JUDGMENT <NAME>, J.

1. The assessee in this case is a company registered under the Indian Companies Act . For the assessment year 1971-72, corresponding to the accounting year ending August 31, 1970, the assessee filed its return to income of Rs. 1,66,00,810. In the statement accompanying the said return, the assessee has valued the stock-in-trade as on August 31, 1970, as follows.

___________________________________________________________________ As on Stock-in-trade 31-8-1970 31-8-1969 ____________________________________________________________________ Rs. Rs. Raw material at cost 65,79,277 78,30,468 Work-in-progress at cost 20,09,266 24,96,856 Finished goods, at lower cost and net realisable value 32,09,437 40,05,522 Other goods at cost 49,471 82,266 ----------------------------------- 1,18,47,487 1,44,15,112 ____________________________________________________________________

2. However, the assessee filed a revised return on July 25, 1972, showing the total income at Rs. 1,48,20,481. Along with its return, the assessee appended a latter to the effect that Rs. 17,80,329, the difference between Rs. 1,66,00,810 and Rs. 1,48,20,481, did not represent the profits of the assessee for the year ending August 31, 1970, as that sum represented part of the value of the closing stock of finished goods as on August 31, 1970. The <ORG> required the assessee to furnish information about the basis of the valuation of the closing stock. The assessee by its letter dated December 22, 1973, had stated that the basis of the valuation of the closing stock was as follows :

1. Raw materials at cost 2. Work-in-progress at direct cost 3. Finished goods at direct cost 4. Other goods at cost

3. In that letter the assessee also pointed out that it has been following the mercantile system of accounting, and that there is no change in the said method of accounting followed by it, but that it has changed only the manner of valuation of certain items (of closing stock), that while the valuation of closing stock in respect of all items in the earlier years was being done at cost, which term was understood to be "total cost", the valuation in respect of the accounting year ended August 31, 1970, has been changed in respect of "work-in-progress" and "finished goods" from "total cost" to " direct cost" and that the difference between the total cost and the direct cost is that in the cost, the overheads such as administrative department expenses are excluded, while in the total cost such overheads are included. The <ORG> sought further elucidation from the assessee as to what is meant by "total cost" and "direct cost", and as to what was the difference between the method of ascertaining the cost. The assessee by its letter dated January 1, 1974, submitted that the "total cost" would include the following 15 items :

(1) Depreciation (2) Rent (3) Rates and taxes (4) Repairs and maintenance (supplies and services) (5) Insurance (6) Shipping (7) Packing (8) Salaries and perquisites - Supervisory and ancillary staff (9) Postage, telegrams and telephones (10) Printing and stationery (11) Travailing (12) Audit fees (13) Advertising (14) Professional charges (15) Technical fees while "direct cost" would include only the following components :

(1) Raw materials (2) Power (3) Fuel (4) Direct labour, wages (5) Direct labour and overtime (6) Holiday pay (7) Fringe benefits, bonus, E.S.I., P.F.

(8) Production department :

Supervisory staff : Salary " " Overtime and fringe benefits (bonus and P.F.) ;

that it has bona fide valued the closing stock at "direct cost" and that this new method of valuation is not for any casual period but it would be adopted consistently in future from year to year and that the new basis adopted is based upon accepted principles of commercial practice. The <ORG>, however, held that the sum of Rs. 17,80,329, which represented the difference in the value of the closing stock as per the new method of valuation and the old method valuation, is to be added back and the reasons given by him may be given in his own words :

"The assessee has been valuing the closing stock of finished goods and work-in-progress at full cost. In addition to the direct cost, production overheads were also taken into account in valuing the unsold stock. The opening stock of the previous year, therefore, includes such part of the production overheads incurred in the preceding previous years at it is attributable to the unsold stock and work-in-progress at the close of that previous year. The assessee has made a departure from the method regularly adopted in the earlier years and for the first time has valued the stock as on August 31, 1970, at part (sic) of the cost, (viz., direct cost). The undervaluation works out to Rs. 17,80,329, though attributable to the unsold stock, is being claimed by the assessee as relating to the goods sold. The valuation adopted this year regardless of the market value or full cost is not only arbitrary but is also inconsistent.

By the adoption of the full cost method for valuing the opening stock and the partial cost method for valuing the closing stock, the assessee seeks to claim a part of the production overheads of the earlier year and thereby understate the income of the previous year by Rs. 17,80,329 or by a corresponding amount included in the opening stock. As the method newly adopted does not reflect the true profits of the previous year and as the assessee has not reduced the opening stock valued o the basis of the new method, I have no other alternative but to add back the sum of Rs. 17,80,329 representing undervaluation of the closing stock of the previous year -Rs. 17,80,329".

4. The assessee appealed to the <ORG> seeking deletion of the said amount of Rs. 17,80,329. The <ORG> accepted the assessee's contention and held that there are various methods of closing stock valuation, that one of the recognised methods is "cost or market value, whichever is lower", that the assessee has been following the "cost method" so far but in the relevant assessment year it has switched over from "actual cost" to "direct cost" and that in that process the value of the closing stock as on August 31, 1970, went down by Rs. 17,80,329 and, therefore, the assessee who has bona fide switched over to the "direct cost" basis, not temporarily but permanently, should be allowed to change the method of valuation. The <ORG>, however, gave a direction to the <ORG> to work out the value of the opening stock as on September 1, 1969, also at direct cost or market price basis, whichever is lower, and recompute the profits.

5. Against the said decision of the <ORG>, the assessee went in appeal contending that it is entitled to change the method of valuation only in relation to closing stock without revaluing the opening stock and that, therefore, the direction issued by the <ORG> to revalue the opening stock is not sustainable. The <ORG> filed an appeal before the <ORG> questioning the finding of the <ORG> that the assessee is entitled to change the method of valuation and seeking to sustain the order of the <ORG> holding that the closing also should be valued on "total cost" basis as was done for the opening stock.

6. The <ORG> upheld the order of the <ORG> holding that the change in the method of valuation has been adopted by the assessee bona fide and that method of valuation is to be adopted in future year after year, that it is not only for the particular assessment year and that, therefore, the change in the method of valuation of the closing stock can be accepted. The <ORG> also upheld the contention of the assessee that it is entitled to adopt "direct cost" method only for the closing stock. Aggrieved by the decision of the <ORG>, the <ORG> has sought and obtained a reference on the following question of law to this court for its opinion :

"Whether, on the facts and in the circumstances of the case, <ORG> was right in deleting the addition of Rs. 17,80,329 representing the difference on account of revaluation of closing stock on direct cost basis for the assessment year 1972-73 ?"

7. Thus, the <ORG> has proceeded on the basis that it is not open to the assessee to change the method of valuation for closing stock alone and, therefore, the closing stock should be valued at the same method as was applied to the opening stock. He, therefore, held that since the opening stock has been valued as per the total cost method, the same method should be adopted for closing stock also. The <ORG>, however, held that the assessee is entitled to change the method of valuation from "total cost" to "direct cost" but that he must adopt that valuation even for the opening stock. The <ORG> has held that this being the first year in which the method of valuation of the stock is changed from "total cost" to "direct cost", the assessee is entitled to value the closing alone on "direct cost" method. Thus, the authorities below have taken three different views.

8. As already stated, both the <ORG> and the <ORG> have found that the change in the method of valuation of the stock from "total cost" to "direct cost" is bona fide, a that it is intended to be followed consistently from year to year and that the change is not restricted for a particular period. Before us the said finding has not been challenged. Therefore, we have to proceed on the basis that the assessee is entitled to change the method of valuation of the stock from "total cost" to "direct cost". The difference between the view taken by the <ORG> and the <ORG> is that while the <ORG> felt that the new method of valuation of stock should be adopted both for closing and opening stock, the <ORG> has held that being the first year when the change is contemplated on a permanent basis, the closing stock alone can be valued on the new basis leaving the value of the opening stock arrived at as per the total cost method intact.

9. The main contention of the <ORG> in this case is that the change in the method of valuation stock should be applied both to the opening stock as well as closing stock, which alone will indicate the true or real profits as has been held in <CITATION> .  4 ITC 245 (PC), and that it is not open to the assessee to apply the new method to the closing stock alone without reference to the opening stock. Thus, according to the learned counsel for the <ORG>, whatever be the method of valuation adopted by the assessee, it should be applied to both the opening and closing stock, as otherwise it will give a distorted picture of the assessee's income. The <ORG>'s reasoning for rejecting this contention of the <ORG> is that so far as the first year when the change is introduced is concerned, there is bound to be a slight distortion in the profits but that will get adjusted in course of time as the new method of valuation of stock is going to be applied on a permanent basis year after year.

10. On a due consideration of the matter, we are inclined to agree with the view of the <ORG>. If the <ORG> is called upon to apply the new method of valuation to the opening stock of the accounting year as well, then, in consequence, the value of the closing stock of the year previous to the accounting year will also get altered and that will result in the modification of the assessment for the previous year. It is for this reason the <ORG> has stated that thought by adoption of the new method of valuation for the closing stock alone the <ORG> may appear to get some unintended benefit, in course of time it will get adjusted and the <ORG> will not be a loser. Even apart from this reason, if the <ORG>'s contention that the new method should be adopted both to opening stock and closing even in the first year of the introduction of the new method is accepted, then it will lead to the position that the <ORG> cannot at all change the method or the <ORG> has to revalue the closing stock of the previous year which will be the opening stock of this year, and such a revaluation on the new basis as per the <ORG> is not ordinarily possible. That when a new method of valuation of stock is adopted in any particular year, the <ORG> can on that basis leave intact the valuation of the opening stock on the old method has been laid down in a series of cases.

11. <CITATION> , <ORG> has observed (headnote) :

"It is a misconception to think that any profit ' arises out of the valuation of the closing stock ' and the situs of its arising or accrual is where the valuation is made. Valuation of unsold stock at the close of an accounting period is a necessary part of the process of determining the trading results of that period, and can in on sense be regarded as the ' source' of such profits."

12. <CITATION>  44 ITR 22 (Mad), it was held that the assessee had the option of valuing the closing stock either at cost or at market value if the market value is less than the cost price and when the assessee bona fide changes his method of accounting and satisfies the <ORG> that he intends to adopt the changed method, he has in fact satisfied the requirements of s. 13 of the Indian I.T. Act, 1922, that unless the books maintained on the basis of the method of accounting so; changed, bona fide, fall within the mischief of the proviso to s. 13 of the Indian I.T. Act, 1922, the assessee is entitled to have his changed method of accounting can be made only once by the assessee. In that case, originally the assessee was following the closing stock at "market value" and he proposed to change the method into "cost". When the change in the method of valuation of the closing stock was not accepted by the income-tax authorities on the ground that the change in the basis of valuation of the stock was highly detrimental to the <ORG> and that the assessee could not be allowed to deduct in one year loss attributable to and spread over many years, the matter was taken to this court, and this court held that the method of valuation of the stock was an integral part of the mercantile system of accounting, the valuation of the closing stock at the market rate and adopted regularly thereafter should be accepted by the <ORG>, that that the change in the method of valuation was detrimental to the <ORG> was not a relevant factor in deciding whether the assessee had a right to change the basis of valuation, that in deciding whether the change method of valuation of closing stock attracted the proviso to s. 13 , it was not a correct approach to see whether the losses of previous years would also enter into the claim made by the assessee for the accounting year and that national or anticipatory loss resulting from a valuation of the closing stock, which an assessee was permitted to take into account in ascertaining his trading profits, stood on no different footing. <CITATION>  63 ITR 51, <ORG> has expressed the view that an assessee is entitled to value the closing stock of any account year either at cost price or market value, whichever is lower, that thought the value of the closing stock must be the value of the opening stock and closing stock of the same accounting year and that the course adopted by the <ORG> in that case of revaluing the opening stock of 1949-50 at cost merely because the assessee had valued the closing stock at cost was not justified in law. In that case, the assessee had valued his closing stock of the assessment year 1948-49 at the market rate and the same value was shown for the opening stock of 1949-50. The closing of 1949-50 was valued at cost price which was much less. The <ORG> revalued the opening stock of 1949-50 at cost price with the result the value of the opening stock of 1949-50 different from the value of the closing stock of the earlier year 1948-49. It is in those circumstances the court held that the course adopted by the <ORG> was not justified in law and the assessee is entitled to value the closing stock for 1949-50 at cost price or market value whichever is lower.

13. <CITATION>  51 ITR 329 (Ker), the assessee which had purchased a lot of spares and stores for machinery from the war disposals in 1947 and used to value its stock at cost, wrote off seventy-five per cent. of the book value of the spare parts and stores on the last date of the accounting year 1956-57 on the basis of a certificate of an engineer that twenty-five per cent. of original value can be taken to be the market value, and claimed a sum of Rs. 1,41,035 as loss on revaluation of stores and spares but continued to value the stock of stores and spares at their market value in subsequent years. The claim was disallowed on the ground that such a change of method could not be allowed previous years. <ORG> had in that case expressed the view that the assessee was entitled to change his method of valuation of stock in this matter even though the <ORG> may be affected adversely by such change, that it is a concession given to the assessee based on the well-recognised usage of the trade, and the principle underlying that concession is in no way violated when the assessee changes his method of valuation from cost to market value, when the latter is less than the cost price, provided the change is bona fide and the new system is continued in subsequent years and, therefore, the assessee is entitled to claim the deduction of Rs. 1,41,035. In that case the decision of this court in <CITATION>  44 ITR 22, was referred to and followed.

14. <CITATION>  99 ITR 574, <ORG> had to deal with a similar situation. In that case the assessee has valued the closing stock as on December 31, 1959, on the basis of the invoice value plus appropriate customs duty and other charges on ad hoc basis, but valued its closing stock on December 31, 1960, without adding customs duty and other charges. In order to bring the two on the same level, proportionate customs duty and other charges estimated at Rs. 40,000 were added by the income-tax authorities to the value of the closing stock shown by the assessee and <ORG> confirmed the addition. When the matter was taken up to the court, <ORG> observed that they are not expressing any opinion in favour of one method of valuation of the closing stock or the other, that though the opening stock for the year under reference was loaded with the value of the proportionate costs of customs duty, freight and handling charges and the closing stock was not loaded with such costs, in order to bring the two on the same level, it is necessary to disturb the valuation either of the opening stock or of the closing stock. This decision which was relied on by the learned counsel for the <ORG> should be confined to the facts of that case as the court refused to direct a reference on the ground that no question of law arose out of the order of the <ORG>.

15. <CITATION>  104 ITR 487 (Bom), was a case where the assessee had valued his closing stock for the assessment year 1960-61 differently from the value should necessary be the closing stock for the same previous year 1959-60, the <ORG> issued a notice to the assessee for re-opening the assessment for the year 1959-60. The assessee filed a return making addition to the value of the closing stock for that year. When the reassessment was made, the assessee filed an appeal seeking addition of the same amount to the opening stock of the assessment year 1959-60. That was refused on the ground that the assessee has filed a return revaluing only the closing stock of the previous year and not the opening stock of the previous year. When the matter came before <ORG>, the court rejected the contention of the assessee that proper adjustment on account of the undervaluation of the opening stock for the year 1959-60 should have been allowed. Though normally the value of the opening stock and the closing stock in a particular assessment year should be the same, the court in that case has contemplated the possibility of the closing stock being different from the opening stock.

16. It is well-established, as pointed out by <ORG> in <CITATION> , that whichever method of book-keeping is adopted, in the case of a trading venture, for computing the true profits of the year stock-in-trade must be taken into account and must be taken into account and if the value in the of the stock-in-trade is not taken into account in the ultimate result the profit or loss resulting from trading is bound to get absorbed or reflected in the stock-in-trade unless the value of the stock-in-trade remains unchanged, at the commencement of the year and at the end of the year. It is, therefore, necessary to value the stock-in-trade at the end of the year by adopting a sound commercial practice of valuing the stock either at cost or market price, whichever is lower. In this case the assessee has been adopting total cost method of valuing the closing stock till the beginning of the accounting year. During the accounting year the assessee has changed the method of valuation of stock from "total cost" to "direct cost" methods is that in a total cost method, certain overheads are added while in the direct cost method the same overheads are excluded.

17. It is not the contention of the <ORG> that the adoption of the direct cost method in the valuation of the closing is not a sound commercial practice. As a matter of fact, <ORG> in <NAME> v. <ORG> [1961] 2 All ER 167, had recognised the "direct cost" method as one of the recognised methods in commercial practice. In that case in the computation of profits, for purposes of income-tax and the profits tax, of a company producing motor vehicle bodies to order, work-in-progress had been consistently valued by the company by the "direct cost" method since 1924 and that method had been accepted by the Inland <ORG>. By "direct cost" method, the value of the work-in-progress comprised the direct cost of the materials and labour used in the work. In the assessment year 1951-52, the Inland <ORG> claimed that the "on cost" method of assessing the work-in-progress should be employed. Under the "on cost" method, the value included a proportion of the indirect expenditure such as business overheads. In the year of assessment 1951-52, the application of the "direct cost" method would result in the value of the work-in-progress being Pounds 2,000 less at the end of the year than at the beginning. The employment of the "on cost" method would result in the valuing beginning Pounds 14,000 more at the end of the year than at the beginning. The increase of Pounds 14,000 was due to the fact that a higher proportion of the overheads were attributed to work-in-progress at the end of the year than at the beginning owing to a slackening of business during the year and consequential increased costs of production. There had been no other change of circumstances. The court found that different accountants were applying either one or the other of the two methods producing a true figure of profit. On the question as to which of the method of valuation should be applied for valuing the work-in-progress in the case, the court held in determining what, in the circumstances of a particular business, was the figure which fairly represented the costs of the work-in-progress as per the method employed consistently since 1924, the Inland <ORG> has not discharged the burden of showing good reason that the method should be changed to the "on cost" method and, therefore, the assessee is entitled to continue to adopt the "direct cost" method as before.

18. Thus, the adoption of "direct cost" method by the assessee cannot be questioned by the <ORG> as it has been found by the <ORG> that the adoption of this method is bona fide and is a permanent arrangement. The <ORG>'s only contention is that it has shown to be prejudicial to the <ORG>. As pointed out in <CITATION> and <CITATION>  44 ITR 22 (Mad), merely because the new method adopted by the assessee was detrimental to the <ORG>, that alone can never be the basis for denying the right to change the method. Further, even though the change of the method has resulted in a detriment to the <ORG> in the year in question, since the method is to be followed consistently year after year in future, this apparent detriment to the <ORG> will get adjusted and disappear. Therefore, in view of the findings of the <ORG> that the change of the method is bona fide and is intended to be followed in future, year after year, the change has to be accepted by the <ORG>, notwithstanding the fact that during assessment year which is the first year when change of method is brought about it has resulted in a prejudice or detriment to the <ORG>. So long as the method of valuation adopted by the assessee gets recognition from the practising accountants and the commercial world for valuation of stock-in-trade, the adoption of that method cannot be questioned by the <ORG> unless the adoption of that method is found to be not bona fide or restricted for a particular year.

19. In view of the above discussion, we answer the question referred to us in the affirmative and against the <ORG>. The <ORG> will pay the costs of the assessee. Counsel's fee Rs. 500.


PETITIONER: <NAME> Vs. RESPONDENT: STATE OF KARNATAKA & ORS. DATE OF JUDGMENT01/02/1990 BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. SAIKIA, K.N. (J) CITATION: 1990 AIR 958 1990 SCR (1) 229 1990 SCC (2) 488 JT 1990 (1) 134 1990 SCALE (1)117 CITATOR INFO : RF 1991 SC1579 (6) ACT: Constitution of India 1950: Articles 226 and 136--Award of contract by <ORG> to <ORG>--Eligibility of party to apply for State contracts--Supply of tender documents--Essentiality of--Comparative merits of parties-Not for <ORG> to decide. HEADNOTE: The petitioner aggrieved by the award of a contract by the respondent in favour of <ORG> (M.C.C.) filed a Writ Petition and a further Writ Appeal in the Karnataka High <ORG>. Being unsuccessful there he came up in appeal before this <ORG> by way of special leave. The single judge of the High <ORG> had taken the view that prerequisites for the supply of tender forms were contained in Para I of the Notification Inviting Tender (NIT) and the details called for in Para V could be supplied any time. <ORG> on appeal did not express any opinion regarding the requirements set out in para V but was of the view that there was nothing unfair or arbitrary about the award of the contract to the <ORG>. In appeal before this <ORG> the plea of the petitioner is that the <ORG> should not have accepted the tender of <ORG>, as the <ORG> did not fulfil certain preliminary requirements contained in Para I and V of the NIT which according to him have to be fulfilled before the forms of tender could be supplied to any intending contractor. Dismissing the appeal of the petitioner, the <ORG>, HELD: Para V cannot but be read with para I. The supply of some of the documents referred to in para V is indispens- able to assess whether the applicant fulfills the prequali- fying requirements set out in para I. It will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para I and disqualify the tenderer. [240E-F] 230 If a party has been consistently and bona fide inter- preting the standards prescribed by it in a particular manner, this <ORG> should not interfere though it may be inclined to read or construe the conditions differently. [241E] Assuming for purposes of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract. On the other hand its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, <ORG> is also found to be qualified to tender for the contract. no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the <ORG> and in the <ORG> going in for a choice of the better on the merits. [242E-G] The comparative merits of the appellant ViS-a-vis <ORG> are, however, a matter for the <ORG> to decide and not for the <ORG>s.[243C-D] JUDGMENT:

<NAME> v. State of U.P., (C.A. 1819/89); <CITATION> .,  (3) SCR 1014, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1027 of 1990.

From the Judgment and Order dated 27.10.1989 of <ORG> in Writ Appeal No. 2017 of 1989. <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and Mrs. <NAME> for the Petitioner. <NAME>, <NAME>, <NAME>, <NAME> and <NAME> for the Respondents.

The Judgment of the Court was delivered by RANGANATHAN, J. The petitioner is aggrieved by the award of a contract by <ORG> (<ORG>), an instrumentality of the State of Karnataka, in favour of <ORG> (<ORG>). His writ petition and a further writ appeal in <ORG> having been unsuccessful, he has preferred this Spe- cial Leave Petition from the judgment of <ORG> in the writ appeal. We have heard counsel for both sides at length. We grant Special leave and proceed to dispose of the appeal. Though, at an earlier stage of the proceedings there were some allegations of favoritism, the plea of the peti- tioner, as urged before us, is that the <ORG> should not at all have entertained the tender of <ORG> as the <ORG> did not fulfill certain preliminary requirements which, under the Notification Inviting Tenders (N.I.T.), had to be ful- filled even before the forms of tender could be supplied to any intending contractor.

The contract pertained to the construction of a Main Station Building of a Power House at the Raichur Thermal Power Plant at an estimated cost of about Rs. 1.8 crores. The N.I.T. dated 27.12.1988 invited tenders from registered contractors of appropriate class. Paragraph I of the notifi- cation listed three "Minimum qualifying requirements" viz., that the intending tenderer:

(1) should have executed civil and architectural works including insulation in a power plant/industrial complex, preferably in power plant;

(2) should have executed atleast 1000 cubic metres per month of concrete pouring and atleast 300 cubic metres per month of brick work at one site; and (3) should have had an annual turnover of atleast 1 crore for each of the preceding three years.

Para V- required the intending tenderers to furnish the following information "along with the application for issue of blank tender books", namely:

(a) Audited Balance Sheet/Certificate from Chartered Ac- countant for preceding three years;

(b) Latest income-tax clearance Certificate;

(c) Copy of the Registration Certificate

(d) Annual output of the works of all the above nature at any site accompanied by a certificate from the organisation for whom the tenderer had carried out the works furnishing details such as rate of pouring of concrete. manufacturing of hollow concrete block, precast concrete block, ..... etc., and period of completion scheduled/envisaged, equipments and their deploy- ment i.e., man months etc. The <ORG> specified January 17, 1989, as the last date for receipt application forms for issue of blank tender books. The issue of blank tender books was to be between 23rd January to 27th January, 1989 and the completed tender books had to be submitted by 3.00 p.m. on 6.2.89. It is common ground, however, that subsequently this time frame was altered. The last date for receipt of application form for issue of blank tender books remained as 17th January, 1989 but the other items were altered to read as follows:

"1. Last date for receipt of 10.2.89 clarification:

2. Period to issue blank tender 10.2.89 to books 16.2.89

3. Last date and time for receipt 27.2.89 completed tender books: upto 3.00 P.M. It appears that six parties applied for tender books.

These were scrutinized with reference to the pre-qualifying requirements and data on experience, work done etc. as furnished by each of the applicants. Four of the firms were found to be pre-qualified by the Chief Engineer and tender books were issued to them. Only three of them, however, submitted completed tender books by February 27, 1989. These tenders were examined by the Chief Engineer as well as an independent firm of Engineering Consultants, namely, <ORG> (<ORG>). Both the Chief Engineer as well as <ORG> recommended acceptance of the tender of <ORG> (which was the lowest tender) in view of the fact that <ORG> had adequate experience in the construction of <ORG> works and they were capable of mobilising the work- force required for the work. It may be mentioned that after making necessary adjustments it was found that the tender of <ORG> was Rs. 15 lakhs less than the tender of the peti- tioner.

The principal argument advanced on behalf of the peti- tioner is that paragraphs I and V of the <ORG> specified certain pre-qualifying requirements. Unless these require- ments were fulfilled, the contractor was not even entitled to be supplied with a set of tender documents. It is submit- ted that <ORG> did not comply with these requirements and hence its application for tender forms should have been rejected at the outset.

The learned single Judge in <ORG> went into the matter in great detail and came to the conclusion that the petitioner's contentions were not well founded. He took the view that the pre-requisites for supply of tender forms were only the three conditions set out in para I of the N.I.T. and that the details called for in para V could be supplied at any time. He, therefore, rejected the petitioner's con- tention that the extensions of time given to <ORG> to submit the tender with requisite clarifications were not warranted. <ORG>, on appeal, did not express any clear opinion as to the nature of the requirements set out in Para V but was satisfied, on an overall view, that there was nothing unfair or arbitrary about the award of the contract tO the <ORG> It observed:

"We have carefully considered these contentions. We are of the view that while exercising jurisdiction under Article 226 of the Constitution, it is not for us to reap- praise the facts on merits and come to one conclusion or other with regard to these aspects of the matter. Why we are obliged to say this is if the <ORG> is satisfied there is nothing arbitrary or unfair in the award of the contract, it cannot convert itself into a super technical Committee and find out whether the requirements have been fulfilled or not. While saying so, we are conscious of the fact that what is argued before the learned single Judge is with reference to prequalifications or in other words the eligibility. Nevertheless where the person who is incharge of award of contract was satisfied about the eligibility and that too after consultancy through an independent agency like <ORG>'s, we cannot come to a contrary conclusion and then say a particular certificate does not in terms meet the require- ment laid down under clause V(d). That we consider is no function of the <ORG>. After all the object of tender in most matters like this is to satisfy the authority that the person who undertakes to execute the work or the person who offers the tender would be really worth and then he would perform to the best of his ability and to the requirement of the person who wants to have the contract. If these basic principles are kept in mind, we do not think we can intro- duce nuances of law to enter into the realm of contract which we consider should be kept out of the purview of writ jurisdiction. From this point of view, we are unable to find out any justification to interfere with the order of the learned single Judge."

The first question that falls to be considered is as to whether there is any difference between the requirements in paras I and V and whether only para I and not para V--sets out the pre-conditions of eligibility to submit a tender for the contract. In our opinion, it is difficult to accept the view of the learned single Judge of <ORG> that it is only para I that stipulates the pre-conditions and that all the documents referred to in the other paras can be supplied at any time before the final award of the contract. It is seen that paras I to XIII set out various terms and conditions some of which relate to the pre-tender stage and some to later stage. For instance, paras X and XI come into operation only after the tenders are received and para XII makes it clear that the K.P.C.'s decision regarding the fulfilment of para IV may remain open right till the actual award of the contract. However, on the contrary, the condi- tion set out in para VI has clearly to be fulfilled even before asking for tender forms. Para V seems to stand some- where in between. If one reads paras I and V together, it will be seen that a common thread runs through them and that they are really meant to supplement each other. It is in order to satisfy itself that the requirements of para I(1) and (2) are fulfilled that the K.P.C. calls for the certifi- cates mentioned in para V and the fulfilment of the require- ment in para I(3) has obviously to be verified by reference to the audited balance sheets called for under clause (a) of para V. The reference in clause (d) of para V to the "annual output of the works of the above nature" is also obviously a reference to the works of the nature described in para I. It is clear that at least some, if not all, of the documents referred to in para V, are intended to verify the fulfilment of the three prequalifying requirements of para I. The stipulation of the time element within which the information asked for in para V should be supplied is also of some significance; it specifically requires the information to be supplied along with the application for tender forms. As pointed out by this Court in its judgment dated 3.3.1989 in <NAME> v. State of U.P., C.A. 1819/89, an intending tenderer can be perhaps letigimately excluded from consideration for a contract, if the certificates such as the ones under clauses (b) and (c) of para V are not fur- nished. It may not, therefore, be correct to read para I in isolation and treat it as the only condition precedent for the supply of forms of tender. The more harmonious and practical way of construing the N.I.T. is by saying that, before the tender books can be supplied, an intending ten- derer should satisfy the K.P.C, by supplying such of the documents called for in para V as are material in assessing the fulfilment of the condition in para I, that he fulfills the three conditions set out in para I. It seems clear to us that, apart from para I, there are some other requirements in the N.I.T. which have to be complied with before the applicant can be eligible for supply of tender forms. These include, if not all, at least such of those documents referred to in para V(d) as have a direct bearing on the three conditions outlined in para I.

Bearing this approach in mind, let us examine to what extent, according to the appellants, the <ORG> failed to fulfil the N.I.T. requirements:

So far as para I is concerned, two defects were pointed out. The first was that, as against the requirement that the applicant "should have executed ..... works including insulation", the certificate of 25.1.1989 produced by the <ORG> was only to the effect that it "is constructing" a building in Hyderabad for <ORG> "in which they have done wall insulation and roof insulation for airconditioning work". The second was that, as against the second requirement of para I that the appli- cant should have executed "at least 300 cubic metres per month of brick work at one site, the certificate from <ORG> produced by the <ORG> on 1.2.89 only stated that it had "constructed over 300 cubic meter of brick masonry for the packing plant and D.G. building totaling to 327.29 cubic metre during the month of June 1985". These certificates, it is submitted, do not come up to the re- quirements of Para I. We think that this criticism, based on the differences in wording as between the language of para I and the certificates produced by the <ORG>, is too weak to be accepted. It was for the <ORG> to consider the suffi- ciency of these certificates. The conditions only required that the applicant should supply information to show that he had experienced in insulation work and that he could carry out brick work in a month to the extent indicated. It was for the <ORG> to assess the value of the certificates furnished in this regard and if the <ORG> considered them sufficient to warrant the issue of a tender form to the applicant, we do not think we should interfere with their decision.

So far as para V is concerned, the criticism is that two items of information concerning the requirements of clause

(d) of Para V were not supplied along with the request for application of tender forms.but were supplied much later. It was only on 21.6.89 that <ORG> furnished a certificate that they had executed "hollow cement blocks work" for <ORG> but even that certificate gave no details. It vaguely stated that "the item had been executed as per our bill of quantities". Again, it was only on 18.8.89 that <ORG> produced a certificate from <ORG> regarding the work of concreting done by it. It is pointed out incidentally that this is also a part of the specific requirements in para I and, as such, the <ORG> cannot be said to have satisfied the preliminary conditions Tendering it eligible to tender for the contract. The second of these does not really cause much difficulty. For, even as early as 11.1.89 along with its application for tender dated 3.1.89 <ORG> had produced a certificate from the <ORG> itself that it had done 35,000 cubic metres of concreting during 7 months and this was apparently considered sufficient for the <ORG> subsequently called for a certificate only regarding brick work. This leaves only the first of the criticisms that the details regarding hollow cement block works done by the <ORG> was furnished only on 21.5.89.

Should the <ORG> have been denied altogether the right to Tender for the contract consequent on the delay in sub- mitting this document is the second question that arises for consideration. <NAME>, for the appellant would have us answer this question in the affirmative on the principle enunciated by <NAME>, J. and approved by this Court in <NAME> v. <ORG>., [1979] 3 S.C.R. 1014. <NAME>, J. (as his Lordship then was) formulated in the following words a principle which has since been applied by this Court in a number of cases:

"It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice <NAME> in <NAME> v. <NAME>, 359 U.S. 535:3 Law. Ed. (Second series) 1012, where the learned Judge said:

An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the require- ments that bind such agency, that procedure must be scrupu- lously observed. This judicially evolved rule of administra- tive law is now add, rightly so. He that takes the procedur- al sword shall perish with the sword."

"This Court accepted the rule as valid and applicable in India in <NAME> v. Punjab, [1975] 3 SCR 82 and in subsequent decision given in <CITATION> ,  3 SCR 619. <NAME>, J., quoted the above-referred observations of Mr. Justice <NAME> with approval. It may be noted that this rule, though supportable also as emanation from Article 14 , does not rest merely on mat article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. If we turn to the judgment of Mr. Justice <NAME> and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution, but evolved it purely as a rule of administrative law. Even in England, the recent trend in administrative law is in that direction as is evident from what is stated at pages 540-41 in Prof. <NAME>'s Administra- tive Law 4th edition. There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law.

XXX XXX XXX It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the stand- ard or norm laid down in paragraph I of the notice inviting tenders which required that only a person running a regis- tered. Find II Class hotel or restaurant and having at least 5 years' experience as such should be eligible to tender. It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was dis- criminatory having no just or reasonable relation to the object of inviting tenders namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a find class restaurant at the airport. Admit- tedly the standard or norm was reasonable and non-discrimi- natory and once such a standard or norm for running a Find Class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satis- fied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbi- trarily accept the tender of the 4th respondents. When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years' expe-

rience of running a II Class restaurant or hotel, denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years' experience of running a II Class restaurant, but who were otherwise compe- tent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the con- tract, but they were precluded from doing so by the condi- tion of eligibility requiring five years' experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the pre- scribed condition of eligibility, was clearly discriminato- ry, since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action."

<NAME>, who supplemented the arguments for the petitioner, contended that this rule has been demonstra- bly infringed in the present case, even on the <ORG>'s own showing. He cited two documents filed by the <ORG> to substantiate this contention. The first is "A note on the tendering system in <ORG>" which, inter alia, reads: "2.00 Brief tender notification containing description of the work, estimated cost of the work, period of completion and the minimum prequalifying/eligibility conditions required and other general requirements such as the value/ fashion of C.M.D. to be furnished, latest certificates works, and furnishing of audited balance sheet etc., duly indicating the dates for issuing and receipt of tenders is widely circulated and also advertised in leading newspapers for the information of the intending tenderers. Where prequalifying conditions are notified in the notification, the applications for the issue of tenders is carefully scrutinised with reference to these requirements and the tenders will be issued to those who comply with all the prequalifying/ eligibility requirements. Apart from the prequalifying conditions contained in the brief tender notification, certain general requirements as described above will also be looked into. any deficiency in the gener- al requirements will, however, not disqualify the tenderers from receiving the tender books as these conditions could be satisfied prior to acceptance of the successful tender. Any clarifica- tions required on the prequalifying requirements/general requirements will also be obtained before issue of tender documents from the intending tenderers. The tenders will be issued to those tenderers who comply with the prequalifying conditions.

The second is the record of minutes showing what they actu- ally did:

"57.01 There was extended discussion on the issue. <ORG> also informed that one of the tenderers had sent a represen- tation objecting to the consideration of the tender of <ORG> on the ground that they had not fulfilled the prequalifying requirements. There was a discussion as to whether the stipulations mentioned in the <ORG> other than those stipulated under prequalifying conditions have to be mandatorily fulfilled before the tenders were filed. It was clarified that only three prequalifying conditions were prescribed in the <ORG> and other details called for vide para 5(c) of <ORG>, were only for information and are such they could be met before consideration of the tenders. It was clarified that while tenders which did not meet minimum prequalifying conditions were not eligible to be considered at all, any shortcoming in furnishing the details at the time of tendering would not disqualify the tenderer from bidding for the work, so long as the conditions could be met before finalisation of the award. It was further clarified that the word 'shall' used in the <ORG> has been the normal practice in all tenders and agreement clauses and the deci- sion of the <ORG> and the application other than the mini- mum qualifying requirement should be prerogative of <ORG> only. It was informed that the practice in <ORG> so far has been to go by the minimum qualifying requirements as stated in the <ORG> and the rest of the information were only for assessing the capabilities of the tenderers as well as their eligibility and simply because Mr. <NAME> has made a complaint it would not be proper to deviate from this estab- lished procedure. As per clause-11, the <ORG> reserves the fight to reject or accept the tender without assigning any reasons. In this particular case, the lacuna in furnish- ing the information has been set right subsequently by the tenderer before opening of the price documents, the Chief Engineer had come to the conclusion that the firm had fulfilled all the prequalifying requirements and as such the tender of <ORG> had been found to be in order. It was also clarified by GM(T) that the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used as this item of work was essentially for a filler wall and the walls would be non-load bearing. It was clarified that those who were prequalified had satisfied the condition with regard to quantity of brick masonry work.

57.02 Under the circumstances, the Committee recommended entrustment of work to <ORG> at their quoted rates amounting to Rs.209.39 lakhs together with their stipulation regarding release of security deposit against furnishing bank guarantee.

57.03 However, it was decided that in future it should be made clear that only prequalifying conditions would be mandatory."

These two documents, particularly the last sentence of the second one, clearly show, <NAME> urged, that the <ORG> had relaxed its N.I.T. standards in favour of the <ORG>

Interesting as this argument is, we do not see much force in it. In the first place, although, as we have ex- plained above, para V cannot but be read with para I and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfills the prequalifying requirements set out in para I, it will be too extreme to hold that the omission to supply every small detail referred in para V would affect the eligibility under para I and disqualify the tenderer. The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the prequalifying conditions is a matter which it is for the <ORG> to assess. We have seen that the documents having a direct learning on para I viz. regarding output of concrete and brick work had been supplied in time. The delay was only in supplying the details regarding "hollow cement blocks" and to what extent this lacuna effected the conditions in para I was for the <ORG> to assess. The minutes relied upon show that, after getting a clarification from the General Manager (Technical), the conclusion was reached that "the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used". In other words, the contract was unlikely to need any work in hollow cement blocks and so the documents in question was consid- ered to be of no importance in judging the pre-qualifying requirements. There is nothing wrong with this, particularly as this document was eventually supplied. Secondly, whatever may be the interpretation that a court may place on the N.I.T, the way in which the tender documents issued by it has been understood and implemented by the <ORG> is explained in its "note", which sets out the general procedure which the <ORG> was following in regard to N.I.T.s issued by it from time to time. Para 2.00 of the "note" makes it clear that the <ORG> took the view that para I alone incorporated the "minimum prequalifying/eligi- bility conditions" and the data called for under para V was in the nature "general requirements". It further clarifies that while tenders will be issued only to those who comply with the prequalifying conditions, any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and that data regarding these requirements could be supplied later. Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along. The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but, on the contrary, decided to adhere to it even in regard to this contract. They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the prequali- fying conditions, that they would make it specific and clear in their future N.I.T.s that only the fulfilment of prequal- ifying conditions would be mandatory. If a party has been consistently and bona fide interpreting the standards pre- scribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently. We are, therefore, of opinion that <ORG> was right in declining to inter- fere.

Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punc- tiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of paras III, V or VI of the N.I.T., it is open to the <ORG> to decline to consider the party for the contract and if a party comes to <ORG> saying that the <ORG> should be stopped from doing so, the <ORG> will decline relief. The second consequence, indicated.by this <ORG> in earlier decisions, is not that the <ORG> cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the <ORG> made some changes in the time frame origi-

nally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed. But neither of these situations is present here. Sri <NAME> says that in this case one of the appli- cants was excluded at the preliminary stage. But it is not known on what grounds that application was rejected nor has that party come to <ORG> with any such grievance. The ques- tion, then, is whether the course adopted by the <ORG> has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxations of the time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less. But, we are inclined to agree with the respondent's contention that while the rule in <NAME>'s case (supra) will be readily applied by <ORG>s to a case where a person complains that a departure from the qualifi- cations has kept him out of the race, injustice is less apparent where the attempt of the applicant before <ORG> is only to gain immunity from competition. Assuming for pur- poses of argument that there has been a slight deviation from the terms of the <ORG>, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant docu- ments, <ORG> is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the <ORG> and in the <ORG> going in for a choice of the better on the merits. The appellant had no doubt also urged that the <ORG> had no experience in this line of work and that the appellant was much better quali- fied for the contract. The comparative merits of the appel- lant vis-a-vis <ORG> are, however, a matter for the <ORG> (counselled by the T.C.E.) to decide and not for the <ORG>s. We were, therefore, rightly not called upon to go into this question.

For the reasons discussed above, this appeal fails and is dismissed. But we make no order as to costs.

R.N.J. Appeal dis- missed.


PETITIONER: MR. A.P. SAREEN & ORS. Vs. RESPONDENT: STATE OF U.P. & ORS. DATE OF JUDGMENT: 13/01/1997 BENCH: K. RAMASWAMY, G.T. NANAVATI ACT: HEADNOTE: JUDGMENT:

<ORG> learned counsel on both sides.

Leave granted.

This appeal arises from the judgment of <ORG> of Allahabad High Court, made on December 9, 1996 in CMWP No. 23997 of 1996. The notification under Section 4(1) of the Land Acquisition Act, 1894 (for short, the 'Act') was published on July 27, 1995 and the <ORG> had in exercise of the power under Section 17(1) of the Act dispensed with inquiry under Section 5-A of the Act. <NAME>, learned counsel for the appellant, contended that since declaration was not published immediately, the exercise of power under Section 17 (1) dispensing with the inquiry under Section 5-A , is bad in law as it indicates that there was no real urgency. The view of <ORG> that possession of land is deemed to have been taken under Section 17(4) is not correct on the facts of this case. The ratio of the judgment of this Court in <ORG> us. <NAME>, <ORG>. [] has no application to the facts of this case though we are in agreement with the learned counsel in this behalf, we do not find substance in the other contentions. As regards the delay in issuing the said declaration we find that the authorities appear to have mis- construed the steps to be taken under the Act. It is well- settled legal position that urgency can be said to exist when land proposed to be acquired is needed for planned development of the city/town etc. In <NAME> & Ors. etc. v. <ORG> [JT 1996 (10) 311], this Court considered the scope of exercise of the power by the <ORG> under Section 17(1) of the Act and the procedure to be followed in that behalf. When the <ORG> forms an opinion that the lands are urgently needed for a public purpose, notification under Section 4(1) could be issued and published in the <ORG> while dispensing with inquiry under Section 5-A , Giving a gap of one day, the declaration under Section 6(1) of the Act could be published in the <ORG>. Notice under Section (1) should be given and on the expiry of 15 days thereafter, possession could be taken. The land stands vested in the State under Section 17 (2) read with Section 16 free from all encumbrances. Since inquiry under Section 5-A has been dispensed with, as provided under the Act, 80% of the compensation was required to be given to the claimants. In this case, instead of adopting the said procedure, after publication of the notification under Section 4(1) , they published the notification in the local newspapers in English as well as Hindi and also substance thereof in the locality and thereafter personal notices appear to have been issued to the owners of the lands. After completion of this process, proceedings were put up before the <ORG> for publication of the declaration under Section 6 which came to be made on April 18, 1996. The appellant filed the writ petition on July 19, 1996 and consequently possession could not be taken. After the writ petition was disposed of, possession was taken on December 10, 1996. In this backdrop, the need of urgent possession was dissipated by beaurocrtic inadvertence and the urgency did not cease. Urgency continues as long as the scheme is not initiated, action taken and process completed, It is true that the petitioners would have raised, at an enquiry under Section 5-A , objection for the acquisition. One of the objections raised in the writ petition was that some of the khasra numbers notified under Section 4 (1) had been deleted from the acquisition proceedings due to interference by some persons and that showed that there was no bona fide in the acquisition proceedings. In that behalf, in the counter-affidavit filed in <ORG>, it was stated that the notification was withdrawn in respect thereof since those lands were required to be taken possession of under the Land Ceiling Act and, therefore, there was no need to acquire those lands. Accordingly, the khasra numbers were deleted by a separate notification.

Another objection raised was that the lands were sought to be given to the private company and, therefore, the procedure prescribed in Chapter VII was required to be adopted. The acquisition notification under Section 4(1) without compliance of the provisions under Chapter VII is bad in law. In the counter-affidavit filed in <ORG>, it was stated that the acquisition was only for the public purpose, viz., for the planned development as per the plans prepared and submitted to the <ORG> by <ORG> and, therefore, the objection raised was not tenable. In view of this stand taken by the <ORG>, the direction to conduct an enquiry under Section 5A of the Act is of no material consequence of the facts of this case. Under those circumstances, we think that there is no justification to quash the declaration under Section 6 and to give direction to conduct an inquiry under Section 5A .

Instead, it is contended by <NAME> that the standing crops and the structures are required to be removed and that the appellants are prepared to cut and carry away the standing crops after they are harvested. <NAME> states that at least one month's time would be required. <NAME> undertakes to give the Khasra numbers and the extent of the land in which there are standing crops. The affidavit be filed within two days. To that extent, the respondents are directed not to destroy the standing crops. The appellants are directed to cut and harvest the standing crop and thereafter the respondents are at liberty to carry on the building operations. For removal of the standing structures, the learned counsel states that four week's time is enough. Accordingly, the appellants are directed to remove the structures within four weeks from today. With regard to the standing crops, the Land Acquisition Officer is directed to depute one of his officers to assess the time required for harvesting the crop and on the basis of the report submitted to the Land Acquisition Officer, he is directed to give them time to cut and harvest the crop and thereafter, the respondents are at liberty to proceed with the carrying out of the planned development activities. Therefore, we do not find any justification warranting interference.

The appeal is accordingly disposed of, No costs.


JUDGMENT

1. This appeal by the plaintiff is against the confirming decree in a suit for permanent injunction restraining the defendant from interfering, with the plaintiff's possession of a truck.

2. Shortly stated, the plaintiff's case is that on 26-9-1973 he purchased the truck bearing, No. A.P.S. 2707 corresponding to the registration No. O.R.K. 3031 of the erstwhile district of Koraput in Orissa for a sum of Rs. 71,267.56 from <ORG>, Kaki-nada in the State of Andnra Pradesh. As he had no sufficient fund, he approached the defendant who is a Financier and Professional Money Lender to advance him loan for the purchase of the said truck and the defendant advance a sum of Rs. 60,000/- charging Rs. 15,400/- towards interest. The entire amount of Rs. 75,400/- was agreed to be liquidated in thirty monthly instalment of Rs. 2,600/-, the first instalment commencing from 26-11-1973. The defendant took the signature of the plaintiff in some blank docu-ments and retained them with him. As per the agreement, although the plaintiff paid all the instalments, he received a notice from the defendant on 1-10-1976 calling, upon him to pay a sum of Rs. 12,483/- towards extra him charges and on 20-11-1979 one <NAME> an employee of the- came to Jeypore and threatened to seize the truck. Such action on the part of the defendant led the plaintiff to file the suit for the relief aforestated.

3. The defendant denied the ownership of the plaintiff over the truck in question and also the transaction concerning money to be a loan. According to him, he paid Rs. 70,794.34 paise to <ORG> on 26-5-1973 for purchase of the truck in question and. the truck was given on hire to the plaintiff under the hire purchase agreement on 26-9-)973. The plaintiff possessed the truck as hirer of the defendant as per terms of the hire purchase agreement and not as owner thereof and agreed to pay Rs. 2,600/- per month as hire charges commnecing from 26-11-1973. It was further agreed that if the plaintiff would fulfil the conditions as laid down in the hire-purchase agreement, he could exercise the option to become the owner of the said vehicle. The plaintiff also undertook to pay Re. 1/- per Rs. l,000/- per day as extra charge for the delay in payment of monthly instalments and also costs or other charges for recovery of the hire charges. As there was delay in payment of the monthly instalments, the defendant sent a letter to the plaintiff demanding payment of Rs. 12,483/- and in reply the plaintiff having (sic) his liability to pay the said amount, the defendant was entitled to seize the truck as per the hire-purchase agreement. It was also planned that the <ORG> at Jaypore had no jurisdiction to entertain the suit as per clause (29) of the hire-purchase agreement and that the suit was not property valued.

4. The plaintiff examined two witnesses including himself to prove his case, besides relying on some documents marked Exts. 1 to 21. On the other hand, the defendant examined his manager to prove his case, besides relying on some documents marked Exts. A and B series. On a consideration of the evidence, the trial court held that the truck in question had been purchased on hire-purchase agreement and while the defendant was the owner, the plaintiff was the hirer. It was also found by it that the claim of the defendant was true and not barred by limita-tion but it was held that the suit was not property valued. Accprdingly, the suit was dismissed. In appeal, the learned <ORG> District Judge reversed the finding of <ORG> in the matter of valuation of the suit and come to hold that the relief of injunction has been correctly valued for the purpose of court-fees and jurisdiction. He concurred with the finding of the trial court that the defendant was the owner of the truck and the plaitniff was a hirer from him. Notwithstanding all these findings, he dismissed the appeal because according to him, the courts at Jayapore had no territorial jurisdiction, the parties having agreed in the hire-purchases agreement to vest exclusive jurisdiction in the courts at Rajamundry and the defendant had every right to seize the truck as per the terms of the hire-purchase agreement, the plaintiff having failed to clear up his case as per Ext. 3/a (a mistake for Ext. A/3). Being aggrieved by such judgment and decree, the present appeal has been filed.

5. Mr. <NAME>, the learned counsel for the appellant does not dispute the correctness of the finding of the courts below that the defendant was the owner of the truck and the plaintiff was the hirer and also the finding of the appellate court that the trial court had pecuniary jurisdiction to try the suit, the suit having been correctly valued. He has, however, contended that the learned Addl. District Judge went wrong in his finding that the courts at Jaypore had no territorial jurisdiction inasmuch as both the parties indirectly agreed in the hire-purchase agreement to oust the jurisdiction of the courts at Jaypore by vesting exclusive jurisdiction with the court at Rajamundry. According to the learned counsel, the parties by consent cannot oust the jurisdiction of a court which has territorial jurisdiction to decide the dispute in terms of Section 20 of the Civil Procedure Code, 1908 (in short 'the C.P.C.'). His second contention is that the plaintiff having cleared the entire case under the hire-purchase agreement by paying all the instalments though irregularly, the defendant had no right To take possession of the truck by seizing it in view of the bar laid down in Section 20 of the Hire-purchase Act, 1972 (in short, 'the Act'). Both the contentions require careful examination.

6. Coming to the question of territorial jurisdiction, it is necessary to refer to Section 20 , C.P.C. which says that subject to the limitations aforesaid (i.e. the limitation contained in Sections 15 to 19 ), every suit shall be instituted in a court within the local limits of whose jurisdiction the defendants where are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or earring on business, or personally works for gain; or the cause of action, wholly or in part, arises. In the present case we are not concerned with the provisions contained in Sections 15 to 19 , C. P. C. It appears that the plaitniff has instituted the suit at Jaypore because an agent of the defendant came there for the purpose of taking possession of the truck by Seizing it. This means that because the course of action arose at Jaypore the plaintiff instituted the suit there. The learned Addl. District Judge has come to hold that the suit could not be instituted in any court at Jaypore because according to clause (29) of the Hire-purchase Agreement, Ext. A, both the parties has agreed that in the event of any dispute arising out of the said agreement, the courts at Rajamundry would have jurisdiction, such agreements between the parties according to him, clearly oust the jurisdiction of any court at Jaypore. The question for consideration is whether by consent of parties jurisdiction can be vested in a court having absolutely no jurisdiction in terms of Section 20 , C.P.C. and by vesting such jurisdiction whether the courts having jurisdiction would be debarred from exercising such jurisdiction. In the case of <CITATION> ., AIR 1971 SC 740 it was held by <ORG> :--

"..... It is not open to the parties by agreement to confer by their agreement jurisdiction on a <ORG> which it does not possess under the Code ....."

Relying on this decision it has been held by this <ORG> in <CITATION> ; AIR 1984 Orissa 182 that it is well settled that it is not open to the parties by agreement to confer jurisdiction on a <ORG> which it does not possess under the Code. <CITATION> , AIR 1975 Guj 72, M. P. Thakkar, J. as he then was observed in para 3 :--

"While parties can lawfully enter into an agreement to restrict a dispute to a particular <ORG> having jurisdiction, that stipulation though valid cannot take, away the jurisdiction of the <ORG> which admittedly had jurisdiction. The ouster clause can operate as estoppel against the parties to the contract. It cannot tie the hands of the <ORG>s and denude it of the power to do justice. It is no doubt true that ordinarily <ORG>s would respect the agreement between the parties which is born out of the meeting of their minds and out of considerations of convenience. But the courts are not obliged to do so in every case....."

The principle that can be hulled from the aforesaid decisions is that the agreement between the parties does not oust the jurisdiction of the <ORG>. It may operate as an estoppel against the parties but it cannot deprive the <ORG> of its power to do justice. The <ORG> would ordinarily have regard to the choice of the parties but where, however, the <ORG> whose jurisdiction has been ousted is satisfied that the stipulation would operate harshly, is oppressive in character, inequitable or unfair, for the ends of justice, it can relieve the party of the bargain. The ouster clause can be ignored. In this case, the plaintiff having filed the suit merely for a permanent injunction restraining the defendant from interfering with his possession of the truck in question, it would have definitely caused harship to him, if he was to run to another State for such relief. In that view of the matter, the finding of the learned <ORG> District Judge that the courts at Jaypore had no jurisdiction to try the suit is bound to be set aside and accordingly, the same is set aside.

7. So far as the second contention is concerned, it is necessary to refer to Sections 18 , 19 and 20 of the Act. Section 18 deals with the rights of a owner to terminate hire-purchase agreement for default in payment of hire or unauthorised act or breach of express condi-tions. Sub-section (1) thereof says that where a hirer makes more than one default in the payment of hire as provided in the hire-purchase agreement then, subject to the provisions of Section 21 , the owner shall be entitled to terminate the agreement by giving notice to the hirer within the time prescribed therein. Section 19 deals with the rights of a owner on termination and clause (c) thereof prescribes that subject to the provisions of Sections 17 and 20 and subject to any contract to the contrary, the owner shall be entitled to enter the premises of the hirer and seize the goods. Section 20 lays down the restriction on owner's right to recover possession of goods otherwise than through court and Sub-section (1) thereof provides, inter alia, that where goods have been let under a, hire-purchase agreement and the statutory proportion of the hire-purchase price has been paid whether in pursuance of the judgment of a court of otherwise, or tendered by or on behalf of the hirer or any surety, the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than in accordance with Sub-section (3) or by suit. Where the hire-purchase agreement is in respect of a motor vehicle, as in the present case, "statutory proportion" of the hire-purchase price means three-fourths or such higher proportion not exceeding nine-tenths as <ORG> may by notification in the Official Gazette, specify, where the hire-purchase price is not less than fifteen thousand rupees. A reading of all these provisions means that if there has been a hire-purchase agreement in respect of a vehicle, owner can terminate such agreement in the event of the hirer making more than one default in payment of hire as provided in the hire-purchase agreement subject of course to notice and thereupon can enter into the premises of the hirer and seize the goods but such action is subject to the provisions not only of Section 19 but also of Section 20 .

If the hirer has already paid three-fourths or such higher proportion not exceeding nine-tenths as the Central Govt. may, by notification in the official Gazette specify where the hire-purchase price is not less than fifteen thousand rupees, the owner cannot enforce any right to recover the goods from the hirer otherwise than in accordance with sub-Section (3) or by suit. In this case, there is no Controversy that all the instalments as provided in the hire-purchase agreement, Ext. A have already been paid by the hirer i.e. the plaintiff and although some of those instalments were not paid in time, the defendant did not take any step to terminate the hire-purchase agreement but on the other hand, went of accepting the instalments till the last. So the questions arise whether the owner is entitled to enter into the premises of the hirer and seize the goods in possession of the hirer without terminating the hire-purchase agreement and whether he has the right to seize the goods in possession of the hirer where all the instalments as provided in the hire-purchases agreement have been paid though irregularly. So far as the first question is concerned, the answer has to be in the negative because the question of the owner entering into the premises of the hirer to seize the goods as provided in Clause (c) of Section 19 is subject to termination of the hire-purchase agreement which admittedly has not been done. So'far as the second question is concerned, the answer must also be in the negative because there is nothing in Section 20 to indicate that the provisions contained therein will not apply if the instalments as provided in the hire-purchase agreement have been irregularly paid by the hirer and accepted by the owner without any demur. Under these circumstances, I hold that the owner had no right to enter into the premises of the hirer i.e. the plaintiff and seize the truck in question. That being so, the finding of the learned <ORG> District Judge that the owner had the right to take possession of the truck by seizing it cannot be sustained in law. Since the defendant, as stated above, had no right to take possession of the truck by seizing it, the appellate court should not have dismissed the appeal.

8. On the discussions as above, the appeal is allowed, the judgment and decree of the learned <ORG> are set aside and that of the trial court restored. In the peculiar circumstances of the case, parties are left to bear their own costs.


JUDGMENT <NAME>, J.

1. This Miscellaneous Appeal filed under Section 11 of the Bihar Public Land Encroachment Act (Act 15 of 1956), is against an order elated the 9th of January, 1976, of the Sub-divisional Magistrate, <NAME>. When it was placed before us under the heading "Under Order 41, Rule 11, Civil Procedure Code", a question arose as to whether the appeal would still lie to this court in view of the Bihar Public Land Encroachment (Amendment) Ordinance, V 1975 (Bihar Ordinance No. 210 of 1975), by which the old Section 11 providing for appeals has been substituted by a new section, thereby taking away the appellate jurisdiction of this <ORG>.

2. According to the old Section 11. an appeal against the final order of the Collector of a district lay to <ORG> if the valuation of the subject-matter was Rs. 10, 000/- or above, and in other cases, to the District Judge. According to the amendment brought in by the Ordinance an appeal has now been provided to the Collector of the district if the order in question is passed by any officer other than the Collector, and to the Commissioner of the Division, if such an order is passed by the Collector of the District. The Ordinance is dated the 4th December, 1975. Its Hindi version was published in the Bihar Gazette on the 5th December. 1975. (Extraordinary), but its English translation was published on the 22nd December, 1975. A question, therefore, arises as to whether in view of the amendment of Section 11 of the Act, taking away the appellate jurisdiction of this court by the amending ordinance, the appellants are entitled to maintain the present appeal in this court. The question was argued at some length and considering the importance of the question raised, we thought it desirable to pass a considered order at this very stage.

3. The argument of Mr. <NAME> appearing for the appellants is that the publication of the Hindi version of the amending Ordinance, which although became a law, would not be enforceable until its English version was published on the 22nd December 1975. On this basis he contended that as the proceeding in question was instituted on the 8th December, 1975, although subsequent to the publication of the Hindi version, but prior to the publication of the English version of the amending ordinance, the right of the appellants must still be governed according to the old Section 11 which must be deemed to be in existence on the date of the institution of the proceeding, and not according to the amend-ed Section 11.

4. In this connection reference was made to Section 6 of the Bihar and Orissa General Clauses Act , 1917, which provides for "Coming into operation of Acts". The relevant portion of the said section may be usefully quoted as under:

"(a) Where any Bihar Act is not ex- pressed to come into operation on a particular day,-- (i) xx xx xx (ii) in the case of a Bihar Act made after the commencement of the Constitution, it shall come into operation on the day on which the assent thereto of a Governor or the President, as the case may require, is first published in <ORG>." The Ordinance in question is not expressed to come into operation on any particular day. The Governor gave his assent to it on the 4th December, 1975. An ordinance promulgated by the Governor under Article 213 of the Constitution has the same force as an Act of a Legislature. Apparently, therefore, applying the provisions of Section 6 (la) (ii) of the aforesaid General Clauses Act , the Ordinance came "into operation on the day on which the assent thereto of the Governor ....." was "first published in <ORG>", and as already said, the Hindi version was admittedly published on 5-12--1975 and the English version on 22-12-1975.

5. In this connection it will be necessary to refer also to some of the provisions of the Constitution of India. According to Article 345 , <ORG> may by law adopt any one or more of the languages in use in the State or Hindi as the language or languages to be used for all or any of the Official purposes of that State, and until then, the English language is to continue to be used for such purposes within the State for which it was being used immediately before the commencement of the Constitution. <ORG> passed an Act, namely, the Bihar Official Language Act, 1950 (Act 39 of 1950) Section 2 of the said Act provides :--

"Subject to the provisions of Articles 346, 347 and 348 of the Constitution of India, the language to be used for the official purposes of the <ORG> shall be Hindi in Devanagri script."

The other relevant Article in this connection is Article 348 , The relevant portion of this Article for the present purposes may be usefully quoted as under:--

"(1) Notwithstanding anything in the foregoing provisions of this Part, until <ORG> by law otherwise provides--

(a) .....

(b) the authoritative texts .....

(i) .....

(ii) of all Acts passed by <ORG> or the Legislature of a State and of all Ordinances promulgated by the President or the Governor of a State, and

(iii) .....

shall be in the English language.

(2) .....

(3) Notwithstanding anything in Sub-clause (b) of Clause (1), where the legislature of a State has prescribed any language other than the English language for use in Billy introduced in, or Acts, passed by, <ORG> or in Ordinances promulgated by the Governor of the State or in any order, rule, regulation or bye-law referred to in paragraph (iii) of that sub-clause a translation of the same in English language published under the authority of the Governor of the State in the Official Gazette of that State shall be deemed to be the authoritative text thereof in the English language under this Article."

6. It is not disputed that <ORG> has prescribed Hindi in Deva-nagari script as the language for use in Bills to be introduced in, or Acts passed by, <ORG>, as also in Ordinances to be promulgated by the Governor of the State of Bihar, besides other matters, as provided in the first part of Clause (3) of the aforesaid Article. Mr. <NAME> laid stress on the fact that although it was permissible for <ORG> to adopt any regional language (s) or Hindi as the language or languages to be used for all or any of the Official purposes of the State, it was the <ORG> alone which could provide by law that Hindi would be the language in which Acts could be passed by the Legislature of a State and all Ordinances could be promulgated by the Governor of a State. Counsel, therefore, contended that inasmuch as the <ORG> has not made any such provision by force of Article 348 (1 ), the English language could be the only language in which an Act could be passed by <ORG> or an Ordinance could be promulgated by the Governor of Bihar. He, therefore, contended that the amendment of Section 11 brought in by the Ordinance would have no application until its English version was published in the <ORG> on 22-12-1975.

7. In my considered opinion, there is no substance in this contention of Mr. <NAME> as the contention is based on an entirely erroneous construction of Article 348 of the Constitution. The provision relied upon by the learned counsel does not support Ms plea. It simply provides that the English version of an Act or Ordinance, etc., is to be treated as the authoritative text in case of any conflict or divergence between the English version and the Hindi version or other languages. Clause (3) of Article 348 has got an overriding effect over Clause (1) and recognises the right of a <ORG> contained under Article 345 to adopt any language other than the English language for use in Bills introduced in, or Acts passed by, the <ORG> of the <ORG> or in Ordinances promulgated by the Governor of the <ORG>. Reading the provision contained in Clause (3) of Article 348 , it cannot be legitimately contended that it is not permissible to a <ORG> Government to prescribe any language other than the English language for use in its official business until the <ORG> made any such law. The Constitution itself has bestowed the discretion in the <ORG> of a <ORG> to adopt by law any one or more of the regional languages in use in the <ORG> concerned or Hindi as the lan-guage(s) to be used for all or any of the official purposes of that <ORG>, and once any <ORG> by-law adopts any such language, that would be the official language or languages, as the case may be, of that <ORG> for all or any of the official purposes of that <ORG>. Section 2 of the Bihar Official Language Act, quoted earlier, has adopted Hindi in Devanagari script as the language to be used for the official purposes of the <ORG> of Bihar without any qualification. The only purport of Clause (3) of Article 348 is to authorise the use of Hindi as the official language of a <ORG> and although notwithstanding a <ORG> law adopting Hindi or regional languages for the official purposes of a <ORG> English can be continued to be used for such purposes until there is an express legislative provision against such use. In my opinion, by no stretch of imagination it can be lawfully contended that the publication of the English translation is a condition precedent for the enforcement of any Act or Ordinance, etc., made in the <ORG> language. The only consequence of the absence of an English translation will be that there will be no authoritative text, but on that account it cannot be held that in the absence of the publication of the authoritative translation, the ordinance itself will not be effective. The English translation provided under Clause (3) of Article 348 is not meant to satisfy the requirement of Clause (1) that such an Ordinance must be in the English language alone. It is, no doubt, true that if the English translation is published, then in case of any conflict between the <ORG> language and the English translation, the latter will prevail, and if the English translation is published, it will be considered as a valid piece of legislation and both the Hindi and the English publication can be looked into. In my judgment what is meant by Clause (1) of Article 348 in making a law by <ORG> is that unless the <ORG> by law otherwise provides, the authoritative texts of all Bills, Acts or Ordinances of a <ORG> <ORG> cannot be in a language other than the English language. The power to declare that the authoritative text of any bill, Act or ordinance of a <ORG> <ORG> shall be in language other than the English language has been vested exclusively in <ORG> but it does not mean that the authority of a <ORG> <ORG> to adopt any language other than the English language can be given only by a law made by the <ORG>. It is therefore clear that the assumption on which the argument is founded is completely misplaced.

8. In the case, of <NAME> v. <NAME>, (AIR 1957 Madh Bha 26) it was observed as follows:

"The mandatory provisions in Clause (b) of Article 348 (1) providing for the use of English language is intended only for the limited purposes of having the authoritative text. It does not forbid laws being passed in languages other than English. It only requires that the authoritative text of the law shall be in English. This also has been relaxed in respect of the State laws by authorising <ORG> by Clause (3) of Article 348 of the Constitution to prescribe any other languages in use in the State for the purposes of Clause (1) (b) of the said Article. By Clause. (3) it is provided that if an English translation of the laws made by the <ORG> or of the rules framed by the <ORG> is published under the authority of the Rajpramukh, it shall also be recognised as an authoritative English text for the purposes of Article 348 (1) (b)".

The above observation was recently quoted with approval by a Bench of this court in the case of <CITATION> , (AIR 1975 Pat 295) in which case the vires of the Bihar Co-operative Societies (Second Amendment) Ordinance, 1975, (Bihar Ordinance No. 35 of 1975) which replaced the Bihar Co-operative Societies (First Amendment) Ordinance, 1974 (Bihar Ordinance No. 173 of 1974) was under challenge. The situation in that case was that the English translation of the impugned Ordinance was not published, and that was one of the grounds of challenge, namely, that the English translation having not been published, there was no authoritative text of the Ordinance, and in the absence of the said publication, the Hindi version must be deemed to be non est. This contention was repelled by this court on consideration of a large number of decisions. It was very clearly held by this court in the said case that all ordinances made in Hindi, where the <ORG> has so authorised, will be a valid piece of legislation even without its English translation. I feel myself in respectful agreement with the above view. As all the relevant decisions on the point have been noticed by this Court in the above decision, I do not feel any necessity to refer to those cases and unnecessarily lengthen this order.

9. From the discussion in the foregoing paragraphs, it is manifest that on 8-12-1975, when the proceeding in question was initiated against the appellants by the Sub-divisional Magistrate, <NAME> the Bihar Public Land Encroachment Act, 1956, had already been amend-ed by the Amending Ordinance aforesaid, thereby prescribing different forum for appeals against the orders passed under Section 6 , of the Act and thus taking away the appellate jurisdiction of this court. It must, therefore, be held that no appeal lies to this court against the impugned order.

10. Before parting with the case. I would like to make it clear that the order of dismissal of this appeal is being passed only on the question of its maintainability without in any way applying our mind to its merits.

11. In the result, this appeal is dismissed.

<NAME>, J.

12. I agree.


PETITIONER: <NAME>, JABALPUR, M.P. Vs. RESPONDENT: <NAME> & ORS. DATE OF JUDGMENT: 07/04/1997 BENCH: K. RAMASWAMY, D.P. WADHWA ACT: HEADNOTE: JUDGMENT:

O R D E R Leave granted.

This appeal by special leave arises from the order of <ORG> passed in Misc. Petition No. 2935 of 1986 on 9th February, 1995 and the order passed in Review petition (MCC No. 461 of 1995) dated 12th July, 1996. On a Scheme sponsored by <ORG>, the appellant-institute had taken up the project. As many as 625 posts were created in different scales. The respondents while working as Binders, Machine Operators & Class IV employees respectively in the regular pay scales of Rs.750-945, filed a writ petition in <ORG> for regularisation of their service, by the impugned order, <ORG> allowed the writ petition, feeling aggrieved,, the appellant-institute has filed this appeal by special leave.

It is not in dispute that the <ORG> is sponsored by <ORG> and, therefore, permanent posts cannot be created. The posts are co-terminus with the scheme. On abolition of the <ORG>, posts also necessarily stand abolished. We are informed that the <ORG> may continue to be in force; but it depends upon the <ORG> being sponsored and the posts made available by the <ORG>. Therefor, the direction to regularise the services is violative of their right to posts. The order of <ORG> to that extent is modified. On whatever posts the respondents are working and discharging their duty, the scale of pay the said post is directed to be paid.

The appeal is accordingly disposed of. No costs.


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

1. This is an execution appeal. It appears that a decree was obtained by minors on the 22nd of May, 1901. There were several applications for execution leading up to one on the 6th of February, 1912, which was dismissed on the 3rd of December, 1912. The present application for execution was made on the 27th of May, 1913. It thus appears that the last application for execution was more than 12 years from the date of the decree. The judgement-debtors resisted execution relying - on Section 48 of the Code of Civil Procedure. This section provides that "where an application to execute a decree, not being a decree granting an injunction has been made, no order for the execution, of the same decree shall be made upon any fresh application presented after the expiration of 12 years" from the various dates specified in the section. It is admitted that had the decree-holders been parsons of full age the present application would be clearly barred. It is, however, contended that being minors they are still entitled to execute the decree. The first court-allowed the objection of the judgement-debtors. The lower appellate court reversed the order of the court of first instance. The learned Judge of this Court reversed the order of the lower appellate court and restored the order of the court of first instance.

2. Section 6 of the Indian Limitation Act, No. IX of 1908, provides as follows : "Where a person entitled to institute a suit, or make an application for the execution of a decree, is at the time from which the period of limitation is to be reckoned, a minor or insane or an idiot, he may institute the suit or make the application within the same period after the disability has ceased, as would otherwise have been allowed from the time prescribed therefor in the third column of the first schedule." It is admitted that the provisions of this section do not help the present decree-holders. It might have given them a right to execute their decree notwithstanding the expiration of the three years limit laid down in Article 182 of the schedule I, but it does not give them any exemption from the provisions of Section 48 of the Code of Civil Procedure. In the case of <NAME> v. <NAME> (1891) I.L.R. 16 Bom. 536 <NAME>, <NAME>, held in a case similar to the present that Section 7 of the former Limitation Act (which corresponds to Section 6 of the present Limitation Act ), only applied to cases dealt with by the statute itself.

3. He, however, goes on to say : "The question referred to us must be decided by the general principles of law as to the disability of minors, to which the provisions of the Code of Civil Procedure must, in the absence of anything to the contrary, be deemed to be subject. The general principle is that time does not run against a minor; and the circumstance that he has been represented by a guardian does not affect the question." If we were. to accept this statement of the law it would mean that a minor party to a suit through his guardian, whether as plaintiff or as defendant, is not bound to take any of the steps provided by the Code of Civil Procedure within the periods therein limited. For example it would be open to a minor judgement-debtor to reopen by way of appeal a question which had been finally decided years before. Just in the same way if a suit had been decided against a minor he might delay presenting his appeal for many years. The learned Judge of this Court has referred to the Judgment of Sir <NAME> in <NAME> v. Mohan Lal Punj. Rec., 1894 C.J. 489, and also to the decision <CITATION> (1912) I.L.R. 37 Mad. 186. In our opinion the Judgment of the learned Judge of this Court was correct and ought to be affirmed. We dismiss the appeal with costs.