonus, (iv) that the payment as bonus was for services rendered by the employee, the recipient of the bonus; and (v) the amount so paid as bonus would not have been payable to that employee as profits or dividend. In addition, the assessee has to establish: (1) that the payment satisfied the test of reasonableness which the First Proviso to Section 5(1) prescribed, and (2) that the terms of the Second Proviso to Section 5(1) did not apply.

6. What follows from the second of the requirements listed above should be clear. No payment to an employee other than a worker as defined by Act LXIX of 1951 will fall within the scope of Section 5 (I) of the Act, even if all the other requirements of Section 5(1) are satisfied. Even of the employees working in a plantation as defined by the Central Act LXIX of 1951, some stand excluded by the definition of worker in that Act. The employees engaged in all other classes of agricultural and horticultural lands will not be workers either within the meaning of Section 5(1) of the Act. Act LXIX of 1951 would also exclude labourers employed on land used for growing tea, coffee, rubber or cinchona, where either the land is less than 25 acres in extent, or where less than thirty persons are employed. Payments of bonus to these classes of employees fall outside the scope of Section 5 (I) of the Act, because they are not within the statutory concept of workers.

7. It should be obvious that but for the specific provision in Section 5(1) of the Act, even payment of bonus to a worker within the scope of Section 5 (/), which satisfied the test of Section 5 (e) that it was expended wholly and exclusively for the purposes of the land, would have been a permissible deduction under Section 5 («) of the Act. But what falls within the scope of Section 5 (I) cannot be dealt with under Section 5 (e) of the Act. Section 5 («) deals with all expenses, while Section 5 (I) deals with speified classes of expenditure. The normal rule of construction is in the words of <NAME>, M.R. in <NAME> v. <NAME> (1859) 26 Beav. 606 at 610 : 53 E.R. 1032:

The general rules which are applicable to particular and general enactments in statutes are very clear. The only difficulty is in their application. The rule is that whenever there is a particular enactment and a general enactment in the same statute and the latter taken in its most comprehensive sense would overrule the former, the particular enactment must be operative and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply.

(See Craies on Statute Law, 5th edition, page 205).

8. As what is included in Section 5 (I) will stand excluded from the scope of Section 5 (e) of the Act, we have to verify what is it that falls within the ambit of Section 5 (I). The contention of the learned Advocate-General was that Section 5 (I) is a specific legistlative provision for deduction of bonus payments, and that no payment of bonus that fails to satisfy any of the requirements of Section 5(1) could be dealt with under Section 5 (e). We are unable to accept that contention, which involves the basic assumption, that the subject-matter of Section 5(1) of the Act is all expenditure by way of payments of bonus. The learned Advocate-General was, of course, right when he pointed out that, when a deduction is claimed under Section 5 (l), and the claim is rejected on the grotind that the payment fails to satisfy, for example, the test of reasonableness imposed by the First Proviso to Section 5(1) the claim could not be considered under Section 5 (e) of the Act. But we are unable to accept as correct his further submission, that the statutory requirement that the payment should be to a worker is just one more of the tests to be satisfied, and that it is not a factor to be taken into account any more than the test of reasonableness in deciding what is the essential subject-matter, the pith and substance, of the legislative provision in Section 5(1) of the Act. As we read Section 5 (I) in the context of the Act, the subject-matter of that statutory provision is in the words of the Sub-section itself, " sums paid to a worker as bonus for services rendered " or at least sums paid to a worker as bonus, worker, of course, being understood in the terms of Act LXIX of 1951. As we pointed out, the statutory concept of worker excludes a large class of employees on land, and the legislature should have been fully aware of that position. The <ORG> should also have been aware of the fact, that bonus is claimed by and paid to other employees also besides the limited class of employees included in the statutory definition of workers in Section 5 (I) of the Act. We find no real basis in the scheme of the Act to justify the contention, that the <ORG> in eff ct intended to Legislate that no payment of bonus to an employee other than the payment to a worker could ever be a permissible item of expenditure which could be deducted in computing the assessable agricultural income of an assessee.

9. The learned Advocate-General invited our attention to the analogous provisions of the Income-tax Act . Section 10(2) of the Income-tax Act provides:

Profits or gains shall be computed after making the following allowances, namely:

(x) any sum paid to an employee as bonus or commission for services rendered where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission:

Provided that the amount of bonus or commission is of a reasonable amount with reference to (a) the pay of the employee and the conditions of his service; (b) the profiis of the business, profession or vocation in the year in question; and (c) the general practice in similar businesses, professions, or vocations;

(xv) any expenditure not being an allowance of the nature described in any of the Clauses (i) to (xiu) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.

10. Section 10(2)(xv) of the Income-tax Act in substance corresponds to Section 5 (e) of Act V of 1955, while Section 10(2)(x) of the Income-tax Act is akin to Section 5(1) of Act V of 1955. The scope of Section 10(2)(x) of the Income-tax Act is much wider than that of Section 5(1) of the Act (Vof" 1955), because Section 10(2)(x) of the Income-tax Act takes in all employees, and also payments both by way of bonus and as commission for services rendered. We would find it difficult to accept the contention that payment of commission for services rendered by a person other than an employee, which would of course be outside the scope of Section 10(2)(x) , could not be dealt with under Section 10(2)(xv) of the Income-tax Act, even if the test prescribed by Section 10(2)(xv) is satisfied.

11. To come back to the question, what was the subject-matter of Section 5(1) of the Act, it is certainly not all payments to an employee or even all payments to the limited class of employees, the workers, but payments to workers by way of bonus. There was no specific statutory provision in the Act to deal with payments by way'of bonus to other class of employees and in the absence of any specific statutory provision, the general provision, Section 5 (e) of the Act should apply to decide whether such payments constitute admissible deductions. The acceptance of the contentions of the learned Advocate-General, that no bonus payment other than the payment to the limited class of employees designated workers would be a permissible item of deduction, would involve reading Section 5(1) of the Act as if it ran:

Any sum paid (to an employee) as bonus for services rendered, provided that no deduction shall be made if the payment was to an employee other than a worker as defined by Act LXIX of 1951.

12. We can see no justification for so reading Section 5(1) of the Act or interpret it to lead to that result. In our opinion Section 5(1) of the Act does not operate as a statutory bar to the deduction of payments of bonus to employees other than statutory workers. Such payments to employees other than statutory workers constitute an item of expenditure, and if that satisfies the test of Section 5 (e) of the Act, it must be allowed as a deduction.

13. The correctness of the finding of the <ORG>, that the test prescribed by Section 5 (e) of the Act, that it was expenditure wholly and exclusively laid out or expended for the purposes of the land was satisfied in each of these cases, was not challenged before us. We agree with the <ORG> that in each of these cases the assessee was entitled to deduct these items of expenditure under Section 5 (e) of the Act in computing his assessable agricultural income.

14. These petitions fail and are dismissed with costs. In each of these petitions other than T.C. Nos. 53 and 56 of 1959, in which the respondent did not enter appearance, the respondent-assessee will be entitled to his costs. Counsel's fee Rs. 100.


PETITIONER: COMMISSIONER OF INCOME TAX, BOMBAY Vs. RESPONDENT: <ORG>. DATE OF JUDGMENT: 01/10/1951 BENCH: KANIA, HIRALAL J. (CJ) BENCH: KANIA, HIRALAL J. (CJ) MAHAJAN, MEHR CHAND AIYAR, N. CHANDRASEKHARA CITATION: 1951 AIR 464 1952 SCR 11 CITATOR INFO : F 1955 SC 89 (21) RF 1973 SC 318 (12) ACT: Indian Income-tax Act (XI of 1922), s. 10(2) (xv)--Expenditure incurred for registration of trade mark--Whether business expenditure-Effect of registration. HEADNOTE: The expenditure incurred by a company carrying on the manufacture and sale of textile goods in registering for the first time its trade marks which were not in use prior to the 25th January, 12 1937, is revenue expenditure and an allowable deduction under Sec. 10 (2) (xv) of the Indian Income-tax Act . The fact that a trade mark after registration could be sepa- rately assigned and not as a part of the goodwill of the business only, does not make the expenditure for registra- tion capital expenditure. It is only an additional and incidental facility given to the owner of the trade mark; it adds nothing to the trade mark itself. Judgment of <ORG> affirmed. Commissioner of Income-tax, Bombay v. <ORG> ( 15 I.T.R. 105) approved. <ORG> v. <ORG> ( A.C. 205), <ORG> v. <ORG> ( 10 I.T.R. Supp. 1), <CITATION> . ( 2 K.B. 184) referred to. JUDGMENT:

CIVIL APPELATE JURISDICTION: Civil Appeal No. 103 of 1950.

Appeal from a Judgment of <ORG> (<NAME> and <NAME>) dated 25th March, 1949, in Income Tax Reference No. 31 of 1948.

<NAME>, Attorney-General for India (<NAME>, with him) for the appellant.

<NAME>, for the respondent.

1951. Oct. 1. The Judgment of the Court was delivered by <NAME> is an appeal from a judgment of <ORG> at Bombay and it arises out of the opinion ex- pressed by <ORG> in respect of a question submitted to it by <ORG>. The material facts are these. The respondent is a textile mills company carrying on the business of manufacturing and selling textile goods. For the assessment years 1943-44 and '1944-45, covering the accounting periods ending with the calendar years 1941, 1942 and 1943, the respondent claimed the expenditure incurred by it in registering for the first time its trade marks which were not in use prior to the 25th February, 1937, as revenue expenditure and an allowable deduction out of its income for the said periods, under section 10(2) (xv) of the Indian Income tax Act. Following the decision of <ORG> in <CITATION> .(1), the <ORG> allowed the claim of the assessee. At the desire of the appellant, the <ORG> submitted the following question for the opinion of <ORG> :-

"Whether, on the facts of the case, the expenditure incurred by the assessee company in registering for the first time its trade marks which were not in use prior to the 25th February, 1937, is revenue expenditure and an allowable deduction under section 10(2) (xv) of the Indian Income-tax Act ?"

<ORG>, following its previous decision and finding that the fact of the trade marks having come into use after the 25th of February, 1937, made no difference in the result, answered the question in the affirmative. The Commissioner of Income-tax, Bombay, has come on appeal to us.

It was argued on behalf of the appellant that the ques- tion whether a certain disbursement was of a capital or revenue nature, has to be decided according to the principle laid down in <ORG> v. Atherton(2). In that case the company which carried on the business of manufacturers of insulated cables established a pension fund for its clerical and technical salaried staff. The fund was constituted by a trust deed which provided that members should contribute a percentage of their salaries to the fund and that the company should contribute an amount equal to half the contributions of the members; and further that the company should contribute a sum of pound 31,784 to form the nucleus of the fund and to provide the amount necessary in order that past years of service of the then existing staff should rank for pension. That sum was arrived at by an actuarial calculation on the basis that the sum would ultimately be exhausted when the object for which it was paid was attained. <ORG> held that this payment was in the nature of capital expenditure and was therefore not an admissible deduction. Although in the opinions expressed by the different members of <ORG> (1) [1917] 15 I.T.R. 105. (2) [1926] A.C. 205.

the line of approach is not completely the same, the principle stated by Lord <NAME> in his speech has been test distinguish capital expenditure from revenue expenditure. It was recognised that a sum of money expended, not of necessi- ty and with a view to a direct and immediate benefit to the trade, but voluntarily and on the grounds of commercial expediency, and in order indirectly to facilitate the carry- ing on of business, may yet be expended wholly and exclu- sively for the purposes of the trade. The Lord Chancellor observed that the question appeared to be a question of fact which was proper to be decided by the Commissioners upon the evidence brought before them in each case. The test that capital expenditure is a thing that is going to be spent once and for all and income expenditure is a thing that is going to recur every year was considered an useful element in arriving at the decision but was not certainly the deci- sive fact. The Lord Chancellor observed as follows:--"But when an expenditure is made, not only once and for all, but with a view to bringing into existence an asset or an advan- tage for the enduring benefit of the trade, I think that there is very good reason for treating such an expenditure as properly attributable not to revenue but to capital." In order to appreciate the true position here Correctly it is next necessary to notice the relevant provisions of the Indian Trade Marks Act , 1940. It may be noted that before this Act there was no Trade Marks Act in India but it was recognised that an action lay for infringement of a trade mark independently of an action for passing off goods. The Act opens with the preamble "whereas it is expedient to provide for the registration and more effective protection of trade marks ...... " Section 2(1) of the Act defines a trade mark as meaning "a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right to use the mark, whether with or without any indication of the identity of that person." Section 14 permits the proprietor of a trade mark to have the trade mark regis- tered. The Attorney-General, on behalf of the appellant, relied on sections 20 , 21 , 28 and 29 in support of his contention. He argued that before the Trade Marks Act , although the proprietor of a trade mark could maintain an action for infringement of his trade mark and the cause of action in such a case was quite different from the cause of action in an action for passing off goods, by the Trade Marks Act the right of the owner of the trade mark is in- creased by section 21 , and it is made assignable independ- ently of the goodwill under sections 28 and 29 of the Trade Marks Act. The question thus resolves itself into whether by reason of these two incidents the case falls within the principle laid down by Lord Chancellor <NAME>, as mentioned above.

In our opinion, the contention urged on behalf of the appellant must fail. It is not contended that by the Trade Marks Act a new asset has come into existence. It was con- tended that an advantage of an enduring nature had come into existence. It was argued that just as machinery may attain a higher value by an implementation causing greater produc- tive capacity, in the present case the trade mark which existed before the Trade Marks Act acquired an advantage of an enduring nature by reason of the Trade Marks Act and the fees paid for registration thereunder were in the nature of capital expenditure. In our opinion, this analogy is falla- cious. The machinery which acquires a greater productive capacity by reason of its improvement by the inclusion of some new invention naturally becomes a new and altered asset by that process. So long as the machinery lasts, the im- provement continues to the advantage of the owner of the machinery. The replacement of a dilapidated roof. by a more substantial roof stands on the same footing. The result however of the Trade Marks Act is only two-fold. By regis- tration, the owner is absolved from the obligation to prove his ownership of the trade mark. It is treated as prima facie proved on production of the registration certificate. It thus merely saves him the trouble of leading evidence, in the event of a suit, in a court of law, to prove his title to the trade mark. It has been said that registration is in the nature of collateral security furnishing the trader with a cheaper and more direct remedy against infringers, Cancel the registration and he has still his right enforceable at common law to restrain the piracy of his trade mark. In our opinion, 'this is neither such an asset nor an advantage as to make payment for its registration a capital expenditure. In this connec- tion it may be useful to notice that expenditure incurred by a company in defending title to property is not considered expense of a capital nature. In <ORG>) v. <ORG>). it is there stated that where a sum of money is laid out for the acqui- sition or the improvement of a fixed capital asset it is attributable to capital, but if no alteration is made in the fixed capital asset by the payment, then it is properly attributable to revenue, being in substance a matter of maintenance, the maintenance of the capital structure or the capital asset of the company. In our opinion, the advantage derived by the owner of the trade mark by registration falls within this class of expenditure. The fact that a trade mark after registration could be separately assigned, and not as a part of the goodwill of the business only, does not also make the expenditure for registration a capital expend- iture. That is only an additional and incidental facility given to the owner of the trade mark. It adds nothing to the trade mark itself.

In the judgment of <ORG> some emphasis is laid on the fact that by reason of registration the duration of the trade mark is only for seven years, and it does not thus possess that permanency which is ordinarily required of an expenditure to make it a capital expenditure and in order to prove the existence of a benefit of an enduring character. The learned Attorney-General contended that the view that as the benefit of registration lasted for seven years, i.e., for a limited period, it prevented the expenses of registra- tion being treated as capital expenditure, is unsound (1) [1942] 10 I.T.R. Suppl. 1.

and for that contention he relied on <CITATION> .(1). In that case, tenants of licensing premises by agreement with the landlord paid by instalment the monopoly value fixed by the licensing jus- tices when granting the licence under section 14 of the Licensing (Consolidation) Act, 1910. These were sought to be deducted as revenue expenditure but were disallowed by the <ORG>. Lord Greene M.R. first considered that the pay- ment fell into the same class as the payment of a premium on the grant of a lease or the expenditure on improvements to the property which justices may require to be made as a condition of granting a licence. Having reached that conclu- sion he rejected the argument that the payment not being made in one lump sum but by instalments made a difference in the character of the payment. He observed as follows :--"Whenever a licence is granted for a term, the payment is made as on a purchase of a monopoly for that term. When a licence is granted for a subsequent term, the monopoly value must be paid in respect of that term and so on. The payments are recurrent if the licence is renewed, they are not peri- odical so as to give them the quality of payments which ought to be debited to revenue account. The thing that is paid for is of a permanent quality although its permanence, being conditioned by the length of the term, is shortlived. A payment of this character appears to me to fall into the same class as the payment of a premium on the grant of a lease, which is admittedly not deductible." The Attorney- General relied on these observations to point out that the permanence of the advantage was thus not dependent on the number of years for which it was to enure for the benefit of the proprietor of the trade mark. In our opinion, these observations have to be read in the context in which they have been made. The learned Master of the Rolls was discuss- ing only the question of payment being made by instalments as not making any difference in the nature of the (1)  2 K.B. 184.

expenditure. It was first held by him that the payment in question was of a capital nature and of the same character as premium paid on the grant of a lease and was therefore necessarily of a capital nature. Having come to that conclu- sion, he only rejected the contention that because the premium was paid in more instalments than one it lost its character a capital expenditure. In our opinion, this is an entirely different thing from stating that the fact of the advantage being for a limited time altered the character of the payment in any way. As observed by Viscount <NAME> the question is always one of fact depending on the circumstances of each case individually. In our opinion, the decision of <ORG> reported in Commissioner of Income-tax, Bombay v. <ORG>) is correct and in the present case also the contention of the appellant must fail. The appeal therefore fails and is dismissed with costs.

Appeal dismissed.

Agent for the appellant: <NAME>.

Agent for the respondent: <NAME>.

(1) [1947] 15 I.T.R. 105.


<NAME>, J.

1. In 1903, the plaintiff applied to the Collector for a grant of the occupancy of Survey Nos. 46 and 47 in the village of Ajanti. The occupancy was accordingly granted to him on payment of Rs. 99, being three times the annual assessment. The grant was made on what is popularly known as "the restricted tenure ", certain conditions being annexed prohibiting, alienation as permitted by Section 68 of the Bombay Land Revenne Code. The relevant words of the Kabulayat are as follows Neither I, nor my heirs nor any agent acting on my behalf will create any encumbrance on the land or any portion of it by way of lease, mortgage or sale or in any other manner.

2. On August 9th, 1915, the plaintiff made an application to the District Deputy Collector in which he stated that the two lands were taken up jointly by himself and defendant No. 2, and prayed that Survey No. 46 might be transferred to the came of defendant No. 2. On August 21, 1915, the statement of defendant No. 2 was recorded by the <NAME>. He said that he had paid the price of Survey No. 43, and prayed that it should be transferred to his name. On November 3rd, 1915, the District Deputy Collector held that there was a private arrangement between plaintiff and defendant No. 2 which constituted a breach of the conditions set out above and directed that the lands should be forfeited. In pursuance of this order plaintiff was evicted on January 18th, 1916 and on February 7th, 1916 the Collector rejected the appeal made to him. The suit was filed on February 6th, 1917.

3. There is no dispute as to the above facts. It may be remarked that if there was in fact a breach of the conditions of the <ORG> plaintiff would cease to be entitled to the occupation of the land as provided for by Section 68 of the Bombay Land Revenue Code and would, therefore, be liable to be summarily evicted by the Collector in exercise of the powers conferred by Section 79A. It is also clear that by virtue of Section 10 the District Deputy Collector was empowered in this behalf. It may further be remarked that the use of the word "forfeiture " in the District Deputy Collector's order is erroneous, but this is a matter of form only. What was in effect done was to evict the plaintiff summarily.

4. The only question of fact which is obscure is what was the exact nature of the arrangement between plaintiff and defendant No. 2. The lower Court holds that there was no agreement prior in date to the <ORG> and that is probably correct. The lapse of eleven years renders this unlikely and the evidence of defendant No. 2 on the point is vague and unsatisfactory. He says: " I do not remember if I and <NAME> paid half and half the amount that was first paid to <ORG>.... I asked <NAME> after he got the lands to give me S. No. 46 and he consented ". The truth of the matter appears to be that defendant No. 2 from time to time advanced money to plaintiff for expenses of cultivation (the lands were originally waste) and that latterly they arranged for the transfer of one of the lands. It may be noted that this was apparently the case for defendant No. 1 in the lower Court. In Exhibit 17-the pursis of the <ORG> Pleader-it is said plaintiff has broken the conditions inasmuch as he has alienated S. No. 46 to defendant 2 ". There is no evidence that any money was paid as purchase money and admittedly no document was executed. In these circumstances it is difficult of <ORG> to understand in what way there has been a breach of the Condition of the <ORG>. There was at most a contract for sale which of itself creates no interest in or charge on the property. Plaintiff and defendant No. 2 appear to have made false representations to the Revenue Authorities in the hope of inducing them to sanction the transfer but this can furnish no valid ground for the order of eviction. Beyond this there was nothing more than an attempt or intention to transfer which was never carried into effect. It may, however, be remarked that if there was indeed an antecedent arrangement such as was suggested by plaintiff and defendant No. 2 the case for applying b. 79A would be no stronger. The action taken was (in my opinion) premature, and not warranted by the terms of that section. The eviction was therefore wrongful.

5. But it has been urged in appeal that the suit is barred by limitation. The point was not taken in the lower Court, and it is urged that Order VIII, Rule 2, of the Code of Civil Procedure & precludes us from considering the point. That order cannot, I think, be read as overriding the established practice. This is a first appeal and the general rule is that effect should be given to a plea of limitation raised for the first time. It may further be noted that the facts necessary for the consideration of this plea are in substance set out in the plaint itself, which shows that the suit was filed more than a year after the date of the actual eviction. Thus it may be doubted whether, on a strict construction of Order VIII, Rull 2 it was necessary for defendant No. 1 to plead limitation (see the words "or would raise issues of fact not arising out of the plaint ").

6. It is argued for defendant No. 1 that the suit is barred by Article 14 of Schedule I of the Indian Limitation Act. The act of eviction, it is urged, was the act of an officer of Government in his official capacity, and as the suit was admittedly brought more than a year after the date of that act it must be held to be barred. The exact scope of Article 14 is a question not freo from A difficulty but I am unable to find any ground on which this case can be distinguished from <NAME> v. Secretary of <ORG> for India (1900) I.L.R. 24 Bom. 435. In that case it was held that if a Collector disposed of land, the property of a private individual, purporting to act under Section 37 of the Bombay Land Revenue Code, the disposition is a nullity because Section 37 does not give power to deal with the lands of private individuals. The order is in fact not one made by a public officer in his official capacity. It would appear to follow that the act of dispossession is equally a nullity-not in the sense that it is a negligible quantity but in the sense that it is not an act done by an officer in his official capacity. It, therefore, stands on no other footing than an act of dispossession by a private individual. The basic defect is that what is done is not within the statutory powers which the officer purports to exercise inasmuch as the land does not fall within that category to which alone Section 37 is applicable. In the present case as the conditions necessary for the exercise of the power of summary eviction conferred by Section 79A did not in fact exist the District Deputy Collector cannot be held to have acted in his official capacity. <CITATION> for India (1911) I.L.R. 36 Bom. 325 : 14 Bom. L.R. 332 the same line of reasoning is adopted. That also was a case under Section 37. The District Deputy Collector held erroneously that the plaintiff was not entitled to the possession of certain land, and the suit was filed more than a year after the order. It was held that the order gave the plaintiff a cause of action, but that as it was based on an erroneous view of the facts it was ultra vires. The District Deputy Collector did not, therefore, act in his official capacity and Article 14 had no application. It seems to me impossible to escape the conclusion that here too by parity of reasoning the act was not done by the District Deputy Collector in his official capacity. The same principle is laid down in Maharaja of Vizianagaram v. <NAME> (1906) I.L.R. Mad. 280. Where an officer of Government purports to act under a statutory authority but in fact acts in excess of that authority his act should be treated as a nullity. It is perhaps simpler to say that the act is not an official act for that view brings out more clearly the reason why Article 14 is no bar. This appears to be the view hitherto taken by this Court, and no valid ground is shown for questioning it. It would appear to follow that Article 14 has no application here. It is not disputed that the suit is otherwise in time.

7. I would, therefore, reverse the decree of the lower Court and make a decree for possession and mesne profits under Order XX, Rule 12, of the Civil Procedure Code. Possession to be given three months after the receipt of the record in the lower Court. Plaintiff to recover his costs throughout.

<NAME>, <NAME>

8. I concur. I desire to add a word with reference to the point of limitation raised on behalf of defendant No. 1 for the first time in the appeal before us. In view of the allegation in the plaint, according to the provisions of Order VIII, Rule 2, limitation ought to have been pleaded. No such point was made in the written statement which was practically confined to the point as to the breach of the conditions of the grant. It is a point, which, if not raised, is likely to take the opposite party by surprise. The effect of the omission to raise this point is, as stated by <NAME> in In re <NAME>'s Settlement Gant v. <NAME>, (1912) 1 Ch. 717, 728 with reference to the corresponding English rule, not to exclude from the consideration of the <ORG> the relevant subject-matter for decision simply on the ground that it is not pleaded, but to leave the party in mercy and the <ORG> will deal with him as is just. Having regard to the nature of the point, as also to the circumstance that it involves no investigation into any fresh facts, we have considered the point of limitation. It seems to me that the real question in the case is whether any breach of the conditions of the grant is established; for if that is not established under the circumstances of this case the defendant No. 1 must fail on the merits as well as on the point of limitation. That was probably the reason why the point of limitation was not separately raised in the lower <ORG>. Both on the question of fact as to the alleged breach of the conditions of the grant, and on the question of law as to the effect of that finding on the point of limitation I entirely agree with my learned brother.


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

1. <ORG> found on the facts that the plaintiff <NAME> was, as she alleged, the daughter of <NAME>. As to the issue whether the plaintiff's suit was barred by the sixty years' rule of limitation, and as to the other points of law raised by the appeal the judgment of the <ORG>--after discussing the documentary evidence as to the original mortgage of 1830, and its bearing upon the question whether that mortgage was redeemable within nine years or only after the expiration of the period--continued as follows:

2. Ordinarily a mortgagor cannot, before the time limited for payment to the mortgagee expires, take proceedings to redeem. The reason for this is that it was the agreement of the parties that the mortgage should, during the intervening time, remain as security for the money advanced, and therefore it is not competent for either party to disturb that relation--<NAME> v. <NAME> (1844) 14 Sim., 427. <NAME>, C.J., in his judgment in <NAME> v. <NAME> (1880) I.L.R., 5 Bom., 22 says: "The general principle as to redemption and foreclosure is that in the absence of any stipulation expressed or implied to the contrary the right to redeem and the right to foreclose must be regarded as co-extensive." In that case the stipulation in the mortgage deed was that the mortgagor would pay the debt within ten years and redeem the mortgaged property, and it was held that a suit for redemption instituted within the ten years was premature, the mere use of the word "within" not being a sufficient indication of an intention that the mortgagor might redeem in a less period than ten years. So in <CITATION> (1885) I.L.R., 8 All., 95, in which the stipulation was that the principal and the interest should be paid at the promised time (that was in ten years), it was held that the advance by the mortgagee to the mortgagor was for a period of ten years certain, and that the mortgagor was not entitled before that period had expired to redeem the property. The principle acted upon in these cases is embodied in the Transfer of Property Act . Section 60 provides that "at any time after the principal money has become payable," the mortgagor may redeem. Section 62 prescribes in the case of a usufructuary mortgage, that the mortgagor has a right to recover possession of the property where the mortgagee is authorized to pay himself from the rents and profits the interest of the mortgage debt, "when the term (if any) prescribed for the payment of the mortgage-money has expired, and the mortgagor pays or tenders to the mortgagee the principal money, &c." Also in Section 67 , in which the right of foreclosure or sale is prescribed, the language is as follows: "In the absence of a contract to the contrary the mortgagee has, at any time after the mortgage money has become payable to him, &c.," a right to obtain an order for foreclosure or sale. The principal money only becomes payable when the payment becomes obligatory upon the mortgagor. <NAME>, M.R., in the case of <ORG> v. <ORG>, 1900, 1 Ch., 142, commenting on the meaning of the words 'time of payment' contained in a bill of sale, observes: "To my mind the expression is unambiguous: it means the time at which payment is to become obligatory, the time at) which the borrower must pay and after which, if he does not pay, he can be sued for payment."

3. On the evidence afforded by the proceeding before the Collector we are of opinion that the agreement of the parties was that the advance made by <NAME> was to be left outstanding for a period of nine years, and that within that period the mortgagee could not foreclose the mortgage nor could the mortgagors redeem it. The learned Subordinate Judge appears to have been of this opinion also, for he says in his judgment: "The mortgage was, no doubt, for a term of nine years." But then he holds that by reason of the statement by the plaintiffs in the plaint that the debt was actually satisfied out of the usufruct within the period, the plaintiffs could not rely on this fact. He also seems to hold that it was optional with the mortgagor to redeem whenever he pleased, and that therefore the period of limitation ran from the date of the mortgage. After referring to some rulings he says: "Having regard to the terms of the mortgage in this case and to the plaintiffs' allegations I am bound to hold, following the above rulings, that the period of limitation in this case will run from the date of the mortgage, viz., the 6th of January 1830, and the suit was beyond time on the 6th of January 1899, when it was instituted." We are unable to agree with him as to this. The time began to run, we think, from the expiration of the term of nine years, and the mere fact that the plaintiffs alleged that the mortgage debt was satisfied within this period, does not affect the question.

4. The next point upon which Mr. <NAME> on behalf of the principal respondents relied was as to the sufficiency of the stamp upon the plaint. The suit is one for redemption, but the plaintiffs in their plaint alleged that a large surplus was due to them and in the plaint they asked that this surplus should be paid to them. Appended to the plaint is given a statement showing the amount of receipts and disbursements according to the settlements of 1247 and 1282 Fasli and bringing out a large balance of over two lakhs, as due to the mortgagors. The <NAME> found that the court fee of Rs. 765 paid by the plaintiffs in respect of the claim for redemption was sufficient, but that no court fee had been paid in respect of the surplus of profits claimed by them. He held that a further court fee of Rs. 2,220 was payable, and an order was passed directing the plaintiff to make good the deficiency. On the 21st of January 1899 the plaintiff's applied for three weeks' time to make good the deficiency, but this application was rejected on the 23rd of January, and on the 25th of January 1899 an order was passed by the Subordinate Judge directing the plaint to be registered, subject to any objection the defendants might raise. The principal defendants raised the preliminary objection that the plaint should have been rejected owing to the fact that the deficiency in the court fee had not been made good by the plaintiffs within the period fixed by the <ORG>, and also on the ground that as there was no sufficiently stamped plaint presented to the <ORG> before the expiry of sixty years, the claim was beyond time. These objections were disallowed, and on the 25th of September 1899 the plaintiffs were allowed to withdraw their claim for mesne profits with liberty to sue again in respect of such profits. There are two answers to the contention of Mr. <NAME> The first is, that the suit is for redemption, and that the mere fact that the plaintiffs claimed in the suit payment of any sum which might be found to be due to them on the taking of the accounts, a relief to which they would be entitled under the ordinary decree for redemption, did not alter the nature of the suit so as to necessitate the payment of an additional fee. Section 7 , Sub- section 9 of the <ORG> Fees Act provides that in a suit for redemption the court fee shall be valued at the principal amount secured by the mortgage. As a suit for redemption only a proper court fee has been paid. Another answer is that Section 373 of the Civil Procedure Code empowered the <ORG> to allow the plaintiffs to abandon part of their claim with liberty to bring a fresh suit in respect of the part so abandoned, if it was satisfied that the suit must fail by reason of a formal defect or that there were sufficient grounds for permitting them to abandon part of their claim. This section was intended to meet, amongst other cases, a case in which there had been an improper valuation of the stamp. Sir <NAME> in <NAME> v. <NAME> (1869) 13 Moo., I.A., 160 dealing with the powers conferred by this section observes, at page 170,"There is a proceeding in these <ORG>s called a non-suit, which operates as a dismissal of the suit without barring the right of the party to litigate the matter in a fresh suit; but that seems to be limited to cases of misjoinder either of parties or of the matters in contest in the suit; to cases in which a material document has been rejected, because it has not borne the proper stamp, and to cases in which there has been an erroneous valuation of the subject of the suit." The <ORG> was in our opinion authorized in permitting the withdrawal by the plaintiffs of that portion of their claim which was concerned with any surplus of profits which might be found to be due to them. We are unable therefore to accede to Mr. <NAME>' contention.

5. We now come to the last question discussed in the appeal. As we have shown, the Court below held that in any case the plaintiffs' suit is barred by 12 years' limitation under Article 134 of the Limitation Act as regards the five villages held by the defendant <NAME> and the defendants who are transferees of portions of these five villages from <NAME>. On the death of the mortgagee <NAME>, his widow, <NAME>, became entitled to the mortgaged property. She, in the year 1862, made a gift of it to <NAME>, and he on the 7th of January 1867 mortgaged five of the twelve villages by way of conditional sale without possession to <NAME>, who later on dedicated these five villages to <NAME>. On the 13th of February 1871 <NAME> took proceedings against <NAME> for foreclosure of his mortgage, and in these proceedings treated <NAME> as absolute proprietor. On the 19th of June 1872 a decree for foreclosure was passed, and on the 2nd of July 1872, according to the practice which then prevailed, a suit was brought for recovery of possession against <NAME> and a decree was obtained therein, and on the 2nd of August 1872 <NAME> obtained delivery of possession. These proceedings were taken behind the back of the original mortgagors, <NAME> having been treated as sole and absolute proprietor. The Court below held that <NAME> was a purchaser of the property within the meaning of that expression as used in Article 134 of Schedule II to the Limitation Act ; and that the claim of <NAME> and his daughter was barred. On the part of the appellants Mr. <NAME> strenuously contended that Article 134 did not apply to a case of an involuntary sale and that the foreclosure proceedings taken by <NAME> did not constitute him a purchaser within the meaning of the article, and that if this be granted the defendants are forced to rely on the mortgage of 1867, and that inasmuch as that mortgage was a mortgage without possession the defendants do not come within the purview of the article. Mr. <NAME> quoted in support of his argument the case of <CITATION> (1901) I.L.R., 25 Mad., 99, in which it was held that a purchaser of immovable property at a sale in execution of a money decree in which the real interest of the judgment-debtor was that of a mortgagee only was not a purchaser from the mortgagee within the meaning of Article 134 , even though the property was sold as the property of the judgment-debtor without any limitation of hie interest therein. He also relied on the decision in <NAME> v. Sheikh <NAME> (1899) I.L.R., 23 Bom., 614, in which it was held that a person purchasing or taking a mortgage from a mortgagee believing that he is getting a good title, must have possession of the property for the statutory period in order to protect the transaction as against the original mortgagor under Article 134.

6. It is clear from the mortgage of 1867 that <NAME> held himself out to the mortgagee as absolute owner of the property therein comprised. In it, it is recited that the property is owned and possessed by him and that he is in proprietary possession of it. He purported to convey to the mortgagee an absolute interest in the property subject to redemption. It may be taken, we think, to be well settled law that a mortgage as well as an out and out sale by a trustee or a mortgagee is a purchase within the meaning of Article 134. In <NAME> v. <NAME>, (1886) <ORG>, 9 All., 97, Edge, C.J., and <NAME>, J., held that Article 134 was intended to protect a person who happening to purchase from a mortgagee had reasonable grounds for believing and did believe that his vendor had the power to convey and was conveying to him an absolute interest and not merely the interest of a mortgagee. In their judgment the learned Judges refer to the case of <NAME> v. <NAME> and Co. (1869) 14 Moo., I.A., 1 in which their Lordships of <ORG> discussed the meaning of the word "purchaser" as used in Section 5 of Act XIV of 1859, which closely corresponds with Article 134 of Schedule II to the Limitation Act of 1877, and point out that upon the true interpretation of their Lordships' language, a person who purchases from a mortgagee having reasonable grounds for believing and believing that his vendor had power to convey to him an absolute interest, and not merely the interest of a mortgagee, was a purchaser within the meaning of the article. In the case of <NAME> v. <NAME> (1891) <ORG>, 16 Bom., 583 it was held by <NAME>, C.J., and <NAME>, J., that the expression "purchases for valuable consideration" in Article 134 includes a mortgagee as well as a purchaser properly so called. In the case of <CITATION> (1898) <ORG>, 20 All., 482, <ORG>, expressed the view that the term "purchased" as used in Article 134 could not be taken as including "mortgaged," but <NAME>, J., in the same case expressed a contrary opinion. In the case of <NAME> v. <NAME> (1896) <ORG>, 22 Bom., 225 the same question was discussed, and it was held by <ORG>, and <ORG>, following the decision in <NAME> v. <NAME> that mortgagees are purchasers for value within the meaning of Article 134.

7. In the case of <CITATION> (1900) I.L.R., 24 Mad., 471 it was held by <NAME>, <NAME>, and <NAME>, dissenting, that a mortgagee whose mortgagor was merely a mortgagee of lands but who mortgaged as if he were complete owner, was a purchaser within the meaning of Article 134 , and having been in possession for 12 years, was entitled to the benefit of that article.

8. In the case of <CITATION> (1908) I.L.R., 27 Bom., 378 <NAME>, C.J., and <NAME>, J., held that a lease described as a "mulgeni lease" was a purchase pro tanto of the interest thereby assured within the meaning of Article 134. <NAME>, C.J., who delivered the judgment of the <ORG>, says: "Here no doubt we have a mulgeni lease and not an absolute alienation, but in principle this involves no distinction, for even if Article 134 be treated as the governing article, a mulgeni lease is a purchase pro tanto of the interests thereby assured."

9. We are supported by the foregoing authorities in the view which we take, namely, that a person who bona fide purchases from a mortgagee in possession what is represented to him and what he believes to be the absolute interest, is entitled to the protection afforded by Article 134. In the case before us we find that <NAME> held himself out as the absolute owner of the five villages which were mortgaged to <NAME> and we have no reason to suspect that <NAME> had any reason to doubt the representation which was made to him by his mortgagor. We find that <NAME> obtained possession of the mortgaged property on the 2nd of August 1872, and that he and his successors in title have been in uninterrupted possession of it from that time to the present. The cases upon which Mr. <NAME> mainly relied do not bear out his argument, One of these, <NAME> v. Sheikh <NAME> (1899) I.L.R., 28 Bom., 614, which decided that a person purchasing or taking a mortgage from a mortgagee, believing that he is getting a good title, must have possession of the property for the statutory period, in order to validate the transaction as against the original mortgagor under Article 134. This case decided that a purchaser from a mortgagee of what is represented to be the absolute estate, must be a purchaser with possession so as to make the purchase valid as against the true owner, after 12 years' enjoyment.

10. This case is not applicable to the case before us, in view of the fact that <NAME>, the mortgagee, obtained possession in the year 1872, and that he and his transferees have been in possession ever since that time. The other case on which he relied, namely <CITATION> (1900) I.L.R., 25 Mad., 99 also has no close application. In it, it was held that Article 134 only applies to cases in which the mortgagee disposes of the property voluntarily and not to a purchase made at an auction sale in execution of a money decree, in which the interest of the judgment-debtor is only that of a mortgagee. The mortgage of 1867 made to <NAME> was a voluntary transaction, under which no doubt possession was not directly obtained, but it was a voluntary sale sub modo by virtue of which the mortgagee by the aid of the <ORG> afterwards obtained possession.

11. Possession is not referred to in Article 134 , but we are disposed to think that the article is applicable only to cases in which a purchaser, whether his purchase be absolute or merely sub modo, must obtain and hold possession for 12 years or upwards, in order that he may have the benefit of the article. If the purchaser is a purchaser from a trustee, the property cannot be followed into his hands, as it may be under Section 10 of the Limitation Act, unless he have possession. So in the case of a purchase from a mortgagee, the mortgagor has no notice of the transaction unless it be with possession. Taking therefore the view of the article most favourable to the plaintiffs appellants, their contention fails, inasmuch as <NAME> and his transferees have had possession since the year 1872.

12. For these reasons we hold as regards the five villages included in the mortgage of the 7th of January 1867, that the plaintiffs' claim to redeem them cannot be sustained.

13. In view of the conclusions at which we have arrived upon the several points raised before us in this appeal, we are prepared to give a decree to the plaintiffs for redemption of the seven villages included in the mortgage which did not pass to <NAME> under his mortgage, upon payment of any sum which may be due after taking an account by them to the mortgagees on foot of the mortgage of 1830 and to dismiss the suit as regards the other five villages. As no account, however, has been taken in the Court below, we cannot finally deal with his appeal, but must remand issues to that Court under the provisions of Section 566 of the Code of Civil Procedure. The mortgagees have put it out of their power to deliver over possession of the five villages to the mortgagors on redemption, These villages are, under Section 82 of the Transfer of Property Act, liable to contribute rateably to the debt. We must therefore ascertain what part of the principal debt of Rs. 19,500 is properly attributable to the seven villages in respect of which we propose to pass a decree for redemption. We therefore remand to the lower Court the following issues under the provisions of Section 566 :

(1) What portion of the mortgage debt is rateably attributable to the seven villages which we hold the plaintiff is entitled to redeem, regard being had to the amount of any incumbrances to which the villages respectively were subject at the date of the mortgage?

(2) How much of the mortgage debt, if any, attributable to the seven villages remains unpaid to the mortgagees, after making allowance for the usufruct of the property by the mortgagees from the date of the mortgage?

14. We direct the Court below to take such relevant evidence as the parties respectively may tender. On return of the findings the parties will have the usual ten days for filing objections. We reserve the question of costs.