JUDGMENT <NAME>, J.

1. We are of opinion that the judgment of the lower <ORG> must be reversed, as we think that the learned District Judge has unduly stretched the doctrine of constructive notice against the plaintiff, appellant. That doctrine, so far as we have to consider it in this case, may be stated as follows: When a person is proved to have had a knowledge of certain facts, or to have been in a position, the reasonable consequence of which knowledge or position would be that he would have been led to make further enquiry which would have disclosed a particular fact, the law fixes him with having himself had notice of that particular fact. For there may be such wilful negligence in abstaining from enquiring into facts which would convey actual notice as may properly be held to have the consequences of notice actually obtained. But if there is not actual notice, and no wilful or fraudulent turning away from an enquiry, into, and consequent knowledge of, facts which the circumstances would suggest to a prudent mind, then the doctrine of constructive notice ought not to be applied. Constructive notice may apply as against third per^ sons from a neglect to call for deeds and documents of title; but not to anything like the same extent where a Registration Act is in operation, as it would where no Registration Act prevails-<ORG> v. <NAME> (L. R., 7 H. L., 135). Even in England, where conveyancing is a science,1 and title is deduced by an abstract and production of deeds, it has been considered that the doctrine of constructive notice has been pushed to its extreme limit, and with the much laxer practice in this country it requires even more careful application against a purchaser for value. (His Lordship then stated the facts of the case as above, and continued.) Both of the <ORG>s below have held, that the sales or conveyances to <NAME> under the zemindar's decree, and to <NAME> and <NAME> from the two attorneys, were benami transactions for <NAME>; and that finding binds us on this appeal. Perhaps the evidence as it now stands may be sufficient to support such finding that these two sales or conveyances were actually benami; but speaking for myself, I must say that I am by no means fully satisfied that they were benami. But whether they were benami or not, does not appear to us to affect the present question. The question which we have to decide is, whether the plaintiff in this case is a purchaser for value without notice. In dealing with that question the District Judge has considered that the plaintiff had notice, at the time of his purchase, of all the circumstances which have been subsequently proved in evidence in this case-of all the circumstances which led both the <ORG>s below to hold that the two original transactions were merely benami transactions. Now, what are these circumstances? Firstly, with regard to the first sale under the zemindar's decree, the learned District Judge has expressed his opinion that the rent was purposely allowed to fall into arrears. But he was hardly justified in pressing that against the plaintiff, because the rent-suit instituted by the zemindar was instituted previously to <NAME> <NAME>'s conviction, and therefore, if rent had been allowed to fall into arrears, it had been so allowed by <NAME> <NAME> himself. Secondly, the learned Judge next relies upon the fact, as found by him, that <NAME>, the ostensible purchaser at that sale, had no funds with which he could make the purchase. But though that may have been proved in this suit, it does not necessarily follow that the plaintiff was aware of it at the ate of his purchase. Indeed, <NAME> was entitled to a share in family property; and, from the circumstance that the plaintiff, on his purchase, took from <NAME> a guarantee to which I shall refer presently, it might be inferred, that the plaintiff considered <NAME> as a person not without means. Thirdly, the learned Judge relied on the fact proved in this suit, that, after the purchase by <NAME>, the rents of the property were paid out of the funds of <NAME> <NAME>, and not out of the funds of <NAME>; but the knowledge of this fact does not appear to have been brought home to the plaintiff. These circumstances might have been sufficient to support the findings of the <ORG>s below, as between <NAME> <NAME> and <NAME>, but it by no means follows, that the purchaser had any knowledge, at the time he purchased, of the circumstances which have been proved at the hearing of this case; and if he was in honest ignorance at the time of his purchase, of course he ought not to be bound by any of such circumstances. With respect to the second conveyance by the two attorneys, the learned Judge considered that it was benami, because there was no proof of any pressure of liabilities which would justify the sale. But in reality there was then a debt due from <NAME> <NAME> to one <NAME> of Rs. 2,400. The conveyance to <NAME> and <NAME> was alleged to have been made in order to pay off that debt; and it is found by the <ORG>s below, that that debt was paid off in the following manner, viz., a kistbundi was taken by the creditor from <NAME> and <NAME> for the precise amount of Rs. 2,400, and <NAME> <NAME> was released from his personal liability. Therefore, there was in this transaction a complete change of debtors to the creditor, and a discharge of the original debtor. One would have thought, if this was a benami purchase, that it would be a most unusual proceeding for mere benamidars to take upon themselves, by this kistbundi, the absolute liability for a debt of Rs. 2,400 to <NAME>, and it would at least seem that <NAME> must have considered the transaction a bond fide one; and that he was content to accept <NAME> as a sufficiently responsible person for one of his sureties. The learned Judge has also relied upon the fact that there was no change of management on the occasion of these first conveyances; but he is scarcely justified in coming to that conclusion, for in a different part of his judgment, he also finds that the ryot's rents were paid in the name of the ostensible purchasers, and therefore, there was, to that extent at least, a change in the management. Next, with respect to the subsequent sale to the plaintiff, it seems to us that the <ORG> below started on a somewhat wrong principle. The learned Judge says, that the plaintiff's case was, that he had acquired by his purchase the rights of his vendors. We are unable to find that that was the case made by his plaint. The plaintiff's case really was, that he had acquired by his purchase a title to the property as a bond fide purchaser for value without notice. But upon the principle assumed by the learned Judge, he considered that the plaintiff was bound to prove that his vendors were the real owners, which he, in the opinion of the lower <ORG>s, failed to do. It appears to us, that the plaintiff was only bound at the outside, to prove that he had given full value for his purchase, and that the persons, purporting to have sold to him, were honestly considered by him as the true owners. Then the learned Judge takes the following circumstances as fixing the plaintiff with constructive notice. He says, that the plaintiff and the defendant resided in the same village; that the properties purchased were adjacent to the place where both lived; that the plaintiff was intimate with the defendant and his family; and that he was also connected by marriage with the defendant. Now it is true that the plaintiff was connected by marriage with the defendant, and it was also proved that he was intimate with the defendant's family; but it appears from the defendant's own evidence that there was enmity between himself and the plaintiff. The learned Judge next relies upon the recitals in the conveyances to the plaintiff as being sufficient to put him upon enquiry. These recitals set out that the property had belonged to <NAME> <NAME>, who was in jail; that <NAME> <NAME> had given a power or authority to his attorneys to deal with that property; and that those attorneys had sold to the plaintiff's ostensible vendors. Then the learned Judge proceeds to say, that, nothwithstanding these recitals, the plaintiff admits that he made no enquiry. Now it is difficult to understand how the learned Judge came to that conclusion, because he afterwards finds that "the only enquiry, plaintiff says he made, was a question to <NAME>, one of defendant's attorneys, whether there was any harm in buying---a question which <NAME> admits he answered in the negative." Now <NAME> was the attorney who did not join in the conveyance of August 1870. But he admits that this enquiry was made of him, and that he made that answer; and it further appears that another of the attorneys was an attesting witness to the plaintiff's conveyance. We think, therefore, that the learned Judge was not justified in finding that the plaintiff made no enquiry; and it is difficult for us to say how he could make any other or more satisfactory enquiry than he actually did, from the authorized agents of the defendant. The defendant was himself in jail; and it was scarcely to be expected that the plaintiff would go and enquire of the defendant himself in the jail; the plaintiff, in fact, did the next best thing. He went to the authorized and trusted agents of the defendant and made enquiry of them, and the result of that enquiry was to the effect, that "there was no harm in buying," in other words, that he would be safe in purchasing from the ostensible vendors. Then the learned Judge further finds that the plaintiff must be fixed with constructive notice, because he did not ask for the accounts or zemindary papers, and did not obtain the deeds; but with respect to the papers, we understand that the zemindary papers were given up to the plaintiff on his purchase, and with respect to not obtaining the deeds, such negligence might he important as against a third person with whom they might have been deposited for value; but is of comparative unimportance as against <NAME> <NAME>, who had placed his affair in the hands of attorneys, one at least of whom had assured the plaintiff that he was safe in purchasing. Moreover, the neglect to ask for deeds, in a country where registration prevails, applies with but slight force as already explained. But what the learned Judge seems principally to have relied upon, is the fact, that, in the conveyance to the purchaser from the ostensible vendors, there is a covenant or guarantee of title from them to him, to this effect, that they undertake or guarantee, that there is no other person having any right in the property. Now, the same observation applies to this guarantee as applies to the kistbundi, viz., it is certainly unusual, and not to be expected that mere benamidars who have no interest whatever in the property, should take upon themselves the personal liabilities and responsibilities of a guarantee; and, if it is an unusual thing to have such guarantee in a deed of conveyence, the reason for its insertion may have been, that the plaintiff did make enquiries for the deeds, and with respect to the title, before he completed his purchase. He, in fact, made enquiries of the agents of the defendant. The agents of the defendant allowed him to believe that the sale was a proper one, and upon that he completed his purchase. We, therefore, think that there is no ground in this case for fixing the plaintiff with constructive notice of any of the circumstances, which, as the <ORG>s below have held, prove that the conveyances to the ostensible vendors of the plaintiff were benami transactions; and this being so, and the first <ORG> having held that he paid full value on his purchase, and the District Judge not having come to any contrary finding, we think he must be treated as a purchaser for value without notice, and that therefore his title is good, and that he is entitled to recover as against the defendant. It may be that there has been a fraud committed against the defendant by his agents, but if that is so, the principal is the person who ought to suffer for the fraud of the agent, and not a stranger---<NAME> v. <NAME> (L. R. 7 Ch. App., 85), which case also shows how the doctrine of constructive notice may be attempted to be pushed to an almost absurd extent. This case in fact falls within the language of <ORG> in the case of <NAME> v. <NAME> (11 B. L. R., 53), which case no doubt was very much stronger in its circumstances than the present case. But the language which I am about to quote is appropriate to the present case; "It is a principle of natural equity which must be universally applicable, that where one man allows another to hold himself out as the owner of an estate, and a third person purchases it for value from the apparent owner, in the belief that he is the real owner, the man who so allows the other to hold himself out, shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser by showing, either that he had direct notice, or something which amounts to constructive notice of the real title, or that there existed circumstances which ought to have put him upon an enquiry that, if prosecuted, would have led to a discovery of it." Now neither of the <ORG>s below in this case have held that there was actual notice; and we are of opinion that the circumstances stated in the judgment of the lower <ORG> are not sufficient to fix the plaintiff with constructive notice, or ought to have put him upon an enquiry which, if prosecuted, would have led to the discovery that his ostensible vendors were benamidars.

2. One other question has arisen in this case which was not raised at the bar, and which certainly did not arise in the <ORG>s below. No certificate having been granted in the sale to <NAME> of the eight annas under the zemindar's decree, whether even an ostensible title would pass to <NAME> which he could convey to the plaintiff. That question, as I have said, was not raised in the. <ORG>s below; and, in fact, it was admitted by the defendant in the pleadings that there was a sale under the zemindar's decree to <NAME>. We think, therefore, it is too late now to raise any objection on that point. Upon the question being started by the <ORG>, it was pointed out, that Section 259 of the former Code of Civil Procedure directs that, after the sale of immoveable property shall have become absolute, the <ORG> shall grant a certificate, which is to be taken and deemed to be a valid transfer of such right, title, and interest. Even if any objection could now be taken on this point, we do not think these words contemplate that nothing would pass to a purchaser unless a certificate were issued; for we are of opinion, that the order affirming the sale would be sufficient to pass a title to the purchaser; and the certificate, which might afterwards be obtained by him, would be merely evidence that the property so passed. The appellant will be entitled to his costs of this appeal and of the <ORG>s below.

3. After this decision, no order will be necessary in Rule No. 1343 of 1880, which will drop of itself.


PETITIONER: <ORG>, NEW DELHI Vs. RESPONDENT: <NAME> & OTHERS DATE OF JUDGMENT09/02/1988 BENCH: OJHA, N.D. (J) BENCH: OJHA, N.D. (J) VENKATARAMIAH, E.S. (J) CITATION: 1988 AIR 719 1988 SCC (1) 626 JT 1988 (1) 265 1988 SCALE (1)268 CITATOR INFO : D 1989 SC1074 (13) ACT: Motor Vehicles Act , 1939- Sections 95(2)(b) and 96-Motor accidents-Comprehensive claim-Insurance company filing copy of Insurance policy-Necessity of-Third party risk- Comprehensive insurance of Vehicle and payment of higher premium liability not in excess of statutory liability. Practice and Procedure-Motor Accidents Compensation case-Filing of insurance policy copy-Necessity for. HEADNOTE: % Respondent No. 1, <NAME>, while driving a three wheeler scooter, met with an accident with bus No. DLP-3699, driven by <NAME>, respondent No. 2, owned by M/s. <ORG>, respondent No. 3, and insured with the appellant. <ORG>, Delhi awarded compensation in the sum of Rs.10,000 to respondent No.1. On appeal, <ORG> enhanced the Compensation to Rs.1,00,000. This <ORG>, while granting special leave required the appellant to deposit the amount of compensation awarded by <ORG> and permitted the respondent to withdraw the same, making it clear that it shall not be refunded by him in the event of reversal of the decision of <ORG>. The appellant contends that in view of the statutory provision contained in this behalf in clause (b) of sub- section (2) of section 95 of the Act, as it stood on the date of accident, no award in excess of the statutory liability of Rs.20,000 could have been made against the appellant. The respondent, on the other hand, contends (1) Notwithstanding the provision contained in this behalf in clause (b) aforesaid, it was open to the insurer to take a policy covering a higher risk than contemplated by clause (b) and consequently the said clause had to be read subject to the terms of the policy. In this connection, the respondent relies on the words "Commercial Vehicle comprehensive" printed on the policy, 911 and on the circumstance that the premium paid was higher than the premium of an "Act only" policy, and urges that the liability of the appellant was unlimited. (2) In view of sub-section (6) of section 96 of the Act no Insurer to whom the notice referred to in sub-section (2) thereof has been given, is entitled "to avoid his liability" to any person entitled to the benefit of any such judgment as is referred to in sub-section (1) thereof otherwise than in the manner provided for in sub-section (2). On this basis it is urged that the appellant was not entitled to assert that its liability was confined to Rs.20,000 only inasmuch as this is not one of the defences specified in sub-section (2) of section 96 of the Act. Allowing the appeal, this <ORG>, ^ HELD: (1) It is not obligatory for the owner of a vehicle to get it comprehensively insured for which a higher premium than for an "act only" policy is payable. Such comprehensive insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle insured. Comprehensive insurance of the vehicle and payment of higher premium on this score, as was done in the instant case do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub-section (2) of section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and additional premium paid. [915C-E] (2) A perusal of the policy indicates that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use of the vehicle has been confined to "such amount as is necessary to meet the requirements of the Motor Vehicle Act , 1939", which was at the relevant time Rs.20,000 only. An award against the appellant could not, therefore, have been made in excess of the said statutory liability. [916F-G] (3) It is apparent from the words "to avoid his liability" used in sub-section (6) of section 96 that the restrictions placed with regard to defences available to the insurer specified in sub-section (2) of section 96 are applicable to a case where the insurer wants to avoid his liability. In the instant case the appellant is not seeking to avoid its liability but wants a determination of the extent of its liability in accordance with the statutory provisions contained in this behalf in clause (b) of sub- section (2) of section 95 of the Act. [917E-F] 912 (4) This <ORG> has consistently emphasized that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the <ORG>, such as the appellant, who are under an obligation to act fairly. The obligation on the part of the <ORG> or its instrumentalities to act fairly can never be over-emphasized. [918C-D] (5) The attitude often adopted by the Insurance Companies, as was adopted in this case, is not to file a copy of the policy before the <ORG> and before <ORG> in appeal. The claimants for compensation are invariably not possessed of either the policy or a copy thereof. In all cases where the Insurance Company concerned wishes to take a defence in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy alongwith its defence. [917G-H; 918B- <CITATION> .,  A.C.J. 343 and <CITATION> , AIR 1959 Supreme <ORG> 1331, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3677 of 1984.

From the Judgment and Order dated 17.5.1982 of <ORG> in F.A. No. 30 of 1975.

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

The Judgment of the Court was delivered by <ORG>, J. This appeal by special leave has been filed by <ORG>, New Delhi, against a judgment of <ORG> in an appeal under Section 110-D of the Motor Vehicles Act, 1939 (hereinafter referred to as the 'Act').

Necessary facts may be stated herein in a nutshell. <NAME>, Respondent No. 1 was, on 15th June, 1969, driving a threewheeler scooter when he met with an accident with bus No. DLP-

<NAME>

3699, driven by <NAME>, Respondent No. 2 and owned by M/s. <ORG>, Respondent No. 3, He sustained injuries consequent upon which he made a claim for compensation before <ORG>, Delhi against Respondent Nos. 2 and 3 and the appellant which was the insurer of the bus aforesaid. The claim of Respondent No. 1 was contested by the appellant and also by Respondent No. 3 but proceeded ex parte against Respondent No. 2. The <ORG> awarded compensation in the sum of Rs.10.000 recoverable jointly and severally from the appellant and Respondent No. 3. Aggrieved by the award of the <ORG> Respondent No. 1 preferred an appeal before <ORG> and asserted that the amount of compensation awarded by the <ORG> was inadequate. His appeal was allowed by <ORG> and the award was modified. <ORG> awarded a sum of Rs. 1,00,000 as compensation to Respondent No. 1 with interest at 9 per cent per annum from the date of institution of the claim till realisation with costs against the driver as well as the owner of the bus as also against the appellant, <ORG>.

Before granting special leave this Court required the appellant to deposit Rs. 1,00,000 namely the amount of compensation awarded by <ORG> and permitted Respondent No. 1 to withdraw the same. Special leave was granted on 14th September, 1984 by the following order of this Court.

"Under the orders of this Court the appellant has deposited Rs. One lac, which is the amount of compensation awarded to the claimants. The claimants have withdrawn the amount without furnishing security.

Special leave granted on condition that in the event of reversal of the decision of <ORG>, the said amount shall not be refunded by the claimants. Stay of further execution of the award confirmed."

It has been urged by the learned counsel for the appellant that in view of the statutory provision contained in this behalf in clause (b) of sub-section (2) of Section 95 of the Act as it stood on the date of accident namely 15th June, 1969 which happens to be prior to 2nd March, 1970, the date of commencement of Amending Act 56 of 1969, no award in excess of Rs.20,000 could have been made against the appellant. Before dealing with the submission we may point out that the policy under which the bus aforesaid was insured had not been filed either before the <ORG> or before <ORG>. A photostat copy of the policy has, however, been filed in this Court and learned counsel for the respondents did not have objection in the same being admitted in evidence. Clause (b) of sub-section (2) of Section 95 of the Act as it stood at the relevant time reads as under:

"95. (1) ..............

(2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely:

(a) ...................

(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, in respect of persons other than passengers carried for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger, if the vehicle is registered to carry more than six passengers excluding the driver;

(c) ..................

On the plain language of the aforesaid clause (b) which applies to the instant case it is apparent that the liability of the appellant could not be in excess of Rs.20,000. Learned counsel for the respondents, however, urged that notwithstanding the provision contained in this behalf in clause (b) aforesaid it was open to the insurer to take a policy covering a higher risk than contemplated by the aforesaid clause (b) and consequently the said clause had to be read subject to the terms of the policy which was taken in the instant case. We find substance in this submission in view of the decision of this Court in <CITATION> ,  A.C.J. 343 where it was held that the insurer can always take policies covering risks which are not covered by the re-

quirements of Section 95 of the Act.

We have accordingly perused the photostat copy of the policy to ascertain whether risk for any amount higher than the amount of Rs.20,000 contemplated by clause (b) aforesaid was covered. Our attention was invited by learned counsel for the respondents to the circumstance that at the right hand corner on the top of page 1 of the policy the words "COMMERCIAL VEHICLE COMPREHENSIVE" were printed. On this basis and on the basis that the premium paid was higher than the premium of an "act only" policy it was urged by the learned counsel for the respondents that the liability of the appellant was unlimited and not confined to Rs.20,000 only. We find it difficult to accept this submission. Even though it is not permissible to use a vehicle unless it is covered at least under an "act only" policy it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured a higher premium than for an "act only" policy is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub-section (2) of Section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf. Likewise, if risk of any other nature for instance, with regard to the driver or passengers etc. in excess of statutory liability, if any, is sought to be covered it has to be clearly specified in the policy and separate premium paid therefor. This is the requirement of the tariff regulations framed for the purpose. Coming to the photostat copy of the policy in the instant case it would be seen that Section II thereof deals with liability to third parties. Sub-section (1) minus the proviso thereto reads as hereunder:

"1. Subject to the Limits of Liability the Company will indemnify the insured against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of

(i) death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the Motor Vehicle.

(ii) damage to property caused by the use (including the loading and/or unloading) of the Motor Vehicle)".

The Schedule to the policy indicates the limits of liability and the amount of premium paid. The limits of liability are indicated as hereinbelow:

"Limits of Liability:

Limit of the amount of the Company's Such amount as is necessary liability under Section II-1(1) in to meet the requirements of respect of any one accidentthe Motor Vehicle Act , 1939 Limit of the amount of the Company's liability under Section II-1(11) in respect of any one claim or series of claims arising out of one event Rs.20,000/- The premium paid on the other hand is shown as below:

"Premium Rs.415.00 Add 1/2% on I.E.V. Rs.200.00 Add for 53 Pass, 9 of Rs.2.50 Rs.132.50 Add for Driver & Conductor Rs.10.00 --------- 757.50" ---------

A perusal of the policy, therefore, indicates that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use (including the loading and or un loading) of the motor vehicle falling under Section II(1)(i) has been confined to "such amount as is necessary to meet the requirements of the Motor Vehicle Act , 1939." This liability, as is apparent from clause (b) of sub-section (2) of Section 95 of the Act, was at the relevant time Rs.20,000 only. The details of the premium also indicate that no additional premium with regard to a case falling under Section II(1)(i) was paid by the owner of the vehicle to the insurance company. It is only the vehicle which was comprehensively insured, the insured's estimate of value including accessories (I.E.V.) thereof having been shown as Rs.40,000. In this view of the matter the submission made by learned counsel for the respondents that the appellant had in the instant case undertaken an unlimited liability does not obviously have any substance. The liability under the policy in the instant case was the same as the statutory liability contemplated by clause (b) of sub-section (2) of Section 95 of the Act namely Rs.20,000. An award against the appellant could not, therefore, have been made in excess of the said statutory liability.

Learned counsel for the appellant then urged relying on the decision of this Court in <CITATION> , AIR 1959 Supreme Court 1331 that in view of the sub-section (6) of Section 96 of the Act no insurer to whom the notice referred to in sub-section (2) thereof has been given, is entitled "to avoid his liability" to any person entitled to the benefit of any such judgment as is referred to in sub- section (1) thereof otherwise than in the manner provided for in sub-section (2). On this basis it was urged that the appellant was not entitled to assert that its liability was confined to Rs.20,000 only inasmuch as this is not one of the defences specified in sub-section (2) of Section 96 of the Act. We find it difficult to agree with this submission either. Firstly, in paragraph 12 of the report of this very case it has been held that sub-section (2) of Section 96 in fact deals with defences other than those based on the conditions of a policy. Secondly, from the words "to avoid his liability" used in sub-section (6) of Section 96 it is apparent that the restrictions placed with regard to defences available to the insurer specified in sub-section (2) of Section 96 are applicable to a case where the insurer wants to avoid his liability. In the instant case the appellant is not seeking to avoid its liability but wants a determination of the extent of its liability which is to be determined, in the absence of any contract to the contrary, in accordance with the statutory provisions contained in this bahalf in clause (b) of sub-section (2) of Section 95 of the Act. In the instant case since as seen above the appellant did not undertake in the policy any liability in excess of the statutory liability the award against it could be only in accordance with the said statutory liability.

Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the <ORG> and even before <ORG> in appeal. In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed of either the policy or a copy thereof. This <ORG> has consistently emphasised that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the <ORG> such as the appellant who are under an obligation to act fairly. In many cases even the owner of the vehicle for reasons known to him does not choose to produce the policy or a copy thereof. We accordingly wish to emphasise that in all such cases where the Insurance Company concerned wishes to take a defence in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defence. Even in the instant case had it been done so at the appropriate stage necessity of approaching this <ORG> in Civil Appeal would in all probability have been avoided. Filing a copy of the policy, therefore, not only cuts short avoidable litigation but also helps the <ORG> in doing justice between the parties. The obligation on the part of the <ORG> or its instrumentalities to act fairly can never be over- emphasised.

In the result, this appeal succeeds and is allowed to this extent that the liability of the appellant is fixed at Rs.20,000 together with interest as allowed by <ORG>. In view of the order of this Court dated 14th September, 1984 quoted above, however, it is held that even if the total liability of the appellant falls short of Rs.1,00,000, it shall not be entitled to any refund out of the sum of Rs.1,00,000 which was deposited by it and withdrawn by the claimant-respondent in pursuance of the said order. The decree of <ORG> as against the driver and the owner of the vehicle namely Respondents 2 and 3 is, however, maintained and all sums in excess of Rs.1,00,000 which has already been withdrawn by the claimant-respondent as aforesaid shall be recoverable by him from Respondents 2 and 3 only. There shall be no order as to costs.

R.S.S. Appeal allowed.


PETITIONER: <NAME> Vs. RESPONDENT: THE STATE OF MADHYA PRADESH AND OTHE DATE OF JUDGMENT: 16/03/1954 BENCH: <NAME>, MEHAR CHAND (CJ) BENCH: <NAME>, MEHAR CHAND (CJ) MUKHERJEA, B.K. DAS, SUDHI RANJAN BOSE, VIVIAN HASAN, GHULAM CITATION: 1954 AIR 403 1954 SCR 1122 CITATOR INFO : F 1955 SC 661 (5,8,60,123,145) R 1955 SC 765 (5) R 1957 SC 397 (14) R 1957 SC 790 (10) RF 1958 SC 578 (228) RF 1959 SC 725 (10) D 1960 SC 424 (14) RF 1961 SC 65 (5) R 1961 SC1615 (11) R 1962 SC 123 (12) RF 1962 SC1006 (77) R 1962 SC1621 (10,12,39,44,45,46,110) R 1967 SC1401 (8) D 1971 SC2280 (11) F 1975 SC1443 (6) ACT: Constitution of India, arts, 19(1)(g), 226, 286(1)(a)- Central Provinces and Berar Sales Tax Act (Act XXI of 1947), as amended by, Act XVI of 1949-Explanation II to section 2(g)-Whether ultra vires the Constitution-Threat to use coercive machinery of Act for realising tax-whether infringement of fundamental rights under art. 19(1)(g) of the Constitution. HEADNOTE: Held, (i) that explanation II to s. 2(g) of the Central Provinces and Berar Sales Tax Act (Act XXI of 1947) as amended by Central Provinces and Berar Act (Act XVI of 1949) is ultra vires <ORG>. (ii) A threat by the <ORG> to realize tax from the assesses without the authority of law by using the coercive machinery of the impugned Act is a sufficient infringement of his fundamental right under art. 19(1)(g) and gives him a right to seek relief under art. 226 of the Constitution. The impugned Act, requiring the assesses to-deposit the whole of the tax before he can get the relief provided by it, cannot be said to provide an adequate alternative remedy. <CITATION> . ( s C.R. 1069); <CITATION> in council (L.R. 74 I.A. 50); <CITATION> ( S.C.R. 572) referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No, 20 of 1952. Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the 25th April, 1952, of <ORG> at Nagp ur in Miscellaneous Petition No. 1623 of 1951.

<NAME> Engineer (<NAME> and <NAME> off, with him) for the appellant.

<NAME>, Advocate-General of Madhya Pradesh, <NAME>, with him) for respondent No. 1.

<NAME>, Advocate-General of Madras (<NAME>, with him) for the intervener.

1954. MArch 16. The Judgment of, the Court was delivered by <NAME> is an appeal by leave from a judgment of <ORG> at Nagpur dated the 25th of April, 1952, dismissing a petition under article 226 of the Constitution of India filed by the appellant questioning the vires of certain provisions of the Central Provinces and Berar Sales Tax Act 1947.

The appellant represents a concern <ORG>, a company registered under' the Indian Companies Act , 1913, having its head office at Bombay, and several branches in . the State of Madhya Pradesh. The main business of the appellant company is that of cotton. The head-office of the appellant at Bombay sells cotton bales to several mills and individuals under the control and the system regulated by the Textile Commissioner at Bombay, and upon a contract of sale being completed the goods after being ginned and pressed are sent from Khamgaon and other places in the State of Madhya Pradesh and are actually delivered in Bombay and such other places outside the State of Madhya Pradesh as directed by the head office. The cotton bales are sent by rail under an insurance in favour of the appellant, and are delivered to the buyer by tender of railway receipt against the payment of price in Bombay. Under the Central Provinces and Berar Sales Tax Act, 1947 (Act I XXI of 1947), cotton was declared liable to sales tax on the 11th of April, 1949, and since that date the appellant commenced paying the tax in respect of the purchases made by it, and continued to pay it till the 31st of December, 1950. For the quarter ending on the 31stof March, 1951, the appellant declined to pay the tax in respect of the purchases made during that quarter, realizing that it could not be made legally liable for the payment of this tax in the State of Madhya, Pradesh, the transactions done or effected in Madhya Pradesh not being " sales" within that State. Apprehending that the company may be subjected to the payment of the tax without authority of law, an application was preferred in <ORG> at Nagpur praying for an appropriate writ or writs which may secure to the company protection from the impugned Act and its enforcement by the State. It was alleged that Explanation II to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, as further amended by Act XVI of 1949 was ultra vires and illegal. This petition, along with a refer eence in another case (Miscellaneous Civil Case No. 258 of 1951: A.I.R. 1952 Nag.

378), was heard by a Division Bench of <ORG> and it was held that Explanation II to section 2(g) of the Act was not enforceable because under the Constitution sales tax could only be collected, in the State where the goods were delivered for consumption. It was further held that Explanation 11 as amended by the C.P. & Berar Act XVI of 1949 was not validly enacted because it made drastic changes in the rules of the Sale of Goods Act . Without obtaining the assent of the Governor-General as required by section 107 of the Government of India Act, 1935. 'It was observed that the mere p reduction of the goods in a State is not enough to make the tax payable unless the goods are appropriated to a particular contract, and that to impose the tax at that stage would be tantamount to charging an excise duty and not a tax on the sale of goods. In spite of these findings <ORG> declined to issue a writ and dismissed. the petition made to it under article 226 of the Constitution on the ground that a mandamus issues only to compel an authority to do or abstain from doing some act, that it is seldom anticipatory and certainly never issues where the action of the authority is dependant on some action of the petitioner and that in the present case the petitioner had not even made his return and no demand for the tax could be made from him.

In this appeal it was argued, by <NAME>, learned counsel for the appellant, that an illegal and unjust imposition operates as an illegal restraint on trade and violates fundamental rights, that <ORG> having held that the Constitution by article 286 thereof made delivery of the goods for consumption the decisive factor for determining which State should have the right of taxing such sales, and having thus found the provision of the Explanation to the definition of "sale" unconstitutional, should have issued a writ of mandamus restraining the respondent State from enforcing that part of the Act.

To appreciate the contentions of the learned counsel it is necessary to set out the relevant provisions of the Act which, <ORG> has declared ultra vires <ORG>. Act XXI of 1947 defines the expression "sale" in section 2(g) of the Act in these terms:- " 'Sale' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payments or other valuable consideration including transfer of property in goods made in the course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge ". " Explanation.(I)-" A transfer of goods on hirepurchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale. "

Explanation (II)-" Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall, wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar. "

This provision was amended by the Central Provinces and Berar Act XVI of 1949 which came into force on the 11th of ApriL 1949, by which Explanation II of section 2(g) was amended as follows:-

Explanation (II)-,' Notwithstanding anything to the contrary in the Indian Sale of Goods Act , 1930, the sale or purchase of any goods shall be deemed for the purposes of this Act, to have taken place in this Province-wherever the contract of sale or purchase might have been made

(a) If the goods were actually in this Province at the time when the contract of sale or purchase in respect thereof was made, or

(b) In case, the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced or found in this Province at any time after the contract of sale or purchase in respect 'thereof was made. "

Certain amendments were made in the Act, by Act IV of 1951 which came into force on the 1st of April. 1951, but these are not relevant to the present' inquiry. As pointed out above, <ORG> held that the new Explanation II was ultra vires <ORG> and that the mere production of goods was not enough to make the tax payable unless the goods were appropriated to a particular contract. The correctness of this view can no longer be questioned by reason of the majority decision of this court in <CITATION> .(1), wherein it was held that article 286(1) (a) of the Constitution read with the Explanation thereto and construed in the light of article 301 and article 304 prohibits the taxation of sales or purchases involving inter-State elements, by all States except the State in which the goods are delivered for the purpose of consumption therein and that the view that the Explanation does not deprive the State, in which the property in the goods passed, of its taxing power and that consequently both the State in which the property in the goods passes and the State i n which the goods are delivered for consumption have the power to tax, is not correct.

The learned Advocate-General of the <ORG> did not in this situation, and very properly, challenge the correctness of the decision of <ORG> on this point, and conceded that the Explanation was clearly ultra vires the <ORG> Legislature. He however contended that on the principle enunciated by the Privy (1) [1953] S.C.R. 1069.

<ORG> in <CITATION> in <ORG>(1), jurisdiction to question assessment otherwise than by use of the machinery expressly provided by the Act, was inconsistent with the statutory obligation to pay, arising by virtue of the assessment and that the liability to pay the sales tax under the Act is a special liability created by the Act itself which at the same time gives a special and particular remedy which ought to be resorted to, and therefore the remedy by a writ ought not to be allowed to be used for evading the provisions of the Act, especially a fiscal Act. It was also said that the con- ditions requisite for the issue of a writ of mandamus were not present in the case and that it was not within the scope and purpose of article 226 of the Constitution to decide an academic question.

In our opinion, the contentions raised by the learned Advocate-General are not well founded. It is plain that the State evinced an intention that it could certainly proceed to apply the penal provisions of the Act against the appellant if it failed to make the return or to meet the demand and in order to escape from such serious consequences threatened without authority of law, and infringing fundamental rights, relief by way of a writ of mandamus was clearly the appropriate relief. <CITATION> (2), it was held by this court that a licence fee on a business not only takes away the property of the licensee but also operates as a, restriction on his fundamental right to carry on his business and therefore if the imposition of a licence fee is without authority of law it can be challenged by way of an application under article 32 , a fortiori also, under article 226. These observations have apposite application to the circumstances of the present case. Explanation II to section 2(g) of the Act having been declared ultra vires, any imposition of sales tax on the appellant in Madhya Pradesh is without the authority of law,, and that being so a threat by the State by using the coercive machinery of the impugned Act to (1) 74 I.A. 5o.

(2) [1952] S.C.R. 572, I46 realize it from the appellant is a sufficient infringement of his fundamental right under article 19(1) (g) and it was clearly entitled to relief under article 226 of the Constitution. The contention that because a remedy under the impugned Act was available to the appellant it was disentitled to relief under article 226 stands negatived by the decision of this court in <CITATION> .(1), above referred to. There it was held that the principle that a court will not issue a prerogative writ when an adequate alternative remedy was available could not apply where a party came to the court with an allegation that his fundamental right had been infringed and sought relief under article 226. Moreover, the remedy provided by the Act is of an onerous and burdensome character. Before the appellant can avail of it he has to deposit the whole amount of the tax. Such a provision can hardly be described as an adequate alternative remedy.

For the reasons given above, we are of the opinion that <ORG>, having held that the Explanation II to section 2(g) of the Act was ultra vires, was in error in dismissing the application on the ground that it was not entitled to relief under the provisions of article 226 of the Constitution. In the result therefore we &How this appeal with costs and direct an appropriate writ to issue restraining the first respondent from imposing or authorising imposition of a tax on the appellant in exercise of its authority under Explanation 11 held void.

Appeal allowed.

(I) [1953] S.C.R. 1069.


PETITIONER: THE SUPERINTENDENT, CENTRAL PRISON,FATEHGARH Vs. RESPONDENT: RAM MANOHAR LOHIA DATE OF JUDGMENT: 21/01/1960 BENCH: <NAME>, K. BENCH: <NAME>, K. SINHA, <NAME> P.(CJ) <NAME>, P.B. GUPTA, K.C. DAS SHAH, J.C. CITATION: 1960 AIR 633 1960 SCR (2) 821 CITATOR INFO : APL 1962 SC1106 (8) APL 1962 SC1166 (15) R 1963 SC 812 (10) MV 1966 SC 740 (49,66) RF 1967 SC1110 (16) RF 1971 SC2486 (14) RF 1973 SC1091 (6) R 1974 SC 911 (2,4) R 1987 SC 998 (4) RF 1989 SC 371 (9) ACT: Fundamental Right-Infringement of-Enactment imposing restrictions on freedom of speech-Constitutional validity- Test-"In the interest of Public order". Meaning of-Doctrine of severability-Applicability-Constitution of India, Arts. 19(1) (a), 19(2)U.P. Special Powers Act, 1932 (U.P. XIV Of 1932) s. 3. HEADNOTE: Section 3 of the U.P. Special Powers Act, 1932 (XIV Of 1932), provided as follows:- "Whoever, by word, either spoken or written, or by signs or by visible representations, or otherwise, instigates, expressly or by implication, any person or class of persons not to pay or to defer payment of any liability, and whoever does any act, with intent or knowing it to be likely that any words, signs or visible representations containing such instigation shall thereby be communicated directly or indirectly to any person or class of persons, in any manner whatsoever, shall be punishable with imprisonment which may extend to six months, or with fine, extending to Rs. 250, or with both." The appellant, who was prosecuted under the section for delivering speeches instigating cultivators not to pay enhanced irrigation rates to the <ORG>, applied to <ORG> for a writ of habeas corpus on the ground, amongst others, that the said section was inconsistent with Art. 19(1) (a) of the Constitution and as such void. <ORG> decided in favour of the appellant and he was released. The <ORG> appealed to this Court and the question for determination was whether the impugned section embodied reasonable restrictions in the interests of public order and was thus protected by Art. 19(2) of the Constitution. Held, that even though in a comprehensive sense all the grounds specified in Art. 19(2) of the Constitution on which any reasonable restrictions on the right to freedom of speech must be based can be brought under the general head "public order", that expression, inserted into the Article by the Constitution (First Amendment) Act, 1951, must be demarcated from the other grounds and ordinarily read in an exclusive sense to mean public peace, safety and tranquility in contradistinction to national upheavals, such as revolution, civil strife and war, affecting the security of the <ORG>. <CITATION> (1950) S.C.R. 594, <CITATION> . (1950) S.C.R. 605, <CITATION> . (1952) S.C.R. 654 and <NAME> v. Connecticut. (1940) 310 U.S. 296, discussed. 822 It is well settled by decisions of this Court that in a restriction in order to be reasonable must have a reasonable relation to the object the Legislation has in view and must not go beyond it. Restrictions, therefore, meant to be in the interest of public order which have no proximate relationship or nexus with it but can be only remotely or hypothetically connected with it, cannot be reasonable within the meaning of Art. 19(2) of the Constitution. <NAME> v. <NAME>, A.I.R.(1950) F.C. 67, applied. <CITATION> . (1957) S.C.R. 86o and <CITATION> , (1958) S.C.R. 308, explained. So judged, it cannot be said that the acts prohibited under the wide and sweeping provisions of s. 3 of the Act can have any proximate or even foreseeable connection with public order sought to be protected by it, and, consequently, that section, being violative of the right to freedom of speech guaranteed by Art. 19(1) (a) of the Constitution, must be struck down as unconstitutional. It would be incorrect to argue that since instigation by a single individual not to pay taxes might ultimately lead to a revolution resulting in distruction of public order, that instigation must have a proximate connection with public order. No fundamental rights can be restricted on such hypothetical and imaginary consideration. Nor is it possible to accept the argument that in a demo- cratic set up there can be no scope for agitational approach or that any instigation to break a bad law must by itself constitute a breach of public order, for to do so without obvious limitations would be to destroy the right to freedom of speech on which democracy is founded. It is not possible to apply the doctrine of severability relating to fundamental rights as enunciated by this Court to the provisions of the impugned section, since it is not possible to precisely determine whether the various categories of instigation mentioned therein fall within or without the constitutionally permissible limits of legislation and separate the valid parts from the invalid. <CITATION> (1957) S.C.R. 93o, explained and distinguished. <CITATION> (1950) S.C.R. 594 and <CITATION> o Madhya Pradesh. (1950) S.C.R. 759, referred to. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 76 of 1956.

Appeal from the judgment and order dated August 27, 1954, of <ORG> in Criminal Misc. Writ No. 20 of 1954.

<NAME>, Advocate-General for the State of Uttar Pradesh. <NAME> and <NAME>, for the appellants. <NAME>, for the respondent.1960. January 21. The Judgment of the Court was delivered by <NAME> J.-This appeal raises the question of interpretation of the words " in the interest of public order " in Art. 19(2) of the Constitution.

The facts are not in dispute and they lie in a small compass. The respondent, Dr. <NAME>, is the General Secretary of <ORG>. <ORG> enhanced the irrigation rates for water supplied from canals to cultivators. The party to which the respondent belongs resolved to start an agitation against the said enhancement for the alleged reason that it placed an unbearable burden upon the cultivators. Pursuant to the policy of his party, the respondent visited Farrukhabad and addressed two public meetings wherein he made speeches instigating the audience not to pay enhanced irrigation rates to the Government. On July 4, 1954, at 10 p.m. he was arrested and produced before the City Magistrate, Farrukhabad, who remanded him for two days. After investigation, the Station officer, <NAME>, filed a charge-sheet against the respondent before Sri <NAME>, a Judicial Officer at Farrukliabad. On July 6, 1954, the Magistrate went to the jail to try the case against the respondent, but the latter took objection to the trial being held in the jail premises. When the Magistrate insisted upon proceeding with the trial, the respondent obtained an adjournment on the ground that he would like to move <ORG> for transfer of the case from the file of the said Magistrate. Thereafter the respondent filed a petition before <ORG> for a writ of habeas corpus on the ground, among others, that s. 3 of the U. P. Special Powers Act (Act No. XIV of 1932), 1932, (hereinafter called the Act) was void under the Constitution.

In the first instance the petition came up for disposal before a division bench of <ORG> at Allahabad consisting of <NAME> and <NAME>, Elaborate arguments were addressed before them covering a wide field. The learned Judges delivered differing judgments expressing their views on the main points raised before them. They referred the matter to the Chief Justice for obtaining the opinion of a third Judge on the following two points: " (i) Was the' provision of s. 3 of the U. P. Special Powers Act of 1932 making it penal for a person by spoken words to instigate class of persons not to pay dues recoverable as arrears of land revenue, inconsistent with Art. 19(1)(a) of the Constitution on the 26th of January, 1950 ? " and " (ii) if so, was it in the interests of public order ? ". The petition was placed before <NAME>, J., as a third Judge, who agreeing with <NAME>, J., gave the following answers to the questions referred to him :

Question No. (i). "The provision of section's of the U. P. Special Powers Act, 1932, making it penal for a person by spoken words to instigate a class of persons not to pay dues recoverable as arrears of land revenue, was inconsistent with Article 19(1)(a) of the Constitution on the 26th January, 1950."

Question No. (ii). " The restrictions imposed by section 3 of the U. P. Special Powers Act, 1932, were not in the interests of public order."

In the usual course the matter was placed before the two learned Judges who first heard the case and they, on the basis of the majority view, allowed the petition and directed the respondent to be released.. The State has preferred the present appeal against the said order of <ORG>.

The learned Advocate General, appearing for the appellant. stated before us that be did not propose to canvass the correctness of the majority view on one of the important points raised in the case, namely, that the effect of the passing of the Act did not ipso facto deprive a citizen of his freedom of speech guaranteed. under Art. 19(1) (a) of the Constitution and its validity should be tested by the provisions of Art. 19(2) thereof. He did not. concede the validity of the finding in this regard but assumed its correctness for the purpose of this case. Nothing further, therefore, need be mentioned on this point.

The gist of the argument of the learned Advocate General may be stated thus: The legislature can make laws placing reasonable restrictions on the rights of a citizen to freedom of speech and expression in the interests of public order among other grounds. The words "in the interests of public order" are wider in connotation than the words " for the maintenance of public order ". Laws are rules made by the legislature for the governance of the people in the <ORG> which they are bound to obey, and they are enacted to keep public peace and order. The avowed object of s. 3 of the Act was to prevent persons from instigating others to break the laws imposing a liability upon a person or class of persons to pay taxes and other dues to the <ORG>, any authority or to any land-owner. The impugned section was enacted in the interests of public order and therefore the section was protected by Art. 19(2) of the Constitution. The learned Advocate General pointed out that the object of the <ORG> in preferring this appeal was to obtain the decision of this Court on the question of constitutional validity of s. 3 of the Act and not to pursue the matter against Dr. <NAME>.

The respondent was not present at the time the appeal was heard and was not represented by an advocate. As the question raised was an important one, we requested Mr. <NAME> to assist the <ORG>, and he kindly agreed to do so. He supported the majority view of the High <ORG>. We record our thanks for his assistance.

At the outset it would not be out of place to notice briefly the history of the Act. The Act was originally passed in the year 1932 during the British rule. In an attempt to offset the campaign of non-payment of taxes and other forms of agitation resorted to by <ORG>, originally it was put on the statute book for one year; but in 1940 when the State was under the " Governor's rule ", the Act was made permanent. Under the Act, ss. 1 and 2 came into effect immediately on the passing of the Act and S. 1(2) enabled the <ORG> by notification to extend all or any of the remaining sections to any district or to any part of a district in the United Provinces. After the Constitution, the Act was not repealed but was allowed to continue, with necessary adaptations, in the statue book. Between April and June, 1954, <ORG> extended the provisions of the Act to 33 districts including Farrukhabad district. Now lot us look at the provisions of the Act to ascertain its scope and field of operation. The preamble discloses that it was enacted in 1932 to make provision against and to take powers to deal with instigation to the illegal refusal of the payment of certain liablities and s. 2 defines " liablity " to mean " land revenue or any sum recoverable as arrears of land revenue or any tax, rate, cess or other dues or amount payable to <ORG> or to any local authority, or rent of agricultural land or anything recoverable as arrears of or along with such rent ". Section 3 prescribes the punishment for instigation to the non-payment of a liability. As the argument centres round this section, it will be convenient to read the same:

Section 3: Whoever, by word, either spoken or written, or by signs or by visible representations, or otherwise, instigates, expressly or by implication, any person or class of persons not to pay or to defer payment of any liability, and whoever does any act, with intent or knowing it to be likely that any words, signs or visible representations con. taining such instigation shall thereby be communicated directly or indirectly to any person or class of persons, in any manner whatsoever, shall be punishable with imprisonment which may extend to six months, or with fine, extending to Rs. 250, or with both."

Section 4 says that any person to whom an arrear of liability is due may apply to the Collector to realize it and the Collector is authorized to realize the same as an arrear of land revenue. The impugned section may be dissected into the following components (i) whoever by word, either spoken or written, or by signs or by visible representations or otherwise, (ii) instigates, (iii) expressly or by implication,(iv) any person or class of persons, (v) not to pay any liability, (vi) to defer payment of any liability, (vii) does an act with intent that any words etc. shall be communicated to any person or class of persons, (viii) with the knowledge that it is likely that such words etc. shall be communicated to any person or class of persons, (ix) such communication may be made directly, or indirectly and (x) shall be punished with imprisonment or with fine or with both. Under this section a wide net has been cast to catch in a variety of acts of instigation ranging from friendly advice to a systematic propaganda not to pay or to defer payment of liability to <ORG>, any authority or to any person to whom rent is payable in respect of agricultural land. The meaning of this section, read along with ss. 2 and 4, can be ascertained more clearly by illustration than by definition. (1) A instigates B not to pay any liability to <ORG>, any authority or to any land owner; (2) A instigates B to defer payment of any liability - to <ORG>, any authority or landlord; (3) A instigates a class of persons to do the same; (4) A may do any one of the foregoing things not only by word, but also by signs, visible representations or otherwise; (5) A may do any one of the things bona fide either to get the claim decided in a Court of law or to gain time to get the law changed; (6) A may instigate B not to pay any amount due to <ORG> or to any authority, but the said amount can be recovered by the authority concerned as arrears of land revenue; (7) A may tell C with intention or with knowledge that the said instigation may be communicated to B so that he may not pay; (8) any statement by A to C may imply such instigation. In its wide amplitude the section takes in the innocent and the guilty persons, bona fide and mala fide advice, individuals and class, abstention from payment and deferment of payment, expressed or implied instigation, indirect or direct instigation, liability due not only to <ORG> but to any authority or landholder. In short, no person, whether legal adviser or a friend or a well-wisher of a person instigated can escape the tentacles of this section, though in fact the rent due has been collected through coercive process or otherwise.

We shall now proceed to consider the constitutional validity of this section. The material portions of the relevant provisions of the Constitution may now be read: Article 19: " (1) All citizens shall have the right-

(a) to freedom of speech and expression;

(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the <ORG> from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of the security of the <ORG>, friendly relations with foreign <ORG>s, public order, decenc or morality or in relation to contempt of court,defamation or incitement to an offence." Clause (2) of Art. 19 was amended by the Constitution (First Amendment) Act, 1951. By this amendment several new grounds of restrictions upon the freedom of speech have been introduced, such as friendly relations with foreign <ORG>s, public order and incitement to an offence. It is self evident and common place that freedom of speech is one of the bulwarks of a democratic form of Government. It is equally obvious that freedom of speech can only thrive in an orderly society. Clause (2) of Art. 19 , therefore, does not affect the operation of any existing law or prevent the <ORG> from making any law in so far as such law imposes reasonable restrictions on the exercise of the right of freedom of speech in the interest of public order, among others. To sustain the existing law or a new law made by the <ORG> under cl. (2) of Art. 19 , so far as it is relevant to the present enquiry, two conditions should be complied with, viz., (i) the restrictions imposed must be reasonable; and (ii) they should be in the interests of public order. Before we consider the scope of tile word,-, of limitation, " reasonable restrictions" and " in the interests of ", it is necessary to ascertain the true meaning of the expression public order " in the said clause. The expression public order" has a very wide connotation. Order is the basic need in any organised society. It implies the orderly state of society or community in which citizens can peacefully pursue their normal activities of life. In the words of an eminent Judge of <ORG> " the essential rights are subject to the, elementary need for order without which the guarantee of those rights would be a mockery ". The expression has not been define(] in the Constitution, but it occurs in List II of its Seventh Schedule and is also inserted by the Constitution (First Amendment) Act, 1951 in el. (2) of Art.

19. The sense in which it is used in Art. 19 can only be appreciates by ascertaining how the Article was construed before it was inserted therein and what was the defect to remedy which the <ORG> inserted the same by the said amendment. The impact of el. (2) of Art. 19 on Art. 19(1)(a) before the said amendment was subject to judicial scrutiny by this Court in <CITATION> (l). There <ORG>, in exercise of their powers under s. 9(1-A) of the Madras Maintenance of Public Order Act, 1949, purported to issue an order whereby they imposed a ban upon the entry and circulation of the journal called " <ORG> in that <ORG>. The petitioner therein contended that the said order contravened his fundamental right to freedom of speech and expression. At the time when that order was issued the (expression " public order " was not in Art. 19(2) of the Constitution; but the words " the security of the <ORG> " were there. In considering whether the impugned Act was made in the interests of security of the <ORG>, <NAME>, J., as he then was, after citing the observation of <NAME> in his Criminal Law of England, states:

(1) [1950) S.C.R. 594, 600, 601, 602, "Though all these offences thus involve disturbances of public tranquillity and are in theory offences against public order, the difference between them being only a difference of degree, yet for the purpose of gurading the punishment to be inflicted in respect of them they may be classified into different minor categories as has been done by the Indian Penal Code . Similarly, the Constitution, in formulating the varying criteria for permissible legislation imposing restrictions on the fundamental rights enumerated in article 19 (1 ), has placed in a distinct category those offences against public order which aim at undermining the security of the <ORG> or overthrowing it, and made their prevention the sole justification for legislative abridgement of freedom of speech and expression, that is to say, nothing less than endangering the foundations of the <ORG> or threatening its overthrow could. justify curtailment of the rights to freedom of speech and expres- sion.........."

The learned Judge continued to state:

" The Constitution thus requires a line to be drawn in the field of public order or tranquillity marking off, may be, roughly, the boundary between those serious and aggravated forms of public disorder which are calculated to endanger the security of the <ORG> and the relatively minor breaches of the peace of a purely local significance, treating for this purpose differences in degree as if they were differences in kind. "

The learned Judge proceeded further to state: " We, are therefore of opinion that unless a law restricting freedom of speech and expression is directed solely against the undermining of the security of the <ORG> or the overthrow of it, such law cannot fall within the reservation under clause (2) of article 19 , although the restrictions which it seeks to impose may have been conceived generally in the interests of public order. "

This decision establishes two propositions, viz., (i) maintenance of public order is equated with maintenance of public tranquillity; and (ii) the offences against public order are divided into two categories, viz., (a) major offences affecting the security of the <ORG>, and (b) minor offences involving breach of purely local significance. This Court in <NAME> v. The state of Delhi (1) followed the earlier decision in the context of s. 7 (1) (c) of the East Punjab Public Safety Act, 1949. <NAME>, J., in his dissenting judgment gave the expression " public order " a wider meaning than that given by the majority view. The learned Judge observed at p. 612 thus: " When we approach the matter in this way, we find that while' public disorder' is wide enough to cover a small riot or an affray and other cases where peace is disturbed by, or affects, a small group or persons, 'public unsafety (or insecurity of the <ORG>), will usually be connected with serious internal disorders and such disturbances of public tranquillity as jeopardize the security of the <ORG>. " This observation also indicates that " public order " is equated with public peace and safety. Presumably in an attempt to get over the effect of these two decisions, the expression " public order " was inserted in Art. 19 (2) of the Constitution by the Constitution (First Amendment) Act, 1951, with a view to bring in offences involving breach of purely local significance within the scope of permissible restrictions under cl. (2) of Art. 19. After the said amendment, this Court explained the scope of <NAME> Case (1) in The state of Bihar v. <NAME> (). That case was concerned with the constitutional validity of s. 4 (1) (a) of the Indian Press (Emergency Powers) Act, 1931. It deals with the words or signs or visible representations which incite to or encourage, or tend to incite to or encourage the commission of any offence of murder or any cognizable offence involving violence. <NAME>, J., as he then was, observed at p. 660: " The deduction that a person would be free to incite to murder or other cognizable offence through the press with impunity drawn from our decision in (1)  S.C R. 605. (2)  S.C.R. 654.

<NAME> case could easily have been avoided as it was avoided by <NAME>, who in very emphatic terms said as follows:

"I have read and re-read the judgments of <ORG>, and I can find nothing in them myself which bear directly on the point at issue,and leads me to think that, in their opinion, a restriction of this kind is no longer permissible. "

The validity of that section came up for consideration after the Constitution (First Amendment) Act, 1951, which was expressly made retrospective, and therefore the said section clearly fell within the ambit of the words " in the interest of public order ". That apart the observations of <NAME>, J., as he then was, indicate that even without the amendment that section would have been good inasmuch as it aimed to prevent incitement to murder.

The words " public order " were also understood in America and England as offences against public safety or public peace. <ORG> observed in <NAME> v. Connecticut (1) thus:

"The offence known as breach of the peace embraces a great variety of conduct destroying or menacing public order and tranquillity. It includes not only violent acts and words likely to produce violence in others. No one would have the hardihood to suggest that the principle of freedom of speech sanctions incitement to riot When clear and present -danger of riot, disorder, interference with traffic upon the public streets, or other immediate threat to public safety, peace, or order appears, the power of the <ORG> to prevent or punish is obvious. "

The American decisions sanctioned a variety of restrictions on the freedom of speech in the interests of public order.

They cover the entire gamut of restrictions that can be imposed under different heads in Art. 19(2) of our Constitution. The following summary of some of the cases of <ORG> given in a well-known book on Constitutional Law illustrates the range of categories of cases covering (1) (1940) 310 U S. 296 , 308 , that expression. " In the interests of public order, the <ORG> may prohibit and punish the causing of 'loud and raucousnoise' in streets and public places by means of sound amplifying instruments, regulate the hours and place of public discussion, and the use of the public streets for the purpose of exercising freedom of speech; provide for the expulsion of hecklers from meetings and assemblies, punish utterances tending to incite an immediate breach of the peace or riot as distinguished from utterances causing mere 'public inconvenience, annoyance or unrest'. " In England also Acts like Public Order Act, 1936, Theatres Act, 1843 were passed: the former making it an offence to use threatening, abusive or insulting words or behaviour in any public place or at any public meeting with intent to provoke a breach of the peace or whereby a breach of the peace is likely to be caused, and the latter was enacted to authorise <NAME> to prohibit any stage play whenever he thought its public performance would militate against good manners, decorum and the preservation of the public peace. The reason underlying all the decisions is that if the freedom of speech was not restricted in the manner the relevant Acts did, public safety and tranquillity in the <ORG> would be affected.

But in India under Art. 19(2) this wide concept of" public order " is split up under different heads. It enables the imposition of reasonable restrictions on the exercise of the right to freedom of speech and expression in the interests of the security of the <ORG>, friendly relations with foreign <ORG>s, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. All the grounds mentioned therein can be brought under the general head " public order " in its most comprehensive sense. But the juxtaposition of the different grounds indicates that, though sometimes they tend to overlap, they must be ordinarily intended to exclude each other. " Public order " is therefore something which is demarcated from the others. In that limited sense, particularly in view of, the history of the amendment, it can be pustulated that "public order "

is synonymous with public peace, safety and tranquillity. The next question is what do the words " interest of public order " mean ? The learned Advocate General contends that the phrase "in the interest of public order" is of a wider connotation than the words "for the maintenance of public order" and,therefore, any breach of law which may have the tendency, however remote, to disturb the public order would be covered by the said phrase. Support is Sought to be drawn for this wide proposition from the judgment of this Court in <CITATION> . (1). It is not necessary to state the facts of that case, as reliance is placed only on the observations of <NAME>, C.J., at p. 865, which read:

"It will be noticed that the language employed in the amended clause is "in the interests of" and not "for the maintenance of". As one of us pointed out in <NAME> v. The State of Bihar (2), the expression "in the interests of" makes the ambit of protection very wide. A law may not have been designed to directly maintain public order and yet it may have been enacted in the interests of public order." The learned Chief Justice again in <CITATION> (3) observed, at p. 317, much to the same effect: "As has been explained by this Court in <CITATION> . (1), the words "in the interests of" are words of great amplitude and are much wider than the words "for the maintenance of." The expression "in the interests of" makes the ambit of the protection very wide, for a law may not have been designed to directly maintain the public order or to directly protect the general public against any particular evil and yet it may have been enacted "in the interests of" the public order or the general public as the case may be."

We do not understand the observations of the Chief Justice to mean that any remote or fanciful connection between the impugned Act and the public order (1) [1957] S.C.R. 860. (2) A.I R. (1954) Pat 254 (3) [1958] S.C.R. 308.

<NAME>

would be sufficient to sustain its validity. The learned Chief Justice was only making a distinction between an Act which expressly and directly purported to maintain public order and one which did not expressly state the said purpose but left it to be implied therefrom ; and between an Act that directly maintained public order and that indirectly brought about the same result. The distinction does not ignore the necessity for intimate connection between the Act and the public order sought to be maintained by the Act. Apart from the said phrase, another limitation in the clause, namely, that the restrictions shall be reasonable, brings about the same result. The word "reasonable" has been defined by this Court in more than one decision. It has been held that in order to be reasonable, "restrictions must have reasonable relation to the object which the legislation seeks to achieve and must not go in excess of that object". The restriction made "in the interests of public order" must also have reasonable relation to the object to be achieved, i.e., the public order. If the restriction has no proximate relationship to the achievement of public order, it cannot be said that the restriction is a reasonable restriction within the meaning of the said clause. A full bench decision of <ORG> in <NAME> v. <NAME> (1) contains some observations which give considerable assistance to construe the words. In that case, the appellant was detained in pursuance of the order made by the Government of U.P. under the U.P. Prevention of Black-Marketing (Temporary Powers) Act, 1947. The question was whether the preventive detention provided for in s. 3(1)

(i) of the said Act was preventive detention for reasons connected with the maintenance of public order. The argument in that case ran on the same lines as in the present case. The learned Advocate General there urged that habitual black-marketing in essential commodities was bound sooner or later to cause a dislocation of the machinery of controlled distribution which, in turn, might lead to breaches of the peace and that, therefore, detention with a view to prevent such black marketing was covered by the (1) A.I.R. (1950) F.C. 67 entry. Answering that argument, <NAME>, J.,as he then was, pointed out, at p. 69:

"Activities such as these are so remote in the chain of relation to the maintenance of public order that preventive detention on account of them cannot, in our opinion, fall within the purview of Entry I of List II...........The connection contemplated must, in our view, be real and proximate., not far-fetched or problematical." The decision, in our view, lays down the correct test. The limitation imposed in the interests of public order to be a reasonable restriction, should be one which has a proximate connection or nexus with public order, but not one far- fetched, hypothetical or problematical or too remote in the chain of its relation with the public order. We shall now test the impugned section, having regard to the aforesaid principles. Have the acts prohibited under s. 3 any proximate connection with public safety or tranquility ? We have already analysed the provisions of s. 3 of the Act. In an attempt to indicate its wide sweep, we pointed out that any instigation by word or visible representation not to pay or defer payment of any exaction or even contractual dues to <ORG>, authority or a landowner is made an offence. Even innocuous speeches are prohibited by threat of punishment. There is no proximate or even forseeable connection between such instigation and the public order sought to be protected under this section. We cannot accept the argument of the learned Advocate General that instigation of a single individual not to pay tax or dues is a spark which may in the long run ignite a revolutionary movement destroying public order. We can only say that fundamental rights cannot be controlled on such hypothetical and imaginary considerations. It is said that in a democratic set up there is no scope for agitational approach and that if a law is bad the only course is to get it modified by democratic process and that any instigation to break the law is in itself a disturbance of, the public order. If this argument without obvious limitations be accepted, it would destroy the right to freedom of speech which is the very foundation of democratic way of life. Unless there is a proximate connection between the instigation and the public order, the restriction, in our view, is neither reasonable nor is it in the interest of public order. In this view, we must strike down s. 3 of the Act as infringing the fundamental right guaranteed under Art. 19(1)(a) of the Constitution.

The learned Advocate General then contended that the section is severable and that if so severed, the section may be made to function within the limited field that stands the test of Art. 19(2) of the Constitution. He asks us to read the section as follows :

"Whoever, by word, either spoken or written, or by signs or by visible representations, or otherwise, instigates, expressly or by implication, any class of persons not to pay or to defer payment of any liability, and whoever does any act, with intent or knowing it to be likely that any words, signs or visible representations containing such instigation shall thereby be communicated directly or indirectly to any class of persons, in any manner whatsoever, shall be punishable with imprisonment which may extend to six months, or with fine, extending to Rs. 250, or with both." By so doing he argues that instigation of a class of persons only is made liable and thereby the section is rid of the vice of unconstitutionality.

The doctrine of severability vis-a-vis the fundamental rights is sought to be supported on the basis of the wording of Art. 13(1) of the Constitution. Under that Article laws, in so far as they are inconsistent with the provisions of Part III, ire void only to the extent of such inconsistency. But this implies that consistent and inconsistent parts of a law are severable. This doctrine in its relation to fundamental rights was considered by this Court in three decisions. In <NAME> case (1) such an. argument has been repelled by this Court. <NAME>, J., as he then was, stat@d the legal position thus at p. 603: (1) [1950) S.C.R. 594, 600, 601 602.

Where a law purports to authorise the imposition of restrictions on a fundamental right in language wide enough to cover restrictions both within and without the limits of constitutionally permissible legislative action affecting such right,it is not possible to uphold it even so far as it may be applied within the constitutional limits, as it is not severable. So long as the possibility of its being applied for purposes not sanctioned by the Constitution cannot be ruled out, it must be held to be wholly unconstitutional and void."

<CITATION> the same principle is again restated. <NAME>, J., as he then was observed at p. 765:

The law even to the extent that it could be said to authorize the imposition of restrictions in regard to agricultural labour cannot be held valid because the language employed is wide enough to cover restrictions both within and without the limits of constitutionally permissible legislative action affecting the right. So long as the possibility of' its being applied for purposes not sanctioned by the Constitution cannot be ruled out, it must be held to be wholly void."

The wide reach of this principle appears to have been circumscribed to some extent in a later decision of this Court in <CITATION> (2). In that case the constitutionality of ss. 4 and 5 of the Prize Competitions Act  was challenged on the ground that prize competition' as defined in s. 2(d) of the Act included not merely competitions that were of a gambling nature but also those in which success depended to a substantial degree on skill. This Court, having regard to the history of the legislation, the declared object thereof and the wording of the statute, came to the conclusion that the competitions which were Sought to be controlled and regulated by the Act were only those competitions in which success did not depend to any substantial degree on skill. That conclusion was sufficient to reject the contention raised in that case; but even on the assumption that (1)  S.C.R. 759.

(2) [1957) S.C.R. 930.

prize competition as defined in s. 2(d) of the Act included those in which success depended to substantial degree on skill as well as those in which it did not so depend, this Court elaborately considered the doctrine of severability and laid down as many as seven rules of construction. On the application of the said rules it was held that the impugned provisions were severable in their application to competitions in which success did not depend to any substantial degree on skill.

The foregoing discussion yields the following results: (1) " Public order " is synonymous with public safety and tranquillity : it is the absence of disorder involving breaches of local significance in contradistinction to national upheavals, such as revolution, civil strife, war, affecting the security of the <ORG>; (2) there must be proximate and reasonable nexus between the speech and the public order; (3) s. 3 , as it now stands, does not establish in most of the cases comprehended by it any such nexus; (4) there is a conflict of decision on the question of severability in the context of an offending provision the language whereof is wide enough to cover restrictions both within and without the limits of constitutionally permissible legislation; one view is that it cannot be split up if there is possibility of its being applied for purposes not sanctioned by the Constitution and the other view is that such a provision is valid if it is severable in its application to an object which is clearly demarcated from other object or objects falling outside the limits of constitutionally permissible legislation; and (5) the provisions of the section are so inextricably mixed up that it is not possible to apply the doctrine of severability so as to enable us to affirm the validity of a part of it and reject the rest.

It is not necessary in this case to express our preference for one or other of the foregoing decisions. Assuming that the summary of the rules of construction given in the last of the cases cited supra are correct and exhaustive, we are not satisfied that in the instant case the impugned section with the  omissions suggested by the learned Advocate General could, wholly or to any extent, be salvaged. The words of the section with the suggested omissions continue to suffer from the same vice they are subjected to without the said omissions. The Suggested omissions from the section only exclude individuals from the operation of the section and confine it to a class of persons and in other respects it is not freed from the defects already pointed out by us. In <NAME> Case (1) the difference between two classes of competitions, namely, those that are of gambling nature and those in which success depends on skill, is clear-cut and has long been recognized in legislative practice. But in the present case it is not even possible to predicate with some kind of precision the different categories of instigation falling within or without the field of constitutional prohibitions. The constitutional validity of a section cannot be made to depend upon such an uncertain factor. Whether the principle of the first two decisions is applied or that of the third is invoked, the constitutional validity of the section cannot be sustained. We, therefore, hold that s. 3 of the Act is void as infringing Art. 19(1)(a) of the Constitution. The, entire section therefore must be struck down as invalid. If so, the prosecution of the respondent under that section is void.

The learned Advocate General made an impassioned appeal to persuade us to express our view that though the present section is void on the ground that it is an unreasonable restriction on the fundamental right, in the interests of public order the <ORG> could legitimately re-draft it in a way that it would conform to the provisions of Art. 19(2) of the Constitution. It is not this <ORG>'s province to express or give advice or make general observations on situations that are not presented to it in a particular case. It is always open to the <ORG> to make such reasonable restrictions which are permissible under Art. 19(2) of the Constitution.

In the result, the appeal is dismissed.

Appeal dismissed.

(1) [1957] S.C.R. 930.