PETITIONER: THE STATE OF MADRAS Vs. RESPONDENT: <NAME> DATE OF JUDGMENT: 26/09/1957 BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. SINHA, BHUVNESHWAR P. MENON, P. GOVINDA CITATION: 1958 AIR 61 1958 SCR 580 ACT: Appeal by special leave--Order of acquittal by <ORG>--Power of Supreme <ORG>-Presumption-Prevention of Corruption Act, (II of 1947), s. 4-Constitution Of India, Art. 136. HEADNOTE: Respondent, an Income-tax Officer, called an assessee to his house and took a sum of Rs. 800 from him. Immediately afterwards a search was made and the respondent, after some evasion, produced the money. The respondent's defence was that he had taken the money as a loan and not as illegal, gratification. The Special judge who tried the respondent found him guilty under s. 16i , Indian Penal Code , and sen- tenced him to six months simple imprisonment. On appeal, <ORG> acquitted the respondent. The <ORG> obtained special leave and appealed. Held, that the words used in Art. I36 of the Constitution show that in criminal matters no distinction can be made as a matter of construction between a judgment of conviction and one of acquittal. <ORG> will not readily interfere with the findings of fact given by <ORG> but if <ORG> (i) A.I.R. (1954) S.C. 680. 581 acts perversely or otherwise improperly interference will be called for. The findings of <ORG> are halting and its approach to the case has been erroneous as it disregarded the special rule of burden of proof under s. 4 Of the Prevention of Corruption Act (II Of 1947). The judgment of <ORG> shows that certain salient pieces of evidence were missed or were not properly appreciated. In this situation <ORG> can interfere in an appeal by special leave. Where it is proved that a gratification has been accepted, the presumption under s- 4 Of the Prevention of Corruption Act shall at once arise. It is a presumption of law and it is obligatory on the <ORG> to raise it in every case brought under s. 4 . The evidence and circumstances in this case lead to the conclusion that the transaction was not one of loan but of illegal gratification. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 5 of 1957.

Appeal by special leave from the judgment and order dated the 6th September, 1955, of <ORG> in Crimi- nal Appeal No. 498 of 1954 and Criminal Revision Case No. 257 of 1955, arising out of the judgment and order dated the 12th July, 1954 of the Special Judge, <NAME> in C. C. No. I of 1952..

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

<NAME> and <NAME>, for the re- spondent.

1957. September 26. The following Judgment of the Court was delivered by <NAME> is an appeal by the State of Madras from the judgment and order of <ORG> reversing the judgment of the Special Judge of Coimbatore and thereby acquitting the respondent who had been convicted of an offence under s. 161 Indian Penal Code and sentenced to six months simple imprisonment.

The respondent, <NAME>, was at all material times the Income-tax Officer of Coimbatore and it is not disputed that he was there in the beginning of June 1951. According to the prosecution the respondent in the end of September 1951 demanded from <NAME> (hereinafter referred to as the complainant) who is a proprietor of <ORG> called Nehru cafe in Coimba- tore with another similar hotel at Bhavanisagar a bribe of Rs. 1,000.

The complainant had been assessed to income-tax all along since 1942. During the course of assessment for the year 1950-51 it was discovered that he had failed to pay advance income-tax. A notice was therefore issued to him on March

24., 1951 under s. 28 read with s. 18-A (2) of the Income- tax Act. to show cause why a penalty should not be. imposed for underestimating his income. For the assessment year 195152 also the complainant in the usual course filed his return on August 11, 1951 and on a notice being issued to him produced his accounts before the Income-tax Officer on September 27, 1951. He again appeared before him on the 28th and the respondent told him that the " penalty papers had. not been disposed of and that the accounts of the current year had also not been gone through " and asked the complainant to see him at his house on the following morn- ing, which the complainant did. There he was told by the respondent that if he wanted to have his return accepted and to be helped in the matter of penalty proceedings he should pay the respondent Rs. 1,000 as illegal gratification. The complainant mentioned this fact to his manager and also that he had been told by the Income-tax Officer that his accounts were unsatisfactory. Because he was asked to do so the complainant saw the respondent at the latter's house on October 6 or 7 and he asked the complainant if he had brought the money and after some talk about the assessment the respondent asked the complainant -to pay half the amount as it was Deepavali time. There is evidence of a defence witness also to show that towards the end of October 1951, the complainant was seen coming from the house of the re- spondent though the prosecution and the defence are not in accord as to the purpose of this visit.

The Circle Inspector, <NAME>, claims to have received complaints while at Madras about the respondent being corrupt and his " indulging in corrupt practices". He then came toCoimbatoreandgot into touchwith the complain- ant and asked him if he had paid anybribetotherespoiident. The complainant mentioned to the Inspector about the demand of a bribe by the respondent. At the instance of the In- spector the complainant appeared before the Tehsildar-Magis- trate who recorded his statement P-17 wherein the whole story of the demand of the bribe has been set out. The Inspector then gave ten one hundred currency notes -to the complainant after their numbers were taken down in Ex. P-

17. The complain ant then went to the office of the accused but no money was accepted on that day because the respondent had received an anonymous letter Ex. P-18 warning, him of the trap which was being laid by the Malayalam people. The respondent naturally got very annoyed with the complainant and sent him. away. The same evening the complainant was told that he was required to go to the house of the respond- ent on the following morning which he did at 8 a. m. The respondent told him that he should take no notice of the anonymous letter which must have been sent by his enemies and asked him to pay some money. The complainant paid a sum of Rs. 200 which on his return he entered in his kacha account book which <ORG> has rejected without sufficient reason. On the evening of November 15, the complainant again went to the house of the respondent and the latter told him that he would pass final orders and that money should be paid. The record, P-7 and P-7 (a), shows that an order was dictated on November 13 although there is no proof or even indication that the complainant knew about it. The complainant was given 8 one hundred rupee notes by the Inspector and the complainant paid them to the respond- ent on the morning of November 17 at the latter's house. On this occasion the complainant accompanied by his manager <NAME> had gone towards the house of the respondent along with the Magistrate and Circle Inspector and Venkates, lyer P. W. - 14 in a car which was stopped three or four blocks away from the house of the respondent and only the complain- ant and his manager went into the respondent's house and paid the money. Two or three minutes later the Inspector <NAME> and the Magistrate <NAME> and one <NAME> who had joined the party en route also came into the house on receiving the signal from the complainant. They disclosed their identity to the respondent and told him that they had information that he had received Rs. 800 from the complain- ant as illegal gratification and asked him to produce the money which he had received from the complainant. The respondent did not say anything and got up from the chair on which he was sitting and tried to go into the house but was prevented from doing so by the Inspector and he then pro- duced the money from the folds of his dhoti. While the mahazar was being prepared the respondent said that he bad received this money as a loan from the complainant who denied this and said it had been paid as a bribe. A tele- gram was then sent to the Superintendent of Special Police Establishment and under his orders a case was registered and the investigation was then taken up by a Deputy Superintend- ent of Police who searched the house of the respondent on November 19 but no pronote seems to have been received or taken into possession on that date. A pronote with four anna stamps affixed was later produced in the court by the respondent on July 17,1952 during the course of his state- ment under s. 342 Criminal Procedure Code but it was not mentioned to the Magistrate <NAME> by the respondent. The charge against the respondent was that he had obtained from the complainant Rs. 800 as gratification other than legal remuneration as a motive for the reward for showing favour to him in the exercise of official functions and had thereby committeed an offence punishable under s. 161 of the Indian Penal Code read with a. 4 of the Prevention of Cor- ruption Act (Act II of 47).

The explanation of the respondent was that be men tioned to the complainant about his money difficulties when accidentally he met him on the road towards the end of August or beginning of September 1951. The complainant offered to lend him Rs 1,000/-. At that time he was not aware that the complainant had an assessment pending before him. It was the complainant who told him on November 15 when he met him again that the anonymous letter was the "'work of his enemies" and promised to advance the loan as previously promised and he also suggested that the respond- ent should execute a pronote for Rs. 1,000 which would be attested by <NAME> to which he (the respondent) was agreeable. The complainant paid Rs. 800 on the morning of November 17 and promised to pay Rs. 200 in the evening. The respondent had the pronote ready and offered to hand it over in the morning but the complainant said he would take it when " he left the house ".

The learned Special Judge accepted the story of the prosecu- tion and after a careful analysis of the evidence found the respondent guilty of the offence charged and sentenced him to -six months simple imprisonment.

On appeal being taken to <ORG> the learned Single Judge reversed the judgment and acquitted the respondent. It will be convenient to give here the main findings of the learned judge in his own words:

(i)" It is true that at the time when the money was accepted by The accused, the proceedings in relation to assessment of income tax on P. W. 8 were pending before the accused. Naturally, therefore, if in such circumstances, the accused should receive money from an assessee, the suspicion is readily aroused that the money must have been paid only as an illegal gratification. On going through the judgment of the learned trial Judge, I formed the impression that he was totally influenced by such suspicion."

(ii)" The result is that if the version of P. W. 8 and thatof the accused are balanced, the probability seems totilt the scale in favour of the accused's version. In any case, the evidence is not enough to show that the explana- tion offered by the accused cannot reasonably be true, and so, the benefit of doubt must go to him."

(iii)" But this was not a case of ordinary lendee, but an Income-tax Officer whose favour was needed by the lender.

(iv)"Evidence shows that in November, 1951, the accused was in need of a sum of Rs. 1,000 and, for that purpose, has asked P.W. 8 for a loan."

(v)" In my view, the evidence does not necessarily make out a case that the accused must have accepted the money only as a bribe. "

(vi)" I do not therefore feel certain that the taking of a loan with an obligation to repay it with interest, would fall within the meaning of the term I gratification'. " The extent of the power of <ORG> to interfere with a judgment of acquittal was raised before us by the respondent's counsel and it was contended that the jurisdic- tion exercised by this court under Art. 136 was the same as that exercised by <ORG> and reliance was placed on a minority judgment by Venka- tarama Aiyar J. in <CITATION> - tra(1) where the learned judge after discussing the various <ORG> judgments and quoting a passage from the judgment of this court in <CITATION> (2) observed:

" The preceding article referred to in the opening passage is clearly article 134.  Article 134(1) confers a right of appeal to this court in certain cases, in terms unqualified, on questions both of fact and law, and if the scope of an appeal under Article 136 is to be extended likewise to questions of fact, then article 134(1) would become super- fluous. It is obvious that the intention of the Constitu- tion in providing for an appeal on facts under Article 134(1)(a) and (b) was to exclude it under Article 136 , and it strongly supports the conclusion reached in <CITATION> (3)that like <ORG> this <ORG> would not function as a further court of appeal on facts in crimi- nal cases. "

(I) [1955]2 S.C.R. 1285, 1301.

(2) [1950] S.C.R. 453, 458,  <CITATION> (1) was also referred to by counsel for the respondent and it was contended that <ORG> should not interfere with the order of <ORG> merely on the ground that it took a different view of the facts. That was an appeal which had been brought on a certificate by <ORG> and not by Special Leave of this <ORG>. That judgment was considered by a Constitution Bench in <CITATION> . (2) and <NAME>, Acting C.J., delivering the judgment of the court pointed out that that was a decision of a bench of three judges and not of a Constitution bench and the observation that there was no provision corresponding to s. 417 of the Criminal Procedure Code only emphasised that this <ORG> should not in appeal by Special Leave interfere with the order of acquittal passed by <ORG> merely for correcting errors of fact or of law. <NAME> case (2) was an appeal against a judgment of acquittal and this court reversed the judgment saying:-

" In our view, <ORG> erred in holding that the prosecution had failed to establish their case and in ac- quitting the accused.

This case negatives the contention that under Art. 136 interference by this court with findings of <ORG> in judgments of acquittal is not intended. Even in <CITATION> (1) <NAME> was of the opinion that <ORG> can interfere where <ORG> "acts perversely or otherwise improperly or has been deceived by fraud. "

<CITATION> (3) Fazl Ali J. after a careful examination of Art. 136 along with the preceding articles stated the scope of the appeal under Art. 136 to be:- " Generally speaking, this court will not grant special leave, unless it is shown that exceptional and special circumstances exist, that substantial and grave injustice has been done and that the case in question

(i) A.I.R. 1954 S.C. 20.

(2) A.I.R. 1956 S.C. 158, 161.

(3) [1950] S.C.R. 453. 458.

presents features of sufficient gravity to warrant a review of the decision appealed against.

Even the Privy Council in laying down the permissible limits for review in criminal matters included things " so irregu- lar or so outrageous as to shock the very basis of justice ". See <NAME> v. <NAME> (1).

An instance of this principle is the decision of <ORG> in <CITATION> (2) which will be discussed later in this judgment and which has been approved of by this court.

Interpreting the following words of s. 205 of the Government of India Act, 1935, "any judgment, decree or final order of a court " and " it shall be the duty of every <ORG> in British India to consider in every case ", Lord <NAME> in King Emperor v. <NAME> (3) said :-- "The purpose of the provision is to confer a right of appeal in every case that involves a substantial question of law as to the interpretation of the Act or of any Order in Council made thereunder. "

One of the questions for decision in that case was whether an appeal lay in cases of habeas corpus. Lord <NAME> there observed :

" In the absence of an express exception of habeas corpus cases, and having in view the terms and purpose of the section, their Lordships are unable to limit tile terms of the section by mere construction so as to exclude these cases from its operation. "

In Art. 136 the use of the words " <ORG> may in its discretion grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the terri- tory of India " show that in criminal matters no distinction can be made as a matter of construction between a judgment of conviction or acquittal. <CITATION> (4) the following, observation of <ORG> in <CITATION> (2) at p. 299:

(1) (I932) L.R. 59 I.A. 233, 235.(3) (1945) L.R. 72 I.A. 241, 255.

(2) A.I.R. 1936 P.C. 289.(4) A.I.R. 1957 S.C. 589.

".. ...... there are here no grounds on the evidence, taken as a whole, upon which any tribunal could properly as a matter of legitimate inference, arrive at a conclusion that the appellant was guilty....... "

was quoted with approval and after an examination of all the facts and circumstances of the case <ORG> re- versed the judgment of conviction by <ORG> under Art. 136. The question for decision in the present case is whether it falls within the limits laid down in the above- mentioned cases. This court will not readily interfere with the findings of fact given by <ORG> but if <ORG> acts perversely or otherwise improperly interference will be called for.

The findings of <ORG> in the present case are, to say the least, halting, and the approach to the whole ques- tion has been such that it falls within what Mr. Justice <NAME> in <CITATION> (1) described as " acting perversely or otherwise improperly ". Although the learned <ORG> Judge has in the begin- ning of the judgment mentioned the presumption which arises under s. 4 of the Prevention of Corruption Act (II of 1947), the following passage in the judgment:

" in any case, the evidence is not enough to show that the explanation offered by the accused cannot reasonably be true, and so, the benefit of doubt must go to him, " is indicative of a disregard of the presumption which the law requires to be raised under s. 4 . The relevant words of this section are:

" Where in any trial of an offence punishable under s.

161 ................it is proved that an accused.......... person has accepted................ any gratification (other than legal remuneration).........from any person,it shall be presumed unless thecontrary is proved that he accepted .................. that gratifica- tion as a motive or reward such as is mentioned in the said section 161 ......................."

Therefore where it is proved that a gratification has been accepted, then the presumption shall at once arise

(i) A.1.R. 1054 S.C. 20.

under the section. It introduces an exception to the gener- al rule as to the burden of proof in criminal cases and shifts the onus on to the accused. It may here be mentioned that the legislature has chosen to use the words' shall presume' and not 'may presume', the former a presumption of law and latter of fact. Both these phrases have been de- fined in the Indian Evidence Act , no doubt for the purpose of that Act, but s. 4 of the Prevention of Corruption Act is in part materia with the Evidence Act because it deals with a branch of law of evidence, e.g., presumptions, and there- fore should have the same meaning. " Shall presume" has been defined in the Evidence Act as follows: " Whenever it is directed by this Act that the <ORG> shall presume a fact, it shall regard such fact as proved unless and until it is disproved. "

It is a presumption of law and therefore it is obligatory on the court to raise this presumption in every case brought under s. 4 of the Prevention of Corruption Act because unlike the case of presumptions of fact, presumptions of law constitute a branch of jurisprudence. While giving the finding quoted above the learned judge seems to have disre- garded the special rule of burden of proof under s. 4 and therefore his approach in this case has been on erroneous lines.

The judgment also shows that certain salient pieces of evidence were missed or were not properly appreciated. At the time when the penalty notice was issued under s. 28 of the Income-tax Act the respondent was not the Income-tax Officer at Coimbatore but by June 6, he had been posted at Coimbatore and the note on the Penalty File dated June 6,1951:

"put up proposal to <ORG> for levy of standard penalty," was made by him. Although this proposal was made on June 6, 1951, it is not clear as to what final orders were passed in these proceedings and when. At least there is nothing to indicate that any intimation was given to the complainant in regard to this matter. The complainant has stated on oath as P.W. 8:-

" I alone went to the accused on 28th September, 1951. He then told me that the penalty paper was not disposed of and that the accounts for the current year had not also been gone through."

On the day following this the respondent asked the complain- ant for illegal gratification of Rs. 1,000. Counsel for the respondent contended that there was no occasion for the respondent to say anything about the penalty proceedings because as far as he was concerned the recommendation had already been made by him but the real question is whether the complainant was told as to what had happened or had any knowledge of this. He states that he had none and there is nothing to indicate that he bad.

The respondent has then stated that the complainant was known to him since 1942 when he, the respondent, was the Head Clerk of the Appellate Assistant Commissioner of In- come-tax and that is the reason why towards the end of August or the beginning of September when be casually met the complain. ant on the road, he told him that he was in financial difficulties and the complainant offered him a loan of Rs. 1,000 to be returned in easy instalments and that he did not know at that time that the complainant was an assessee before him. This statement of the respondent has -been accepted by <ORG> without considering the following important facts. Notice was issued to the com- plainant and he filed his return on August 11, 1951. The notice must have been issued to the complainant under a. 22(2) of the Income-tax Act by the respondent himself as he was at that time the Income-tax Officer. So it is difficult to believe his statement about his not knowing that the complainant was an assessee before him and it is improbable that the respondent would mention his financial troubles to a more or less casual acquaintance who has neither been shown to be a banker, nor a money lender nor a wealthy person. The complainant has stated that he visited the respondent on 6th or 7th October, 1951, when he asked him if he had brought the money. The complaint replied that he had no money to spare as he had purchased a house and he also asked him if the respondent had finished the assessment. The latter's reply was that he would look into the matter and also told him that the complainant might pay half the amount (of the illegal gratification) before the deepavali time.. This statement the respondent has denied but the statement of the complainant as to his having no money as he had purchased a house has not been seriously challenged in cross-examination.

The complainant had been asked to produce the accounts and be did produce them on September 27. The notes made by the respondent in P-7 and P-7(a) show that the accounts of the complainant were not being accepted in regard to <ORG>. The portion of the order was :-

" All the defects that are usual in hotel accounts exist here."

In regard to <ORG> the note stated: :-- " Purchases are not fully supported and sales are reckoned from till takings."

On October 1, 1951, the assesses had filed his written statement and also some other documents. Nothing more seems to have been done till November 7, when the relevant part of the note on the file is:

"I have been keeping this in order to compare the results with other nearby hotels."

As to why no enquiries could be made in the whole of this period is not clear from the assessment record and it ]ends support to the prosecution case that the respondent was making approaches to the complainant to get money from him. The respondent during the pendency of assessment proceedings of the complainant allowed the complainant to visit him at his house and even paid visit to his cafe. Even according to the findings of <ORG> the complainant was "needing the favours" of the respondent who on his own showing was himself in dire need of a thousand rupees as he had succeeded in collecting only a thousand rupees by November2, and needed twice that amount for his son's premi- um or security as he chooses to call it. No importance was attached to this aspect of the case by the learned judge of <ORG>. In our opinion the learned trial judge correctly appreciated this part of the prosecution case and his judgment is not, as <ORG> has said, coloured by nere suspicion.

On November 6, 1951, Circle Inspector <NAME> contacted the complainant and arrangement was made for Rs. 1,000 to be paid by the complainant to the respondent and the money was actually taken by the complainant and offered to the re- spondent on November 8 which the respondent did not accept as he had received an anonymous letter Ex. P-18 which was dated November 6, 1951 in which the respondent had been warned that Malayalam people were attempting to "ruin him". In spite of this warning the respondent continued to have truck with the complainant and actually accepted Rs. 800 from him. It is true that when soon after the money was paid and the Inspector P. W. 12 and the Magistrate P.W. 13 arrived at the house of the respondent and asked him about this money he stated that he had taken it as a loan but in the context it assumes a different complexion. The state- ment of the Magistrate P.W. 13 was:-

" While the mahazar. was being prepared the accused volun- teered and told me that he had received the 800 rupees as a loan from P.W. 8-the complainant."

This witness had also stated that when he went into the verandah of the house, he asked the respondent whether he had received an illegal gratification from the complainant and also asked him to produce the money. The accused did not say anything but got up from the chair and tried to go inside the house which he was prevented from doing by the Inspector P. W. 12. The witness added:

" The accused was seen trembling and meddling with something under the towel. I asked the accused to remove the towel. The accused removed the towel. I saw some bulging at his waist in the dhoti be was wearing. I asked him again to produce the currency notes. He produced them from the folds of the dhoti be was wearing. When producing the currency notes the accused did not say anything."

No real cross-examination was directed against these por- tions of the statement of the Magistrate P.W. 13 nor has <ORG> correctly appreciated them or given them due weight. The respondent produced before the Special First Class Magistrate on July 11, 1952, an unsigned promote for Rs. 1,000 executed by him in favour of the complainant. That promote was not found in the house when the search was made by the Deputy Superintendent of Police on November 19, 1951, and it is not explained why the promote should have been made for Rs. 1,000 when actually the amount paid was only Rs. 800 and why the respondent offered to give this promote to the complainant without receiving full considera- tion.

These salient features of the case do not seem to have been properly appreciated or given due weight to by <ORG> and in our opinion the learned judge's approach to the question whether the sum of Rs. 800 was an illegal gratifi- cation or a loan is such that the judgment falls within the words of <NAME> in <NAME>'s case (1), i.e. that <ORG> has acted perversely or otherwise improperly. The evidence and the circumstances lead to the conclusion that the transaction was not one of loan but illegal grati- fication.

In view of the finding that the sum of Rs. 800 was a bribe and not a loan it is not necessary to consider whether in this case the loan would be an illegal gratification within s. 4 of the Prevention of Corruption Act (II of 1947) or not.

We would, therefore, allow this appeal, set aside the judg- ment and order of <ORG> and restore that of the Special Judge of Coimbatore convicting the respondent of the offence he was charged with. The respondent must surrender to his bail bond.

Appeal allowed.

(i) A.I.R. 1954 S.C. 20,


PETITIONER: <NAME> AND <NAME>. Vs. RESPONDENT: UNION OF INDIA AND ORS. DATE OF JUDGMENT: 01/10/1996 BENCH: B.P. JEEVAN REDDY, K.S. PARIPOORNAN ACT: HEADNOTE: JUDGMENT:

J U D G M E N T B.P.JEEVAN REDDY,J.

Leave granted. Heard the counsel for the parties. In <ORG> v. <ORG> [1992 Suppl.(3) S.C.C.215], this Court had, while declaring that Article 16(4) does not contemplate or permit reservation in the matter of promotions, declared that for the several reasons stated therein, the reservations already made shall continue for a period of five years from the date of the said judgment. In Para 829 [at Page 747] of the majority judgment, it was directed that "our decision on this question shall operate only prospectively and shall not affect promotions already made, whether on temporary, officiating or regular/permanent basis. It is further directed that wherever reservations are already provided in the matter of promotion-be it <ORG> or <ORG>, or for that matter services under any corporation, authority or body falling under the definition of 'State' in Article 12- such reservations shall continue in operation for a period of five years from this day". Then, in the next para, Para 831, the majority judgment made the following observations:

"We must also make it clear that it would not be impermissible for the <ORG> to extend concessions and relaxations to members of reserved categories in the matter of promotion without compromising the efficiency of the administration.

The relaxation concerned in <CITATION> , and the concessions namely carrying forward of vacancies and provisions for in-service coaching/training in <CITATION> , , are instances of such concessions and relaxations. However, it would not be permissible to prescribe lower qualifying marks or a lesser level of evaluation for the members of reserved categories since that would compromise the efficiency of administration. We reiterate that while it may be permissible to prescribe a reasonably lesser qualifying marks or evaluation for the OBCs, SCs and STs - consistent with the efficiency of administration and the nature of duties attaching to the office concerned - in the matter of direct recruitment, such a course would not be permissible in the matter of promotions for the reasons recorded hereinabove."

<NAME>, J. expressed himself on this aspect in Para 549, which reads:

"There is no doubt that the meaning of the various expressions used in Article 16 , viz., 'matters relating to employment or appointment to any office', and 'appointments or posts' cannot be whittled down to mean only initial recruitment and hence the normal rule of the service jurisprudence of the loss of the birth marks cannot be applied to the appointments made under the article. However, as pointed out earlier, the exclusive quota is not the only form of reservation and where the resort to it such as in the promotions, results in the inefficiency of the administration, it is illegal. But that is not the end of the road nor is a backward class employee helpless on account of its absence. Once he gets an equal opportunity to show his talent by coming into the mainstream, all he needs is the facility to achieve equal results.

The facility can be and must be given to him in the form of concessions, exemptions etc. such as relaxation of age, extra attempts for passing the examinations, extra training period etc. along with the machinery for impartial assessment as stated above. Such facilities when given are also a part of the reservation programme and do not fall foul of the requirement of the efficiency of the administration. Such facilities, however, are imperative if, not only the equality of opportunity but also the equality of results is to be achieved which is the true meaning of the right to equality."

The question before <ORG> was whether the saving of reservations provided in Para 829 takes within its purview the provisions providing for lesser qualifying marks in the qualifying examination for promotion. The Tribunal held that inasmuch as the expression "reservation" provided in Article 16(4) takes within its fold concessions and facilities including provision for lesser qualifying marks in the qualifying examination for promotion, such a provision is also saved by virtue of the declaration contained in Para 829. The declaration made by the Tribunal reads thus:

"14. We therefore hold that the status quo in the matter of reservations in promotion required to be maintained by <ORG> for five years, would also include status quo being maintained in the matter of prescribing lesser qualifying marks in the qualifying examination for promotion, within which period the authorities could take the steps indicated in the judgment.

15. In view of what is stated above, we hold that the impugned Memorandum cannot be assailed and are legally sustainable."

The memorandum referred to in Para 15 aforesaid is the Memorandum dated January 21, 1977 which provided that where the promotions are made on the basis of seniority subject to fitness and where a qualifying examination is held to determine the fitness of the candidates for such promotions, suitable relaxation in the qualifying standard in such examination should be made for Scheduled Castes/Scheduled Tribes to the extent of the relaxation to be decided on each occasion, whenever such examination was held, taking into account all relevant factors including the number of vacancies reserved, performance of Scheduled Caste/Scheduled Tribe candidates as well as the general candidates in that examination, the minimum standard of fitness for appointment to the post and the overall strength of the cadre and that of the Scheduled Caste/Scheduled Tribe in that cadre [Purport of the Office Memorandum taken from Para-2 of the <ORG>'s judgment]. Pursuant to the said Office Memorandum, <ORG> has been issuing orders from time to time providing lesser qualifying marks for passing the qualifying examination prescribed for promotion, in the case of Scheduled Caste/Scheduled Tribe.

The precise question raised before the <ORG> was whether the said provision is saved by the declaration contained in Para 829 of this <ORG>'s judgment.

Having heard the counsel for the parties and considered the various opinions in <NAME>, we are of the opinion that the very posing of the question as well as the answer given by the <ORG> are erroneous and unsustainable.

According to Para 831, extracted hereinabove, while it is "permissible to prescribe a reasonably lesser qualifying marks or evaluation for the OBCs, SCs and STs - consistent with the efficiency of administration and the nature of duties attaching to the office concerned - in the matter of direct requirement, such a course would not be permissible in the matter of promotion for the reasons recorded hereinabove". At the same time, it is held that "it would not be impermissible for the <ORG> to extend concessions and relaxations to members of reserved categories of the administration. The relaxation concerned in <NAME> and the concessions namely carrying forward of vacancies and provisions for in-service coaching/training in <ORG> are instances of such concessions and relaxations. However, it would not be permissible to prescribe lower qualifying marks or a lesser level of evaluation for the members of reserved categories since that would compromise the efficiency of administration." The relaxation concerned in <ORG> of Kerala v N.M. <NAME> [1976 (2) S.C.C.310] is also set out in Para 713 of the majority judgment. The concession was providing "temporary exemption to members already in service belonging to any of the Scheduled Castes or Scheduled Tribes from passing all tests (unified, special or departmental test) for a period of two years..... They were required to pass the tests within the period of exemption." So far as the concessions in <CITATION> [1981 (1) S.C.C.246] are concerned, they are specified in Para 831 itself as referring to carrying forward vacancies and provisions for in-service coaching/training. It is thus clear from a reading of Para 831 that so far as promotions are concerned, it is not permissible to provide lesser qualifying marks of evaluation in favour of OBCs/SCs/STs since that would compromise the efficiency of administration, while the same can be provided in the matter of direct recruitment. So far as promotions are concerned the only provision permitted other than the provision for reservation is providing the concessions and reservations like the ones provided in <NAME> and <ORG>, which do not take in provision for lower qualifying marks or a lesser level of evaluation.

To the same effect are the observations of <NAME>,<NAME> in Para 549, which we have extracted hereinabove. The learned Judge also speaks of "concessions/exemptions etc. such as relaxation of age, extra attempts for passing the examination, extra training period etc." The other learned Judges in their separate opinions have merely held that reservation in the matter of promotions is not permissible under Article 16(4). They have not separately dealt with the concessions and facilities which can be extended to these reserved categories. [Of course, one of the learned Judges who constituted the majority, <NAME><NAME> (as the learned Chief Justice then was) was of the opinion that it was not necessary to consider in that case the question whether Article 16(4) permits reservation in the matter of promotions.] In the light of the fact that <NAME> and <NAME>,J<NAME> have agreed with the conclusions arrived at in the majority judgment and in the absence of any contrary proposition in the opinion of any other learned Judge, it must be held that the law on this question is the one declared in Para 831. We are, therefore, of the opinion that so far as the provision for lower qualifying marks or lesser level of evaluation in the matter of promotion is concerned, it is not permissible under Article 16(4) in view of the command contained in Article 335 of the Constitution. In other words, even if it is assumed for the sake of argument that reservation is permitted by Article 16(4) in the matter of promotions, a provision for lower qualifying marks or lesser level of evaluation is not permissible in the matter of promotions, by virtue of Article 335. If so, there can be no question of such a provision or "concession", as it is called by the <ORG>, being saved by the declaration in Para 829 of the said judgment.

The learned counsel for the parties referred to certain decisions of this <ORG> but, in our opinion, it is wholly unnecessary to refer to them since none of them deal with the question at issue.

The appeal is accordingly allowed with the above clarifications. The order of the <ORG> is set aside. No costs


JUDGMENT <NAME>, C.J.

1. This Appeal against the Judgment of <NAME>, J., in C.M.S.A. No. 130 of 1954 arises in the following circumstances. One <NAME> filed O.S. No. 675 of 1952 in <ORG>, Tiruchirapalli, against <NAME>, the respondent herein, for recovery of possession of the property in dispute and for past and future rents. In that suit the parties entered into a compromise and based on that compromise the Court passed a decree directing the respondent herein to deliver possession of the property by 15th March, 1954 and also to pay past and future rents. As the respondent failed to deliver possession by the prescribed date, the plaintiff-decree-holder filed E.P. No. 240 of 1954 on 18th March, 1954, for delivery of possession. An order for delivery was passed on 12th April, 1954, directing delivery by 10th Jnne, 1954. On 15th April, 1954, the respondent filed an appeal to <ORG>, Tiruchirapalli, against the order for delivery (A.S. No. 177 of 1954). In that appeal he obtained on ex parte order of stay on 15th April, 1954, itself. On 27th May, 1954, the original decree-holder <NAME> died. On 8th July, 1954, <ORG> dismissed A.S. No. 177 of 1954 on the ground that the order of delivery was right. The learned Judge inter alia observed as follows:

The right given to a tenant by Section 7 of the Act is a substantive right and there is nothing in the Act to indicate that it is retrospective in the application. Therefore, there can be no question of applying the provisions of the Act, so as to hold that the order of delivery passed against the appellant is wrong. It is urged that Section 7 not merely vests a right in the appellant but prohibits the <ORG> from evicting him. If that is so, it is for the appellant to ask the <ORG> which is threatening to evict him to stay his hands (whether it is bound to do so or not is not a matter on which I am expressing any opinion); not to come in appeal against an order which is perfectly proper and legal.

2. Apparently the view taken by the learned District Judge was that Section 7 of the Madras Buildings (Lease and Rent Control) Act would not make the original order for possession ipso facto invalid, but it might be that the judgment-debtor could object to actual eviction in pursuance of the order. After the dismissal of his appeal the respondent filed an application, E.A. No. 845 of 1954 on 12th July, 1954, for Stay of execution. Meanwhile the son of <NAME>, the present appellant before us, filed an application on the same day that he may be added as legal representative of the decree-holder praying for a decree directing delivery of possession of the suit property to him. The ground taken by the respondent was that the Rent Control Act had been extended to the village in which the property was situated on and from 16th June, 1954 and therefore the decree-holder's legal representative could not evict him. The learned District Munsif of Tiruchirapalli overruled the respondent's objection and brought the appellant before us as the legal representative of the deceased decree-holder and passed again another order for delivery of possession to the legal representative. Against this order of the District Munsif the respondent filed an appeal, A.S. No. 261 of 1954 which was heard and disposed of by the learned Subordinate Judge of Tiruchirapalli. He dismissed the appeal on the ground that Section 7 of the Act would not apply to pending execution proceedings, that is to say, to the prior execution petition wherein an order for eviction had already been passed. From this order the respondent preferred an appeal to this Court, C.M.S.A. No. 130 of 1954 which came up for decision before <NAME>, J. The only question argued before him was whether the Rent Control Act whose application had been extended to the village in which the property was situated only on 16th June, 1954, would prevent the eviction of <NAME> except in accordance with Section 7 of that Act. The learned Judge after an elaborate discussion of the several decisions cited before him held that Section 7 of the Act does apply and is a complete answer to the claim of the decree-holder's legal representative to evict the respondent. The learned Judge therefore allowed the appeal and dismissed the execution petition filed by the decree-holder's legal representative but granted leave to file a Letters Patent Appeal.

3. Mr. <NAME>, learned Counsel for the appellant, contended, relying upon the well-known rule against implying retrospective operation of statutes, that Section 7 of the Act would only apply to decree passed in suits filed after the passing of the Act. In this case admittedly the decree was passed long before the Act, and even an execution petition had been filed before the Act came into force. We cannot agree with this contention of learned Counsel for the appellant. Na authority has been cited to us for this extreme position that Section 7 would not apply except to decrees passed in suits filed after the passing of the Act. On the other hand <ORG> of this Court held in <CITATION> (1949) 1 M.L.J. 376 : A.I.R. 1949 Mad. 809, that a provision similar to Section 7 of the Act of 1949 might bar the eviction of a tenant in execution of a decree passed in a suit filed before the concerned statute. In that case the suit was filed in 1943 for eviction of the tenant. On 11th July, 1944, Clause 8 of the Madras Non-Residential Buildings Rent Control Order, 1942, was amended and when so amended the clause ran as follows:

A tenant in possession of a non-residential building shall not be evicted therefrom, whether in execution of a decree or otherwise...except in accordance with the provisions of this clause.

4. It was contended before <ORG> that the moment a person files a suit he obtains thereby a vested right to have applied not only to the suit, but to all execution proceedings also, the law relating to execution as it existed at the time of filing the suit. The learned Judges had no difficulty in rejecting this contention as they were not aware of any such principle. They found no reason to think that if a new law is introduced restricting the right to execute, execution proceedings can nevertheless be instituted if such a right existed on the date of the filing of the suit. The observations of <NAME>, J., in The United Provinces w. Mt. Atica Begaun (1941) 1 M.L.J. Sup. F.C. 65, were relied on behafore <ORG> but the learned Judges did not agree that the observations in any way affected their decision. Actually in that case the decree was passed after Clause 8 of the Non-Residential Buildings Rent Control Order had been amended in the manner aforesaid. The execution petition was filed subsequently. The decision of the learned Judge was that Clause 8 prohibited the decree-holder from filing an execution petition, his only way of evicting the tenant being to file an application before the Rent Controller. No doubt there is a reference to pending proceedings in one part of the judgment but it was not necessary to deal with the point because they held that during the interval between the passing of the decree and the filing of the execution petition there was no pending proceeding. The basis of the decision is certainly against the view that Clause 8 would not affect pending proceedings. Mr. <NAME> relied upon the decision of <ORG>, in <NAME> v. <NAME> (1945) 1 M.L.J. 441. In that case the Chief Judge of <ORG> dismissed an application for ejectment. That application was filed on 18th March, 1944. There was a sub-letting of a portion in June, 1943. Possession was to be given on 14th April. On 14th April the plaintiff when he sought to obtain possession was obstructed by the respondent. Thereupon an application was made to <ORG> and that Court dismissed the application. The learned Judge adverted to the difference in the language between the old Section 7-A, Madras House Rent Control Order and the new Section 7-A. The learned Judge took the view that <ORG> had no jurisdiction to invoke the new provision and construe it to operate retrospectively. He allowed therefore the revision petition before him and set aside the order of <ORG>. In the concluding portion of his judgment there are certain observations which really are pertinent for the disposal of this case, namely:

If and when an application for possession comes before the Controller, the Controller should apply his mind to the circumstances actually and presently before him to enable him to make or refuse an order, and it would be for one side or the other to point out that the application for ejectment had lost its force owing to the fact that since the application has been made, difficulties which were then not in existence had arisen or difficulties that were in existence had disappeared.

5. We must confess we are not able to fully appreciate the scope of these observations. The Division Bench in <CITATION> (1949) 1 M.L.J. 376 : A.I.R. 1949 Mad. 809, understood this passage thus:

It is seen from this passage that the learned Judge, far from thinking that the landlord had, by the institution of his application for possession in the Sub-Court, acquired an absolute right to physical possession, contemplated proceedings before the rent controller in which it would be contended by the tenant that in view of the new legislation, actual possession could not be given.

<CITATION> (1949) 1 M.L.J. 452, it was pointed out by a Division Bench to which one of us was party that the jurisdiction of a Civil Court to entertain and pass a decree in a suit for eviction by a landlord against his tenant is not expressly or impliedly taken away and that Clause 8 of the Madras Non-residential Buildings Rent Control Order, which corresponds to Section 7 of the Madras Buildings (Lease and Rent Control) Act, 1949, prevents the tenant from being thrown out. One of the methods of eviction is by the process of execution of a decree for possession and it was held that this method was prohibited and eviction could only be in accordance with the provisions of the Rent Control Order.

6. In our opinion this appeal can be disposed of on a very short point. This appeal arises out of an execution petition filed on 12th July, 1954, (E.P. 240 of 1954) by the legal representative of <NAME>. There was no doubt a prior execution petition filed by <NAME> himself and an order for eviction but admittedly the respondent had not been evicted in pursuance of that order. That is why after the death of <NAME> his legal representative, the appellant before us, was compelled to file another execution petition praying for delivery of possession. That admittedly was filed after the Rent Control Act had come into operation in the village in which the property was situated. We fail to see how the principle against retrospective operation is offended in this case. It is not as if during the pendency of E.P. No. 240 of 1954, out of which this appeal arises, that the Rent Control Act came to be extended to the suit village. By the date of the filing of the present execution petition the Act had come into force. The executing Court which was bound to apply the provisions in the statute had come into force even before the date of the execution petition which it was called upon to dispose of. In our opinion there is no substance in the contention of learned Counsel for the appellant.

7. It was argued but without the support of any authority that Section 7 would not apply to compromise decrees. Once a decree is passed, we can see no difference on principle between a decree passed on a compromise and a decree passed after contest.

8. Mr. <NAME> sought to raise a new point which was not raised by him in the Courts below and not even in the memorandum of appeal, namely, that as the respondent had obtained a stay of the order for delivery passed by the learned District Munsif of Tiruchirapalli on 15th April, 1954, on the misrepresentation that the Rent Control Act had been extended to the suit village, he was disentitled to any relief based on the provisions of the Act. We do not have the order of stay passed by the learned District Judge nor a copy of the affidavit filed by the respondent in support of his application. We do not know what prompted the learned District Judge to pass the ex parte order. In the absence of even a specific ground in the Letters-Patent Appeal, we do not think the appellant should be allowed to raise a new point at this late stage. The appeal fails and is dismissed with costs.


PETITIONER: <NAME> Vs. RESPONDENT: THE TOWN AREA COMMITTEE,<NAME> AND ANOTHER. DATE OF JUDGMENT: 27/02/1952 BENCH: <NAME>, <NAME> BENCH: <NAME>, <NAME> SASTRI, M. PATANJALI (CJ) MAHAJAN, MEHR CHAND MUKHERJEA, B.K. AIYAR, N. CHANDRASEKHARA CITATION: 1952 AIR 115 1952 SCR 572 CITATOR INFO : F 1952 SC 118 (1,3) R 1953 SC 252 (8) R 1954 SC 403 (9) R 1955 SC 661 (5,60,145) RF 1957 SC 790 (10) R 1958 SC 296 (7) RF 1958 SC 578 (228) R 1958 SC 956 (26) R 1959 SC 480 (2,4) R 1962 SC 123 (12) R 1962 SC1006 (34,81) F 1962 SC1563 (115) R 1962 SC1621 (39,45,165) R 1970 SC 564 (74) D 1971 SC1737 (45) RF 1975 SC1443 (6) RF 1992 SC1033 (33) ACT: Constitution of India, 1950, Arts. 19(1)(g), 32--U. P. Municipalities Act, 1916, ss. 293 ( 1), 298(2)(g)(d)--Munic- ipal bye-laws-Bye-law imposing fee for carrying on wholesale trade in vegetables and fruits within municipal area--Valid- ity--Restraint on fundamental right to carry on trade--Licence and tax, difference. HEADNOTE: There is a difference between a tax like the income-tax and a licence fee for carrying on an occupation, trade or business. A licence lee on a business not only takes away the property of the licensee but also operates as a restric- tion on his fundamental 573 right to carry on his business. Therefore if the imposition of a licence fee is without authority of law it can be challenged by way of an application under Art. 32. Under Art. 19(1) (g) of the Constitution a citizen has the right to carry on any occupation, trade or business and the only restriction on this unfettered right is the author- ity of the <ORG> to make a law relating to the carrying on of such occupation, trade or business as mentioned in cl. (6) of that article as amended by the Constitution (First Amendment) Act, 1951. If therefore a licence fee imposed for carrying on an occupation, trade or business cannot be justified on the basis of any valid law, no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction and will necessarily infringe the right of the citizen to carry on his occupa- tion, trade or business under Art. 19(1) (g ), and such infringement can properly be made the subject matter of a challenge under Art. 32 of the Constitution. Bye-law No. 1 of the Bye-laws of <ORG> (in the United Provinces) provided that no person shall sell or purchase any vegetables or fruit within the prescribed limits of <ORG> by whole- sale or auction, without paying the fees fixed by these bye-laws to the licensee appointed by the Town Magistrate. Bye-law No. 4 (b) provided that any person can sell in wholesale at any place in the town area provided he pays the prescribed fees to the licensee. A person who had been carrying on the business of wholesale dealer in vegetables and fruits in his own shop at Jalalabad for a period of seven years applied for protection under Art. 32 contending that these bye-laws infringed his fundamental right to carry on his trade guaranteed by Art. 19 (1) (g) and were there- fore void. Held, that s. 293 (1) and s. 298 (2) (J) (d) of the U.P. Municipalities Act, 1916, as amended at the time they were extended to the town areas in the United Provinces did not empower <ORG> to make any bye-law autho- rising it to charge any fees otherwise than for the use and occupation of any property vested in or entrusted to the management of <ORG> including any public street. The bye-laws in question which imposed a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immovable property vested in or entrusted to the management of <ORG> including any public street, are obvi- ously ultra vires the powers of the <ORG> and, there- fore, the bye-laws cannot be said to constitute a valid law which alone may, under Art. 19 (6) of the Constitution, impose a restriction on the right conferred by Art. 19(1) (g). In the absence of any valid law authorising it, such illegal imposition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on 74 574 his occupation, trade or business which is guaranteed to him by Art. 19 (1) (g) of our Constitution. <NAME> case  S.C.R. 566 and <CITATION> - tax Officer, Mohindargarh  S.C. R. 127 distinguished. JUDGMENT:

ORIGINAL JURISDICTION: Petition No. 132 of 1951. Peti- tion under Art. 32 of the Constitution for a writ in the nature of mandamus. The material facts are set out in the judgment.

<NAME> for the petitioner.

<NAME> for the respondents.

1952. February 27. The Judgment of the Court was delivered by DAs J.--This is an application under article 32 of the Constitution made by <NAME> for the protection of his fundamental right of carrying on his business which, according to him, is being infringed by the respondent. The case sought to be made out in the petition may be shortly stated as follows:--

The petitioner is a wholesale dealer in fresh vegetables and fruits at Jalalabad in the district of Muzaffarnagar in the State of Uttar Pradesh and claims to have been carrying on such business for the last 7 years or so at his shop situated in the town of Jalalabad. The vegetable and fruit growers used to bring their goods to the town and get them auctioned through any of the vegetable dealers of their choice who used to charge one anna in the rupee as and by way of commission. The respondent <ORG> which is <ORG> has framed certain bye-laws under which all right and power to levy or collect commission on sale or purchase of vegetables and fruits within the limits of the town vest in the respondent <ORG> or any other agency appointed by the <ORG> and no one except the respondent <ORG> is authorised to deal in wholesale vegetables and fruits and collect the commission thereof in any place and in any event. The respondent <ORG> has by auction given the contract for sale of vegetables and fruits and for collecting the commission for the current year to the respondent <NAME> who, it is alleged, has never dealt in vegetables and fruits The respondent <ORG> has not set up any market nor has it framed any bye-laws for issue of licences to the vegetable and fruit merchants. The bye-laws also provide for prosecu- tion for the breach of any of the provisions of these bye- laws. Although, in terms, there is no absolute prohibition against carrying on business as wholesale dealer in vegeta- bles and fruits, the result of the bye-laws requiring the wholesale dealers to pay the prescribed fee of one anna in the rupee to the contractor who holds the monopoly is, in effect, to bring about a total prohibition of the business of the wholesale dealers in vegetables and fruits. The petitioner contends that by granting a monopoly of the right to do wholesale business in vegetables and fruits to the respondent <NAME> the respondent <ORG> has in effect totally prevented the petitioner from carrying on his busi- ness and has thereby infringed his fundamental right under article 19(1)(g) of the Constitution. In the alterna- tive, the petitioner contends that the respondent <ORG> has no legal authority to impose a tax of the kind it has sought to do, that the imposition of a tax calculated at one anna in the rupee is in the nature of a sale-tax and cannot be regarded as a licence fee and such unauthorised impost constitutes an illegal restraint on his fundamental right under article 19 (1) (g).

The notice of motion has been served on the respondent <ORG> as well as on respondent <NAME>. The respond- ents have entered appearance and filed an affidavit in opposition to the present application affirmed by their agent on record Paragraph 4 of that affidavit is as follows :--

"4. Paragraphs 4, 5, 6 and 7 of the petition are wrong and misleading and do not convey the correct idea. If the bye-laws are read from beginning to end, the correct posi- tion is that <ORG> has lawfully imposed certain taxes on the purchase and sale of fruits and vegetables within the ambit of the Town Area; and instead of collecting the aforesaid taxes departmentally the <ORG> finds it more convenient and less expensive to auction the 'right to collect the taxes' and give the contract to the highest bidder or whomsoever it thinks fit and proper. There is absolutely no restriction on anybody who wants to purchase or anybody who wants to sell; only he must pay the prescribed tax to <ORG> through the Contractor. The market is open, and writ large throughout the territory of <ORG> and anybody can purchase from anybody and anybody can sell to anybody, without any control or intervention by the Contractor, whose position is simply that of a taxcollector on behalf of <ORG>. Instead of getting the pay, he gets the profits, if any, and runs the risk of incurring losses if his gross realisations are less than what he paid. This is clearly the position, and it is submitted, there is nothing wrong with it legally and no interference of the petitioner's rights."

The petitioner has to his petition annexed copies of a set of bye-laws dated June 24, 1942, and a copy of a resolu- tion of the respondent <ORG> dated March 16, 1950, recommending the addition of several bye-laws to the previ- ous bye-laws. At the hearing of the petition before us it was agreed by and between counsel on both sides that the petition has to be disposed of on the basis of the bye-laws of 1942 only and learned counsel for the respondent Commit- tee has produced the original bye-laws of 1942 before us. Bye-law 1 only provides that no person shall sell or pur- chase any vegetable or fruit within the prescribed limits of the Town Area <ORG>, Jalalabad by wholesale or auction,without paying the fee fixed under these bye-laws to the licensee appointed by the Town Magistrate. Bye-law 4

(b) expressly provides that any person can sell in wholesale at any place in the Town Area provided he pays the pre- scribed fees to the licensee. It is, therefore, clear that these byelaws do not in terms, prohibit anybody from dealing in vegetables and fruits as alleged by the petitioner and in this respect they materially differ from the bye-laws which this <ORG> had to consider in the <ORG> case(1) which consequently does not govern this case. Learned counsel, however, contends--and we think with considerable force and cogency--that although, in form, there is no prohibition against carrying on any wholesale business by anybody, in effect and in substance the bye-laws have brought about a total stoppage of the wholesale deal- ers' business in a commercial sense. The wholesale dealers, who will have to pay the prescribed fee to the contractor appointed by auction, will necessarily have to charge the growers of vegetables and fruits something over and above the prescribed lee so as to keep a margin of profit for themselves but in such circumstances no grower of vegetables and fruits will have his produce sold to or auctioned by the wholesale dealers at a higher rate of commission but all of them will flock to the contractor who will only charge them the prescribed commission. On the other hand, if the wholesale dealers charge the growers of vegetables and fruits only the commission prescribed by the bye laws they will have to make over the whole of it to the contractor without keeping any profit themselves. In other words, the wholesale dealers will be converted into mere tax col- lectors for the contractor or the respondent <ORG> without any remuneration from either of them In effect, therefore, the bye-laws, it is said, have brought about a total prohibition of the business of the wholesale dealers in a commercial sense and from a practical point of view. We are not of opinion that this contention is unsound or untenable.

Learned counsel for the petitioner, however, does not leave the matter there. He goes further and urges that the respondent <ORG> has no legal authority to impose this fee of one anna in the rupee on the value of goods sold or auctioned and that such imposition is in the nature of a sale tax rather than a licence fee.

(1) [1950] S.C.R. 566.

Learned counsel for the respondent in reply takes a preliminary objection to this line of argument. He points out that as the levying of a tax without authority of law is specifically prohibited under article 265 of the Constitu- tion, article 81(1) must be construed as referring to depri- vation of property otherwise than by levying of a tax and that levying of a tax in contravention of article 265 does not amount to a breach of a fundamental right. He contends, on the authority of the decision of this Court in <CITATION> (1), that while an ille- gal imposition of tax may be challenged in a properly con- stituted suit, it cannot be questioned by an application under article 32. This argument overlooks the difference between a tax like the income-tax and a licence fee for carrying on a business. A licence fee on a business not only takes away the property of the licensee but also operates as a restriction on his right to carry on his business, for without payment of such fee the business cannot be carried on at all. This aspect of the matter was not raised or considered in the case relied on by the learned counsel, and that case, therefore, has no application to the facts of this case. Under article 19(1) (g) the citizen has the right to carry on any occupation, trade or business which right under that clause is apparently to be unfettered. The only restriction to this unfettered right is the authority of the <ORG> to make a law relating to the carrying on of such occupation, trade or business as mentioned in clause (6) of that article as amended by the Constitution (First Amend- ment) Act, 1951. If therefore, the licence fee cannot be justified on the basis of any valid law no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction and will necessarily infringe the right of the citizen to carry on his occupa- tion, trade or business under article 19 (1) (g) and such infringement can properly be made the subject-matter of a challenge under article 32 of the Constitution. (1)  S.C.R.127.

<NAME>

Learned counsel for the respondents then refers us to the U.P. Town Areas Act (No. 11 of 1914) which governs the respondent <ORG>. Section 14 of this Act requires the <ORG> to annually determine and report to the District Magistrate the amount required to be raised in any town area for the purposes of this Act and provides that the amount so determined shall be raised by the imposition of a tax to be assessed on the occupiers of houses or lands within the limits of the town area according either to their general circumstances or to the annual rental value of the houses or lands so occupied by them as the <ORG> may determine. There were, at the time when the bye-laws of the respond- ent <ORG> were framed, five provisos to this section none of which authorised the imposition of any tax on any business and, therefore, they have no bearing on the ques- tion now under consideration. Learned counsel for the respondents, however, draws our attention to section 38 of the Act which authorises <ORG> by noti- fication in the Official Gazette to extend to all or any or any part of any town area any enactment for the time being in force in any municipality in the United Provinces and to declare its extension to be subject to such restrictions and modifications, if any, as it thinks fit. Then he proceeds to draw our attention to Notification No. 397/XI-871-E, dated the 6th February, 1929, whereby, in supersession of all previous notifications, <ORG>, in exer- cise of the powers conferred by section 38(1) of the United Provinces Town Areas Act, 1914, extended the provisions of sections 293(1) and 298(2) (J) (d) of the United Provinces Municipalities Act (11 of 1916) to all the town area in the United Provinces in the modified form set forth therein. The original bye-laws produced by learned counsel purport, however, to have been framed by the respondent <ORG> under sections 298 (2)(F)(a)and 294 of the United Provinces Municipalities Act (11 of 1916). We have not been referred to any notification whereby section '294 of the United Provinces Municipalities Act was extended to the respondent <ORG>. It appears, however, that the bye-laws of the respondent <ORG> were revised in Septem- ber 1942 and were then said to have been made under section 298 (2) (J) (d). It will have, therefore, to be seen wheth- er these bye-laws come within The purview of section 298 (2) (J) (d) as modified in their application to the respondent <ORG>. It will be noticed that under section 298 (2) (J)

(d) as modified as aforesaid the respondent <ORG> is authorised only to make bye-laws fixing any charges or fees or any scale of charges or fees to be paid under section 9.93(1) and prescribing the times at which such charges or fees shall be payable and designating the persons authorised to receive payment thereof. Section 293(1), as modified, authorises the respondent <ORG> to charge fees to be fixed by bye-laws or by public auction or by agreement for the use or occupation (otherwise than under a lease) of any immovable property vested in, or entrusted to the management of the Town Area <ORG>, including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise. Bye-law 1 of the respondent <ORG> to which a reference has already been made forbids a person from using any land within the limits of the town area for the sale or purchase of fruits and vegetables without paying the prescribed fee. Bye-law 4

(b), however, allows any person to sell in wholesale at any place in the town area, provided he pays the prescribed fees to the licensee. These bye-laws do not purport to fix a fee for the use or occupation of any immovable property vested in or entrusted to the management of <ORG> including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise. Sections 293(1) and 298(2) (J) (d) of the United Province Municipalities Act, 1916, as amended at the time they were extended to the town areas in the United Provinces do not empower <ORG> to make any bye-law authorising it to charge any fees otherwise than for the use or occupation of any property vested in or entrusted to the management of <ORG> including any public street. Therefore, the bye-laws prima facie go much beyond the powers con- ferred on the respondent <ORG> by the sections men- tioned above and the petitioner complains against the en- forcement of these bye laws against him as he carries on business in his own shop and not in or on any immoveable property vested in <ORG> or entrusted to their management. Learned counsel for the respondent Commit- tee, however, urges that the growers of vegetables and fruits come on foot or in carts or on horses along the public street and stand outside the petitioner's shop and for such use of the public street the respondent <ORG> is well within its powers to charge the fees. From the way the case was formulated by the learned counsel, it is quite clear that if anybody uses the public street it is the growers of vegetables and fruits who come to the petition- er's shop to get their produce auctioned by the petitioner and the petitioner cannot be charged with fees for use of the public street by those persons. In our opinion, the bye-laws which impose a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immoveable property vested in or en- trusted to the management of <ORG> includ- ing any public street, are obviously ultra vires the powers of the respondent <ORG> and, therefore, the bye laws cannot be said to constitute a valid law which alone may, under article 19(16) of the Constitution,ofimpose a restric- tion on the right conferred by article 19(1) (g). In the absence of any valid law authorising it, such illegal impo- sition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on his occupation, trade or business which is guaranteed to him by article 19(1) (g) of our Constitution  In this view of the matter the petitioner is entitled to a suitable order for protection of his fundamental right. The prayer in the petition, however, has been expressed in language much too wide and cannot be granted in that form. The proper order would be to direct the respondent <ORG> not to prohibit the petitioner from carrying on the busi- ness of a wholesale dealer in vegetables and fruits within the limits of the Jalalabad Town Area <ORG> until proper and valid bye-laws are framed and thereafter except in accordance with a licence to be obtained by the petitioner under the bye-laws to be so framed. The respondent Commit- tee will pay the costs of this application to the petition- er.

Agent for the petitioner: <NAME>.

Agent for the respondent: <NAME>.


JUDGMENT <NAME>, C.J.,

1. A decree of the 14th June 1873 for Rs. 123 was made payable by annual instalments of Rs. 20-8-0, with a proviso that, on default of payment of any one instalment, the whole amount of the decree should become payable forthwith. The first instalment fell due, but was not paid until subsequently to the 14th June 1874. The second instalment was paid into <ORG> on the 2nd April 1875, and the third instalment on the 13th March 1876. The plaintiff on the 23rd June 1877, applied for execution for the whole of the residue of the amount decreed. The Judge of the <ORG> of Small Causes at Ahmedabad has referred to this <ORG> the question whether the right to such execution is barred by the law of limitation (Act IX of 1871), and has expressed his own opinion to be in the affirmative. In that opinion we concur. We think that the whole amount decreed, became due on the first default in payment of the instalments, viz, on the 14th June 1874, so that three years and nine days had elapsed when the plaintiff made his present application for execution. The Full Bench case, of <CITATION> ., 1 Bom., 125) was decided upon the Limitation Act XIV of 1859. The principles, however, on which that case was decided, apply in this case. There is not in the last clause of Article 167* of Schedule II of Act IX of 1871, which clause relates to decrees payable by instalments, any provision similar to that in Article 75 of the same schedule with respect to promissory notes or bonds payable by instalments; where such notes or bonds provide that, if default be made in payment of one instalment, the whole shall be due, fixing that the period of limitation shall begin to run from the time of the first default, unless where the obligee waives the benefit of the provision, and then when fresh default is made. Nor does there appear to be in the new Limitation Act XV of 1877, Schedule II, Article 179 , Clause 6, relating to decrees payable by instalments, any such provision.

2. The first question of the learned Judge--we whether a decree, payable by instalments with proviso as aforesaid, is 'barred, if application for execution of the same be not made within three years from the date on which any one instalment fell due and was not paid--must be answered in the affirmative and his second question, as to whether the payment of instalments subsequent to default in payment of the first instalment at the date specified, gives to the judgment-creditor a fresh starting point, must be answered in the negative.