CASE NO.: Appeal (civil) 12845 of 1996 PETITIONER: <ORG>. Vs. RESPONDENT: <ORG> & ORS. DATE OF JUDGMENT: 21/02/2001 BENCH: S. Rajendra Babu & <NAME>. JUDGMENT:

J U D G M E N TL...I...T.......T.......T.......T.......T.......T.......T..J RAJENDRA BABU, J. :

The first respondent, which is <ORG>, filed a complaint against the appellant for unfair labour practices under Section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 (for short the Act) under Item 1(a) by way of victimisation; (b) not in good faith, but in the colourable exercise of the employers right; (d) for patently false reasons; and (f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste of Scheduled IV of the Act. Before <ORG> at Bombay it was claimed by the respondent herein that the statutory duty of the appellant is not only to keep the factory premises clean, hygienic and dust free but also the surroundings thereof in terms of Schedule M of Drugs & Cosmetics Act , 1940 and the employees engaged for such process are, therefore, employees of the company itself; that, in fact, the appellant had been directly employing the workmen to attend such work and the appellant used to appoint such persons on casual or temporary basis and terminate their services from time to time with a view to depriving them of the permanent status and wages and other benefits as applicable to permanent workmen of the appellant; that this situation continued till the year 1990-91 when such casual or temporary workmen engaged in cleaning process joined the respondent-Union in order to protect their rights for permanency in the appellant-company; that since about 1991 the appellant has been engaging persons but on paper they are shown as contract workmen working for contractor, respondent No. 2 herein; that the second respondent is only a name lender whereas the appellant is the real employer of the workmen; that the appellant through the second respondent terminated the services of such workmen employed through second respondent the moment the persons completed 11 months of services thereby depriving them of the status of permanent workmen; that the entire effort being made to avoid giving permanency to the workmen concerned with sanitation, sweeping and in keeping the factory premises and surrounding thereof in a hygienic condition. It is further alleged that there are about 30 such workmen who were engaged in such activities; that in keeping with the past practice, the respondent had reasons to apprehend that the moment any of the workmen completes 11 months of service, the services of such employee would be terminated. It is submitted on behalf of the respondent that the recruitment of such workmen is done by the appellant and upon selection such workmen are sent to appellants doctor for medical check up. However, they are not given any appointment letters but are given attendance cards by the second respondent only to show that they are the employees of the second respondent and not that of the appellant. They claimed that they are the workmen working under the direct supervision, control and direction of the officers of the appellant who assign work to them and they are granted leave by the officers of the appellant and are also paid by the appellant; that the company is the real employer apart from being the employees because of statutory obligation of the company to employ such workmen; that, however, the appellant denied the relationship of employer-employee from various stages; that such denial of relationship is only to deprive the workmen of permanency in the company and payment of wages as are applicable to the permanent workmen of the company; that the company has denied this relationship as employer and thus this cause of action has arisen in this complaint; that the appellant has engaged in unfair labour practices in terms of Act and it be directed to cease and desist from continuing to do so.

The appellant, apart from denying that it is guilty of unfair labour practices under Items 1(a), (b), (d) and (f) of Scheduled IV of the Act, contended that the persons listed in Exhibit A and referred to in the complaint are not the employees of the company nor are they employed ostensibly through the second respondent. The appellant categorically denied that they are the employees of the company and there has never been any employer-employee relationship between them and, therefore, the question of terminating the services of the employees employed by the second respondent would not arise. The appellant contended that since it is engaged in the manufacture of pharmaceutical products for which a high degree of cleanliness and hygiene is required to be maintained and, therefore, it is necessary for the company to seek the services of the specialised agencies and this practice has been in vogue for several years and in the last eight year such services have been obtained from three different agency and they are (i) <ORG>, (ii) <ORG> and (iii) <ORG>. The second respondent had been engaged as an agency for rendering house- keeping and hygiene services and the terms of the engagement were set out in a letter dated 28.2.1992. Pursuant to such rendering of services the second respondent had engaged services of the persons named in Exhibit A. The appellant contended that the named persons in the Exhibit A to the complaint are those who have joined the second respondent only during the last 3 to 8 months. The appellant denied that it interviewed and selected the persons to be employed by the second respondent, but it was expected that persons employed by the second respondent were subjected to periodical medical examination in order to comply with the statutory requirements for maintaining proper hygiene integrity of the manufacturing processes of the company. It is also denied by the appellant that the workmen are working under the direct control and supervision of the officers of the company and there is any employer-employee relationship between them. It was submitted that the second respondent pays wages to those employees in accordance with or more than the minimum wages. It is also contended that the appellant has obtained registration as required under the earlier Act and the copy of which was produced in the proceedings. The second respondent supported the contentions made by the appellant.

<ORG> on the basis of these pleadings framed the following issues: ISSUES@@ JJJJJJ

1. Does the complainant prove that the company indulged in unfair labour practices as alleged ?

2. ---------deleted---------

3. Does he prove that he is entitled the relief as prayed for?

4. What order ?

ADDITIONAL ISSUES 3A. Whether the complaint is maintainable? 3B. Whether the complainant prove that the names in Annexure A are the workmen of the Respondent No.1? 3C. Whether this <ORG> has jurisdiction to entertain the complaint?

<ORG>, after elaborate consideration of the pleadings and evidence on record, came to the following@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ conclusion:@@ JJJJJJJJJJJ It can be seen from the evidence on record and the documents filed by the parties that different contractors engaged by the first respondent company and these workmen had never worked in the first respondent company but they had worked through second respondent. Hence, the arrangement between the respondent No. 1 & 2 can be said to be legal and bonafide. The second respondent has also obtained licence No. 2796 under the provisions of Contract Labour (Regulation & Abolition) Act, 1971 which is at Exh.C-14 at page 5. The respondent No. 2 has its own separate and independent establishment which has been registered under the provisions of Bombay Shops and Establishment Act , 1948. It is also independently and separately registered under the provisions of Employees Provident Fund and Miscellaneous Provisions Act . These documents are produced At Sr.No.10 of Exh.C-14. From these documents, it is crystal clear that it is a separate entity and there is a contract between the first respondent and second respondent in respect of sweeping and cleaning in the company premises.

After further examination, it was held that the arrangement between the appellant and the second respondent can only be termed as legal and bona fide and hence the matter of abolition of contract labour in the process of house-keeping and maintenance of the premises of the factory can be agitated only under the provisions of Contract Labour (Regulation and Abolition) Act, 1970. Therefore, <ORG> dismissed the complaint filed by the first respondent-Union. When the matter was carried by revision under the Act <ORG> dismissed the revision application by reiterating the views of <ORG>.

In the writ petition <ORG> of <ORG> took a different view of the matter and allowed the complaint. Before <ORG> several decisions were referred to including the decision of this Court in <CITATION> ., 1995 Supp. (1) SCC 175. In that case the complaint of the <ORG> was that 21 workmen who were working in one of the canteens of the respondent-company were not given the service conditions as were available to the other workmen of the company and there was also a threat of termination of their services. This Court proceeded to consider the case on the basis that their complaint was that the workmen were the employees of the company and, therefore, the breach committed and the threats of retrenchment were cognizable by <ORG> or <ORG> under the Act. Even in the complaint no case was made out that the workmen had ever been accepted by the company as its employees. On the other hand, the complaint proceeded on the basis as if the workmen were a part of the work force of the company. This Court noticed that the workmen were never recognised by the company as its workmen and it was the consistent contention of the company that they were not its employees. In those circumstances, <ORG> having dismissed the complaint and <ORG> having upheld the same, this Court stated that it was not established that the workmen in question were the workmen of the company and in those circumstances, no complaint could lie under the Act as was held by the two courts. In that case it was the admitted position that the workmen were employed by a contractor, who was given a contract to run the canteen in question. Thereafter, <ORG> adverted to the decision of this Court in <CITATION> ., 1995 (5) SCC 27, wherein it was noticed that the first question to be decided would be whether an industrial dispute could be raised for abolition of the contract labour system in view of the provisions of the Act and, if so, who can do so. <ORG> was of the view that the decision in <CITATION> . (supra) would make it clear that such a question can be gone into and that the observations would not mean that the workmen had to establish by some other proceedings before the complaint is filed or that if the complaint is filed, the moment the employer repudiates or denies the relationship of employer and employees the court will not have any jurisdiction. The observation of this Court that it is open to the workmen to raise an appropriate industrial dispute in that behalf if they are entitled to do so has to be understood in the light of the observations of this Court made earlier. <ORG> further held that the judgment in <CITATION> . (supra) was confined to the facts of that case. On that basis <ORG> proceeded to further consider the matter and reversed the findings recorded by the two courts and gave a finding that the workmen in question are the workmen of the appellant-company.

In this Court it was submitted that <ORG> had proceeded entirely on wrong lines. <CITATION> (supra) the question raised was whether the workers whose services were engaged by the contractors but who were working in the thermal power station of <ORG> at Ukai can legally claim to be the employees of <ORG>. The industrial tribunal had adjudicated the matter and held that the workmen concerned in the reference could not be the workmen of the contractors and, therefore, all the workmen employed by the contractor should be deemed to be the workmen of the <ORG>. The industrial tribunal also gave consequential directions to the <ORG> for payment of wages, etc. The award of the industrial tribunal was upheld by <ORG> in appeal. The contention put forth before this Court was that after coming into force of the Act it is only the appropriate Government, which can abolish the contact labour system after consulting the Central <ORG> or the State <ORG>, as the case may be, and no other authority including the industrial tribunal has jurisdiction either to entertain such dispute or to direct abolition of the contract labour system and neither the appropriate Government nor the industrial tribunal has the power to direct that the workmen of the erstwhile contractor should be deemed to be the workmen of the <ORG>. <ORG> or the industrial tribunal, as the case may be, can only direct the abolition of the contract labour system as per the provisions of the Act but it does not permit either of them to declare the erstwhile workmen of the contract to be the employees of the principal employer. As to what would happen to an employee engaged by the contractor if contract employment is abolished is another moot question yet to be decided by this Court. But that is not a point on which we are called upon to decide in this matter.

contract covered by But one thing is clear - if the employees are working under a the Contract Labour (Regulation & Abolition) Act then it is clear that the labour court or the industrial adjudicating authorities cannot have any jurisdiction to deal with the matter as it falls within the province of an appropriate Government to abolish the same. If the case put forth by the workmen is that they have been directly employed by the appellant- company but the contract itself is a camouflage and, therefore, needs to be adjudicated is a matter which can be gone into by appropriate industrial tribunal or labour court. Such question cannot be examined by the labour court or the industrial court constituted under the Act. The object of the enactment is, amongst other aspects, enforcing provisions relating to unfair labour practices. If that is so, unless it is undisputed or indisputable that there is employer-employee relationship between the parties, the question of unfair practice cannot be inquired into at all. The respondent union came to <ORG> with a complaint that the workmen are engaged by the appellant through the contractor and though that is ostensible relationship the true relationship is one of master and servant between the appellant and the workmen in question. By this process, workmen repudiate their relationship with the contractor under whom they are employed but claim relationship of an employee under the appellant. That exercise of repudiation of the contract with one and establishment of a legal relationship with another can be done only in a regular industrial tribunal/court under the I.D.Act.

<NAME>, the learned senior Advocate appearing for the respondent, submitted that under Section 32 of the Act the labour court has the power to decide all matters arising out of any application or complaint referred to it for the decision under any of the provisions of the Act. Section 32 would not enlarge the jurisdiction of the court beyond what is conferred upon it by other provisions of the Act. If under other provisions of the Act the industrial tribunal or the labour court has no jurisdiction to deal with a particular aspect of the matter, Section 32 does not give such power to it. In the cases at hand before us, whether a workmen can be stated to be the workman of the appellant establishment or not, it must be held that the contract between the appellant and the second respondent is a camouflage or bogus and upon such a decision it can be held that the workman in question is an employee of the appellant establishment. That exercise, we are afraid, would not fall within the scope of either Section 28 or Section 7 of the Act. In cases of this nature where the provisions of the Act are summary in nature and give drastic remedies to the parties concerned elaborate consideration of the question as to relationship of employer-employee cannot be gone into. If at any time the employee concerned was indisputably an employee of the establishment and subsequently it is so disputed, such a question is an incidental question arising under Section 32 of the Act. Even the case pleaded by the respondent-Union itself is that the appellant establishment had never recognised the workmen mentioned in Exhibit A as its employees and throughout treated these persons as the employees of the second respondent. If that dispute existed throughout, we think, the labour court or the industrial court under the Act is not the appropriate court to decide such question, as held by this Court in <CITATION> . (supra), which view was reiterated by us in <CITATION> ., 2001 (1) SCALE 82.

However, <NAME> very strenuously contended, by adverting to the scope of the Payment of Wages Act , 1936 and the scope of Section 32C(2) of the Industrial Disputes Act, that these questions can be gone into by the courts and, in this context, he relied upon the decision of <ORG> in <CITATION> , <CITATION> , 59 BLR 892. In determining whether the wages had been appropriately paid or not, the authority under the Payment of Wages Act was held to have jurisdiction to decide the incidental question of whether the applicant was in the employment of the railway administration during the relevant period. It means that at one time or the other the concerned employee was indisputably in employment and later on he was found to be not so employed and in those circumstances, the court stated that it was an incidental question to be considered.

<ORG> v. Next decision relied upon by <NAME> is <ORG>, 1964 (3) SCR 140, to contend that even in cases arising under Section 33C(2) of the Industrial Disputes Act the scope, though very limited, certain incidental questions can be gone into like a claim for special allowance for operating adding machine which may not be based on the Sastry Award made under the provisions of Chapter V-A. The learned counsel pointed out that in the event we were to hold that it is only in clear cases or undisputed cases the labour court or the industrial tribunal under the Act can examine the complaints made thereunder, the whole provision would be rendered otiose and in each of those cases provisions of the Bombay Industrial Relations Act, 1946 or the Industrial Disputes Act will have to be invoked. We are afraid that this argument cannot be sustained for the fact that even in respect of claims arising under Section 33C(2) appropriate dispute can be raised in terms of Section 10 of the Industrial Disputes Act and that has not been the position in the present case. Nor can we say that even in cases where employer-employee relationship is undisputed or indisputably referring to the history of relationship between the parties, dispute can be settled and not in a case of the present nature where it is clear that the workmen are working under a contract. But it is only a veil and that will have to be lifted to establish the relationship between the parties. That exercise, we are afraid, can also be done by the industrial tribunal under the Bombay Industrial Relations Act, 1946 or under the Industrial Disputes Act . Therefore, we are afraid that the contention advanced very ably by <NAME> on behalf of the respondents cannot be accepted. Therefore, we hold that <ORG> went far beyond the scope of the provisions of the Act and did not correctly understand the decisions of this Court in <CITATION> (supra) and <CITATION> . (supra). The correct interpretation of these decisions will lead to the result, which we have stated in the course of this order In the view we have taken on the question of jurisdiction of <ORG> under the Act, the decision given by <ORG> on other questions need not be considered.

In the circumstances, we allow this appeal, set aside the order of <ORG> and restore that of the industrial court affirming the order of the labour court. No costs.

[ <NAME> ] [S.N. Phukan]@@ JJJJJJJJJJJJJ FEBRUARY 21, 2001.


<NAME>, J.

1. The plaintiff herein sued to be declared owner of a piece of ground in Mouje Gadag measuring eight feet long from North to South and thirty-three feet broad from East to West, immediately to the south of the present building of the plaintiff and also for an injunction to restrain the defendant, the Secretary of <ORG>, from interfering with the plaintiff's enjoyment of the ground or extending his building thereover. AL though the plaint does not, in so many words, pray to set aside the Deputy Collector's order hereinafter set out still para. 2 which says inter alia that " this order is erroneous and illegal <ORG> had no title whatever to the plot " obviously involves such a consequence. It appears that the plaintiff purchased first a plot of land from <ORG> which is marked on the plan (Exhibit 18) measuring as stated in the deed (Exhibit 10) fifty-six feet East and West to the North, twenty-nine feet East and West to the South, and fifty-seven feet on the east side and fifty-four feet on the west side, the Southern boundary being given as <ORG> Betta land. Subsequently! the plaintiff bought another piece of land to the North of the former thirty-five feet East to West and eight feet North to South, and the plaintiff has built upon the said pieces of ground.

2. The learned Judge in the Court below has found, and we have had no argument addressed to us to the contrary, that the plaintiff purchased and is entitled to sixty-two feet from North to South, but that, as a matter of fact, he has up to the present M time built over only sixty feet; in other words that he is entitled to build over a space of two feet further to the South than what he has already built over.

3. On the 27th December 1906, the District Deputy Collector passed the order (Exhibit 24), the effect of which was to restrain the plaintiff from building over the said two feet. It was in the following terms:-

I personally inspected the ground in dispute and also took measurements. It is not now in the condition in which it was when it was purchased. The building of that time is removed and the present one is newly built. In the deed of sale under which this ground was purchased, the boundaries of the ground purchased have been mentioned. It is mentioned therein that on the North there is the backyard of <NAME>, Recently out of that backyard a portion adjoining this ground in dispute was got by <NAME> by way of purchase. To the East thereof ho now holds what has now come to the share of <NAME>. The old wall built on the boundary of the buck-yard of his share exists now. That wall alone is the index to determine the ground purchased. In the deed of sale, the measurements of four sides have been mentioned. From the corner between the North and the East, (that is), from the North-East corner of the above wall, the measurement North to South from the corner to the East along the whole length of the building is fifty-seven feet. <NAME> says that the measurement of the building should be taken in a straight line and that thus the ground up to the point at which it measures fifty-seven feet to the South belongs to him. What he says is not correct. In the deed of sale, it is mentioned that towards the East the measurement of the building including an open ground and trees is fifty-seven feet. It is also mentioned that the measurement East to West is fifty-six feet towards the North. These two measurements are found to be correct if they are taken from the abovementioned North East corner. What <NAME> says is wrong. The building now existing and the measurement in the sale-deed tally (a difference of one foot or half afoot is not of any importance. Now, after the dispute arose, <ORG> took measurements according to scale. They might not have been taken in that manner when they were entered in the deed of sale formerly); From the existing condition it does not appear that the <ORG> land is included in the building now built by <NAME>. Therefore it does not appear necessary to take further steps in this matter. But now the building should not be allowed to be extended on the South over a larger space than it occupies at present. It should be allowed to remain in its present dimensions. Besides informing <NAME> in writing of the above decision, steps should be taken to supply a Dakhla (a copy of it) to the village also.

4. We have set the order out at length, for it seems to us that it is an order which " interfered with the plaintiff's possession so as to give rise to a cause of action, and not simply administrative orders'; which need no setting aside." See per <NAME> v. Secretary of Slate for India (1900) I. L. R. 24 Bom. 435, 455. The plaint was filed on the nth of August 1908, and the defendant has raised a plea of limitation, under Article 14 of the Limitation Act of 1877. The plaintiff in his plaint says that he unsuccessfully filed before the revenue authorities appeals against the District Deputy Collector. But we agree with the learned Judge's opinion that, that fact will not affect the question of limitation. See <NAME> v. Secretary of <ORG> for India (1896) I. L. R. 22 Bom. 579, 582. The learned Judge held, as we have pointed out, that the plaintiff is in fact entitled to the two feet extra to the south of his present building; but that the suit is barred under Article 14 of the Limitation Act .

5. The question we have to decide is : Is this view correct? It is admitted that the Deputy Collector in passing the said order purported to act under Section 37 of the Land Revenue Code, which runs thus :-

All public roads, lanes and paths, the bridges, ditches, dikes and fences, on, or beside, the same, the bed of the sea and of harbours and creeks below high-water mark, and of rivers, streams, nalas, lakes and tanks, and all canals, and water-coursos, and all standing and flowing water, and all lands, wherever situated, which are not the property of individuals, or of aggregates of persons legally capable of holding property, and except in so far as any rights of such persons may be established in or over the same, and except as may be otherwise provided in any law for the time being in force, are and are hereby declared to be, with all rights in or over the same, or appertaining thereto, the property of Government; and it shall be lawful for the Collector, subject to the orders of the Commissioner, to dispose of them in such a manner as ho may deem fit, or as may be authorized by general rules sanctioned by Government, subject always to the rights of way, and all other rights of the public or of individuals legally subsisting.

Explanation :-In this section "high-water mark" means the highest point reached by ordinary spring tides at any season of the year.

6. Obviously the important words in that section are "all lands, wherever situated, which are not the property of individuals &c; and except in so far as any rights of such persons may be established in or over the same."

7. Section 135 of the Land Revenue Code runs as follows:-

Any suit instituted in <ORG> to set aside any order passed by the Collector under Section 37 or 129, in respect of any land situated within the site of a village, town or city, shall be dismissed, although limitation has not been sot up as a defence, if it has not been instituted within one year from the date of the order.

8. Article 14 of the Limitation Act of 1877 runs as follows:- . " To set aside any act or order of an officer of Government in his official capacity, not herein otherwise expressly provided for." The words "or order" were not in the Limitation Act of 1871. The important words in that Article are "in his. official capacity." Judging of this case by the light of this s Legislation alone it appears to us that, if a Collector purports to deal with land which is prima facie the property of an individual who has been in peaceful occupation thereof and not of the Government, and passes an order with reference thereto, he is not dealing with that land in his official capacity, but is acting ultra vires. If this is so, then the judgment of <NAME>, C. J., in <NAME> v. Secretary of State for India (1900) I. L. R. 24 Bom. 435, 441 is directly applicable; so also is <CITATION> (1894) I.L.R. 21 Cal. 626 (see especially <NAME> judgment in that case); and <NAME> v. Secretary of State for India (1905) I.L.R. 29 Bom. 480. We have read the three judgments in <NAME>'s case but have been quite unable to differentiate this case from the judgment of <NAME> C. J. nearly the whole of whose judgment is applicable to the present case.

9. If we are right in this opinion, it follows that the decree in the lower Court must be reversed and the decree we would pass is:-Declare the plaintiff entitled to the strip of land measuring two feet North and South and thirty-three feet East and West, and grant an injunction restraining the defendant, his servants and agents, from interfering with his possession thereof, dismiss the plaintiff's suit in so far as he claims any relief in respect of the remaining six feet of the said southern strip and direct each party to bear his own costs throughout.


PETITIONER: <NAME> AND OTHERS Vs. RESPONDENT: STATE OF PUNJAB DATE OF JUDGMENT06/10/1972 BENCH: <NAME>, S.N. BENCH: <NAME>, S.N. SHELAT, J.M. PALEKAR, D.G. MATHEW, KUTTYIL KURIEN CHANDRACHUD, Y.V. CITATION: 1972 AIR 381 1973 SCR (2) 582 1973 SCC (1) 204 ACT: The Indian Independence (Rights, Property and Liabilities) Order, 1947, Cl. 8(3) and Punjab Partition (Contracts) Order, 1947, Cl. 2(d)--Scope of--Liability of appellant to respondent regarding contracts entered into with the Province of Punjab prior to partition--S. 63 Contract Act --Remission of a part of the promise by the promissee effective even without consideration from the promiser. HEADNOTE: Sometime in 1944 an agreement was entered into between the appellant and the then Province of Punjab, whereby the appellant agreed to act as a Clearing Agent (Foodgrains) for the sale and purchase of food-grains on behalf of the Province on payment of a commission. The appellant obtained stock of rice from the Rationing Controllers. On August 14, 1947, the Governor-General issued, in exercise of his power under s.9(1)(b) of the Indian Independence Act, 1947, the Indian Independence (Rights, Property and Liabilities) Order, 1947. Clause 8(3) of the Order provided that any contract made on behalf of the Province of Punjab, if it was not exclusively for the purpose of the Province of East Punjab in India, was deemed to have been made on behalf of the Province of West Punjab in Pakistan. On the same day, the Governor of the Provinces of Punjab also issued the Punjab Partition (Contracts) Order, 1947. Clause 2(d) of the Governor's Order provided that every contract entered into on behalf of the Governor in accordance with s.175 of the Government of India Act, 1935, shall, in so far as it relates to services to be rendered for the benefit of areas within the two new Provinces of East Punjab and West Punjab, be deemed to have been entered into with the two Provinces as two separate contracts having effect respectively in relation to the services to be rendered in each of the Provinces. The Governor of Punjab also issued another Order, the Punjab Partition (Apportionment of Assets and Liabilities) Order, 1947, for a general financial settlement between the two new Provinces. As the two new Provinces did not arrive at any agreement, the Chief Justice of <ORG> gave his award according to which 60% of the total assets were to go to the Province of West Punjab in Pakistan and 40% thereof to the Province of East Punjab in India. With respect to the stock supplied to the appellant, the appellant made certain payments to the respondent, and the respondent State of Punjab, sued the appellant for the balance. The appellant, while denying liability, also contended that the liability if any, was to the extent of 40% only of the amount due. The trial court substantially decreed the suit. On appeal, <ORG> reduced the amount payable by the appellant to the respondent. In appeal to this Court. HELD : (1) It could not be contended by the appellant that the respondent had no right to sue on the basis that the rights under the contract accrued under cl. 8(3) of the Governor-General's Order, in favour 583 of <ORG> in Pakistan. it is c1. 2(a) of the Governor's Order that applies to the contract. The clause deals with contracts with continuing obligations. In the period when the contract of agency was subsisting it created the relationship of principal and agent between the contracting parties, and the relationship imposed mutual obligations. The appellant was bound to render the service of acting as a clearing agent and of purchasing and selling foodgrains for the Province of Punjab. The contract was not a completed Contract, but one which imposed the continuing obligation of rendering the service of an agent on the appellant. Therefore, cl. 2(d) of the Governor's Order applied and that clause itself provided for the' bifurcation of a single and indivisible contract into two separate contracts. [588C-F; 591A] (2) The fields of operation of the two Orders, the Governor- General's Order and the Governor's Order did not overlap and therefore the question of one prevailing over the other did not arise. [589G] (3) Clause 8(3) of the Governor `General's Order dealt with the contracts which formed the subject-matter of s.177(1) of the Government of India Act, 1935, that is, with contracts made by or on behalf of the Secretary of State in <ORG> for the purposes of the Province of punjab before the Government of India Act, 1935, was brought into force. It has nothing to do with the contracts made by or on behalf of the Governor of Punjab under s.175(3), Government of India Act, 1935, after March 1937. Clause 2(d) of the Governor's Order dealt with such contracts made by or on behalf of the Governor under s. 175(3) . [589A- <CITATION> ,  S.C.R. 1, <CITATION>  S.C.R. 378, <CITATION> ,  S.C.R. 1039, <CITATION> , A.I.R. 1957 Cal. 44 and <CITATION> ,  3 S.C.R. 412, explained. (4) (a) The arbitration award which brought about a financial adjustment between East Punjab and West Punjab did not deal with the liabilities of third parties, like the appellant, to one or the other of the Provinces. it did not direct that any amount due by a third part,,, could be recovered only to the extent of 40% of his liability. [591F- G] (b) There was no settlement between the appellant and the respondent that the former should recover only 40% of the amount due from the appellant. No such settlement could be spelt out from the correspondence between the parties. There was only a proposal to the appellant for settlement of the claims of the respondent and the sellers but the appellant, instead of unconditionally accepting the proposal, made an alternative proposal, with the result that there was no settlement between the parties. There was no progress beyond he stage of proposal and counter-proposal. [591G-H; 592G; 593A-F] (c) The appellant could not raise the pleas that the respondent had represented to the appellant that it would recover only 40% of the amount debited to the account of the erstwhile Province of Punjab, and hence was estopped from claiming a higher amount because no such plea was raised in the written statement nor was an issue framed, nor were arguments advanced in the trial court and <ORG>. The plea was not raised even in the statement of case in this Court. [593F-H; 594C-D] (d) But the minutes of meeting held between the representatives of the appellant and the respondent showed that the respondent had decided 584 to claim only 40% of the amount debited to the account of Province of Punjab before March 1948. The respondent could not contend that the decision to recover only 40% was subject to the condition that the appellant should pay the sellers. The minutes of the meeting can be split into two parts : (1) limiting the appellants' liability to 40%, and (ii) payment of the amounts due to the sellers by the appellant; but the first part is not dependent on the performance of the second part. The letters and subsequent conduct indicate that in spite of the absence of consent by the appellants the respondent was paying the sellers from the amount with it to the credit of the appellant, showing, that instead of insisting upon payment to the sellers, the respondent was acting accord'ing to the appellant's proposal that the sellers should be paid by the respondent from the money with it to the credit of the appellant. Therefore, the respondent had decided to recover only 40% and no more. It amounted to a remission of a part of the debt due by the appellant under s.63 of the Contract Act , 1872 and it is not necessary that such remission should be supported by consideration. Since, admittedly more than 40% of the total liability had already been paid to the respondent, nothing was due from the appellant and hence the appeal should be allowed. [595A-B, G-H; 596A-C, F-H; 597A-B] JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 909, of 1967.

Appeal by certificate from the judgment and decree dated April 1, 1966 of <ORG> at Chandigarh in Regular First Appeal No. 216 of 1960.

<NAME>, <NAME>, <NAME>, <NAME>, and <NAME>, for the appellant. <NAME>,. <NAME> and <NAME>, for the respondents.

The Judgment of the <ORG>-was delivered by <NAME>, J. The factual framework of this appeal is set spatically in the undivided geography of India during the British period and temporarily during 1944 to June 1947. There are three appellants :

(1) Messrs <NAME>'Madan Gopal and Co., (2) <NAME> and (3) <NAME>. The first appellant is a partnership firm of which the other two appellants are partners. Some time in 1944 there was concluded an agreement between the first appellant and <ORG> the Province of Punjab (hereinafter called <ORG>). By that agreement, the first appellant agreed to act as a Clearing Agent (Foodgrains) for the sale and purchase of foodgrains on behalf of <ORG> on payment of a commission. The first appellant obtained stock of rice from the <ORG> of the districts which were after the Partition of India in August 1947 included in the State of East Punjab and are now included in the State of Punjab. According to the State' of Punjab (the plaintiff-respondent) the price of the stock supplied by the said <ORG> was Rs. 12,15,178/4/11. The stock was supplied in May and June, 1947. The first appellant sold the said stock to persons in Delhi and the United Provinces (now called Uttar Pradesh). The plaint admits the receipt of three amounts : (1) a sum of Rs. 2,91,817/13//11-1/2 (2) a sum of Rs. 2,67,963/10/1, collected from various purchasers in Delhi and Uttar Pradesh to whom the first appellant had sold the stock, and (3) a sum of Rs. 20,000/paid by the first appellant. The aggregate of receipts thus comes to Rs. 5,79,841,/8/1/2. Deducting the aggregate amount from the total sum due, there still remains an outstanding of Rs. 6,03,897/, /9. It is alleged in paragraph 9 of the plaint that on July 29, 1953, the appellants admitted their liability to pay the said amount.

The third appellant did not enter appearance. The case pro- ceed ex-parte against him in the trial court. The appellants Nos. 1 and 2 filed their first joint written statement on June 15, 1957. They pleaded that all rights and liabilities under the agreement of 1944 have accrued in favour of <ORG> which forms, part of Pakistan and the respondent has no right to sue. They also pleaded that in the meeting held on July 28 and 29, 1953 between the representatives of the respondent and the first appellant, it was admitted on behalf of the respondent that the first appellant, was liable to pay only 40% of the total amount. It is alleged that according to the respondent the 40% of the total liability was Rs. 5,00,085/12 but according to the first appellant it was only Rs. 47,327/6/9. As the plaintiff has admitted in the plaint to have received Rs. 5.79,841/8/1/2 from and on behalf of them, there was in credit in favour of the first appellant a sum of Rs. 59,695/12,/1/2. The written statement adds that according to the first appellant the credit amount would be Rs. 86,510/1/3. It is asserted in the written statement that nothing was due by the appellants. The written statement denies that the appellants Nos. 1 and 2 admitted their liability to pay any amount in the meeting held on July 29, 1953.

The appellants Nos. 1 and 2 filed another written statement on June 2, 1959. In this written statement they reiterated their pleas in the first written statement. They also added that the Award of the Chairman of the Arbitration Tribunal, dated March 17, 1944 determined the ratio of financial adjustment between East Punjab and West Punjab in respect of assets and liabilities of the Undivided Punjab as 40 : 60 and that accordingly the respondent was entitled only to 40% of the amount due by the appellants.

The trial court decreed the suit of the respondent for a sum of Rs. 5,53,897 ' /-/9. On appeal <ORG> reduced the decrement amount to Rs. 3,23,897/-/9. Not feeling satisfied with the judgment and decree of <ORG> the appellants Nos. 1 and 2 have preferred this appeal.

It is now necessary to set out the legal background against which two of the appellants' arguments need to be examined. On July 18, 1947, <ORG> enacted the Indian Independence Act, 1947. Section 1(2) defines the expression "appointed day" as the 15th of August, 1947. On the said date there were born two independent Dominions, the Dominion of India and the Dominion of Pakistan. The Undivided India was partitioned between the two Dominions. Consequently, the Undivided Punjab was split up into two Provinces, one called the Province of West* Punjab and the other the Province of East Punjab. Section 9(1) (b) enabled the Governor-General to make Orders for dividing between the new Dominions, and between the new Provinces rights and liabilities of the Governor-General in <ORG> and the relevant Provinces which were to cease to exist." Sub- section (2), of s. 9 provided that the power conferred on the Governor-General by s. 9(1)(b) could, in relation to their respective provinces , be exercised also by the Governors of the provinces which would cease to exist on the appointed date.

On August 14., 1947, the Governor-General issued, in exer- cise of his power tinder S. 9(1) (b), an Order called the Indian Independence (Rights, Property and Liabilities) Order, 1947 (hereinafter called the Governor-General's Order). It came into force at once. Clause 3(1) of the Order provided that the provisions of the Order related to the initial distribution of rights, property and liabilities consequential on the setting up of the Dominions of India and Pakistan. The Order would have effect subject to any award that might be made by <ORG>. Clauses 8(3) is important for our purposes and is reproduced in extenso :

"8(3) Any contract made on behalf of the province of the Punjab before the appointed day shall, as from that day-

(a) if the contract is for purposes which as from that day are exclusively purposes of the Province of East Punjab, be deemed to have been made on behalf of that Province instead of the Province of the Punjab, and

(b) in any other case be deemed to have been made on behalf of the Province of West Punjab instead of the Province of the Punjab;

and all rights and liabilities which have accrued or may accrue under any such contract shall, to the extent to which they would have been rights or liabilities of the Province of East Punjab or the Province of West Punjab, as the case may be."

On the same day, the Governor of the Undivided Punjab issued an Order Linder s. 9(2) . The Order is called the Punjab Partition (Contracts) Order, 1947 (hereinafter called the Governor's Order). The second paragraph in the preamble to the Order recited that "whereas it was necessary to make provision for division between the two new Provinces of the rights and obligations of the Governor of the Punjab in respect of contract, deeds, covenants and all other matters hereinafter referred to", accordingly the Governor was making the Order. The material this part of Clause 2(d) of the Order, which is important for case is set out here :

"2. With effect from the appointed day every contract made, deed executed or covenant entered into, by or on behalf of the Governor of the Punjab in accordance with section 175 of the Government of India Act, 1935, shalll, for all purposes, in so far as it relates to :

(d) Service to be rendered, in or for the benefit of areas situated, within both the new Provinces, be deemed to have been made, executed or entered into with the West Punjab Province and the East Punjab Province, as two separate contracts, deeds or covenants having effect respectively only in relation to such services, as are to be rendered in, or for the benefit, of the West Punjab Province or the East Punjab Province; and............"

The Governor of the Undivided Punjab issued another Order called the Punjab Partition (Apportionment of Assets and Liabilities,) Order, 1947. Clause 6 of the Order provided that there would be a general financial settlement between the two new Provinces, West Punjab and East Punjab in regard to all assets and liabilities of the Undivided Punjab as they stood immediately before the appointed day. It further provided that any award of the Arbitrator given under Cl. 3 or Cl. 4 of the Order would be taken into account in making general financial settlement. The two new Provinces did not arrive at any agreement regarding financial settlement. So the Chief Justice of <ORG> was appointed the Arbitrator. He gave his Award on March 17, 1948. According to the Award, 60% of the total assets were to go to the Province of West Punjab and 40 % thereof to the Proprovince of East Punjab.

The first argument of counsel for the appellants is developed in this way : Clause 2(d) of the Governor's Order deals with a contract with a continuing obligation and not with a completed contract. The contract of agency between the appellants and <ORG> was a completed contract. Accordingly was not governed by the Governor's Order. It was governed by cl. 8(3) of the Governor- General's Order. Clause 2(d.) of the Government Order dealt with any contract made for "service,,% to be rendered". Obviously clause 2(d) dealt with contracts with continuing obligations. The written contract in the present case is not on record, but it is admitted that the contract was subsisting during May and June, 1947 when the appellants took stock of rice from the Rationing Controllers of the districts which fell into the new Province of East Punjab and are now comprised in the Province of Punjab. In the period when the contract of agency was subsisting it created the relationship of principal laid agent between the contracting parties. That relationship imposed mutual obligations on them. The appellants were bound to render the service of acting as a clearing agent and of purchasing and selling food-rains for <ORG>. The services were to be performed as long as the contract remained in force. It cannot accordingly be said that the contract between the appellants and <ORG> was a completed contract, On the other hand, it was a contract which imposed a continuing obligation of rendering the services of an agent on the 'appellants. In the result, cl. 2(d) of the Governor's Order would apply to the contract. The next argument is that Governor-General's Order and the Governor's Order occupied the same field. On the analogy of s. 107 of the Government of India Act, 1935, the former Order would prevail over the latter Order. Counsel has cited a number of cases in support of this argument. But it is not necessary to refer to them as we are of opinion that the two Orders did not overlap. They operated in different fields. Clauses @(2), and (4) of the Governor-General's Order dealt with any contract made "on behalf of the Province of West Bengal", "the Province of Punjab" and the "Province of Assam" before the appointed ,<NAME>. Clauses 2, 3, 4 and 7 of the Governor's order dealt with various contracts "made by or on behalf of the Governor of Punjab in accordance with s. 175 of the Government of India Act, 1935" or rights and obligations of the Governor arising Under those contracts. The aforesaid difference in the phraseology of the two Orders is purposive. The phrase "on behalf of the Province of Punjab" in Cl. 8(3) of the Governor-General's Order shows that the contracts dealt with in that clause were the contracts which formed the subject-matter of s. 177(1) of the Government of India Act, 1935. Section 177(1) provided that any contract made before the commencement of Part III of the said Act by or on behalf of the Secretary of <ORG> in council would from that date, if made for purposes which would after the commencement of Part III of the Act be purposes of the Government of a Province. have effect as if it had been made "on behalf of that Province" and reference in any such contract to the Secretary of <ORG> in <ORG> would be construed accordingly. According to s. 179(1) of that Act, such a contract could be enforced in a suit against the province concerned. So clause 8(3) of the Gov- ernor-General's Order dealt with contracts made by or on behalf of the Secretary of <ORG> in <ORG> for purposes of the Punjab Province before. March 1937 when Part III of the Government of India Act, 1935 ",as brought into force. Clause 8(3) has nothing to do with the contracts made by or on behalf of the Governor of Punjab under s. 175(3) of the Government of India Act, 1935, after March 1937. Clause 2(d) of the Govern's Order dealt with the contracts made by or on behalf of the Governor under s. 175(3) . It would thus appear that the fields of operation of clause 8(3) of the Governor-General's Order and cl. 2(d) of the Governor's Order were distinct and discrete. They did not overlap and there was no conflict between them.

<CITATION> (1), this <ORG> construed the phrase "any liability in respect of any actionable wrong other than breach of contract" in cl. (1) of the Governor-General's Order as including a liability to be restrained by injunction from completing what was a wrongful or unauthorised act already commenced. The question that we are called upon to decide in this case was not considered in that case. Counsel laid stress on the <ORG>'s remark that "a wide and liberal construction, as fat-, as the language used would admit, should be placed upon the terms of the order so as to leave no gap or lacuna in relation to the matters sought to be provided for." It is difficult to under-stand how this remark helps the appellants on account of the construction that we are putting on the language of clause 8(3) of the Governor- General's Order. <CITATION> (2), the Province of (1)  S. C. R. 1.

(2) [1954] S. C. R. 78.

Bengal took certain premises on lease on February 6, 1947. It agreed to pay a monthly rent of Rs. 1800/-. The purposes for which the lease was entered into were exclusively the purposes of West Bengal after August 15, 1947. It was held that the liability to pay the amount was not a "financial obligation" contemplated by cl. 9 of the Governor-General's Order and the Government of West Bengal was liable under cl. 8 (2) (a) of the said Order to pay the rent which had accrued upto August 15, 1947. It does not appear that the Governor of the Province of Bengal had made an order of the nature of the Governor's Order in the present case. At any rate, the Court was not referred to any such order. On the contrary, at page 382 of the Report it is said that the Advocate-General of West Bengal fairly and frankly conceded that in the absence of anything else that case would be wholly covered by article 8 (2) (a ), but contended that by virtue of article 8 (6) that article was to have effect subject to the provisions of article 9. It is thus clear that the case was decided on the concession made by the Advocate-General and the question that has arisen before us did not arise there. <CITATION> (1), the contract was made on behalf of the Governor- General in Council and the question arising before us could not arise, there. <CITATION> ( 2 certain paddy was requisitioned under the Defence of India Rules during the Second World War by the Province of, West Bengal. The amount of compensation was assessed under rule 75-A of the Defence of India Rules. That amount was not paid by the Province of Bengal. After partition a suit was instituted against the Province of West Bengal. <ORG> held that by virtue of cl. 10(2) of the Governor-General's Order, the Province of West Bengal was liable to pay the amount to the plaintiff whose paddy had been requisitioned. In that case also <ORG> was not called upon to decide the question that arises before us. In the judgment there is no reference-to any Order made by the Governor of the Province of Bengal. <CITATION> (3), the contract was made by the Governor-General in (1) (1957) S. C. R. 1039.

(2) A.I. R. 1957 Cal. 44.

(3) [1962] 3 S. C. R. 412.

<ORG>. There the question that faces us could not arise. None of the aforesaid decisions assist the appellants in this case.

It is then submitted that the contract of agency between the appellants and the respondent was a single and indivisible contract and could not be split up at the will of the Government for the purpose of instituting a suit against the appellants. This argument is completely negatived by cl. 2(d) of the Governor's Order. Clause 2(d) provided that any contract made by the Governor of Punjab in accordance with s. 175 of the Government of India Act, 1935, in so far as it related, inter alia, to services to be rendered "in or for the benefit of areas situated within both the new Provinces, would be deemed to have been made, executed or entered into with the West Punjab Province and the East Punjab Province, as two separate contracts". Each such separate contract would have effect only in relation to "such services as are to be rendered in or for the benefit of the West Punjab or East Punjab Province". Obviously cl. 2(d) itself provided for the bifurcation of t single and indivisible contract into two separate contracts.

Lastly, it is submitted that the <ORG> could recover only 40 % of the total liability from the appellants. This argument had been put in several ways. Firstly, it is pointed out that the arbitration award of the Chief Justice of India, dated March 7, 1948 had distributed the total assets of the Undivided Punjab between the West Punjab and East Punjab in the ratio of 60 : 40. Consequently,' the <ORG> can recover from the appellants only 40% of the total dues found due by them. As admittedly the <ORG> has recovered more than 40 %, nothing remains due by the appellants. The trial court and <ORG> did not accept this argument. We are also unable to accept it. The arbitration award brought about a financial adjustment between the West Punjab and East Punjab. It did not deal with the liabilities of third parties like the appellants to one or the other Province. It did not direct that an amount due by a third party could be recovered only to the extent of 40 % of his total liability. According to the award, if more than 40% is recovered from the appellants, the excess over 40% would become payable by the Governor to the West Punjab. Secondly, it is said that by virtue of a settlement between the <ORG> and the appellants, the former can recover only 40% of the amount found due by the latter. The trial court and <ORG> have found that there was no settlement between the parties, and we agree with them The so-called settlement, is spelt out by the appellants from <NAME> letters, dated January 17, 1951. One of the letters was written by the Director of <ORG> Punjab to the first appellant and the other was a reply to it by the second appellant on 3-L499 Sup. CI/73 behalf of the first appellant. The subject-matter of the Director's letter is "settlement of accounts". The letter opens with the statement that "the question of settlement of claims of <ORG> and all sellers against your agency has been discussed at length", in the presence of certain <ORG> representatives and <NAME>, the second appellant. The second paragraph of the letter pertinently states : "It appears that a settlement of these claims will be possible in the following manner

(a) This Government should realise only 40% of the amount debited to the Joint Punjab account prior to March 1948 and the sellers on whose behalf the amounts have been realised by Government should be paid by the Clearing Agents through the Controller of Food Accounts and the balance amount adjudged by <ORG> may be paid by the Clearing Agents direct."

Paragraph 3 requests : "kindly confirm if you are agreeable to ,this method of settlement". It is stated that the actual details of the amounts due to the <ORG> and to the sellers would be supplied to the appellants later "on receiving your acceptance as above". The second appellant in his reply letter said : "We hereby confirm the arrangements embodied in your letter...... subject to the following amendments.............. (1) you shall be entitled to a realisation on the basis of 40 % out of the amount realised by us on account of rice supplied by Rationing Controllers; (2) after disbursing the balance to sellers for whose supplies the amounts have been realised by you in our account,, the balance shall be utilised for the settlement of the claims of other sellers against our agency." It may be noted that in paragraph 3 of the written statement the appellants had taken the plea that the settlement of January 17, 1951. was "'without prejudice". The phrase "without prejudice" suggests that they had accepted the settlement without prejudice to their rights. It is not a pleading that there was a firm settlement between the parties. It is evident from the Director's letter that he had only made a proposal to the appellants for the settlement of the claims of the <ORG> and sellers. The proposal contained two essential and inseverable terms. The inference that the letter made a proposal to, the appellant is supported by such phrases in the letter as "kindly confirm if you are agreeable to this method of settlement", and "on receiving your acceptance as above". The inseverable character of the two terms follows from such expressions as "the question of settlement of claims of <ORG> and of sellers against your agency has been discussed, "and" a settlement of these claims will be possible in the following manner". <NAME> reply letter did not unconditionally accept the Director's proposal. Instead, he made an alternative proposal. According to the Director's letter. the <ORG> could recover 4O % of the amount debited to the <ORG> account prior to March 1948 : according to <NAME> reply the <ORG> could recover 40 % of the amounts realised by the appellants on account of, rice supplied by the Rationing Controllers. According to the Director's proposal, the appellants should pay the sellers on whose behalf certain amounts had been realised from purchasers by the <ORG>. They should also pay the sellers to whom payments were lo be made according to the decision of <ORG>. <NAME>, on the other hand, suggested that excess over 40 % recovered by the <ORG> should be paid to the sellers for whom the <ORG> has recovered the amounts and that the balance, if any, should be utilised in paying the remaining sellers. There is plainly substantial difference between the terms proposed by the Director and the alternative term proposed by <NAME>. It has not been argued that the <ORG> accepted the alternative proposal of <NAME>. In the result, we are of opinion, that there was no settlement between the parties. The things did not move beyond the stage of proposal and counter-proposal. This inference is supported by three letters sent to the appellants by the Director, <ORG>, the Controller of Food Accounts and the Director General, <ORG>, dated September 22, 1951, November 22, 1951 and September 18. 1952 respectively In all these letters it is insisted upon that the appellants should settle the claims of the sellers. The appellants can derive no advantage from the word "settlement" in those letters. We are satisfied that the said word has been loosely used therein.

Thirdly, it is said that as the Government had represented to the appellants that it would recover only 40 % of the amount debited to the <ORG> account, it is now estopped from claiming any hi-her amount. This argument cannot be raised at this stage. The plea of estoppel was not taken by the appellants in their two written statements filed on January 15, 1957 and June 2, 1959. No issue was framed on estoppel. No argument founded on estoppel was advanced by the appellants in the trial court and <ORG>. The argument is not raised even in the statement of case filed by the appellants in this Court. As we are not allowing the' appellants to raise the plea of estoppel at the stage of hearing, it is not necessary to deal with <CITATION> .(") and (1)  2 S. C. R. 366.

<CITATION> (1). Fourthly, it is said that as the <ORG> had decided to claim only 40 % of the amount debited to the <ORG> account before March 1948, the <ORG> cannot now recover more than that amount. While dealing with this argument, the trial court said : "These letters and other letters on the file which have been referred to by the learned counsel for the defendants do show that the <ORG> had taken such a decision". However, the trial court did not accept the argument that the <ORG> could not claim more than 40 %. It does not appear from the judgment of <ORG> that this argument was recanvassed before it, for the judgment of <ORG> does not expressly deal with ;It. The argument is founded on the proceedings of the meeting held on July 28 and 29, 1953 in the office of the Controller, <ORG>, at Simla. In the meeting the second appellant and the other partner <NAME> were present on behalf of the first appellant. The other three persons who attended the meeting were the <ORG> representatives. One of them was the Deputy Controller, <ORG>. The Deputy Controller, <ORG>, explained the history of the controversy to the meeting. He said that the <ORG> had been claiming 40% of the amount actually debited to the <ORG> account before March, 1948 and payment by the appellants of the claims of sellers for whom the <ORG> had recovered certain amounts from the consignees. Thereafter he stated the case of the appellants which was set forth in their reply letter of January 17, 1951. Then he stated that 40 % of the amount actually debited to the <ORG> account came to Rs. 5,85,000/12/according to the <ORG> and Rs. 4,73,271/6/9 according to the appellants. He admitted that the <ORG> has recovered two sums of Rs. 2,92,102/11/9 and Rs. 2,67,963/10/1 from and on behalf of the appellants. Thus the total recovery was admitted to be Rs. 5,59,781/8/- 1/2. Then he said that the net credit in favour of the Clearing Agents came to Rs. 59,695/ 1 1/2 according to the <ORG> and according to the Clearing Agents it was Rs. 86,510/1/31/2. Thereafter he added that they have "to settle all the accounts of all the sellers on whose behalf the Punjab <ORG> has recovered the money from the con- signees and the amounts found due to different sellers as per <ORG> proceedings by making cash payment to <ORG> of the amount found short". He ended by saying that the appellants stated that they had settled the amounts of certain sellers and that they promised to settle the accounts of more (1)[ 1970] 3 S. C. R. 854.

sellers by the third week of August, 1953. They were asked by him to bring the payees' receipts with them in support of payments made to sellers.

While examining the implications of the aforesaid minutes of the meeting, it is necessary to bear in mind three things- One, it is clear from the letter of the Director General, Food and Civil Supplies, to the Secretary, <ORG> dated March 31, 1948 that <ORG> had great sympathy for the pitiable plight of the appellants. the letter say that the Clearing Agents were unable to pay the amounts debited to the Joint account of the Punjab <ORG> before March, 1948 because they had been uprooted from West Punjab where they had huge property worth 27 lakhs in the shape of mills , agricultural lands and other movable and immovable properties, because large amounts were due to them from <ORG> on account of the supply of foodgrains by them, because there were also other dues payable to them on account of securi- ties and shares in wholesale <ORG> and <ORG> in West Punjab and because the commission due to them to the tune of Rs. 7 lakhs by <ORG> was not being paid to them. It is said that on account of their financial difficulties the <ORG> had decided that Rs. 12,55,214/6/3 payable by them should be debited to the Joint Account of the Undivided' Punjab and that all recoveries in respect of those dues relating to the pre-partition period and payable at Lahore should be credited to the Joint Account. Second, the <ORG> was not legally liable to pay the sellers from whom the appellants had purchased rice. <NAME> , Secretary to the Governor, has deposed that there was "no legal liability of the <ORG> to pay sellers, whose goods were supplied to the consignees through the sellers at Shahdara. The <ORG> had filed a suit against the <ORG>. That suit was dismissed." Third, the <ORG> was likely to get mere 40 % of the recovery from the appellants. Any recovery in excess of it was likely to benefit West Punjab. So the <ORG> could afford to take a magnanimous decision without the likelihood of any loss to itself that only 40 % of the amount debited to the Joint Punjab Account before March 1948, should be recovered from the appellants.

According to counsel for the respondent, the minutes of the meeting would show that the decision to recover only 40 % of the aforesaid amount "-as subject to the condition that the appellants should pay the sellers for whom the <ORG> has already recovered certain amounts from the consignees. We are diffident to draw that inference from the minutes of the meeting held on July 28 and 29, 1953. It is important to notice the difference in the language of the Director's letter dated January 17, 1951 and the minutes of the aforesaid meeting. The language of the former clearly evinces that payment to the sellers by the appellants was an essential term of the proposed settlement. The language of the minutes of the meeting does not show that payment to the sellers was a condition precedent to the limitation of recovery to 40 %. The minutes of the meeting can be split up in two ?arts (1) Limiting the appellants' liability to 40%, and (2) payment of the amounts due to sellers by the appellants. The first part is not dependent on the performance of the second part as in the Director's letter of January 17, 1951.

This inference is supported by the subsequent conduct of the <ORG> Officers. After January 17, 1951, the <ORG> had sent letters to the appellants indicating that payment to sellers was an essential term of the proposed settlement of January 17, 1951. A similar letter was never sent to the appellant after July 28-29, 1953. On the other hand, letters of the Director, <ORG>, dated April 21, 1954 and May 11, 1954 show that the <ORG> was paying the sellers from the amount with it to the credit of the appellants and asking them to give their consent to such payment. The Director, <ORG>, sent five letters to the appellants on April 21, 1954. They are exhibits D-6 to D-1 1. In each of them he has 'stated that if no reply were received within a fortnight, it would be presumed that the appellants had agreed to the payment being made to the sellers mentioned in the letters. The appellants replied to those five letters on May 3, 1954. 'They said that unless a detailed account of their post- partition dealings was made available to them, it would not be possible to reply to the Director's letters. The Director was requested to send a complete copy of the ac- counts. In his reply letter of May 11, 1954, the Director said that the appellants had already been given details of the accounts in the meeting of July 28 and 29, 1953. He concluded by saying that if no reply was received by him up to May 20, 1954, it would be presumed that they had no objection to the payment being made to the sellers and that "this office would proceed to make payment to the parties concerned." These letters indicate that in spite of the absence of consent by the appellants, the <ORG> t was paving sellers from the amount with it to the credit of the appellants. These letters show that instead of insisting upon payment to the sellers by the appellants, the <ORG> was accepting and acting according to the appellants' proposal of January 17, 1951 that the sellers should be paid by the <ORG> from the money with it to the credit of the appellants.

In view of the foregoing discussion, we are of the view, that the <ORG> had decided to recover only 40% and no more. The <ORG>'s decision would amount to remitting a part of the debt due by the appellants. Under s. 63 of the Contract Act, a promise can remit a promise in part. It is not necessary under the Contract Act that such remission should be supported by consideration. If the decision of the <ORG> amounts to remitting a part of the debt, as we think, then the <ORG> cannot seek to recover more than 40%. Admittedly more than 40% of the total liability has already been paid to the <ORG>. Therefore nothing remains due by the appellants.

Accordingly we allow the appeal and dismiss the suit of the <ORG>. In the peculiar circumstances of this case, the appellants shall no costs throughout.

<ORG> dismissed


PETITIONER: SUPDT. & REMEMBRANCER OF LEGAL AFFAIRS WEST BENGAL Vs. RESPONDENT: ANIL KUMAR BHUNJA & ORS. DATE OF JUDGMENT23/08/1979 BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH SHINGAL, P.N. REDDY, O. CHINNAPPA (J) CITATION: 1980 AIR 52 1980 SCR (1) 323 1979 SCC (4) 274 CITATOR INFO : RF 1986 SC2045 (45) RF 1990 SC1962 (7) ACT: Arms Act 1959 -S. 29(b)-Scope of-Giving of fire-arms for limited purpose of repairs-Whether amounts to delivery of 'possession'-Great caution and discernment necessary in the application of the ratio of cases decided under the Arms Act of 1878 to those under the present Act. Words & Phrases-"Possession" meaning of-S. 29(b) Arms Act , 1959. HEADNOTE: The prosecution alleged that the police officers of the appellant state while investigating a case discovered a workshop run by a mechanic who was then actually working on a revolver. Several other guns, revolvers and rifles were found in the workshop and all these fire-arms were seized. The mechanic claimed to have received one of the guns so seized from a gun-licensee and the rest from respondents 1 to 4 for repairs. The mechanic had no valid licence under the Arms Act to keep or repair these fire-arms but respondent No. 4 however possessed licences under the Act to run the business of repairing and dealing in fire-arms. The police charge-sheeted the mechanic, the gun licensee and respondents 1 to 4, for having committed offences under Sections 25(1)(a) and 27 of the Act. The Magistrate held that there were materials to make out a prima facie case under s. 25(1)(c) of the Act against the gun-licensee and under s. 29(b) of the Act against the mechanic and charged them accordingly. As regards Respondents 1 to 4 taking the view that giving of the arms to the mechanic by the respondents for the limited purpose of repairs, did not amount to delivery of 'possession' of those arms within the meaning of s. 29(b) of the Act, he discharged the said respondents. The appellant's criminal revision against the said order, was dismissed, <ORG> holding that Respondents 1 to 4 could not be said to have delivered the fire-arms into the 'possession' of the mechanic within the meaning of s. 29(b) of the Act, because the respondents possessed valid licences for repairs as well as for sale of fire-arms and had given only 'temporary' custody of those arms to the mechanic for the limited purpose of carrying out the repair job, while the effective control over those arms all the time remained with the respondents. In appeal to this Court it was contended on behalf of the appellant-State that the question whether a person is in possession of a fire-arm or had transferred and delivered it to another, is largely one of fact; that in the instant case, the mechanic was not a servant or employee of the respondents but was independently running his own business of repairing fire-arms; that the fire-arms were handed over by the respondents to the mechanic to be repaired at the latter's residence-cum-workshop which was not the respondent's licensed place 324 of business; that the mechanic had no licence for repairing or keeping fire-arms and the respondents were either aware of this fact or did not ascertain it before delivering the fire-arms to him, that 'possession' within the purview of s. 29(b) means immediate possession and consequently, delivery of even temporary possession and control to an unauthorised person falls within the mischief of the section; that in the circumstances of the instant case there was a clear prima facie case not only under s. 29(b) but also under s. 30 read with s. 5 of the Act, against the Respondents and consequently the Magistrate was not justified in discharging them. On behalf of the Respondents it was contended that the mechanic was only in temporary custody of the fire-arms for the limited purpose of repairing them, as an agent of the owners, who being licencees in Form IX entitled to repair and keep these fire arms, throughout remained in their lawful possession and control. The delivery of possession contemplated by s. 29(b) is something more than entrusting the arms to an 'agent' for the limited purpose of repairs. Allowing the appeal, ^ HELD: 1. "Possession" is a polymorphous term which may have different meanings in different contexts. It is impossible to work out a completely logical and precise definition of "possession" uniformly applicable to all situations in the contexts of all statutes. "Possession" implies a right and a fact; the right to enjoy annexed to the right of property and the fact of the real intention. It involves power of control and intent to control. [328D-E] "Possession" is not a purely legal concept but also a matter of fact, and the broad test for determining whether a person is in possession of anything is whether he is in general control of it. [328H-329A] Salmond's Jurisprudence 11th Edn. p. 52 referred to. In the instant case although the respondents held licences in Form IX for repairing and dealing in fire-arms at the place of business, factory or shop which was specified in Column 3 of their licences, they handed over the fire-arms to the mechanic who had no such licence to be repaired at the latters own workshop. Since that workshop and the repairing business being run therein, was in the exclusive control and occupation of the mechanic, the inference would be that by handing over the fire-arms to the mechanic for repair the respondents had divested themselves for the time being not only of physical possession but also of effective control over those fire-arms. The respondents had not done anything to ascertain whether the mechanic was legally authorised to retain those fire-arms even for the limited purpose of repairing them. Prima facie the materials before the Magistrate showed that the respondents had delivered the fire-arms in question into the possession of the mechanic without previously ascertaining that he was legally authorised to have the same in his possession, and as such, they appeared to have committed an offence under s. 29(b) of the Act. [330B-C, 330G-331A] 3. By allowing the fire-arms to be removed to a place other than the place of business or factory specified in Column 3 of the licences in Form IX, the respondents contravened condition (1)(c) of the licence, amounting to an offence punishable under s. 30 of the Act. [331 B-C] 325 The materials before the Magistrate, prima facie disclosed the commission of offences under Sections 29(b) and 30 of the Act by Respondents 1 to 4. The Magistrate was thus clearly in error in discharging these respondents. [331D] 4. The ratio of cases decided under the Old Arms Act (Act 11 of 1878) should not be blindly applied to cases under the Act of 1959 which has in several aspects modified or changed the law relating to the regulation of arms. [331H] 5. Trial of summons case as a warrant case does not amount to an illegality but is a mere irregularity that does not vitiate the trial unless there is a prejudice. [333 B] 6. Case remitted to trial Magistrate with direction to frame charges in respect of offences under Sections 29(b) and 30 of the Act against Respondents 1 to 4 and to proceed further with the trial. [333C] <CITATION> , AIR 1928 All. 55(1); <CITATION> , AIR 1953 HP 121; Emperor v. <NAME>, ILR XXIV All. 454; <CITATION> , AIR 1933 Cal. 218; <CITATION> , 14 Bom. L.R. 964; <CITATION> , AIR 1933 Pat. 600; <NAME> v. <NAME>, AIR 1929 All. 720; <NAME> v. <NAME>, ILR 16 All. 276; held inapplicable. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 98 of 1973.

Appeal by Special Leave from the Judgment and Order dated 16-8-1972 of <ORG> in Criminal Revision No. 85/72.

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

<NAME> for Respondents 1 and 3.

<NAME> for Respondents 2 and 4.

The Judgment of the Court was delivered by SARKARIA, J.-Whether the giving of fire-arms by a person holding a licence for repairing and dealing in fire- arms for repairs to mechanic who holds no such licence, but does the repair job at his workshop at a place different from the factory or place of business of the licence holder, amounts to "delivery of those arms into the possession of another person" within the contemplation of Section 29(b) of the Arms Act, 1959 (For short, called the 'Act'), is the principal question that falls to be answered in this appeal by special leave directed against a judgment, dated August 16, 1972, of <ORG>. It arises in these circumstances:

On or about April 17, 1971, <ORG> while investigating a case, went to premises No. 4, Ram Kanai Adhikari Lane in Calcutta, and, on the ground floor of the building, they discovered a workshop run by <NAME>, who was then working on a re-

volver. In the said premises, the police found several other guns, revolvers and rifles. All these fire-arms were seized by the police.

<NAME> claimed to have received one of the guns so seized from one <NAME> gun-licensee and the rest from respondents 1 to 4 for repairs. <NAME> had no valid licence to keep or repair these fire-arms under the Act. Respondents 1 to 4, however, were holding licences under the Act to run the business of repairing and dealing in fire-arms.

On April 17, 1970, the police charge-sheeted <NAME>, <NAME> and respondents 1 to 4 to stand their trial in <ORG>, in respect of offences under Sections 25(1) (a) and 27 of the Act.

The trial Magistrate, while considering the question of framing charges, held that there were materials to make out a prima facie case under Section 25(1) (c) of the Act against <NAME> and under Section 29(b) of the Act against <NAME>, and charged them accordingly. So far as respondents 1 to 4 are concerned, the Magistrate took the view that the giving of the arms to the accused <NAME>, by respondents 1 to 4 for the limited purpose of repairs, did not amount to delivery of possession of those arms within the meaning of Section 29(b) of the Arms Act (Act IV/1959), and in the result, he discharged the respondents by an order, dated November 17, 1971.

Aggrieved, the State of West Bengal filed a Criminal Revision against the Magistrate's order before <ORG>, contending that delivery of the arms, into the possession of a person who did not have a valid licence for repairs of fire-arms, is not only a contravention of the provisions of Section 5 of the Act, but also amounts to delivery of fire-arms by the respondents into the possession of <NAME> and, as such, the respondents were prima facie liable for an offence under Section 29(b) of the Act.

<ORG> of <ORG>, who heard the Revision, dismissed it with the reasoning, that Respondents 1 to 4, could not be said to have delivered the fire-arms, concerned into the possession of <NAME> within the meaning of Section 29(b) of the Act, because the respondents who possessed valid licences for repairs as well as for sale of fire-arms, had given only temporary custody of those arms to <NAME> for the limited purpose of carrying the repair job, while the effective control over those arms all the time remained with the respondents. In its view, there is no delivery of possession of the fire-arms so long as control over the arms and the authority to use those arms is not transferred to the custodian.

Hence, this appeal.

The whole case pivots around the interpretation and application of the term "possession", used in Section 29(b) of the Act.

Learned counsel for the appellant-State contends that the question whether a person is in possession of an arm or had transferred and delivered it to another, is largely one of fact. It is submitted that in the instant case, there were three stark facts which more than any other, unmistakably showed that the respondents had given possession of these fire-arms to <NAME>: (a) <NAME> was not a servant or employee of the respondents, but was running his own business of repairing fire-arms. (b) The fire-arms were handed over to <NAME> to be repaired at his own residence-cum-workshop which was not the respondents licensed place of business, and was in the exclusive control and occupation of <NAME>. (c) <NAME> had no licence for repairing or keeping fire-arms and the respondents were either aware of this fact or did not ascertain it before delivering the fire-arms to him. It is maintained that "possession, within the purview of Section 29(b) means immediate possession, and consequently, delivery of even temporary possession and control to an unauthorised person falls within the mischief of the Section. It is further urged that the delivery of fire-arms for repairs to the unlicensed mechanic for repairs, to be carried out at a place other than the factory or place of business specified in the licence of the owners, will amount to an offence under Section 30 read with Section 5 of the Act also.

As against this, Mr. <NAME> has addressed lengthy arguments to support the judgments of the <ORG> below. The sum and substance of his arguments is that the mechanic, <NAME>, was only in temporary custody of these arms for the limited purpose of repairing them, as an agent of the owners, who being licensees in Form IX entitled to repair and keep these fire-arms, throughout remained in their lawful possession and control. It is maintained that the delivery of possession contemplated by Section 29(b) is something more than entrusting the arms to an agent for the limited purpose of repairs. In support of this contention, Mr. <NAME> has cited several decisions. Particular reliance has been placed on <NAME> v. Emperor <NAME> v. <ORG>; <CITATION> ; <CITATION> ; <CITATION> ; <NAME> v.

Emperor; <CITATION> ; and <NAME> v. Earl of Caithness.

Reference was also made to Halsbury's Laws of England, Vol. 25, Third Edition, page 874, and Salmond's Jurisprudence, 11th Edition.

It was next contended that even if the term "possession" in Section 29(b) is susceptible of two interpretations, the one favourable to the accused be adopted. In this connection reference has been made to <NAME> v. <NAME>.

The last submission of Mr. <NAME> is that since these criminal proceedings have been brooding over the heads of the respondents for the last eight years, this <ORG> should not, even if it reverses the opinion of the courts below, direct the Magistrate to frame charges against the respondents and to proceed with the trial. It is emphasised that in any event, the offence disclosed against the respondents was purely technical.

"Possession" is a polymorphous term which may have different meanings in different contexts. It is impossible to work out a completely logical and precise definition of "possession" uniformly applicable to all situations in the contexts of all statutes. <NAME> & <NAME> in their book on Jurisprudence say that if a topic ever suffered from too much theorizing it is that of "possession". Much of this difficulty and confusion is (as pointed out in Salmond's Jurisprudence, 12th Edition, 1966) caused by the fact the possession is not purely a legal concept. "Possession", implies a right and a fact; the right to enjoy annexed to the right of property and the fact of the real intention. It involves power of control and intent to control.

(See Dias and <NAME>, ibid) According to <NAME> & <NAME> "when a person is in such a relation to a thing that, so far as regards the thing, he can assume, exercise or resume manual control of it at pleasure, and so far as regards other persons, the thing is under the protection of his personal presence, or in or on a house or land occupied by him or in any receptacle belonging to him and under his control, he is in physical possession of the thing".

While recognising that "possession" is not a purely legal concept but also a matter of fact; <NAME> (12th Edition, page 52) describes "possession, in fact", as a relationship between a person and a thing.

According to the learned author the test for determining "whether a person is in possession of anything is whether he is in general control of it".

In <NAME> (ibid), this <ORG> while noting that the concept of possession is not easy to comprehend, held that in the context of Section 25(a) of the Arms Act, 1959, the possession of a fire-arm must have, firstly, the element of consciousness or knowledge of that possession in the person charged with such offence, and secondly, he has either the actual physical possession of the fire-arm, or where he has not such physical possession, he has nonetheless a power or control over that weapon. It was further recognised that whether or not the accused had such control or dominion to constitute his possession of the fire-arm, is a question of fact depending on the facts of each case. In that connection, it was observed: "In any disputed question of possession, specific facts admitted or proved will alone establish the existence of the de facto relation of control or the dominion of the person over it necessary to determine whether that person was or was not in possession of the thing in question".

With this guiding criterion in mind, the Magistrate had to see whether the facts alleged and sought to be proved by the prosecution prima facie disclose the delivery of the fire-arms by the respondents into the possession of <NAME>, without previously ascertaining whether the recipient had any licence to retain and repair those fire-arms within the contemplation of Section 29(b) .

It may be remembered that the case was at the stage of framing charges; the prosecution evidence had not yet commenced. The Magistrate had therefore, to consider the above question on a general consideration of the materials placed before him by the investigating police officer. At this stage, as was pointed out by this Court in <CITATION> , the truth, veracity and effect of the evidence which the prosecutor proposes to adduce are not to be meticulously judged. The standard of test, proof and judgment which is to be applied finally before finding the accused guilty or otherwise, is not exactly to be applied at the stage of Section 227 or 228 of the Code of Criminal Procedure, 1973. At this stage, even a very strong suspicion founded upon materials before the Magistrate, which leads him to form a presumptive opinion as the existence of the factual ingredients constituting the offence alleged; may justify the framing of charge against the accused in respect of the commission of the offence.

Now, in the instant case, at that initial stage, it was apparent from the materials before the Magistrate, that the basic facts proposed to be proved by the prosecution against the accused-respondents were as follows:

(a) That the respondents held licences, inter alia, in Form IX for repairing and dealing in fire-arms at the place of business, factory or shop specified in the Column 3 of their licences.

(i) The respondents handed over the fire-arms in question to <NAME> for repairs.

(ii) Mrityunjoy Dutta did not have any license for repairing or dealing in fire-arms;

(iii) (a) Mrityunjoy Dutta was doing the repair job in respect of these fire-arms at his own residence-cum-workshop which was situated at a place different from the business places specified in the licences of the respondents.

(b) The fire-arms in question were seized from the workshop-cum-house in the occupation and control of <NAME>, when the latter was actually in the act of repairing working on a revolver.

There is nothing in these materials to show that at the time of the seizure of these fire-arms, any of the respondents or any Manager of their concerns, was found present and personally supervising the repair work that was being done by the mechanic, <NAME>.

These positive and negative facts, in conjunction with other subsidiary facts, appearing expressly or by implication from the materials which were before the Magistrate at that initial stage were, at least, sufficient to show that there were grounds for presuming that the accused-respondents had committed offences under Sections 29(b) and 30 of the Act. Facts (iii) (a) & (b) listed above, inferentially show that by handing over the fire-arms to <NAME> to be repaired at the latter's independent workshop, the respondents had divested themselves, for the time being, not only of physical possession but also of effective control over those fire-arms. There is nothing in those materials to show that before handing over those fire- arms to <NAME> for repairs, the respondents had done anything to ascertain that <NAME> was legally authorised to retain those arms even for the limited purpose of repairing them. Thus, prima facie the materials before the Magistrate showed that the respondents had delivered the fire-arms in question into the possession of <NAME>, without previously ascertaining that he was legally authorised to have the same in his pos-

session, and as such, the respondents appeared to have committed and offence under Section 29(b) of the Act.

Further, by allowing the fire-arms to be removed to a place other than the places of their business or factory specified in Column 3 of their licences in Form IX, the respondents appear to have contravened condition 1(c) of their licence, the material part of which reads as under:

"(c) This licence is valid only so long as the licensee carries on the trade or business in the permises shown in Column 3 thereof.. "

Contravention of any condition of the licence amounts to an offence punishable under Section 30 of the Act.

In sum, the materials before the Magistrate, prima facie disclosed the commission of offences under Sections 29(b) and 30 of the Act by respondents 1 to 4. The Magistrate was thus clearly in error in discharging these accused-respondents.

We do not think it necessary to notice and discuss in detail the various decisions cited by the counsel at the bar, because, as mentioned earlier, the question whether a particular person is or continues to be in possession of an arm (in the context of the Act) is, to a substantial extent, one of fact. This question, often resolves into the issue: whether that person is or continues to be, at the material time, in physical possession or effective control of that arm. This issue, in turn, is a mixed issue of fact and law, depending on proof of specific facts or definite circumstances by the prosecution.

At this preliminary stage, therefore, when the prosecution has yet to lead evidence to prove all the facts relevant to substantiate the ingredients of the charge under Section 29(b) levelled against these respondents, a detailed discussion of the principles enunciated in the cited decisions, is apt to partake of the character of a speculative exercise.

It will be sufficient to say in passing that almost all the decisions of <ORG> cited before us were cases under the 'Old' Arms Act (Act 11 of 1878). The ratio of cases decided under the 'Old' Act should not be blindly applied to cases under the Act of 1959 which has, in several aspects modified or changed the law relating to the regulation of arms. For instance under the 'Old' Act, repairing of arms without a licence, was not punishable, as 'repair' was different and distinct from manufacture. In <NAME> v. <ORG> and <NAME> v. <ORG> it was held that a person in temporary possession of arms without a licence, for repairing purposes was not guilty under Section 19 of the Act of 1878. But section 5 of the present Act of 1959, has materially altered this position by requiring the obtaining of a licence for-repairing fire-arms (or other arms if so prescribed). Further, the word "keep" occurring in Section 5 of the 'Old' Act has been replaced by the words "have in his possession" in the present Section.

Then in three of these cases, namely, <NAME>, <NAME> v. <ORG>, <CITATION> , the license-holder sent his licensed firearm for repairs through a person who had the license-holders' oral authority, expressly or impliedly given, to carry it to the repairer. It was held that the carrier, though he held no licence to keep the fire-arm, could not be said to be in "possession" of it, nor could the license-holder be said to have parted with the "possession" of the fire-arm or delivered its possession to an unauthorised person. Similarly, in one of the cases cited, the license-holder sent his fire-arm to the Magistrate through his servant or agent for getting the licence renewed. In that case also, it was held that the servant was not guilty of any offence for having in his possession or "carrying" a gun without a licence. The possession was held to be still with the license-holder- owner of the weapon.

The rule enunciated in these decisions has been given a limited recognition in the Proviso to Section 3 of the Act of 1959. Under this Proviso, if a licensed weapon is carried to an authorised repairer by another having no licence, he will not be guilty for carrying that fire-arm, if he has a written authority of the license-holder for carrying that weapon to a repairer. Similarly, for carrying a licensed fire-arm to the appropriate authority for renewal of the license, written authority of the owner of the weapon is essential to bring him within the protection of the Proviso. In some of these cases referred to by the counsel, a person was carrying or was in custody of a licensed weapon for use by the licensee. Now, the Proviso to Section 3 of the present Act, protects such carriers or custodians of weapons for use by the license holder, only if they do so in the presence of the license-holder concerned. We have referred, by way of example, some of these changes brought about by the Act of 1959, only to impress on the trial court that in considering the application of the ratio of the cases decided under the Act of 1878, to those under the present Act great caution and discernment is necessary.

For all the reasons aforesaid, we allow this appeal and set aside the orders of the Courts below whereby respondents 1 to 4, herein, were discharged. Although offences under Section 29(b) and 30 of the Act are summons cases, the Magistrate has followed the warrant procedure, obviously because an offence under Section 25 of the Act, for which <NAME> was being jointly tried with Respondents 1 to 4, was a warrant case. Moreover, trial of a summons case as a warrant case does not amount to an illegality, but is a mere irregularity that does not vitiate the trial unless there is prejudice. We therefore, send the case back to the trial Magistrate with the direction that he should frame charges in respect of offences under Sections 29(b) and Section 30 of the Act against the accused- respondents 1 to 4 and proceed further with the trial in accordance with law. We decline the submission made on behalf of these respondents that on account of their prolonged harassment and expense, which are the necessary concomitants of protracted criminal proceedings extending over eight years, they should not be put on trial now for offences which, according to the counsel, are merely technical. Even so, we think, this is a circumstance to be taken into consideration by the trial court in fixing the nature and quantum of sentence, in the event of the accused being found guilty.

Before parting, with this judgment, we will however, set it down by way of caution that the Magistrate while assessing the evidence and recording his findings on its basis with regard to proof or otherwise the factual ingredients of the offences with which the accused may stand charged, shall not allow himself to be unduly influenced by anything said in this judgment in regard to the merits of the case.

N.V.K. Appeal allowed.