JUDGMENT

1. This appeal is against an order of <ORG> dismissing an application for execution of the decree of <ORG> in Original Suit No. 15 of 1892. The decree is one for partition and was passed on the 3rd August 1897. There were several intermediate applications for execution presented on the plaintiff's behalf during his minority by his next friend. One of them was compromised on the 29th January 1900. The plaintiff's present application ignores the compromise, his case being that it was illegal and not binding on him. The application has been dismissed by the lower <ORG> on the ground that it is barred by limitation under Section 48 of the Code of Civil Procedure, it having been presented more than twelve years after the date of the decree, although within three years after the attainment of majority by the plaintiff. The first question for consideration is whether the plaintiff is entitled to the benefit of Section 7 of the Limitation Act and to reckon the period of limitation for execution of the decree from the date of attainment of majority; and whether apart from that section, there is any general principle of law entitling him to the same benefit on account of his disability arising from minority. Article 182 of the Limitation Act which lays down the general rule of limitation applicable to execution of decrees exempts from its operation cases coming within the purview of Section 48 of the Civil Procedure Code. Section 6 of the Act enacts that "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,... 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"; and as Article 182 of the schedule is inapplicable to the case, Section 6 enacting the rule of exemption during the period of minority must also be held to be inapplicable, The District Judge, Mr. <NAME>, has dealt with the question in a remarkably able and lucid judgment; but the question really does not admit of any serious doubt on the language of the section. It is unnecessary to consider whether the other general provisions of the Limitation Act contained in Sections 4 to 25 would be applicable or not, where the period of Limitation is prescribed by some special Act and not by the general code of limitation. Section 6 is expressly limited to cases where the limitation is provided for in the Limitation Act itself. We therefore agree with the Judge in holding that the plaintiff cannot claim the benefit of Section 6 of the Limitation Act. It is strenuously contended by Mr. <NAME>, the learned vakil for the appellant, that apart from that section minority is a well recognised ground of exemption in law from the operation of the law of limitation. He relies in support of this contention mainly on <NAME> v. <NAME> (1892) I.L.R. 16 Bom. 536 and a passage in Bacon's Abridgment. The Bombay case, it cannot be denied, supports his contention. The question there was the same as in this case. <NAME>, <NAME>, observed : " The question referred to us must be decided by the general principle of law as to the disability of minors, to which the provisions of the Civil Procedure Code 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." No authority has been cited in support of the enunciation of the rule that there is a general principle of law that time does not run against a minor. The passage cited from Bacon's Abridgment is in the following terms:-- "The rights of infants are much favoured in law, and regularly their laches shall not be prejudicial to them, upon a presumption that they understand not their right, and that they are not capable of taking notice of the rules of law, so as to be able to apply them to their advantage. Hence, by the common law, infants were not bound for want of claim and entry within a year and a day, nor are they bound by a fine and five years' non-claim, nor by the statutes of limitation, provided they prosecute their right within the time allowed by the statute after the impediment removed." Tit: Infancy and Age, Section (g), IV volume, seventh edition page 348 <NAME> v. <NAME> (2) is cited as authority for this proposition. After full consideration we have come to the conclusion that the authority relied on in the passage cited does not show that according to the English law, infancy is an answer to a plea of limitation. The question in <NAME> v. <NAME> (1688) 87 E.R., 142 at p. 144 (3 Mod., 221 at p. 223) was whether a certain custom was applicable to minors, namely, a custom that the person to whose use a copyhold estate is surreudered shall come in and be admitted after three proclamations or otherwise his land shall be forfeited. It was held that it was not and that therefore if a surrender be made in fee and the surrenderee die before the next <ORG>, the estate is not forfeited by the infant heir and the surrenderee not coming in after three proclamations. <ORG>, observed "that a feoffment of an infant was no forfeiture at the common law, and that as a particular custom may bind an infant for a time, so it may bar him for ever," and that the question was whether the custom in question as it was found in general words should bind an infant after three proclamations; "All customs," he said, "are to be taken strictly when they go to the destruction of an estate." Strictly, infants were not prevented by the letter of the custom, they were not bound by other customs like this, there was no necessity to construe them to be within the custom. He no doubt observed that, "the right of infants is much favoured in the law, and their laches shall not be prejudicial to them as to entry or claim, upon a presumption that they understand not their right" but he did not say that they were not bound by statutes of limitation. On the other hand he observed: "it is admitted that if an infant do not present to a church within six months, or do not appear within a year, that his right is bound; but this is because the law is more tender of the church, and the life of a man, than of the privileges of infancy. Bo if an office of parkship be given or descends to an infant, it the condition annexed in law to such an office (which is skill) be not observed, the office is forfeited. But that a proclamation in a base court should bind an infant, when he is not within the reason of the custom, is not agreeable either to law or reason" Nor did either of the other concurring Judges <NAME>, J.,and <NAME>, J., make any pronouncement in favour of the exemption of minors from rules of limitation proper. It may be that laches may not be attributable to an infant and that a penalty inflicted for laches may not be enforced on an infant. But laches should not be regarded as the sole or perhaps even the main ground on which rules of limitation are based. Lord St Leonards observed "all statutes of limitation have for their object the prevention of the rearing up of claims at great distances of time when evidences are lost; and in all well regulated countries the quieting of possession is held an important point of policy." In Trustees of Dundee Harbour v. <NAME> 1 Macq H.L. 321 Lord <NAME> described the statutes of limitation as statutes of repose. See also the observations of Lord <NAME> in <NAME> v. <NAME> (1821) 4 Bligh (P.C.) 1 at p. 106 : (4 E.R. 721). Lord <NAME> says that the limitation of actions was by force of diverse Acts of Parliament, although at a very remote time in England there was undoubtedly a stated time for the heir of the tenants to claim after the death of his ancestor and in case of non-claim before the expiration of the time (a year and a day) the claimant was without remedy. Banning in his work on Limitations, page 1, observes: "the limitation of the times for bringing actions is, at the present day entirely dependent on statute." He states that under the common law the presumption arose alter a long time in respect to a legal claim that it had been satisfied. See <NAME> v. <NAME> (1792) 4 Brown's Chancery Cases, 115. Eminent Judges have repudiated the notion that limitation is based solely on the ground of laches. In <NAME> v. <NAME> (1881) 6 A.C. 740 at p. 818 Lord <NAME> observed: "This ground of acquiescence or laches is often spoken of as if it were the only ground on which prescription was or could be founded. But I think the weight of authority, both in this country and in other systems of jurisprudence, shews that the principle on which prescription is founded is more extensive. Prescription is not one of those laws which are derived from natural justice. Lord <NAME>, in his Institutions, treating of the law of Scotland, in the old customs of which country he tells us prescription had no place (book 2, tit. 12, Section 9 ), says, I think truly, "Prescription, although it be by positive law, founded upon utility more than upon equity, the introduction whereof the Romans ascribed to themselves, yet hath it been since received by most nations, but not so as to be counted amongst the laws of nations, because it is not the same, but different in diverse nations as to the matter, manner, and the time of it....It is both fair and expedient that there should be provisions to enlarge the time when the true owners are under disabilities or for any other reason are not to be considered guilty of laches in not using their right within the specified period, and such provisions there were in the lioman law, and commonly are in modern (Statutes of Limitations, but I take it that these are positive laws, founded on expedience, and varying in different countries and at different times." <NAME> in his work On Limitation observes: "although, says <NAME>, there was no other reason to justify the introduction and use of prescription than that of public policy, it would be just to prevent the property of things from being constantly in a state of uncertainty. Laches like limitation no doubt deprive the plaintiff of his remedy, but it depends upon general principles while limitation depends on express law. Laches may be adapted to the facts of each particular case, but limitation is a matter of inflexible law. A positive rule of limitation must not depend on whether there be laches or no: <ORG>s of Equity in England apart from any rules of limitation refused relief to parties resorting to th em for remedies not open to the courts of common law, if they were guilty of laches; but they also followed the Statutes of Limitation by analogy in granting equitable reliefs; although no Statute of Limitations before 3 and 4 Will. IV, c 27, provided in terms 'for equitable rights or expressly bound the <ORG>s of Equity." See <ORG> on Limitation, page 234.

2. Limitation then being the result of statute law, it has been held in England that no exemption from it can be recognised except what the statute itself provides. In <NAME> v. <NAME> (1805) 11 R.R., 20 at pp. 23 and 24 : S.C. 17 Ves. 87 at pp. 91--93, the Judicial Committee of the Privy Council held that the fact that the defendants in an action were absent from the realm could not postpone the running of limitation. The Master of the <NAME> observed; "The proposition, that this construction, under the doctrine of inherent equity, is put upon our English Statutes of Limitation, is, as I apprehend, altogether unfounded. General words in a statute must receive a general construction; unless you can find in the statute itself some ground for limiting and restraining their meaning by reasonable construction, and not by arbitrary addition or retrenchment." He goes on to say: "The true rule on this subject is laid down by Sir <NAME> in his opinion in <ORG> on the case of Earl of Buckinghamshire v. <NAME> 1762 (Wilm. 177), [97 E.R.,69]. He says: 'many cases have been put, where the law implies an exception; and takes infants out of general words by what is called a virtual exception. I have looked through all the cases, and the only rule to be drawn from them is, that, where the words of a law in their common and ordinary signification are sufficient to include infants, the virtual exception must be drawn from the intention of the legislature, manifested by other parts of the law, from the general purpose and design of the law, and from the subject matter of it.' And he mentions the Statutes of Limitations, as an instance of a case, in which infants would be barred, if it were not for the introduction of the waving clause. Accordingly we find, that in the great case of <NAME> v. Lord <NAME> (1797) 1 Plowden 353 [75 E.R. 536], upon the Statute of Fines of Henry the Seventh where the question was, whether, when the bar by five years' non-claim had begun to run in the time of the ancestor of lull age, it should continue to run against his infant heir, although there was great difference of opinion among the Judges upon that question, the whole argument turns upon the true construction of the statute itself, with reference to all the parts of it, and to the object it had in view, and not upon any supposed inherent, equity, by which infants were to be excepted out of the operation of the Statutes of Limitation. On the contrary it is laid down in that case and laid down without any contradiction; 'For as much as they intended,' that is, the <ORG> intended, 'to avoid universal trouble fas the preamble speaks) and to make peace, which is to be preferred before all other things, and for as much as they have made the provision general, viz. that the fine shall be final, and shall conclude as well privies as strangers: if the Act had stopped there, it would have bound as well infants, femes covert, and the others, named in the exception, as people of full age, and who were void of such defects," His Lordship went on to observe, referring to the case before him, that the absence of the defendants from the realm or even the fact of <ORG> being shut up in times of war were no grounds for excluding the Statutes of Limitation. See also <NAME> on Limitation, page 498, where the opinions of Chancellor <NAME> and <NAME>, C.J. in America to the same effect are referred to. It is perfectly clear from <NAME> v. <NAME> (1805) 11 R.R., 20 at pp. 23 and 24 : S.C. 17 Ves. 87 at pp. 91--93, that minority unless expressly provided for in the statute would be no ground of privilege. See <NAME> v. Collector of Bareilly (1874) 1 I.A., 107. We have no hesitation in saying that the same view must be held in this country also.

3. The earliest statutes of limitation in India therefore made express provisions in favour of minors. See Madras Regulation 2 of 1802, Section 18 , Clauses 1, 2 and 3. In Act XIV of 1859, Section 11 provided a general exemption in favour of minors but only in the case of suits. In Act IX of 1871 also the exemption was confined to suits, but a further restriction was introduced by it by limiting the privilege to cases where limitation was provided for in the schedule to the Act. There can be no doubt that the restriction was deliberately made. In Section 7 of Act XV of 1877 the privilege was extended to applications; but the restriction to cases for which the limitation was provided for in the Act was continued. The provision in the present Act is in the same terms. We cannot therefore uphold the argument that there is any fundamental rule of law or justice entitling the appellant to claim that the limitation should run only from the date of his attaining majority. The decision of <ORG> in <CITATION> 29 P.R., 489, is in accordance with the view we have taken on the question.

4. It is next contended for the appellant that the application is not barred in so far as the claim for <ORG> profits is concerned, even if Section 48 of the Civil Procedure Code would be a bar so far as partition is concerned. The argument is that with regard to <ORG> profits the decree cannot be regarded as complete until they are ascertained; and that the present application may be regarded as one for the ascertainment of the <ORG> profits and as such should be regarded as one not for execution of the decree but as one in the suit itself to finish the enquiry and make the decree for <ORG> profits final, And reliance is placed in support of the argument on <CITATION> (1892) I.L.R. 19 Calc. 132 (F.B.), <NAME> v. <NAME> (1907) 6 C.L.J.,462, <CITATION> (1912) I.L.R. 39 Calc. 220 : S.C, 16 C.W.N., 109, <NAME> v. <NAME> (1902) I.L.R.125 All. 385 and <NAME> v. <NAME> (1904) I.L.R. 26 All. 628. The decree here was passed when the repealed Civil Procedure Code was in force. If provided that "the defendants do pay to the plaintiff his one-third share of the <ORG> profits (to be ascertained in execution) from the date of suit 11th August 1892 until delivery of the lands or until three years from this date whichever event first occurs." The direction for the ascertainment of the <ORG> profits in execution was apparently made under Section 211 of the Code. Section 212 enacted that with regard to <ORG> profits prior to the institution of the suit "the <ORG> may either determine the amount by the decree itself, or may pass a decree for the property and direct an enquiry into the amount of <ORG> profits and dispose of the same on further orders." Where the decree provided for the <ORG> profits up to the date of delivery of the property the enquiry had necessarily to be postponed. Section 244 laid down that "questions regarding the amount of any <ORG> profits or interest which the decree has made payable in respect of the subject-matter of a suit, between the date of its institution and the execution of decree, or the expiration of three years from the date of the decree". should be decided by the <ORG> executing the decree. It is argued that the expression "the <ORG> executing the deoree" merely designates the <ORG> which is to hold the enquiry into <ORG> profits and that the provision in Section 244 does not make the enquiry a matter relating to the execution of the decree. It is not easy to see why an enquiry for <ORG> profits accruing subsequent to the date when judgment is given by the <ORG> should be regarded as necessary to make the decree itself complete. Where the <ORG> profits relate to the period before the decree, it may be said that the decree should, strictly speaking, determine all the rights of the plaintiff including the claim to <ORG> profits up to the date of the decree; but it is doubtful whether this argument can apply to <ORG> profits subsequent to decree. Whatever the strictly logical view of. the matter may be, it appears to us that the object of provisions of the Code was to enable the <ORG> to separate the question of <ORG> profits from the claim to the land and to relegate the former to proceedings in execution. It was certainly within the competence of the legislature to do so; and it was regarded as promoting the convenience of litigants and the <ORG>, According to Section 244 the enquiry need not be held by the <ORG> which tried the suit. If the execution of the decree is transferred to another <ORG> it might be held by such <ORG>. The enquiry may not logically be one relating to the execution of the decree; but in our opinion it was the intention of the legislature to make it a part of the execution proceedings. This explains the reason for its inclusion in Section 244 . The language of Clause (c) of that section "any other question relating to the execution" shows that the enquiry into the amount of <ORG> profits was also to be regarded as a question relating to execution. An application for the ascertainment of <ORG> profits must therefore according to the Code be regarded as an application for execution, though it may be that the decree, in so far as <ORG> profits are concerned, would be incomplete until they have been ascertained. It may be right to hold that within the meaning of Section 280 of the repealed Code, the twelve years prescribed therein for the execution of a decree for money would run only from the date when the <ORG> profits are ascertained; for it may be said that until that is done, it cannot be said that there is a decree for money. In this view the actual decision in <NAME> v. <NAME> (1907) 6 C.L.J., 462 may not be open to exception and the observation in <CITATION> (1892) I.L.R. 19 Calc. 132 (F.B.) that the decree is not complete with regard to <ORG> profits for the purpose of execution until they have been ascertained, may also be unexceptionable; but this does not show that an application for the ascertainment of <ORG> profits would not be an application for execution as held by the Calcutta and Allahabad High <ORG>s. The Code expressly made it such. <CITATION> (1906) I.L.R. 28 Calc. 242 is in accordance with this view, <CITATION> (1912) I.L.R. 39 Calc. 220 : S.C. 16 C.W.N., 109, no doubt contains an observation that the whole decree including the decree for possession must be regarded as incomplete until the <ORG> profits are ascertained; but with all deference we are for the reasons already stated unable to agree in this view. It is not supported by the earlier decisions of the Calcutta High <ORG>. It is based partly upon a judgment of <ORG> in <NAME> v. <NAME> (1891) I.L.R. 13 All. 53. But that case does not support the proposition. There although there was a declaration that the original defendants were liable for <ORG> profits, the decree did not determine the important question whether the defendants were liable jointly or severally in respect of wrongful occupation. There was no adjudication upon any of these matters until a long time after the original decree and until after the death of the defendants whose representatives were sought to be made liable. The decision of their Lordships was that the representatives not having been made parties to the investigation about <ORG> profits, they were not liable for the amount adjudged against them. Their Lordships did not decide any question of limitation. The appellant relies also on the decision of this <ORG> in <CITATION> (1911) 21 M.L.J., 546. There the decree directed that the costs of one of the parties should be paid by the other when ascertained. The ascertainment was not directed to be made in execution proceedings. The <ORG> had no power to give such a direction. The question was when limitation began to run for the execution of the decree. It was held that the decree was complete only when the costs were ascertained. We do not think that the case affords any support to the appellant's contention here. According to Section 48 of the present Code the execution of all decrees except a decree granting an injunction will be barred after the expiration of twelve years. An application for the ascertainment of <ORG> profits being in our view an application for execution, we must hold that it is barred by the provisions of the section.

5. But it is contended that this case must be decided according to the provisions of the present Procedure Code which by Order XX, Rule 12, directs that in a suit for the recovery of immoveable property and mesne profits the <ORG> may direct an enquiry as to the mesne profits and should pass a final decree in accordance with the result of the enquiry. The effect of the provision is to make the decree so far as mesne profits are concerned complete only when the amount has been ascertained while not making the rest of the decree incomplete till then. In this view an application for the ascertainment of mesne profits would not be one for execution of the decree, though the question might then arise whether Article 181 would not apply to such an application. We are however of opinion that the question whether the application is one for execution or not should be decided in accordance with the provisions of the repealed Code. The effect to be given to a document and to the proceedings of a <ORG> must be decided by the law in force when the document was executed or the proceedings were passed. The decree for mesne profits in this case cannot be regarded as incomplete and incapable of execution on the ground that according to the present Code it would be so regarded. This view is in our opinion in accordance with the decisions discussed at pages 324 to 333 of Maxwell on the Interpretation of Statutes. See also the judgment of this <ORG> in <CITATION> . 117 of 1911.

6. Lastly it is contended that the application is not barred at any rate so far as the recovery of out standings is concerned inasmuch as they had not been collected by the defendants at the time of the decree, according to which the plaintiffs are entitled to recover their share when the out standings are collected. But the application for execution does not state when they were collected or that they have been collected at all. It does not therefore disclose any right on the part of the plaintiff to recover anything from the defendants. In the result the appeal is dismissed with costs.


PETITIONER: <NAME> Vs. RESPONDENT: <NAME> DATE OF JUDGMENT08/08/1988 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) <NAME>, R.S. (CJ) CITATION: 1988 AIR 1858 1988 SCR Supl. (2) 276 1988 SCC Supl. 710 JT 1988 (3) 308 1988 SCALE (2)523 ACT: Civil Procedure Code. Section 100-Appeal-Subordinate courts refuse to consider evidence having direct hearing on disputed issue Error arising gives birth to a substantial question of law-Whether <ORG> has jurisdiction to set aside finding. % Madhya Pradesh Accommodation Control Act, 1961, Section 12(1) (f)-Suit for eviction of tenant for personal necessity-Essential for plaintiff to prove ownership of property-Partition deed by which ownership claimed not produced-Effect of-<ORG> under duty to examine other relevant evidence on record. HEADNOTE: The respondent-plaintiff filed a suit under s. l2(l)(f) of the Madhya Pradesh Accommodation Control Act, 196l, for eviction of the appellant-tenant, on the ground of personal necessity. The trial court rejected the plaintiffs claim that he was the owner of the house in question. On appeal, the Additional District.judge confirmed the finding of the trial court on the ground that the plaintiff did not produce the deed of partition, alleged to have been executed by the parties and, under which the house in question was said to have been allotted to him. In second appeal, the <ORG> reversed the finding and decreed the suit. In the appeal to this <ORG>, on behalf of the tenant it was contended that it was essential for the plaintiff- respondent to establish that he was the owner of the premises, and that the concurrent finding of fact recorded by first two courts was binding on the <ORG> under s. 100 of the Code of Civil Procedure and its reversal was illegal. Dismissing the appeal, HELD: 1.1 The <ORG>'s power to interfere with the finding of fact reached by the first appellate court cannot be denied if, when the lower appellate court decides an issue of fact, a substantial question of law arises, even PG NO 276 PG NO 277 though the <ORG>, while hearing the appeal under s. 100 of the Code of Civil Procedure, has no jurisdiction to re- appraise the evidence and reverse the conclusion reached by the first appellate court.[280C] The court is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct B bearing on the disputed issue and the error which arises is of a magnitude that it gives birth to a substantial question of law, the <ORG> is fully authorised to set aside the finding. [280D] 1.2 A perusal of the language of the clause (f) of s. 12(l) of the Madhya Pradesh Accommodation Control Act, 1961, and comparison there of with that in the other clauses clearly indicates that it is essential for the plaintiff who claims that he requires the shop personally for starting a business, to establish that he is the owner of the premises. [278G-H] In the instant case, though the partition deed under which the D plaintiff claims exclusive title to the property was not produced in court, the first appellate court was under a duty to consider all the relevant evidence led by the parties along with the circumstances. The Civil Judge, who tried the suit as well as the Additional District Judge, confirming the decision of the trial court, had seriously erred in not considering the entire evidence on record including the reply to the notice sent by the plaintiff-respondent, wherein the tenant-appellant has accepted the plaintiff's title and counter-foil receipts signed by the appellant in which the plaintiff had been described as the owner of the property. In the circumstances, the <ORG> was fully justified in reversing the finding of the courts below. [279E, F-G, 280A] JUDGMENT:

CIVlL APPELLATE JURlSDlCTlON: Civil Appeal No. 3387 of From the Judgment and Order dated 20.8.1981 of <ORG> in Second Appeal No. 33 of 1978. <NAME>, <NAME> and <NAME> for the Appellant.

<NAME> for the Respondent.

The Judgment of the Court was delivered by PG NO 278 SHARMA,J. The appellant is in possession of a shop in a town in Madhya Pradesh as a tenant under the respondent who filed a suit out of which the present appeal arises for his eviction on the ground of personal necessity. The suit was dismissed by the trial court and the first appellate court. <ORG> in second appeal has reversed the decision and passed a decree.

2. The case is governed by the Madhya Pradesh Accommodation Control Act, 1961 (hereinafter referred to as the Act) and s. 12(1)(f) deals with the ground of landlord's bona fide necessity with reference to buildings let out for non-residential purposes, in the following words:

"12. Restriction on eviction of tenants-(l) Notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely :

(a) -----------------------------------------

(f) that the accommodation let for non-residential purposes is required bona fide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner thereof or for any person for whose benefit the accommodation is held and that the land- lord or such person has no other reasonably suitable non-residential accommodation of his own in his occupation in the city or town concerned ;

(g) ......................................... .........................................

3. The plaintiff claims that he requires the shop personally for starting a business and it is rightly contended by Mr. <NAME>, learned counsel appearing for the appellant, that it is essential for him to establish that he is the owner of the premises. A perusal of the language of the clause (f) and a comparison thereof with that in the other clauses clearly leads to this conclusion. The issue in the case is whether the plaintiff, respondent before us, has been able to establish this condition.

PG NO 279

4. The defendant has been admittedly paying the rent to the plaintiff who, therefore, is included in the expression 'landlord' as defined in the Act as a person receiving or entitled to receive the rent whether on his own account or on account of any other person. In the register of <ORG> the property stands in the name of the plaintiff's brother <NAME>. On this ground the trial court rejected the plaintiff's case that the shop belongs to him. On appeal the Additional District Judge, <NAME> confirmed the finding mainly on the ground that the plaintiff did not produce the deed of partition which is alleged to have been executed by the parties and under which the house was claimed by the plaintiff to have been allotted to him. The Court also held that since the plaintiff failed to plead his ownership and further neglected to get his plaint amended after his title was denied in the written statement, he was not entitled to rely on any evidence in support of his title. On the plaintiff filing a second appeal, <ORG> reversed the finding and decreed the suit.

5. Mr. <NAME> strongly urged that the concurrent finding of fact recorded by the first two courts was binding on <ORG> under s. 100 of the Code of Civil Procedure and its reversal is illegal. We have gone through all the three judgments and some of the documents placed before us by the learned counsel for the parties and we find that <ORG> was fully justified in reversing the finding. The first appellate court was not correct in assuming that the plaintiff had failed to assert in the plaint his ownership of the disputed shop. The necessary pleading is to be found in paragraph 1 of the plaint, which of course was denied in the written statement and the parties led their evidence on this question at the trial. It is true that the partition deed under which the plaintiff claims exclusive title to the property was not produced in court, but the first appellate court was under a duty to consider all the relevant evidence led by the parties along with the circumstances. Unfortunately neither the Civil Judge who tried the suit nor the Additional District Judge confirming the decision of the trial court adverted to important items of relevant evidence which were considered and relied upon by <ORG>. The plaintiff, before filing the suit, sent a notice through his counsel, to the appellant in which it was stated that the shop in question belongs to him. In his reply sent through an advocate the appellant, while denying the other statements in the notice, accepted the plaintiff's title in the following words :

"That it is admitted that my client is occupying the shop situated at Dal Bazar belonging to your client. . . . "

PG NO 280 The plaintiff also produced counter foil receipts signed by the tenant-appellant in which the plaintiff was described as "the owner of property". It was not a case of an isolated single receipt-quite a number of such documents were produced in the trial court. <ORG> was right in pointing out that the courts below had seriously erred in not considering the entire evidence on the record including the aforesaid documents. It is true that <ORG> while hearing the appeal under s. 100 of the Code of Civil Procedure has no jurisdiction to re-appraise the evidence and reverse the conclusion reached by the first appellate court, but at the same time its power to interfere with the finding cannot be denied if when the lower appellate court decides an issue of fact a substantial question of law arises. The court is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue and the error which arises is of a magnitude that it gives birth to a substantial question of law, <ORG> is fully authorised to set aside the finding. This is the situation in the present case. We, therefore, do not discover any defect in the judgment of <ORG>, and the appeal is accordingly dismissed with costs.

N.P.V. Appeal dismissed.


PETITIONER: R. DALMIA Vs. RESPONDENT: C.I.T., DELHI, NEW DELHI DATE OF JUDGMENT21/09/1977 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA BHAGWATI, P.N. CITATION: 1977 AIR 2394 1978 SCR (1) 537 1977 SCC (4) 329 ACT: Income Tax Act 1922, s. 12(2) -Assessee borrowed money from a bank and bought shares-Agreement provided that dividend etc., on shares declared after a certain date shall be held by the bank for the benefit of the assessee Shares not taken delivery of by the assessee by the stipulated date-Dividend declared, it accrued to the assessee. Section 12(2) , scope of-Interest paid on loan and damages paid-If permissible deduction. HEADNOTE: The assessee borrowed a large sum of money from a bank and purchased shares from it; but did not take delivery of the transfer forms and share certificates by making payment of the purchase price. Clause (3) of the agreement, however, stipulated that if the shares were not taken delivery of by a certain date, dividends, rights, bonuses etc. which might be declared after that date would be held by the bank for the benefit of the assessee; and that the assessee would be liable to pay interest on the purchase price. Clause (4) provided that if the assessee did not take delivery of the shares by a certain date, the bank would be at liberty to sell the undelivered shares and to hold the assessee liable for the difference in the. price fetched by the shares. The assessee paid to the bank over two lacs of rupees by way of interest and more than a lac of rupees by way of damages for failure to take delivery of the shares. A sum of Rs. 95,000 odd was earned as dividend by the assessee on the shares. The Income Tax Officer disallowed the claim of the assessee for deduction Linder s. 12(2) of the Indian Income Tax Act 1922 of the interest on the loan and damages paid by him to the bank but included the dividend earned on the shares in his total income. On appeal the Appellate Assistant Commissioner affirmed the view of the Income Tax Officer. The <ORG>, on the other hand, held that since there was no transfer of equitable title in the shares to the assesee he was not entitled to any deduction of interest; disallowed the deduction of damages paid by the assessee but excluded the dividend from his total income on the ground that it was not dividend earned by him. On reference, <ORG> affirmed the findings of the <ORG>. Allowing the appeal in part, HELD : (1) <ORG> and the <ORG> were wrong in taking the view that the Income Tax Officer rightly disallowed the interest claimed by the assessee. This amount was a permissible deduction under s.12(2) of the Act and should have been allowed. There is a direct nexus between the amount paid by the assessee as interest and the earning of the dividend income. [546 A-B] (2) In <ORG> v. <NAME> A.I.R. 1950 P.C. 90 at 97, <ORG> held that even though a transaction may not amount to an acquisition of equitable interest, yet as between the vendor and the purchaser a term regarding payment of the declared dividend would be fully effective because once the dividends are declared, they will be deemed to have accrued to the purchaser even though there may not have been any transfer of equitable title to the purchaser. Clause (3) of the agreement read in the light of this decision shows that even if there was no transfer of equitable title to the assessee, since the dividend declared would be an additional source of income to him, the assessee would be entitled to deduct the interest paid on the loan for acquiring the shares. [541 E & H] 538 (3) An analysis of s.12(2) of the Indian Income Tax Act 1922 shows that before this provision could apply, the following conditions must be fulfilled; (i) the expenditure must have been incurred solely and exclusively for the pur- pose of earning income or making profit; (ii) the expenditure should not be is the nature of a capital expenditure; (iii) the amount in question should not be in the nature of personal expenses of the assessee; (iv) the expenditure should be incurred in the accounting year; and (v there must be a clear nexus between the expenditure incurred and the income sought to be earned. [542 E-G] In the instant case (i) a genuine and bona fide contract had been entered into between the assessee and the bank for transfer of a large number of shares to the assessee; (ii) the assessee, in pursuance of this agreement raised the loan from the bank and paid interest for this purpose; and (iii) under cl.(3) of the agreement the dividends, rights and bonuses etc., were held by the bank for the benefit of the assessee after they were declared. <CITATION> 20 I.T.R. 1 and Bombay Steam Navigation Co. (1963) <CITATION> 56 I.T.R. 52, 59, followed. <CITATION> . 72. I.T.R. 296 and <CITATION> 100 I.T.R. 67, approved. <CITATION> 36 I.T.R. 329 and <CITATION> 11 82 I.T.R. 648, referred to. (4) Since the assessee's main business was not dealing in shares, damages were paid by him due to his own default. The damages paid would, therefore, be capital expenditure. [546 C] (5) The dividend earned by the assessee should be included in his total income. [546 F] JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1519 of 1971.

Appeal by Special Leave from the Judgment and Order dated 22-1-1971 of <ORG> in 1. T. Reference No. 25 of 1966.

<NAME> for the Appellant.

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

The Judgment of the Court was delivered by <NAME> J. In this appeal by special leave, the assessee who is an individual had purchased a large number of shares from <ORG> for Rs. 44,14,990/- by borrowing this amount from the, <ORG> and he paid interest of Rs. 2,04,744/- on the said amount. In fact four years back i.e. in 1944-45 the joint family of which the assesses was a member had sold these very shares along with other shares to <ORG> The agreement by which the assessee purchased these shares is dated February 5, 1948 and is to be found at Annexure A on p. 19 of the Paper Book. In spite of the fact that the assessee had agreed to buy the shares from <ORG> he did not take delivery of the transfer forms and the share certificates by making payment of the purchase price. Under the agree-

ment dated February 5, 1948 it was agreed that the shares would be taken delivery of on or before March 31, 1948. It was further agreed that if the shares were not taken delivery of by this date, the dividends, rights, bonuses etc. which may be declared after that date, namely, March 31, 1948 will be held by the <ORG> for the benefit of the assessee and the assessee would be liable to pay interest at the rate of 6% p.a. on the purchase price from April 1, 1948 till actual delivery of the shares' Clause (4) of the agreement provided that if for any reason the shares were not taken delivery of by March 31, 1951, the <ORG> will be at liberty to sell the then undelivered shares and to hold the assessee liable for the difference in the price fetched by the shares. The assessee did not take delivery of some of the shares until March 31, 1951 and paid a sum of Rs. 1,05,000/- as damages for his failure to take delivery as stipulated in the agreement between the parties. It is also the admitted case of the parties that the assessee earned a dividend income of Rs. 95,664/-. The assessment year in the instant case is 1953-54 i.e. the previous year ending September 30, 1952. The assessee claimed that be was entitled to deduct the interest paid for acquiring the shares worth Rs. 44,14,990/- and, therefore, a sum of Rs., 2,04,744/- was deductible under s. 12(2) of the Income-tax Act, 1922-hereinafter referred to as 'the Act'. It was further alleged by the assessee that even the damages amounting to Rs. 1,05,000/- which he had paid to the Bharat <ORG> for not taking delivery of the shares were also deductible because this was a business expenditure. Finally, the assessee also claimed that the sum of Rs. 95,664/ being the dividend income was not to be included in the total income of the assessee. The Income-tax Officer rejected all the pleas taken by the assessee and disallowed the deductions claimed by the assessee as mentioned above. The Income-tax Officer also included the sum of Rs. 95,664/- in the total income of the assessee.

The assessee filed an appeal before the Appellate Assistant Commissioner who affirmed the order of the Income-tax Officer, though on slightly different grounds with which we are not concerned here. Thereafter the assessee filed an appeal before the <ORG> which gave a finding that under the facts and circumstances of the present case there was no transfer of equitable title in the shares to the assessee and, therefore, he was not entitled to any deduction of the interest paid by him on the capital amount which constituted the purchase money of the shares. The <ORG> further held that the interest paid was of a capital nature and did not fall within the ambit of s. 12(2) of the Act. As regards the assessee's claim to the dividend income of Rs. 95,664/-, the <ORG> held that as the said income had been credited to the account of the assessee in terms of cl. (3) of the agreement dated February 5, 1948 it bad not been actually earned by the assessee and the receipt of the dividend by the <ORG> was only taken into account for finalisation of the price. The <ORG> accordingly directed deletion of this amount from the total income of the assessee. As regards the third point, namely, the sum of Rs. 1,05,000/- which the assessee paid as damages to the <ORG>, the <ORG> held that as the assessee was not doing business exclusively in shares he was not entitled to set off the interest paid by him as revenue loss.

<NAME>

Thereafter the appellant moved the Tribunal for making a reference to <ORG> and after hearing counsel for the parties the Tribunal referred the following questions for the opinion of <ORG> "(1) Whether on the facts and in the circumstances of case the tribunal rightly rejected the assessee's claim for deduction of, the interest payment of Rs. 2,04,744/- ? (2) Whether on the facts and in the circumstances of the case the tribunal rightly held that the revenue was not estopped from disallowing the claim for the deduction of the interest amount in view of the allowance of such claim in the past ?

(3) Whether on the facts and in the circumstances of the case the tribunal rightly disallowed the loss of Rs. 1,05,000/in respect of 7500 preference shares of <ORG> ?

(4) Whether on the facts and in the circumstances of the case the tribunal rightly held that the dividend amount of Rs: 95,664/- did not constitute the income of the assessee ?"

Out of these questions, Question No. (2) has not been pressed by the appellant because it is well settled that there is no question of estoppel or res judicata in relation to the assessment of different years. Thus the only questions that were to be determined by <ORG> were Questions Nos. (1), (3) and (4). <ORG> agreed with the <ORG> that in the facts and circumstances of the case there was no transfer of equitable title of the shares to the assessee and, therefore, he was not entitled to claim deduction of Rs. 2,04,744/-. The finding of the <ORG> on Question No. (3) was also upheld and <ORG> agreed that the loss of Rs. 1,05,000/- was rightly disallowed. On Question No. (4) <ORG>, also agreed with the view of the <ORG> and held that this amount could not be included in the total income of the assessee. The assessee has come up to this <ORG>,, after obtaining special leave from this <ORG>.

Both the <ORG> and <ORG> have gone into the question of transfer of equitable title at very great length, but in the facts and circumstances of this case after hearing the parties and going through the record we feel that the question of transfer of equitable title is a vexed question of law and is not free from difficulty. Having regard to the peculiar facts of this case, it is not necessary for the <ORG> to decide the question of equitable transfer in order to give relief to the appellant on Question No. (1). In other words, we are of the opinion that the question as to whether or not the appellant is entitled to a deduction of Rs. 2,04,744/- can be decided without touching or affecting the question of transfer of equitable title to the assessee. This can be done by examining the scope and ambit of S. 12(2) of the Act in order to find out if the assessee's case for payment of interest can come within the four corners of that section. In these circumstances we do not propose to go into the question of transfer of equitable title which had occupied a greater part of the judgments of <ORG> and the <ORG>. We would, however, like to make it clear that we should not be taken to have affirmed the decision of <ORG> on this point, but we refrain from expressing any opinion thereon in the view that we take in the present case.

In <ORG> v. <NAME>), Lord <NAME> pointing out the extent of the doctrine of transfer of equitable title to a purchaser observed as follows :

" Their Lordships do not desire to case doubt on the proposition that in India a purchaser of shares (which under the Indian Sale of Goods Act come within the definition of " goods") does not acquire an equitable interest by virtue of the contract of sale. But they cannot agree with the application of this proposition which commended itself to <ORG>. No doubt as between a company and a purchaser of shares therein the date of completion is all important. But as between vendor and purchaser, where the con- tract does not otherwise provide, the term to be implied as to dividends is not confined to dividends still to be declared in respect of a period or periods prior to the contract. It includes such dividends but that is not because the period in which they were earned is crucial; what is crucial is the date or dates of declaration."

It would appear from the observations of <ORG> that even though the transaction may not amount to acquisition of equitable interest, yet between the vendor and the purchaser the term regarding payment of the declared dividend would be fully effective because once the dividends are declared they will be deemed to have accrued to the purchaser even though there may not have been any transfer of equitable title to the purchaser. In the instant case, cl. (3) of the agreement by which the assessee purported to acquire shares from the <ORG> runs thus :

"That if the shares are not taken delivery of by 31-3-48 the dividends, rights, bonuses, etc., that may be declared after that date, will be for your benefit, but you will be liable to pay interest at 6% from 1-4-1948 till the date of actual delivery on the price of the shares calculated at the rates above mentioned."

A perusal of the statement made in this paragraph manifestly reveals that even if the shares are not taken delivery of by the assessee, the dividends, rights, bonuses etc. which may be declared after that date were to be held by the <ORG> for the benefit of the purchaser. Thus the principle which is deducible from the decision of <ORG> in <NAME> case (supra) fully applies to the facts of the present case. It follows, as a logical corollary, therefore, that even if there was no transfer of equitable title to the assessee, since a Company declared the dividend etc. which would be an additional source (1) A.I.R.1950P.C90., 97.

of income to the assessee, would he not be entitled to, deduct a sum of Rs. 2,04,744/- being the interest paid on the loan for acquiring the shares ? The position will become clear if we extract s. 12(2) of the Act as it stood at the relevant time "(2) Such income, profits and gains shall be computed after making allowance for any expenditure incurred solely for-the purpose of making or earning such income, profits or gains provided that no allowance shall be made on account of--

(a) any personal expenses of the assessees, or

(b) any interest chargeable under this Act which is payable without the taxable territories, not being interest on a loan issued for public subscription before the 1st day of April, 1938, or not being interest on which tax has been paid or from which tax has been deducted under section 18 , or

(c) any payment which is chargeable under the head "Salaries" if it is payable without the taxable territories and tax has not been paid thereon nor deducted therefrom under section 18 ."

An analysis of this sub-section would show that in computing the income under this head the assessee is entitled to deduction in respect of the expenditure incurred solely for the purpose of earning such income, provided the expenditure is not of a capital nature and does not include any personal expenses incurred by the assessee. In other words, before this provision could apply the following conditions must be fulfilled :

(i) the expenditure must have been incurred solely and exclusively for the purpose of earning income or making profit;

(ii) the expenditure should not be in the nature of a capital expenditure;

(iv) that the expenditure should be incurred in the accounting year; and

(v) there must be a clear nexus between the expenditure incurred and the income sought to be earned.

<CITATION> (1) the facts were that the assessee which was an Investment Company was formed for acquiring. holding and dealine in shares and Government securities belonging to C. C died and S was appointed Administrator of his estate and in that capacity he sold 50,000 ordinary shares. Money was required by the Executor of C and he entered into an agreement with the assessee Company by which the assessee (1) 20 I.T.R. 1 agreed to reduce its share capital by Rs. 50 lakhs by taking over from the Administrator 50,000 shares at Rs. 100/- per share and to receive instead debentures of the face value of Rs. 50 lakhs carrying interest at 5% per annum. The agreement was sanctioned by <ORG> and was ultimately carried out. The transaction was held to be genuine. <ORG> and <ORG> took the view that in computing the income of the assessee the interest paid on the debentures could not be deducted under s. 12 (2) of the Act as this was not an expenditure for the purpose of earning the income. This Court, while reversing the judgment of <ORG>, held that once the transaction was held to be a genuine one it clearly fell within the purview of s. 12(2) of the Act and the interest paid by the assessee was a permissible deduction under s. 12(2) of the Act. In this connection, this Court observed as follows :-

"On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency. It therefore falls within the purview of Section 12(2) of the Income-tax Act, 1922, before its amendment. This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under Section 12(2) of the Income lax Act."

The aforesaid case appears to be on all fours with the facts in the present case. In the instant case also it is not disputed before us that the agreement entered into between the parties was a genuine one. In fact the <ORG> had also held that the agreement was actually acted upon. Once this was so, then the interest which the assessee paid on the loan of Rs. 44,14,990/- which came to Rs. 2,04,744/- was really paid for the purpose of earning income, namely, the dividends, bonuses etc. which were held by the <ORG> for the benefit of the assessee. The interest of Rs. 2,04,744/- paid by the appellant could not be said to be of a capital nature, nor could it be, deemed to be personal expense& incurred by the assessee. In these circumstances, therefore, the essential ingredients of s. 12(2) are fully satisfied in this case and on the authority of this Court in <ORG>'s case (supra) the appellant's case squarely falls within the four corners of s. 12(2) as a result of which the amount of interest of Rs. 2,04,744/- was a permissible deduction under s. 1  2 (2) of the Act. In <ORG> (1953) <CITATION> (1), in somewhat similar circumstances, this Court allowed the expenditure as a deduction under s. 10(2) (xv), and observed as follows :

"But in our judgment interest paid by the assessee-company is a permissible deduction under Section 10(2) (xv) (1) 56 I.T.R. 52. 59.

which permits any expenditure not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation" as a permissible allowance in the computation, of profits or gains of the business carried on in the year of account...... The expenditure was incurred after the commencement of the business. The expenditure is not for any private or domestic purposes of the assessee-company. It is in the capacity of a person carrying on- business that this interest is paid."

This Court further observed "Whether a particular expenditure is revenue expenditure incurred for the purpose of business must be determined on a consideration of all the facts and circumstances, and by the application of principles of commercial trading. The question must be viewed in the larger context of business necessity or expediency. If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit--earning process and not for acquisition of an asset or a right of a permanent character, the possession of which is a condition of the carrying on of the business, the expenditure may be regarded as revenue expenditure."

Apart from these decisions of this Court, a number of decisions of <ORG> have also taken the same view. <CITATION> - tax, Bombay City(1), <ORG> allowed certain sums of money paid as interest on borrowed capital for the purchase of shares and held that the word " purpose" in the expression "expenditure incurred solely for the purpose of making or earning such income, profits or gains" did not mean motive for the transaction, much less can it mean ulterior motive, or ulterior object. The Court held that as the investments were made for the purpose of earning income, the interest paid thereon would be deductible under s. 12(2) of the Act.

A similar view was taken by <ORG> in. <CITATION> - tax, U.P.(2) where it was held that any expenditure incurred for preservation or protection of a capital asset was revenue in nature. The Court held that legal and travelling expenses incurred by the assessee for protecting dividend income and to ensure the prospective dividend earning capa- city were clearly allowable under S. 12(2) of the Act. We find ourselves in complete agreement with the view taken by <ORG> in that case.

(1) 36 I.T.R. 329.

(2) 72 I.T.R. 296.

54 5 <CITATION> (1), <ORG> held that payment of interest for earning dividend income was deductible under s. 12(2) of the Act.

<CITATION> (2), a Division Bench of <ORG> held that the deduction which is permissible under sub-s. (2) of s. 12 is all expenditure incurred solely for the purpose of making or earning the income which has been subjected to tax and the dominant purpose of the expenditure incurred must be to earn income. It was further held that the connection between the expenditure and the earning of income need not be direct, and even an indirect connection could prove the nexus between the expenditure incurred and the income. We fully agree with the view taken by <ORG>. In view of the direct decision of this Court in <ORG>'s case (supra), it is not necessary for us to multiply authorities. Summarising therefore, the facts of the present case, the position which emerges is as follows (1) that a genuine and bona fide contract had been entered into between the assessee and the <ORG> for transfer of large number of shares to the assessee;

(2) that the assessee in pursuance of this agreement had raised a loan of Rs' 44,14,990/- from the <ORG> in order to acquire the shares and had paid interest of Rs. 2,04,744/- for this purpose-, and (3) as a result of the aforesaid acquisition, under cl. (3) of the agreement the dividends, rights, bonuses etc.

held by the <ORG> were held for the benefit of the assessee after they were declared. it is obvious that if the assessee would not have paid the interest on the loan raised by him he would not have been able to get the dividend income.

In these circumstances, therefore, there was a direct nest between the expenditure of Rs. 2,04,744/- incurred by the assessee as interest and the earning of the dividend income. The assessee has clearly established that the expenditure aforesaid was incurred solely and wholly for the purpose of earning the bonuses and dividend income. As the shares were not the stock-in-trade of the appellant it could not be said that the interest paid by the assessee to the <ORG> was an expenditure of a capital nature, nor was there any material to show that the expenditure incurred by the assessee amounted to his personal expenses. In these circumstances, we are satisfied that the case of the appellant in paying the interest amounting to Rs. 2,04,744/- falls clearly within s. 12(2) of the Act and the conditions of the aforesaid provision being fulfilled the assessee was in law entitled to deduction of the amount of (1) 82 I.T.R. 648.

(2) 1 00 I.T.R. 67.

11-930SCI/77 Rs. 2,04,744/- under- s. 12 (2) of the Act. We are, therefore, of the opinion that <ORG> and the <ORG> were wrong in taking the view that the Income-tax authorities rightly disallowed the amount of Rs. 2,04,744/- as claimed by the assessee. We are clearly of the opinion that this amount was a permissible deduction under s. 12(2) of the Act and should have been allowed by the Income-tax authorities. In these circumstances, therefore, we bold on question No. (1) that both the <ORG> and <ORG> should have held that the assessee's claim for deduction of interest amounting to Rs. 2,04,744/was wrongly rejected by the Income-tax authorities.

So far as Question No. 3 relating to damages of Rs. 1,05,000/paid to the <ORG> by the assessee for non-delivery of the shares is concerned, we are unable to agree with counsel for the appellant that this was a deductible expenditure. We have already pointed out that the assessee's main business was not dealing in shares and, therefore, the damages paid were due to his own default and would, therefore, be a capital expenditure rather than a revenue one. <ORG> and the <ORG> were right in disallowing this amount.

As regards question No. (4) the position is somewhat obscure. While the <ORG> had deleted the amount of Rs. 95,664/- from the total income of the assessee, <ORG> also agreed with the <ORG> and answered this question in the affirmative against the <ORG>. Learned counsel for the <ORG> has, however, submitted that if we are of the opinion that the appellant should be entitled to the deduction of Rs. 2,04,744/- under S. 12(2) of the Act, then it automatically follows that he cannot claim exemption in respect of the dividend income. In our opinion the argument of Mr. <NAME>, learned counsel for the <ORG> is well founded and must prevail. Even Mr. '<NAME> appearing for the assessee/appellant was fair enough to concede that if we hold that the interest of Rs. 2,04,744/- was a permissible deduction under S. 12(2) of the Act then he would not press his claim before the Income-tax authorities for deletion of the dividend income of Rs. 95,664/- and he would have no objection if this. Court sets aside this deletion. In this view of the matter we set aside the order of <ORG> as also that of the <ORG> deleting the amount of Rs. 95,664/- which will be included in the total income of the assessee. The result is that the appeal is allowed in part and our finding on Question No. (1) is that <ORG> and the <ORG> were wrong in disallowing the deduction of Rs. 2,04,744/- as claimed by the assessee. The assessee is, therefore, entitled to a deduction of this amount from his total income. We affirm the judgment of <ORG> in disallowing the claim of Rs. 1,05,000/- which forms the basis of Question No. (3). As the appeal has partially succeeded and partially failed, we leave the parties to bear their own costs in this Court.

P.B.R. Appeal allowed in part.


PETITIONER: THE STATE OF UTTAR PRADESH Vs. RESPONDENT: <NAME> AND OTHERS DATE OF JUDGMENT: 01/10/1963 BENCH: <NAME>, K. BENCH: <NAME>, K. <NAME>, P.B. <NAME>, K.N. <NAME>, J.C. <NAME>, <NAME> CITATION: 1964 AIR 416 1964 SCR (4)1002 CITATOR INFO : F 1978 SC 771 (22) ACT: Suppression of Immoral Traffic in Women and Girls Act, 1956 (104 of 1956), s. 20-"On receiving information", meaning of- Whether information could be from any source. Constitution of India, Art. 14- Whether Suppression of Immoral Traffic in Women Act , 1956, s. 20 gives Magistrate uncandlised power- Article 19- Whether s. 20 a reasonable restriction. HEADNOTE: The respondents in the above 6 appeals are alleged to be prostitutes carrying on their trade in Kanpur. On receiving information from the Sub-Inspector of Police who is not a Special Police Officer, the City Magistrate issued notices to the respondents under s. 20(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956 to show cause why they should not be required to remove themselves from the place where they were residing. The respondents filed their objections claiming that the proceedings were not legally maintainable. The Magistrate repelled the objections. Their revision petitions were dismissed by the Additional Sessions Judge. <ORG> allowed their re- vision on the ground that s. 20 of the Act offended Arts. 14 and 19(1)(d)(e) of the Constitution of India. The State appealed to this Court on certificates granted by <ORG>. Before this Court it was contended that the information re- ceived by the Magistrate must be information received from a special police officer designated under s. 13 of the Act. The next Contention was that in as much under s. 20 the Magistrate acted in his executive capacity, his powers were uncanalized, he is conferred with power capable of discriminating between prostitute and prostitute and he could interfere on flimsy grounds in the lives of respec- table woman and that the section offended against Art. 14. It was further contended that s. 20 imposed an unreasonable restriction on girls and women leading a life of prostitution and hence it violated Art. 19(1)(d) and (c). Held : (i) If the <ORG> intended to confine the expression "information" only to that given by a special police officer, it would have specifically stated so in the section. The omission is a clear indication that a particular source of information is not material for the application of the section. Giving the rational meaning to the expression "on receiving information" it is dear that information may be from any source. (ii) The Act discloses a clear policy affording a real guidance for the Magistrate to decide the two questions which he is called upon to adjudicate under s. 20 of the Act. He functions as a court and decides the said two questions after giving full opportu- 1003 nity to the alleged prostitute to respresent her case and examine her evidence. His decision is subject to revision by <ORG> or <ORG> as the case may be. In the circumstances it is not possible to say that uncanalized power is conferred on the Magistrate as an executive authority to decide the fate. of an alleged prostitute in an arbitrary manner. (iii) It is well settled that Art. 14 does not prohibit reasonable classifications for the purpose of legislation and a law will not infringe Art. 14 if the classification is founded on an intelligible differentia and the said differentia has rational relation to the object to be achieved by the said law. There are pronounced and real difference between a woman who is a prostitute and one who is not and between a prostitute who does not demand in public interest any restriction on her movements and a prostitute whose action in public places call for the imposition of restriction on her movement and even deportation. The difference between these classes of prostitutes has a rational relation to the object sought to be achieved by the Act. Section 20 in order to prevent moral decadence in a busy locality, seeks to restrict the movements of the second category of prostitutes or to deport such of them as the peculiar methods of their operation in an area may demand. Section 20 therefore does not offend Art. 14. Begum State, A.I.R. 1963 Bom. 17 and <NAME> v. State of U. P. A.I.R. 1959 All 57. (iv) The reasonableness of a restriction depends upon the value of life in a society, the circumstances obtaining at a particular point of time when the restriction is imposed, the degree land urgency of the evil sought to be controlled and similar others. 'The vice of prostitution has to be controlled and regulated and one of the objects of the Act is to control the' growing evil of prostitution in public places. The restrictions placed by s. 20 are certainly in the interest of the general public and as the imposition of the restriction is done through a judicial process on the basis of a clearly disclosed policy the said restrictions are reasonable. <CITATION> ,  S.C.R. 759 and <CITATION> ,  S.C.R. 597. (v) Once it is held that the activities of a prostitute in a particular area having regard to the conditions obtaining therein, are so subversive of public morals and so destructive of public health that it is necessary in public interest to deport her from that place, them is no reason why the restriction should be held to be unrea sonable. The decision of <ORG> in <CITATION> , is not correct to the extent it holds that the restriction under s. 20 encroach upon the fundamental right guaranteed under Art 19(1)(d) and (e). Those are reasonable restrictions imposed in 'public. interest and do not infringe the fundamental rights under Art. 19(1)(d)  & (e) of the Constitution. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 21 to 26 of 1962.

<NAME>

Appeals from the judgment and order dated November 17, 1961, of <ORG> in Criminal Revision nos. 322, 323, 324, 611, 612 and 613 of 1961.

<NAME> and <NAME>, for the appellant (in all the appeals).

<NAME>, for the respondents (in Cr. A. Nos. 21-24 and 26 of 1962)-

October 1, 1963. The Judgment of the Court was delivered by <NAME> six appeals filed by certificates granted by <ORG> at Allahabad raise the question of the vires of s. 20 of the Suppression of Immoral Traffic in Women and Girls Act, 1956 , hereinafter called the Act.

The relevant facts may be briefly stated. The respondents are alleged to be prostitutes carrying on their trade in the City of Kanpur. On receiving information from the Sub- Inspector of Police, who is not a Special Police Officer, the City Magistrate, Kanpur, issued notices to the respondents under s. 20(1) of the Act to show cause why they should not be required to remove themselves from the places where they were residing and be prohibited from re-entering them. The respondents received the notices and filed objections claiming that the proceedings were not legally maintainable. The learned City Magistrate repelled the said objections. Against the orders of the Magistrate the respondents went up in revision to the Additional Sessions Judge Kanpur but the same were dismissed. Thereafter the respondents preferred revisions to <ORG> at Allahabad and the said <ORG> allowed the revision petitions and set aside the proceedings pending against the respondents in <ORG>, Kanpur. The <ORG> held that s. 20 of the Act abridged the fundamental rights of the respondents under Art. 14 and sub-cls. (d) and (e) of Art. 19(1) of the Constitution. After obtaining certificates for leave to appeal from the <ORG>, the present appeals have been preferred by the <ORG>.

As the argument turns upon the provisions of s. 20 of the Act, it will be convenient at the outset to read it : Section 20 . (1) A Magistrate on receiving information that any woman or girt residing in or frequent-

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ing any place within the local limits of his jurisdiction is a prostitute, may record the substance of the information received and issue a notice to such woman or girl requiring her to appear before the Magistrate and show cause why she should not be required to remove herself from the place and be prohibited from re-entering it.

(2) Every notice issued under subsection (1) shall be accompanied by a copy of the record aforesaid and the copy shall be served alongwith the notice on the woman or girl against whom the notice is issued.

(3) The Magistrate shall, after the service of the notice referred to in sub-section (2), proceed to inquire into the truth of the information received, and after giving the woman or girl an opportunity of adducing evidence, take such further evidence as he thinks fit and if upon such inquiry it appears to him that such woman or girl is a prostitute and that it is necessary in the interests of the general public that such woman or girl should be required to remove herself therefrom and be prohibited from re-entering the same, the Magistrate shall, by order in writing communicated to the woman or girl in the manner specified therein, require her after a date (to be specified in the order) which shall not be less than seven days from the date of the order, to remove herself from the place to such place whether within or without the local limits of Ms jurisdiction, by such route or routes and within such time as may be specified in the order and also prohibit her from re-entering the place without the permission in writing of the Magistrate having jurisdiction over such place. The first question raised is whether the information received enabling a Magistrate under s. 20 of the Act to make the enquiry provided thereunder should be only from a special police officer designated under s. 13 of the Act. Section 13 of the Act says that there shall be for each area to be specified by the State Government in this behalf a special police officer appointed by or on behalf of that Government for dealing with offences under this Act in that area. The post of special police officer is created under the Act for dealing with offences under the Act, whereas s. 20 does not deal with offences. That apart, the expression used in s. 20 , namely, on receiving information" is not expressly or by necessary implication limited to information received from a special police officer. If the <ORG> intended to confine the expression "information" only to that given by a special police officer, it would have specifically stated so in the section. The omission is a clear indication that a particular source of information is not material for the application of the section. There is an essential distinction between an investigation and arrest in the matter of offences and information to the Magistrate : the former, when dealing with women, has potentialities for grave mischief and, therefore, entrusted only to specific officers, while mere giving of information 'Would. not have such consequences particularly when" as we would indicate later, the information received by the Magistrate would only start the machinery of a judicial enquiry. We therefore, hold, giving the natural meaning to the expression "on receiving information", that' "information" may be from any source.

The next question is whether s.20 of the Act offends Art. 14 of the Constitution. It is stated that the power conferred on the Magistrate under s. 20 of the Act is an uncanalized and uncontrolled one, that he acts thereunder in his executive capacity, that the said section enables him to discriminate between prostitute and prostitute in the matter of restricting their movements and deporting them to places outside his jurisdiction, and that it also enables him on flimsy and untested evidence to interfere with the lives of respectable women by holding them to be prostitutes and, therefore, it violates Art.14 of the Constitution. So stated, the argument appears to be plausible, but a closer scrutiny of the section and the connected sections not only, reveals a clearcut policy but also the existence of, effective checks against, arbitrariness. ; Let us At the outset scrutinize the. provisions of the Act. The preamble of the Act shows that the Act was made to provide in pursuance of the Intentional Convention signed, at) New York on May 9, 1950, for suppression of immoral traffic in women and girls. The short title of the Act says that the Act may be called "The Suppression of Immoral Traffic in Women and Girls Act, 1956". Though the preamble as well as the short title shows that the Act was intended to prevent immoral traffic in women and girls, the other sections of the Act indicate that it was not the only purpose of the Act. Section 2(b) defines "girl" to mean a female who has not completed the age of twenty-one, s. 2(1) , "woman" to mean a female who has completed the age of 21 years, s. 2 (e), "prostitute" to mean a female who offers her body for promiscuous sexual intercourse for lure, whether in money or in kind, and s. 2(f) , "prostitution" to mean the act of a female offering her body for promiscuous sexual intercourse for hire, whether in money or in kind. There are provisions in the Act for punishing men who run brothels and who procure girls and women for prostitution, for punishing women and girls who seduce or solicit for the purpose of Prostitution in public places, for placing the rescued women and girls in detention in protections in protection home for closure of brothels and eviction of offenders from premises, for restricting the movements of prostitutes and even for deporting them to places outside the Jurisdiction of the Magistrate, Section 7(1) provides for the punishment of a prostitute, if she carries on prostitution in any premises Which are within a distance of two hundred yards or any place of public religious worship, educational institution, hostels, hospitals, nursing home or such other public place or any kind notified in that behalf by the Commissioner of- Police or the District Magistrate, as the casec it may be. Section 8 prohibits seducing or soliciting for purpose of prostitution in any public place or within sight of, and in such manner as to be seen or heard from, any public place, whether from within any building or house or not, and makes such soliciting or seducing an offence under the Act. Section 18 provides for the closure of brothels and eviction of offenders from the premises, if such premises are within a distance of two hundred yards from a public place mentioned in s. 7(1) and are used or run as a brothel by any person or used by prostitutes for carrying on their trade. The Act was conceived to serve a public social purpose, viz., to suppress immoral traffic in women and girls, to rescue fallen women and girls and to prevent deterioration in public morals. The Act clearly defines a "prostitute", and gives definite indications from which places prostitutes should be' removed or in respect whereof their movements should be restricted.

With this policy in mind, let us now give close look to the provisions of s. 20(1) of the Act. The following procedural steps are laid down in s. 20 of the Act: (1) the enquiry is initiated by a Magistrate on his receiving the requisite information that a woman a girl is a prostitute; (2) he records the substance of the information; (4) he sends, along with the notice, a copy of the record; (5) he shall give the woman or girl an opportunity to adduce evidence on two points, namely, (i) whether she is a prostitute, and

(ii) whether in the interests of the general public she should be required to remove herself from the place where she is residing or which she is frequenting; (6) the Magistrate shall give his findings on the said questions, and on the basis thereof, he makes the appropriate order; and (7) the disobedience of the order entails punishment of fine.

It is argued that the enquiry is not in respect of "of- fences", though disobedience of an order made thereunder may entail punishment of fine, and, therefore, the order is one made in an administrative capacity. The expression "Magistrate" has been defined to mean a District Magistrate, a Sub-Divisional Magistrate, a Presidency Magistrate or a Magistrate of the first class specially empowered by the State Government, by notification in <ORG>, to exercise jurisdiction under this Act. The definition shows that special jurisdiction is conferred upon a Magis- trate of comparatively high status who can safely be relied upon to discharge the onerous and delicate duties inherent in such jurisdiction. The jurisdiction under s. 20 is not conferred on such a Magistrate as a persona designata but is to be exercised by him in his capacity as a Magistrate functioning within the limits of his territorial juris- diction. The procedure prescribed thereunder, which we have analysed earlier, approximates, as nearly as possible, to that of a judicial enquiry. The enquiry starts on infor- mation; notice, along with a copy of the record, is given to the alleged prostitute; she is given an opportunity to adduce evidence which necessarily implies a right to have a public enquiry, to engage an Advocate, to ask for the examination of the informant or informants and to cross- examine them and to adduce her evidence, both oral and documentary. The Magistrate, on the basis of the evidence, decides the aforesaid two questions, and makes a suitable order indicated in the section. The right with respect whereof the jurisdiction is exercised is an important one. It is a fundamental right of personal liberty. No right can be more important to a person than the right to select his or her home and to move about in the manner he or she likes. Even depraved woman cannot be deprived of such a right except for good reasons. When the <ORG> conferred Jurisdiction on a Magistrate to decide the question of imposing restrictions on such a right by following judicial procedure, it is reasonable to hold that it conferred jurisdiction on him as a court, unless the clear provisions of the Act compel us to hold otherwise. Indeed the analysis of the section earlier made negatives any intention to the contrary. The fact that the enquiry does not relate to an "offence " is not decisive of the question whether the Magistrate is functioning as a court. There are many proceedings under the Code of Criminal Procedure, such as those under ss. 133 , 144 , 145 and 488 , which do not deal with offences but still it is never suggested that a Magistrate in making an enquiry in respect of matters thereunder is not functioning as a court. We therefore, hold that in the circumstances the Magistrate must be held to be acting as a court. If the Magistrate is acting as a court, as we have held he is, it is obvious that be is subject to the revisional jurisdiction conferred under ss. 435 and 439 of the Code of Criminal Procedure. The said sections confer ample authority on the courts mentioned therein to set right improper orders passed by a Magistrate in appropriate cases. The result of the discussion is that the Act discloses a clear policy affording a real guide for the Magistrate to decide the two questions which he is called upon to adjudicate under s. 20 of the Act. He func- tions as a court and decides the said two questions after giving full opportunity to the alleged prostitute to repre- sent her case and examine her evidence. His decision is subject to revision by <ORG> or <ORG>, as the case may be. In the circumstances it is riot possible to say that uncanalised power is conferred on the Magistrate as an executive authority to decide the fate of an alleged prostitute in an arbitrary manner. The next question is whether the policy so disclosed offends Art. 14 of the Constitution. It has been well settled that Art. 14 does not prohibit reasonable classification for the purpose of legislation and that a law would not be held to infringe Art. 14 of the Constitution if the. classification is founded on an intelligible differentia and the said differentia has a rational relation to the object sought to be achieved by the said law. The differences between a woman who is a prostitute and one who is not certainly justify their being placed in different classes. So too, there are obvious differences between a prostitute who is a public nuisance and one who is not. A prostitute who carries on her trade on the sly or in the unfrequented part of the town or in a town with a sparse population may not be so dangerous to public health or morals as a prostitute who lives in a busy locality or in an overcrowded town or in a place within the easy reach of public institutions like religious an educational institutions. Though both sell their bodies, the latter is far more: dangerous to the public, particularly to the younger generation during the emotional stage of their life. Their freedom of uncontrolled movement in a crowded -locality or in the vicinity of public institutions not only helps to demoralise the public morals, but, what is worse, to spread diseases not only affecting the present generation, but also the future ones. Such trade in public may also lead to scandals and unseemly broils. There are, therefore, pronounced and real differences between a woman who is a prostitute and one who is not, and between a prostitute, who does not demand in public interests any restrictions on her movements and a prostitute, whose actions in public places call for the imposition of restrictions on her movements and even deportation. The object of the Act, as has already been noticed is not only to suppress immoral traffic in women and girls, but also to improve public morals by removing. prostitutes from busy public places in the vicinity of religious and educational., tutions. The differences between these two- classes of stitutes have a rational relation to the object sought to be achieved by the Act. Section 20 , in order to prevent moral decadence in a busy locality, seeks to restrict the movements of the second category of prostitutes and to deport such of them as the peculiar methods of their operation in area may demand.

judicial decisions arising under the Act and under analogous Acts were cited at the <ORG>. The question whether a particular provisions offends Art. 14 of the Constitution or not depends upon the provisions of the Act wherein that section appears. The decisions oil other Acts do not afford any guidance to decide the Vires of s. 20 of the Act. We shall, therefore, briefly notice the decisions which have a direct bearing on s. 20 of the Act.

A Division Bench of <ORG>, in <CITATION> (1) bad to consider the same question now before us. It held that the provisions of s. 20 of the Act would not be bit by Art. 14 of the Constitution, though it held that the provisions of s. 20 of the Act which enable a Magistrate to direct a prostitute to remove herself from the place where she is residing to a place without the local limits of his jurisdiction was an unresonable restriction upon the fundamental right guaranteed under Art. 19(1)(d) and (e) of the Constitution. We agree with <ORG> in so far as it held that the section does not offend Art. 14 of the Constitution, but we cannot accept the view expressed by it in respect of Art. 19(1)(d) and (e) thereof. We shall consider this aspect at a later stage.

In <NAME> v. State of U. P. (2), <NAME>, though he dismissed the writ petition without giving notice to the other party, made some observations indicating his view that the said provision prima facie offends Art. 14 of the Constitution. For the reasons already stated by us, we do not agree with this view. We, therefore, hold that s. 20 of the Act does not infringe Art. 14 of the Constitution. Now coming to Art. 19(1)(d) and (e) of the Constitution, the question that arises is whether s. 20 of the Act imposes an unreasonable restriction on girls and women leading a life of prostitution. To state it differently, (1) A.I.R. 1963 Bom. 17.

(2) A.I.R. 1959 All. 57 does s. 20 of the Act impose reasonable restrictions on the exercise of the fundamental right of the prostitutes under Art. 19(1)(d) and (e) of the Constitution in the interests of the general public. Under Art. 19(1)(d) the prostitute has a fundamental right to move freely throughout the ter- ritory of India; and under sub-cl.(e) thereof to reside and settle in any part of the territory of India. Under s. 20 of the Act the Magistrate can compel her to remove herself from place where she is residing or which she is frequenting to places within or without the local limits of his jurisdiction by such route or routes and within such time as may be specified in the order and prohibit her from re- entering the place without his permission in writing. This is certainly a restriction on a citizen's fundamental right under Art. 19(1)(d) and (e) of the Constitution. Whether a restriction is reasonable in the interests or the general public cannot be answered on a priori reasoning; it depends upon the peculiar circumstances of each case. <NAME>, as he then was, speaking for the <ORG> in <CITATION> (1) succinctly defined the expression "reasonable restrictions" thus : "The- phrase "reasonable restriction" connotes the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word "reasonable" implies intelligent care and deliberation, that is, the choice of a course which reason dictates." A fairly exhaustive test to ascertain the reasonableness of a provision is given by <NAME> in <CITATION> (2). Therein the learned Chief justice observed thus :

"It is important in this context to bear in mind that the test of reasonableness, wherever prescribed) should be applied to each individual statute impugned, and no abstract standard, or general pattern, of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions (1) [1950] S.C.R. 759, 763.

(2) [1952]_ S.C.R. 597, 607.

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imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict."

If we may say so, with respect, this passage summarized the law on the subject fully and precisely. The reasonableness of a restriction depends upon the values of life in a society, the circumstances obtaining at a particular point of time when the restriction is imposed, the degree and the urgency of the evil sought to be controlled and similar others. If in a particular locality the vice of prostitution isendemic degrading those who live by prostitutionand demoralising others who come into contact with them, the <ORG> may have to impose severe restrictions on the right of the prostitute to move about and to live in a house 'of her choice. If the evil is rampant, it may also be necessary to provide for deporting the worst of them from the area of their operation. The magnitude of the evil and the urgency of the reform may require such drastic remedies. It cannot be gainsaid that the vice of prostitution is rampant in various parts of the country. There cannot be two views on the question of its control and regulation. One of the objects of the Act is to control the growing evil of prostitution in public places. Under s. 20 of the Act the freedom of movement and residence are regulated, but, as we have stated earlier, an effective and safe Judicial machinery is provided to carry out the objects of the Act. The said restrictions placed upon them are certainly in the interests of the general public and, as the imposition of the restrictions is done through a judicial process on the basis of a clearly disclosed policy, the said restrictions are clearly reasonable. It is said that the restrictions on prostitutes, though they may be necessary, are excessive and beyond the requirements the eradication of the evil demands. The movements of prostitutes, the argument proceeds, maybe controlled, but that part of the section which enables the Magistrate to deport them outside his jurisdiction is far in excess of the requirements. It is suggested that by consecutive orders made by various Magistrates, the point may be reached when a prostitute may be deported out of India.

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The second argument borders on fantasy. The first argument also has no force. If the presence of a prostitute in a locality within the Jurisdiction of a Magistrate has a demoralising influence on the public of that locality, having regard to the density of population, the existence of schools, colleges and other public institutions in that locality and other similar causes, we (lo not see how an order of deportation may not be necessary to curb the evil and to improve the public morals. Once it is held that the activities of a prostitute in a particular area, having regard to the conditions obtaining therein, are so subversive of public morals anti so destructive of Public health that it is necessary in public interest to deport her from that place, we do not see any reason why the restrictions should be held to be unreasonable. Whether deportation out of the jurisdiction of the Magistrate is necessary or not depends upon the facts of each case and the degree of the demoralizing influence a particular prostitute is exercising in a particular locality. If in a particular case a Magistrate goes out of the way and makes an order which is clearly disproportionate to the evil influence exercised by a particular prostitute, she has a remedy by way of revision to an appropriate court.

The Division Bench of <ORG> in <CITATION> (1) no doubt held that the portion of s. 20 of the Act which enables the Magistrate to direct a prostitute to remove herself from the place where she is living to a place without the local limits of his jurisdiction unreasonably encroaches upon the fundamental right guaranteed under Art. 19(1)(d) and (e) of the Constitution and is, therefore, invalid. For the aforesaid reasons, we cannot agree with this view.

We, therefore, hold that the provisions of s. 20 of the Act are reasonable restrictions imposed in public interest within the meaning of s. 19(5) of the Constitution and, therefore, do not infringe the fundamental rights of the respondents under Art. 19(1)(d) and (e) thereof. In the result, the appeals are allowed. The orders of <ORG> are set aside and those of the Additional Sessions judge are restored. The City Magistrate will now proceed with the enquiry on merits.

Appeals allowed.

(1) A.I.R. 1963 Bom. 17.

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