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No. XIII of 1950. Application under article 32 (1) of the Constitution of India for a writ of habeas corpus against the detention of the appellant in the Madras jail in pursuance of an order of detention made under the . The material facts of the case and arguments of counsel are set out in detail in the judgments. The relevant provisions of the , are printed below. Short title, extent and duration. This Act may be called the . (2) It extends to the whole of India . . (3) It shall cease to have effect on the 1st day of April, 1951, as respects things done or omitted to be done before that date. 2. Definitions. In this Act, unless the context other wise requires, (a) "State Government" means, in relation to a Part C State, the Chief Commissioner of the State; and (b) "detention order" means an order made under Section 3. 3. Power to make orders detaining certain persons. (1) The Central Government or the State Government may (a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to (i) the defence of India, the relations of India foreign power, or the security of India, or (ii) the security of the State or the maintenance of public order, or (iii) the maintenance of supplies and services to the community, or (b) if satisfied with respect to any person who is a foreigner within the meaning of the (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India it is necessary so to do, make an order directing that such person be detained. (2) Any District Magistrate or Sub Divisional Magistrate, or Presidency town, the Commissioner of Police, may, if satisfied provided in sub clauses (ii) and (iii) of clause (a) of sub section (1), exercise the power conferred by the said sub section. (3) When any order is made under this section by a Dis trict Magistrate, Sub Divisional Magistrate or Commissioner of Police, he shall forthwith report the fact to the State Government to which he is subordinate together with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the necessi ty for the order. Grounds of order of detention to be disclosed to persons affected by the order. (1) When a person is de tained in pursuance of a detention order, the authority making the order shall, as soon as may be, communicate to him the grounds on which the order his been made, and shall afford him the earliest opportunity of making a representa tion against the order, in a case where such order has been made by the Central Government, to that Government, and in a case where it has been made by a State Government or an officer subordinate thereto, to the State Government. 94 11. Confirmation of detention order. In any case where the Advisory Board has reported that* there is in Rs opinion suffcient cause for the detention of the person concerned, the Central Government or the State Government. as the case may be, may confirm the detention order and continue the detention of the person concerned for ' such period as it thinks fit. Duration of detention in certain cases. (1) Any person detained in any of the following classes of cases or under 'my of the following circumstances may be detained without obtaining the opinion of an Advisory Board for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained wish a view to preventing him from acting in any manner prejudicial to (a) the defence of India, relations of India with foreign powers or the security of India; or (b) the security of a State or the maintenance of public order. * * * 14. Disclosure of grounds of detention, etc. (1) No court shall, except for the purpose of a prosecution for an offence punishable under sub section (9,), allow any state ment to be made, or any evidence to be given. before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by 'him against such order; and notwithstanding anything contained in any other law, no court shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or representation made, or the proceedings of an Advisory Board or that par of the report of an Advisory Board which is confidential. (2) It shall be an offence punishable with imprisonment for term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of the Central Government or the State Government, as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub section (1): Provided that nothing in this sub section shall apply to a disclosure made ' to his legal adviser by a person who is the subject of a detention order. M. K. Nambiar (section K. Aiyar and V.G. Rao, with him) for the petitioner. K. Rajah Aiyar, Advocate General of Madras (C. R. Pattabi Raman and R. Ganapathi, with him) lot the State of Madras. M.C. Setalvad, Attorney General for India (Jindralal, with him) for the Union of India. 95 1950. May 19. The following Judgments were delivered. KANIA C. J This is a petition by the applicant under article 32 (1) of the Constitution of India for a writ of habeas corpus against his detention in the Madras Jail. In the petition he has given various dates showing how he has been under detention since December, 1947. Under the ordi nary Criminal Law he was sentenced to terms of imprisonment but those convictions were set aside. While he was tires under detention under one of the orders of the Madras State Government, on the 1st of March, 1950, he was served with an order made under section 3 (1) of the , IV of 1950. He challenges the legality of the order as it is contended that Act IV of 1950 contravenes the provisions of articles 13, 19 and 21 and the provisions of that Act are not in accordance with article 22 of the Con stitution. He has also challenged the validity of the order on the ground that it is issued mala fide. The burden of proving that allegation is on the applicant. Because of the penal provisions of section 14 of the impugned Act the applicant has not disclosed the grounds, supplied to him, for his detention and the question of mala fides of the order therefore cannot be gone into under this petition. The question of the validity of Act IV of 1950 was argued before us at great length. This is the first case in which the different articles of the Constitution of India contained in the Chapter on Fundamental Rights has come for discussion before us. The Court is indebted to the learned counsel for the applicant and the Attorney General for their assistance in interpreting the true meaning of the relevant clauses of the Constitution. In order to appreciate the rival contentions it is useful first to bear in mind the general scheme of the Constitution. Under article 53 of the Constitution the executive power of the Union is vested in the President and is to be exercised by him in accordance with the 96 Constitution either directly or through officers subordinate to him. The legislative powers of the Union are divided between the Parliament and Legislatures of the States. The ambit and limitations on their respective powers are found in article 246 read with article 245, Schedule VII, Lists 1,2 and 3 of the Constitution. For the Union of India the Supreme Court is established and its powers and jurisdiction are set out in articles 124 to 147. This follows the pat tern of the Government of India Act, 1935, which was the previous Constitution of the Government of India. Unlike the American Constitution, there is no article vesting the judicial power of the Union of India in the Supreme Court. The material points substantially altering the edifice are first in the Preamble which declares india a Sovereign Democratic Republic to secure to all its citizens justice, liberty and equality and to promote among them all, frater nity. Part III of the Constitution is an important innova tion. It is headed "Fundamental Rights. " In that Part the word "State" includes both the Government of the Union and the Government of the States. By article 13 it is expressly provided that all laws in force in the territory of India, immediately before the commencement of the Constitution, in so far as they are inconsistent with the provisions of this Part, to the extent of such inconsistency, are void. There fore, all laws in operation in India on the day the Consti tution came into force, unless otherwise saved, to the extent they are inconsistent with this Chapter on Fundamen tal Rights, become automatically void. Under article 13 (2) provision is made for legislation after the Constitution comes into operation. It is there provided that the State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contraven tion of this clause shall to the extent of the contraven tion, be void. Therefore, as regards future legislation also the Fundamental Rights in Part III have to be respected and, unless otherwise saved by the provisions of the Consti tution, they will be void to the extent they contravene the provisions of Part III. Under article 245 (1) the legisla tive powers conferred under 97 article 246 are also made "subject to the provisions of this Constitution," which of course includes Part III dealing with the Fundamental Rights. The term law in article 13, is expressed to be wide enough to include Acts, Ordinances, Orders, Bye laws, Rules, Regulations and even custom or usage having, in the territory of India, the force of law. The rest of this Part is divided in seven divisions. "Right to Equality" is found in articles 14 18, "Eight to Freedom" in articles 19 22, "Right against Exploitation" in articles 23 and 24, "Right to Freedom of Religion" in articles 25 28, "Cultural and Educational Rights" in articles 29 and 30, "Right to Property" in article 31 and "Right to Constitu tional Remedies" in articles 32 35. In this case we are directly concerned only with the articles under the caption "Right to Freedom" (19 22) and article 32 which gives a remedy to enforce, the rights conferred by this Part. The rest of the articles may have to be referred to only to assist in the interpretation of the above mentioned arti cles. It is obvious that by the insertion of this Part the powers of the Legislature and the Executive, both of the Union and the States, are further curtailed and the right to enforce the Fundamental Rights found in Part III by a direct application to the Supreme Court is removed from the legislative control. The wording of article 32 shows that the Supreme Court can be moved to grant a suitable relief, mentioned in article 32 (2), only in respect of the Funda mental Rights mentioned in Part III of the Constitution. The petitioner is detained under a preventive detention order, made under Act IV of 1950, which has been passed by the Parliament of India. In the Seventh Schedule of the Constitution, List I contains entries specifying items in respect of which the Parliament has exclusive legislative powers. Entry 9 is in these terms: "preventive detention for reasons connected with Defence, Foreign Affairs or the Security of India; persons subjected to such detention." List III of that Schedule enumerates topics on which both the Union and the States have concurrent legislative 98 powers. Entry 3 of that List is in these terms: "Preventive detention for reasons connected with the security of a State, the maintenance of public order or the maintenance of supplies and services essential to the community; persons subjected to such detention. " It is not disputed that Act IV of 1950 is covered by these two Entries in List I and List III of the Seventh Schedule. The contention of the peti tioner is that the impugned legislation abridges or in fringes the rights given by articles 19 21 and is also not in accordance with the permissive legislation on preventive detention allowed under articles 22 (4) and (7) and in particular is an infringement of the provisions of article 22 (5). It is therefore necessary to consider in detail each of these articles and the arguments advanced in respect thereof. Article 19 is for the protection of certain rights of freedom to citizens. It runs as follows : "19. (1) All citizens shall have the right (a) to free dom of speech and expression; (b) to assemble peaceably and without arms; (c) to form associations or unions; (d) to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; (f) to acquire, hold and dispose of property; and (g) to practise any profession, or to carry on any occupation, trade or business. "(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relat ing to, libel, slander, defamation, contempt of court or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the State. (3) Nothing in sub clause (b) of the said clause shall affect the operation of any existing law in so far as it imposts, or prevent the State from making any law imposing, in the interests of public order 99 reasonable restrictions on the exercise of the right con ferred by the said sub clause. (4) Nothing in sub clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause. (5) Nothing in sub clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe. (6) Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restric tions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe, or prevent the State from making any law prescribing or empowering any authority to prescribe, the professional or technical qualifications necessary for practising any pro fession or carrying on any occupation, trade or business. " Clause (2) specifies the limits up to which the abridge ment of the right contained in 19 (1) (a) may be permitted. it is an exception. Similarly clause (3) sets out the limit of abridgement of the right in 19 (1) (b) and clause (4) specifies such limits in respect of the right in 19 (1) (c). Clause (5) is in respect of the rights mentioned in 19 (1) (d), (e) and (f) and clause (6) is in respect of the rights contained in 19 (1) (g). It cannot be disputed that the articles collected under the caption "Right to Freedom" have to be considered together to appreciate the extent of the Fundamental Rights. In the first place it is necessary to notice that 100 there is a distinction between rights given to citizens and persons. This is clear on a perusal of the provisions of article 19 on the one hand and articles 20, 21 and 22 on the other. In order to determine whether a right is abridged or infringed it is first necessary to determine the extent of the right given by the articles and the limitations pre scribed in the articles themselves permitting its curtail ment. The inclusion of article 13 (1) and (2) in the Con stitution appears to be a matter of abundant caution. Even in their absence, if any of the fundamental rights was infiringed by any legislative enactment, the Court has always the power to declare the enactment, to the extent it transgresses the limits, invalid. The existence of article 13 (1) and (2) in the Constitution therefore is not material for the decision of the question what fundamental right is given and to what extent it is permitted to be abridged by the Constitution itself. As the preventive detention order results in the deten tion of the applicant in a cell it was contended on his behalf that the rights specified in article 19 (1) (a), (b), (c), (d), (e) and (g) have been infringed. It was argued that because of his detention he cannot have a free right to speech as and where he desired and the same argument was urged in respect of the rest of the rights mentioned in sub clauses (b), (c), (d), (e) and (g). Although this argu ment is advanced in a case which deals with preventive detention, if correct, it should be applicable in the case of punitive detention also to any one sentenced to a term of imprisonment under the relevant section of the Indian Penal Code. So considered, the argument must clearly be rejected. In spite of the saving clauses (2)to(6) permitting abridge ment of the rights connected with each of them, punitive detention under several sections of the Penal Code, e.g., for theft, cheating, forgery and even ordinary assault, will be illegal. 'Unless such conclusion necessarily follows from the article, it is obvious that such construction should be avoided. In my opinion, such result is clearly not the outcome of the Constitution. The article has to be read without any pre conceived notions. So read, it clearly means 101 that the legislation to be examined must be directly in respect of one of the rights mentioned in the subclauses. If there is a legislation directly attempting to control a citizen 's freedom of speech or expression, or his right to assemble peaceably and without arms, etc., the question whether that legislation is saved by the relevant saving clause of article 19 will arise. If, however, the legisla tion is not directly in respect of any of these subjects, but as a result of the operation of other legislation, for instance, for punitive or preventive detention, his right under any of these subclauses is abridged, the question of the application of article 19 does not arise. The true approach is only to consider the directness of the legisla tion and not what will be the result of the detention other wise valid, on the mode of the detenue 's life. On that short ground, in my opinion, this argument about the in fringement of the rights mentioned in article 19 (1) gener ally must fail. Any other construction put on the article, it seems to me. will be unreasonable. It was next urged that while this interpretation may meet the contention in respect of rights under article 19 (1) (a), (b), (c), (e) and (g), the right given by article 19 (1) (d) is left untouched. That sub clause expressly gives the right "to move freely throughout the territory of India. " It was argued that by the confinement of the peti tioner under the preventive detention order his right to move freely throughout the territory of India is directly abridged and therefore the State must show that the im pugned legislation imposes only reasonable restrictions on the exercise of that right in the interests of the general public or for the protection of the interests of any Sched uled Tribe, under article 19 (5). The Court is thus en joined to inquire whether the restrictions imposed on the detained person are reasonable in the interests of the general public. Article 14 of the Constitution gives the right to equality in these terms: "The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. " 102 It was argued that the words "within the territory of India" are unnecessary in that article because the Parlia ment is supreme to make laws operative only within the territory of India. Without those words also the article will bear the same meaning. Similarly, it was urged that the words "territory of India" in article 19 (1) (d) may be treated as superfluous, and preventive detention would thus be an abridgement of the right to move freely. In my opin ion, this rule of construction itself is faulty. Because certain words may be considered superfluous (assuming them to be. so in article 14 for the present discussion) it is quite improper to assume that they are superfluous wherever found in the rest of the Constitution. On the contrary, in my opinion, reading sub clause (d) as a whole the words "territory of India" are very important. What is sought to be protected by that sub clause is the right to freedom of movement, i.e., without restriction, throughout the terri tory of India. Read with their natural grammatical. mean ing the sub clause only means that if restrictions are sought to be put upon movement of a citizen from State to State or even within a State such restrictions will have to be tested by the permissive limits prescribed in clause (5) of that Article. Sub clause (d) has nothing to do with detention, preventive or punitive. The Constitution men tions a right to freedom of movement throughout the territo ry of India, Every word of that clause must be given its true and legitimate meaning and in the construction of a Statute, particularly a Constitution, it is improper. to omit any word which has a reasonable and proper place in it or to refrain from giving effect to its meaning. This position is made quite clear when clause (5) is read along with this sub clause. It permits the imposition of reasona ble. restrictions on the exercise of such right either in the interest of general public or the protection of the interest of any Scheduled Tribe. It is difficult to conceive of a reasonable restriction necessary in the interests of the general public for confining a person in a cell. Such restriction may be appropriate to prevent a person from going from one Province to another or 103 one area to another, having regard to local conditions prevailing in particular areas. The point however is made abundantly clear by the alternative, viz., for the protec tion of the interests of any Scheduled Tribe. What protec tion of the interests of a Scheduled Tribe requires the confinement of a man in a cell ? On the other hand, pre venting the movement of a person from one part of the terri tory of India to another and the question of reasonable restriction imposed to protect the interests of a Scheduled Tribe is clearly intelligible and often noticed in the course of the administration of the country. Scheduled Tribes have certain rights, privileges and also disabili ties. They have their own civilization, customs and mode of life and prevention of contact with persons or groups with a particular Scheduled Tribe may be considered undesirable during a certain time or in certain conditions. The legis lative history of India shows that Scheduled Tribes have been given a separate place on these grounds. Reading article 19 as a whole, therefore, it seems to me that it has no application to a legislation dealing with preventive or punitive detention as its direct object. I may point out that the acceptance of the petitioner 's argument on the interpretation of this clause will result in the Court being called upon to decide upon the reasonableness of several provisions of the Indian Penal Code and several other penal legislations as abridging this right. Even under clause (5), the Court is permitted to apply the test of reasonable ness of the restrictions or limits not generally, but only to the extent they are either in the interests of the gener al public, e.g., in case of an epidemic, riot, etc., or for the protection of the interests of any Scheduled Tribe. In my opinion, this is not the intention of the Constitution. Therefore the contention urged in respect of article 19 fails. It was argued that article 19 and article 21 should be read together as implementing each other. Article 19 gave substantive rights to citizens while article 21 prescribed that no person can be deprived of his life and personal liberty except by procedure 104 established by law. Even so, on a true construction of article 19, it seems to me that both preventive and punitive detention are outside the scope of article 19. In order to appreciate the true scope of article 19 it is useful to read it by itself and then to consider how far the other articles in Part HI affect or control its meaning. It is the first article under the caption "Right to Freedom . " It gives the rights mentioned in 19 (1) (a) to (g) to all citizens of India. These rights read by them selves and apart from the controls found in clauses (2) to (6) of the same article, specify the different general rights which a free citizen in a democratic country ordi narily has. Having specified those rights, each of them is considered separately from the point of view of a similar right in the other citizens, and also after taking into consideration the principle that individual liberty must give way, to the extent it is necessary, when the good or safety of the people generally is concerned. Thus the right to freedom of speech and expression is given by 19 (1) (a). But clause (2) provides that such right shall not prevent the operation of a law which relates to libel, slander, defamation, contempt of Court or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the State. Clause (2) thus only emphasizes that while the individual citizen has a free right of speech or expression, he cannot be permit ted to use the same to the detriment of a similar right in another citizen or to the detriment of the State. Thus, all laws of libel, slander, contempt of Court or laws in respect of matters which offend against decency or morality are reaffirmed to be operative in spite of this individual right of the citizen to freedom of speech and expression. Simi larly; that right is also subject to laws which prevent undermining the security of the State or against activities which tend to overthrow the State. A similar analysis of clauses f3) and (4) shows similar restrictions imposed on similar grounds. In the same way clause (5) also permits reasonable restrictions in the exercise of the right to freedom of movement throughout the territory of India, the right to reside and settle in any part of the 105 territory of India or the right to acquire, hold and dispose of property, being imposed by law provided such reasonable restrictions on the exercise of such right are in the inter est of the general ' public. The Constitution further pro vides by the same clause that similar reasonable restric tions could be put on the exercise of those rights for the protection of the interest of a Scheduled Tribe. This is obviously to prevent an argument being advanced that while such restriction could be put in the interest of general public, the Constitution did not provide for the imposi tion of such restriction to protect the interests of a smaller group of people only. Reading article 19 in that way as a whole the only concept appears to be that the specified rights of a free citizen arc thus controlled by what the framers of the Constitution thought were necessary restric tions in the interest of the rest of the citizens. Reading article 19 in that way it appears to me that the concept of the right to move freely throughout the territo ry of India is an entirely different concept from the right to "personal liberty" contemplated by article 21. "Person al liberty" covers many more rights in one sense and has a restricted meaning in another sense. For instance, while the right to move or reside may be covered by the expression , 'personal liberty" the right to freedom of speech (men tioned in article 19 (1) (a)) or the right to acquire, hold or dispose of property (mentioned in 19 (1) (f)) cannot be considered a part of the personal liberty of a citizen. They form part of the liberty of a citizen but the limita tion imposed by the word "personal"leads me to believe that those rights are not covered by the expression personal liberty. So read there is no conflict between articles 19 and 21. The contents and subject matters of articles 19 and 21 are thus not the same and they proceed to deal with the rights covered by their respective words from totally different angles. As already mentioned in respect of each of the rights specified in sub clauses of article 19 (1) specific limitations in respect of each is provided, while the expression "personal 106 liberty" in article 21 is generally controlled by the gener al expression "procedure established by law. " The Constitu tion, in article 19, and also in other articles in Part III, thus attempts to strike a balance between individ ual liberty and the general interest of the society. The restraints provided by the Constitution on the legislative powers or the executive authority of the State thus operate as guarantees of life and personal liberty of the individu als. Deprivation (total loss) of personal liberty, which inter alia includes the right to eat or sleep when one likes or to work or not to work as and when one pleases and sever al such rights sought to be protected by the expression "personal liberty" in article 21, is quite different from restriction (which is only a partial control) of the right to move freely (which is relatively a minor right of a citizen) as safeguarded by article 19 (1) (d). Deprivation of personal liberty has not the same meaning as restriction of free movement in the territory of India. This is made clear when the provisions of the Criminal Procedure Code in Chapter VIII relating to security of peace or maintenance of public order are read. Therefore article 19 (5) cannot apply to a substantive law depriving a citizen of personal liberty. I am unable to accept the contention that the word "deprivation" includes within its scope "restriction" when interpreting article 21. Article 22 envisages the law of preventive detention. So does article 9.46 read with Schedule Seven, List I, Entry 9, and List III, Entry 3. Therefore, when the subject of preventive detention is specifically dealt with in the Chapter on Fundamental Rights I do not think it is proper to consider a legisla tion ' permitting preventive detention as in conflict with the rights mentioned in article 19 (1). Article 19 (1) does not purport to cover all aspects of liberty or of personal liberty. In that article only certain phases of liberty are dealt with. "Personal liberty" would primarily mean liberty of the physical body. The rights given under article 19 (1) do not directly come under that description. They are rights which accompany the freedom or liberty of the person. By their very 107 nature they are freedoms of a person assumed to be in full possession of his personal liberty. If article 19 is considered to be the only article safeguarding personal liberty several well recognised rights, as for instance, the right to eat or drink, the right to work, play, swim and numerous other rights and activities and even the right to life will not be deemed protected under the Constitution. I do not think that is the intention. It seems to me improper to read article 19 as dealing with the same subject as article 21. Article 19 gives the rights specified therein only to the citizens of India while arti cle 21 is applicable to all persons. The word citizen is expressly defined in the Constitution to indicate only a certain section of the inhabitants of India. Moreover, the protection given by article 21 is very general. It is of "law" whatever that expression is interpreted to mean. The legislative restrictions on the law making powers of the legislature are not here prescribed in detail as in the case of the rights specified in article 19. In my opinion there fore article should be read as a separate complete article. Article 21 which is also in Part III under the caption "Right to Freedom" runs as follows : "No person shall be deprived of his life or personal liberty except according to procedure established by law. " This article has been strongly relied upon by the peti tioner in support of his contention that the impugned Act is ultra vires the Parliament as it abridges the right given by this article to every person. It was argued that under the Constitution of the United States of America the corre sponding provision is found in the 5th and 14th Amendments where the provision, inter alia, is "that no person shall be deprived of his life or liberty or property except by due process of law. " It was contended for the petitioner that the Indian Constitution gives the same protection to every person in India, except that in the 'United States "due process of law" has been .construed by its Supreme Court to cover both 108 substantive and procedural law, while in India only the protection of procedural law is guaranteed. It was contend ed that the omission of the word "due" made no difference to the interpretation of the words in article 21. The word "established" ' was not equivalent to "prescribed". It had a wider meaning. The word "law" did not mean enacted law because that will be no 'legislative protection at all. If so construed, any Act passed by the Parliament or the State Legislature, which was otherwise within its legislative power, can destroy or abridge this right. On the same line of reasoning, it was argued that if that was the inten tion there was no necessity to put this as a fundamental right in Part III at all. As to the meaning of the word "law" it was argued that it meant principles of natural justice. It meant "jus", i.e., law in the abstract sense of the principles of natural justice, as mentioned in standard works of Jurisprudence, and not "lex", i.e., enact ed law. Against the contention that such construction will leave the meaning vague, it was argued that four principles of natural justice recognised in all civilized countries were covered, in any event, by the word "law". They are: (1) An objective test, i.e., a certain, definite and ascer tainable rule of human conduct for the violation of which one can be detained; (2) Notice of the grounds of such detention; (3) An impartial tribunal, administrative, judi cial or advisory, to decide whether the detention is justi fied; and (4) Orderly course of procedure, including an opportunity to be heard orally (not merely by making a written representation) with a right to lead evidence and call witnesses. In my opinion, this line of approach is not proper and indeed is misleading. As regards the American Constitution its general structure is noticed in these words in "The Government of the United States" by Munro (5th Edition) at page 53: "The architects of 1787 built only the basement. Their descendants have kept adding walls and windows, wings and gables, pillars and porches to make a rambling structure which is not yet finished. Or, to change the metaphor, it has a fabric which, to use the words of 109 James Russell Lowell, is still being 'woven on the roaring loom of time '. That is what the framers of the original Constitution intended it to be. Never was it in their mind to work out a final scheme for the government of the country and stereotype it for all time. They sought merely to pro vide a starting point. " The same aspect is emphasized in Professor Willis 's book on Constitutional Law and Cooley 's Constitutional Limitations. In contrast to the American Constitution, the Indian Constitution is a very detailed one. The Constitution itself provides in minute details the legislative powers of the Parliament and the State Legisla tures. The same feature is noticeable in the case of the judiciary, finance, trade, commerce and services. It is thus quite detailed and the whole of it has to be read with the same sanctity, without giving undue weight to Part III or article 246, except to the extent one is legitimately and clearly limited by the other. Four marked points of distinction between the clause in the American Constitution and article 21 of the Constitution of India may be noticed at this stage. The first is that in U.S A. Constitution the word "liberty" is used simpliciter while in India it is restricted to personal liberty. (2) In U.S.A. Constitution the same protection is given to proper ty, while in India the fundamental right in respect of property is contained in article 31. (3) The word "due" is omitted altogether and the expression "due process of law" is not used deliberately. (4) The word "established" is used and is limited to "Procedure" in Our article 21. The whole argument of the petitioner is rounded on the meaning of the word "law" given to it by the Supreme Court of America. It seems unnecessary to embark on a discussion of the powers and jurisdiction of the Supreme Court of the 'U.S.A. and how they came to enlarge or abridge the meaning of law in the expression "due process of law". Without going into details, I think there is no justification to adopt the meaning of the word "law" as interpreted by the Supreme Court of U.S.A. in the expression "due 110 process of law" merely because the word "law" is used in article 21. The discussion of the meaning of "due process of law" found in Willis on Constitutional Law and in Coo ley 's Constitutional Limitations shows the diverse meanings given to that expression at different times and under dif ferent circumstances by the Supreme Court of U.S.A., so much so that the conclusion reached by these authors is that the expression. means reasonable law according to the view of the majority of the judges of the Supreme Court at a particular time holding office. It also shows how the meaning of the expression was widened or abridged in certain decades. Moreover, to control the meaning so given to that expression from time to time the doctrine of police powers was brought into play. That doctrine, shortly put, is that legislation meant for the good of the people generally, and in which the individual has to surrender his freedom to a certain extent because it is for the benefit of the people at large, has not to be tested by the touchstone of the "due process of law" formula. Our attention was drawn to the debates and report of the drafting committee of the Constituent Assembly in respect of the wording of this clause. The report may be read not to control the meaning of the article, but may be seen in case of ambiguity. In The Municipal Council of Sydney vs The Commonwealth(1), it was thought that individu al opinion of members of the Convention expressed in the debate cannot be referred to for the purpose of construing the Constitution. The same opinion was expressed in United States vs Wong Kim Ark(2). The result appears to be that while it is not proper to take into consideration the indi vidual opinions of Members of Parliament or Convention to construe the meaning of the particular clause, when a ques tion is raised whether a certain phrase or expression was up for consideration at all or not, a reference to the debates may be ' permitted. In the present case the debates were referred to to show that the expression "due process of law" was known to exist in the American Constitution (1) (2) (169) U.S 649 at 699. 111 and after a discussion was not adopted by the Constituent Assembly in our Constitution. In Administrator General of Bengal vs Premlal Mullick(1), a reference to the proceedings of the Legislature which resulted in the passing of the Act was not considered legitimate aid in the construction of a particular section. The same reasons were held as cogent for excluding a reference to such debates in construing an Indian Statute. Resort may be had to these sources with great caution and only when latent ambiguities are to be resolved. See Craies ' Statute Law (4th Edition) page 122, Maxwell on Interpretation of Statutes (9th Edition)pp. 28 29 and Crawford on Statutory Construction (1940 Edition) p. 379, article 214. A perusal of the report of the drafting committee to which our attention was drawn shows clearly that the Constituent Assembly had before it the American article and the expression "due process of law" but they deliberately dropped the use of that expression from our Constitution. No extrinsic aid is needed to interpret the words of article 21, which in my opinion, are not ambiguous. Normally read, and without thinking of other Constitutions, the expression "procedure established by law" must mean procedure prescribed by the law of the State. If the Indian Constitution wanted to preserve to every person the protection given by the due process clause of the Ameri can Constitution there was nothing to prevent the Assembly from adopting the phrase, or if they wanted to limit the same to procedure only, to adopt that expression with only the word "procedural" prefixed to "law. " However, the correct question is what is the right given by article 21 ? The only right is that no person shall be deprived of his life or liberty except according to procedure established by law. One may like that right to cover a larger area, but to give such a right is not the function of the Court; it is the function of the Constitution. To read the word "law" as meaning rules of natural justice will land one in (1) (1895)L.R. 221. A. 107. 15 15 112 difficulties because the rules of natural justice, as re gards procedure, are nowhere defined and in my opinion the Constitution cannot be read as laying down a vague standard. This is particularly so when in omitting to adopt "due process of law" it was considered that the expression "procedure established by law" made the standard specific. It can not be specific except by reading the expression as meaning procedure prescribed by the legislature. The word "law" as used in this Part has different shades of meaning but in no other article it appears to bear the indefinite meaning of natural justice. If so, there appears no reason why in this article it should receive this peculiar meaning. Article 31 which is also in Part III and relates to the fundamental rights in respect of property runs as follows : "No person shall be deprived of his property save by authority of law. " It is obvious that in that clause "law" must mean enact ed law. The object of dealing with property under a differ ent article appears more to provide the exceptions found in article 31 (2) to (6), rather than to give the word "law" a different meaning than the one given in article 21. The world "established" according to the Oxford Dictionary means "to fix, settle, institute or ordain by enactment or agree ment. " The word "established" itself suggests an agency which fixes the limits. According to the dictionary this agency can be either the legislature or an agreement between the parties. There is therefore no justification to give the meaning of "jus" to "law" in article 21. The phrase "procedure established by law" seems to be borrowed from article 31 of the Japanese Constitution. But other articles of that Constitution which expressly pre serve other personal liberties in different clauses have to be read together to determine the meaning of "law" in the expression "procedure established by law. " These articles of the Japanese Constitution have not been incorporated in the Constitution of India in the same language. It is not shown that the word "law" means "jus" in the Japanese Constitution. In the Japanese Constitution these 113 rights claimed under the rules of natural justice are not given by the interpretation of the words "procedure established by law" in their article 31. The word "due" in the expression "due process of law" in the American Consti tution is interpreted to mean "just," according to the opinion of the Supreme Court of U.S.A. That word imparts jurisdiction to the Courts to pronounce what is "due" from otherwise, according to law. The deliberate omission of the word "due" from article 21 lends strength to the conten tion that the justiciable aspect of "law", i.e., to consider whether it is reasonable or not by the Court, does not form part of the Indian Constitution. The omission of the word "due", the limitation imposed by the word "procedure" and the insertion of the word "established" thus brings out more clearly the idea of legislative prescription in the expres sion used in article 21. By adopting the phrase "procedure established by law" the Constitution gave the legislature the final word to determine the law. Our attention was drawn to The King vs The Military Governor of the Hair Park Camp ( '), where articles 6 and 70 of the Irish Constitution are discussed. Under article 6 it is provided that the liberty of the person is inviolable and no person shall be deprived of such except "in accord ance with law" . In article 70 it is provided that no one shall be tried "save in due course of law" and extraor dinary Courts were not permitted to be established except the Military Courts to try military offences. The expres sion "in accordance with law" was interpreted to mean not rules of natural justice but as the law in force at the time. The Irish Court gave the expression "due course of law" the meaning given to it according to the English law and not the American law. It was observed by Lord Atkin in Eshugbayi Eleko vs Officer Administering the Government of Nigeria C), that in accordance with British Jurispru dence no member of the executive can interfere with the liberty or property of a British subject except when he can support the legality of his act before a Court of justice. (1) [1924] 2 Irish Reports K.B. 104. (2) [1931] A.C. (62 at 670. 114 In The King vs The Secretary of State for Home Affairs(1), Scrutton LJ. observed: "A man undoubtedly guilty of murder must yet be released if due forms of law have not been followed in his conviction. " It seems very arguable that in the whole set up of Part III of our Constitution these principles only remain guaranteed by article 21. A detailed discussion of the true limits of article 21 will not be necessary if article 22 is considered a code to the extent there are provisions therein for preventive detention. In this. connection it may be noticed that the articles in Part III deal with different and separate rights. Under the caption "Right to Freedom" articles 19 22 are grouped but each with a separate marginal note. It is obvious that article 22 (1) and (2) prescribe limita tions on the right given by article 21. If the procedure mentioned in those articles is followed the arrest and detention contemplated by article 22 (1) and (2), although they infringe the personal liberty of the individual, will be legal, because that becomes the established legal proce dure in respect of arrest and detention. Article 22 is for protection against arrest and detention in certain cases, and runs as follows : "22. (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. (2.) Every person who is arrested and detained in custo dy shall be produced before the nearest magistrate within a period of twenty four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate. (3) Nothing in clauses (1) and (2) shall apply(a) to any person who for the time being is an enemy alien; or (1) at 382. 115 (b) to any person who is arrested or detained under any law providing for preventive detention. (4) No law providing for preventive detention shall authorize the detention of a person for a longer period than three months unless (a) an Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court, has reported before the expiration of the said period of three months that there is in its opinion suffi cient cause for such detention: Provided that nothing in this sub clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by Parliament under sub clause (b) of clause 17); or (b) such person is detained in accordance with the provisions of any law made by Parliament under subclauses (a) and (b) of clause (7). (5) When any person is detained in pursuance .of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose. (7) Parliament may by law prescribe (a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of sub clause (a) of clause (4); (b) the maximum period for which any person may ,in any class or classes of cases be detained under any law provid ing for preventive detention; and (c) the procedure to be followed by an Advisory Board in an inquiry under sub clause (a) of clause (4). " The learned Attorney General contended that the subject of preventive detention does not fall under 116 article 21 at all and is covered wholly by article 22. According to him, article 22 is a complete code. I am unable to accept that contention. It is obvious that in respect of arrest and detention article 22 (1) and (2) provide safeguards. These safeguards are excluded in the case of preventive detention by article 22 (3), but safe guards in connection with such detention are provided by clauses (4) to (7) of the same article. It is therefore clear that article 21 has to be read as supplemented by article 22. Reading in that way the proper mode of construc tion will be that to the extent the procedure is prescribed by article 22 the same is to be observed; otherwise article 21 will apply. But if certain procedural safeguards are expressly stated as not required, or specific rules on certain points of procedure are prescribed, it seems im proper to interpret these points as not covered by article 22 and left open for consideration under article 21. To the extent the points are dealt with, and included or excluded,, article 22 is a complete code. On the points of procedure which expressly or by necessary implication are not dealt with by article 22, the operation of article 21 will remain unaffected. It is thus necessary first to look at article 22 (4) to (7) and next at the provisions 0 the impugned Act to determine if the Act or any of its provi sions are ultra vires. It may be noticed that neither the American nor the Japanese Constitution contain provisions permitting preventive detention,. much less laying down limitations on such right of detention, in normal timeS, i.e., without a declaration of emergency. Preventive deten tion in normal times,. i.e., without the existence of an emergency like war,. is recognised as a normal topic of legislation in List I. Entry 9, and List III, Entry 3, of the Seventh Schedule. Even in the Chapter on Fundamental Rights article 22 envisages legislation in respect of pre ventive detention in normal times. The provisions of article 22 (4) to (7) by their very wording leave unaffected the large powers of legislation on this point and emphasize particularly by article 22 (7) the power of the Parliament to deprive a person of a right to have his case considered by an advisory board. Part III and. 117 article 22 in particular are the only restrictions on that power and but for those provisions the power to legislate on this subject would have been quite unrestricted. Parliament could have made a law without any safeguard or any procedure for preventive detention. Such an autocratic supremacy of the legislature is certainly cut down by article 21. There fore, if the legislature prescribes a procedure by a validly enacted law and such procedure in the case of preventive detention does not come in conflict with the express provi sions of Part III or article 22 (4) to (7), the must be held valid notwithstanding that the Court may not fully approve of the procedure prescribed under such Act. Article 22 (4) opens with a double negative. Put in a positive form it will mean that a law which provides for preventive detention for a period longer than three months shall contain .a provision establishing an advisory board, (consisting of persons with the qualifications mentioned in sub clause (a)), and which has to report before the expira tion of three months if in its opinion there was sufficient cause for such detention. This clause, if it stood by itself and without the remaining provisions of article 22, will apply both to the Parliament and the State Legislatures. The proviso to this clause further enjoins that even though the advisory board may be of the opinion that there was sufficient cause for such detention, i.e., detention beyond the period of three months, still the detention is not to be permitted beyond the maximum period, if any, prescribed by Parliament under article 22 (7) (b). Again the whole of this sub clause is made inoperative by article 22 (4) (b) in respect of an Act of preventive detention passed by Parlia ment under clauses (7) (a) .and (b). Inasmuch as the im pugned Act is an Act of the Parliament purported to be so made, clause 22 (4) has no operation and may for the present discussion be kept aside. Article 22 prescribes that when any person under a preventive detention law is detained, the authority making the order shall, as soon as may be, commu nicate to such person the grounds on which . the order has been made and shall afford him the 118 earliest opportunity of making a representation against the order. This clause is of general operation in respect of every detention order made under any law permitting deten tion. Article 22 (6) permits the authority making the order to withhold disclosure of facts which such authority consid ers against the public interest to disclose. It may be noticed that this clause only permits the non disclosure of facts, and reading clauses (5) and (6) together a distinc tion is drawn between facts and grounds of detention. Article 22 (4) and (7) deal not with the period of detention only but with other requirements in the case of preventive detention also. They provide for the establishment of an advisory board, and the necessity of furnishing grounds to the detenue and also to give him a right to make a represen tation. Reading article 22 clauses (4) and (7) together it appears to be implied that preventive detention for less than three months, without an advisory board, is permitted under the Chapter on Fundamental Rights, provided such legislation is within the legislative competence of the Parliament or the State Legislature, as the case may be. Article 22 (5) permits the detained person to make a representation. The Constitution is silent as to the person to whom it has to be made, or how it has to be dealt with. But that is the procedure laid down by the Constitution. It does not therefore mean that if a law made by the Parliament in respect of preventive detention does not make provision on those two points it is invalid. Silence on these points does not make the impugned Act in contravention of the Constitution because the first question is what are the rights given by the Constitution in the case of preventive detention. The contention that the representation should be to an outside body has no support in law. Even in the Liversidge case the representation had to be made to the Secretary of State and not to another body. After such representation was made, another advisory board had to consider it, but it was not necessary to make the represen tation itself to a third party. Article 22 (4) and (7) permit the non establishment of an advisory board expressly in a parliamentary legislation 119 providing for preventive detention beyond three months. If so, how can it be urged that the nonestablishment of an advisory. board is a fundamental right violated by the procedure prescribed in the Act passed by the Parliament? The important clause to be considered is article 22 (7). Sub clause (a) is important for this case. In the case of an Act of preventive detention passed by the Parliament this clause contained in the Chapter on Fundamental Rights, thus permits detention beyond a period of three months and ex cludes the necessity of consulting an advisory board, if the opening words of the sub clause are complied with. Sub clause (b) is permissive. It is not obligatory on the Parliament to prescribe any maximum period. It was argued that this gives the Parliament a right to allow a person to be detained indefinitely. If that construction is correct, it springs out of the words of sub clause (7) itself and the Court cannot help in the matter. Subclause (c) permits the Parliament to lay down the procedure to be followed by the advisory board in an inquiry under sub clause (a) of clause (4). I am unable to accept the contention that article 22 (4) (a) is the rule and article 22 (7) the exception. I read them as two alternatives provided by the Constitution for making laws on preventive detention. Bearing in mind the provisions of article 22 read with article 246 and Schedule VII, List I, Entry 9, and List III, Entry 3, it is thus clear that the Parliament is empowered to enact a law of preventive detention (a) for reasons connected with defence, (b) for reasons connected with foreign affairs, (c) for reasons connected with the security of India; and (under List III), (d) for reasons connected with the security of a State, (e) for reasons connected with the maintenance of public order, or (f) for reasons connect ed with the maintenance of supplies and services essential to the community. Counsel for the petitioner has challenged the validity of several provisions of the Act. In respect of the construction of a Constitution Lord Wright in James vs The Commonwealth of Australia(1), (1) (1936) A. 0. 578 at 614. 16 120 observed that "a Constitution must not be construed in any narrow and pedantic sense." Mr. Justice Higgins in Attorney General of New South Wales vs Brewery Employees ' Union (1), observed: "Although we are to interpret words of the Constitution on the same principles of interpretation as we apply to any ordinary law, these very principles of interpretation compel us to take into account the nature and scope of the Act that we are interpreting to remember that it is a Constitution, a mechanism under which laws are to be made and not a mere Act which declares what the law is to be." In In re The Central Provinces and Berar Act XIV of 1938 (" '), Sir Maurice Gwyer C.J. after adopting these observations said: "especially is this true of a Federal Constitution with its nice balance of jurisdictions. I conceive that a broad and liberal spirit should inspire those whose duty it is to interpret it; but I do not imply by this that they are free to stretch or pervert the lan guage of the enactment in the interest of any legal or con stitutional theory or even for the purpose of supplying omissions or of correcting supposed errors. " There is considerable authority for the statement that the Courts are not at liberty to declare an Act void because in their opinion it is opposed to a spirit supposed to pervade the Constitution but not expressed in words. Where the funda mental law has not limited, either in terms or by necessary implication, the general powers conferred upon the Legisla ture we cannot declare a limitation under the notion of hav ing discovered something in the spirit of the Constitution which is not even mentioned in the instrument. It is diffi cult upon any general principles to limit the omnipotence of the sovereign legislative power by judicial interposition, except so far as the express words of a written Constitution give that authority. It is also stated, if the words be positive and without ambiguity, there is no authority for a Court to vacate or repeal a Statute on that ground alone. But it is only in express constitutional provisions limiting legislative power and controlling the temporary will of a majority by a permanent and (1) at 611 12. (2) at 37. 121 paramount law settled by the deliberate wisdom of the nation that one can find a safe and. solid ground for the authority of Courts of justice to declare void ,any legislative enact ment. Any assumption of authority beyond this would be to place in the hands of the judiciary powers too great and too 'indefinite either for its own security. or the protection of private rights. It was first argued that by section 3 the Parliament had delegated its legislative power to the executive officer in detaining a person on his being satisfied of its necessi ty. It was urged that the satisfaction must be of the legislative body. This contention of delegation of the legislative power in such cases has been considered and rejected in numerous cases by our Federal Court and by the English Courts. It is unnecessary to refer to all those cases. A reading of the various speeches in Liversidge vs Anderson clearly negatives this contention. Section 3 of the impugned Act is no delegation of legislative power to make laws. It only confers discretion on the officer to enforce the law made by the legislature. Section 3 is also impugned on the ground that it does not provide an objective standard which the Court can utilize for determining whether the requirements of law have been complied with. It is clear that no such objective standard of conduct can be pre scribed, except as laying down conduct tending to achieve or to avoid a particular object. For preventive detention action must be taken on good suspicion. It is a subjective test based on the cumulative effect of different actions, perhaps spread over a considerable period. As observed by Lord Finlay in The King vs Halliday (2), a Court is the least appropriate tribunal to investigate the question whether circumstances of suspicion exist warranting the restraint on a person. The contention is urged in respect of preventive detention and not punitive detention. Before a person can be held liable for an offence it is obvious that he should be in a position to know what he may do or not do, and an omission to do or not to do will result in the State (1) (2) ; at 269. 122 considering him guilty according to the penal enactment. When it comes however to preventive detention, the very purpose is to prevent the individual not merely from acting in a particular way but, as the sub heads summarized above show, from achieving a particular object. It will not be humanly possible to tabulate exhaustively all actions which may lead to a particular object. It has therefore been considered that a punitive detention Act which sufficiently prescribes the objects which the legislature considers have not to be worked up to is. a sufficient standard to prevent the legislation being vague. In my opinion, therefore, the argument of the petitioner against section 3 of the impugned Act fails. It was also contended that section 3 prescribes no limit of time for detention and therefore the legislation is ultra vires. The answer is found in article 22 (7) (b). A perusal of the provisions of the impugned Act moreover shows that in section 12 provision is made for detention for a period longer than three months but not exceeding one year in respect of clauses (a) and (b) of that section. It appears therefore that in respect of the rest of the clauses mentioned in section 3 (1)(a)the detention is not contem plated to be for a period longer than three months, and in such cases a reference to the advisory board under section 9 is contemplated. Section 7 of the Act which is next challenged, runs on the same lines as article 22 (5) and. (6) and in my opinion infringes no provision of the Constitution. It was argued that this gave only the right of making a representation without being heard 'orally or without affording an opportu nity to lead evidence and therefore was not an orderly course of procedure, as required by the rules of natural justice. The Parliament by the Act has expressly given a right to the person detained under a preventive detention order to receive the grounds for detention and also has given him a right to make a representation. The Act has thus complied with the requirements of article 22 (s). That clause, which prescribes what procedure has to be followed as a matter of fundamental right, is silent about the person detained having a right to be heard 123 orally or by a lawyer. The Constituent Assembly had before them the provisions of clause (1) of the same article. The Assembly having dealt with the requirements of receiving grounds and giving an opportunity to make a representation has deliberately refrained from providing a right to be heard orally. If so, I do not read the clause as guarantee ing such right under article 22 (5). An "orderly course of procedure" is not limited to procedure which has been sanc tioned by settled usage. New forms of procedure are as much, held even by the Supreme Court of America, due process of law as old forms, provided they give a person a fair opportunity to present his case. It was contended that the right to make a representation in article 22 (5) must carry with it a right to be heard by an independent tribunal; otherwise the making of a representation has no substance because it is not an effective remedy. I am unable to read clause (5) of .article 22 as giving a fundamental right to be heard by an independent tribunal. The Constitution deliberately stops at giving the right of representation. This is natural because under article 22 (7), in terms, the Constitution permits the making of a law by Parliament in which a reference to an advisory board may be omitted. To consider the right to make a representation as necessarily including a right to be heard by an independent judicial, administrative or advisory tribunal will thus be directly in conflict with the express words of article 22 (7). Even according to the Supreme Court of U.S.A. a right to a judicial trial is not absolute. In the United States vs Ju Toy (1), a question arose about the exclusion from entry into the States, of a Chinese who claimed to be a citizen of the United States. At page 263 the majority judgment con tains the following passage : " If for the purpose of argument, we assume that the Fifth Amendment applies to him, and that to deny entrance to a citizen is to deprive him ,of liberty, we nevertheless are of opinion that with regard to him due process of law does not require judicial trial: That is the result of the cases which we have cited, and the almost necessary result of the (1) (198) U.S. 253 at 263. 124 power of the Congress to pass exclusion laws. That the decision may be entrusted to an executive officer, and that his decision is due process of law, was affirmed and ex plained in several cases. It is unnecessary to repeat the often quoted remarks of Mr. Justice Curtis, speaking for the whole Court, in Den Exden Murray vs Hoboken Land and Im provement Company (1), to. show that the requirement of a judicial trial does not prevail in every case. " Again, I am not prepared to accept the ' contention that a right to be heard orally is an essential right of proce dure even according to the rules of natural justice. The right to make a defence may be admitted, but there is nothing to support the contention that an oral interview is compulsory. In the Local Government Board vs Arlidge (2), the respondent applied to the Board constituted under the Housing Act to state a special case for the opinion of the High Court, contending that the order was invalid because (1) the report of the Inspector had been treated as a confi dential document and had not been disclosed to the respond ent, and (2) because the Board had declined to give the respondent an opportunity of being heard orally by the person or persons by whom the appeal was finally decided. The Board rejected the application. Both the points were urged before the House of Lords on appeal. Viscount Haldane L.C. in his speech rejected the contention about the necessity of an oral hearing by observing "But it does not follow that the procedure of every tribunal must be.the same. In the case of a Court of law tradition in this country has prescribed certain principles to which, in the main, the procedure must conform. But what that procedure is to be in detail must depend on the nature of a tribunal. " In rejecting the contention about the disclosure of the report of the Inspector, the Lord Chancellor stated: "It might or might not have been useful to disclose this report, but I do not think that the Board was bound to do so. any more than it would have been bound to disclose all the minutes made on the papers in the office before (1) 18 HO.W. 272 at 280. (2) 125 a decision was come to . What appears to me to have been the fallacy of the judgment of the majority in the Court of appeal is that it begs the question at the begin ning by setting up the test of the procedure of a Court of justice instead of the other standard which was laid down for such cases in Board of Education vs Rice (1). I do not think the Board was bound to hear the respondent orally provided it gave him the opportunities he actually had. " In spite of the fact that in England the Parliament is supreme I am unable to accept the view that the Parliament in making laws, legislates against the well recognised principles of natural justice accepted as such in all civilized countries. The same view is accepted in the United States in Federal Communications Commission vs WJR The Goodwill Station (2). A right to lead evidence against facts suspected to exist is also not essential in the case of preventive deten tion. Article 22 (6) permits the non disclosure of facts. That is one of the clauses of the Constitution dealing with fundamental rights. If even the non disclosure of facts is permitted, I fail to see how there can exist a right to contest facts by evidence and the noninclusion of such procedural right could make this Act invalid. Section 10 (3) was challenged on the ground that it excludes the right to appear in person or by any lawyer before the advisory board and it was argued that this was an infringement of a fundamental right. It must be noticed that article 22 (1) which gives a detained person a right to consult or be defended by his own legal practitioner is specifically excluded by article 22 (3) in the case of legislation dealing with preventive detention. Moreover,. the Parliament is expressly given power under article 22 (7) (c) to lay down the procedure in an inquiry by an advisory board. This is also a part of article 22 itself. If so, how can the omission to give a right to audience be considered against the constitutional rights ? It was pointed out that section 10 (3) prevents even the disclosure of a (1) (2) ; at 276. 126 portion of the report and opinion of the advisory board. It was argued that if so how can the detained person put forth his case before a Court and challenge the conclusions ? This argument was similarly advanced in Local Government Board vs Arlidge (1) and rejected, as mentioned above. In my opinion, the answer is in the provision found in article 22 (7) (c) of the Constitution of India. It was argued that section 11 of the impugned Act was invalid as it permitted the continuance of the detention for such period as the Central Government or the State Govern ment thought fit. This may mean an indefinite period. In my opinion this argument has nos substance because the Act has to be read as a whole. , The whole life of the Act is for a year and therefore the argument that the detention may be for an indefinite period is unsound. Again, by virtue of article 22 (7)(b), the Parliament is not obliged to fix the maximum term of such detention. It has not so fixed it, except under section 12, and therefore it cannot be stated that section 11 is in contravention of article 22 (7). Section 12 of the impugned Act is challenged on the ground that it does not conform to the provisions of article 22 (7). It is argued that article 22 (7) permits preventive detention beyond three months, when the Parliament pre scribes "the circumstances in which, and the class or class es of cases in which," a person may be detained. It was argued that both these conditions must be fulfilled. In my opinion, this argument is unsound, because the words used in article 22 (7) themselves are against such interpretation. The use of the word "which" twice in the first part of the sub clause, read with the comma put after each, shows that the legislature wanted these to be read as disjunctive and not conjunctive. Such argument might have been possible (though not necessarily accepted) if ' the article in the Constitution was "the circumstances. and the class or class es of cases in which . "I have. no doubt that by the clause, as worded, the legislature (1) 127 intended that the power of preventive detention beyond three months may be exercised either if the circumstances in which, or the class or classes of cases in which, a person is suspected or apprehended to be doing the objectionable things mentioned in the section. This contention therefore fails. It was next contended that by section 12 the Parliament had provided that a person might be detained for a period longer than three months but not exceeding one year from the date of his detention, without obtaining the opinion of an advisory board, with a view to prevent him from acting in any manner prejudicial to (a) the defence of India, rela tions of India with foreign powers or the security of India; or (b)the security of a State or the maintenance of public order. It must be noticed that the contingency provided in section 3 (1) (a) (iii), viz., the maintenance of supplies and services essential to the community is omitted in sec tion 12. Relying on the wording of these two sub sections in section 12, it was argued that in the impugned Act the wording of Schedule VII List I, Entry 9, and List III, Entry 3, except the last part, are only copied. This did not comply with the requirement to specify either the circum stances or the class or classes of cases as is necessary to be done under article 22 (7) of the Constitution. Circum stances ordinarily mean events or situation extraneous to the actions of the individual concerned, while a class of cases mean determinable groups based on the actions of the individuals with a common aim or idea. Determinable may be according to the nature of the object also. It is obvious that the classification can be by grouping the activities of people or by specifying the objectives to be attained or avoided. The argument advanced on behalf of the petitioner on this point does not ' appeal to me because it assumes that the words of Schedule VII List I, Entry 9, and List III, Entry 3 are never capable of being considered as circum stances or classes of cases. In my opinion, that assumption is not justified, particularly when we have to take into consideration cases of preventive 17 128 detention and not of conviction and punitive detention. Each of the expressions used in those entries is capable of complying with the requirement of mentioning circumstances or classes of cases. The classification of cases, having regard to an object, may itself amount to a description of the circumstances. It is not disputed that each of the entries in the Legislative Lists in the Seventh Schedule has a specific connotation well understood and ascertainable in law. If so, there appears no reason why the same expression when used in section 12 (1) (a) and (b) of the impugned Act should not be held to have such specific meaning and thus comply with the requirement of prescribing circumstances or classes of cases. This argument therefore must be rejected. Section 13(2) was attacked on the ground that even if a detention order was revoked, another detention order under section 3 might be made against the same person on the same grounds. This clause appears to be inserted to prevent a man being released if a detention order was held invalid on some technical ground. There is nothing in the Chapter on Fundamental Rights and in article 21 or 22 to prevent the inclusion of such a clause in a parliamentary legislation, permitting preventive detention. Article 20 (2) may be read as a contrast on this point. Dealing with the four fundamental principles of natural justice in procedure claimed by the petitioner, it is thus clear that in respect of preventive detention no question of an objective standard of human conduct can be laid down. It is conceded that no notice before detention can be claimed by the very nature of such detention. The argument that after detention intimation of the grounds should be given has been recognised in article 22 (5) and incorporated in the impugned Act. As regards an impartial tribunal, article 22 and (7) read together give the Parliament ample discretion. When in specified circumstances and classes of cases the preventive detention exceeds three months, the absence of an advisory board is expressly per mitted 129 by article 22 (7). Under article 22 (4) it appears implied that a provision for such tribunal is not necessary if the detention is for less than three months. As regards an opportunity to be heard, there is no absolute natural right recognised in respect of oral representation. It has been held to depend on the nature of the tribunal. The right to make a representation is affirmed by the Constitution in article 22 (5) and finds a place in the impugned Act. The right to an orderly course of procedure to the extent it is guaranteed by article 22 (4) read with article 22 (7) (c), and by article 22 (7) (a) and (b), has also been thus provided in the Act. It seems to me therefore that the petitioner 's contentions even on these points fail. Section 14 was strongly attacked on the ground that it violated all principles of natural justice and even in fringed the right given by article 22 (5) of the Constitu tion. It runs as follows: "14. (1) No Court shall, except for the purposes of a prosecution for an offence punishable under subsection (2), allow any statement to be made, or any evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order; and, notwithstanding anything contained in any other law, no Court shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or representation made, or the proceedings of an Advisory Board or that part of the report of an Advisory Board which is confidential. (2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of the Central Government or the State Government, as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub section (1): 130 Provided that nothing in this sub section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order. " By that section the Court is prevented (except for the purpose of punishment for such disclosure) from being in formed, either by a statement or by leading evidence, of the substance of the grounds conveyed to the detained person under section 7 on which the order was made, or of any representation made by him against such order. It also prevents the Court from calling upon any public officer to disclose the substance of those grounds or from the produc tion of the proceedings or report of the.advisory board which may be declared confidential. It is clear that if this provision is permitted to stand the Court can have no material before it to determine whether the detention is proper or not. I do not mean whether the grounds are suffi cient or not. It even prevents the Court from ascertaining whether the alleged grounds of detention have anything to do with the circumstances or class or classes of cases men tioned in section 12 (1) (a) or (b). In Machindar Shivaji Mahar vs The King (1), the Federal Court. held that the Court can examine the grounds given by the Government to see if they are relevant to the object which the legislation has in view. The provisions of article 22 (5) do not exclude that right of the Court. Section 14 of the impugned Act appears to be a drastic provision. which re quires considerable support to sustain it in a preventive detention Act. The learned Attorney General urged that the whole object of the section was to prevent ventilation in public of the grounds and the representations, and that it was a rule of evidence only which the Parliament could prescribe. I do not agree. This argument is clearly not sustainable on the words of article 22 clauses (5) and (6). The Government has the right under article 22 (6)not to disclose facts which it considers undesirable to disclose in the public interest. It does not permit the Government to refrain from disclosing grounds which fall under clause (5). (1) 131 Therefore, it cannot successfully be contended that the disclosure of grounds may be withheld from the Court in public interest, as a rule of evidence. Moreover, the position is made clear by the words of article 22 (5). It provides that the detaining authority shall communicate to such detained person the grounds on which the order has been made. It is there fore ,essential that the grounds must be connected with the order of preventive detention. If they are not so .connected the requirements of article 22 (5) are not ,complied with and the detention order will be invalid. Therefore, it is open to a detained person to contend before a Court that the grounds on which the order ' has been made have no connection at all with the order, or have no connec tion with the circumstances or class or classes of cases under which a preventive detention order could be supported under section 12. To urge this argument the aggrieved party must have a right to intimate to the Court the grounds given for the alleged detention and the representation made by him. For instance, a person is served with a paper on which there are written three stanzas of a poem or three alphabets written in three different ways. For the validity of the detention order it is necessary that the grounds should be those on which the order has been made. If the detained person is not in a position to put before the Court this paper, the Court will be prevented from considering whether the requirements of article 22 (5) are complied with and that is a right which is guaranteed to every person. It seems to me therefore that the provisions .of section 14 abridge the right given under article 22 (5) and are there fore ultra vires. It next remains to be considered how far the invalidity of this section affects the rest of the impugned Act. The impugned Act minus this section can remain unaffected. The omission of this section will not change the nature or the structure or the object of the legislation. Therefore the decision that section 14 is ultra vires does not affect the validity of the rest of the Act. In my opinion therefore Act IV of 1950, except .section 14, is not ultra vires. It does not infringe any 132 provisions of Part III of the Constitution and the con tention of the applicant against the validity of that Act except to the extent of section 14, fails. The petition therefore fails and is dismissed. FAZL ALI J. The question to be decided in this case is whether 'the (Act IV of 1950), is wholly or in part invalid and whether the peti tioner who has been detained under that Act is entitled to a writ in the nature of habeas corpus on the ground that his detention is illegal. The question being a pure question of law can he decided without referring to a long chain of facts which are narrated in the petitioner 's application to this Court and which have a more direct bearing on the alleged mala fides of the authorities who have detained him than on the validity of the Act. The Act which is impugned was enacted by the Parliament on the 26th February, 1950, and will cease to have effect on the 1st April, 1951, save as respects. things done or omit ted to be done before that date. The main provisions of the Act are set out in sections 7, 8, 9, 10,11, 12 and 14. Section a (1) provides that "the Central Government or the State Government may (a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to (i) the defence of India, the relations of India with foreign powers, or the security of India, or (ii) the security of the State or the maintenance of public order, or (iii) the maintenance of supplies and services essential to the community, or (b) if satisfied with respect to any person who is. a foreigner within the meaning of the (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India, 133 it is necessary so to do, make an order directing that such person be detained. " Sub sections (2) and (3) of this section empower a District Magistrate, Sub Divisional Magistrate or the Com missioner of Police in a Presidency Town to exercise the power conferred by and make the order contemplated in sub section (1), but with the qualification that any order made thereunder must be reported forthwith to the Government of the State to which the .officer in question is subordinate with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the necessity for the order. Section 7 of the Act provides that the authority making an order of detention shall as soon as may be communicate to the person detained the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order, in a case where such ,order has been made by the Central Government, to that Government, and in a case where it has been made by a State Government or an officer subor dinate thereto, to the State Government. Section 8 provides that the Central Government and each State Government shall, whenever necessary, constitute one or more advisory boards for the purposes of the Act, and state the qualifications of persons of which the board should consist. Section 9 pro vides that when a detention order has been made with a view to preventing a person from acting in any manner prejudicial to the maintenance of supplies and services essential to the community or if it is made in regard to a person who is a foreigner within the meaning of the with a view to regulating his continued presence in India or making arrangements for his expulsion from India, the grounds on which the order has been made and the representation, if any,. of the person detained shall, within six weeks from the date of detention, be placed 'before an advisory regard. It will be noticed that this section does not provide that the cases of persons who are detained under section 3 (1) (a) (i) and (ii) will also be placed before the advisory board. Section 10 lays down the 134 procedure to be followed by. the advisory board and section 11 provides that in any case where the advisory board has reported that there is sufficient cause for the detention of the person concerned, the detention order may be confirmed and the detention of the person concerned may be continued for such period as the Central Government or the State Government, as the case may be, thinks fit. Section 12,. which is a very important section, as we shall presently see, runs as follows : "12 (1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of an Advisory Board for a period longer than three months, but not exceed ing one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to (a) the defence of India, relations of India with foreign powers or the security of India; or (b) the security of a State or the maintenance of public order. (2) The case of every person detained under a detention order to which the provisions of sub section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by the Central Government or a State, Government, by such Govern ment, and where the order was made by any officer specified in sub section (2) of section 3, by the State Government to which such officer is subordinate, in consultation with a person who is or has been or is qualified to be appointed as Judge of a High Court nominated in that behalf by the Cen tral Government or the State Government, as the case may be. " Section 14, which is also a material section for the purpose of this case, is to the following effect : "(1) No Court shall, except for the purposes of ' a prosecution for an offence punishable under subsection (2), allow any statement to be made, or any 135 evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order; and, not withstanding anything contained in any other law, no Court shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such commu nication or representation made, or the proceedings of an Advisory Board or that part of the report of an Advisory Board which is confidential. (2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of the Central Government or the State Government, as the case may be, any contents or matter purporting to be the contents of any such communication or representation as is referred to in sub section (1): Provided that nothing in this sub section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order. " The point which has been pressed before us is that the Act is invalid, as it takes away or abridges certain funda mental rights conferred by Part III of the Constitution of India, and in support of this general proposition, reliance is placed on article 13 (2) which runs as follows : "The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. " The rights guaranteed under Part III of the Constitution are classified under seven broad heads, as follows : (1) Right to equality; (2) Right to freedom; (3) Right against exploitation; (4) Right to freedom of religion; (5) Cultural and educational rights; (6) Right to property; and (7) Right to constitutional remedies. 136 Most of the articles which are said to have been disre garded occur under the heading "Right to freedom," these articles being articles 19 (1) (d), 21 and 22. Another article which is also said to have been violated is article 32, under which the present application for a writ of habeas corpus purports to have been made. Article 19 (1)is divided into seven sub clauses and runs as follows: "All citizens shall have the right (a) to freedom of speech and expression; (b) to assemble peaceably and without arms; (c) to form associations or unions; (d) to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; " (f) to acquire, hold and dispose of property; and (g) to practise any profession, or to carry on any occupation, trade or business. " Clauses (2), (3), (4), (5) and (6) of this article pro vide that nothing in clause (1) shall affect the operation of any existing law in regard to the rights under that clause, under certain conditions which are mentioned there in. Clause (5), with which we are directly concerned and which will serve as a specimen to show the nature of these provisions, is to the following effect : "Nothing in sub clauses (d), (e) and (f)of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection 'of the interests of any Scheduled Tribe. " The contentions advanced on behalf of the petitioner with reference to this article are : (1) that the Act under which he has been detained deprives him who is a citizen of the Republic of India of the right to move freely throughout the territory of India, which is guaran teed under article 19 (1) (d), and (2) 137 that under clause (5) of article 19, it is open to this Court to judge whether the restrictions imposed by the Act on the exercise of the right conferred by article 19 (1) (d) are reasonable or otherwise. Before dealing with this argument, it is necessary to understand the meaning of the words used in article 19 (1)(d) and to have a clear compre hension as to the true nature of the right conferred there under. The contention put forward on behalf of the peti tioner is that freedom of movement is the essence of person al liberty and any restraint on freedom of movement must be held to amount to abridgment or deprivation of personal liberty, as the case may be, according to the nature of the restraint. After very careful consideration, I have come to the conclusion that this contention is well founded in law. Blackstone in his "Commentaries on the Laws of England" (4th Edition, volume 1, page 134) states that "personal liberty consists in the power of locomotion, of changing . 'situation or moving one 's person to whatsoever place one 's own incli nation may direct, without imprisonment or restraint unless by due course of law. " The authority of this state ment has never been questioned, and it has been bodily incorporated by H.J. Stephen in his "Commentaries on the Laws of England" and has been reproduced by Cooley in his well known treatise on "Constitutional Limitations" (8th Edition, volume 1, page 710), which was extensively quoted by both parties in the course of their arguments. The view that freedom of movement is the essence of personal liberty will also be confirmed by reference to any book on the criminal law of England dealing with the offence of false imprisonment or any commentary on the Indian Penal Code dealing with the offences of wrongful restraint or confine ment. Russell in his book on "Crimes and Misdemeanours" (8th Edition, volume 1, page 861), dealing with the offence of false imprisonment states as follows : "False imprisonment is unlawful and total restraint of the personal liberty of another, whether by constraining him or compelling him to go to a particular place or by confin ing him in a prison or 138 police station or private place, or by detaining him against his will in a public place . . . the essential element in the offence is the unlawful detention of the person or the unlawful restraint on his liberty. Such interference with the liberty of another 's movements is unlawful, unless it may be justified . " Again, Dr. Gour in dealing with the offence of wrongful restraint in his book on "The Penal Law of British India" (5th Edition, page 1144) observes as follows : "Following the principle that every man 's person is sacred and that it is free, law visits with its penalties those who abridge his personal liberty, though he may have no design upon his person. But the fact that he controls its movements for ever so short a time is an offence against the King 's peace, for no one has the right to molest another in his free movements. " Dealing with the offence of wrongful confinement, the same learned author observes as follows at page 1148 of his book : " 'Wrongful confinement ' is a species of ' wrongful restraint ' as defined in the last section. In wrongful restraint, there is only a partial suspension of one 's liberty of locomotion, while in wrongful confinement there is a total suspension of liberty 'beyond certain circum scribing limits '. " Both these authors speak of restraint on personal liber ty and interference with the liberty of one 's movements or suspension of liberty or locomotion as interchangeable terms. In Bird vs Jones (1), Coleridge J. said that "it is one part of the definition of freedom to be able to go whithersoever one pleases." A similar opinion has been expressed by several authors including Sir Alfred Denning in his book entitled "Freedom under the Law. " There can there fore be no doubt that freedom of movement is in the last analysis the essence of personal liberty, and just as a man 's wealth is generally measured in this country in terms of rupees, annas and pies, one 's personal liberty depends upon the extent of his freedom of movement. But it is contended on behalf of the State that freedom of move (1) 7 Q.B. 742. 139 ment to which reference has been made in article 19 (1) (d) is not the freedom of movement to which Blackstone and other authors have referred, but is a different species of freedom which is qualified by the words "throughout the territory of India. " How the use of the expression "throughout the territory of India" can qualify the meaning of the rest of the words used in the article is a matter beyond my compre hension. In my opinion, the words "throughout the territory of India" were used to stretch the ambit of the freedom of movement to the utmost extent to which it could be guaran teed by our Constitution. The Constitution could not guar antee freedom of movement outside the territorial limits of India, and so has used those words to show that a citizen was entitled to move from one corner of the country to another freely and without any obstruction. "Throughout" is an amplifying and not a limiting expression, and I am sur prised to find that the expression "throughout the territory of India," which was used to give the widest possible scope to the freedom of movement, is sought to be construed as an expression limiting the scope and nature of the freedom. In my opinion, the words "throughout the territory of India," having regard to the context in which they have been used here, have the same force and meaning as the expression "to whatsoever place one 's own inclination may direct" used by Blackstone, or the expression "freedom to be ,able to go whithersoever one pleases" used by Coleridge J. in Bird vs Jones (1). I am certain that neither of these authorities contemplated that the freedom of movement which is vouch safed to a British citizen, is guaranteed beyond the terri torial limits of British territories. The question as to whether preventive detention is an encroachment on the right guaranteed by article 19 (1) (d) has been considered by the Nagpur, Patna and Calcutta High Courts. The view which has .been ultimately adopted by these High Courts is that preventive detention is not a violation of the right guaranteed by article 19 (1) (d), but, in the Calcutta (1) 7 Q.B. 742. 140 High Court, where the matter has been elaborately discussed, at least five Judges have held that it does, and in the ultimate analysis the number of Judges. who have held the contrary view appears to be the same. Having regard to the fact that the view expressed by so many learned Judges is opposed to the view I am inclined to take, I consider it necessary to deal briefly with the main objections which have been raised in support of the narrow meaning sought to be attached to the words in article 19 (1)(d). I have already dealt with one of them which is based on the ex pression "throughout the territory of India. " A. nd I shall now proceed to deal with the, others seriatim. I. It will be recalled that clause (5) of article 19, which I have already quoted in full, provides among other things that nothing in clause (1) (d) shall affect the operation of any law, present or future, imposing reasonable restrictions on the exercise of the right of freedom of movement either in the interests of the general public or for the protection of the interests of any Scheduled Tribe. It has been argued that the use of the words "interests of any Scheduled Tribe" in this clause shows that the right guaranteed by article 19 (1) (d) is a limited right of movement, such as the right to visit different localities and to go from one place to another and is different from the expression "freedom of movement" which has been stated by Blackstone to be another name for personal liberty. It is pointed out that the restrictions in contemplation here are mainly restrictions preventing undesirable outsiders from visiting Scheduled Areas and exploiting Scheduled Tribes, and if the words "freedom of movement" had been used in the larger sense, such a small matter would not have found a place in clause (5) of article 19. I must frankly confess that I am unable to appreciate this argument and to hold that a mere reference to Scheduled Tribes affects the plain meaning of the words used in clause (1) (d) of article 19. The words used in article 19 (1) (d) are very wide and mean that a person can go at his will in any direction to any locality and to any distance. Re straint on a freedom. 141 so wide in scope and extent may assume a variety of forms and may include internment or externment of a person, his confinement to a particular locality or within the walls of a prison, his being prevented from visiting or staying in any particular area, etc. The framers of the Constitution wanted to save all restrictive legislation affecting freedom of movement made in the interests of the general public (which expression means the same thing as "public interests") and I think that the law in regard to preventive detention is fully covered by the expression "restrictions imposed in the public interests. " But they also remembered that there were restrictive laws made in the interests of an important community and that similar laws may have to be made in future and hence they added the words "for the protection of the interests of any Scheduled Tribe. " A reference to the Fifth Schedule of the Constitution and the corresponding provisions of the Government of India Act, 1935, as well as to certain laws made for Chota Nagpur, Santhai Pargangs and .other localities will show that great importance has been attached in this country to. the protec tion and preservation of the members of the scheduled tribes .and maintenance of order in tribal areas, and this, in my opinion, is sufficient to account for the special mention of the scheduled tribes in clause (5). It may, at first sight, appear to be a relatively small matter, but in their anxiety to cover the whole field of restrictive laws made whether in the public interest or in the interests of a particular community and not to leave the smallest loophole, the framers of the Constitution apparently decided to draft the clause in the present form. As far as I am aware, there are no restrictive laws made in the interests of any commu nity other than the scheduled tribes, and I think clause (5)is sufficiently comprehensive to include the smallest as well as the most complete restrictions on freedom of move ment. I am also satisfied that the mere mention of sched uled tribes in clause (5) cannot change, the plain meaning of the words of the main provision which we find in article 19 (1) (d) and confine it to some kind of peculiar and truncated freedom of 142 movement which is unconnected with personal liberty and which is unknown to any Constitution with which. we are familiar: It will perhaps be not out of place to refer in this. connection to Ordinance XIV of 1943, which is one of the ordinances by which the Defence of India Act, 1939, was partly amended. This ordinance provides for "the apprehension and detention in custody of any person whom the authority empowered by the rules to appre hend or detain as the case may be suspects, on grounds appearing to such authority to be reasonable, of being of hostile origin, or of having acted, acting, being about to act, or being likely to act in a manner prejudicial to the public safety or interest, the defence of British India, the maintenance of public order, His Majesty 's relations with foreign powers or Indian States, the maintenance of peaceful conditions in tribal areas or the efficient prosecution of the war, or with respect to whom such authority is satisfied that his apprehension and detention are necessary for the purpose of preventing him from acting in any such prejudi cial manner, the prohibition of such person from entering or residing or remaining in any area, and the compelling of such person to reside and remain in any area, or to do or abstain from doing anything. " The points to be noted in connection with the ordinance are : (1) that it is an ordinance specifically providing for apprehension and detention; (2) that notwithstanding the fact that there is a gener al reference in it to acts prejudicial to public safety or interests and maintenance of public order there is also a specific reference to maintenance of peaceful conditions in tribal areas; (3) that tribal areas and scheduled tribes are, kindred subjects as would appear from the Fifth Schedule appended to the Constitution; and (4) that maintenance of peaceful conditions in tribal areas may be as much in the public interest as in the inter ests of persons living in those areas. 143 This ordinance shows at least this much that sometimes the law of preventive detention can also be made in the interests of scheduled tribes or scheduled areas and conse quently the mere mention of scheduled tribes in clause (5) does not necessarily exclude laws relating to preventive detention from the scope of article 19 (5) The same remarks apply to the ordinance called "The Restriction and Detention Ordinance, 1944" (Ordinance No. III of 1944) which empow ered the Central Government or the Provincial Government to detain and make orders restricting the movements of certain persons in the interest of public safety, maintenance of public order as well as maintenance of peaceful conditions in tribal areas, etc. It is also argued that since preventive detention amounts to a total deprivation of freedom of movement, it is not a violation of the right granted under article 19 (1) (d) in regard to which the word "restriction" and not "deprivation" has been used in clause (5). This argument also does not appeal to me. There are really two questions which fall to be decided in this case, viz., (a) Does pre ventive detention take away the right guaranteed by article 19 (1) (d)?; and (b) if so, what are the consequences, if any ? It seems obvious to me that preventive detention amounts to a complete deprivation of the right guaranteed by article (19) (d). The meaning of the word "restriction" is to be considered with reference to the second question and I think that it will be highly technical to argue that deprivation of a right cannot be said to involve restriction on the exercise of the right. In my opinion, having regard to the context in which the word "restriction" has been used, there is no antithesis between that word and the word "depriva tion. " As I have already stated, restraint on the right to move can assume a variety of forms and restriction would be the most appropriate expression to be ' used in clause (5) so as to cover all those forms ranging from total to various kinds of partial deprivation freedom of movement. I will however have to advert to this subject later and will try to show that the 19 144 construction I have suggested is supported by good authori ty. It appears that some of the Judges who had to deal with the question which we have before us were greatly influenced by the argument that if the deprivation of per sonal liberty amounts to deprivation of the right granted under article 19 (1) (d), any conviction for an offence under the Indian Penal Code involving a sentence of impris onment will be subject to judicial review on the ground of reasonableness of the provisions of the Code under which the conviction is recorded. Meredith C.J. of the Patna High Court has given expression to his concern for the situation which will thereby arise, in these words : "It will be seen that the claim made is very sweeping indeed. It would mean that every law under which a person may be imprisoned, including all the provisions of the Penal Code, is open to examination by the Courts on the ground of reasonableness. It makes the Courts supreme arbiters in regard to any such legislation, and they can reject it or accept it in accordance with their ideas of whether it appeals to their reason. But ideas of reasonableness or otherwise are apt to vary widely. Take for example, laws relating to prohibition or take such a matter as adultery which the Indian law regards as a crime punishable with imprisonment but the English law does not. It is difficult to believe the framers of the Constitution ever intended to place so enormous a power in the hands of the Courts . . . "[Rattan Roy vs The State of Biharl. The obvious and strictly legal reply to this argument is that the consideration, which has so greatly weighed with the learned Chief Justice, is not enough to cut down the plain meaning of the general words used in article 19 (5) of the Constitution. As has been pointed out in a number of cases, "in construing enacted words, we are not concerned with the policy involved or with the results injurious or otherwise which may follow by giving effect to the language 145 used" [King Emperor vs Benoari Lal Sharma and others (1)I Apart from this aspect of the matter, I agree with one of the learned Judges Of the Calcutta High Court in his remark that "no calamitous or untoward result will follow even if the provisions of the Penal Code become justiciable. " I am certain that no Court would interfere with a Code which has been the law of the land for nearly a century and the provisions of which are not in conflict with the basic principles of any system of law. It seems to me that this Court should not be deterred from giving effect to a fundamental right granted under the Constitution, merely because of a vague and unfounded fear that something catas trophic may happen. I have so far proceeded on the assumption that the basis of the objection raised by Meredith C.J. is correct in law, but, in my opinion, it is not. Crime has been defined to consist in those acts or omissions involving breach of a duty to which a sanction is attached by law by way of pun ishment or pecuniary penalty in the public interests. (See Russell 's "Crimes and Misdemeanours "). Section 2 of the Indian Penal Code, 1860, provides that "every person shall be liable to punishment under this Code ' and not otherwise for every act or omission contrary to the provisions there of, of which he shall be guilty within British India ." The Indian Penal Code does not primarily or necessarily impose restrictions on the freedom of movement, and it is not correct to say that it is a law imposing restrictions on the right to move freely. Its primary object is to punish crime and not to restrict movement. The punishment may consist in imprisonment or a pecuniary penalty. If it consists in a pecuniary, penalty, it obviously involves no restriction on movement; but if it consists in imprisonment, there is a restriction on movement. This restraint is imposed not under a law imposing restrictions on movement but under a law defining crime and making it punishable. The punishment is correlated directly with the violation of some other person 's right and not with the right of (1) at p. 177. 146 movement possessed by the offender himself. In my opinion, therefore, the Indian Penal Code does not come within the ambit of the words "law imposing restriction on the right to move freely ". In the course of the arguments, the expression "punitive detention" was frequently used and the tendency was to put it on the same footing as preventive detention for the purpose of certain arguments. Punitive detention is however essentially different from preventive detention. A person is punitively detained only after a trial for committing a crime and after his guilt has been established in a compe tent Court of justice. A person so convicted can take his case to the State High Court and sometimes bring it to this Court also; and he can in the course of the proceedings connected with his trial take all pleas available to him including the plea of want of jurisdiction of the Court of trial and the invalidity of the law under which he has been prosecuted. The final judgment in the criminal trial will thus constitute a serious obstacle in his way if he chooses to assert even after his conviction that his right under article 19 (1) (d) has been violated. But a person who is preventively detained has not to face such an obstacle whatever other obstacle may be in his way. It was pointed out that article 19 being confined to citizens, the anomalous situation will follow that in cases of preventive detention, a citizen will be placed in a better position than a non citizen, because if a citizen is detained his detention will be open to some kind of judicial review under article 19 (5), but if a non citizen has been detained his case will not be open to such review. In this view, it is said that the whole Act relating to preventive detention, may be declared to be void if it is unreasonable, though it concerns citizens as well as persons other than citizens. I must frankly state that I am not at all per turbed by this argument. It is a patent fact that the Constitution has confined all the rights mentioned in arti cle 19 (1) to citizens. It is equally clear that restric tions on those rights are to a limited extent at least open to judicial review The very same question which is 147 raised in regard to article 19 (1)(d) will arise with regard to most of the other sub clauses. A citizen has the right to assemble peaceably and without arms, to form associations or unions and so on. If there is any law imposing unreason able restrictions on any of these rights, that law will not be good law so far as citizens are concerned, but it may be good law so far as non citizens are concerned. I do not see why a similar situation arising with regard to the right granted under sub clause (d) should be stated to be anoma lous. So far as the right of free movement is concerned, a non citizen has been granted certain protections in articles 21 and 22. If a ,citizen has been granted certain other additional protections under article 19 (1) (d), there is no anomaly involved in the discrimination. I think that it is conceivable that a certain law may be declared to be void as against a citizen but not against a non citizen. Such a result however should not affect our mind if it is found to have been clearly within the contemplation of the framers of the Constitution. V. It was contended that the rights declared by article 19 are the rights of a free citizen and if he has already been deprived of his liberty in the circumstances referred to in articles 20, 21 and 22, then it would be idle to say that he still enjoys the right referred to in article 19. After giving my fullest consideration to this argument, I have not been able to appreciate how it arises in this case. There is nothing in article 19 go suggest that it applies only to those cases which do not fall under articles 20, 21 and 22. Confining ourselves to preventive detention, it is enough to point out that a person who is preventively de tained must have been, before he lost his liberty, a free man. Why can 't he say to those who detained him: "As a citizen I have the right to move freely and you cannot curtail or take away my right beyond the limits imposed by clause (5)of article 19. " This is the only question which arises in the case and it should not be obscured by any abstruse or metaphysical considerations. It is true that if you put a man under detention, he cannot move and therefore he is not in a position to 148 exercise the right guaranteed under article 19 (1) (d). but this is only the physical aspect of the matter and a person who is bed ridden on account of disease suffers from a similar disability. In law, however,. physical duress does not deprive a person of the right to freedom of movement. If he has been detained under some provision of law imposing restrictions on the freedom of movement, then the question will arise whether the restrictions are reasonable. If he has been detained under no provision of law or under some law which is invalid, he must be set at liberty. To my mind, the scheme of the Chapter dealing with the fundamental rights does not contemplate what is attributed to it, namely, that each article is a code by itself and is independent of the others. In my opinion, it cannot be said that articles 19, 20, 21 and 22 do not to some extent over lap each other. The case of a person who is convicted of an offence will come under articles 20 and 21 and also under article 221 so far as his arrest and detention in custody before trial are concerned. Preventive detention, which is dealt with in article 22, also amounts to deprivation of personal liberty which is referred to in article 21, and is a violation of the right of freedom of movement dealt with in article 19 (1) (d). That there are other instances of overlapping of articles in the Constitution may be illus trated by reference to article 19 (1) (f) and article 31 both of which deal with the right to property and to some extent overlap each other. It appears that some learned High Court Judges, who had to deal with the very question before us, were greatly impressed by the statement in the report of the Drafting Committee of the Constituent Assembly on article 15 (corresponding to the present article 21), that the word "liberty" should be qualified by the insertion of the word "personal" before it for otherwise it may be construed very widely so as to include the freedoms dealt with in article 13 (corresponding to the present article 19). I am not however prepared to hold that this statement is decisive on the question of the construction of the words used in article 19 (1) (d) which are quite plain and can be construed without any 149 extraneous help. Whether the report of the Drafting Commit tee and the debates on the floor of the House should be used at all in construing the words of a statute, which are words of ordinary and common use and are not used in any technical or peculiar sense, is a debatable question; and whether they can be used in aid of a construction which is a strain upon the language used in the clause to be interpreted is a still more doubtful matter. But, apart from these legal consider ations, it is, I think, open to us to analyse the statement and see whether it goes beyond adding a somewhat plausible reason a superficially plausible reason for a slight verbal change in article 21. It seems clear that the addi tion of the word "personal" before "liberty" in article 21 cannot change the meaning of the words used in article 19, nor can it put a matter which is inseparably bound up with personal liberty beyond its place. Personal liberty and personal freedom, in spite of the use of the word "personal ," are, as we find in several books, sometimes used in a wide sense and embrace freedom of speech, freedom of .asso ciation, etc. These rights are some of the most valuable phases or elements of liberty and they do not cease to be so by the addition of the word "personal. " A general statement by the Drafting Committee referring to freedom in plural cannot take the place of an authoritative exposition of the meaning of the words used in article 19 (1)(d), which has not been specifically referred to and cannot be such an overriding consideration as to compel us to put a meaning opposed to reason and authority. The words used in article 19 (1) (d) must be construed as they stand, and we have to decide upon the words themselves whether in the .case of preventive detention the right under article 19 (1) (d) is or is not infringed. But, as I shall point out later, however literally we may construe the words used in article 19 (1) (d) and however restricted may be the meaning we may attribute to those words, there can be no escape from the conclusion that preventive detention is a direct infringe ment of the right guaranteed in article 19 (1) (d). 150 Having dealt with the principal objections, I wish to revert once again to the main topic. The expressions "per sonal liberty" and" personal freedom" have, as we find in several books, a wider meaning and also a narrower meaning. In the wider sense, they include not only immunity from arrest and detention but also freedom of speech, freedom of association, etc. In the narrower sense, they mean immunity from arrest and detention. I have shown that the juristic conception of "personal liberty ," when these words are used in the sense of immunity from arrest, is. that it consists in freedom of movement and locomotion. I have also pointed out that this conception is at the root of the criminal law of England and of this country, so far as the offences of false imprisonment and wrongful confinement are concerned. The gravamen of these offences is restraint on freedom of movement. With these facts in view, I have tried to find out whether there is any freedom of movement known in England apart from personal liberty used in the sense of immunity from arrest and detention, but I find no trace of any such freedom. In Halsbury 's Laws of England (2nd Edition, volume 6, page 391), the freedoms mentioned are the right to per sonal freedom (or immunity from detention or confinement), the right to property, the right to freedom of speech, the right of public meeting, the right of association, etc. Similar classifications will be found in Dicey 's "Introduc tion to the Study of the Law of the Constitution" and Keith 's "Constitutional Law" and other books on constitu tional subjects, but there is no reference anywhere to any freedom or right of movement in the sense in which we are asked to. construe the words used in article 19 (1) (d). In the Constitutions of America, Ireland and many other countries where freedom is prized, there is no reference to freedom or right of movement as something distinct from personal liberty used in the sense of immunity from arrest and confinement. The obvious explanation is that in legal conception no freedom or right of movement exists apart from what personal liberty connotes and therefore a separate treatment of this freedom was not necessary. It is only in the Constitution of the Free 151 City of Danzig, which covers an area of 701 square miles, that we find these words in article 75 : "All nationals shall enjoy freedom of movement within the City. " There is however no authoritative opinion available to support the view that this freedom is anything different from what is otherwise called personal liberty. The problem of construc tion in regard to this particular right in the Constitution of Danzig is the same as in our Constitution. Such being the general position, I am confirmed in my view that the juristic conception that personal liberty and freedom of movement connote the same thing is the correct and true conception, and the words used in article 10 (1) (d) must be construed according to this universally accepted legal conception. This conclusion is further supported by reference to the war legislation in England and in India, upon which the law of preventive detention, which has been in force in this country since the war, is based. In the first world war, the British Parliament passed the Defence of the Realm Consoli dation Act, in 1914, and a number of regulations were made under it including regulation 14 B, which permitted the Secretary of State to subject any person "to such obliga tions and restrictions as hereinafter mentioned in view of his hostile origin or associations." Lord Atkin in refer ring to this regulation said in Liversidge vs Sir John Anderson (1), "that the regulation undisputedly gave to a Secretary of State unrestricted power to detain a suspected person." Apparently, Lord Atkin meant that the restriction referred to in the Act included preventive detention. Under this regulation, one Arthur Zadig was interned, and he applied to the King 's Bench for a writ of habeas corpus which was refused. The matter ultimately came up before the House of Lords in Rex vs Halliday (2), and the noble Lords in dealing with the case proceeded on the assumption that there was no difference between internment and incarceration or imprisonment. Lord Shaw in narrating the facts of the case stated : (1) (2) ; 20 152 His person was seized, he has been interned . The appellant lost his liberty and was interned . " He then proceeded to state that there was no difference between internment and imprisonment and quoted the following passage from Blackstone : "The confinement of the person, in any wise, is an imprisonment. So that the keeping a man against his will in a private house, putting him in the stocks, arresting or forcibly detaining him in the street, is an imprisonment. " Proceeding on this footing (which I find to be the common basis in all other speeches delivered in the case, though Lord Shaw had given a dissenting judgment), Lord Finlay while dealing with the provisions of the regulations observed : "One of the most obvious means of taking precautions against dangers such as are enumerated is to impose some restriction on the freedom of movement of persons whom there may be any reason to suspect of being disposed to help the enemy "(1). Again, Lord Atkinson while dealing with the merits of the case made the following observations : "If the legislature chooses to enact that he can be deprived of his liberty and incarcerated or interned for certain things for which he could not have been heretofore incarcerated or interned, that enactment and the orders made under it if intra vires do not infringe upon the Habeas Corpus Acts or take away any right conferred by Magna Charta . ,, (2). This passage read with the previous passage quoted by me will show that both internment and incarceration were re garded as "restrictions on the freedom of movement "and that deprivation of liberty and restriction on freedom of move ment were used as alternative expressions bearing the same meaning. The same conclusion is to be drawn by reference to the regulations made in the last world war under the Emergency Powers (Defence)Act, 1939. The regulation which directly dealt with detention orders was 18 B. This regulation and a number of other regulations have been placed in Part I under the heading" Restrictions (1) (2) 153 On movements and activities of persons . " The classifica tion is important, because it meets two principal arguments advanced in this case. It shows firstly that detention is a form of restriction and secondly that it is a restriction on movement. I have noticed that" movement" is used in plural, and the heading also refers to restrictions on activities, but, having regard to the subjects classified under this head, movement undoubtedly refers to physical movement and includes such movements as entering a particu lar locality, going from one place to another, etc. , i.e., the very things to which article 19 (1) (d) is said to have reference. In Liversidge 's case, in construing the provi sions of the Act of 1939, Viscount Maugham observed as follows : "The language of the Act of 1939 (above cited) shows beyond doubt that Defence Regulations may be made which must deprive the subject "whose detention appears to the Secre tary of State to be expedient in the interests of public safety" of all his liberty of movement while the regulations remain in force"(1). Thus Viscount Maugham also considered detention to be synonymous with deprivation of liberty of movement. The classification that we find in the Defence of the Realm Regulations was with a little verbal modification adopted in the Defence of India Rules, and we find that here also rule 26, which dealt with preventive detention, has been placed under the heading "Restriction of movements and activities of persons. " A somewhat similar classification has also been adopted in a series of Provincial Acts and Ordinances relating to maintenance of order [see section 2 of the Bihar Maintenance of Public Order. Act, 1949, section 16 of the West Bengal Security Act, 1948, section 4 of the East Punjab Public Safety Act, 1949, section 2 of the Madras Maintenance of Public Order Act, 1947, section 3 of the U.P. Maintenance of Public Order Temporary Act, 1947, and section 2 of the Bombay Public Security Measures Act, 1947. In these Acts and Ordinances, preventive detention and certain (1) 154 other forms of restriction on movement such as internment, externment, etc. have been classed together and dealt with more or less on the same footing, and sometimes they have been dealt with in different clauses of the same section. In one of the Acts, the same advisory board is to deal with the case of a detenue as well as that of an externed person, and there are also similar provisions giving them the right to represent their case to the Government. I will now assume for the sake of argument that the freedom of movement to which reference is made in article 19 (1) (d) has nothing to do with personal liberty and that the words which occur in the article bear the restricted meaning attributed to them by the learned Attorney General and some of my colleagues. It seems to me that even on this assump tion, it is difficult to arrive at any conclusion other than what I have already arrived at. There can be no doubt that preventive detention does take away even this limited free dom of movement directly and substantially, and, if so, I do not see how it can be argued that the right under article 19 (1) (d) is not infringed if the alternative interpretation is accepted. We have only to ask ourselves: Does a person who is detained retain even a fraction of his freedom of movement in howsoever restricted sense the term may be used and does he not lose his right to move freely from one place to another or visit any locality he likes as a necessary result of his detention ? I think I should refer here once more to the fact that in the Defence of the Realm Regula tions and Defence of India Rules, preventive detention is classed under the heading "Restriction of movements and activities." "Movement" is here used in plural and refers to that very type of movement which is said to be protected by article 19 (1) (d), moving from one State or place to another, visiting different localities, etc. One of the objects of 'preventive detention is to restrain the person detained from moving from place to. place so that he may not spread disaffection or indulge in dangerous activities in the ' places he visits. The same consideration applies to the cases of persons who are interned or externed. Hence, externment, 155 internment and certain other forms of restriction on move ment have always been treated as kindred matters belonging to the same group or family and the rule which applies to one must necessarily apply to the other. It is difficult to hold that the case of externment can possibly be dealt with on a different footing from the case of preventive deten tion. I am however interested to find that the Patna and Bombay High Courts have held that a person who is externed can successfully assert that the right granted to him under article 19 (1) (d) has been violated. This view has not been seriously challenged before us, and, if it is correct, I really do not see how it can be held that preventive deten tion is also not a direct invasion of the right guaranteed in article 19 (1) (d). Perhaps, one may pause here to ask what kind of laws were in contemplation of the framers of the Constitution when they referred to laws imposing re strictions in the public interest in article 19 (5). I think the war laws and the Provincial Acts and Ordinances to which I have already referred must have been among them, these being laws which expressly purport to impose restrictions on movements. If so, we should not overlook the fact that preventive detention was an inseparable part of these laws and was treated as a form of restriction on movement and classified as such. It seems to me that when the matter is seriously considered, it would be found that the interpreta tion of the learned Attorney General attracts the operation of article 13 (2) no less strongly and directly than the interpretation I have suggested, and I prefer the latter only because I consider that it is legally unsound to treat what is inseparably bound up with and is the essential element in the legal concept 1of personal liberty as a wholly separate and unconnected entity. But, as I have already indicated, it will be enough for the purpose of this case if we forget all about personal liberty and remember only that detention is, as is self evident and as has been pointed out by Viscount Maugham and other eminent judges, another name for depriving a person of all his "liberty of movement. " It was pointed out in the course of the arguments 156 that preventive detention not only takes away the right in article 19 (1) (d) but also takes away all the other rights guaranteed by article 19 (1), except the right to hold, acquire and dispose of property. Where exactly this argu ment is intended to lead us to, I cannot fully understand, but it seems to me that it involves an obvious fallacy, because it overlooks the difference in the modes in which preventive detention operates on the right referred to in sub clause (d) and other sub clauses of article 19 (1). The difference is that while preventive detention operates on freedom of movement directly and inevitably, its operation on the other rights is indirect and consequential and is, often only notional. One who is preventively detained is straightaway deprived of his right of movement as a direct result of his detention, but he loses the other rights only in consequence of his losing freedom of movement. Beside% while freedom of movement is lost by him in all reality and substance, some of the other rights may not be lost until he wishes to exercise them or is interested in exercising them. A person who is detained may not be interested in freedom of association or may not pursue any profession, occupation, trade or business. In such a case, the rights referred to are lost only in theory and not as a matter of substance. I wish only to add that when I said that I was not able to understand the full force of the argument which I have tried to deal with, what I had, in mind was that if preventive detention sweeps away or affects almost all the rights guaranteed in article. 19 (1), the matter deserves very serious consideration and we cannot lightly lay down that article 13 (2) does not come into operation. Being fully alive to the fact that it is a serious matter to be asked to declare a law enacted by Parliament to be unconstitutional, I have again and again asked myself the question: What are we to put in the scales against the construction which I am inclined to adopt and in favour of the view that preventive detention does not take away the freedom of movement guaranteed in article 19 (1) (d)? The inevitable answer has always been that while in one of the scales 157 we have plain and unambiguous language, the opinion eminent jurists, judicial dicta of high authority, constitu tional practice in the sense that no Constitution refers to any freedom of movement apart from personal liberty, and the manner in which preventive detention has been treated in the very laws on which our law on this subject is based, all that we can put in the opposite scale is a vague and ill rounded apprehension that some fearful object such as the revision of the Penal .Code is looming obscurely in the distant horizon, the peculiar objection that the mere men tion of the scheduled tribes will alter the meaning of certain plain words, the highly technical and unreal dis tinction between restriction and deprivation and the assump tion not warranted by any express provision that a person who is preventively detained cannot claim the right of freedom of movement because he is not a free man and certain other things which, whether taken singly or ,collectively, are too unsubstantial to carry any weight. In these circum stances, I am strongly of the view that article 19 (1)(d) guarantees the right of freedom of movement in its widest sense, that freedom of movement being the essence of person al liberty, the right guaranteed under the article is really a right to personal liberty and that preventive detention is a deprivation of that right. I am also of the view that even on the interpretation suggested by the learned Attor ney General, preventive detention cannot but be held to be a violation of the right conferred by article 19 ,(1) (d). In either view, therefore, the law of preventive detention is subject to such limited judicial review as is permitted under article 19 (5). The scope of the review is simply to see whether any particular law imposes any unreasonable restrictions. Considering that the restrictions are imposed on a most valuable right, there is nothing revolutionary in 'the legislature trusting the Supreme Court to examine whether an Act which infringes upon that right is within the limits of reason. I will now pass on to the consideration of article 21, which runs as follows : "No person shall be deprived of his life or personal 158 liberty except according to procedure established by law. " Here again, our first step must be to arrive at a clear meaning of the provision. The only words which cause some difficulty in the proper construction of the article are "procedure established by law." The learned Attorney General contended before us that the word "law" which is used in article 21 means State made law or law enacted by the State. On the other hand, the learned counsel for the petitioner strongly contended that the expression "procedure established by law" is used in a much wider sense and approximates in meaning to the expres sion "due process of law" as interpreted by the Supreme COurt of America in the earliest times and, if that is so, it means exactly what some of the American writers mean to convey by the expression "procedural due process." In the course of the arguments, the learned Attorney General referred us to the proceedings in the Constituent Assembly for the purpose of showing that the article as originally drafted contained the words "without due process of law" but these words were subsequently replaced by the words "except according to procedure established by law." In my opinion, though the proceedings or discussions in the Assembly are not relevant for the purpose of construing the meaning of the expressions used in article 21, especially when they are plain and unambiguous, they are relevant to show that the Assembly intended to avoid the use of the expression "without due process of law. " That expression had its roots in the expression "per legem terrae" (law of the land) used in Magna Charta in 1215. In the reign of Edward III, 'however, the words "due process of law" were used in a statute guaranteeing that no person will be de prived of his property or imprisoned or indicted or put to death without being brought in to answer by due process of law (28, Edward III, Ch. The expression was after wards adopted in the American Constitution and also in the Constitutions of some of the constituent States, though some of the States preferred to use the 159 words "in due course of law" or "according to the law of the land." [See Cooley on "Constitutional Limitations," 8th Edn. II, pages 734 51. In the earliest times, the American Supreme Court construed "due process of law" to cover matters of procedure only, but gradually the meaning of the expression was widened so as to cover substantive law also, by laying emphasis on the word "due. " The expression was used in such a wide sense that the judges found it difficult to define it and in one of the cases it was ob served as follows : "It would be difficult and perhaps impossible to give to those words a definition, at once accurate, and broad enough to cover every case. This difficulty and perhaps impossi bility was referred to by Mr. Justice Miller in Davidson vs New Orleans, where the opinion was expressed that it is wiser to ascertain their intent and application by the 'gradual process of judicial inclusion and exclusion, ' as the cases presented for decision shall require, with the reasoning on which such decisions may be rounded:" Missouri Pacific Railway Co. vs Humes (1). It seems plain that the Constituent Assembly did not adopt this expression on account of the very elastic meaning given to it, but preferred to use the words "according to procedure established by law" which occur in the Japanese Constitution framed in 1946. It will not be out of place to state here in a few words how the Japanese Constitution came into existence. It appears that on the 11th October, 1945. General McArthur directed the Japanese Cabinet to initiate measures for the preparation of the Japanese Constitution, but, as no progress was made, it was. decided in February, 1946, that the problem of constitutional reform should be taken over by the Government Section of the Supreme Commander 's Headquar ters. Subsequently the Chief of this Section ,and the staff drafted the Constitution with the help of American constitu tional lawyers who were called to assist the Government Section in the task. This Constitution, as a learned writer has remarked, bore (1) ; at page 513. 21 160 on almost every page evidences of its essentially Western origin, and this characteristic was especially evident in the preamble "particularly reminiscent of the American Declaration of Independence, a preamble which, it has been observed, no Japanese could possibly have conceived or written and which few could even understand" [See Ogg and Zink 's "Modern Foreign Governments"]. One of the character istics of the Constitution which undoubtedly bespeaks of direct American influence is to be found in a lengthy chap ter, consisting of 31 articles, entitled "Rights and Duties of the People," which provided for the first time an effec tive "Bill of Rights" for the Japanese people. The usual safeguards have been provided there against apprehension without a warrant and against arrest or detention without being informed of the charges or without adequate cause (articles 33 and 34). Now there are two matters which deserve to be noticed : (1) that the Japanese Constitution was framed wholly under American influence; and (2) that at the time it was framed the trend of judicial opinion in America was in favour of confining the meaning of the expression "due process of law" to what is expressed by certain American writers by the somewhat quaint but useful expression "proce dural due process. " That there was such a trend would be clear from the following passage which I quote from Carl Brent Swisher 's "The Growth of Constitutional Power in the United States" (page 107.): "The American history of its interpretation falls into three periods. During the first period, covering roughly the first century of government under the Constitution, due process was interpreted principally as a restriction upon procedure and largely the judicial procedure by which the government exercised its powers. During the second period, which, again roughly speaking, extended through 1936, due process was expanded to serve as a restriction not merely upon procedure but upon the substance of the activities in which the government might engage. During the third period, extending from 1936 to date, the use of due 161 process as a substantive restriction has been largely sus pended or abandoned, leaving it principally in its original status as a restriction upon procedure. " In the circumstances mentioned, it seems permissible to surmise that the expression "procedure established by law" as used in the Japanese Constitution represented the current trend of American judicial opinion with regard to "due process of law," and, if that is so, the expression as used in our Constitution means all that the American writers have read into the words "procedural due process." But I do not wish to base any conclusions upon mere surmise and will try to examine the whole question on its merits. The word "law" may be used in an abstract or concrete sense. Sometimes it is preceded by an article such as "a" or "the" or by such words as "any," "all," etc., and sometimes it is used without any such prefix. But, generally, the word "law" has a wider meaning when used in the abstract sense without being preceded by an article. The question to be decided is whether the word "law" means nothing more than statute law. Now whatever may be the meaning of the expression "due process of law," the word "law" is common to that expression as well as "procedure established by law" and though we are not bound to adopt the construction put on "law" or "due process of law" in America, yet since a number of eminent American Judges have devoted much thought to the subject, I am not prepared to hold that we can derive no help from their opinions and we should completely ignore them. I will therefore in the first instance set out certain quotations from a few of the .decisions of the American Supreme Court construing the word "law" as used in the expression "due process of law," in so far as it bears on the question of legal procedure. (1) "Although the legislature may at its pleasure provide new remedies or change old ones, the power is never theless subject to the condition that it cannot remove certain ancient land marks, or take away certain fundamen tal rights which have been always 162 recognized and observed in judicial procedures:" Bardwell vs Collins (1). (2) ' 'By the law of the land is most clearly intended the general law: a law which hears before it condemns, which proceeds upon inquiry and renders judgments only after trial. The meaning is that every citizen shall hold his life, liberty and property, and immunities under the protection of the general rules which govern society:" Dartmouth College Case (2). (3) "Can it be doubted that due process of law signifies a right to be heard in one 's defence ? If the legislative department of the government were to enact a statute confer ring the right to condemn the citizen without any opportuni ty whatever of being heard, would it be pretended that such an enactment would not be violative of the Constitution ? If this be true, as it undoubtedly is, how can it be said that the judicial department. the source and fountain of justice itself, has yet the authority to render lawful that which if done under express legislative sanction would be viola of the Constitution ? If such power obtains, then the judicial department of the government sitting to uphold and enforce the Constitution is the only one possessing a power to disregard it. If such authority exists then in conse quence of their establishment, to compel obedience to law and enforce justice, Courts possess the right to inflict the very wrongs which they were created to prevent:" Hovey vs Elliott(3). (4) "It is a rule as old as the law, and never more to be respected than now, that no one shall be personally bound until he has had his say in Court, by which is meant, until he has been duly cited to appear, and has been afforded an opportunity to be heard. Judgment without such citation and opportunity wants all the attributes of a judicial determi nation; it is judicial usurpation and oppression, and can never be upheld where justice is justly administered:" Gatpin vs Page(4). Thus, in America, the word "law" does not mean merely State made law or law enacted by the State and does not exclude certain fundamental principles of (1) ; (3) ; at page 417. (2) (4) 163 justice which inhere in every civilized system of law and which are at the root of it. The result of the numerous decisions in America has been summed up by Professor Willis in his book on "Constitutional Law" at page 662, in the statement that the essentials of due process are: (1) no tice, (2) opportunity to be heard, (3) an impartial tribu nal, and (4) orderly course of procedure. It is pointed out by the learned author that these essentials may assume different forms in different circumstances, and so long as they are conceded in principle, the requirement of law will be fulfilled. For example, a person cannot require any particular form or method of hearing, but all that he can require is a reasonable opportunity to be heard. Similarly, an impartial tribunal does not necessarily mean a judicial tribunal in every case. So far as 'orderly course of proce dure is concerned, he explains that it does not require a 'Court to strictly weigh the ,evidence but it does require it to examine the entire record to ascertain the issues, to discover whether there are facts not reported and to see whether or not the law has been correctly applied to facts. The view expressed by other writers is practically the same as that expressed by Professor Willis, though some of them do not expressly refer to the fourth element, viz., orderly course of procedure. The real point however is that these four elements are really different aspects of the same right, viz., the right to be heard before one is condemned. So far as this right is concerned, judicial opinion in England appears to be the same as that in America. In Eng land, it would shock one to be told that a man can be de prived of his personal liberty without a fair trial or hearing. Such a case can happen if the Parliament expressly takes away the right in question in an emergency as the British Parliament did during// the last two world wars in a limited number of cases. I will refer here to a few cases which show that the fundamental principle that a person whose right is affected must be heard has been observed not only in cases involving personal liberty but also 'in proceedings affecting other rights, even though they may have 164 come before administrative or quasi judicial tribunals. Cooper vs The Wadsworth Board of Works (1)was a case under an Act which empowered the District Board to alter or demol ish a house where the builder had neglected to give notice of his intention. seven days before proceeding to lay or dig the foundation. Acting upon this power, the Board directed the demolition of a building without notice to the builder, but this was held to be illegal. Byles 5. in dealing with the matter observed as follows : "I conceive they acted judicially, because they had to determine the offence, and they had to apportion the punish ment as well as the remedy. That being so, a long course of decisions, beginning with Dr. Bentley 's case, and ending with some very recent cases, establish that although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature. The judgment of Mr. Justice Fortescue, in Dr. Bentley 's case, is somewhat quaint, but it is very applicable, and has been the law from that time to the present. He says, "The. objection for want of notice can never be got over. The laws of God and man both give the party an opportunity to make his defence, if he has any. " In the same case Erie C.J. observed : "It has been said that the principle that no man shall be deprived of his property without an opportunity of being heard, is limited to a judicial proceeding. I do not quite agree with that; . the law, I think, has been applied to many exercises of power which in common under standing would not be at all more a judicial proceeding than would be the act of the District Board in ordering a house to be pulled down." The observations made by Erie C.J. were quoted and applied by Sir Robert Collier in Smith vs The ' Queen (2), and the observations of Lord Campbell in Regina vs The Archbishop of Canterbury (3) were to the. same effect. (1) ; (2) 3 A.C. 614. (3) 1E.& E. 559. 165 A similar opinion was expressed by Sir GeorgeJessel in Fisher vs Keane (1), Labouchere vs Earl of Wharncliffe (2), and Russell vs Russell (3). In the last mentioned case, he observed as follows : "It [Wood vs Woad (4)] contains a very valuable state ment by the Lord Chief Baron as to his view of the mode of administering justice by persons other than Judges who have judicial functions to perform which I should have been very glad to have had before me on both those club cases that I recently heard, namely, the case of Fisher vs Keane and the case of Labouchere vs Earl of Wharncliffe. The passage I mean is this, referring to a committee: 'They are bound in the exercise of their functions by the rule expressed in the maxim "audi alteram partem," that no man should be condemned to consequences without having the opportunity of making his defence. This rule is not confined to the con duct of strictly legal ' tribunals, but is applicable to every tribunal or body of persons invested with authority to adjudicate upon matters involving civil consequences to individuals '. " This opinion was quoted with approval by Lord Macnaghten in Lapointe vs L 'Association etc. de Montreal (5). In that case, on an application for pension by the appellant, who had been obliged to resign, the Board of Directors, without any judicial inquiry into the circumstances, resolved to refuse the claim on the ground that he was obliged to tender his resignation. This procedure was condemned by Lord Macnaghten as being "contrary to rules of society and above all contrary to the elementary principles of justice. " These observations of Lord Macnaghten were referred to and relied on in The King vs Tribunal of Appeal under the Hous ing Act, 1919 (6). In that case, a company proposed to build a picture house and the local authority having prohibited 'the building, the company appealed under the Housing (1) H. Ch. D. 353. (4) [1874] L.R. 9 exhibit 190. (2) 13 Oh. D. 346. (5) (3) (6) 166 (Additional Powers) Act, 1919, which contained a provision that an appeal could in certain cases be properly determined without a hearing and that the appellate Court could dis pense with the hearing and determine the appeal summarily. It was held that the meaning of rule 7 was that the tribunal on appeal might dispense with an oral hearing, not that they might dispense with a hearing of any kind, and that they were bound to give the appellants a hearing in the sense of an opportunity to make out a case. The Earl of Reading in delivering the judgment observed: "The principle of law applicable to such a case is well stated by Kelly C.B. in Wood vs Woad in a passage which is cited with approval by Lord Macnaghten in Lapointe vs L ' Association etc. de Montreal . " In Local Government Board vs Arlidge(1), the Local Government dismissed an appeal by a person against whom a closing order had been made under Housing, Town Planning, &c. Act, without an oral hearing and without being allowed to see the report made by the Board 's Inspector upon 'public local inquiry. The House of Lords did not interfere with the order on the ground that the appeal had been dealt with by an administrative authority whose duty was to enforce obligations on the individual in the interests of the commu nity and whose character was that of an organization with executive functions. The principle however was conceded and lucidly set forth that when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially, and they must deal with the question referred to them without bias and must give to each of the parties an opportunity of presenting its case, and that the decision must be come to in the spirit and with the sense of respon sibility of a tribunal whose duty it is to mete out justice. Commenting upon this case, which is generally regarded as an extreme case, Mr. Gavin Simonds, who afterwards became a member of the House of Lords observes : (1) [1915] A.C.120. 167 "I think you would agree that if the subjectmatter of such proceedings as arc here indicated was the liberty of the subject, or indeed his life, you would regard such a judicial procedure as outrageous. " (See C.K. Allen 's "Law and Orders," page 167). I have particularly referred to cases which were before administrative tribunals, because I have to deal in this case with preventive detention which is said to be an execu tive act and because I wish to point out that even before executive authorities and administrative tribunals an order cannot generally be passed affecting one 's rights without giving one such hearing as may be appropriate to the circum stances of the case. I have only to add that Halsbury after enumerating the most important liberties which are recog nized in England, such as right of personal freedom, right to freedom of speech, right of public meeting, etc. , adds : "It seems to me that there should be added to this list the following rights which appear to have become well estab lished the right of the subject to have any case affecting him tried in accordance with the principles of natural justice, particularly the principles that a man may not be a judge in his own cause, and that no party ought to be con demned unheard, or to have a decision given against him unless he has been given a reasonable opportunity of putting forward his case . "(Halsbury 's Laws of England, 2nd Edition, volume 6, page 392). The question is whether the principle that no person can be condemned without a hearing by an impartial tribunal which is well recognized in all modern civilized systems of law and which Halsbury puts on a par with well recognized fundamental rights cannot be regarded as part of the law of this country. I must confess that I find it difficult to give a negative answer to this question. The principle being part of the British system of law and procedure which we have inherited, has been observed in this country for a very long the and is also deeply rooted in our ancient history, being the basis of the 168 panchayat system from the earliest times. The whole of the Criminal Procedure Code, whether it deals with trial of offences or with preventive or quasiadministrative measures such as are contemplated in sections 107, 108, 109, 110 and 145, is based upon the foundation of this principle, and it is difficult to see that it has not become part of the "law of the land" and does not inhere in our system of law. If that is so, then "procedure established by law" must include this principle, whatever else it may or may not include. That the word "law" used in article 21 does not mean only State made law is clear from the fact that though there is no statute laying down the complete procedure to be adopted in contempt of Court cases, when the contempt is not within the view of the Court, yet such procedure as now prevails in these cases is part of our law. The statute law which regulates the procedure of trials and enquiries in criminal cases does not specifically provide for arguments in certain cases, but it has always been held that no decision should be pronounced without hearing arguments. In a number of cases, it has been held that though there may be no specific provision for notice in the statute, the provision must be read into the law. I am aware that some Judges have ex pressed a strong dislike for the expression "natural jus tice" on the ground that it is too vague and elastic, but where there are well known principles with no vagueness about them, which all systems of law have respected and recognized, they cannot be discarded merely because they are in the ultimate analysis found to be based on natural jus tice. That the expression "natural justice" is not unknown to our law is apparent from the fact that the Privy Council has in many criminal appeals from this country laid down that it shall exercise its power of interference with the course of criminal justice in this country when there has been a breach of principles of natural justice or departure from the requirements of justice. [See In re Abraham Mallory Dillet (1), Taba Singh vs King Emperor C), George Gfeller vs The (1) 12 A.C. 459. (2) I.L.R. 48 Born. 515. 169 King(1), and Bugga and others vs Emperor(2). In the present case, there is no vagueness about the right claimed which is the right to have one 's guilt or innocence considered by an impartial body and that right must be read into the words of article 21. Article 21 purports to protect life and person al liberty, and it would be a precarious protection and a protection not worth having, if the elementary principle of law under discussion which, according to Halsbury is on a par with fundamental rights, is to be ignored and excluded. In the course of his arguments, the learned counsel for the petitioner repeatedly asked whether the Constitution would permit a law being enacted, abolishing the mode of trial permitted by the existing law and establishing the procedure of trial by battle or trial by ordeal which was in vogue in olden times in England. The question envisages something which is not likely to happen, but it does raise a legal problem which can perhaps be met only in tiffs way that if the expression "procedure established by law" simply means any procedure established or enacted by statute it will be difficult to give a negative answer to the question, but ii the word "law" includes what I have endeavoured to show it does, such an answer may be justified. It seems to me that there is nothing revolutionary in the doctrine that the words "procedure established by law" must include the four principles set out in Professor Willis ' book, which, as I have already stated, are different aspects of the same principle and which have no vagueness or uncertainty about them. These principles, as the learned author points out and as the authorities show, are not absolutely rigid principles but are adaptable to the circumstances of each case within certain limits. I have only to add that it has not been seriously controverted that "law" in this article means valid law and "procedure" means certain definite rules of proceeding and not something which is a mere pretence for procedure. I will now proceed to examine article 22 of the Consti tution which specifically deals with the subject (1) A.I.R. 1943P.C. 211. (2) A.I.R. 1919P. C. 108. 170 of preventive detention. The first point to be noted in regard to this article is that it does not exclude the operation of articles 19 and 21, and it must be read subject to those two articles, in the same way as articles 19 and 21 must be read subject to article 22. The correct position is that article 22 must prevail in so far as there are specific provisions therein regarding preventive detention, but, where there are no such provisions in that article, the operation of articles 19 and 21 cannot be excluded. The mere fact that different aspects of the same right have been dealt with in three different articles will not make them mutually exclusive except to the extent I have indicated. I will now proceed to analyse the article and deal with its main provisions. In my opinion, the main provisions of this article are : (1) that no person can be detained beyond three months without the report of an advisory board [clause 4 (a) ]; (2) that the Parliament may prescribe the circumstances and the class or classes of cases in which a person may be detained for more than three months without obtaining the opinion of an advisory board [clause 7 (a)]; (3) that when a person is preventively detained, the author ity making the order of detention shall communicate to such person the grounds on which the order is made and shall afford him the earliest opportunity of making a representa tion against the order [clause (5) ]; and (4) that the Parliament may prescribe the maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention [clause 7 (b) ]. The last point does not require any consideration in this case, but the first three points do require considera tion. In connection with the first point, the question arises as to the exact meaning of the words "such detention" occur ring in the end of clause 4 (a). Two alternative interpre tations were put forward: (1) "such detention" means preven tive detention; (2) "such detention" means detention for a period longer than three months. If the first interpreta tion is correct, then the function of the advisory board would be to go into the merits of the case of each person and simply 171 report whether there was sufficient cause for his detention. According to the other interpretation, the function of the advisory board will be to report to the government whether there is sufficient cause for the person being detained for more than three months. On the whole, I am inclined to agree with the second interpretation. Prima facie, it is a seri ous matter to detain a person for a long period (more than three months) without any enquiry or trial. But article 22 (4) (a) provides that such detention may be ordered on the report of the advisory board. Since the report must be directly connected with the object for which it is required, the safeguard provided by the article, viz., calling for a report from the advisory board, loses its value, if the advisory board is not to apply its mind to the vital ques tion before the government, namely, whether prolonged deten tion (detention for more than three ' months) is justified or not. Under article 22 (4) (a), the advisory board has to submit its report before the expiry of three months and may therefore do so on the eighty ninth day. It would be some what farcical to provide, that after a man has been detained for eighty nine days, an advisory board is to say whether ' his initial detention was justified. On the other hand, the determination of the question whether prolonged detention (detention for more than three months)is justified must necessarily involve the determination of the question wheth er the detention was justified at all, and such an interpre tation only can give real meaning and effectiveness to the provision. The provision being in the nature of a protection or safeguard, I must naturally lean towards the interpreta tion which is favourable to the subject and which is also in accord with the object in view. The next question which we have to discuss relates to the meaning and scope of article 22 (7)(a) which runs as follows: "Parliament may by law prescribe (a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven tive detention without obtaining 172 the opinion of an Advisory Board in accordance with the provisions of sub clause (a) of clause (4). " The question is what is meant by "circumstances" ' and "class or classes of cases" used in this provision. This question has arisen because of the way in which these ex pressions appear to have been interpreted and applied in the Act of Parliament with which we are concerned. As the matter is important and somewhat complicated, I shall try to express my meaning as clearly as possible even at the risk of some repetition, and, in doing so, I must necessarily refer to the impugned Act as well as Lists I and III of the Seventh Schedule of the Constitution, under which Parliament had jurisdiction to enact it. Item 9 of List I Union List shows that the Parliament has power to legislate on preventive detention for reasons connected with (1) defence, (2) foreign affairs, and (3) security of India. Under List III Concurrent List the appropriate item is item 3 which shows that law as to preventive detention can be made for reasons connected with (1) the security of the State, (2) the maintenance of public order, and (3) the maintenance of supplies and services essential to the community. The impugned Act refers to all the subjects mentioned in Lists I and III in regard to which law of preventive detention can be made. Section 3 (1)of the Act, the substance of which has already been mentioned, is important, and I shall reproduce it verbatim. "The Central Government or the State Government may (a) if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to (i) the defence of India, the relations of India with foreign powers, or the security of India, or (ii) the security of the State or the maintenance of public order, or (iii) the maintenance of supplies and services essen tial to the community, or 173 (b) if satisfied with respect to any person who is a foreigner within the meaning of the (XXXI of 1946), that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India, it is necessary so to do, make an order directing that such person be detained. " It will be noticed that all the subjects of legislation concerning preventive detention occurring in item of List I are grouped in sub clause (1) of clause (a). The subjects in this group are three in number and, for convenience of reference, I shall hereafter refer to them as A, B and C. In sub .clause (ii), we find grouped two of the matters referred to in item 3 of List III, these being security of the State and the maintenance of public order. These two subjects, I shall refer to as D and E. In sub clause (iii), reference has been made to the third matter in item 3 of List III, and I shall refer to this subject as F. With this classification, let us now turn to the Constitution itself. On reading articles 22 (4) and 22 (7) together, it would be clear that so long as article 22 (4) (a) holds the field and Parliament does not act under clause (7) (a) of article 22, there must be an advisory board in every case, i.e., if the legislation relates to groups A to F, as it does here, there must be an advisory board for all these groups. Article 22 (7) however practically engrafts an excep tion. It states in substance that the Parliament may by an Act provide for preventive detention for more than three months without reference to an advisory board, but in such cases it shall be incumbent on the Parliament to prescribe (1) the circumstances and (2) the class or classes of cases in which such course is found to be necessary. If the case contemplated in clause (4)(a)is the rule and that contem plated 'in clause (7) (a) is the exception, then the circum stances and the class or classes of cases must be of a special or extraordinary nature, so as to take the case out of the rule and bring it within the exception. It is always 174 possible to draw the line between the normal or ordinary and the abnormal or extraordinary cases. and this is what, in my opinion, the Parliament was expected to do under clause (7) (a). I do not think that it was ever intended that Parliament could at its will treat the normal as the abnor mal or 'the rule as the exception. But this is precisely what has been done in this case All the items on which preventive legislation is possible excepting one, i.e., A to E, have been put within the exception, and only one, F, which relates to maintenance of supplies and services essen tial to the community, has been allowed to remain under the rule. In other words, it is provided that there shall be an advisory board only for the last category, F, but no provi sion having been made for the other categories, A to E, it may be assumed that the advisory board has been dispensed with in those cases. The learned Attorney General maintained that it would have been open to the Parliament to dispense with the advisory board even for the category F, and if such a course had been adopted it would not have affected the validity of the Act. This is undoubtedly a logical position in the sense that it was necessary for him to go as far as this to justify his stand; but, in my opinion, the course adopted by the Parliament in enacting section 12 of the impugned Act is not what is contemplated under article 22 (7) (a) or is permitted by it. The circumstances to be prescribed must be special and extraordinary circumstances and the class or classes of cases must be of the same na ture. In my opinion, the Constitution never contemplated that the Parliament should mechanically reproduce all or most of the categories A to F almost verbatim and not apply its mind to decide in what circumstances and in what class or classes of cases the safeguard of an advisory board is to be dispensed with. I may state here that two views are put forward before us as to how clauses (4) (a) and 7 (a) of article 22 are to be read: (1) that clause (4) (a) lays down the rule that in all cases where detention for more than three months is ordered, it should be done in consultation with and on the report of the advisory 175 board, and clause (7) (a) lays down an exception to this rule by providing that Parliament may pass an Act permitting detention for more than three months without reference to an advisory board; (2) that clauses (4)(a) and (7) (a) are independent clauses making two separate and alternative provisions regarding detention for more than three months, in one case on the report of an advisory board and in other case without reference to an advisory board. Looking at the substance and not merely at the words, I am inclined to hold that clause (7) (a) practically engrafts an exception on the rule that preventive detention for more than three months can be ordered only on the report of an advisory board, and so far I have proceeded on that footing. But it seems to me that it will make no difference to the ulti mate conclusion, whichever of the two views we may adopt. Even on the latter view, it must be recognized that the law which the Constitution enables the Parliament to make under article 22 (7) (a) would be an exceptionally drastic law, and, on the principle that an exceptionally drastic law must be intended for an exceptional situation, every word of what I have said so far must stand. Clause (7) (a) is only an enabling provision, and it takes care to provide that the Parliament cannot go to the extreme limit to which it is permitted to go without prescribing the class or classes cases and the circumstances to which the extreme law would be applicable. It follows that the class or classes of cases and the circumstances must be of a special nature to require such legislation. It was urged that the word "and" which occurs between "circumstances" and "class or classes of cases" is used in a disjunctive sense and should be read as "or," and by way of illustration it was mentioned that when it is said that a person may do this and that, it means that he is at liberty to do either this or that. I do not think that this argu ment is sound. I think that clause (7)(a) can be accurately paraphrased somewhat as follows : " Parliament may dispense with an advisory board, but in that case it shall prescribe the circumstances and the class or 23 176 classes of cases . . "If this is the meaning, then ' 'and" must be read as "and" and not as "or"; and "may" must be read as "shall. " Supposing it was said that Parliament may prescribe the time and place for the doing of a thing, then can it be suggested that both time and place should not be prescribed ? It seems obvious to me that the class or classes of cases must have some reference to the persons to be detained or to their activities and movements or to both. "Circumstances" on the other hand refer to something extra neous, such as surroundings, background, prevailing condi tions, etc., which might prove a fertile field for the dangerous activities of dangerous persons. Therefore the provision clearly means that both the circumstances and the class or classes of cases (which are two different expres sions with different meanings and connotations and cannot be regarded as synonymous) should be prescribed, and prescrip tion of one without prescribing the other will not be enough. As I have already stated, such law as can be enact ed under article 22 (7) (a) must involve, by reason of the extreme limit to which it can go, serious consequences to the persons detained. It will mean (1) prolonged detention, i.e., detention for a period longer than three months, and (2) deprivation of the safeguard of an advisory board. Hence article 22 (7) (a) which purports to be a protective provi sion will cease to serve its object unless it is given a reasonable interpretation. To my mind, what it contemplates is that the law in question must not be too general but its scope should be limited by prescribing both the class or classes of cases and the circumstances. It was contended that the expression "class or classes of cases" is wide enough to enable the Parliament to treat any of the categories mentioned in Lists I and III, items 9 and 3 respectively, (i.e., any of the categories A to F) as constituting a class. At first sight, it seemed to me to be a plausible argument,, but the more I think about it the more unsound it appears to me. The chief thing to be remem bered is what I have already emphasized more than once, viz., that a special or extreme type of law must be limited to special classes of cases and circumstances. Under the 177 Constitution, the Parliament has to prescribe "the class or classes," acting within the limits of the power granted to it under Lists I and III. The class or classes must be its own prescription and must be so conceived as to justify by their contents the removal of an important safeguard provid ed by the Constitution. Prescribing is more than a mere mechanical process. It involves a mental effort to select and adapt the thing prescribed to the object for which it has to be prescribed. We find here that what is to be prescribed is "class or classes" (and also "circumstances "). We also find that what the law intends to provide is prolonged detention (by which words I shall hereafter mean detention for more than three months) and elimination of the advisory board. The class or classes to be prescribed must therefore have a direct bearing on these matters and must be so selected and stated that any one by looking at them may say : " That is the reason why the law has prescribed prolonged detention without reference to an advisory board. " In other words, there must be something to make the class or classes prescribed fit in with an extreme type of legisla tion some element of exceptional gravity or menace, which cannot be easily and immediately overcome and therefore necessitates prolonged detention; and there must be some thing to show that reference to an advisory board would be an undesirable and cumbersome process and wholly unsuitable for the exceptional situation to which the law applies. Perhaps a simple illustration may make the position still clearer. Under the Lists, one of the subjects on which Parliament may make a law of preventive detention is "matter connected with the maintenance of public order. " The Act simply repeats this phraseology and states in sec tion 3: "with a view to preventing him (the person to be detained) from acting in a manner prejudicial to the main tenance of public order. " This may be all right for section 3, but section 12 must go further. An act prejudicial to. the maintenance of public order may be an ordinary act or it may be an act of special gravity. I think that article 22 (7)(a) contemplates that the graver and 178 more heinous types of acts falling within the category of acts prejudicial to the maintenance of public order (or other heads) should be prescribed so as to define and cir cumscribe the area of an exceptional piece of legislation. That some kind of sub classification (if I may be per mitted to use this word) of the categories A to F was possi ble can be illustrated by reference to regulation 18 ]3 of the British Defence of the Realm Regulations. This regula tion was made under an Act of 1039 which authorized "the making of regulations for the detention of persons whose detention appears to the Secretary of State to be expedient in the interests of public safety or the defence of the realm. " The two matters "public safety" and "defence of the realm" are analogous to some of the heads stated in Lists I and III. It will be instructive to note that under these two heads, regulation 18 B has set forth several subheads or class or classes of cases in which preventive detention could be ordered. These classes are much more specific than what we find in section a of the impugned Act and therefore there is less chance of misuse by the executive of the power to order preventive detention. The classes set out are these : (1) If the Secretary of State has reasonable cause to believe any person to be of hostile origin or associa tions, (2) if the Secretary of State has reasonable cause to believe any person to have been recently concerned in acts prejudicial to the public safety or the defence of the realm or in the preparation or instigation of such acts, (3) if the Secretary of State has reasonable cause to believe any person to have been or to be a member of, or to have been or to be active in the furtherance of the objects of, any such organization as is hereinafter mentioned . (a) the organization is subject to foreign influence or control, (b) the persons in control of the organization have or have had associations with, persons concerned in the government of, or sympathies with the system of government of, any Power with which His Majesty is at war, and in either case there is danger of the utilization of the organization for pur poses prejudicial to the public safety, etc., (4) if the Secretary of State has reasonable cause to believe that the recent conduct of any person for the time being in an area or any words recently written or spoken by such a person expressing sympathy with the enemy, indicates or indicate that person is likely to assist the enemy. I have only to point out that the scope within which preventive detention can be legislat ed upon in this country is much larger than the scope indi cated in the British Act under which Regulation 18 B was framed, and therefore there is more scope for specification of the circumstances as well as the class or classes of cases under the impugned Act. But all that has been done is that words which occur in the legislative Lists have been taken and transferred into the Act. What I have stated with regard to class or classes of cases also applies to the circumstances which are also to be prescribed under article 22 (7) (a). These circumstances are intended to supply the background or setting in which the dangerous activities of dangerous persons might prove specially harmful. They must be special circumstances which demand a specially drastic measure and under which reference to an advisory board might defeat the very object of preven tive action. The evident meaning of article 22 (7) (a) seems to be that the picture will not be complete without mentioning both the classes and the circumstances. There was some discussion at the Bar as to what kind of circumstances might have been specified. It is not for me to answer this question, but I apprehend that an impending rebellion or war, serious disorder in a particular area such as has induced the Punjab Government to declare certain areas as "disturbed areas," tense communal situation, prevalence of sabotage or widespread political dacoities and a variety of other matters might answer the purpose the Constitution had in view. I will now try to sum up the result of a somewhat pro tracted discussion into which I had to enter merely to clarify the meaning of a very important provision of the Constitution which has, in my opinion, been completely misunderstood by the framers of the 180 impugned Act. It appears to me that article 22 deals with three classes of preventive detention : (1) preventive detention for three months; (2) preventive detention for more than three months on the report of the advisory board; and (3) preventive detention for more than three months without reference to the advisory board. If one has to find some kind of a label for these class es for a clear understanding of the subject, one may label them as "dangerous," "more dangerous" and "most danger ous. " Now so far as the first two classes are concerned, there is nothing to be prescribed under the Constitution Apparently, the authors of the Constitution were not much concerned about class No. (1), and they thought that in so far as class No. (2) was concerned the provision that a reference to the advisory board was necessary coupled with the provision that detention was not to exceed the maximum period which may be fixed by the Parliament was enough. But they did take care to make a special provision for class No. (3), and it is extermly important for the liberty of the subject as well as for the smooth working of the Constitu tion that this provision should not be lightly treated but should receive a well considered and reasonable construc tion. It is elementary that the rigour of a law should correspond to or fit the gravity of the evil or danger it aims at combating, and it is also evident that the law which the Parliament has been permitted to enact under article 22 (7) (a) can, so far as rigour is concerned, go to the I farthest limit. It follows that the law must have been intended for exceptionally grave situations and exigencies. Hence the authors of the Constitution have made it necessary that the Parliament should put certain specifications into the Act which it is empowered to pass under article 22 (7) (a), so that by means of these specifications the necessity for enacting so drastic a law should be apparent on the face of it, and its application should be confined to the classes and circumstances specified. The Act must prescribe (1) "c]ass or classes of cases" which are to have reference to the persons. 181 against whom the law is to operate and their activities and movements and (2) "circumstances" which would bring into prominence the conditions and the backgrounds against which dangerous activities should call for special measures. By means of such two fold prescription, the sphere for the application of the law will be confined only to a special type of cases it will be less vague, less open to abuse and enable those who have to administer it to determine objec tively when a condition has arisen to justify the use of the power vested in them by the law. This, in my opinion, is the true meaning and significance of article 22 (7) (a) and any attempt to whittle it down will lead to deplorable results. Having stated my views as to the construction of article 22 (7) (a), I propose to consider at once whether section 12 of the impugned Act conforms to the requirements of that provision. In my opinion, it does not, because it fails to prescribe either the circumstances or the class or classes of cases in the manner required by the Constitution. It does not prescribe circumstances at all, and, though it purports to prescribe the class or classes, it does so in a manner showing that the true meaning of the provision from which the Parliament derived its power has not been grasped. I have sufficiently dwelt on this part of the case and shall not repeat what I have already said. But I must point out that even if it be assumed that the view advanced by the learned Attorney General is correct and it was within the competence of Parliament to treat any of the categories mentioned in items 9 and 3 of Lists I and III as constitut ing a class and to include it without any qualification or change, the impugned section cannot be saved on account of a two fold error : . (1) the word "and" which links "class or classes" with "circumstances" in article 22 (7) (a) has been wrongly construed to mean "or ;" and (2) the distinction between "circumstances" and "class or classes" has been completely ignored and they are used as interchangeable terms. The first error appears to me to be quite a serious one, because though the Constitution lays down two require ments and insists 182 on the prescription of circumstances as well as class or classes, it has been assumed in enacting section 12 that prescription of one of them only will be enough. The other error is still more serious and goes to the root of the matter. There can be no doubt that circumstances and class or classes are two different expressions and have different meanings, but the Act proceeds on the assumption that cir cumstances are identical with class or classes, as will appear from the words "any person detained in any of the following classes of cases or under any of the following circumstances" used in the section. I have already shown how important the specification of circumstances is in legislation of such an extreme and drastic character. There fore, to confuse "classes" with "circumstances" and to omit to mention "circumstances" at all are in my opinion grave errors. There can, in my opinion, be no escape from the conclusion that section 12 of the Act by which a most impor tant protection or safeguard conferred on the subject by the Constitution has been taken away, is not a valid provision, since it contravenes the very provision in the Constitution under which the Parliament derived its competence to enact it. I will now briefly deal with article 22 (5) which makes it incumbent on the authority ordering preventive deten tion to communicate to the person detained the grounds on which the order has been made and to give him the earliest opportunity of making a representation against the order. It must be remembered that this provision is intended to afford protection to and be a safeguard in favour of a detained person, and it cannot be read as limiting any rights which he has under the law or any other provisions of the Consti tution. If article 21 guarantees that before a person is deprived of his liberty he must be allowed an opportunity of establishing his innocence before an impartial tribunal, that right still remains. In point of fact, there is no express exclusion of that right in the Constitution and no prohibition against constituting an impartial tribunal. On the other hand, the right to make a representation which has 183 been granted under the Constitution, must carry with it the right to the representation being properly considered by an impartial person or persons. There must therefore be some machinery for properly examining the cases of the detenus and coming to the conclusion that they have not been de tained without reason. If this right had been expressly taken away by the Constitution, there would have been an end of the matter, but it has not been expressly taken away, and I am not prepared to read any implicit deprivation of such a valuable right. The mere reference to an advisory board in article 22 (4) (a) does not, if my interpretation of the provision is correct, exclude the constitution of a proper machinery for the purpose of examining the cases of detenus on merits. The constitution of an advisory board for the purpose of reporting whether a person should be detained for more than three months or not is a very different thing from constituting a board for the purpose of reporting whether a man should be detained for a single day. In the view I take, all that Parliament could do under clause (7) (a) of article 22 was to dispense with an advisory board for the purpose contemplated in clause (4) (a) of that article and not to dispense with the proper machinery, by whichever name it may be called, for the purpose of examining the merits of the case of a detained person. It was argued that article 22 is a code by itself and the whole law of preventive detention is to be found within its four corners. I cannot however easily subscribe to this sweeping statement. The article does provide for some mat ters of procedure, but it does not exhaustively provide for them. It is said that it provides for notice, an opportuni ty to the detenu to represent his case, an advisory board which may deal with his case, and for the maximum period beyond which a person cannot be detained. These points have undoubtedly been touched, but it cannot be said that they have been exhaustively treated. The right to represent is given, but it is left to the legislature to provide the machinery for dealing with the representation. The advisory board has been mentioned, but 24 184 it is only to safeguard detention for a period longer than three months. There is ample latitude still left to the Parliament, and if the Parliament makes use of that latitude unreasonably, article 19 (5) may enable the Court to see whether it has transgressed the limits of reasonableness. I will now proceed to deal with the Act in the light of the conclusions I have arrived at. So far as section 3 of the Act is concerned, it was contended that it is most unreasonable, because it throws a citizen at the mercy of certain authorities, who may at their own will order his detention and into whose minds we cannot probe to see wheth er there is any foundation for the subjective satisfaction upon which their action is to rest. I am however unable to accept this argument. The administrative authorities who have to discharge their responsibilities have to come to quick decisions and must necessarily be left to act on their own judgment. This principle is by no means unreasonable and it underlies all the preventive or quasi administrative measures which are to be found in the Criminal Procedure Code. Under section 107 of that code, it is left to the discretion of the magistrate concerned to determine whether in his opinion there is sufficient ground for proceeding against any person who is likely to occasion a breach of the peace. Under section 145 also, his initial action depends upon his personal satisfaction. Therefore I do not find anything wrong or unconstitutional in section 3 of the Act. But I must point out that it is a reasonable provision only for the first step, i.e., for arrest and initial detention, and must be followed by some procedure for testing the so called subjective satisfaction, which can be done only by providing a suitable machinery for examining the grounds on which the order of detention is made and considering the representations of the persons detained in relation to those grounds. I do not also find anything radically wrong in section 7 of the Act, which makes it incumbent on the authority con cerned to communicate to a detenu the grounds on which the order has been made and to 185 afford him the earliest opportunity of making a representa tion against the order. Section 10 which provides that the advisory board shall make its report within ten weeks from the date of the detention order is in conformity with arti cle 22 (4) (a) of the Constitution, and the only comment which one can make is that Parliament was not obliged to fix such a long period for the submission of a report and could have made it shorter in ordinary cases. The real sections which appear to me to offend the Constitution are sections 12 and 14. I have already dealt with the principal objec tion to section 12, while discussing the provisions of article 22 (7) (a) and I am of the opinion that section 12 does not conform to the provisions of the Constitution and is therefore ultra vires. I also think that even if it be held that it technically complies with the requirements of article 22 (7) (a), Parliament has acted unreasonably in exercising its discretionary power without applying its mind to essential matters and thus depriving the detenus of the safeguard of an advisory board which the Constitution has provided in normal cases. So far as section 14 is con cerned, all my colleagues have held it to be ultra vires, and, as I agree with the views expressed by them, I do not wish to encumber my judgment by repeating in my own words what has been said so clearly and so well by them. Section 14 may be severable from the other provi sions of the Act and it may not be possible to grant any relief to the petitioner on the ground that section 14 is invalid. But I think that section 12 goes to the very root of the legislation inasmuch as it deprives a detenu of an essential safeguard, and in my opinion the petitioner is entitled to a writ of habeas corpus on the ground that an essential provision of the Constitution has not been com plied with. This writ will of course be without prejudice to any action which the authorities may have taken or may hereafter take against the petitioner under the penal law I have to add this qualification because there were allega tions of his being involved in some criminal cases but the actual facts were not clearly brought out before us. 186 I have only to add a few concluding remarks to my judg ment. In studying the provisions of the impugned Act, I could not help instituting a comparison in my own mind between it and similar legislation in England during the last two world wars. I could not also help noticing that the impugned Act purports to be a peacetime Act, whereas the legislation to which I have referred was enacted during the war. During the first war as well as the second, a number of persons were detained and a number of cases were brought to Court in connection with their detention, but the two lead ing cases which will be quoted again and again are Rex vs Halliday (1) and Liversidge vs Sir John Anderson(2). We are aware that in America certain standards which do not conform to ordinary and normal law have been applied by the Judges during the period of the war and sometimes they are compen dionsly referred to as being included in "war power. " The two English cases to which I have referred also illustrate the same principle, as will appear from two short extracts which I wish to reproduce. In Rex vs Halliday (3), Lord Atkinson observed as follows : " However precious the personal liberty of the subject may be, there is something for which it may well be, to some extent, sacrificed by legal enactment, namely, national success in the ' war, or escape from national plunder or enslavement. " In Liversidge vs Sir John Anderson (4), Lord Macmillan struck the same note in these words : "The liberty which we so 'justly extol is itself the gift of the law and as Magna Charta recognizes may by the law be forfeited or abridged. At a time when it is the undoubted law of the land that a citizen may by conscription or requisition be compelled to give up his life and all that he possesses for his country 's cause it may well be no matter for surprise that there should be confided to the Secretary of State a discretionary power of enforcing the relatively mild precaution of detention. " (1) [1917] A.C.260. (3) ; 271. ; (4) ; at p. 257. 187 These passages represent the majority view in the two cases, but the very elaborate judgments of Lord Shaw in Rex vs Halliday and that of Lord Atkin in Liversidge vs Sir John Anderson show that there. was room for difference of opinion as well as for a more dispassionate treatment of the case and the points involved in it. It is difficult to say that there is not a good substratum of sound law in the celebrat ed dictum of Lord Atkin that even amidst the clash of arms the laws are not silent and that they speak the same lan guage in war as in peace. However that may be, what I find is that in the regulations made in England during the first war as well as the second war there was an elaborate provi sion for an advisory board in all cases without any excep tion, which provided a wartime safeguard for persons de prived of their liberty. There was also a provision in the Act of 1939 that the Secretary of State should report at least once in every month as to the action taken under the regulation including the number of persons detained under orders made thereunder. I find that these reports were printed and made available to the public. I also find that the Secretary of State stated in the House of Commons on the 28th January, 1943, that the general order would be to allow British subjects detained under the Regulation to have consultations with their legal advisers out of the hearing of an officer. This order applied to consultations with barristers and solicitors but not to cases where solicitors sent to interview a detained person a clerk who was not an officer of the High Court. The impugned Act suffers in com parison, on account of want of such provisions, though, so far as I can see, no great harm was likely to have been caused by setting up a machinery composed of either adminis trative or judicial authorities for examining the cases of detained persons so as to satisfy the essentials of fairness and justice. The Act also suffers in comparison with some of the later Provincial Acts in which the safeguard of an advisory board is , expressly provided for. I find that there is a provision in section 12 (2) of the Act for the review of the cases of detenus after six months, but this is quite different 188 from examining the merits of the case. The object of such a review is obviously to find out whether by reason of any change in the circumstances, a review of the original order is required. I hope that in pointing out the shortcomings of the Act I will not be misunderstood. I am aware that both in Eng land and in America and also in many other countries, there has been a reorientation of the old notions of individual freedom which is gradually yielding to social control in many matters. I also realize that those who run the State have very onerous responsibilities, and it is not correct to say that emergent conditions have altogether disappeared from this country. Granting then that private rights must often be subordinated to the public good, is it not essen tial in a free community to strike a just balance in the matter ? That a person should be deprived of his personal liberty without a trial is a serious matter, but the needs of society may demand it and the individual may often have to yield to those needs. Still the balance between the maintenance of individual rights and public good can be struck only if the person who is deprived of his liberty is allowed a fair chance to establish his innocence, and I do not see how the establishment of an appropriate machinery giving him such a chance can be an impediment to good and just government. PATANJALI SASTRI J. This is an application under arti cle 32 of the Constitution of India for releasing the petitioner from detention in jail without trial under directions purporting to be issued by the Government of Madras under the , and it has the distinction of being the first application invoking the guaranteed protection of this Court as the guardian of Fundamental Rights against alleged infringement of the petitioner 's right to freedom of movement. As the case involved issues of great public importance and breaking of new ground it was argued with thoroughness and ability on both sides, reference being made to more or less analogous provisions of the Constitutions of 189 other countries and in particular the Constitution of the United States of America. The petitioner had been under detention previously under orders passed by the said Government under the Madras Main tenance of Public Order Act, 1947, but as the validity of that Act and all other similar local public safety enact ments had been questioned in some of the High Courts in India after the new Constitution came into force, the Par liament enacted a comprehensive measure called the Preven tive Detention Act, 1950, (hereinafter referred to as the impugned Act) extending to the whole of India with a certain exception not material here. The Act came into force on 25th February 1950, and, on the 27th February, the Government of Madras, in purported exercise of the powers conferred by the impugned Act and in supersession of earlier orders, directed the detention of the petitioner, and the order was served on him on 1st March. The petitioner contends that the impugned Act and in particular sections 3, 7, 10, 11, 19,, 13 and 14 thereof take away or abridge the fundamental right to freedom of movement in contravention of article 13 (2) of the Constitu tion and is, therefore, void as declared therein. Article 13 is one of a fasciculus of articles which are comprised in part III of the Indian Constitution headed "Fundamental Rights. " This Part forms a new feature of the Constitution and is the Indian "Bill of Rights. " It is modelled on the first ten Amendments of the American Con stitution which declare the fundamental rights of the American citizen. Article 12, which is the first article in this Part, defines "the State" as including the Governments and Legislatures of the Union and the States as well as all local and other authorities against which the fundamental rights are enforceable, and article 13 (1) declares that all existing laws inconsistent with the provisions of Part III shall, to the extent of the inconsistency, be void. Clause (2) of the article, on which the petitioner 's con tention is primarily founded reads as follows: 190 "The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. " As the constitutional inhibition against deprivation or abridgement relates only to "the rights conferred by this Part," it is necessary first to ascertain the nature and extent of the right which, according to the petitioner, Part III has conferred on him, and, secondly, to determine wheth er the right so ascertained has been taken away or abridged by the impugned Act or by any of its provisions. The first question turns on the proper interpretation of the relevant articles of the Constitution, and the second involves the consideration of the provisions of the impugned Act. Mr. Nambiar appearing for the petitioner advanced three main lines of argument. In the first place, the right to move freely throughout the territory of India referred to in article 19 (1)(d) is of the very essence of personal liber ty, and inasmuch as the detention authorised by the impugned Act was not a "reasonable restriction" which Parliament could validly impose on such right under clause (5) of the article, the impugned Act is void. Alternatively, the petitioner had a fundamental right under article 21 not to be deprived of his personal liberty except according to procedure established by law, and the impugned Act by autho rising detention otherwise than in accordance with proper procedure took away that right and was therefore void. And, lastly, the provisions of the impugned Act already re ferred to were ultra vires and inoperative as Parliament in enacting them has overstepped the ]imitations placed on its legislative power by article 22 clauses (4) to (7). Accordingly, the first question for consideration is whether article 19 (1) (d) and (5) is applicable to the present case. "Liberty," says John Stuart Mill, "consists in doing what one desires. But the liberty ' of the individual must be thus far limited he must not make him self a nuisance to others. " Man, as a rational being, desires to do many things, but in a civil society his de sires have to be controlled, regulated 191 and reconciled with the exercise of similar desires. by other individuals. Liberty has, therefore, to be limited in order to be effectively possessed. Accordingly, article 19, while guaranteeing some of the most valued phases or elements of liberty to every citizen as civil1 rights, pro vides for their regulation for the common good by the State imposing certain "restrictions" on their exercise. The power of locomotion is no doubt an essential element of personal liberty which means freedom from bodily restraint, and detention in jail is a drastic invasion of that liberty. But the question is: Does article 19, in its setting in Part III of the Constitution, deal with the deprivation of per sonal liberty in the sense of incarceration ? Sub clause (d) of clause (1) does not refer to freedom of movement simplic iter but guarantees the right to move freely "throughout the territory of India." Sub clause (e) similarly guaran tees the right to reside and settle in any part of the territory of India. And clause (5) authorises the imposi tion of "reasonable restrictions" on these rights in the interests of the general public or for the protection of the interests of any Scheduled Tribe. Reading these provisions together, it is reasonably clear that they were designed primarily to emphasise the factual unity of the territory of India and to secure the right of a free citizen to move from one place in India to another and to reside and settle in any part of India unhampered by any barriers which nar row minded provincialism may seek to interpose. The use of the word "restrictions" in the various sub clauses seems to imply, in the context, that the rights guaranteed by the article are still capable of being exercised, and to exclude the idea of incarceration though the words "restriction" and "deprivation" are sometimes used as interchangeable terms, as restriction may reach a point where it may well amount to deprivation. Read as a whole and viewed in its setting among the group of provisions (articles 19 22) relating to "Right to Freedom," article 19 seems to my mind to pre suppose that the citizen to whom the possession of these fundamental rights is secured retains the substratum 192 of personal freedom on which alone the enjoyment of these rights necessarily rests. It was said that subclause (f) would militate against this view, as the enjoyment of the right "to acquire, hold and dispose of property" does not depend upon the owner retaining his personal freedom. This assumption is obviously wrong as regards moveable proper ties, and even as regards immoveables he could not acquire or dispose of them from behind the prison bars; nor could he "hold" them in the sense of exercising rights of possession and control over them which is what the word seems to mean in the context. But where, as a penalty for committing a crime or otherwise, the citizen is lawfully deprived of his freedom, there could no longer be any ques tion of his exercising or enforcing the rights referred to in clause (1). Deprivation of personal liberty in such a situation is not, in my opinion, within the purview of article 19 at all but is dealt with by the succeeding arti cles 20 and 21. In other words, article 19 guarantees to the citizens the enjoyment of certain civil liberties while they are free, while articles 20 22 secure to all persons citizens and non citizens certain constitutional guarantees in regard to punishment and prevention of crime. Different criteria are provided by which to measure legisla tive judgments in the two fields, and a construction which would bring within article 19 imprisonment in punishment of a crime committed or in prevention of a crime threatened would, as it seems to me, make a reductio ad absurdum of that provision. If imprisonment were to be regarded as a "restriction" of the right mentioned in article 19 (1)(d), it would equally be a restriction on the rights mentioned by the other subclauses of clause (1), with the result that all penal laws providing for imprisonment as a mode of punish ment would have to run the gauntlet of clauses (2) to (6) before their validity could be accepted. For instance,the law which imprisons for theft would, on that view, fall to be justified under clause (2) as a law sanctioning restric tion of freedom of speech and expression. Indeed, a Divi sion Bench of the Allahabad High Court,in a recent unreport ed decision brought to our notice 193 applied the test of undermining the security of the State or tending to overthrow it in determining the validity or otherwise of the impugned Act. The learned Judges construed article 19 as covering cases of deprivation of personal liberty and held, logically enough, that inasmuch as the impugned Act, by authorising preventive detention, infringed the right to freedom of speech and expression, its validity should be judged by the reservations in clause (2), and, as it failed to stand that test, it was unconstitutional and void. Mr. Nambiar did not seek to go so far. He drew a dis tinction between the right conferred by sub clause (d) and those conferred by the other sub clauses. He urged, refer ring to Blackstone 's Commentaries, that personal liberty consisted "in moving one 's person to whatever place one 's inclination might direct," and that any law which de prived a person of such power of locomotion was a direct invasion of the right mentioned in sub clause (d), whereas it inter fered only indirectly and consequentially with the rights mentioned in the other sub Clauses. There is no substance in the distinction suggested. It would be illogi cal, in construing article 19, to attribute to one of the sub clauses a scope and effect totally different from the scope and effect of the others or to draw a distinc . tion between one right and another in the group. All the rights mentioned in clause (1) are equally essential elements in the liberty of the individual in any civilised and democrat ic community, and imprison, ment operates as an extinction of all of them alike. It cannot, therefore, be said that deprivation of personal liberty is an infringement of the right conferred by sub clause (d) alone but not of the others. The learned Judges of the Allahabad High Court realised this and were perfectly logical in holding that the constitutional validity of a law providing for deprivation of personal liberty or imprisonment must be judged by the tests laid down not only in clause (5) of article 19 but also in the other clauses including clause (2), though their major premise that deprivation of personal liberty was a "restriction" within the meaning of article 19 is, in my judgment, erroneous. 194 It was said that preventive detention being a drasic re striction of the right to move freely was, in its pith and substance," within article 19 (1) (d) read with clause (5) and not within article 21 which deals with crime and its punishment and prevention. There is no room here, in my opinion, for the application of the rule of "pith and sub stance. " As pointed out by the Privy Council in Prafulla Kumar Mukherjee vs The Bank of Commerce Ltd., Khulna (1), approving the observations of the Federal Court in Subrah manyam Chettiar vs Muttuswamy Goundan (2), the rule was evolved by the Board for determining whether an impugned statute was, in its true character, legislation with respect to matters within the jurisdiction of one legislature or another in a scheme of divided legislative power. No such question arises here. What the Court has to ascertain is the true scope and meaning of article 19 in the context of Part III of the Constitution, in order to decide whether depriva tion of personal liberty falls within that article, and the pith and substance rule will be more misleading than helpful in the decision of that issue. Article 19, as I have already indicated, guarantees protection for the more important civil liberties of citizens who are in the enjoyment of their freedom, while at the same time laying down the re strictions which the legislature may properly impose on the exercise of such rights, and it has nothing to do with deprivation of personal liberty or imprisonment which is dealt with by the succeeding three articles. There is also another consideration which points to the same conclusion. The ]Drafting Committee of the Constituent Assembly, to whose Report reference was freely made by both sides during the argument, recommended "that the word liber ty should be qualified by the insertion of the word 'person al ' before it, for otherwise it might be construed very widely so as to include even the freedoms already dealt with in article 13" (now article 19). The acceptance of this suggestion shows that whatever may be the generally accepted (1) 74 I.A. 23. (2) [1940] F.C.E. 188. 195 connotation of the expression "personal liberty," it was used in article 21 in a sense which excludes the freedoms dealt with in article 19, that is to say, personal liberty in the context of Part III of the Constitution is something distinct from the freedom to move freely throughout the territory of India. It was further submitted that article 19 declared the substantive rights of personal liberty while article 21 provided the procedural safeguard against their deprivation. This view of the correlation between the two articles has found favour with some of the Judges in the High Courts which have had occasion to consider the constitutional validity of the impugned Act. It is, however, to be ob served that article 19 confers the rights therein specified only on the citizens of India, while article 21 extends the protection of life and personal liberty to all persons citizens and noncitizens alike. Thus, the two articles do not operate in a conterminous field, and this is one reason for rejecting the correlation suggested. Again, if article 21 is to be understood as providing only proce dural safeguards, where is the substantive right to personal liberty of non citizens to be found in the Constitution ? Are they denied such right altogether ? If they are to have no right of personal liberty, why is the proce dural safeguard in article 21 exended to them ? And where is that most fundamental right of all, the right to life, provided for in the Constitution ? The truth is that arti cle 21, like its American prototype in the Fifth and Four teenth Amendments of the Constitution of the United States, presents an example of the fusion of procedural and substan tive rights in the same provision. The right to live, though the most fundamental of all, is also one of the most difficult to define and its protection generally takes the form of a declaration that no person shall be deprived of it save by due process of law or by authority of law. "Process" or "procedure" in this context connotes both the act and the manner of proceeding to take away a man 's life or per sonal liberty. And the first and essential step in a proce dure established by law for such deprivation must be a law made by a competent legislature 196 Authorising such deprivation. This brings me to the consid eration of articles 21 and 22 to which was deroted the greater part of the debate at the Bar. These articles run as follows: "21. No person shall be deprived of his life or person al liberty except according to procedure established by law. (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest, nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. (2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate. (3) Nothing in clauses '(1) and (2) shall apply (a) to any person who for the time being is an enemy alien; or (b) to any person who is arrested or detained under any law providing for preventive detention. (4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless (a) an Advisory Board consisting of persons who, are, or have been, or are qualified to be appointed as, Judges of a High Court has reported before the expiration of the said period of three months that there is in its opinion suffi cient cause for such detention: Provided that nothing in this sub clause shall ' autho rise the detention of any person beyond the maximum period prescribed by any law made by parliament under sub clause (b) of clause (7); or (b) such person is detained in accordance with the provisions of any law made by Parliament under sub clauses (a) and (b) of clause (7). 197 (5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, commu nicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. (6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose. (7) Parliament may by law prescribe (a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven tive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of sub clause (a) of clause (4); (b) the maximum period for which any person may in any class or classes of cases be detained under any law provid ing for preventive detention; and (c) the procedure to be followed by an Advisory Board in an inquiry under sub clause (a) of clause (4)." Mr. Nambiar urged that the word "law" in article 21 should be understood, not in the sense of an enactment but as signifying the immutable and universal principles of natural justice the jus naturale of the civil law and that the expression "procedure established by law" meant the same thing as that famous phrase "due process of law" in the American Constitution in its procedural aspect. Numerous American decisions were cited to show that the phrase implied the basic requirements of (1) an objective and ascertainable standard of conduct to which it is possi ble to conform, (2) notice to the party of the accusation against him, (3) a reasonable opportunity for him to estab lish his innocence, and (4) an impartial tribunal capable of giving an unbiased judgment Mr. Nambiar conceded that these requirements might have to be modified or adapted to suit the nature of the particular proceeding and the object it had in 198 view, as for instance, in a case of preventive detention, previous notice, which might result in the person concerned going underground might be dispensed with Learned counsel insisted that these requirements, being the very core of the principles of natural justice which transcended all State made laws, must be substantially complied with by any law governing the process of deprivation of life or personal liberty, subject, of course, to any express provision in the Constitution sanctioning their relaxation or dispensation in any case or class of cases. He also appealed to the Pream ble of the Constitution as the guiding star in its interpre tation to support his thesis that, in view of the democratic Constitution which the people of India have purported to give themselves guaranteeing to the citizens certain funda mental rights which are justiciabke, the provisions of Part III must be construed as being paramount to the legislative will, as otherwise the socalled fundamental right to life and personal liberty would have no protection against legis lative action, and article 13 12) would be rendered nugato ry. There can be no doubt that the people of India have, in exercise of their sovereign will as expressed in the Pream ble, adopted the democratic ideal which assures to the citizen the dignity of the individual and other cherished human values as a means to the full evolution and expression of his personality, and in delegating to the legislature, the executive and the judiciary their respective powers in the Constitution, reserved to themselves certain fundamental rights, socalled, I apprehend, because they have been re tained by the people and made paramount to the delegated powers, as in the American model. Madison (who played a prominent part in framing the First Amendment of the Ameri can Constitution) pointing out the distinction, due to historical reasons, between the American and the British ways of securing "the great and essential rights of the people," observed "Here they are secured not by laws para mount to prerogative but by Constitutions paramount to laws:" Report on the Virginia Resolutions, quoted in Near vs Minnesota (1). (1) ; 109 This has been translated into positive law in Part III of the Indian Constitution, and I agree that in construing these provisions the high purpose and spirit of the Preamble as well as the constitutional significance of a Declaration of Fundamental Rights should be borne in mind. This, howev er, is not to say that the language of the provisions should be stretched to square with this or that constitutional theory in disregard of the cardinal rule of interpretation of any enactment, constitutional or other, that its spirit, no less than its intendment should be collected primarily from the natural meaning of the words used. Giving full effect to these principles, however, I am unable to agree that the term "law" in article 21 means the immutable and universal principles of natural justice. "Procedure established by law" must be taken to refer to a procedure which has a statutory origin, for no procedure is known or can be said to have been established by such vague and uncertain concepts as "the immutable and universal principles of natural justice. " In my opinion, "law" in article 21 means "positive or State made law." No doubt, the American Judges have adopted the other connotation in their interpretation of the due process clause in the Fifth and Fourteenth Amendments of the Ameri can Constitution (" Nor shall any person be deprived of life, liberty or property without due process of law "). But that clause has an evolutionary history behind it. The phrase has been traced back to 28 Edw. III Ch. 3, and Coke in his Institutes identified the term with the expression "the law of the land" in the Great Charter of John. Even in England where the legislative omnipotence of Parliament is now firmly established, Coke understood these terms as implying an inherent limitation on all legislation,and ruled in Dr. Bonham 's Case (1) that "the common law will control Acts of Parliament and sometimes adjudge them to be utterly void when they are against common right and reason." Though this doctrine was later discarded in England as being "a warning (1) (a). 26 200 rather than an authority to be followed" [per Willes J. in Lee vs Dude and Torrington Ry. (1)] it gained ground m America, at first as a weapon in the hands of the Revolu tionists with which to resist the laws of Parliament, and later as an instrument in the hands of the Judges for estab lishing the supremacy of the judiciary [see Calder vs Bull (" ')]. In the latter half of the 19th century, this doc trine of a transcendental common law or natural justice was absorbed in the connotation of the phrase "due process of law" occurring in the Fifth and Fourteenth Amendments. By laying emphasis on the word" due," interpreting "law" as the fundamental principles of natural justice and giving the words "liberty" and "property" their widest meaning, the Judges have made the due process clause into a general restriction on all legislative power. And when that power was threatened with prostration by the excesses of due process, the equally vague and expansive doctrine of "police power," i.e., the power of Government to regulate private rights in public interest, was evolved to counteract such excesses. All this has been criticised as introducing great uncertainty in the state of the law in that country, for no one could be sure how due process of law would affect a particular enactment. A century after the phrase had been the subject of judicial interpretation one learned Judge observed in 1877 that it was incapable of precise definition and that its intent and application could only be ascer tained by "the gradual process of inclusion and exclusion" [Davidson vs New Orleans (3)]and, as recently as 1948, another Judge referred to the difficulty of "giving defi niteness to the vague contours of due process" and "of spinning judgment upon State action out of that gossamer concept:" Haley vs State of Ohio (4). It is not a matter for surprise, therefore, that the Drafting Committee appointed by the Constituent Assembly of India recommended the substitution of the expression "except according to procedure (1) , 582. (3) 96 U.S. 97. ; (4) 332 U.S. 596. 201 established by law" taken from the Japanese Constitution, 1946, for the words "without due process of law" which occurred in the original draft, "as the former is more specific. " In their Report the Committee added that they have "attempted to make these rights (fundamental rights) and the. limitations to which they must necessarily be subject as definite as possible, since the Courts may have to pronounce upon them" (para. 5). In the face of all these considerations, it is difficult to accept the suggestion that "law" in. article 21 stands for the jus naturale of the civil law, and that the phrase "according to procedure established by law" is equivalent to due process of law in its procedural aspect, for that would have the effect of introducing into our Constitution those "subtle and elusive criteria" implied in that phrase which it was the deliberate purpose of the framers of our Constitution to avoid. On the other hand, the interpretation suggested by the Attorney General on behalf of the intervener that the ex pression means nothing more than procedure prescribed by any law made by a competent legislature is hardly more accept able. "Established" according to him, means prescribed, and if Parliament or the Legislature of a State enacted a proce dure, however novel and ineffective for affording the ac cused person a fair opportunity of defending himself, it would be sufficient for depriving a person of his life or personal liberty. He submitted that the Constituent Assem bly definitely rejected the doctrine of judicial supremacy When it rejected the phrase "due process of law" and made the legislative will unchallengeable, provided only "some procedure" was laid down. The Indian Constitution having thus preferred the English doctrine of Parliamentary supremacy, the phrase "procedure established by law" must be construed in accordance with the English view of due process of law, that is to say, any procedure which Parliament may choose to prescribe. Learned counsel drew attention to the speeches made by several members of the Assembly on the floor of the House for explaining, as he put it, the "his torical background. " A speech 202 made in the course of the debate on a bill could at best be indicative of the subjective intent of the speaker, but it could not reflect the inarticulate mental processes lying behind the majority vote which carried the bill. Nor is it reasonable to assume that the minds of all those legislators were in accord. The Court could only search for the objec tive intent of the legislature primarily in the words used in the enactment, aided by such historical material as reports of statutory committees, preambles etc. I attach no importance, therefore, to the speeches made by some of the members of the Constituent Assembly in the course of the debate on article 15 (now article 21). The main difficulty I feel in accepting the construction suggested by the Attorney General is that it completely stultifies article 13 (2) and, indeed, the very conception of a fundamental right. It is of the essence of that con ception that it is protected by the fundamental law of the Constitution against infringement by ordinary legislation. It is not correct to say that the Constitution has adopted the doctrine of Parliamentary supremacy. So far, at any rate, as Part III is concerned, the Constitution, as I have already observed, has accepted the American view of funda mental rights. The provisions of articles 13 and 32 make this reasonably clear. Could it then have been the inten tion of the framers of the Constitution that the most impor tant fundamental rights to life and personal liberty should be at the mercy of legislative majorities as, in effect, they would be if "established" were to mean merely "pre scribed ?" In other words, as an American Judge said in a similar context, does the constitutional prohibition in article 13 (2) amount to no more than "You shall not take away life or personal freedom unless you choose to take it away," which is mere verbiage. It is no sound answer to say that, if article 21 conferred no right immune from legisla tive invasion, there would be no question of contravening article 13 (2). The argument seems, to my mind, to beg the question, for it assumes that the article affords no such immunity. It is said that article 21 affords no protection against competent legislative action in 203 the field of substantive criminal law, for there is no provision for judicial review, on the ground of reasonable ness or otherwise, of such laws, as in the case of the rights enumerated in article 19. Even assuming it to be so the construction of the learned Attorney. General would have the effect of rendering wholly ineffective and illusory even the procedural protection which the article was un doubtedly designed to afford. It was argued that "law" in article 31 which provides that no person shall be deprived of his property "save by authority of law" must mean enacted law and that if a person 's property could be taken away by legislative action, his right to life and personal liberty need not enjoy any greater immunity. The analogy is mis leading. Clause (2) of article 31 provides for payment of compensation and that right is justiciable except in the two cases mentioned in clauses (4) and (6) which are of a tran sitory character. The constitutional safeguard of the right to property in the said article is, therefore, not so illu sory or ineffective as clause (1) by itself might make it appear, even assuming that" law" there means ordinary legis lation. Much reliance was placed on the Irish case The King vs The Military Governor of Hare Park Camp (1) where the Court held that the term "law" in article 6 of the Irish Constitu tion of 1922 which provides that "the liberty of the person is inviolable and no person shall be deprived of his liberty except in accordance with law" meant a law enacted by the Parliament, and that therefore the Public Safety Act of 1924 did not contravene the Constitution. The Court followed The King vs Halliday(2) where the House of Lords by a majority held that the Defence of the Realm (Consolidation) Act, 1914, and the Regulations framed thereunder did not infringe upon the Habeas Corpus Acts and the Magna Carta "for the simple reason that the Act and the Orders become part of the law of the land. " But that was because, as Lord Dunedin pointed out "the British Constitution has entrusted to the two Houses of parliament subject to the assent (1) [19241 2 I.R. 104. (2) [1917] A.C. 260. 204 of the King, an absolute power untrammelled by any written instrument obedience to which may be compelled by some judicial body," whereas the Irish Constitution restricted the legislative powers of the Irish Parliament by a formal declaration of funda mental rights and by providing for a judicial review of legislation in contravention of the Constitution (article 65). This radical distinction was overlooked. The Attorney General further submitted that, even on his interpretation, article 21 would be a protection against violation of the rights by the executive and by individuals, an d that would be sufficient justification for the article ranking as a fundamental safeguard. There is no substance in the suggestion. As pointed out in Eshugbayi Eleko vs Gov ernment of Nigeria (Officer Administering) (1), the execu tive could only act in pursuance of the powers given by law and no constitutional protection against such action is really needed. Even in monarchical Britain the struggle between prerogative and law has long since ended in favour of the latter. "In accordance with British jurisprudence" said Lord Atkin in the case cited above, "no member of the executive can interfere with the liberty or property of a British subject except on the condition that he can support the legality of his action before a Court of justice. " As for protection against individuals, it is a misconception to think that constitutional safeguards are directed against individuals. They are as a rule directed against the State and its organs. Protection against violation of the rights by individuals must be sought in the ordinary law. It is therefore difficult to accept the suggestion that article 21 was designed to afford protection only against infringements by the executive or individuals. On the other hand,the insertion of a declaration of Fundamental Rights in the forefront of the Constitution, coupled with an express prohibition against legislative interference with these rights (article 13) and the provision of a constitutional sanction for the enforcement of such prohibition by means of a judicial review (article 32) is, in my (1) ; 205 opinion, a clear and emphatic indication that these rights are to be paramount to ordinary State made laws. After giving the matter my most careful and anxious consideration, I have come to the conclusion that there are only two possible solutions of the problem. In the first place, a satisfactory via media between the two extreme positions contended for on either side may be found by stressing the word "established" which implies some degree of firmness, permanence and general acceptance, while it does not exclude origination by statute. "Procedure estab lished by law" may well be taken to mean what the Privy Council referred to in King Emperor vs Benoari Lal Sharma (1) as "the ordinary and well established criminal proce dure," that is to say, those settled usages and normal modes of proceeding sanctioned by the Criminal Procedure Code which is the general law of criminal procedure in the coun try. Their Lordships were referring to the distinction between trial by special Courts provided by an Ordinance of the Governor General and trial by ordinary Courts under the Criminal Procedure Code. It can be no objection to this view that the Code prescribes no single and uniform proce dure for all types of cases but provides varying procedures for different classes of cases. Certain basic principles emerge as the constant factors common to all those proce dures, and they form the core of the procedure established by law. I realise that even on this view, the life and liberty of the individual will not be immune from legisla tive interference, for a competent legislature may change the procedure so as to whittle down the protection if so minded. But, in the view I have indicated, it must not be a change ad hoc for any special purpose or occasion, but a change in the general law of procedure embodied in the Code. So long as such a change is not effected, the protection under article 21 would be available. The different measures of constitutional protection which the fundamental right to life and personal liberty will enjoy under article 21 as interpreted in the three ways (1) ,175. 206 referred to above will perhaps be best illustrated by a concrete example. Suppose that article 22 (1) was not there and Parliament passed an Act, as a temporary measure, taking away in certain cases the right of an accused person to be defended by a legal practitioner. According to the petition er 's learned counsel the Act would be void as being contrary to the immutable principles of natural justice embodied in article 21, whereas on the construction contended for by the Attorney General, the Act would be perfectly valid, while, on the view I have indicated above, the Act would be bad, but if the denial of such right of defence is made a normal feature of the ordinary law of criminal procedure by abro gating section 340 (1)of the Code, article 21 would be powerless to protect against such legislative action. But in a free democratic republic such a drastic change in the normal law of procedure, though theoretically possi ble, would be difficult to bring about, and that practical difficulty will be the measure of the protection afforded by article 21. It was said that the safeguards provided in clauses (1) and (2) of article 22 are more or less covered by the provisions of the Criminal Procedure ' Code, and this overlapping would have been avoided if article 21 were intended to bear the construction as indicated above. The argument overlooks that, while the provisions of the Code would be liable to alteration by competent legislative action, the safeguards in clauses (1)and (2) of article 22, being constitutional, could not be similarly dealt with: and this sufficiently explains why those safeguards find a place in the Constitution. The only alternative to the construction I have indi cated above, if a constitutional transgression is to be avoided, would be to interpret the reference to "law" as implying a constitutional amendment pro tanto, for it is only a law enacted by the procedure provided for such amend ment (article 368) that could modify or override a fundamen tal right without contravening article 13 (2). 207 The question next arises as to how far the protection under article 21, such as it has been found to be, is avail able to persons under preventive detention. The learned Attorney General contended that article 21 did not apply to preventive detention at all, as article 22 clauses (4) to (7) formed a complete code of constitutional safeguards in respect of preventive detention,and, provided only these provisions are conformed to, the validity of any law relat ing to preventive detention could not be challenged. I am unable to agree with this view. The language of article 21 is perfectly general and covers deprivation of personal liberty or incarceration, both for punitive and preventive reasons. If it was really the intention of the framers of the Constitution to exclude the application of article 21 to cases of preventive detention, nothing would have been easier than to add a reference to article 21 in clause (3) of article 22 which provides that clauses (1) and (2) of the latter shall not apply to any person who is arrested or detained under any law providing for preventive detention Nor is there anything in the language of clauses (4) to (7) of article 22 leading necessarily to the inference that article 21 is inapplicable to preventive detention. These clauses deal only with certain aspects of preventive deten tion such as the duration of such detention, the constitu tion of an advisory board for reviewing the order of deten tion in certain cases, the communication of the grounds of detention to the person detained and the provision of an opportunity to him of making a representation against the order. It cannot be said that these provisions form an exhaustive code dealing with all matters relating to preven tive detention and cover the entire area of protection which article 21, interpretedin the sense I have indicated above, would afford to the person detained. I am, therefore, of opinion that article 21 is applicable to preventive deten tion as well. I will now proceed to examine whether the impugned Act or any of its provisions under which the petitioner has been ordered to be detained, takes away any of the rights con ferred by articles 21 and 22 or infringes the protection afforded thereby. The 208 outstanding fact to be borne in mind in this connection is that preventive detention has been given a constitutional status. This sinister looking feature, so strangely out of place in a democratic constitution which invests personal liberty with the sacrosanctity of a fundamental right and so incompatible with the promises of its preamble is doubtless designed to prevent an abuse of freedom by anti sOcial and subversive elements which might imperil the national welfare of the infant Republic. It is in this spirit that clauses (3) to (7) of article 22 should, in my opinion, be con strued and harmonised as far as possible with article 21 so as not to diminish unnecessarily the protection afforded for the legitimate exercise of personal liberty. In the first place, as already stated, clause (3) of article 22 excludes a, person detained under any law providing for preventive detention from the benefit of the safeguards provided in clauses (1) and (2) No doubt clause (5) of the same article makes some amends for the deprivation of these safeguards in that it provides for the communication to the person detained the grounds on which the order has been made and for an opportunity being afforded to him of making a representation against the order, but the important right to consult and to be defended by a legal practitioner of his choice is gone. Similarly, the prohibition against detention in custody beyond a period of 24 hours without the authority of a magistrate has also been taken away m cases of preventive detention. It was not disputed that, to the extent to which the express provisions of clauses (4) to (7) authorised the abrogation or abridgement of the safeguards provided under other articles or substitution of other safeguards in a modified form, those express provisions must rule. Of the four essentials of the due process on which Mr. Nambiar insisted, (which also form part of the ordinary and established procedure under the Criminal Procedure Code, though I cannot agree that they are immutable and beyond legislative change) the requirements of notice and an opportunity to establish his innocence must, as already stated, be taken to have 209 been provided for by clause (5)of article 22. As for an ascertainable standard of conduct to which it is possible to conform, article 22 makes no specific provision in cases of preventive detention, and if such a safeguard can be said to be implicit in the procedure established by law in the sense explained above in preventive detention cases, it could no doubt be invoked. This point will be considered presently in dealing with provisions of the impugned Act. The only other essential requirement, and the most essen tial of all, is an impartial tribunal capable of giving an unbiassed verdict. This, Mr. Nambiar submitted, was left unprovided for by article 22, the advisory board referred to in clause (4) (a) being, according to him, intended to deal solely with the question of duration of the detention, that is to say, whether or not there was sufficient cause for detaining the person concerned for more than three months, and not with judging whether the person detained was innocent. A tribunal which could give an unbiassed judg ment on that issue was an essential part of the protection afforded by article21 in whichever way it may be interpret ed, and reference was made in this connection to the preven tive provisions of the Criminal Procedure Code (Ch. VIII). The impugned Act, not having provided for such a tribunal contravened article 21 and was therefore void. It will be seen that the whole of this argument is based on the major premise that the advisory board mentioned in clause (4) (a) of article 22 is not a tribunal intended to deal with the issue of justification of detention. Is that view correct? It was argued that the words "sufficient cause for such detention" in sub clause (a) of clause (4) had reference to the detention beyond three months mentioned in clause (4) and that this view was supported by the language of sub clause (a) of clause (7) whereby Parliament is authorised to prescribe the circumstances under 'which and the class or classes of cases in which a person may be detained for a period longer than three months without the opinion of an advisory board. In other words, learned counsel submitted, 210 the combined effect of clauses (4) and (7) was that no person could be detained for a period over three months without obtaining the opinion of an advisory board that there was sufficient cause for detention for the longer period, except in cases where Parliament passed a law autho rising detention for such period even without the opinion of an advisory board. Thus, these two clauses were concerned solely with the duration of the preventive detention, and so was the advisory board which those clauses provided for that purpose. I am unable to accept this view. I am inclined to think that the words "such detention" in sub clause (a) refer back to the preventive detention mentioned in clause (4) and not to detention for a longer period than three months. An advisory board, composed as it has to be of Judges or lawyers, would hardly be in a position to judge how long a person under preventive detention, say, for reasons connected with defence, should be detained. That must be a matter for the executive authorities, the Depart ment of Defence, to determine, as they alone are responsible for the defence of the country and have the necessary data for taking a decision on the point. All that an advisory board can reasonably be asked to do, as a safeguard against the misuse of the power, is to judge whether the detention is justified and not arbitrary or mala fide. The fact that the advisory board is required to make its report before the expiry of three months and so could submit it only a day or two earlier cannot legitimately lead to an inference that the board was solely concerned with the issue whether or not the detention should continue beyond that period. Before any such tribunal could send in its report a reasonable time must elapse, as the grounds have to be communicated to the person detained, he has to make his representation to the detaining authority which has got to be placed before the board through the appropriate departmental channel. Each of these steps may, in the course Of official routine, take some time, and 'three months ' period might well have been thought a reasonable period to allow before the board could be required to submit its report. 211 Assuming, however, that the words "such detention" had reference to the period of detention, there is no apparent reason for confining the enquiry by the advisory board to the sole issue of duration beyond three months without reference to the question as to whether the detention was justified or not. Indeed, if is difficult to conceive how a tribunal could fairly judge whether a person should be detained for more than three months without at the same time considering whether there was sufficient cause for the detention at all. I am of opinion that the advisory board referred to in clause (4) is the machinery devised by the Constitution for reviewing orders for preventive detention in certain cases on a consideration of the representations made by the persons detained. This is the view on which Parliament has proceeded in enacting the impugned Act as will be seen from sections 9 and 10 thereof, and I think it is the correct view. It follows that the petitioner cannot claim to have his case judged by any other impartial tribu nal by virtue of article 21 or otherwise. Mr. Nambiar, however, objected that, on this view, a law could authorise preventive detention for three months with out providing for review by any tribunal, and for even longer periods if Parliament passed an Act such as is con templated in sub clause (a) of clause (7). That may be so, but, however deplorable such a result may be from the point of view of the person detained, there could be no remedy if, on a proper construction of clauses (4) and (7), the Consti tution is found to afford no higher protection for the personal liberty of the individual. Turning next to the provisions of the impugned Act, whose constitutional validity was challenged, it will be necessary to consider only those provisions which affect the petitioner before us. In the first place, it was contended that section 3, which empowers the Central Government or the State Government to detain any person if it is "satisfied" that it is necessary to do so with a view to preventing him from acting in any manner prejudicial to (among other 212 things) the security of the State or the maintenance of public order, cannot be said to comply with the procedure established by law, as the section prescribes no objective and ascertainable standard of conduct to which it will be possible to conform, but leaves it to the will and pleasure of the Government concerned to make an order of detention. TIm argument proceeds on the assumption that the procedure established by law is equivalent to the due process of law. I have already endeavoured to show that it is not Apart from this, the argument overlooks that for the purposes of preventive detention it would be difficult, if not impossi ble to lay down objective rules of conduct failure to conform to which should lead to such detention. As tim very term implies, the detention in such cases is effected with a view to prevent the person concerned from acting prejudi cially to certain objects which the legislation providing for such detention has in view. Nor would it be practicable to indicate or enumerate in advance what acts or classes of acts would be regarded as prejudicial. The responsibility for the security of the State and the maintenance of public order etc. having been laid on the executive Government it must naturally be left to that Government to exercise the power of preventive detention whenever they think the occa sion demands it. Section 12 came in for a good deal of criticism. That section, which governs the duration of thepetitioner 's detention reads as follows : "Duration of detention in certain cases. Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of an Advisory Board for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to: (a) the defence of India, relations of India with for eign powers or the security of India; or (b) the security of a State of the maintenance of public order. 213 (2) The case of every person detained under a detention order to which the provisions of sub section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by the Central Government or a State Government, by such Govern ment, and where the order was made by any officer specified in sub section (2)of section 3, by the State Government to which such officer is subordinate, in consultation with a person who is, or has been, or is qualified to be appointed as a Judge of a High Court nominated in that behalf by the Central Government or the State Government, as the case may be. " It was urged that this did not comply with the require ments of clause (7) of article 22 as it merely repeated the "matters" or legislative topics mentioned in Entry 9 of List I and Entry 3 of List III of the Seventh Schedule to the Constitution. What Parliament has to do under clause(7) of article 22 is to prescribe "the circumstances under which and the class or classes of cases in which" a person may be detained for a period longer than three months without obtaining the opinion of an advisory board. It was said that clause (4) (a) provided for ordinary cases of preventive detention Where such detention could not continue beyond three months without obtaining the opinion of an advisory board, whereas clause (7) (a) made provision for special cases of detention for more than three months with out the safeguard of the advisory board 's opinion, for aggravated forms of prejudicial conduct. In other words, clause (4) (a) laid down the rule and clause (7) (a) enacted an exception. It was therefore necessary for Parliarnent to indicate to the detaining authority for its guidance the more aggravated forms of prejudicial activity, and mere mention of the subjects in respect of which Parliament is authorised under the legislative lists to make laws in respect of preventive detention could hardly afford any guidance to such authority and should not be regarded as sufficient compliance with the requirements of clause (7). There is a two fold fallacy in 214 this argument. In the first place, the suggested correla tion between clause (4) (a) and clause (7) (a) as enacting a rule and an exception is, as a matter of construction, without foundation. Reading clauses (4) and (7) together it is reasonably clear that preventive detention could last longer in two cases: (1) where the opinion of an advisory board is obtained, subject however to a prescribed period [sub clause (a)of clause (4)] and (2) where a person is detained under a law made by Parliament under sub clauses (a) and (b) of clause (7) [sub clause (b) of clause (4)]. These are two distinct and independent provisions. It is significant that sub clause (b) of clause (4) is not worded as a proviso or an exception to sub clause (a) of the same clause as it would have been if it was intended to operate as such. The attempt to correlate clause (4)(a)and clause (7) (a) as a rule and an exception respectively is opposed both to the language and the structure of those clauses. 'Secondly, the argument loses sight of the fact that clause (7) deals with preventive detention which is a purely precautionary measure which "must necessarily proceed in all cases, to some extent, on suspicion or anticipation as distinct from proof" [ per Lord Atkinson in Rex vs Halliday (1) ]. The remarks I have ' already made with reference to the absence of any objective rules of conduct in section 3 of the impugned Act apply also to this criticism of section 12. It would be difficult, if not impracticable, to mention the variouscircumstances, or to enumerate the various class es of cases exhaustively in which a person should be de tained for more than three months for preventive purposes, except in broad outline. Suppose a person belongs to. an organization pledged to violent and subversive activity as its policy. Beyond his membership of theparty the person might have done nothing until he1 was arrested and detained. But if released he might indulge in anything from the mild est form of prejudicial activity, like sticking an objec tionable handbill on a hoarding, to the most outrageous acts of sabotage. (1) ; , 275. 215 How could the insertion in section 12 of a long series of categories of aggravated forms of prejudicial activities, or the enumeration of the various circumstances in which such activities are likely to be indulged in, be of any assist ance to the detaining authority in determining whether the person concerned should be detained for three months or for a longer period ? All that would be necessary and suffi cient for him to know for coming to a decision on the point is that the person is a member of such an organisation and will probably engage in subversive activities prejudicial to the security of the State or the maintenance of public order or, in other words, he belongs to class (b) in section 12. While enumeration and classification in detail would un doubtedly help in grading punishment for offences committed, they would not be of much use in fixing the duration of preventive detention. Sufficient guidance in such cases could be given by broadly indicating the general nature of the prejudicial activity which a person is likely to indulge in, and that in effect is what Parliament has done in sec tion 12. Reference was made in this connection to Rule 34 of the Defence of India Rules framed under the Defence of India Act, 1939, where "prejudicial act" is defined by enumeration. But it was also for the purpose of prohibiting such acts [ Rule 38 sub rule (1) ] and making them offences (sub rule 5). And even there, the definition had to end in a residuary clause sweeping in acts likely "to prejudice the efficient prosecution of the war, the defence of British India or, the public safety or interest. " In Lists I and III of the Seventh Schedule to the Constitution six topics are mentioned in respect of which Parliament could make laws providing for preventive detention, and section 12 of the impugned Act mentions five of them as being the classes of cases or the circumstances in which longer detention is authorised. I fail to see why this could not be regarded as a broad classification of cases or a broad description of circumstances where Parliament considers longer detention to be justifiable. A class can well be designated with refer ence to the end which one desires to secure, and the matters referred to as classes (a) 216 and (b) of sub section (1) of section 12 being clearly the objects which Parliament desired to secure by enacting the section, it seems to me that the classification with refer ence to such general aims does not contravene article 22 (7). It was argued that Parliament did not, in enacting section 12, perform its duty of prescribing both the circumstances and the class or classes of cases where detention without obtaining the advisory board 's opinion could be for a period longer than three months. The use of the disjunctive "or" between the word "circumstances" and the words "class or classes of cases" showed, it was said, that Parliament proceeded on the view that it need not prescribe both. This was in contravention of article 22 (7) which used the con junctive "and" between those words. There is no substance in this objection. As I read article 22 (7) it means that Parliament may prescribe either the circumstances or the classes of cases or both, and in enacting section 12 Parliament evidently regarded the matters mentioned in clause (a) and (b) of sub section (1) as sufficiently indic ative both of the Circumstances under which and the classes in which a person could be detained for the longer period. To say, for instance, that persons who are likely to act prejudicially to the defence of India may be detained beyond three months is at once to "prescribe a class of persons in which and the circumstances under which" a person may be detained for the longer period. In other words, the classi fication itself may be such as to amount to a sufficient description of the circumstances for purposes of clause (7). The circumstances which would justify precautionary deten tion beyond three months without recourse to an advisory board must be far too numerous for anything approaching an exhaustive enumeration, and it can, in my judgment, be no objection to the validity of section 12 that no circum stances are mentioned apart from the matters referred to in clauses (a) and (b) of sub section (1). It would indeed be singular for the Court to strike down a parliamentary enact ment because in its opinion a 217 certain classification therein made is imperfect or the mention of certain circumstances is unspecific or inade quate. Lastly, Mr. Nambiar turned his attack on section 14 which prohibits the disclosure of the grounds of detention communicated to the person detained and of the representa tion made by him against the order of detention, and debars the Court from allowing such disclosure to be made except for purposes of a prosecution punishable under sub section (2) which makes it an offence for any person to disclose or publish such grounds or representation without the previous authorisation of the Central Government or the State Government as the case may be. The petitioner com plains that this provision nullifies in effect the rights conferred upon him under clause (5) of article 22 which entitles him to have the grounds of his detention communi cated to him and to make a representation against the order. If the grounds are too vague to enable him to make any such representation, or if they are altogether irrelevant to the object of his detention, or are such as to show that his detention is not bona fide, he has the further right of moving this Court and this remedy is also guaranteed to him under article 32. These rights and remedies, the petitioner submits, cannot be effectively excercised, if he is prevent ed on pain of prosecution, from disclosing the grounds to the Court. There is great force in this contention. All that the Attorney General could say in answer was that if the other provisions of the Act were held to be valid, it would not be open to the Court to examine the sufficiency of the grounds on which the executive authority was "satisfied" that detention was necessary, as laid down in Machindar Shivaji Mahar vs The King (1), and so the petitioner could not complain of any infringement of his rights by reason of section 14 which enacted only a rule of evidence. The argument overlooks that it was recognised in the decision referred to above that it would be open to the Court to examine the grounds of detention in order to see whether they were relevant to the object which the legislature had (1) 218 in view, such as, for instance, the prevention of acts prejudicial to public safety and tranquillity, or were such as to show that the detention was not bona fide. An examina tion of the grounds for these purposes is made impossible by section 14, and the protection afforded by article 22 (5) and article 32 is thereby rendered nugatory. It follows that section 14 contravenes the provisions of article 22 (5) and article 32 in so far as it prohibits the person detained from disclosing to the Court the grounds of his detention communicated to him by the detaining authority or the repre sentation made by him against the order of detention, and prevents the Court from examining them for the purposes aforesaid, and to that extent it must be held under article 13 (2) to be void. This however, does not affect the rest of the Act which is severable. As the petitioner did not disclose the grounds of his detention pending our decision on this point he will now be free to seek his remedy, if so advised, on the basis of those grounds. In the result, the application fails and is dismissed. MAHAJAN J. The people of India having solemnly resolved to constitute India into a Sovereign Democratic Republic on the 26th day of November 1949 gave to themselves a Constitution which came into force on the 26th January 1950. This is the first case in which this Court has been called upon to determine how far the Constitution has secured personal liberty to the citizens of this country. A.K. Gopalan, the petitioner, who was already under the custody of the Superintendent, Central Jail, Cuddalore, was served with an order of detention under section 3 (1) of the (Act IV of 1950) on the 27th February 1950. It was said in the order that the Governor of Madras was satisfied that it was necessary to make the order with a view to preventing him from acting in any manner prejudicial to the security of the State and the maintenance of public order. On 20th March 1950 a petition was presented to this Court under article 32 219 of the Constitution praying for the issue of a writ of habeas corpus directing the State of Madras to produce him before the Court and to set him at liberty. A writ was accordingly issued. The return to the writ is that the detention is legal under Act IV of 1950, enacted by Parlia ment. The petitioner contends that the Act abridges and infringes certain provisions of Part III of the Constitution and is thus outside the constitutional limits of the legis lature and therefore void and unenforceable. The matter is one of great importance both be cause the legislative power expressly conferred by the 7th Schedule has been impugned and because the liberty of the citizen is seriously affected. The decision of the question whether Act IV of 1950 takes away or abridges the rights conferred by Part III of the Constitution depends on a consideration of two points: (1) In what measure has the Constitution secured person al liberty to a citizen of India, and. (2) has the impugned legislation in any way taken away or abridged the rights so secured and if so, to what extent ? Act IV of 1950 provides for preventive detention in certain cases and it has been enacted as a temporary meas ure. It will cease to have effect on 1st April 1951. It empowers the Central Government and the State Governments to make an order directing a person to be detained with a view to preventing him from acting in any manner prejudicial to the defence of India, the relations of India with foreign powers or the security of India. It also gives power to detain a person who acts in any manner prejudicial to the security of the State or the maintenance of public order or the maintenance of supplies and services essential to the community. It came into force on 26th February 1950 and was enacted by virtue of the powers conferred on Parliament by article 22 clause (7) of Part III of the Constitution read with the entries in the 7th Schedule. There can be no doubt that the legislative will expressed herein 220 would be enforceable unless the legislature has failed to keep within its constitutional limits. It is quite obvious that the Court cannot declare a statute unconstitutional and void simply on the ground of unjust and oppressive provi sions or because it is supposed to violate natural, social or political rights of citizens unless it it can be shown that such injustice is prohibited or such rights are guaranteed or protected by the Constitution. It may also be observed that an Act cannot be declared void because in the opinion of the Court it is opposed to the spirit supposed to pervade the Constitution but not so expressed in words. It is difficult on any general principles to limit the omnipo tence of the sovereign legislative power by judicial inter position except in so far as the express words of a written Constitution give that authority. Article 13 (2) of our Constitution gives such an authority and to the extent stated therein. It says that the State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall to the extent of the contravention be void. Preventive detention laws are repugnant to democratic constitutions and they cannot be found to exist in any of the democratic countries of the world. It was stated at the Bar that no such law was in force in the United States of America. In England for the first time during the first world war certain regulations framed under the Defence of the Realm Act provided for preventive detention at the satisfaction of the Home Secretary as a war measure and they ceased to have effect at the conclusion of hostilities. The same thing happened during thesecond world war. Similar regulations were introduced during the period of the war in India under the Defence of India Act. The Government of India Act, 1935, conferred authority on the Central and Provincial Legislatures to enact laws on this subject for the first time and since then laws on this subject have taken firm root here and have become a permanent part of the statute book of this country. Curiously enough, this subject has found place in the Constitution in the. 221 chapter on Fundamental Rights. Entry 9 of the Union List and Entry 3 of the Concurrent List of the 7th Schedule mention the scope of legislative power of Parliament in respect of this topic. The jurisdiction, however, to enact these laws is subject to the provisions of Part III of the Constitu tion. Article 22 in this Part provides : "(1 ) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice. (2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate. (3) Nothing in clauses (1) and (2) shall apply (a) to any person who for the time being is an enemy alien; or (b) to any person who is arrested or detained under any law providing for preventive detention. (4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless (a) an Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court has reported before the expiration of the said period of three months that there is in its opinion suffi cient cause for such detention: Provided that nothing in this sub clause shall authorise the detention of any person beyond the maximum period pre scribed by any law made by Parliament under sub clause (b) of clause (7); or (b) such person is detained in accordance with the provisions of any law made by Parliament under sub clauses (a) and (b) of clause (7). (5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, commu nicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. (6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to, disclose facts which such authority considers to be against the public interest to disclose, (7) parliament may by law prescribe (a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preven tive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of sub clause (a) of clause (4); (b) the maximum period for which any person may in any class or classes of cases be detained under any law provid ing for preventive detention; and (c) the procedure to be followed by an Advisory Board in an inquiry under sub clause (a) of clause (4). " The question of the constitutional validity of the impugned statute has to be approached with great caution in view of these provisions of the Constitution and has to be considered with patient attention. The benefit of reasona ble doubt has to be resolved in favour of legislative ac tion, though such a presumption is not conclusive It seems that the subject of preventive detention became the particu lar concern of the Constitution because of its intimate connection with deprivation of personal liberty to protect which certain provisions were introduced in the Chapter on Fundamental Rights and because of the conditions prevailing in the newly born Republic. Preventive detention means a complete negation of freedom of movement and of personal liberty and is incompatible with both those subjects and yet it is placed in the same compartment with them in Part III of the Constitution. 223 Though the Constitution has recognized the necessity of laws as to preventive detention it has also provided certain safeguards to mitigate their harshness by placing fetters on legislative power conferred on this subject. These are (1) That no law can provide for detention for a period of more than three months unless the sufficiency for the cause of the detention is investigated by an advisory board within the said period of three months. This provision limits legislative power in the matter of duration of the period of detention. A law of preventive detention would be void if it permits detention for a longer period than three months without the intervention of an advisory board. (2) That a State law cannot authorize detention beyond the maximum period prescribed by Parliament under the powers given to it in clause (7). This is a limitation on the legislative power of the State legislature. They cannot make a law authorizing preventive detention for a longer period than that fixed by Parliament. (3) That Parliament also cannot make a law authorizing detention for a period beyond three months without the intervention of an advisory board unless the law conforms to the conditions laid down in clause (7) of article 22. Provision also has been made to enable Parliament to make laws for procedure to be followed by advisory boards. This is a safeguard against any arbitrary form of procedure that may otherwise find place in State laws. Apart from these enabling and disabling provisions certain procedural rights have been expressly safeguarded by clause (5) of article 22. A person detained under a law of preventive detention has a right to obtain information as to the grounds of his detention and has also the right to make a representation protesting against an order of preventive detention. This right has been guaranteed independently of the duration of the period of detention and irrespective of the existence or non existence of an advisory board. No machinery, however, has been provided or expressly 29 224 mentioned for dealing with this representation. It seems to me that when a constitutional right has been conferred as a necessary consequence, a constitutional remedy for obtaining redress in case of infringement of the right must be pre sumed to have been contemplated and it could not have been intended that the right was merely illusory and that a representation made may well find place in cold storage. Consideration of the representation made by virtue of clause (5) by an unbiassed authority is, m my opinion, a necessary consequence of the guaranteed right contained herein. The right has been conferred to enable a detained person to establish his innocence and to secure justice, and no jus tice can be said to be secured unless the representation is considered by some impartial person. The interpretation that I am inclined to place on clause (5) of article 22 is justi fied by the solemn words of the declaration contained in the Preamble to the Constitution. It is this declaration that makes our Constitution sublime and it is the guarantees mentioned in the chapter on Fundamental Rights that make it one of the greatest charters of liberty and of which the people, of this country 'may well be proud. This charter has not been forced out of unwilling hands of a sovereign like the Magna Carta but it has been given to themselves by the people of the country through their Constituent Assem bly. Any interpretation of the provisions of Part III of the Constitution without reference to this solemn declara tion is apt to lead one into error. If the right of repre sentation given to a detained person by clause (5) of arti cle 22 is a guaranteed right and has been given for the purpose of securing justice, then it follows that no justice can be held secured to him unless an unbiassed person considers the merits of the representation and gives his opinion on the guilt or the innocence of the persons detained. In my view, the right cannot be defeated or made elusive by presuming that the detaining authority itself will consider the representation with an unbiassed mind and will render justice. That would in a way make the prosecu tor a judge in the case and such a procedure is repugnant. to all notions 225 of justice. The Constitution has further curtailed the rights given in clause (5) by providing in clause (6) a privilege on the detaining authority of witholding facts which the said authority considers not in public interests to disclose. This privilege has been conferred for the security of the State and possibly for the security of the Constitution itself, but in view of these stringent provi sions no additional clogs can be put on the proper consider ation of the representation of the detained person by pre suming that the detaining authority itself will properly consider the representation. It has also to be remembered in this context that a person subjected to the law of pre ventive detention has been deprived of the rights conferred on persons who become subject to the law of punitive deten tion [vide clauses (1) and (2) of article 22]. He has been denied the right to consult a lawyer or be defended by him and he can be kept in detention without being produced before a magistrate. Having examined the provisions of article 22, I now proceed to consider the first question that was canvassed before us by the learned Attorney General, i.e., that arti cle 22 of the Constitution read with the entries in the 7th Schedule was a complete Code on the subject of preventive detention, and that being so, the other articles of Part III could not be invoked in the consideration of the validity of the impugne 'd statute. It was conceded by the learned coun sel for the petitioner that to the extent that express provisions exist in article 22 on the topic of preventive detention those provisions would prevail and could not be controlled by the other provisions of Part III. It was, however, urged that on matters on which this article had made no special provision on this topic the other provisions of Part III of the Constitution had application, namely, articles 10 and 21 and to that extent laws made on this subject were justiciable. In order to draw the inference that the framers of the Constitution intended the provisions as regards preventive detention in article 22 to be self contained a clear indication of such an intention has to be gathered. If the provisions embodied in this article have dealt 226 with all the principal questions that are likely to arise in matters of procedure or on questions of the reasonableness of the period of detention, the inference of such an indica tion would be irresistible. Ordinarily when a subject is expressly dealt with in a constitution in some detail, it has to be assumed that the intention was to exclude the application of the general provisions contained therein elsewhere. Express mention of one thing is an exclusion of the other. Expressio unius est exclusio alterius. I am satisfied on a review of the whole scheme of the Constitu tion that the intention was to make article 22 self con tained in respect of the laws on the subject of preventive detention. It was contended that all the articles in the Constitution should be read in an harmonious manner and one article should not be read as standing by itself and as having no connection with the other articles in the same part. It was said that they were all supplementary to one another. In this connection it was argued that a law made under article 22 would not be valid unless it was in accord with the provisions of article 21 of the Constitution. This article provides that no person shall be deprived of life or liberty ' except according to procedure established by law. It was contended that in substance the article laid down that no person will be deprived of life or liberty without having been given a fair trial or a fair hearing and that unless a law of preventive detention provided such a hearing that law would be in contravention of this article and thus void. Conceding for the sake of argument (but without expressing any opinion on it ) that this contention of the learned counsel is correct, the question arises whether there is anything in article 22 which negatives the application of article 21 as above construed to a law on preventive detention. In my opinion, sub clause (5) of article 22 read with clauses (1) and (2) leads to the inference that the contention raised by the learned counsel is unsound. Clause (5), as already stated, provides that notice has to be given to a detenu of the grounds of his detention. It also provides a limited hearing inasmuch as it gives him an opportunity to 227 establish his innocence. As, in my opinion, the considera tion of a representation made by a detained person by an unbiassed authority is implicit in clause (5) it gives to the detained person all that he is entitled to under the principles of natural justice. The right to consult and to be represented by a counsel of his own choice has been denied in express terms to such a person by the Constitu tion. He is also denied an opportunity of appearing before a magistrate. When the Constitution has taken away certain rights that ordinarily will be possessed by a detained person and in substitution thereof certain other rights have been conferred on him even in the matter of procedure, the inference is clear that the intention was to deprive such a person of the right of an elaborate procedure usually pro vided for in judicial proceedings. Clause (6) of article 22 very strongly supports this conclusion. There would have been no point in laying down such detailed rules of proce dure in respect of a law of preventive detention if the intention was that such a law would be subject to the provi sions of article 21 of the Constitution. In its ultimate analysis the argument of the learned counsel for the peti tioner resolves itself to this: that the impugned statute does not provide for an impartial tribunal for a considera tion of the representation of the detained person and to this extent it contravenes article 21 of the Constitution. As discussed above, in ray opinion, such a provision is implicit within article 22 itself and that being so, the application of article 21 to a law made under article 22 is excluded. It was next contended that a law of preventive detention encroaches on the right of freedom of movement within the territory of India guaranteed to a citizen under article 19 (1) (d) and that being so, by reason of the provisions of sub clause (5) of article 19 it was justiciable on the ground of reasonableness. It is true, as already pointed out, that a law of preventive detention is wholly incompati ble with the right of freedom of movement of a citizen. Preventive detention in substance is a negation of the freedom of locomotion guaranteed under article 19 (1) (d) but it cannot be said that it merely restricts it. Be that as it may, the 228 question for consideration is whether it was intended that article 19 would govern a law made under the provisions of article 22. Article 19 (5) is a saving and an enabling provision. It empowers Parliament to make a law imposing reasonable restriction on the right of freedom of movement while article 22 (7) is auother enabling provision empower ing Parliament to make a law on the subject of preventive detention in certain circumstances. If a law conforms to the conditions laid down in 'article 22 (7), it would be a good law and it could not have been intended that that law validly made should also conform itself to the provisions of article 19 (5). One enabling provision cannot be considered as a safeguard against another enabling provision. Article 13 (2) has absolutely no application in such a situation. If the intention of the constitution was that a law made on the subject of preventive detention had to be tested on the touchstone of reasonableness, then it would not have trou bled itself by expressly making provision in article 22 about the precise scope of the limitation subject to which such a law could be made and by mentioning the procedure that the law dealing with that subject had to provide. Some of the provisions of article 22 would then have been redun dant, for instance, the provision that no detention can last longer than three months without the necessity of such detention being examined by an advisory board. This provi sion negatives the idea that the deprivation of liberty for a period of three months without the consultation of the advisory board would be justiciable on the ground of reason ableness. Again article 22 has provided a safeguard that if an advisory board has to be dispensed with, it can only be so dispensed with under a law made by Parliament and that Parliament also in enacting such a law has to conform to certain conditions. This provision would have ' been unnec essary in article 22 if a law on this subject was justicia ble. In sub clause (b) of clause (7) of article 22 provision has been made enabling Parliament to fix the maximum period for which a person can be detained under a law on the sub ject of preventive detention. Under 229 this express provision it is open to Parliament to fix any period, say, even a period of five to ten years as the maximum period of detention of a person. Can it be said that in view of this express provision of the Constitution such a law was intended to be justiciable by reason of article 19 (5) ? Duration of detention is the principal matter in preventive detention laws which possibly could be examined on the touchstone of reasonableness under article 19 (5), but this has been expressly excluded by express provisions in article 22. In my judgment, therefore, an examination of the provisions of article 22 clearly suggests that the intention was to make it self contained as regards the law of preventive detention and that the validity of a law on the subject of preventive detention cannot be exam ined or controlled either by the provisions of article 21 or by the provisions of article 19 (5) because article 13 (2) has no application to such a situation and article 22 is not subject to the provisions of these two articles. The Consti tution in article 22 has gone to the extent of even provid ing that Parliament may by law lay down the procedure to be followed by an advisory board. On all important points that could arise in connection with the subject of preventive detention provision has been made in article 22 and that being so, the only correct approach in examining the validi ty of a law on the subject of preventive detention is by considering whether the law made satisfied the requirements of article 22 or in any way abridges or contravenes them and if the answer is in the affirmative, then the law will be valid, but if the answer is in the negative, the law would be void. In expressing the view that article 22 is in a sense self contained on the law of preventive detention I should not however be understood as laying down that the framers of the article in any way overlooked the safeguards laid down in article 21. Article 21, in my opinion. lays down sub stantive law as giving protection to life and liberty inas much as it says that they cannot be deprived except accord ing to the procedure established by law; in other words, it means that before a person can be deprived of his life or liberty 230 as a condition precedent there should exist some substantive law conferring authority for doing so and the law should further provide for a mode of procedure for such depriva tion. This article gives complete ' immunity against the exercise of despotic power by the executive. It further gives immunity against invalid laws which contravene the Constitution. It gives also further guarantee that in its true concept there should be some form of proceeding before a person can be condemned either in respect of his life or his liberty. It negatives the idea of fantastic, arbitrary and oppressive forms of proceedings. The principles there fore underlying article 21 have been kept in view in draft ing article 22. A law properly made under article 22 and which is valid in all respects under that article and lays down substantive as well as adjective law on this subject would fully satisfy the requirements of article 21, and that being so, there is no conflict between these two articles. The next question that arises for decision is whether there is anything in Act IV of 1950 which offends against the provisions of article 22 of Part III of the Constitu tion. The learned counsel for the petitioner contended that section 3 of the Act was bad inasmuch as it made "satisfaction of the Government" as the criterion for de taining a person. It was said that as section 3 laid down no objective rule of conduct for a person and as people were not told as to what behaviour was expected of them, the result was that it could not be known what acts a person was expected to avoid and what conduct on his part was prejudi cial to the security of the State or the maintenance of ' public order; in other words, it was argued that section 3 left the determination of the prejudicial act of a person to the arbitrary judgment of the Government and that even the officer who was to administer this law had been furnished no guide and no standard of conduct in arriving at his own satisfaction whether the conduct was prejudicial to the security of the State etc. This criticism of the learned counsel, in my opinion, is not valid, It is no doubt true that a detention order depends on the satisfac tion of the ' 231 Government but this provision is in accordance with article 22 of the Constitution which to my mind contemplates detention on the satisfaction of the executive authority. By its very nature the subject is such that it implies detention on the judgment of the authority entrusted with the making of the order. The whole intent and purpose of the law of preventive detention would be defeated if satis faction of the authority concerned was subject to such an objective standard and was also subject to conditions as to legal proof and procedure. In the 7th Schedule jurisdiction to make the law on this subject has been given for reasons connected with defence etc. and the maintenance of public order. These are subjects which concern the life and the very existence of the State. Every citizen is presumed to know what behaviour is prejudicial to the life of the State or to its existence as an ordered State. Considering that the State is presumed to have a government that conducts itself in a reasonable way and also presuming that its officers usually will be reasonable men, it cannot be said that in making "satisfaction of the government" as the standard for judging prejudicial acts of persons who are subject to the law of preventive detention section 3 in any way contravenes article 22 of the constitution. Section 7 of the impugned Act gives full effect to the provisions of article 22 sub clause (5) and enacts that representation has to be made to the Central or State Gov ernment as the case may be. It was impeached on the ground that no machinery has been provided herein to consider and adjudicate on the merits of the representation. To this extent, as already indicated, the law is defective. In the absence of a machinery for the investigation of the conten tions raised in the representation it may be open to the detenu to move this Court under article 32 for a proper relief. It is, however, unnecessary to express any opin ion as to the precise remedy open to a detained person in this respect. The absence of a provision of this nature in the statute however would not make the law wholly void. Section 9 of the Act makes reference 30 232 to the advisory board obligatory in cases falling under sub clause (iii) of clause (a) or clause (b) of sub section (1) of section a within six weeks of the order. The proce dure to be followed by the advisory board is laid down in section 10. Parliament has been authorized to lay down such a procedure to be followed by an advisory board in sub clause (c) of clause (7). It was contended that the law had not provided a personal hearing to the detenu before an advisory board, nor had it given him a right to lead evi dence to establish his innocence. In my opinion, this criticism is not sound and does not in any way invalidate the law. The advisory board has been given the power to call for such information as it requires even from the person detained. It has also been empowered to examine the materi al placed before it in the light of the facts and arguments contained in the representation. The opportunity afforded is not as full as a person gets under normal judicial proce dure but when the Constitution itself contemplates a special procedure being prescribed for preventive detention cases, then the validity of the law on that subject cannot be impugned on the grounds contended for. Section 11 of the Act was also impugned on the ground that it offended against the Constitution inasmuch as it provided for preventive detention for an indefinite period. This section in my opinion has to be read in the background of the provision in sub clause (3) of section 1 of the Act which says that the Act will cease to have effect on 1st April, 1951. Besides, the words "for such period as it thinks fit" do not in any way offend against the provisions of article 22 wherein Parliament has been given the power to make a law fixing the maximum period for preventive deten tion. It has to be noted that Parliament has fixed a period of one year as the maximum period for the duration of detention where detention has to be without reference to an advisory board. In my opinion, there is nothing in section 11 which is outside the constitutional limits of the powers of the supreme legislature. 233 It is section 12 of the Act which was assailed by the learned counsel for the petitioner rather vehemently. This section is of a very controversial character. It has been enacted on the authority of clause (7) of article 22 and runs thus : "(1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of an Advisory Board for a period longer than three months, but not exceed ing one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to (a) the defence of India, relations of India with for eign powers or the security of India; or (b) the security of a State or the maintenance of public order. (2) The case of every person detained under a detention order to which the provisions of sub section (1) apply shall, within a period of six months from the date of his detention, be reviewed where the order was made by the Central Government or a State Government, by such Govern ment, and where the order was made by any officer specified in sub section (2) of section a, by the State Government to which such officer is subordinate, in consultation with a person who is, or has been, or is qualified to be appointed as, a Judge of a High Court nominated in that behalf by the Central Government or the State Government, as the case may be." The section purports to comply with the conditions laid down in clause (7) of article 22. It was, however, argued that in substance and reality it has failed to comply with any of the conditions laid down therein; that it neither mentions the circumstances under which nor the classes of cases in which preventive detention without recourse to the machinery of an advisory board could be permitted. The crucial question for consideration is whether section 12 mentions any circumstances under which or defined the class es of cases in which authority was conferred by clause (7) 234 to dispense with an advisory board. So far as I have been able to gather from opinions of text book writers on the subject of classification, the rule seems clear that in making classification of cases there has to be some rela tionship to the classification to the objects sought to be accomplished. The question for consideration therefore is what object was sought to be accomplished when the Constitu tion included clause (7) in article 22. It seems clear that the real purpose of clause (7) was to provide for a contin gency where compulsory requirement of an advisory board may defeat the object of the law of preventive detention. In my opinion, it was incorporated in the Constitution to meet abnormal and exceptional cases, the cases being of a kind where an advisory board could not be taken into confidence. The authority to make such drastic legislation was entrusted to 'the supreme legislature but with the further safeguard that it can only enact a law of such a drastic nature provided it prescribed the circumstances under which such power had to be used or in the alternative it prescribed the classes of cases or stated a determinable group of cases in which this could be done. The intention was to lay down some objective standard for the guidance of the detaining authority on the basis of which without consultation of an advisory board detention could be ordered beyond the period of three months. In this connection it has to be remembered that the Constitution must have thought of really some abnormal situation and of some dangerous groups of persons when it found it necessary to dispense with a tribu nal like an advisory board which functions in camera and which is not bound even to give a personal hearing to the detenu and whose proceedings are privileged. The law on the subject of preventive detention in order to avoid even such an innocuous institution could only be justified on the basis of peculiar circumstances and peculiar situations which had to be objectively laid down and that was what in my opinion was intended by clause (7). If the peculiarity lies in a situation outside 'the control or view of a de tained person, then it may be said that the description of such a situation would 235 amount to a prescription of the circumstances justifying the detention for a longer period than three months by a law without the intervention of an advisory board '. If, however, the abnormality relates to the conduct and character of the activities of a certain determinable group of persons, then that would amount to a class of cases which was contemplated to be dealt with under clause (7). In such cases alone arbitrary detention could be held justifiable by law beyond a period of three months. It was argued by the learned counsel for the petitioner that the phrase "circumstances under which, and the classes of cases in which" used in clause (7) had to be construed in a cumulative sense; on the other hand, the learned Attorney General contended that the word "and" had been used in this clause in the same sense as "or." He further argued that even if the word "and" is not given that meaning the true construction of the phrase was that Parliament could prescribe either the circumstances or the classes of cases for making a law on the subject of preventive detention authorizing detention for a longer period than three months without the machinery of an advisory board. In Full Bench Reference No. 1 of 1950, Das Gupta J. of the Calcutta High Court held that the intention of the legislature in enacting the clause was that the law of preventive detention author izing detention for a longer period than three months with out the intervention of an advisory board had to fulfil both the requirements laid down in clause (7) and not only one of the requirements in the alternative. The same view has been expressed by my brother Sir Fazl Ali. I share this view with him. I would, however, like to consider this matter from a different aspect on the assumption that the contention raised by the learned Attorney General is right. Dealing first with the question whether section 12 mentions any circumstances, so far as I have been able to see, it does not prescribe any circumstances unless it can be said that the prejudicial acts for reasons connected with the security of State, maintenance of public order, etc. are both the circumstances as well as 236 the classes of cases. In my opinion, this line of approach cannot be held to be correct in the construction of clause (7) of article 22. I am inclined to agree with the learned Attorney General that the phrase "circumstances under which" means some situation extraneous to the detenu 's own acts, in other words, it means some happening in the country with which the detenu is not concerned, such as a situation of tense communal feelings, an apprehended internal rebellion or disorder, the crisis of an impending war or apprehended war, etc. In such a situation the machinery of an advisory board could be dispensed with because it may become cumber some or it may hamper the exercise of necessary powers. In this view of the matter I have no hesitation in holding that no circumstances have been stated in section 12, though the section ostensibly says so. If it was permissible to con jecture, it seems that the draftsman of section 12 ' repeated the words of clause ' (7) of article 22 without an applica tion of his mind to the meaning of those words and as the legislation was passed in haste to meet an emergent situa tion, it suffers from the defects which all hasty legisla tion suffer from. I now proceed to consider whether section 12 has classi fied the cases in which detention for a longer period beyond three months could be suffered by a citizen without the benefit of the machinery of an advisory board. The section has placed five subjects out of the legislative list within its ambit and these are described as the classes of cases. The question is whether it can be said that a mere selection of all or any of the categories of the subjects for reasons connected with which a law of preventive detention could be ' made under the 7th Schedule amounts to a classification of cases as contemplated in clause (7) of article 22. Entry 9 of the Union List and Entry 3 of the Concurrent List of the 7th Schedule lay down the ambit of legislative power of Parliament on the subject of preventive detention on the following six subjects : (1) Defence of India, (2) Foreign Affairs, (a) Security of India, (4) Security of the State, (5) Mainten 237 ance of public order, (6) Maintenance of supplies and serv ices essential to the community. Clause (4) of article 22 enjoins in respect of all the six subjects that no law can provide for preventive deten tion for a longer period than three months without reference to an advisory board. Clause (7) gives permission to make a law for dispensing with an advisory board by a prescription of the circumstances and by a prescription of the classes of cases in which such a dispensation can be made. The legis lative authority under clauses (4) and (7)in my opinion, extends to all these six subjects. The normal procedure to be followed when detention is intended to be beyond a period of three months in respect of the six subjects is provided in sub clause (4) The extraordinary and unusual procedure was intended, to be adopted in certain abnormal cases for which provision could be made by a parliamentary statute under clause (7). It seems to me, however, that section 12 of Act IV of 1950 has reversed this process quite contrary to the intention of the Constitution. By this section Act IV of 1950 has dispensed with the advisory board in five out of the six subjects above mentioned and the compulsory procedure of an advisory board laid down in clause (4) of article 22 has been relegated to one out of these six sub jects. This has been achieved by giving a construction to the phrase "circumstances under which and the classes of cases in which" so as to make it co extensive and cotermi nous with the "subjects of legislation. " In my opinion, this construction of clause (7) is in contravention of the clear provisions of article 22, and makes clause (4) of article 9,2 to all intents and purposes nugatory. Such a construction of the clause would amount to the Constitution saying in one breath that a law of preventive detention cannot provide for detention for a longer period than three months without reference to an advisory board and at the same breath and moment saying that Parliament, if it so chooses, can do so in respect of all or any of the subjects mentioned in the legislative field. If that was so, it would have been wholly unnecessary to provide such a safe guard in the Constitution on a matter 238 which very seriously affects personal liberty. On the other hand, it would be a reasonable construction of the clause to hold that the Constitution authorized Parliament that in serious classes of cases or in cases of those groups of persons who are incorrigible or whose activities are secret the procedure of an advisory board may well be dispensed with, that being necessary in the interests of the State. On the other construction as adopted by the framers of section 12, the Constitution need not have troubled itself by con ferring an authority on Parliament for making such a law. Moreover, if that was the intention, it would have in very clear words indicated this by drafting article 22 clause (4) thus: "Unless otherwise provided by Parliament no law provid ing for preventive detention shall authorize detention for a longer period than three months unless an Advisory Board has investigated the sufficiency of the cause of such detention. " The words "Unless otherwise provided for by Parliament" would have been in accord with the construction which the framers of section 12 have placed on article 22 clause (7). I am further of the opinion that the construction placed by the learned Attorney General on clause (7) of article 22 and adopted by the framers of Act IV of 1950 creates a very anomalous situation. The matter may be examined from the point of view of the law of preventive detention for reasons connected with supplies and services essential to the life of the community. This subject has been put under section 9 in Act IV of 1950. Suppose a tense situation arises and there is a danger of the railway system being sabotaged and it becomes necessary to pass detention orders against cer tain persons. According to Act IV of 1950 in such a serious state of affairs the procedure of an advisory board is compulsory, while on the other hand, if there is an appre hension of disturbance of public order by reason of a wrong decision of an umpire at a cricket match or on account of conduct of persons celebrating the festival of Holi, then detention beyond three 239 months can be ordered without reference to an advisory board. Could such an anomalous result be in the contempla tion of the framers of the Constitution ? The construction that I am inclined to place on the section is in accord with the scheme of the law of punitive detention. Hurt is an offence under the Indian Penal Code and this is one of the subjects of punitive detention. The cases on the subject have been classified in different groups, namely, simple hurt, grievous hurt, grievous hurt with dangerous weapons, grievous hurt to extort a confession, grievous hurt to restrain a public officer from doing his duty, grievous hurt by a rash act, and grievous hurt on provocation. Even simple hurt has been classified in different categories. The sub ject of assault has also been similarly dealt with. Sections 352 to 356 deal with cases classified according to the gravity of the offence, i.e., cases of simple assault, assault on a public servant, assault on women, assault in attempt to 'commit theft, assault for wrongfully confining a person and assault on grave provocation have been separately grouped. Another illustration is furnished by the Criminal Procedure Code in the preventive sections 107 to 110. These deal with different groups of persons; vagrants are in one class, habitual offenders in another, bad characters in the third and disturbers of peace in the fourth. It seems that it is on lines similar to these that it must have been contemplated by the Constitution that classes of cases would be prescribed by Parliament, but this has not been done. The Constitution has recognised varying scales of duration of detention with the idea that this will vary with the nature of the apprehended act, detention for a period of three months in ordinary cases, detention for a longer period than three months with the intervention of an adviso ry board in more serious cases, while detention for a longer period than three months without the intercession of an advisory board for a still more dangerous class and for acts committed in grave situations. It can hardly be said that all cases of preventive detention for reasons connected with the maintenance of public order stand on the same footing in the degree of gravity and deserve the same 240 duration of detention and all cases connected with the maintenance of supplies and services essential to the life of the community stand in the matter of their gravity on such a footing as to require a lenient treatment. It is true that in a sense all persons who act prejudicially to the defence of India may be comprehensively said to form one group and similarly persons who act prejudicially to the maintenance of supplies and services essential to the life of the community may form another class but the question is, whether it was in this comprehensive sense that classifica tion was intended by the Constitution in clause (7) or was it intended in a narrower and restricted sense ? It has to be remembered that the law under clause (7) was intended to provide detention for a longer period and such a law very seriously abridges personal liberty and in this situation giving a narrower and restricted meaning to this expression will be in accordance with well established canons of con struction of statutes. The wide construction of clause (7) of article 22 brings within the ambit of the clause all the subjects in the legislative list and very seriously abridges the personal liberty of a citizen. This could never have been the inten tion of the framers of the Constitution. The narrow and restricted interpretation is in accord with the scheme of the article and it also operates on the whole field of the legislative list and within that field it operates by demar cating certain portions out of each subject which requires severe treatment. If I may say so m conclusion, section 12 treats the lamb and the leopard in the same class because they happen to be quadrupeds. Such a classification could not have been in the thoughts of the Constitution makers when clause (7) was introduced in article 22. For the reasons given above, I am of the opinion that section 12 of Act IV of 1950 does not fulfil the requirements of clause (7) of article 22 of the Constitution and is not a law which falls within the ambit of that clause. That being so, this section of Act IV of 1950 is void and by reason of it the detention of the petitioner cannot be justified. There is no other provision in 241 this law under which he can be detained for any period whatsoever. It was argued that it was neither practicable nor possi ble to make a classification on any definite basis in the case of apprehended acts of persons whose activities are of a prejudicial character to the maintenance of public order or to the security of the State or to the defence of India. This contention to my mind is not sound. Such a classifica tion was made in the rules under the Defence of India Act by defining "a prejudicial act" in regulation 34. Mere difficulty in precisely ascertaining the groups or in defin ing objectively the conduct of such groups is no ground for not complying with the clear provisions of the statute or for disobeying it. I see no difficulty whatsoever if a serious effort was made to comply with the provisions of clause (7). I cannot see that the compulsory requirement of an advisory board is likely to lead to such disastrous or calamitous results that in all cases or at least in five out of the six subjects of legislation it becomes necessary to dispense with this requirement. The requirement of an advi sory board is in accordance with the preamble of the Consti tution and is the barest minimum that can make a law of preventive detention to some little degree tolerable to a democratic Constitution. Such a law also may have some justification even without the requirement of an advisory board to meet certain defined dangerous situations or to deal with a class of people who are a danger to the State but without such limitation the law would be destructive of all notions of personal liberty. The Constitution must be taken to have furnished an adequate safeguard to its citi zens when it laid down certain conditions in clause (7) and it could not be considered that it provided no safeguard to them at all and that the words used in clause (7) were merely illusory and had no real meaning. Section 14 of Act IV of 1950 has been impugned on the ground that it contravenes and abridges the provisions of articles 22 (5) and 32 of the Constitution. This section is in these terms: 242 "(1) No Court shall except for the purposes of a prose cution for an offence punishable under subsection (2), allow any statement to be made, or any evidence to be given, before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or of any representation made by him against such order, and notwithstanding anything con tained in any other law, no Court shall be entitled to require any public officer to produce before it, or to disclose the substance of, any such communication or repre sentation made, or the proceedings of an advisory board or that part of the report of an advisory board which is confi dential. (2) It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of the Central Government or the State Government, as the case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub section (1): Provided that nothing in this sub section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order. " This section is in the nature of an iron curtain around the acts of the authority making the order of preventive detention. The Constitution has guaranteed to the detained person the right to be told the grounds of detention. He has been given a right to make a representation [vide arti cle 22 (5)], yet section 14 prohibits the disclosure of the grounds furnished to him or the contents of the representa tion made by him in a Court of law and makes a breach of this injunction punishable with imprisonment. Article 32 (1) of the Constitution is in these terms : "The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed. " 243 Sub section (4) says : "The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitu tion." Now it is quite clear that if an authority passes an order of preventive detention for reasons not connected with any of the six subjects mentioned in the 7th Schedule, this Court can always declare the detention illegal and release the detenu, but it is not possible for this Court to func tion if there is a prohibition against disclosing the grounds which have been served upon him. It is only by an examination of the grounds that it is possible to say wheth er the grounds fall within the ambit of the legislative power contained in the Constitution or are outside its scope. Again something may be served on the detenu as being grounds which are not grounds at all. In this contingency it is the right of the detained person under article 32 to move this Court for enforcing the right under article 22 (5) that he be given the real grounds on which the detention order is based. This Court would be disabled from exercis ing its functions under article 32 and adjudicating on the point that the grounds given satisfy the requirements of the sub clause if it is not open to it to see the grounds that have been furnished. It is a guaranteed right of the person detained to have the very grounds which are the basis of the order of detention. This Court would be entitled to examine the matter and to see whether the grounds furnished are the grounds on the basis of which he has been detained or they contain some other vague or irrelevant material. The whole purpose of furnishing a detained person with the grounds is to enable him to make a representation refuting these grounds and of proving his innocence. In order that this Court may be able to safeguard this fundamental right and to grant him relief it is absolutely essential that the detenu is not prohibited under penalty of punishment to disclose the grounds to the Court and no injunction by law can be issued to this Court disabling it from having a look at the grounds. Section 14 creates a substantive offence if the grounds are disclosed and it also lays a duty on the Court not 244 to permit the disclosure of such grounds. It virtually amounts to a suspension of a guaranteed right provided by the Constitution inasmuch as it indirectly by a stringent provision makes administration of the law by this Court impossible and at the same time it deprives a detained person from obtaining justice from this Court. In my opin ion, therefore, this section when it prohibits the disclo sure of the grounds contravenes or abridges the rights given by Part III to a citizen and is ultra vires the powers of Parliament to that extent. The result of the above discussion is that, in my opin ion, sections 12 and 14 of Act IV of 1950 as above indicated are void and the decision of the detenu 's case has to be made by keeping out of sight these two provisions in the Act. If sections 12 and 14 are deleted from the impugned legislation, then the result is that the detention of the petitioner is not legal. The statute has not provided for detention for a period of three months or less in such cases as it could have done under article22 (4) of the Constitu tion and that being so, the petitioner cannot be justifia bly detained even for a period of three months. I would accordingly order his release. In view of the decision above arrived at I do not con sider it necessary to express any opinion on the other points that were argued at great length before us, namely, (1)what is 'the scope and true meaning of the expression "procedure established by law" in article 21 of the Consti tution, and (2) what is the precise scope of articles 19 (1) (d) and 19 (5)of the Constitution. MUKHERJEA J. This is an application under article 32 of the Constitution praying for a writ of habeas corpus upon the respondents with a view to release the petitioner who, it is alleged, is being unlawfully detained in the Central Jail, Cuddalore, within the State of Madras. The petitioner, it is said, was initially arrested in Malabar on 17th of December, 1947, and prosecution was started against him on various charges for having 245 delivered certain violent speeches. While these criminal cases were going on, he was served with an order of deten tion under the Madras Maintenance of Public Order Act on 22nd April, 1948. This order of detention was held to be illegal by the Madras High Court, but on the same day that the judgment was pronounced, a second order of detention was served upon him. On his moving the High Court again for a writ of habeas corpus in respect to the subsequent order, his application was dismissed on the ground that as he was not granted bail in one of the three criminal cases that were pending against him, the detention could not be said to be unlawful. Liberty, however, was given to him to renew his application if and when his detention under the criminal proceedings ceased. In two out of the three criminal cases the trial before the magistrate ended on February 23, 1949, and the petitioner was sentenced to rigorous imprisonment for 6 months in each of the cases. These sentences, however, were set aside in appeal on 26th September, 1949. As re gards the third case, he was tried by the Sessions Judge of North Malabar and sentenced to rigorous imprisonment for 5 years but this sentence was reduced to 6 months ' imprison ment by the Madras High Court on appeal. The petitioner made a fresh application to the High Court praying for a writ of habeas corpus in respect of his detention under the Madras Maintenance of Public Order Act and this application, which was heard after he had served out his sentences of imprisonment referred to above, was dismissed in January, 1950. On 25th February, 1950, the was passed by the Parliament and on the 1st of March follow ing, the the detention of the applicant under the Madras Maintainance of Public Order Act was cancelled and he was served with a fresh order of detention under section 3 (1) of the . On behalf of the respondents the detention of the petitioner is sought to be justified on the strength of the of 1950. The position taken up on behalf of the petitioner on the other hand is that the said Act is invalid and ultra vires the conStitution by reason of its being in conflict with certain 246 fundamental rights which are guaranteed by the Constitution. It is argued, therefore, that the detention of the peti tioner is invalid and that he should be set at liberty. The contentions that have been but forward by Mr. Nambi ar who appeared in support of the petition, may be classi fied under four heads. His first contention is that as preventive detention is, in substance, a restriction on the free movements of a person throughout the Indian territory, it comes within the purview of article 19 (1) (d) of Part III of the Constitution which lays down the fundamental rights. Under clause (5) of the article, any restriction imposed upon this right of free movement must be reasonable and should be prescribed in the interests of the general public. The question as to whether it is reasonable or not is a justiciable matter which is to be determined by the Court. This being the legal position, the learned Counsel invites us to hold that the main provisions of the impugned Act, particularly those which are contained in sections 3, 7, 10, 11, 12, 13 and 14 are wholly unreasonable and should be invalidated on that ground. The second contention advanced by the learned Counsel is that the impugned legislation is in conflict with the provi sion of article 21 of the Constitution inasmuch as it pro vides for deprivation of the personal liberty of a man not in accordance with a procedure established by law. It is argued that the word 'law ' here does not mean or refer to any particular legislative enactment but it means the gener al law of the land, embodying those principles of natural justice ' with regard to procedure which are regarded as fundamental, in all systems of civilised jurisprudence. It is conceded by the learned counsel that the proce dure, if any, with regard to preventive detention as has been prescribed by article 22 of the Constitution which itself finds a place in the chapter on Fundamental Rights must override those general rules of procedure which are contemplated by article 21 but with regard to matters for which no provision is made in article 22, the general provi sion made in article 21 247 must apply. He has indicated in course of his arguments what the essentials of such procedure are and the other point specifically raised in this connection is that the provision of section 12 of the is in conflict with article 22 (7) of the Constitution. The last argument in support of this application is that the provisions of sections 3 and 14 of the Preventive Deten tion Act are invalid as they take away and render completely nugatory the fundamental right to constitutional remedies as is provided for in article 32 of the Constitution. In discussing these points it should be well to keep in mind the general scheme of the Indian Constitution relating to the protection of the fundamental rights of the citizens and the limitations imposed in this respect upon the legis lative powers of the Government. The Constitution of India is a written Constitution and though it has adopted many of the principles of the English Parliamentary system, it has not accepted the English doctrine of the absolute supremacy of Parliament in matters of legislation. In this respect it has followed the American Constitution and other systems modelled on it. Notwithstanding the representative charac ter of their political institutions, the Americans regard the limitations imposed by their Constitution upon the action of the Government, both legislative and executive, as essential to the preservation of public and private rights. They serve as a check upon what has been described as the despotism of the majority; and as was observed in the case of Hurtado vs The People of California (1) "a government which holds the lives, the liberty and the property of its citizens, subject at all times to the absolute disposition and unlimited control of even the most democratic depository of power, is after all but a despotism. " In India it is the Constitution that is supreme and Parliament as well as the State Legislatures must not only act within the limits of their respective legislative spheres as demarcated in the three (1) ; 32 248 lists occuring in the Seventh Schedule to the Constitution, but Part III of the Constitution guarantees to the citizens certain fundamental rights which the legislative authority can on no account transgress. A statute law to be valid must, in all cases, be in conformity with the constitutional requirements and it is for the judiciary to decide whether any enactment is unconstitutional or not. Article 13 (2) is imperative on this point and provides expressly that the State shall not make any law which takes away or abridges the right conferred by this Part and any law made in contra vention of this clause shall, to the extent of the contra vention, be void. Clause (1) of the article similarly invalidates all existing laws which are inconsistent with the provisions of this Part of the Constitution. The fundamental rights guaranteed by the Constitution have been classified under seven heads or categories. They are: (1) Right to equality; (2) Right to freedom; (3) Right against exploitation; (4) Right to freedom of religion; (5) Cultural and educational rights; (6) Right to property; and (7) Right to constitutional remedy. The arrangement differs in many respects from that adopted in the American Constitution and bears a likeness on certain points to similar declarations in the Constitutions of other countries. Of the different classes of fundamental rights spoken of above, we are concerned here primarily with right to freedom which is dealt with in four articles beginning from article 19 and also with the right to constitutional remedy which is embodied in article 32. Article 10 enumerates certain forms of liberty or free dom, the protection of which is guaranteed by the Constitu tion. In article 20, certain protections are given in cases of persons accused of criminal offences. Article 21 lays down in general terms that no person shall be deprived of his life or personal liberty, except 249 according to procedure established by law. Article 22 pro vides for certain additional safeguards in respect to arrest and detention and by way of exception to the rules so made, makes certain special provisions for the particular form of detention known as Preventive Detention. The first contention advanced by Mr. Nambiar involves a consideration of the question as to whether Preventive Detention, which is the subject matter of the impugned legislative enactment, comes within the purview of article 19 (1) (d) of the Constitution, according to which a right to move freely throughout the territory of India is one of the fundamental rights guaranteed to all citizens. If it comes within that sub clause, it is not disputed that clause (5) of article 19 would be attracted to it and it would be for the courts to decide whether the restrictions imposed upon this right by the Parliament are reasonable restric tions and are within the permissible limits prescribed by clause (5) of the article. There is no authoritative definition of the term 'Pre ventive Detention ' in Indian law, though as description of a topic of legislation it occurred in the Legislative Lists of the Government of India Act, 1935, and has been used in Item 9 of List I and Item 3 of List III in the Seventh Schedule to the Constitution. The expression has its origin in the language used by Judges or the law Lords in England while explaining the nature of detention under Regulation 14 (B) of the Defence of Realm Consolidation Act, 1914, passed on the outbreak of the First World War; and the same lan guage was repeated in connection with the emergency regula tions made during the last World War. The word ' preventive ' is used in contradistinction to the word ' punitive. ' To quote the words of Lord Finlay in Rex vs Halliday(1), "it is not a punitive but a precautionary measure. " The object is not to punish a man for having done something but to intercept him before he does it and to prevent him from doing it. No offence is proved, nor any charge formulated; and the justification of such detention is suspicion (1) ; at p. 269. 250 or reasonable probability and not criminal conviction which can only be warranted by legal evidence (1). Detention in such form is unknown in America. It was resorted to in England only during war time but no country in the world that I am aware of has made this an integral part of their Constitution as has been done in India. This is undoubtedly unfortunate, but it is not our business to speculate on questions of policy or to attempt to explore the reasons which led the representatives of our people to make such a drastic provision in the Constitution itself, which cannot but be regarded as a most unwholesome encroachment upon the liberties of the people. The detention of a man even as a precautionary measure certainly deprives him of his personal liberty, and as article 21 guarantees to every man, be he a citizen or a foreigner, that he shall not be deprived of his life and personal liberty, except in accordance with the procedure established by law, the requirements of article 21 would certainly have to be complied with, to make preventive detention valid in law. What these requirements are I will discuss later on. Article 22 comes immediately after arti cle 21. It secures to all persons certain fundamental rights in relation to arrest and detention, and as already said, by way of exception to the rights thus declared, makes certain specific provisions relating to preventive deten tion. The subject of preventive detention is specified in and constitutes Item No. 9 in the Union legislative List and it also forms Item No. 3 in the Concurrent List. Under article 246 of the Constitution, the Parliament and the State Legislatures are empowered to legislate on this sub ject within the ambit of their respective authorities. Clause(3) of article 22 expressly enjoins that the protec tive provisions of clauses (1) and (2) of the article would not be available to persons detained under any law providing for preventive detention. The only fundamental rights which are guaranteed by the Constitution in the matter of preven tive detention and which to that extent impose restraints upon the exercise of legislative powers in that respect are (1) Vide Lord Macmillan in Liversidge vs Anderson ; at p. 254. 251 contained in clauses (4) to (7) of article 22. Clause (4) lays down that no law of preventive detention shall autho rise the detention of a person for a period longer than three months, unless an advisory board constituted in the manner laid down in sub clause (a) of the clause has report ed before the expiration of the period that there is suffi cient cause for such detention. The period of detention cannot, in any event, exceed the maximum which the Parlia ment is entitled to prescribe under clause (7) (b). The Parliament is also given the authority to prescribe the circumstances and the class of cases under which a person can be detained for a period longer than three months under any law of preventive detention without obtaining the opin ion of the advisory board. There is one safeguard provided for all cases which is contained in clause (5) and which lays down that the authority making the order of detention shall, as soon as possible communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. But even here, the authority while giving the grounds of detention need not disclose such facts which it considers against public interest to disclose. The question that we have to consider is whether a law relating to preventive detention is justiciable in a Court of law on the ground of reasonableness under article 19 (5) of the Constitution inasmuch as it takes away or abridges the right to free movement in the territory of India guaran teed by clause (1) (d)of the article. It will be seen from what has been said above that article 22 deals specifically with the subject of preventive detention and expressly takes away the fundamental rights relating to arrest and detention enumerated in clauses (1) and (2) of the article from per sons who are detained under any law which may be passed by the Parliament or State Legislatures acting under article 246 of the Constitution read with the relevant items in the legislative lists. I will leave aside for the moment the question as to how far the court can examine the reasonable ness or otherwise of the procedure that is prescribed by any law relating 252 to preventive detention, for that would involve a considera tion of the precise scope and meaning of article. 21; but this much is beyond controversy that so far as substantive law is concerned, article 22 of the Constitution gives a clear authority to the legislature to take away the funda mental rights relating to arrest and detention, which are secured by the 'first two clauses of the article. Any legis lation on the subject would only have to conform to the requirements of clauses (4) to (7) and provided that is done, there is nothing in the language employed nor in the context in which it appears which affords any ground for suggestion that such law must be reasonable in its character and that it would be reviewable by the Court on that ground. Both articles 19 and 22 occur in the same Part of the Con stitution and both of them purport to lay down the fundamen tal rights which the Constitution guarantees. It is well settled that the Constitution must be interpreted in a broad and liberal manner giving effect to all its parts, and the presumption should be that no conflict or repugnancy was intended by its framers. In interpreting the words of a Constitution, the same principles undoubtedly apply which are applicable in construing a statute, but as was observed by Lord Wright in James vs Commonwealth of Australia ( 1 ), "the ultimate result must be determined upon the actual words used not in vacuo but as occurring in a single complex instrument in which one part may throw light on the other." "The Constitution," his Lordship went on saying, "has been described as the federal compact and the construction must hold a balance between all its parts. " It seems to me that there is no conflict or repugnancy between the two provisions of the Constitution and an exami nation of the scheme and language of the catena of articles which deal with the rights to freedom would be sufficient to show that what clause (1) (d) of article 19 contemplates is not freedom from detention, either punitive or preventive; it relates to and speaks of a different aspect or phase of civil liberty. (1) at p. 613. 253 Article 19, which is the first of this series of arti cles, enumerates seven varieties or forms of freedom begin ning with liberty of speech and expression and ending ' with free right to practise any trade, profession or business. The rights declared it articles 19 to 22 do not certainly exhaust the whole list of liberties which people possess under law. The object of the framers of the Constitution obviously is to enumerate and guarantee those forms of liberty which come under well known categories recognised by constitutional writers and are considered to be fundamental and of vital importance to the community. There cannot be any such thing as absolute or uncon trolled liberty wholly freed from restraint, for that would lead to anarchy and disorder. The possession and enjoyment of all rights, as was observed by the Supreme Court of America in Jacobson vs Massachusetts (1), are subject to such reasonable conditions as may be deemed by the governing authority of the country essential to the safety, health, peace, general order and morals of the community. The question, therefore arises in each case of adjusting the conflicting interests of the individual and of the society. In some cases, restrictions have to be placed upon free exercise of individual rights to safeguard the interests of the society; on the other hand, social control which exists for public good has got to be restrained, lest it should be misused to the detriment of individual rights and liberties. Ordinarily, every man has the liberty to order his life as he pleases, to say what he will, to go where he will, to follow any trade, occupation or calling at his pleasure and to do any other thing which he can lawfully do without let or hindrance by any other person. On the other hand for the very protection of these liberties the society must arm itself with certain powers. No man 's liberty would be worth its name if it can be violated with impunity by any wrong doer and if his property or possessions could be preyed upon by a thief or a marauder. The society, therefore, has got to exercise certain powers for the protection of these liber ties and to arrest, search, imprison and (1) ; 254 punish those who break the law. If these powers are ' prop erly exercised, they themselves are the safeguards of free dom, but they can certainly be abused. The police may arrest any man and throw him into prison without assigning any reasons; they may search his belongings on the slightest pretext; he may be subjected to a sham trial and even pun ished for crimes unknown to law. What the Constitution, therefore, attempts to do in declaring the rights of the people is to strike a balance between individual liberty and social control. To me it seems that article 19 of the Constitution gives a list of individual liberties and prescribes in the various clauses the restraints that may be placed upon them by law, so that they may not conflict with public welfare or general morality. On the other hand articles 20, 21 and 22 are primarily concerned with penal enactments or other laws under which personal safety or liberty of persons could be taken away in the interests of the society and they set down the limits within which the State control should be exer cised. Article 19 uses the expression ' 'freedom" and men tions the several forms and aspects of it which are secured to individuals, together with the limitations that could be placed upon them in the general interests of the society. Articles 20, 21 and 22 on the other hand do not make use of the expression "freedom" and they lay down the restrictions that are to be placed on State control where an individual is sought to be deprived of his life or personal liberty. The right to the safety of one 's life and limbs and to enjoyment of personal liberty, in the sense of freedom from physical restraint and coercion of any sort, are the inher ent birthrights of a man. The essence of these rights consists in restraining others from interfering with them and hence they cannot be described in terms of "freedom" to do particular things. There is also no question of imposing limits on the activities of individuals so far as the exer cise of these rights is concerned. For these reasons, I think, these rights have not been mentioned in article 19 of the Constitution. An individual can be deprived of his life or personal liberty only by action 255 of the State, either under the provisions of any penal enactment or in the exercise of any other coercive process vested in it under law. What the Constitution does there fore is to put restrictions upon the powers of the State, for protecting the rights of the individuals. The re straints on State authority operate as guarantees of indi vidual freedom and secure to the people the enjoyment of life and personal liberty which are thus declared to be inviolable except in the manner indicated in these articles. In my opinion, the group of articles 20 to 22 embody the entire protection guaranteed by the Constitution in relation to deprivation of life and personal liberty both with regard to substantive as well as to procedural law. It is not correct to say, as I shah show more fully later on, that article 21 is confined to matters of procedure only. There must be a substantive law, under which the State is empow ered to deprive a man of his life and personal liberty and such law must be a valid law which the legislature is compe tent to enact within the limits of the powers assigned to it and which does not transgress any of the fundamental rights that the Constitution lays down. Thus a person cannot be convicted or punished under an ex post facto law, or a law which compels the accused to incriminate himself in a crimi nal trial or punishes him for the same offence more than once. These are the protections provided for by article 20. Again a law providing for arrest and detention must conform to the limitations prescribed by clauses (1) and (2) of article 22. These provisions indeed have been withdrawn expressly in case of preventive detention and protections of much more feeble and attenuated character have been substi tuted in their place;but this is a question of the policy adopted by the Constitution which does not concern us at all. The position, therefore, is that with regard to life and personal liberty, the Constitution guarantees protection to this extent that no man could be deprived of these rights except under a valid law passed by a competent legislature within the limits mentioned above and in accordance with the procedure which such law lays down. Article 19, on the other hand, 256 enunciates certain particular forms of civil liberty quite independently of the rights dealt with under article 21. Most of them may be connected with or dependent upon person al liberty but are not identical with it; and the purpose of article 19 is to indicate the limits within which the State could, by legislation, impose restrictions on the exercise of these rights by the individuals. The reasonableness or otherwise of such legislation can indeed be determined by the Court to the extent laid down in the several clauses of article 19, though no such review is permissible with regard to laws relating to deprivation of life and personal liber ty. This may be due to the fact that life and personal freedom constitute the most vital and essential rights which people enjoy under any State and in such matters the pre cise and definite expression of the intention of the legislature has been preferred by the Constitution to the variable standards which the judiciary might lay down. We find the rights relating to personal liberty being de clared almost in the same terms in the Irish Consti tution article 40 (1) (4) (1) of which lays down that "no citizen shall be deprived of his personal liberty save in accordance with law. " In the Constitution of the Free City of Danzig, "the liberty of the person has been declared to be inviolable and no limitation or deprivation of personal liberty may be imposed by public authority except by virtue of a law" (vide article 74). Article 31 of the Japanese Constitution is the closest parallel to article 21 of the Indian Constitution and the language is almost identical. This is the scheme adopted by the Constitution in dealing with the rights to freedom described in the chapter on fundamental rights and in my opinion, therefore, the proper test for determining the validity of an enactment under which a person is sought to be deprived of his life and personal liberty has to be found not in article 19, but in the three following articles of the Constitution. Article 20 of course has no application so far as the law relating to preventive detention is concerned. Mr. Nambiar 's endeavour throughout has been to 257 establish that article 19 (1) (d) of the Constitution read with article 19 (5) enunciates the fundamental rights of the citizens regarding the substantive law of personal liberty, while article 21 embodies the protection as regards proce dural law. This, in my opinion, would be looking at these provisions from a wrong angle altogether. Article 19 cannot be said to deal with substantive law merely, nor article 21 with mere matters of procedure. It cannot also be said that the provisions of article 19 (1) (d) read with clause (5) and article 21 are complementary to each other. The con tents and subject matter of the two provisions are not identical and they proceed on totally different princi ples. There is no mention of any "right to life" in article 19, although that is the primary and the most important thing for which provision is made in article 21. If the contention of the learned counsel is correct, we would have to hold that no protection is guaranteed by the Constitution as regards right to life so far substantive law is con cerned. In the second place, even if freedom of movement may be regarded as one of the ingredients of personal liberty, surely there are other elements included in the concept and admittedly no provision for other forms of personal liberty are to be found in article 19 (5) of the Constitution. Furthermore article 19 is applicable to citizens only, while the rights guaranteed by article 21 are for all per sons. citizens as well as aliens. The only proper way of avoiding these anomalies is to interpret the two provisions as applying to different subjects and this would be the right conclusion if we have in mind the scheme which under lies this group of articles. I will now turn to the language of article 19 (1) (d) and see whether preventive detention really comes within its purview. Article 19 (1) (d) provides that all citizens shall have the right to move freely throughout the territory of India. The two sub clauses which come immediately after sub clause (d) and are intimately connected with it, are in these terms: "(e) To reside and settle in any part of the territory of India; 258 (f) to acquire, hold and dispose of property." Clause (5)relates to all these three sub clauses and lays down that nothing in them shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clause either in the interests of the general public or for the protection of the interests of any scheduled tribe. I agree with the learned Attorney General that in con struing article 19 (1) (d) stress is to be laid upon the expression "throughout the territory of India," and it is a particular and special kind of right, viz., that of free movement throughout the Indian territory, that is the aim and object of the Constitution to secure. In the next sub clause, right tO reside and settle "in any part of the territory of India" is given and here again the material thing is not the right of residence or settlement but the right to reside or settle in any part of the Indian territo ry. For an analogous provision, we may refer to article 301 which says that subject to the other provisions of this Part, commerce and intercourse throughout the territory of India shall be free. The meaning of sub clause (d) of arti cle 19 (1) will be clear if we take it along with sub clauses (e) and (f), all of which have been lumped together in clause (5) and to all of which the same restrictions including those relating to protecion of the interest of any scheduled tribe have been made applicable. It will be remembered that these rights are available only to citizens. To an alien or foreigner, no guarantee of such rights has been given. Normally all citizens would have the free right to move from one part of the Indian territory to another. They can shift their residence from one place to any other place of their choice and settle anywhere they like. The right of free trade, commerce and intercourse throughout the territory of India is also secured. What the Constitu tion emphasises upon by guaranteeing these rights is that the whole of Indian Unian in spite of its being divided into a number of States is really one unit as far as the citizens of the Union are concerned. All the 259 citizens would have the same privileges and the same facilities for moving into any part of the territory and they can reside or carry on business anywhere they like; and no restrictions either inter State or otherwise would be allowed to set up in these respects between one part of India and another. So far as free movement throughout the territory is concerned, the right is subject to the provision of clause (5), under which reasonable limitation may be imposed upon these liberties in the interests of the general public or protection of any scheduled tribe. The interests of the public which necessitates such restrictions may be of var ious kinds. They may be connected with the avoidance of pestilence or spreading of contagious diseases; certain places 'again may be kept closed for military purposes and there may be prohibition of entry into areas which are actual or potential war zones or where disturbances of some kind or other prevail. Whatever the reasons might be, it is necessary that these restrictions must be reasonable, that is to say, commensurate with the purpose for which they are laid down. In addition to general interest, the Constitu tion has specified the protection of the interests of the scheduled tribes as one of the factors which has got to be taken into consideration in the framing of these restric tions. The scheduled tribes, as is well known, are a back ward and unsophisticated class of people who are liable to be imposed upon by shrewd and designing persons. Hence there are various provisions disabling them from alienating even their own properties except under special conditions. In their interest and for their benefit, laws may be made restricting the ordinary right of citizens to go or settle in particular areas or acquire property in them. The refer ence to the interest of scheduled tribe makes it quite clear that the free movement spoken of in the clause relates not to general rights of locomotion but to the particular right of shifting or moving from one part of the Indian territory to another, without any sort of discriminatory barriers. This view will receive further support if we look to some analogous provisions ,in the Constitution of 260 other countries. It will be seen that sub clauses (d) (e) and (f)of article 19 (1) are embodied in almost identical language in one single article, viz., article 75 of the Constitution of the Free City of Danzig. The article runs as follows: "All nationals shall enjoy freedom of movement within the free city and shall have the right to stay and to settle at any place they may choose, to acquire real property and to earn their living in any way. This right shall not be curtailed without legal sanctions. " The several rights are thus mentioned together as being included in the same category, while they are differentiated from the "liberty of the person" which is "described to be inviolable except by virtue of a law" in article 74 which appears just previous to this article. An analogous provi sion in slightly altered language occurs in article 111 of the Constitution of the German Reich which is worded in the following manner: All Germans enjoy the right of change of domicile within the whole Reich. Every one has the right to stay in any part of the Realm that he chooses, t6 settle there, acquire landed property and pursue any means of livelihood. " Here again the right to personal liberty has been dealt with separately in article 114. A suggestion was made in course of our discussions that the expression "throughout the territory of India" occurring in article 19 (1) (d) might have been used with a view to save Passport Regulations or to emphasise that no rights of free emigration are guaran teed by the Constitution. The suggestion does not seem to me to be proper. No State can guarantee to its citizens the. free right to do anything outside its own territory. This is true of all the fundamental rights men tioned in article 19 and not merely of the right of free movement. Further it seems to me that the words "throughout the territory of India" have nothing to do with rights of emigration. We find that both in the Danzig as well as in the German Constitution, where similar words have been used with regard to the excercise of the right of free movement throughout the. 261 territory, there are specific provisions which guarantee to all nationals the free right of emigration to other coun tries (vide article 76 of the Danzig Constitution and arti cle 112 of the Constitution of the German Reich). In my opinion, therefore, preventive detention does not come either within the express language or within the spirit and intendment of clause (1) (d) of article 19 of the Constitu tion which deals with a totally different aspect or form of civil liberty. It is true that by reason of preventive detention, a man may be prevented from exercising the right of free movement within the territory of India as contemplated by article 19 (1) (d) of the Constitution, but that is merely incidental to or consequential upon loss of liberty resulting from the order of detention. Not merely the right under clause (1) (d), but many of the other rights which are enumerated under the other sub clauses of article 19 (1) may be lost or suspended so long as preventive detention continues. Thus a detenu so long as he is under detention may not be able to practise any profession, or carry on any trade or business which he might like to do; but this would not make the law providing for preventive detention a legislation taking away or abridging the rights under article 19 (1) (g) of the Constitution and it would be absurd to suggest that in such cases the validity of the legislation should be tested in accordance with the requirement of clause (6) of article 19 'and that the only restrictions that could be placed upon the person 's free exercise of trade and profession are those specified in that clause. Mr. Nambiar concedes that in such cases we must look to the substance of the particular legis lation and the mere fact that it incidentally trenches upon some other right to which it does not directly relate is not material. He argues, however, that the essence or substance of a legislation which provides for preventive detention is to take away or curtail the right of free move ments and in fact, "personal liberty" according to him, connotes nothing else but unrestricted right of locomotion. The learned counsel refers in this connection to certain passages in Blackstone 's Commentaries on the Laws of Eng land, where 262 the author discusses what he calls the three absoluterights inherent in every Englishman, namely, rights of personal security, personal liberty and property. "Personal security", according to Blackstone, consists in a person 's legal and uninterrupted enjoyment of his life, his limb, his body, his health and his reputation; whereas "personal liberty" consists in the power of locomotion, of changing of situation or moving one 's person to whatsoever place one 's own inclination may direct without imprisonment or restraint unless by due course of law (1). It will be seen that Blackstone uses the expression "personal liberty" in a somewhat narrow and restricted sense. A much wider and larger connotation is given to it by later writers on con stitutional documents, particularly in America. In ordinary language "personal liberty" means liberty relating to or concerning the person or body of the individual; and "per sonal liberty" in this sense is the antithesis of physical restraint or coercion. According to Dicey, who is an acknowledged authority on the subject "personal liberty" means a personal right not to be subjected to imprisonment, arrest or other physical coercion in any manner that does not admit of legal justification(2). It is, in my opinion, this negative right of not being subjected to any form of physical restraint or coercion that constitutes the essence of personal liberty and not mere freedom to move to any part of the Indian territory. In this connection, it may not be irrelevant to. point out that it was in accordance with the recommendation of the 'Drafting Committee that the word "personal" was inserted before "liberty" in article 15 of the Constitution which now stands as article 21. In the report of the Drafting Commit tee it is stated that the word "liberty" should be quali fied by the insertion of the word "personal" before it; otherwise, it might be construed very widely so as to in clude even the freedoms already dealt with in article 13. Article. 13, it should be noted, is the present article 19. If the views of the Drafting Committee were accepted by the (1) Vide Chase 's Blackstone, 4th Edn, pp. 68, 73. (2) Vide Dicey on Constitutional Law, 9th Edn, pp. 207 208. 263 Constituent Assembly, the intention obviously was to exclude the contents of article 19. from the concept of "personal liberty" as used in article 21. To what extent the meaning of words used in the Constitution could be discovered from reports of Drafting Committee or debates on the floor of the House is a matter not quite free from doubt and I may have to take up this matter later on when discussing the meaning of the material clause in article 21 of the Constitution. It is enough to say at this stage that if the report of the Drafting Committee is an appropriate material upon which the interpretation of the words of the Constitution could be based, it certainly goes against the contention of the applicant and it shows that the words used in article 19 (1) (d) of the Constitution do not mean the same thing as the expression "personal liberty" in article 21 does. It is well known that the word " 'liberty" standing by itself has been given a very wide meaning by the Supreme Court of the United States of America. It includes not only personal freedom from physical restraint but the right to the free use of one 's own property and to enter into free contractual relations, In the Indian Constitution, on the other hand, the expression "personal liberty" has been deliberately used to restrict it to freedom from physical restraint of person by incarceration or otherwise. Apart from the report of the Drafting Committee, that is the plain grammatical meaning of the expression as I have already explained. It may not, I think, be quite accurate to state that the operation of article 19 of the Constitution is limited to free citizens only and that the rights have been described in that article on the presupposition that the citizens are at liberty. The deprivation of personal liberty may entail as a consequence the loss or abridgement of many of the rights described in article 19, but that is because the nature of these rights is such that free exercise of them is not possible in the absence of personal liberty. On the other hand, the right to hold and dispose of property which is in subclause (f) of article 19 (1) and which is not dependent on full possession of personal liberty by the owner may 264 not be affected if the owner is imprisoned or detained. Anyway, the point is not of much importance for purposes of the present discussion. The result is that, in my opinion, the first contention raised by Mr. Nambiar cannot succeed and it must be held that we are not entitled to examine the reasonableness or otherwise of the and see whether it is within the permissible bounds specified in clause (5) of article 19. I now come to the second point raised by Mr. Nambiar in support of the application; and upon this point we had arguments of a most elaborate nature addressed to us by the learned counsel on both sides, displaying a considerable amount of learning and research. The point, however, is a short one and turns upon the interpretation to be put upon article 21 of the Constitution, which lays down that "no person shall be deprived of his . . personal liberty, except according to procedure established by law. " On a plain reading of the article the meaning seems to be that you cannot deprive a man of his personal liberty, unless you follow and act according to the law which provides for deprivation of such liberty. The expression "procedure" means the manner and form of enforcing the law. In my opinion, it cannot be disputed that in order that there may be a legally established procedure, the law which establish es it must be a valid and lawful law which the legislature is competent to enact in accordance with article 245 of the Constitution and the particular items in the legislative lists which it relates to. It is also not disputed that such law must not offend against the fundamental rights which are declared in Part III of the Constitution. The position taken up by the learned Attorney General is that as in the present case there is no doubt about the competency of that Parliament to enact the law relating to preventive detention which is fully covered by Item 9 of List I, and Item 3 of List III, and as no question of the law being reasonable or otherwise arises for consideration by reason of the fact that article 19 (1) (d) is not attracted to this case, the law must be held to be a valid piece of legisla tion and if the procedure 265 laid down by it has been adhered to, the validity of the detention cannot possibly be challenged. His further argu ment is that article 22 specifically provides for preventive detention and lays down fully what the requirements of a legislation on the subject should be. As the impugned Act conforms to the requirements of article 22, no further ques tion of its validity under article 21 of the Constitution at all arises. The latter aspect of his arguments, I will deal with later on. So far as the main argument is concerned,the position taken up by Mr. Nambiar is that article 21 refers to 'procedure only and not to substan tive law the procedure, however, must be one which is established by law. The expression "law" in this context does not mean or signify, according to the learned counsel, any particular law enacted by the legislature in conformity with the requirements of the Constitu tion or otherwise possessing a binding authority. It refers to law in the abstract or general sense in the sense of jus and not lex and meaning thereby the legal principles or fundamental rules that lie at the root of every system of positive law including our own, and the authority of which is acknowledged in the jurisprudence of all civilised coun tries. It is argued that if the word "law" is interpret ed in the sense of any State made law, article 21 could not rank as a fundamental right imposing a check or limitation on the legislative authority of the Government. It will be always competent to the legislature to pass a law laying down a thoroughly arbitrary and irrational procedure opposed to all elementary principles of justice and fairness and the people would have no protection whatsoever, provided such procedure was scrupulously adhered to. In support of this argument the learned counsel has relied upon a large number of American cases, where the Supreme Court of America ap plied the doctrine of "due process of law" as it appears in the American Constitution for the purpose of invalidating various legislative enactments which appeared to that Court to be capricious and arbitrary and opposed to the fundamen tal principles of law. 266 It may be noted here that in the original draft of the Indian Constitution the words used in article 15 (which now stands as article 21) were "in accordance with due process of law." The Drafting Committee recommended that in place of the "due process" clause, the expression "according to procedure established by law" should be substituted. The present article 21 seems to have been modeled on article 31 of the Japanese Constitution, where the language employed is "no person shall be deprived of 'life or liberty, nor shall any other criminal penalty be imposed, except according to procedure established by law." Mr. Nambiar argues that the expression "procedure established by law" in article 21 of the Constitution bears the same meaning as the "due process" clause does in America, restricted only to this extent, viz., that it is limited to matters of procedure and does not extend to questions of substantive law. To appre ciate the arguments that have been advanced for and against this view and to fix the precise meaning that is to be given to this clause in article 21, it would be necessary to discuss briefly the conception of the doctrine of "due process of law" as it appears in the American Constitution and the way in which it has been developed and applied by the Supreme Court of America. In the history of Anglo American law, the concept of "due process of law" or what is considered to be its equiva lent "law of the land" traces its lineage far back into the beginning of the 13th century A.D. The famous 39th chapter of the Magna Charta provides that "no free man shall be taken or imprisoned or disseized, or outlawed or exiled or in any way destroyed; nor shall we go upon him nor send upon him but by the lawful judgment of his peers and by the law of the land." Magna Charta as a charter of English liberty was confirmed by successive English monarchs and it is in one of these confirmations (28 Ed. III, Chap. 3) known as "Statute of Westminster of the liberties of London", that the expression "due process of law" for the first time appears. Neither of these phrases was explained or defined in any of the 267 documents, but on the authority of Sir Edward Coke it may be said that both the expressions have the same meaning. In substance, they guaranteed that persons should not be imprisoned without proper indictment and trial by peers, and that property should not be seized except in proceedings conducted in due form in which the owner or the person in possession should have an opportunity to show cause why seizure should not be made (1). These concepts came into America as part of the rights of Englishmen claimed by the colonists. The expression in one form or other appeared in some of the earlier State Constitutions and the exact phrase "due process of law" came to be a part of the Federal Constitution by the Fifth Amendment which was adopted in 1791 and which provided that "no person shall. be deprived of life, liberty or property without due process of law. " It was imposed upon the State Constitution in almost identical language by the Fourteenth Amendment in the year 1868. What "due process of law" exactly means is difficult to define even at the present day, The Constitution contains no description of what is "due process of law" nor does it declare the principles by application of which it could be ascertained. In Twining vs New Jersey (2) the Court ob served: "Few phrases in the law are so elusive of exact appre hension as this. This COurt has always declined to give a comprehensive definition of it and has preferred that its full meaning should be gradually ascertained by the process of inclusion and exclusion in the course of the decisions of cases as they arise. " It is clear, however, that the requirement of "due process of law" in the United States Constitution imposes a limitation upon all the powers of Government, legislative as well as executive and judicial. Applied in England only as protection against executive usurpation and royal tyranny, in America it became a bulwark against arbitrary legislation (3). (1) Vide Willoughby on the Constitution of the United States, Vol. III, p. 1087. (2) (3) Vide Hurtando vs People of California, ; at p. 532. 268 As it is a restraint upon the legislative power and the object is to protect citizens against arbitrary and capri cious legislation, it is not within the competence of the Congress to make any process a "due process of law" by its mere will; for that would make the limitation quite nugato ry. As laid down in the case cited above, "it is not any act legislative in form that is law; law is something more than mere will exerted as an act of power. " It means and signifies the general law of the land, the settled and abid ing principles which inhere in the Constitution and lie at the root of the entire legal system. To quote the words of Daniel Webster in a famous argument before.the Supreme Court (1): "By the law of the land is most clearly intended the general law a law which hears before it condemns, which proceeds upon enquiry and renders judgment only after trial. The meaning is that every citizen shall hold his life, liberty, property and immunities under the protection of the general rules which govern society. " What these principles of general law are nobody has ever attempted to enumerate. To a large extent they are the principles of English common law and modes of judicial pro ceedings obtaining in England, the traditions of which came along with the settlers in America. Some Judges seem to have alluded to the principles of natural justice in ex plaining what is meant by general law or "law of the land," though the doctrine of a law of nature did not obtain a firm footing at any time. In Wynehamer vs New York (2), Justice Hubbard declared himself opposed to the judiciary attempting to set bounds to the legislative authority or declaring a statute invalid upon any fanciful theory of 'higher law or first principles of natural right outside of the Constitu tion. Coke 's dictum of a supreme fundamental law which obviously referred to principles of English common law cer tainly did exercise considerable influence upon the minds of the American Judges (3) and there are observations in some cases (1) Darmouth College case, 4 Wheaton p. 518. (2) (3) Willis on Constitutional Law, p. 647. 269 which go to suggest that the principles of natural justice were regarded as identical with those of common law, except where the rules of common law were not considered to be of fundamental character or were not acted upon as being un suited to the progress of time or conditions of the American Society (1). In the case of Loan Association vs Topeka (2), it was observed that there are limitations upon powers of Government which grow out of the essential nature of free Governments implied reservations of individual rights without which the social compact could not exist and which are respected by all Governments entitled to the name. What is hinted at, is undoubtedly the old idea of a social com pact under which political institutions were supposed to come into being; and the suggestion is that when the Ameri cans formed themselves into a State by surrendering a por tion of their rights which they possessed at that time and which presumably they inherited from their English ancestors, there were certain rights of a fundamental character still reserved by them which no State could possibly take away. As has been said already, "due process of law" has never been defined by Judges or Jurists in America. The best description of the expression would be to say that it means in each particular case such an exercise of the powers of Government as the settled maxims of law permit and sanction, and under such safeguards for the protection of individual rights as those maxims prescribe for the class of cases to which the one in question belongs (3). In the actual application of the clause relating to "due process of law" to particular cases the decisions of the Supreme Court of America present certain peculiar and unusu al features and there is total lack of uniformity and consistency in them. Ever since the appearance of the clause in the Fifth Amendment and down to the middle of the 19th century, it was interpreted as a restriction on proce dure, and particularly the judicial procedure, by which the Government (1) Cooley 's Constitutional Limitations, Vol. II, p. 73940. (2) 20 Wall, p. 655. (3) Cooley 's Constitutional Limita tions, Vol. II, p. 741. 270 exercises its powers. Principally it related to the proce dure by which persons were tried for crimes and guaranteed to accused persons the right to have a fair trial in compli ance with well established criminal proceedings. The same principle applied to the machinery or proceeding by which property rights were adjudicated and by which the powers of eminent domain and taxation were exercised. During this period it was not considered to have any bearing on substan tial law at all. Change, however, came in and the period that followed witnessed a growing recognition of the doctrine that sub stantive rights of life, liberty and property are protected by the requirement of due process of law against any depri vation attempted at by legislative authority; and the polit ical and economic conditions of the country accounted to a great extent for this change in judicial outlook. The close of the civil war brought in a new period of industrial development leading to accumulation of large capital in the hands of industrialists and the emergence of a definite labouring class. New and important problems arose which the States attempted to deal with by various laws and regu lations. Some of them seem to have been ill advised and arbitrary and there was a clamour amongst businessmen against what they described as legislative encroachments upon their vested private rights. The Supreme Court now began to use the rule of due process of law as a direct restraint upon substantial legislation and any statute or administrative act, which imposed a limitation upon rights of private property or free contractual relations between the employers and employed, was invalidated as not being in accordance with due process of law (1). What constituted a legitimate exercise of the powers of legislation now came to be a judicial question and no statute was valid unless it was. reasonable in the opinion of the Court. The question of reasonableness obviously depends largely upon the. ideas of particular individuals and the Courts or rather the majority of Judges thus marshalled their own (1) Vide Encyclopaedia of the Social Sciences, Vol. V, pp. 265 67. 271 views of social and economic policy in deciding the reasona bleness or otherwise of the statutes. In the language of a well known writer, the Courts became a kind of negative third chamber both to the State Legislatures and the Con gress(1). To what extent the Courts laid stress upon the doctrine of freedom of contract is illustrated in the case of Lochner vs New York(2). In that case the question arose as to the validity of a labour legislation which prohibited the employment of persons in certain fields of activity for more than 60 hours a week. Lochner was indicted for violat ing this law by employing a man in his Biscuit and Cake Factory who was to work more than 60 hours in a week. The Court by a majority of 5 to 4 held the statute to be invalid on the ground that the "right to purchase or sell labour is part of the liberty protected by the Amendment unless there are circumstances which excluded the right. " That decision has been criticized not merely on the ground that it rested upon an economic theory which to quote the language of Holmes J., who was one of the dissentient Judges "was not entertained by a large part of the country;" but it ignored that such regulation was necessary for protecting the health of the employees, that is to say, it was in substance an exercise of police powers with a view to accomplish some object of public interest(s). It may be mentioned here that while the due process doctrine was being extended by judicial pronouncements, the doctrine of police power which operates to some extent as a check upon the "due process" clause was simultaneously gaining importance. Roughly speaking, police power may be defined as "a right of a Government to regulate the conduct of its people in the interests of public safety, health, morals and convenience. Under this authority, a Government may make regulations concerning the safety of building, the regulation of traffic, the reporting of incurable diseases, the inspection of markets, the sanitation of factories, the hours of work for women (1) Vide Kelley and Harbinson on the American Constitution, p. 539. 198 u.s. 45. Vide Willoughby on the Constitution of the U.S., Vol. III, p. 271. 272 and children, the sale of intoxicants and such other matters ,,(1). Here again, the extent to which the Court can inter fere with exercise of police powers by the State has not been clearly defined by judicial pronouncements. The doc trine generally accepted is that although any enactment by legislature under the guise of exercise of police powers would not necessarily be constitutional, yet if the regula tion has a direct relation to its proposed object which is the accomplishment of some legitimate public purpose, the wisdom or policy of the legislation should not be examined by the Courts. The rule is not without its exceptions but it is not necessary to elaborate them for our present pur pose(2). The later decisions, though not quite uniform, reveal the growing influence of the police power doctrine. It may be said that since 1936 there has been a definite swing of the judicial pendulum in the other direction. In the case of West Coast Hotel Company vs Parrish(3) which related to the legality of a Statute for regulating the minimum wages of women, Chief Justice Hughes, who delivered the opinion of the Court, observed as follows: "In each case the violation alleged by those attack ing minimum wage regulation for women is deprivation of freedom of contract. What is the freedom? The Constitution does not speak of freedom of contract. It speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation the Constitution does not recognise an absolute and uncontrol lable liberty. Liberty in each of its phases has its histo ry and connotation. But the liberty safeguarded is liberty in a social organisation which requires the protection of law. against the evils which menace the health, safety, morals and welfare of the people. " In the succeeding years the indications certainly are that the requirement of due process of law as a substantial restriction on Government control is becoming a thing of the past and the rule is being restricted more (1) Vide Munroe The Government of the U.S., p. 522. (2) Vide Willoughby on the Constitution of the U.S. Vol. III, pp. 1709 70. (3) ; 273 and more to its original procedural meaning. What will happen in future cannot certainly be predicted at this stage(1). Thus it will be seen that the "due process" clause in the American Constitution came to be used as a potent in strument in the hands of the judiciary for exercising con trol over social legislation. The judicial pronouncements are not guided by any uniform principle, and the economic and social ideas of the Judges, who form the majority in the Supreme Court for the time being, constitute, so to say, the yard stick for measuring the reasonableness or otherwise of any enactment passed during that period. No writer of American Constitutional Law has been able uptil now to evolve anything like a definite and consistent set of prin ciples out of the large mass of cases, where the doctrine of "due process of law" has been invoked or applied. It is against this background that we must consider how the constitution makers in India dealt with and gave final shape to the provisions, on an analogous subject in the Indian Constitution. In the Draft Constitution, article 15 (which now stands as article 21) was apparently framed on the basis of the 5th and 14th Amendments in the American Constitution. The article was worded as follows: "No person shall be deprived of his life or liberty without due process of law. " The Drafting Committee in their report recommended a change in the language of this article. The first sugges tion was that the word "personal" shall be inserted before the word "liberty" and the second was that the expression "in accordance with procedure established by law" shall be substituted for "due process of law," the reason given being that the former expression was more specific. The learned Attorney General has placed before us the debates in the Constituent Assembly centering round the adoption of this recommendation of the Drafting Committee and he has referred us to the (1) Swisher The Growth of Constitutional Power in the United States, pp. 123 25. 274 speeches of several members of the Assembly who played an important part in the shaping of the Constitution. As an aid to discover the meaning of the words in a Consti tution, these debates are of doubtful value. ' 'Resort can be had to them" ' says Willoughby, ' 'with great caution and only when latent ambiguities are to be solved. The proceed ings may be of some value when they clearly point out the purpose of the provision. But when the question is of ab stract meaning, it will be difficult to derive from this source much material assistance in interpretation"(1). The learned Attorney General concedes that these debates are not admissible to explain the meaning of the words used and he wanted to use them only for the purpose of showing that the Constituent Assembly when they finally adopted the recommendation of the Drafting Committee, were fully aware of the implications of the differences between the old form of expression and the new. In my opinion, in interpreting the Constitution, it will be better if such extrinsic evi dence is left out of account. In matters like this, differ ent members act upon different impulses and from different motives and it is quite possible that some members accepted certain words in a particular sense, while others took them in a different light. The report of the Drafting Committee, however,has been relied upon by both parties and there are decided authori ties in which a higher value has been attached to such reports than the debates on the floor of the House. In Caminetti vs United States (2), it is said that reports to Congress accompanying the introduction of proposed law may aid the Courts in reaching the true meaning of the legisla tion in case of doubtful interpretation. The report is extremely short. It simply says that the reason for the suggested change is to make the thing more specific. I have no doubt in my mind that if the "due process" clause which appeared in the original draft was finally retained by the Constituent Assembly, it could be safely presumed that the framers of the Indian (1) Vide Willoughby on the Constitution of the United States, p. 64. (2) ; 275 Constitution wanted that expression to bear the same sense as it does in America. But when that form was abandoned and another was deliberately substituted in its place, it is not possible to say that in spite of the difference in the language and expression, they should mean the same thing and convey the same idea. Mr. Nambiar 's contention is that in view of the somewhat uncertain and fluidic state of law as prevails in America on the subject, the Drafting Committee recommended an alteration for the purpose of making the language more specific and he would have us hold that it was made specific in this way, namely, that instead of being extended over the whole sphere of law, substantive as well as adjective, it was limited to procedural law mere ly. That is the reason, he says, why instead of the word "process" the expression "procedure" was adopted, but the word "law" means the same thing as it does in the "due process" clause in America and refers not to any State made law but to the fundamental principles which are inherent in the legal system and are based upon the immutable doctrines of natural justice. Attractive though this argument might at first sight appear, I do not think that it would be possible to accept it as sound. In the first place, it is quite clear that the framers of the Indian Constitution did not desire to intro duce into our system the elements of uncertainty, vagueness and changeability that have grown round the "due process" doctrine in America. They wanted to make the provision clear, definite and precise and deliberately chose the words" procedure established by law," as in their opinion no doubts would ordinarily arise about the meaning of this expression. The indefiniteness in the application of the "due process" doctrine in America has nothing to do with the distinction between substantive and procedural law. The uncertainty and elasticity are in the doctrine itself which is a sort of hidden mine, the contents of which nobody knows and is merely revealed from time to time to the. judicial conscience of the Judges. This theory, the Indian Constitu tion deliberately discarded 276 and that is why they substituted a different form in its place which, according to them, was more specific. In the second place, it appears to me that when the same words are not used, it will be against the ordinary canons of con struction to interpret a provision in our Constitution in accordance with the interpretation put upon a somewhat analogous provision in the Constitution of another country, where not only the language is different, but the entire political conditions and constitutional set up are dissimi lar. In the Supreme Court of America, stress has been laid uniformly upon the word "due" which occurs before and quali fies the expression "process of law. " "Due" means " what is just and proper" according to the circumstances of a particular case. It is this word which introduces the varia ble element in the application of the doctrine; for what is reasonable in one set of circumstances may not be so in another and a different set. In the Indian Constitution the word "due" has been deliberately omitted and this shows clearly that the Constitution makers of India had no inten tion of introducing the American doctrine. The word "estab lished" ordinarily means "fixed or laid down" and if "law" means, as Mr. Nambiar contends, not any particular piece of law but the indefinite and indefinable principles of natural justice which underlie positive systems of law, it would not at all be appropriate to use the expression "established," for natural law or natural justice cannot establish anything like a definite procedure. It does not appear that in any part of the Constitution the word "law" has been used in the sense of "general law" connoting what has been described as the principles of natural justice outside the realm of positive law. On the other hand, the provision of ' article 31 of the Constitu tion, which appears in the. chapter on Fundamental Rights, makes it clear that the word "law" is equivalent to State made law and to deprive a person of his property, the au thority or sanction of such law is necessary. As has been said already, the provision of article 21 of. the Indian Constitution reproduces, save in one particular, the 277 language of article 31 of the Japanese Constitution and it is quite clear from the scheme and provisions of the Japa nese Constitution that in speaking of law it refers to law passed or recognised as such by the State. In the Irish Constitution also, there is provision in almost similar language which conveys the same idea. Article 40 (4) (1) provides that "no citizen shall be deprived of his personal liberty save in accordance with law," and by law is certain ly meant the law of the State. Possibly the strongest argument in support of Mr. Nambi ar 's contention is that if law is taken to mean State made law, then article 21 would not be a restriction on legisla tion at all. No question of passing any law abridging the right conferred by this article could possibly arise and article 13 (2) of the Constitution would have no operation so far as this provision is concerned. To quote the words of an American Judge it would sound very much like the Constitution speaking to the legislature that the latter could not infringe the right created by these articles unless it chose to do so (1). Apparently this is a plausible argument but it must be admitted that we are not concerned with the policy of the Constitution. The fundamental rights not merely impose limitations upon the legislature, but they serve as checks on the exercise of executive powers as well, and in the matter of depriving a man of his personal liberty, checks on the high handedness of the executive in the shape of pre venting them from taking any step, which is not in accord ance with law, could certainly rank as fundamental rights. In the Constitutions of various other countries, the provi sions relating to protection of personal liberty are couched very much in the same language as in article 21. It is all a question of policy as to whether the legislature or the judiciary would have the final say in such matters and the Constitution makers of India deliberately decided to place these powers in the hands of the legislature. Article 31 of the Japanese Constitution, upon which article 21 of our Constitution is modelled, also (1) Vide per Bronson 5. in Taylor vs Porte 4 Hill 1<0. 278 proceeds upon the same principle. The Japanese Constitu tion, it is to be noted, guarantees at the same. time other rights in regard to arrest, detention and access to Court which might serve as checks on legislative authority as well. Thus article 32 provides: "No person shall be denied the right of access to the Courts. " Article 34 lays down: "No person shall be arrested or detained without being at once informed of the charges against him or without the immediate privilege of counsel, nor shall he be detained without adequate cause; and upon demand of any person, such cause must be immediately shown in open Court in his presence and in the. presence of his counsel. " It was probably on the analogy of article 34 of the Japanese Constitution that the first two clauses of article 22 of the Indian Constitution were framed. Article 22 was not in the original Draft Constitution at all; and after the "due process" clause was discarded by the Constituent Assem bly and the present form was substituted in its place in article 21, article 22 was introduced with a view to provide for some sort of ' check in matters of arrest and detention and the protection it affords places limitations upon the authority of the legislature as well. These protections indeed have been denied to cases of preventive detention but that again is a question of policy which does not concern us as a Court. My conclusion, therefore, is that in article 21 the word "law" has been used in the sense of State made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice. The article presupposes that the law is a valid and binding law under the provisions. of the Constitution having regard to the competency of the legislature and the subject it relates to and does not infringe any of the fundamental rights which the Constitution provides for. In the view that I have taken, the question raised by Mr. Nambiar that the is invalid, by reason of the fact that the procedure it lays 279 down is not in conformity with the rules of natural justice, does not fall for consideration. It is enough, in my opin ion, if the law is a valid law which the legislature is competent to pass and which does not transgress any of the fundamental rights declared in of the Constitution. It is also unnecessary to enter into a discussion on the question raised by the learned Attorney General as to wheth er article 22 by itself is a self contained Code with regard to the law of Preventive Detention and whether or not the procedure it lays down is exhaustive. Even if the procedure is not exhaustive, it is not permissible to supplement it by application of the rules of natural justice. On the third point raised by Mr. Nambiar, the only question, therefore, which requires consideration is whether section 12 of the is ultra vires of the Constitution by reason of its being not in conformity with the provision of article 22 (7)(a). Article 22 (7) (a) of the Constitution empowers the Parliament to prescribe the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an advisory board in accordance with the provisions of sub clause (a) of clause (4). Section 12 of the which purports to be an enact ment in pursuance of article 22 (7) (a) of the Constitution provides as follows: "(1) Any person detained in any of the following classes of cases or under any of the following circumstances may be detained without obtaining the opinion of an advisory board for a period longer than three months, but not exceeding one year from the date of his detention, namely, where such person has been detained with a view to preventing him from acting in any manner prejudicial to (a) the defence of India, relations of India with for eign powers or the security of India; or (b) the security of a State or the maintenance of public order. " It will be noticed that there are altogether six 36 280 heads or subjects in the two Items in the legislative lists, namely, Item No. 9 of List I and Item No. 3 of List III which deal with preventive detention. Item No. 9 of List I mentions reasons connected with defence, foreign affairs and security of India, while Item No. 3 of List III speaks of reasons connected with security of a State, the maintenance of public order and the maintenance of supplies and services essential to the community. With the exception of the last head; all the remaining five have been listed in section 12 of the preventive Detention Act and they have been mentioned both as circumstances and classes of cases in which deten tion for more than three months would be permissible without the opinion of any advisory board. Mr. Nambiar 's argument is that the mentioning_ of five out of the six legislative heads in section 12 does not amount to prescribing the circumstances under which, or the classes of cases in which, a person could be detained for more than three months as contemplated by article 22 (7) (a). It is also contended that in view of the fact that the two items "circumstances" and "classes" are separated by the conjunction "and," what the Constitution really contemplated was that both these items should be specified and a statement or specification of any one of them would not be a proper compliance with the provisions of the clause. It is further pointed out that the mentioning of the same matters as "circumstances" or "classes" is not warranted by article 22 (7) of the Consti tution and is altogether illogical and unsound. I must say that section 12 has been drafted in a rather clumsy manner and certainly it could have been framed in a better and more proper way. Under article 22(7)(a), the Parliament may specify the circumstances under which, and the classes of cases in which, the necessity of placing the cases of detention for examination by the advisory board could be dispensed with. By "classes of cases" we mean certain determinable groups, the individuals comprised in each group being related to one another in a particular way which constitutes the determining factor of that group. "Circumstances" on the other hand 281 connote situations or conditions which are external to the persons concerned. Preventive detention can be provided for by law for reasons connected with six different ,matters specified in the relevant items in the legislative lists, and whatever the reasons might be, there is a provision contained in article 22 (4) (a) which lays down that deten tion for more than three months could not be permitted except with the sanction of the advisory board. An alterna tive however has been provided for by clause (b) and Parlia ment has been given the option to take away the protection given by clause (a) and specify the circumstances and the cases when this rule will not apply. I am extremely doubt ful whether the classification of cases made by Parliament in section 12 of the Act really fulfils the object which the Constitution had in view. The basis of classification has been the apprehended acts of the persons detained described with reference to the general heads mentioned in the items in the legislative lists as said above. Five out of the six heads have been taken out and labelled as classes of cases to which the protection of clause (4) (a) of the article would not be available. It is against common sense that all forms of activities connected with these five items are equally dangerous and merit the same drastic treatment. The descriptions are very general and there may be acts of various degrees of intensity and danger under each one of these heads. Although I do not think that section 12 has been framed with due regard to the object which the Constitution had in view, I am unable to say that the section is invalid as being ultra vires the Constitution. The Constitution has given unfettered powers to Parliament in the matter of making the classifications and it is open to the Parliament to adopt any method or principle as it likes. If it chose the principle implied in the enumeration of subjects under the relevant legislative heads, it cannot be said that Parliament has exceeded its powers. I am also unable to hold that both "circumstances" as well as "classes" have to be prescribed in order to 282 comply with the requirement of sub clause (a) of article 22 (7). The sub clause (a) of the article lays down a purely enabling provision and Parliament, if it so chooses, may pass any legislation in terms of the same. Where an optional power is conferred on certain authority to perform two separate acts, ordinarily it would not be obligatory upon it to perform both; it may do either if it so likes. Here the classes have been specified and the classes apparently are composed of persons who are detained for the purpose of preventing them from committing certain apprehended acts. I am extremely doubtful whether the classes themselves could be described as "circumstances" as they purport to have been done in the section. "Circumstances" would ordinarily refer to conditions like war, rebellion, communal disturbances and things like that, under which extra precaution might be :necessary and the detention of suspected persons beyond the period of three months without the sanction of the advisory board might be justified. It is said that the likelihood of these persons committing the particular acts which are specified might constitute "circumstances. " In my opinion, that is not a plain and sensible interpretation. But whatev er that may be, as I am of opinion that it is not obligatory on Parliament to prescribe both the circumstances and the classes of cases, I am unable to hold that section 12 is ultra vires the Constitution because the circumstances are not mentioned. As I have said at the beginning, the draft is rather clumsy and I do not know why Parliament used the word "or" when in the Constitution itself the word "and" has been used. In the fourth and last point raised by Mr. Nambiar the principal question for consideration is the validity of section 14 of the . Subsection (1)of section 14 prohibits any Court from allowing any statement to be made or any evidence to be given before it of the substance of any communication made under section 7 of the grounds on which a detention order has been made against any person or any representation made by him against such order. It further provides that no Court shall be 283 entitled to require any public officer to produce before it or to disclose the substance of any such communication or representation made or the proceedings of an advisory board or that part of the report of an advisory board which is confidential. Sub section (2) further provides that: "It shall be an offence punishable with imprisonment for a term which may extend to one year, or with fine, or with both, for any person to disclose or publish without the previous authorisation of the Central Government or the State Government, as the ' case may be, any contents or matter purporting to be contents of any such communication or representation as is referred to in sub section (1): Provided that nothing in this sub section shall apply to a disclosure made to his legal adviser by a person who is the subject of a detention order. " The provisions of this section are obviously of a most drastic character. It imposes a ban on the Court and pre vents it from allowing any statement to be made or any evidence produced before it of the substance of any communi cation made to the detenu apprising him of the grounds upon which the detention order was made. The Court is also incompetent to look into the proceedings before the advisory board or the report of the latter which is confidential. Further the disclosure of such materials has been made a criminal offence punishable with imprisonment for a term which may extend to one year. Mr. Nambiar 's contention is that these restrictions render utterly nugatory the provi sions of article 32 of the Constitution which guarantees to every person the right to move this Court by appropriate proceedings for the enforcement of the rights conferred by Part III of the Constitution. It is not disputed that the petitioner has the right of moving this Court for a writ of habeas corpus, and unless the Court is in a position to look into and examine the grounds upon which the detention order has been made, it is impossible for it to come to any deci sion on the point and pass a proper judgment. Though the right to move this 284 Court is not formally taken away, the entire proceedings are rendered ineffective and altogether illusory. On behalf of the respondent, it is pointed out that article 32 guarantees only the right to constitutional remedy for enforcement of the rights which are declared by the Constitution. If there are no rights under the Constitution, guaranteed to a person who is detained under any law of preventive deten tion, no question of enforcing such rights by an ap proach to this Court at all arises. I do not think that this argument proceeds on a sound basis; and in my opinion, section 14 does take away and materially curtails some of the fundamental rights which are guaranteed by the Constitu tion itself. Article 22, clause (5), of the Constitution lays down as a fundamental right that when a person is detained for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made, and shall afford him the earliest opportunity of making a representa tion against the order. Under clause (6), the authority need not disclose such facts as it considers to be against public interest to disclose. But so far as the grounds are concerned, the disclosure is not prohibited under any cir cumstance. It is also incumbent upon the detaining authori ty to afford a detenu the earliest opportunity of making a representation against the detention order. It has been held in several cases, and in my opinion quite rightly, that if the grounds supplied to a detained person are of such a vague and indefinite character that no proper and adequate representation could be made in reply to the same, that itself would be an infraction of the right which has been given to the detenu under law. In my opinion, it would not be possible for the Court to decide whether the provisions of article 22, clause (5), have been duly complied with and the fundamental right guaranteed by it has been made avail able to the detenu unless the grounds communicated to him under the provisions of this article are actually produced before the Court. Apart from this, it is also open to. the person detained to contend that the detention 285 order has been a main fide exercise of power by the detain ing authority and that the grounds upon which it is based, are not proper or relevant grounds which would justify detention under the provisions of the law itself. These rights of the detenu would for all practical purposes be rendered unenforceable if the Court is precluded from look ing into the grounds which have been supplied to him under section 7 of the . In my opinion, section 14 of the does materially affect the fundamental rights declared under of the Constitution and for this reason it must be held to be illegal and ultra vires. It is not disputed, however, that this section can be severed from the rest of the Act without affecting the other provisions of the Act in any way. The whole Act cannot, therefore, be held to be ultra vires. Mr. Nambiar has further argued that section 3 of the Act also contravenes the provisions of article 32 of the Consti tution, for it makes satisfaction of the particular authori ties final in matters of preventive detention and thereby prevents this Court from satisfying itself as to the propriety of the detention order. This contention cannot succeed as no infraction of any fundamental right is in volved in it. As has been pointed out already, this Court cannot interfere unless it is proved that the power has been exercised by the authorities in a mala fide manner or that the grounds are not proper or relevant grounds which justify detention. The provisions are undoubtedly harsh, but as they do not take away the rights under articles 21 and 22 of the Constitution, they cannot be held to be illegal or ultra vires. The result, therefore, is that, in my opinion, the must be declared to be intra vires the Constitution with the exception of section 14 which is held to be illegal and ultra vires. The present petition, however, must stand dismissed, though it may be open to the petitioner to make a fresh application if he so chooses and if the grounds that have been supplied to him under section 7 of the Act do furnish adequate reasons for making such application. 286 DAS J. I am likewise of opinion that this application should be dismissed. The contention of learned counsel appearing in support of this application is that the provisions of the (Act IV of 1950), are extremely drastic and wholly unreasonable and take away or, in any event, considerably abridge the fundamental rights conferred on the citizens by the provisions of of the Constitution and that this Court should declare the Act wholly void under article 13 (2) of the Constitution and set the petitioner at liberty. It is necessary to bear in mind the scope and ambit of the powers of the Court under the Constitution. The powers of the Court are not the same under all Constitutions. In England Parliament is supreme and there is no limitation upon its legislative powers. Therefore, a law duly made by Parliament cannot be challenged in any Court. The English Courts have to interpret and apply the law; they have no authority to declare such a law illegal or unconstitutional. By the American Constitution the ' legislative power of the Union is vested in the Congress and in a sense the Congress is the supreme legislative power. But the written Constitu tion of the United States is supreme above all the three limbs of Government and, therefore, the law made by the Congress, in order to be valid, must be in conformity with the provisions of the Constitution. If it is not, the Supreme Court will intervene and declare that law to be unconstitutional and void. As will be seen more fully hereafter, the Supreme Court of the United States, under the leadership of Chief Justice Marshall, assumed the power to. declare any law unconstitutional on the ground of its not being in "due process of law," an expression to be found in the Fifth Amendment (1791) of the United States Constitution and the Fourteenth Amendment (1868) which related to the State Constitutions. It is thus that the Supreme Court established its own supremacy over the executive and the Congress. In India the position of the Judiciary is some where in 287 between the Courts in England and the United States. While in the main leaving our Parliament and the State Legisla tures supreme in their respective legislative fields, our Constitution has, by some of the articles, put upon the Legislatures certain specified limitations some of which will have to be discussed hereafter. The point to be noted, however, is that in so far as there is any limitation on the legislative power, the Court must, on a complaint being made to it, scrutinise and ascertain whether such limitation has been transgressed and if there has been any transgression the Court will courageously declare the law unconstitution al, for the Court is bound by its oath to uphold the Consti tution. But outside the limitations imposed on the legisla tive powers our Parliament and the State Legislatures are supreme in their respective legislative fields and the Court has no authority to question the wisdom or policy of the law duly made by the appropriate legislature. Our Constitution, unlike the English Constitution, recognises the Court 's supremacy over the legislative authority, but such supremacy is a very limited one, for it is confined to the field where the legislative power is circumscribed by limitations put upon it by the Constitution itself. Within this restrict ed field the Court may, on a scrutiny of the law made by the Legislature, declare it void if it is found to have trans gressed the constitutional limitations. But our Constitu tion, unlike the American Constitution, does not recognise the absolute supremacy of the Court over the legislative authority in all respects, for outside the restricted field of constitutional limitations our Parliament and the State Legislatures are supreme in their respective legislative fields and in that wider field there is no scope for the Court in India to play the role of the Supreme Court of the United States. It is well for us to constantly remember this basic limitation on our own powers. The impugned Act has been passed by Parliament after the Constitution came into force. Article 246 gives exclusive power to Parliament to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule and it gives exclusive power to 288 the State Legislatures to make laws with respect to any of the matters specified in List II of that Schedule. It also gives concurrent power to Parliament as well as to the State Legislatures to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. Residuary powers of legislation are vested in parliament under article 248. The first thing to note is that under Entry 9 of List I the parliament and under Entry 3 in List III both parliament and the State Legislatures are empowered to make laws for preventive detention for reasons connected with the several matters specified in the respective entries. This legisla tion is not conditioned upon the existence of any war with a foreign power or upon the proclamation of emergency under Part XVIII of the Constitution. Our Constitution has, there fore, accepted preventive detention as the subjectmatter of peacetime legislation as distinct from emergency legisla tion. It is a novel feature to provide for preventive detention in the Constitution. There is no such provision in the Constitution of any other country that I know of. Be that as it may, for reasons good or bad, our Constitution has deliberately and plainly given power to Parliament and the State Legislatures to enact preventive detention laws even in peacetime. To many of us a preventive detention law is odious at all times but what I desire to emphasise is that it is not for the Court to question the wisdom and policy of the Constitution which the people have given unto themselves. This is another basic fact which the Court must not overlook. The next thing to bear in mind is that, if there were nothing else in the Constitution, the legislative powers of Parliament and the State Legislatures in their respective fields would have been absolute. In such circumstances the Court would have been entitled only to scrutinise whether Parliament or the State Legislature had, in making a partic ular law, over . stepped its legislative field and en croached upon the legislative field of the other legislative power, but could not have otherwise questioned the validity of any law made by the parliament or the State Legislatures. 289 Thus under Entry 9 of List I the Parliament and under Entry 3 of List III the Parliament and the State Legislature could make as drastic a preventive detention law as it pleased. Such a law might have authorised a policeman, not to speak of a District Magistrate or Sub Divisional Magistrate or the Commissioner of Police, to take a man, citizen or non citi zen, into custody and keep him in detention for as long as he pleased. This law might not have made any provision for supplying to the detenu the grounds of his detention or affording any opportunity to him to make any representation to anybody or for setting up any advisory board at all. Likewise, under Entries 1 and 2 in List III the Parliament or the State Legislature might have added as many new and novel offences as its fancy might have dictated and provided for any cruel penalty ranging from the maiming of the limbs to boiling to death in oil or repealed the whole of the Code of Criminal Procedure and provided for trial by battle or ordeal or for conviction by the verdict of a sorcerer or a soothsayer. Such law might have forbidden any speech criti cising the Government, however mildly, or banned all public meetings or prohibited formation of all associations under penalty of law. Under Entry 33 of List I the Parliament might have made a law for acquiring anybody 's properties for the purposes of the Union without any compensation and under Entry 36 in List III the State Legislature could do the same subject to the provisions of Entry 42 in List III which empowers the making of a law laying down principles for payment of compensation which might be anything above noth ing. Under Entry 81 Parliament could have made any law restricting or even prohibiting inter State migration so that a Bengali would not be able to move into and settle in Bihar or vice versa. It is needless to multiply instances of atrocious laws which Parliament or the State Legislature might have made under article 246 read with the different lists if there were nothing else in the Constitution. Our Legislatures, subject to the limitation of distribution of legislative powers, would have been as supreme in their respective legislative fields as the 290 English Parliament is and has been. The Court in India, in such event, would have had to take the law duly made, inter pret it and apply it. It would not have been entitled to utter a word as to the propriety of the particular law, although it might have shuddered at the monstrous atrocities of such law. Our Constitution, however, has not accepted this abso lute supremacy of our Parliament or the State Legislature. Thus by article 245 (1) the legislative power is definitely made "subject to the provisions of this Constitution. " Turning to the Constitution, article 13 (2) provides as follows: "The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. " This clearly puts a definite limitation on the wide legislative powers given by article 246. It is certainly within the competency of the Court to judge and declare whether there has been any contravention of this limitation. In this respect again the Court has supremacy over the Legislature. From the provisions so far referred to, it clearly follows that there are two principal limitations to the legislative power of parliament, namely, (i) that the law must be within the legislative compe tence of parliament as prescribed by article 246; and (ii) that such law must be subject to the pro visions of the Constitution and must not take away or abridge the rights conferred by Part III. There can be no question and, indeed, the learned Attorney General does not contend otherwise that both these matters are justiciable and it is open to the Courts to decide whether Parliament has transgressed either of the limitations upon its legislative power. Learned counsel for the petitioner does not say that the impugned Act is ultra vires the legislative powers of Parliament as prescribed by article 246. His contention is that the impugned Act is void 291 because it takes away or abridges the fundamental rights of citizens conferred by Part III of the Constitution. It is, therefore, necessary to ascertain first the exact nature, extent and scope of the particular fundamental right insist ed upon and then to see whether the impugned Act has taken away or, in any way, abridged the fundamental right so ascertained. Civil rights of a person are generally divided into two classes, namely, the rights attached to the person (jus personarum) and the rights to things, i.e., property (jus rerum). Of the rights attached to the person, the first and foremost is the freedom of life, which means the right to live, i.e., the right that one 's life shall not be taken away except under authority of law. Next to the freedom of life comes the freedom of the person, which means that one 's body shall not be touched, violated, arrested or imprisoned and one 's limbs shall not be injured or maimed except under authority of law. The truth of the matter is that the right to live and the freedom of the person are the primary rights attached to the person. If a man 's person is free, it is then and then only that he can exercise a variety of other auxiliary rights, that is to say, he can, within certain limits, speak what he likes, assemble where he likes, form any associations or unions, move about freely as his "own inclination may direct," reside and settle anywhere he likes and practise any profession or carry on any occupation, trade or business. These are attributes of the freedom of the person and are consequently rights attached to the person. It should be clearly borne in mind that these are not all the rights attached to the person. Besides them there are varieties of other rights which are also the attributes of the freedom of the person. All rights attached to the person are usually called personal liberties and they are too numerous to be enumerated. Some of these auxiliary rights are so important and fundamental that they are re garded and valued as separate and independent rights apart from the freedom of the person. Personal liberties may be compendiously summed up as the right to do as one pleases within the law. I 292 say within the law because liberty is not unbridled licence. It is what Edmund Burke called "regulated freedom." Said Montesquieu in Book III, Ch. 3, of his Spirit of the Laws: "In Governments, that is, in societies directed by laws, liberty can consist only in the power of doing what we ought to will, and in not being constrained to do what we ought not to will. We must have continually present to our minds the difference between independence and liberty. Liberty is a right of doing whatever the laws permit, and if a citizen could do what they forbid, he would no longer be possessed of liberty, because all his fellow citizens would enjoy the same power. " To the same effect are the following observations of Webster in his Works Vol. II, p. 393: "Liberty is the creation of law, essentially different from that authorised licentiousness that trespasses on right. It is a legal and refined idea, the offspring of high civilization, which the savage never understands, and never can understand. Liberty exists in proportion to wholesome restraint; the more restraint on others to keep off from us, the more liberty we have. It is an error to suppose that liberty consists in a paucity of laws . . The working of our complex system, full of checks and restraints on legislative, executive and judicial power is favourable to liberty and justice. These checks and restraints are so many safeguards set around individual rights and interests. That man is free who is protected from injury. " Therefore, putting restraint on the freedom of wrong doing of one person is really. securing the liberty of the intended victims. To curb the freedom of the saboteur of surreptitiously removing the fish plates from the railway lines is to ensure the safety and liberty of movement of the numerous innocent and unsuspecting passengers. Therefore, restraints on liberty should be judged not only subjectively as applied to a few individuals who come within their opera tions but also objectively as securing the liberty of a far greater number of individuals. Social interest in individu al 293 liberty may well have to be subordinated to other greater social interests. If a law ensures and protects the greater social interests then such law will be a wholesome and beneficent law although it may infringe the liberty of some individuals, for it will enure for the greater liberty of the rest of the members of the society. At the same time, our liberty has also to be guarded against executive, legislative as well as judicial usurpation of powers and prerogatives. Subject to certain restraints on individuals and reasonable checks on the State every person has a varie ty of personal liberties too numerous to be cataloged. As will be seen more fully hereafter, our Constitution has recognised personal liberties as fundamental rights. It has guaranteed some of them under article 19 (1) but put re straints on them by clauses (2) to (6). It has put checks on the State 's legislative powers by articles 21 and 22. It has by providing for preventive detention, recognised that individual liberty may be subordinated to the larger social interests. Turning now to the Constitution I find that Part III is headed and deals with "Fundamental Rights" under seven heads, besides, "General" provisions (articles 12 and 13), namely "Right to Equality" (articles 14 to 18), "Right to Freedom" (articles 19 to 22), "Right against Exploitation" (articles 23 and 24), "Right to Freedom of Religion" (articles 25 to 28), "Cultural and Educational Rights" (articles 29 and 30), "Right to Property" (article 31), "Right to Constitutional Remedies" (articles 32 to 35). Under the heading "Right to Freedom" are grouped four arti cles, 19 to 22. Article 19 (1) is in the following terms : " (1) All citizens shall have the right (a) to freedom of speech and expression; (b) to assemble peaceably and without arms; (c) to form associations or unions; (d) to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; (f) to acquire, hold and dispose of property; and 294 (g) to practise any profession, or to carry on any occupation, trade or business. " It will be noticed that of the seven rights protected by clause (1) of article 19, six of them, namely, (a), (b), (c), (d), (e) and (g) are what are said to be rights at tached to the person (jus personarum). The remaining item, namely, (f) is the right to property (jus rerum). If there were nothing else in article 19 these rights would have been absolute rights and the protection given to them would have completely debarred parliament or any of the State Legisla tures from making any law taking away or abridging any of those rights. But a perusal of article 19 makes it abun dantly clear that none of the seven rights enumerated in clause (1) is an absolute right, for each of these rights is liable to be curtailed by laws made or to be made by the State to the extent mentioned in the several clauses (2) to (6) of that article. Those clauses save the power of the State to make laws imposing certain specified restrictions on the several rights. The nett result is that the unlimit ed legislative power given by article 246 read with the different legislative lists in the Seventh Schedule is cut down by the provisions of article 19 and all laws made by the State with respect to these rights must, in order to be valid, observe these limitations. Whether any law has in fact transgressed these limitations is to be ascertained by the Court and if in its view the restrictions imposed by the law are greater than what is permitted by clauses (2) to (6) whichever is applicable the Court will declare the same to be unconstitutional and, therefore, void under article 13. Here again there is scope for the application of the "intel lectual yardstick" of the Court. If, however, the Court finds, on scrutiny, that the law has not overstepped the constitutional limitations, the Court will have to uphold the law, whether it likes the law or not. The first part of the argument is put broadly, namely, that personal liberty is generally guaranteed by the Consti tution by article 19 (1) and that the , has imposed unreasonable 295 restrictions thereon in violation of the provisions of clauses (2) to (6) of that article. The very first question that arises, therefore, is as to whether the freedom of the person which is primarily and directly suspended or de stroyed by preventive detention is at all governed by arti cle 19 (1). If personal liberty as such is guaranteed by any of the sub clauses of article 19 (1) then why has it also been protected by article 21 ? The answer suggested by learned counsel for the petitioner is that personal liberty as a substantive right is protected by article 19 (1) and article 21 gives only an additional protection by prescrib ing the procedure according to which that right may be taken away. I am unable to accept this contention. If this argument were correct, then it would follow that our Consti tution does not guarantee to any person, citizen or non citizen, the freedom of his life as a substantive right at all, for the substantive right to life does not fall within any of the sub clauses of clause (1) of article 19. It is retorted in reply that no constitution or human laws can guarantee life which is the gift of God who alone can guar antee and protect it. On a parity of reasoning no Constitu tion or human laws can in that sense guarantee freedom of speech or free movement, for one may be struck dumb by disease or may lose the use of his legs by paralysis or as a result of amputation. Further, what has been called the procedural protection of article 21 would be an act of supererogation, for when God takes away one 's life, whatever opportunity He may have had given to Adam to explain his conduct before sending him down, He is not likely in these degenerate days to observe the requirements of notice or fair trial before any human tribunal said to be required by article 21. The fifth Amendment and the Fourteenth Amendment of the American Constitution give specific protection to life as a substantive right. So does article 31 of the Japanese Constitution of 1946. There is no reason why our Constitution should not do the same. The truth is that article 21 has given that protection to life as a substan tive right and that, as will be seen hereafter, that article properly understood does not purport to prescribe any par ticular procedure at all. The 38 296 further astounding result of the argument of counsel for the petitioner will be that the citizen of India will have only the rights enumerated in article 19, clause (1) and no other right attached to his person. As I have already stated, besides the several rights mentioned in the several sub clauses of article 19 (1) there are many other personal liberties which a free man, i.e., a man who has the freedom of his person, may exercise. Some of those other rights have been referred to by Harries C.J. of Calcutta in his unreported judgment in Miscellaneous Case No. 166 of 1950 (K.shitindra vs The Chief Secretary of West Bengal) while referring the case to a Full Bench in the following words : "It must be remembered that a free man has far more and wider rights than those stated in article 19 (1) of the Constitution. For example, a free man can eat what he likes subject to rationing laws, work as much as he likes or idle as much as he likes. He can drink anything he likes subject to the licensing laws and smoke and do a hundred and one things which are not included in article 19. If freedom of person was the result of article 19, then a free man would only have the seven rights mentioned in that article. But obviously the free man in India has far greater rights. " I find myself in complete agreement with the learned Chief Justice on this point. If it were otherwise, the citizen 's right to eat what he likes will be liable to be taken away by the executive fiat of the Civil Supply Depart ment without the necessity of any rationing laws. The Government may enforce prohibition without any prohibition laws or licensing laws and so on. I cannot accept that our Constitution intended to give no protection to the bundle of rights which, together with the rights mentioned in sub clauses (a) to (e) and (g) make up personal liberty. In deed, I regard it as a merit of our Constitution that it does not attempt to enumerate exhaustively all the personal rights but uses the compendious expression "personal liber ty" in ' article 21, and protects all of them. It is pointed out that in the original draft the word "liberty" only was used as in the American 297 Constitution but the Drafting Committee added the word "personal" to make it clear that what was being protected by what is now article 21 was not what had already been pro tected by what is now article 19. If it were permissible to refer to the Drafting Committee 's report, it would be anoth er answer to the contentions of learned counsel for the petitioner that personal liberty as a substantive right was protected by article 19. I do not, however, desire to base my judgment on the Drafting Committee 's report and I express no opinion as to its admissibility. Whatever the intentions of the Drafting Committee might have been, the Constitution as finally passed has in article 21 used the words "personal liberty" which have a definite connotation in law as I have explained. It does not mean only liberty of the person but it means liberty or the rights attached to the person (jus personarum). The expressions "freedom of life" or "personal liberty" are not to be found in article 19 and it is strain ing the language of article 19 to squeeze in personal liber ty into that article. In any case the right to life cannot be read into article 19. Article 19 being confined, in its operation, to citizens only, a non citizen will have no protection for his life and personal liberty except what has been called the procedural protection of article 21. If there be no substantive right what will the procedure protect ? I recognise that it is not imperative that a foreigner should have the same privileges as are given to a citizen, but if article 21 is construed in the way I have suggested even a foreigner will have equal protection for his life and personal liberty before the laws of our country under our Constitution. I am unable, there fore, for all the reasons given above, to agree that person al liberties are the result of article 19 or that that article purports to protect all of them. It is next urged that the expression "personal liberty" is synonymous with the right to move freely and, therefore, comes directly under article 19 (1) (d). Reference is made to the unreported dissenting judgment of Sen J. of Calcutta in Miscellaneous Case No. 166 of 1950 while referring that case to a Full Bench. 298 In his judgment Sen J. quoted the following passage from Blackstone 's Commentaries : "Next to personal security the law of :England regards, asserts and preserves, the personal liberty of individuals. This personal liberty consists in the power of locomotion, of changing situation, or moving one 's person to whatsoever place one 's own inclination may direct, without imprisonment or restraint, unless by due course of law." (Page 73 of George Chase 's Edition (4th Edition) of Blackstone, Book I, Chapter I. On the authority of the above passage the learned Judge concluded that personal liberty came within article 19 (1)(d). I am unable to agree with the learned Judge 's con clusion. On a perusal of Chapter I of Book I of Black stone 's Commentaries it will appear that the]earned commen tator divided the rights attached to the person (jus person arum) into two classes, namely, "personal security" and "personal liberty. " Under the head "personal security" Blackstone included several rights, namely, the rights to ' life, limb, body, health and reputation, and under the head "personal liberty" he placed only the right of free move ment. He first dealt with the several rights classified by him under the head "personal security" and then proceeded to say that next to those rights came personal liberty which according to his classification consisted only in the right of free locomotion. There is no reason to suppose that in article 21 of our Constitution the expression "personal liberty" has been used in the restricted sense in which Blackstone used it in his Commentaries. If "personal liber ty" in article 21 were synonymous with the right to move freely which is mentioned in article 19 (1) (d), then the astounding result will be that only the last mentioned right has what has been called the procedural protection of arti cle 21 but none of the other rights in the other sub clauses of article 19 (1) has any procedural protection at all. According to learned counsel for the petitioner the proce dure required by article 21 consists of notice and a right of hearing before an impartial tribunal. Therefore, accord ing to him, a man 's right of movement cannot be taken away without giving him notice and a fair trial 299 before an impartial tribunal but he may be deprived of his freedom of speech or his property or any of his other rights without the formality of any procedure at all. The proposi tion has only to be stated to be rejected. In my judgment, article '19 protects some of the important attributes of personal liberty as independent rights and the expression "personal liberty" has been 'used in article 21 as a compen dious term including within its meaning all the varieties of rights which go to make up the personal liberties of men. Learned counsel for the petitioner next contends that personal liberty undoubtedly means or includes the freedom of the person and the pith and substance of the freedom of the person is right to move about freely and consequently a preventive detention law which destroys or suspends the freedom of the person must inevitably destroy or suspend the right of free movement and must necessarily offend against the protection given to the citizen by article 19 (1)(d) unless it satisfies the test of reasonableness laid down in clause (5). The argument is attractive and requires serious consideration as to the exact purpose and scope of sub clause (d) of article 19 (1). There are indications in the very language of article 19 (1) (d) itself that its purpose is to protect not the gener al right of free movement which emanates from the freedom of the person but only a specific and 'limited aspect of it, namely, the special right of a free citizen of India to move freely throughout the Indian territory, i.e., from one State to another within the Union. In other words, it guarantees, for example, that a free Indian citizen ordinarily residing in the State of West Bengal will be free to move from West Bengal to Bihar or to reside and settle in Madras or the Punjab without any let or hindrance other than as provided in clause (5). It is this special right of movement of the Indian citizen in this specific sense and for this particu lar purpose which is protected by article 19 (1) (d). It is argued on the authority of a decision of a Special Bench of the Calcutta High Court presided over by Sen J. in Sunil Kumar vs The Chief 300 Secretary of West Bengal (1) that the words "through . out the territory of India" occurring in that sub clause only indicate that our Constitution does not guarantee to its citizens the right of free movement in or into foreign territory and that those words have been added to save passport restrictions. I am unable to accept this interpre tation. Our Constitution cannot possibly give to any of its citizens any right of free movement in a foreign country and it was wholly superfluous to specifically indicate this in the Constitution, for that would have gone without saying. The words "throughout the territory of India" are not used in connection with most of the other sub clauses of clause (1) of article 19. Does such omission indicate that our Constitution guarantees to its citizens freedom of speech and expression, say, in Pakistan ? Does it guarantee to. its citizens a right to assemble or to form associations or unions in a foreign territory ? Clearly not. Therefore, it was not necessary to use those words in sub clause (d) to indicate that free movement in foreign countries was not being guaranteed. It is said that by the use of those words the Constitution makes it clear that no1 guarantee was being given to any citizen with regard to emigration from India without a passport and that the freedom of movement was restricted within the territory of India. Does the omission of those words from article 19 (1) (a) indicate that the citizen of India has been guaranteed such freedom of speech and expression as will enable him to set up a broadcasting station and broadcast his views and expressions to foreign lands without a licences ? Clearly not. Dropping this line of argument and adopting a totally new line of argument it is said that by the use of the words "throughout the territory of India" the Constitution indicates that the widest right of free movement that it could possibly give to its citizens has been given. then, the omission of those words from the other subclauses indicate that the Constitution has kept back some parts of those rights even beyond the limits of the qualifying clauses that follow ? Do not those other rights prevail throughout the Indian territory ? (1) 301 Clearly they do, even without those words. Therefore, those words must have been used in sub clause (d) for some other purpose. That other purpose, as far as I can apprehend it, is to indicate that free movement from one State to another within the Union is protected so that Parliament may not by a law made under Entry 81 in List I curtail it beyond the limits prescribed by clause (5) of article 19. Its purpose, as I read it, is not to provide protection for the general right of free movement but to secure a specific and special right of the Indian citizen to move freely throughout the territories of India regarded as an independent additional right apart from the general right of locomotion emanating from the freedom of the person. It is a guarantee against unfair discrimination in the matter of free movement of the Indian citizen throughout the Indian Union. In short, it is a protection against provincialism. It has nothing to do with the freedom of the person as such. That is guaranteed to every person, citizen or otherwise, in the manner and to the extent formulated by article 21. Clause (5) of article 19 qualifies sub clause (d) of clause (1) which should, therefore, be read in the light of clause (5). The last mentioned clause permits the State to impose reasonable restrictions on the exercise of the right of free movement throughout the territory of India as ex plained above. Imposition of reasonable restrictions clearly implies that the right of free movement is not entirely destroyed but that parts of the right remain. This reasona ble restriction can be imposed either in the interest of the general public or for the protection of the interests of any Scheduled Tribe. The Scheduled Tribes usually reside in what are called the Scheduled Areas. The provision for imposing restriction on the citizens ' right of free movement in the interests of the Scheduled Tribes clearly indicates that the restriction is really on his right of free movement into or within the Scheduled Areas. It means that if it be found necessary for the protection of the Scheduled Tribes the citizens may be restrained from entering into or moving about in the Scheduled Areas, although they are left quite free to move about elsewhere. This restraint may well be 302 necessary for the protection of the members of the, Sched uled Tribes who are generally impecunious and constitute a backward class. They may need protection against money lenders or others who may be out to exploit them. They may have to be protected against their own impecunious habits which may result in their selling or mortgaging their hearths and homes. Likewise, the free movement of citizens may have to be restricted in the interest of the general public. A person suffering from an infectious disease may be prevent from moving about and spreading the disease. and regulations for his segregation in the nature of quarantine may have to be introduced. Likewise, healthy people may be prevented, in the interests of the general public, from entering a plague infected area. There may be protected places, e.g., forts or other strategic places, access where to may have to be regulated or even prohibited in the inter ests of the general public. The point to be noted, however, is that when free movement is thus restricted, whether in the interest of the general public or for the protection of the Scheduled Tribes, such restriction has reference gener ally to a certain local area which becomes the prohibited area but the right of free movement in all other areas in the Union is left unimpaired. The circumstance that clause (5) contemplates only the taking away of a specified area and thereby restricting the field of the exercise of the right conferred by subclause (d) of clause (1) indicates to my mind that subclause (d)is concerned, not with the freedom of the person or the general right of free movement but with a specific aspect of it regarded as an independent right apart from the freedom of the person. In other words in sub clause (d)the real emphasis is on the words "throughout the territory of India. " The purpose of article 19 (1) (d) is to guarantee that there shall be no State barrier. It gives protection against provincialism. It has nothing to do with the freedom of the person as such. Finally, the ambit and scope of the rights protected by article 19 (1) have to be considered. Does it protect the right of free movement and the other 303 personal rights therein mentioned in all circumstances irrespective of any other consideration ? Does it not postulate a capacity to exercise the rights ? Does its protection continue even though the citizen lawfully loses his capacity for exercising those rights ? How can the continuance of those personal rights be compatible with the lawful detention of the person ? These personal rights and lawful detention cannot go together. Take the case of a person who has been properly convicted of an offence punish able under a section of the Indian Penal Code as to the reasonableness of which there is no dispute. His right to freedom of speech is certainly impaired. Under clause (2) the State may make a law relating to libel, slander, defama tion, contempt of Court or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the State. Any law on any of these matters contemplated by this clause certainly must have some direct reference to speech and expression. It means that the law may directly curtail the freedom of speech so that the citizen may not talk libel or speak contemptuously of the Court or express indecent or immoral sentiments by speech or other forms of expression or utter seditious words. To say that every crime undermines the security of the State and, therefore, every section of the Indian Penal Code, irrespective of whether it has any reference to speech or expression, is a law within the meaning of this clause is wholly unconvincing and betrays only a vain and forlorn attempt to find an explanation for meeting the argument that any conviction by a Court of law must necessarily infringe article 19 (1) (a). There can be no getting away from the fact that a detention as a result of a conviction impairs the freedom of speech far beyond what is permissible under clause (2) of article 19. Likewise a detention on lawful conviction impairs each of the other personal rights men tioned in sub clauses (b) to (e) and (g) far beyond the limits of clauses (8) to (6). The argument that every section of the Indian Penal Code irrespective of whether it has any reference to any of the rights referred to in sub clauses (b) to (e) and (g) is a law imposing 304 reasonable restriction on those several rights has not even the merit of plausibility. There can be no doubt that a detention as a result of lawful conviction must necessari ly impair the fundamental personal rights guaranteed by article 19 (1) far beyond what is permissible under clauses (2) to (6) of that article and yet nobody can think of questioning the validity of the detention or of the section of the Indian Penal Code under which the sentence was passed. Why ? Because the freedom of his person having been lawfully taken away, the convict ceases to be entitled to exercise the freedom of speech and expression or any of the other personal rights protected by clause (1) of article 19. On a parity of reasoning he cannot, while the detention lasts, exercise any other personal right, e.g., he cannot eat what he likes or when he likes but has to eat what the Jail Code provides for him and at the time when he is by Jail regulations required to eat. Therefore, the conclusion is irresistible that the rights protected by article 19 (1), in so far as they relate to rights attached to the person, i.e., the rights referred to in sub clauses (a) to (e) and (g), are rights which only a free citizen, who has the freedom of his person unimpaired, can exercise. It is pointed out, as a counter to the above reasonings, that detention as a result of a lawful conviction does not deprive a person of his right to acquire or hold or dispose of his property mentioned in sub clause (f). The answer is simple, namely, that that right is not a right attached to the person (jus personrum) and its existence is not depend ent on the freedom of the person. Loss of freedom of the person, therefore, does not suspend the right to property. But suppose a person loses his property by reason of its having been compulsorily acquired under article 31 he loses his right to hold that property and cannot complain that his fundamental right under sub clause (f) of clause (1) of article 19 has been infringed. It follows that the rights enumerated in article 19 (1) subsist while the citizen has the legal capacity to exercise them. If his capacity to exercise them is gone, by reason of a lawful conviction with respect to the rights 305 in sub clauses (a) to (e) and (g), or by reason of a lawful compulsory acquisition with respect to the right in sub clause (f), he ceases to have those rights while his inca pacity lasts. It further follows that if a citizen 's free dom of the person is lawfully taken away otherwise than as a result of a lawful conviction for an offence, that citizen, for precisely the same reason, cannot exercise any of the rights attached to his person including those enumerated in sub clauses (a) to (e) and (g) of article 19 (1). In my judgment a lawful detention, whether punitive or preventive, does not offend against the protection conferred by article 19 (1) (a) to (e) and (g), for those rights must necessarily cease when the freedom of the person is lawfully taken away. In short, those rights end where the lawful detention be gins. So construed, article 19 and article 21 may, there fore, easily go together and there is, in reality, no con flict between them. It follows, therefore, that the validi ty or otherwise of preventive detention does not depend on, and is not dealt with by, article 19. To summarise, the freedom of the person is not the result of article 19. Article 19 only deals with ' certain particu lar rights which, in their origin and inception, are attributes of the freedom of the person but being of great importance are regarded as specific and independent rights. It does not deal with the freedom of the person as such. Article 19 (1) (d) protects a specific aspect of the right of free locomotion, namely, the right to move freely throughout the territory of India which is regarded as a special privilege or right of an Indian citizen and is protected as such. The protection of article 19 is co termi nous with the legal capacity of a citizen to exercise the rights protected thereby, for sub clauses (a) to (e) and (g) of article 19 (1) postulate the freedom of the person which alone can ensure the capacity to exercise the rights pro tected by those sub clauses. A citizen who loses the free dom of his person by being lawfully detained, whether as a result of a conviction for an offence or as a result of preventive detention loses his capacity to exercise those rights and, therefore, has none of the rights which sub clauses (a) to (e) and (g) may protect. 306 In my judgment article 19 has no bearing on the question of the validity or otherwise of preventive detention and, that being so, clause (5) which prescribes a test of reasonable ness to be defined and applied by the Court has no applica tion at all. Article 19 being thus out of the way, I come to article 20 which is concerned with providing protection against what are well known as ex post facto laws, double jeopardy and self incrimination. This article constitutes a limitation on the absolute legislative power which would, but for this article, be exercisable by Parliament or the State Legisla tures under article 246 read with the legislative lists. If the Legislature disobeys this limitation the Court will certainly prevent it. Article 20 has no bearing on preven tive detention laws and I pass on. Article 21 runs thus: "21. No person shall be deprived of his life or person al liberty except according to procedure established by law. " The contention of learned counsel for the petitioner is that by this article the Constitution offers to every per son, citizen or non citizen, only a procedural protection. According to the argument, this article does not purport to give any protection to life or personal liberty as a sub stantive right but only prescribes a procedure that must be followed before a person may be deprived of his life or personal liberty. I am unable to accept this contention. Article 21, as the marginal note states, guarantees to every person "protection of life and personal liberty. " As I read it, it defines the substantive fundamental right to which protection is given and does not purport to prescribe any particular procedure at all. That a person shall not be deprived of his life or personal liberty except according to procedure established by law is the substantive fundamental right to which protection is given by the Constitution. The avowed object of the article, as I apprehend it, is to define the ambit of the right to life and personal liberty which is to be protected as a fundamental right. The right to life and 307 personal liberty protected by article 21 is not an absolute right but is a qualified right a right circumscribed by the possibility or risk of being lost according to procedure established by law. Liability to deprivation according to procedure established by law is in the nature of words of limitation. The article delimits the right by a reference to its liability to deprivation according to procedure estab lished by law and by this very definition throws a corre sponding obligation on the State to follow a procedure before depriving a man of his life and personal liberty. What that procedure is to be is not within the purpose or purview of this article to prescribe or indicate. The claim of learned counsel for the petitioner is that article 21 prescribes a procedure. This procedure, accord ing to learned counsel, means those fundamental immutable rules of procedure which are sanctioned or well established by principles of natural justice accepted in all climes and countries and at all times. Apart from the question whether any rule of natural procedure exists which conforms to the notions of justice and fair play of all mankind at all times, it has to be ascertained whether the language of article 21 will permit its introduction into our Constitu tion. The question then arises as to what is the meaning of the expression "procedure established by law. " The word "procedure" in article 21 must be taken to signify some step or method or manner of proceeding leading up to the depriva tion of life or personal liberty. According to the language used in the article, this procedure has to be "established by law. " The word "establish" according to the Oxford English Dictionary, Vol. III, p. 297, means, amongst other things, "to render stable or firm ; to strengthen by materi al support; to fix, settle, institute or ordain permanently by enactment or agreement." According to Dr. Annandale 's edition of the New Gresham Dictionary the word "establish," means, amongst other things, "to found permanently; to institute; to enact or decree; to ordain; to ratify; to make firm. " It follows that the word "established" in its ordi nary natural sense means, amongst other things, "enacted." "Established by law" will, 308 therefore, mean "enacted by law. " If this sense of the word "established" is accepted, then the word "law" must mean State made law and cannot possibly mean. the principles of natural justice, for no procedure can be said to have ever been "enacted" by those principles. When section 124 A of the Indian Penal Code speaks of "Government established by law," surely it does not mean "Government set up by natural justice. " Therefore, procedure established by law must, I apprehend, be procedure enacted by the State which, by its definition in article 12, includes parliament. There is no escape from this position if the cardinal rule of construc tion, namely, to give the words used in a statute their ordinary natural meaning, is applied. And this construction introduces no novelty or innovation, for at the date of the Constitution the law of procedure in this country. both civil and criminal, was mainly if not wholly, the creature of statute. The Hindu or Muhammadan laws of procedure were abrogated and replaced by the Code of Civil Procedure or the Code of Criminal Procedure. Therefore, procedure established by law is quite compatible with procedure enact ed by law. If, however, the word "established" is taken to mean "sanctioned" or "settled" or "made firm" then the question will arise as to the meaning of the word "law" in that context. Reference is made to Salmond 's Jurisprudence, 10th Edition, p. 37, showing that the term "law" is used in two senses and it is suggested that the word "law" in the expression "established by law "means law in its abstract sense of the principles of natural justice. It is "jus" and not "lex," says learned counsel for the petitioner. It is pointed out that both the English and the Indian law in many cases, some of which have been cited before us, have recog nised and applied the principles of natural justice and that this Court should do the same in interpreting tim provisions of our Constitution. I find it difficult to let in princi ples of natural justice as being within the meaning of the word "law," having regard to the obvious meaning of that word in the other articles. Article 14 certainly embodies a principle of natural justice which ensures to. 309 every person equality before the law. When natural jus tice speaks of and enjoins equality before the law, that law must refer to something outside natural justice, and must mean the State made laws. It is only when the State law gives equality to every person that that law is said to be in accordance with natural justice. There can be no doubt that the words "in accordance with law" in article 17 have reference to State law. Likewise, the word "law" in article 20 (1) can mean nothing but law made by the State. The same remark applies to the words "in accordance with law" in articles 23, 31 and 32. Natural justice does not impose any tax and, therefore, the word "law" in articles 265 and 286 must mean State made law. If this be the correct meaning of the word "law" then there is no scope for intro ducing the principles of natural justice in article 21 and "procedure established by law" must mcan procedure estab lished by law made by the State which, as defined, includes Parliament and the Legislatures of the States. We have been referred to a number of text books and decisions showing the development of the American doctrine of "due process of law" and we have been urged to adopt those principles in our Constitution. The matter has to be considered against its historical background. The English settlers in different parts of America had carried with them the English common law as a sort of personal law regulating their rights and liberties inter se as well as between them and the State. After the War of Independence the Constitu tions of the United States were drawn up in writing. The majority of those who framed the Constitution were lawyers and had closely studied the Commentaries of the great Eng lish jurist Blackstone, who in his famous commentaries had advocated the separation of the three limbs of the State, namely, the executive, the legislature and the judiciary. Montesquit 's Spirit of Laws had already been published wherein he gave a broader and more emphatic expression to the Aristotelian doctrine of separation of powers. The experience of the repressive laws of Parliament had im pressed upon the framers of the American Constitution the 310 belief that it was the habit of all legislative bodies to grasp and exercise powers that did not belong to them. The interference of the colonial governors with legislation and the judiciary was also real. This sad experience coupled with the political philosophy of the time induced the fram ers of the American Constitutions to adopt safeguards not only against the executive but also against the legislature. (See Munro on the Government of the United States, 5th Edition, Chapter IV, p. 53 et seq.). Says Judge Cooley in his Constitutional Limitations, 6th Edition, Vol. II, Chap ter XI, p. 755: "The people of the American States, holding the sover eignty in their own hands, have no occasion to exact any pledges from any one for a due observation of individual rights; but the aggressive tendency of power is such that they have deemed it of no small importance, that, in framing the instruments under which their governments are to be administered by their agents, they should repeat and re enact this guarantee, and thereby adopt it as a principle of constitutional protection. " There can be little doubt that the people of the differ ent States in America intended not to take any risk as to their life, liberty or property even from the legislature. As Munro puts it at pp. 58 61 : "The framers of the Constitution set boundaries to the powers of the Congress, and it was their intent that these limitations should be observed. But how was such observance to be enforced by the Courts ? The statesmen of 1767 did not categorically answer that question. " The Constitution was silent and there was no express provision as to who was to serve as umpire in case the Congress overstepped the limits of its legislative powers. By the 5th Amendment what is now known as the "due process clause" was introduced in the Federal Constitution and by the 14th Amendment a similar clause was adopted in the State Constitutions. Some of the State Constitutions used the words "due course of law," some repeated the words of Magna Charta, namely, "the law of the land" but most of 311 them used the expression "due process of law. " All the expressions meant the same thing, namely, that no person should be deprived of his life, liberty or property except in due process of law. The Constitution by this clause gave the Supreme Court an opportunity to take upon itself the function of declaring the national laws unconstitutional. And the Supreme Court, under the leadership of Chief Justice John Marshall, seized this opportunity and assumed the right to say the last word on questions of constitutionality, and possesses that right to day: (Munro, p. 62). The expression "due process of law" has been interpreted by the American Courts in different ways at different times. Carl Brent Swisher in his book on the Growth of Constitutional Power in the United States at p. 107 says, with reference to the development of the doctrine of due procedure: "The American history of its interpretation falls into three periods. During the first period covering roughly the first century of Government under the Constitution "due process" was interpreted "principally as a restriction upon procedure and largely the judicial procedure by which the Government exercised its powers. During the second period,which, again roughly speaking, extended through 1936, "due process" was expanded to serve as a restriction not merely upon procedure but upon the substance of the activi ties in which the Government might engage. During the third period extending from 1936 to date, the use of "due process" as a substantive restriction has been largely suspended or abandoned, leaving it principally in its original status as a restriction upon procedure. " In the guise of interpreting "due process of law" the American Courts went much further than even Lord Coke ever thought of doing. The American Courts gradually arrogated to themselves the power to revise all legislations. In the beginning they confined themselves to insisting on a due procedure to be followed before a person was deprived of his life, liberty or property. In course of time, "due process of law" came to be applied to personal liberty, to social control, to procedure 40 312 to jurisdiction and to substantive law: (Willis, p. 642). In the words of Munro "due process of law" became a sort of palladium covering all manner of individual rights. A_II the while the Supreme Court refused to define the phrase, but used it to enable it to declare unconstitutional any Act of legislation which it thought unreasonable: (Willis, p. 657). In Holden vs Hardy (1) we find the following observa tions: "This Court has never attempted to define with precision the words ' due process of law . . . It is suffi cient to say that there are certain immutable principles of justice which inhere in the very idea of free government which no member of the Union may disregard. "In Taylor vs Peter (2) Bronson J. observed: "The words 'by the law of the land ' as used in the Constitution, do not mean a statute passed for the purpose of working the wrong. That construction would render the restriction absolutely nugatory, and turn this part of the Constitution into mere nonsense. The people would be made to say to the two Houses: ' You shall be vested with the legis lative power of the. State, but no one shall be disenfran chised or deprived of any of the rights or privileges of a citizen, unless you pass a statute for that purpose. In other words you shall not do the wrong unless you choose to do it. '" It was thus that the Supreme Court of the United States firmly established its own supremacy over the other two limbs of the State, namely, the executive and the Congress. In the words of John Dickinson quoted in Munro at p. 61, "The Judges of Aragon began by setting aside laws and ended by making them." And all this sweeping development could only be possible because of the presence of one little word "due" which, in its content, knows no bound and is not subject to any fixed definition. Whenever a substantive law or some procedure laid down in any law did not find favour with the majority of the learned Judges of the Supreme Court it was not reasonableand, therefore, it was not "due." (1) ; at p. 389. (2) 4 Hill 140, 145. 313 The very large and nebulous import of the word "due" was bound to result in anomalies, for what was not "due" on one day according to the Judges then constituting the Supreme Court became "due" say 20 years later according to the new Judges who then came to occupy the Bench, for the Court had to adapt the Constitution to the needs of the society which were continually changing and growing. The larger content of due process of law, which included both procedural and substantive due process of law, had of necessity to be narrowed down, for social interest in personal liberty had to give way to social interest in other matters which came to be considered to be of more vital interest to the commu nity. This was achieved by the Supreme Court of the United States evolving the new doctrine of police powers a pecul iarly American doctrine. The police powers are nowhere exhaustively defined. In Chicago B. & Q. Ry. vs Drainage Commissioner (1) ,, police power" has been stated to "em brace regulations designed to promote the public convenience or the general prosperity, as well as regulations designed to promote the public health, the public morals or the public safety." Reference in this connection may be made to Cooley 's Constitutional Limitations, 8th Edition, Vol. II, p. 1223 and to Chapter XXVI of Willis at p. 727. The nett result is that the all inclusive and indefina ble doctrine of due process of law has in America now been brought back to its original status of a procedural due process of law by the enunciation and application of the new doctrine of police power as an antidote or palliative to the former. Who knows when the pendulum will swing again. Turning now to what has been called the procedural due process of law it will be found that the matter has been described in different languages in different cases. In Westervelt vs Gregg (2) Edwards J. defined it thus: "Due process of law undoubtedly means, in the due course of legal proceedings, according to those rules 204 u.s. 561,592. (2) 314 and forms which have been established for the protection of private rights. " A more specific definition of the expression "the law of the land" meaning procedural due process was given by Web ster appearing as counsel for the plaintiff in error in the Trustees of Dartmouth College vs Woodward (1): "By the law of the land is most clearly intended the general law; a law which hears before it condemns; which proceeds upon inquiry and renders judgment only after trial. The meaning is that every citizen shall hold his life, liberty, property, and. immunities, under the protection of the general rules which govern society. Everything which may pass under the form of an enactment is not therefore to be considered the law of the land." Willis in Ch. XXIII, p. 661, says: "The guarantee of due process of law as a matter of procedure means that no part of a person 's personal liberty, including ownership, shall be taken away from him except by the observance of certain formalities. Hence its object is the protection of the social interest in personal liberty. " At p. 662 Willis enumerates the requirements of the procedural due process of law as follows:(1) notice. (2) opportunity to be heard, (3) an impartial tribunal, and (4) an orderly course of procedure. In short, the procedural due process requires that a person who is to be deprived of his life, liberty or property shall have had "his day in Court. " This according to Willough by p. 736, means: "(1) that he shall have had due notice, which may be actual or constructive, of the institution of the proceed ings by which his legal rights may be affected; (2) that he shall be given a reasonable opportunity to appear and defend his rights, including the right himself to testify, to produce witnesses, and to introduce relevant documents and other evidence, (3) that the tribunal in or before which his rights are adjudicated is so constituted as to give reasona ble assurance of its. (1) ; at p. 579; 4 L. Edn. 629 at p. 645. 315 honesty and impartiality; and (4) that it is a Court of competent jurisdiction. " It will be noticed that the fourth item of Willoughby is different from the fourth item of Willis. Such, in short, are the history of the development of the doctrine of the process of law in the United States and the requirements of the procedural due process as insisted on by the Supreme Court of that country. Learned counsel for the petitioner before us does not contend that we should import this American doctrine of due process of law in its full glory but that we should adopt the procedural part of it and insist that no person shall be deprived of his life or personal liberty except by the observance of the formalities which justice and fair play require to be observed. The arguments of learned counsel for the petitioner are attractive and in the first blush certainly appeal to our sentiment but on serious reflection I find several insuperable objections to the introduction of the American doctrine of procedural due process of law into our Constitution. That doctrine can only thrive and work where the legislature is subordinate to the judiciary in the sense that the latter can sit in judgment over and review all acts of the legislature. Such a doctrine can have no application to a field where the legislature is supreme. That is why the doctrine of "due process of law" is quite different in England where Parliament is supreme. This difference is pointedly described by Mathews J. in Joseph Hurtado vs People of California (1) at p. 531: "The concessions of Magna Charta were wrung from the King as guarantees against oppression and usurpation of his prerogatives. It did not enter into the minds of the barons to provide security against their own body or in favour of the commons by limiting the power of Parliament, so that bills of attainder, ex post facto laws, laws declaring forfeitures of estates and other arbitrary Acts of legisla tion which occur so frequently in English history, were never regarded as inconsistent with the law of the land, for, notwithstanding what was attributed to Lord Coke in. Bonham 's (1) ; 316 case, , 118 (a),] the omnipotence of Parliament over the Common Law was absolute, even against common right and reason. The actual and practical security for English liberty against legislative tyranny was the power of a free public opinion represented by the Commons. In this country written Constitutions were deemed essen tial to protect the rights and liberties of the people against the encroachments of power delegated to their gov ernments and the provisions of Magna Charta were incorporat ed in the bills of rights. They were limitations upon all the powers of government, legislative as well as executive and judicial. " This basic distinction between the two systems should never be lost sight of, if confusion of thought is to be avoided. Although our Constitution has imposed some limita tions on the legislative authorities, yet subject to and outside such limitations our Constitution has left our Parliament and the State Legislatures supreme in their respective legislative fields. In the main, subject to the limitations I have mentioned, our Constitution has preferred the supremacy of the Legislature to that of the Judiciary. The English principle of due process of law is, therefore, more in accord with our Constitution than the American doctrine which has been evolved for serving quite a differ ent system. The picturesque language of Bronson J. quoted above, while that is quite appropriate to the American Constitution which does not recognise the supremacy of the Congress, is wholly out of place in, and has no applica tion to, a Constitution such as ours, which, subject only to certain restrictions, recognises the supremacy of the Legis latures in their respective fields. In the next place, it is common knowledge that our Constitution makers deliberate ly declined to adopt the uncertain and shifting American doctrine of due process of law and substituted the words ' "except in due process of law" that were in the original draft by the more specific expression "except in accordance with procedure established by law. " To try to bring in the American doctrine, in spite of this fact, will be to stulti fy the intention of the Constitution as expressed in 317 article 21. In the third place, in view of the plain meaning of the language of that article as construed and explained above it is impossible to let in what have been called the principles of natural justice as adopted in the procedural due process of law by the American Supreme Court. Again, even the all pervading little word "due" does not find a place in article 21 so as to qualify the procedure. It speaks of procedure and not "due" procedure and, therefore, "the intellectual yardstick" of the Court is definitely ruled out. Finally, it will be incongruous to import the doctrine of due process of law without its palliative, the doctrine of police powers. It is impossible to read the last mentioned doctrine into article 21. It has also been suggested as a compromise that this Court should adopt a middle course between the flexible principles of natural justice as adopted by the American doctrine of due process of law and the unbending rigidity of mere State made laws. h is said that we have our Code of Criminal Procedure which embodies within its provisions certain salutary principles of procedure and we must insist that those underlying principles should be regarded as procedure established or settled by our positive law. But who will say what are those fundamental principles? What principles. do I reject as inessential and what shall I adopt as fundamental ? What is fundamental to me today may not appear to be so to another Judge a decade hence, for principles give way with changing social conditions. In America it was suggested that due process of law should be taken to mean the general body of common law as it stood at the date of the Constitution. In Bardwell vs Collins (1) it was negatived in the following words: " 'Due process of law ' does not mean the general body of the law, common and statute, as it was at the time the Constitution took effect; for that would deny the legisla ture power to change or amend the law in any particular. " The Court, however, brought in principles of (1) 318 natural justice under the due process clause. To sanctify what I may to day regard as the basic principles underlying our Code of Criminal Procedure will be to make them immuta ble and to prevent the legislature even to improve upon them. This is nothing but imposing on the legislature a limitation which the Constitution has not placed on it. I do not think it is a permissible adventure for the Court to undertake. It is a dangerous adventure, for it will bring about stagnation which means ruin. We must accept the Con stitution which is the supreme law. The Constitution has by article 21 required a procedure and has prescribed certain minimum requirements of procedure in article 22. To add to them is not to interpret the Constitution but to recast it according to our intellectual yardstick and our unconscious predilections as to what an ideal Constitution should be. Article 21, in my judgment, only formulates a substan tive fundamental right to life and personal liberty which in its content is not an absolute right but is a limited right having its ambit circumscribed by the risk of its being taken away by following a procedure established by law made by the appropriate legislative authority and the proximate purpose of article 21 is not to prescribe any particular procedure. It is to be kept in mind that at the date when the Constitution came into effect we had the Indian Penal Code creating diverse offences and a conviction for any of them would deprive a person of his personal liberty. Under article 246 read with Entry 1 of the Concurrent List, Par liament or any State Legislature could add more offences and create further means for taking away personal liberty. But all this deprivation of personal liberty as a result of a conviction could only be done by following the procedure laid down by the Code of Criminal Procedure. Again, at the date of this Constitution there were preventive detention laws in almost every province and a person could be deprived of his personal liberty under those laws. Those laws, however, provided a procedure of a sort which had to be followed. Therefore, before the Constitution came into force, personal liberty could be taken away 319 only by following the procedure enacted by the Criminal Procedure Code in the case of punitive detention or by the procedure enacted by the different Security Acts in case of preventive detention. Power, however, has been given to Parliament and the State Legislatures under article 246 read with Entry 2 of the Concurrent List to make laws with re spect to Criminal Procedure. If that article stood by itself the Parliament or the State Legislature could repeal the whole of the Criminal Procedure Code and also do away even with the skeleton procedure provided in the Security Acts. If article 246 stood by itself then the appropriate legislative authority could have taken away the life and personal liberty of any person without any procedure at all. This absolute supremacy of the legislative authority has, however, been cut down by article 21 which delimits the ambit and scope of the substantive right to life and person al liberty by reference to a procedure and by article 22 which prescribes the minimum procedure which must be fol lowed. In this situation the only power of the Court is to determine whether the impugned law has provided some proce dure and observed and obeyed the minimum requirements of article 29. and if it has, then it is not for the Court to insist on more elaborate procedure according to its notion or to question the wisdom of the legislative authority in enacting the particular law, however harsh, unreasonable, archaic or odious the provisions of that law may be. It is said that if this strictly technical interpreta tion is put upon article 21 then it will not constitute a fundamental right at all and need not have been placed in the chapter on Fundamental Rights, for every person 's life and personal liberty will be at the mercy of the Legislature which, by providing some sort of a procedure and complying with the few requirements of article 22, may, at any time, deprive a person of his life and liberty at its pleasure and whim. There are several answers to this line of argument. Article 21 as construed by me will, if nothing else, cer tainly protect every person against the executive and as such will be as much a fundamental right deserving 411 320 a place in the Constitution as the famous 39th Chapter of the Magna Charta was and is a bulwark of liberty in English law. It appears to me that article 21 of our Constitution read with article 32 also gives us some protection even against the legislative authority in that a person may only be deprived of his life and personal liberty in accordance with procedure which, although enacted by it, must at least conform to the requirements of article 22. Subject to this limitation our parliament or any State Legislature may enact any law and provide any procedure it pleases for depriving a person of his life and personal liberty under article 21. Such being the meaning of that article and the ambit and extent of the fundamental right of life and personal liberty which the people of this country have given unto themselves, any law for depriving any person of his life and personal liberty that may be made by the appropriate legislative authority under article 246 and in conformity with the requirements of article 22 does not take away or abridge any right conferred by article 21, for the very right conferred by that article is circumscribed by this possi bility or risk and, therefore, such law cannot be regarded as violating the provisions of article 13 (2). Our Constitution is a compromise between Parliamentary supremacy of England and the supremacy of the Supreme Court of the United States. Subject to the limitations I have mentioned which are certainly justiciable, our Constitution has ac cepted the supremacy of the legislative authority and, that being so, we must be prepared to face occasional vagaries of that body and to put up with enactments of the nature of the atrocious English statute to which learned counsel for the petitioner has repeatedly referred, namely, that the Bishop of Rochester 's cook be boiled to death. If Parliament may take away life by providing for hanging by the neck, logi cally there can be no objection if it provides a sentence of death by shooting by a firing squad or by guillotine or in the electric chair or even by boiling in oil. A procedure laid down by the legislature may offend against the Court 's sense of justice and fair play 821 and a sentence provided by the legislature may outrage the Court 's notions of penology, but that is a wholly irrelevant consideration. The Court may construe and interpret the Constitution and ascertain its true meaning but once that is done the Court cannot question its wisdom or policy. The Constitution is supreme. The Court must take the Constitu tion as it finds it, even if it does not accord with its preconceived notions of what an ideal Constitution should be. Our protection against legislative tyranny, if any, lies in ultimate analysis in a free and intelligent public opinion which must eventually assert itself. The conclusion I have arrived at does not introduce any novelty, for in many other Constitutions the supremacy of the legislature is recognised in the matter of depriving a person of his life, liberty and property. The English Democratic Constitution is one in point. Take the Constitu tion of the Irish Free State. Article 40 (4) (i) provides that no citizen shall be deprived of personal liberty save in accordance with law, and article 50 (5) guarantees that the dwelling of every citizen is inviolable and shall not be forcibly entered save in accordance with law. The words "in accordance with law" in both the above clauses must mean the same thing and I have no doubt in my mind, reading clause (5)that it means in accordance with the State made law, for we have not been referred to any rule prescribed by natural justice regulating searches of, or entry into, dwelling houses. Article 107 (2) of the Czechoslovakian Constitution uses the words "in accordance with law" which, read with clause (1) of that article, obviously means the law to be made which will form part of the Constitution. Take the Constitution of the Free City of Danzig. Article74 of that Constitution which is in Part II headed "Fundamental Bights and Duties" provides as follows: "The liberty of the person shall be inviolable. No limitation or deprivation of personal liberty may be imposed by public authority, except by virtue of a law. " 322 The word" law" clearly cannot, in the context,mcan princi ples of natural justice Again, article 75 of that Consti tution protects the freedom of movement within the Free City and the right to stay and to settle at any place, to acquire real property and to earn a living. It concludes by saying that this right shall not be curtailed without legal sanctions. Legal sanctions, in this context, can only mean sanctions of the City laws. Article 114 of the Weimar Constitution is on the same lines and expressed in almost the same language as article 74 of the Danzig Constitution. Take the Japanese Constitution of 1946 from which our arti cle 21 is reputed to have been taken. Article XXXI of that Constitution says: No person shall be deprived of life or liberty nor shall any other criminal penalty be imposed, except according to procedure established by law. " Surely the words "except according to procedure established by law" in their application to the imposition of criminal penalty must mean State made law and the same words in the same sentence in the same article cannot, according to ordi nary rules of construction of statutes, mean a different thing in their application to deprivation of life or liber ty. I am aware that it is not right to construe one Consti tution in the light of another and that is not my purpose when I refer to the other Constitutions; but I do think that after reading the relevant provisions of other written Con stitutions one sees quite clearly that there is no pressing special reason applicable to or inherent in written Consti tutions which requires the importation of the principles of natural justice or of the American doctrine of due process of law into our Constitution. The several Constitutions referred to above have not adopted that American doctrine but have been content with leaving the life and liberty of their citizens to the care of the laws made by their legis latures. It is no novelty if our Constitution has done the same. For all these reasons, in spite of the very able and attractive arguments of the learned counsel for the peti tioner which I freely acknowledge, I am not convinced that there is any scope for the introduction into article 21 of our 323 Constitution of the doctrine of due process of law even as regards procedure. I may or may not like it, but that is the result of our Constitution as I understand it. The learned Attorney General has referred to certain debates in the Constituent Assembly on the original clause which has now become article 21, not as evidence to be used in interpreting the language of article 21 but as disclos ing the historical background. His purpose, he says, is to show that the framers of our Constitution had the essential difference in the meaning of the phrases "due process of law" and "according to procedure established by law" clearly explained to them, that they knew that the former implied the supremacy of the judiciary and the latter the supremacy of the legislature and with all that knowledge they deliber ately agreed to reject the former expression and adopt the latter. As, in my opinion, it is possible to interpret the language of article 21 on the ordinary rules of interpreta tion of statutes, I do not think it is at all necessary to refer to the debates. As I do not propose to refer to, or rely on, the debates for the purposes of this case, I express no opinion on the question of the admissibility or otherwise of the debates. I now pass on to article 22. The contention of learned counsel for the petitioner is that article 21 by reason of the last few words, "according to procedure established by law" attracts the four requirements of the American proce dural due process of law as summarised by Willis to which reference has been made earlier, and that those require ments, except to the extent they have been expressly abro gated or modified by article 22, must be strictly followed before a person may be deprived of his life or personal liberties. I have already stated for reasons set forth above, that there is no scope for introducing any rule of natural justice or the American procedural due process of law or any underlying principle of our Code of Criminal Procedure into that article. This being the conclusion I have arrived at, the major premise assumed by learned coun sel for the petitioner is missing and this 324 line of argument does not begin and cannot be accepted. The learned Attorney General, on the other hand. has at one stage of his argument, urged that article 21 has nothing to do with preventive detention at all and that preventive detention is wholly covered by article 22 (4) to (7) which by themselves constitute a complete code. I am unable to accede to this extreme point of view also. The true posi tion, as I apprehend it, lies between the two extreme views. Article 21, to my mind, gives protection to life and person al liberty to the extent therein mentioned. It does not recognise the right to life and personal liberty as an absolute right but delimits the ambit and scope of the right itself The absolute right is by the definition in that article cut down by the risk of its being taken away in accordance with procedure established by law. It is this circumscribed right which is substantively protected by article 21 as against the executive as well as the legislature, for the Constitution has conditioned its depri vation by the necessity for a procedure established by law made by itself. While subclauses (2) to (6) of article 19 have put a limit on the fundamental rights of a citizen, articles 21 and 22 have put a limit on the power of the State given under article 246 read with the legislative lists. Under our Constitution our life and personal liberty are balanced by restrictions on the rights of the citizens as laid down in article 19 and by the checks put upon the State by articles 21 and 22. preventive detention deprives a person of his personal liberty as effectively as does punitive detention and, therefore, personal liberty, circum scribed as it is by the risk of its being taken away, re quires protection against punitive as well as preventive detention. The language of article 21 is quite general and is wide enough to give its limited protection to personal liberty against all forms of detention. It protects a person against preventive detention by the executive without the sanction of a law made by the legislature. It prevents the legislature from taking away a person 's personal liberty except in accordance with procedure established by law, although such 325 law is to be by itself. If, as contended by the learned Attorney General and held by me, article 19 only protects the rights of a free citizen as long as he is free and does not deal with total deprivation of personal liberty and if, as contended by the learned Attorney General, article 21 does not protect a person against preventive detention then where is the protection for life and personal liberty as substantive rights which the procedural provisions of arti cle 22 may protect ? What is the use of procedural protec tion if there is no substantive right ? In my judgment article 21 protects the substantive rights by requiring a procedure and article 22 gives the minimum procedural pro tection. Clauses (1) and (2) of article 22 lay down the procedure that has to be followed when a man is arrested. They ensure four things: (a) right to be informed regarding grounds of arrest, (b) right to consult, and to be defended by, a legal practitioner of his choice, (c) right to be produced before a magistrate within 24 hours and (d) freedom from detention beyond the said period except by order of the magis trate. These four procedural requirements are very much similar to the requirements of the procedural due process of law as enumerated by Willis. Some of these salutary protections are also to be found in our Code of Criminal Procedure. If the procedure has already been prescribed by article 21 incorporating the principles of natural justice or the principles underlying our Code of Criminal Procedure what was the necessity of repeating them in clauses (1) and (2) of article 22 ? Why this unnecessary overlapping ? The truth is that article 21 does not prescribe any particular procedure but in defining the protection to life and person al liberty merely envisages or indicates the necessity for a procedure and article 22 lays down the minimum rules of procedure that even Parliament cannot abrogate or overlook. This is so far as punitive detention is concerned. But clause (3) of article 22 expressly provides that none of the procedure laid down in clauses (1) and (2) shall apply to an alien enemy or to a person who is arrested or detained under any law providing for preventive detention. It is thus expressly 326 made clear that a detenu need not be produced before the magistrate and he is not to have the assistance of any lawyer for consultation or for defending him. Such being the express provision of our Constitution nobody can question its wisdom. So I pass on. Clauses (4), (5), (6) and (7) of article 22 in terms relate to preventive detention. Article 246 authorises the appropriate legislature to make a law for preventive deten tion in terms of Entry 9 in List I and/or Entry 3 in List III of the Seventh Schedule. On this legislative power are imposed certain limitations by article 22 (4) to (7). According to this the legislature, whether it be Parliament or a State Legislature, is reminded that no law made by it for preventive detention shall authorise the detention of a person for a longer period than three months except in two cases mentioned in sub clauses (a) and (b). The proviso to sub clause (a) and sub clause (b) refer to a law made only by Parliament under clause (7). Under clause (7) it is Parliament alone and not any State Legislature that may prescribe what are specified in the three subclauses of that clause. Although a State Legislature may make a law for preventive detention in terms of Entry 3 in List III of the Seventh Schedule no such law may authorise detention for more than three months unless the provisions of sub clauses (a)and (b) of clause (4) sanction such detention. Even a law made by Parliament cannot authorise detention for more than three months unless it is a law made under the provi sions of clause (7). In short, clause (4) of article 22 provides a limitation on the legislative power as to the period of preventive detention. Apart from imposing a limitation on the legislative power, clause (4) also pre scribes a procedure of detention for a period longer than three months by providing for an advisory board. Then comes clause (5). It lays down the procedure that has to be fol lowed when a person is detained under any law providing for preventive detention, namely, (a) the grounds of the order of detention must be communicated to the detenu as soon as may be, and (b) the detenu must be afforded the earliest opportunity of making a representation against 327 the order. The first requirement takes the place of notice and the second that of a defence or hearing. These are the only compulsory procedural requirements laid down by our Constitution. There is nothing to prevent the Legislature from providing an elaborate procedure regulating preventive detention but it is not obliged to do so. If some procedure is provided as envisaged by article 21 and the compulsory requirements of article 22 are obeyed and carried out nobody can, under our Constitution, as I read it, complain of the law providing for preventive detention. Learned counsel for the petitioner concedes that the four requirements of procedural due process summarised by Willis will have to be modified in their application to preventive detention. Thus he does not insist on a prior notice before arrest, for he recognises that such a require ment may frustrate the very object of preventive detention by giving an opportunity to the person in question to go underground. The provision in clause (5) for supplying grounds is a good substitute for notice. He also does not insist that the Tribunal to judge the reasonableness of the detention should be a judicial tribunal. He will be satis fied if the tribunal or advisory board, as it is called in article 22 of the Constitution, is an impartial body and goes into the merits of the order of detention and its decision is binding on the executive government. He insists that the detenu must have a reasonable and effective oppor tunity to put up his defence. He does not insist on the assistance of counsel, for that is expressly taken away by the Constitution itself. But he insists on what he calls an effective opportunity of being heard in person before an impartial tribunal which will be free to examine the grounds of his detention and whose decision should be binding alike on the detenu and the executive authority which detains. The claim may be reasonable but the question before the Court is not reasonableness or otherwise of the provisions of article 22 (4) to (7). Those provisions are not justicia ble, for they are the provisions of the Constitution itself which is supreme over everybody. 42 328 The Court can only seek to find out, on a proper construc tion, what protection has in fact been provided. The Consti tution has provided for the giving of the grounds of deten tion although facts as distinguished from grounds may be withheld under clause (6) and the right of representation against the order of detention. It has provided for the duration of the detention. There the guaranteed fundamental procedural rights end. There is no provision for any trial before any tribunal. One cannot import the condition of a trial by any tribunal from the fact that a right of repre sentation has been given. The right to make representation is nothing more than the right to "lodge objections" as provided by the Danzig Constitution and the Weimar Constitu tion. The representations made will no doubt be considered by the Government. It is said a prosecutor cannot be himself the judge. Ordinarily, the orders of detention will in a great majority of cases be made by the District Magistrate or Sub Divisional Officer or the Commissioner of Police. The representation of the detenu goes to the Government. Why should it be assumed that a high government official at the seat of the government will not impartially consider the representation and judge the propriety of the order of detention made by local officials ? Clause (5) does not imperatively provide for any oral representation which a hearing will entail. Indeed the exclusion of the provisions of clauses (1) and (2) negatives any idea of trial or oral defence. The Court may not, by temperament and training, like this at all but it cannot question the wisdom or the policy of the Constitution. In my judgment as regards pre ventive detention laws, the only limitation put upon the legislative power is that it must provide some procedure and at least incorporate the minimum requirements laid down in article 22 (4) to (7). There is no limitation as regards the substantive law. Therefore, a preventive detention law which provides some procedure and complies with the require ments of article 22 (4) to (7) must be held to be a good law, however odious it may appear to the Court to be. 329 Learned counsel for the petitioner contends that the impugned Act does not comply with even the bare requirements of article 22 (4) to (7). It is pointed out that section 3 of the Act does not lay down any objective test but leaves it to the authority to define and say whether a particular person comes within the legislative heads. In other words, it is contended that Parliament has not legislated at all but has delegated its legislative powers to the executive authorities. I do not think there is any substance in this contention. In the first place this is not an objection as to procedure but to substantive law which is not open to the Court 's scrutiny. In the next place this contention over looks the basic distinction between the delegation of power to make the law and the conferring of an authority and discretion as to its execution to be exercised under and in pursuance of the law. The impugned Act has specifically set forth an ascertainable standard by which the conduct of a particular person is to be judged by the detaining authori ty. It is next urged that section 12 of the Act does not comply with the requirements of clause (7) of article 22 for two reasons, namely (i) that clause (7) contemplates a law prescribing the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months and then another law thereafter providing for preventive detention for a period longer than three months; and (ii) that under clause (7) Parliament must prescribe both the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months. As regards the first point I do not see why Parliament must make two laws, one laying down the principles for longer detention and another for detention for such longer period. It may be that a State cannot provide for longer detention until Parliament 330 has made the law, but I can see no reason why Parliament cannot do both by the same Act. In fact, clause (4) (b) contemplates the detention itself to be in accordance with the provisions of any law made by Parliament under sub clauses (a) and (b) of clause (7). Therefore, the detention can well be under the very law which the Parliament makes under sub clauses (a) and (b) of clause (7). As to the second point the argument is that Parliament has a discre tion under clause (7) to make a law and it is not obliged to make any law but when our Parliament chooses to make a law it must prescribe both the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months. I am unable to construe clause (7) (a) in the way suggested by learned counsel for the petitioner. It is an enabling provision empowering Parliament to prescribe two things. Parliament may prescribe either or both. H a father tells his delicate child that he may play table tennis and badminton but not the strenuous game of football, it obviously does not mean that tim child, if he chooses to play at all, must play both table tennis and badminton. It is an option given to the child. Likewise, the Constitution gives to Parliament the power of prescribing two things. Parliament is not obliged to prescribe at all but if it chooses to prescribe it may prescribe either or both. Clause 7 (a), in my opinion, has to be read distributively as follows: The Parliament may prescribe the circumstance under which a person may be detained for a period longer than three months and Parlia ment may prescribe the class or classes of cases in which a person may be detained for a period longer than three months. That appears to me to be consonant with sound rules of construction. Further, the circumstances and the class or classes of cases may conceivably coalesce. Indeed the Full Bench case No. 1 of 1950 before the Calcutta High Court (Kshitindra Narayan vs The Chief Secretary) itself indicates that the same provision may be read as circumstances or as a classification. In that case learned counsel conceded that section 12 had prescribed the circumstances but his com plaint was that it had not 331 prescribed the class or classes of cases. The majority of the Court repelled this contention. One learned Judge howev er, held that section 12 had prescribed the class or classes of cases but had not prescribed the circumstances. It is, therefore, clear that the classification itself may indicate the circumstances. Again, the classification may be on a variety of bases. It may be according to provinces the detenus come from. It may be according to the age of the detenus. It may be according to the object they are supposed to have in view or according to the activities they are suspected to be engaged in. In this case Parliament has taken five out of the six legislative heads and divided them into two categories. The detenus are thus classified ac cording to their suspected object or activities endangering the several matters specified in the section. I do not see why classification cannot be made on the footing of the objectives of the detenus falling in some of the legislative heads, for each legislative head has a specific connotation well understood in law. If I am correct that there has been a classification then the fact that a person falls within one or the other class may well be the circumstances under which he may be detained for a period longer than three months. I do not consider it right, as a matter of con struction, to read any further limitation in clause 7 (a) of article 22. In my judgment Par]lament was not obliged under clause (7) to prescribe both circumstances and classes, and in any case has in fact and substance prescribed both. I am conscious that a law made by Parliament under article 22 (7)will do away with the salutary safeguard of the opinion of an advisory board. But it must be remembered that our Constitution itself contemplates that in certain circumstances or for certain class or classes of detenus even the advisory board may not be safe and it has trusted Parliament to make a law for that purpose. Our preference for an advisory board should not blind us to this aspect of the matter. It is true that circumstances ordinarily relate to extraneous things, like riots, commotion, 332 political or communal or some sort of abnormal situation and it is said that the framers of the Constitution had in mind some such situation when the advisory board might be done away with. It is also urged that they had in mind that the more dangerous types of detenus should be denied the privi lege of the advisory board. I am free to confess that prescription of specific circumstances or a more rigid and definite specification of classes would have been better and more desirable. But that is crying for the ideal. The Constitution has not in terms put any such limitation as regards the circumstances or the class or classes of cases and it is idle to speculate as to the intention of the Constitution makers, who, by the way, are the very persons who made this law. It is not for the Court to improve upon or add to the Constitution. If the law duly made by Parlia ment is repugnant to good sense, public opinion will compel Parliament to alter it suitably. Finally, an objection is taken that section 14 of the impugned Act takes away or abridges the right of the detenu to move this Court by appropriate proceedings. Both clauses (1) and (2) of article 32 speak of enforcement of rights conferred by Part III. The right to move this Court is given to a person not for the sake of moving only but for moving the Court for the enforcement of some rights conferred by Part III and this Court has been given power to issue direc tions or orders or writs for the enforcement of any of such rights. In order, therefore, to attract the application of article 32, the person applying must first satisfy that he has got a right under Part III which has to be enforced under article 32. I have already said that article 19 does not deal with the freedom of the person. I have also said that articles 21 and 22 provide for protection by insisting on some procedure. Under article 22 (5) the authority making the order of detention is enjoined, as soon as may be, to communicate to the detenu the grounds on which that order has been made. This provision has some purpose, name ly, that the disclosure of the grounds will afford the detenu the 333 opportunity of making a representation against the order. Supposing the authority does not give any grounds at all as distinct from facts referred to in Clause (6). Surely, the detenu loses a fundamental right because he is prevented from making a representation against the order. of deten tion. Suppose the authority hands over to the detenu a piece of paper with some scribblings on it which do not amount to any ground at all for detention. Then also the detenu can legitimately complain that his right has been infringed. He can then come to the Court to get redress under article 32, but he cannot show to the Court the piece of paper with the scribblings on it under section 14 of the Act and the Court cannot judge whether he has actually got the grounds which he is entitled to under article 22 (5). such a case the detenu may well complain that both his substantive right under article 22 (5) ' as well as his right to constitutional remedies under article 32 have been in fringed. He can complain of infringement of his remedial rights under article 32, because he cannot show that there has been an infringement of his substantive right under article 22 (5). It appears to me, therefore, that section 14 of the Act in so far as it prevents the detenu from disclosing to the Court the grounds communicated to him is not in conformity with Part III of the Constitution and is, therefore, void under article 13 (2). That section, howev er, is clearly severable and cannot affect the whole Act. On this question the views of Meredith C.J. and Das J. of Patna in Criminal Miscellaneous No. 124 of 1950 (Lalit Kumar Barman vs The State) and the majority of the learned Judges of the Calcutta High Court in Full Bench Case No. 1 of 1950 (Kshitindra Narayan vs The Chief Secretary) appear to be correct and sound. For the reasons I have given above, in my opinion, the impugned Act is a valid law except as to section 14 in so far as it prevents the grounds being disclosed to the Court. The petitioner before us does not complain that he has not got proper grounds. Further, the period of his detention under the impugned Act 334 has not gone beyond three months and, in the circumstances, this application should, in my opinion, stand dismissed. Petition dismissed. Agent for the petitioner: section Subrahmanyam. Agent for the State of Madras and Union of India: P.A. Mehta.

The petitioner who was detained under the Preventive Detention Act (Act IV of 1950) applied under article 32 of the Constitution for a writ of habeas corpus and for his release from detention, on the ground that the said Act contravened the provisions of articles 13, 19, 21 and 22 of the Constitu tion and was consequently ultra rites and that his detention was therefore illegal: Held, per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and DAS JJ. (FAZL ALI and MAHAJAN JJ. dissentinq) that the preventive Detention Act, 1950, with the exception of Sec. 14 thereof did not contravene any of the Articles of the Constitution and even though Sec. 14 was ultra rites inas much as it contravened the provisions of article 9.9, (5) of the Constitution, as this section was severable from the remaining sections of the Act, the invalidity of Sec. 14 did not affect the validity of the Act as a whole, and the detention of the petitioner was not illegal. FAZL ALl and MAHAJAN JJ. Section 12, of the Act was also ultra vires, and since it contravened the very provi sion in the 89 Constitution under which the Parliament derived its compe tence to enact the law, the detention was illegal. Held, by the Full Court (KANIA CJ., FAZL ALI, PATANJALI SASTRI, MAHAJAN, MUKHERJEA and DAS JJ.) Section 14 of the , contravenes the provisions of article 9.9. (5) of the Constitution in so far as it prohibits a person detained from disclosing to the Court the grounds on which a detention order has been made or the representation made by him against the order of detention, and is to that extent ultra vires and void. Per KANIA C.J., PATANJALI SASTRI, MAHAJAN, MUKHERJEA and DAS JJ. (FAZL ALI J. dissenting). Article 19 of the Consti tution has no application to a law which relates directly to preventive detention even though as a result of an order of detention the rights referred to in sub cls. (a) to (e) and (g) in general, and sub cl. (d) in particular, of cl. (1) of article 19 may be restricted or abridged; and the constitution al validity of a law relating to such detention cannot therefore, be judged in the light of the test prescribed in el. (5) of the said Article. DAS J. Article 19 (1) postulates a legal capacity to exercise the rights guaranteed by it and if a citizen loses the freedom of his person by reason of lawful detention as a result of a conviction for an offence or otherwise he cannot claim the right s under sub cls. (a) to (e) and (g) of article 19 (1); likewise if a citizen 's property is compulsorily ac quired under article 31, he cannot claim the right under sub el. (f) of article 19 (1) with respect to that property. In short the rights under sub cls. (a) to (e) and (g) end where lawful detention begins and therefore the validity of a preventive detention Act cannot be judged by Arc. 19 (5). MAHAJAN J. Whatever be the precise scope of article 19 (1) (d) and Art.19(5) the provisions of article 19(5) do not apply to a law relating to preventive detention, inasmuch as 'there is a special self contained provision in article 22 regulating it. FAZL ALI.J. Preventive detention is a direct infringe ment of the right guaranteed in article 19 (1) (d), even if a narrow construction is placed on the said sub clause, and a law relating to preventive detention is therefore subject to such limited judicial review as is permitted by article 19 (5). Per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and DAS JJ. (FAZL ALl J. dissenting). The concept of the right "to move freely throughout the territory of India" referred to in article 19 (1) (d), of the Constitution is entirely differ ent from the concept of the right to "personal liberty" referred to in article 21, and article 19 should not, therefore, be read as controlled by the provisions of article 21. The view that article 19 guarantees substantive rights and article 21 prescribes the procedure is incorrect. DAs J. Article 19 protects some of the important attributes of personal liber ty as independent rights and the expression "personal liber ty" is used in article 21 as a compendious term 90 including within Rs meaning all varieties of rights which go to make up the personal liberties of men. FAZL ALl J. Even if it be assumed that article 19 (1) (d) does not refer to " personal liberty" and that it bears the restricted meaning attributed to it,that is to say, R signi fies merely the right to move from one locality to another, preventive detention must be held to affect this limited right of movement directly and substantially. One of the objects of preventive detention is to restrain a person detained from moving from place to place so that he may not spread disaffection or indulge in dangerous activities in the places he visits. The same consideration applies to the cases of persons who are interned or externed. Hence, externment, interment and certain other forms of restriction on movement have always been treated as kindred matters belonging to the same group or family, and the rule which applies to one must necessarily apply to the others. Per KANIA C. J ,, PATANJALI SASTRI and DAS 35. (MAHAJAN 3. dissenting). Article 22 does not form a complete code of constitutional safeguards relating to preventive detention. To the extent that provision is made in article 9.9, it cannot be controlled by article 9,1; but on points of procedure which expressly or by necessary implication are not dealt with by article 22, article 9.1 will apply. DAS J. article 21 protects substantive rights by requiring a procedure and article 9.9. lays down the minimum rules of procedure that even the Parliament cannot abrogate or overlook. MAHAJAN J. article 99. contains a self contained code of constitutional safeguards relating to preventive detention and cannot be examined or controlled by the provisions of article 21. The principles underlying article 21 are however kept in view in article 22 and there is no conflict between these articles. MUKHERJEA J. Even assuming that article 22 is not a self contained code relating to preventive detention and that article 21 would apply, it is .not permissible to supplement article 22 by the application of rules of natural justice. FAZL ALI J. article 22. does not form an exhaustive code by itself relating to preventive detention. Parliament can make further provi sions and if it has done so article 19 (5) may be applied to see if those provisions have transgressed the bounds of reasonableness. Per KANIA C.J., MUKHERJEA and DAS JJ. (FAZL ALI J. dis senting). In article 9.1 the word 'law" has been used in the sense of State made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice; and "procedure established by law" means procedure established by law made by the State, that is to say, the Union Parliament or the Legislatures of the States. It is not proper to construe this expression in the light of the meaning given to.the expression "due process of law" in the American Constitution by the Supreme Court of America. FATANJALI SASTRI cl. "Law" in article 21 does not mean the jus naturale of civil law but means 91 positive or State made law. "Procedure established by law" does not however mean any procedure which may be prescribed by a competent legislature, but the ordinary well estab lished criminal procedure, i.e., those settled. usages and normal modes of procedure sanctioned by the Criminal Proce dure Code, which is the general law of criminal proce dure in this country. The only alternative to this con struction, if a constitutional transgression is to be avoid ed is to interpret the reference to "law" as implying a constitutional 'amendment pro tanto, for it is only a law enacted by the procedure provided for such amendment that could modify or override a fundamental right without contra vening article 13 (2). FAZL, ALI J. There is nothing revolutionary in the view that "procedure established by law "must include the four principles of elementary justice which inhere in and are at the root of all civilized systems of law, and which have been stated by the American Courts and jurists as consisting in (1) notice, (2) opportunity to be heard, (3) impartial tribunal and (4) orderly course of procedure. These four principles are really different aspects of the same right, namely, the right to be heard before one is condemned. Hence the words "procedure established by law ", whatever its exact meaning be, must necessarily include the principle that no person shall be condemned without hearing by an impartial tribunal. Per KANIA C.J., FAZL ALI, PATANJALI SASTRI, MAHAJAN and DAS JJ. Section 3 of the , does not delegate any legislative power to an executive officer but merely confers on such officer a discretion to enforce the law made by the legislature, and is not there fore invalid on this ground. The fact that the section does not provide an objective standard for determining whether the requirements of law have been complied with, is not a ground for holding that it is invalid. FAZL ALI J. Section 3 is however a reasonable provision only for the first step, i.e., for arrest and initial detention and must be followed by some procedure for testing the so called subjective satisfaction, which can be done only by providing a suitable machinery for examining the grounds on which the order of detention is made and considering the representations of the persons detained in relation to those grounds. Per KANIA C. J., MAHAJAN and DAS JJ. Section 7 of the said Act is not invalid merely because it does not provide for an oral hearing or an opportunity to lead evidence but only gives right to make a representation. Right to an oral hearing and right to give evidence are not necessarily implied in the right to make a representation given by article 22. Per KANIA C.J., and MAHAJAN J. The provision contained in Sec. 11 that a person may be detained for such period as the 12 A 92 State thinks fit does not contravene article 22 (7) and it is not therefore invalid. Per KANIA. C.J., PATANJALI SASTRI, MUKHERJEA and DAS JJ. (FAZL ALI and MAHAJAN JJ. dissenting). Article 22 (7) means that Parliament may prescribe either the circumstances under which, or the class or classes of cases in which, a person may be detained for a period longer than three months without reference to an advisory board. It is not necessary that the Parliament should prescribe both. The matters referred to in clauses (a) and (b) of sub see. (1) of Sec. 12 constitute a sufficient description of such circumstances or classes of cases and Section 12 is not therefore open to the objection that it does not comply with article 22 (7) DAS J. Parliament has in act and substance prescribed both in clauses (a) and (b) of sub sec. (1) of Sec. 12. FAZL ALI and MAJAN JJ. Article 22 (7) Means that both the circumstances and the class or classes of cases (which are two different expressions with different meanings and connotations) should be prescribed, and the prescription of one without the other will not be enough. The enumeration of the subjects for reasons connected with which a law of preventive detention could be made contained in els. (a) and (b) of sub see. (1) of Sec.12 does not amount to prescribing the circumstances under which, or the class or classes of cases in which, a person can be detained for more than three months. Per KANIA C.J. While it is not proper to take into consideration the individual opinions of members of Parlia ment or Convention to construe the meaning of a particular clause, when a question is raised whether a certain phrase or expression was up for consideration at all or not, a reference to the debates may be permitted. PATANJAYLI SASTRI J. In construing the provisions of an Act, speeches made in the course of the debates on the bill should not be taken into consideration. MUKHERJEA J. In construing the Constitution it is better to leave out of account the debates in the Constituent Assembly, but a higher value may be placed on the report of the Drafting Committee.

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TITION Nos. 356 361 OF 1977. (Under Article 32 of the Constitution) N. A. Palkhiwala, J. B. Dadachanji, Ravinder Narain, O. C. Mathur, H. P. Raina, section Swarup, K. 1. John, Talat Ansari, Mrs. A. K. Verma, section Thakora, Shri Narain, Robinson, F. section Nariman, A. N. Haksar, J. section Singh and Manzal Kumar for the Petitioners L. N. Sinha, Att. Genl., K. K. Venugopal, Addl. Genl., R. N. Sachthey, Grish Chandra, section Markendaya, Miss A. Subhashini and P. P. Singh for RR. 1 & 4. T.V.S. Narasimhachari, M. section Ganesh and Kailash Vasudeva for RR 2 & 3. L. N. Sinha, Att. Genl., Miss A. Subhashini for Attorney General of India. M. N. Shroff for the Advocates General for State of Maharashtra M. M. Ahdul Khader and K. R. Nambiar for the Advocate General for Kerala State. N. Nettar for the Advocates General for state of Karnataka State. Pranat Kumar Chatterjee, G. section Chatterjee and P. K. Chatterjee for State of West Bengal. B. M. Patnaik Advt. and R. K. Mehta for State of Orissa. section L. Garg, Adv. Genl and section K. Gambhir for State of Madhya Pradesh. R. K. Rastogi, Adv. Genl, Badridas Sharma and Aruneshwar Gupta for State of Rajasthan. M. V. Goswami and O. P. Rana for State of U.P. P. H. Parekh for the interveners, M/s, Domestic Cast Pvt. Ltd. and ors. Gocul Gas Pvt. Ltd. and ors. and Parel Investment Pvt. Ltd. and Ors. M. N. Phadke and N. M. Ghatate for the Applicant interveners M/s. Waman Rao and Ors. R. K. Garg and V. 1. Francis for The Applicant Intervener Shyam Narain Tewari. Chinta Subba Rao Applicant intervener in person. M. C. Bhandare and M. N. Shroff applicant intervener for State of Maharashtra. 235 Capt. Virendra Kumar applicant intervener in person. A N. section Grewal, B. P. Maheshwari and Suresh Sethi for G. section Grewal applicant intervener. H. K. Puri. for the intervener M/s Shree Sitaram Sugar Co. Ltd. The following Judgments were delivered: B CHANDRACHUD, C. J. In Keshavananda Bharati this Court held by a majority that though by Article 368 Parliament is given the power to amend the Constitution. that power cannot be exercised so as to damage the basic features of the Constitution or so as to destroy its basic structure. The question for consideration in this group of petitions under article 32 is whether sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 transgress that limitation, on the amending power. Petitioner No. 1 which is a limited company owned a textile undertaking called Minerva Mills situated in the State of Karnataka. This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974. Petitioners 2 to 6 are shareholders of Petitioner No. 1, some of whom are also unsecured creditors and some secured creditors. Respondent 1 is the Union of India. Respondent 2 is the National Textile Corporation Limited in which the textile undertaking of Minerva Mills comes to be vested under section 3(2) of the Nationalisation Act of 1974. Respondent 3 is a subsidiary of the 2nd respondent. On August 20, 1970, the Central Government appointed a Committee under section 15 of the Industries (Development and Regulation Act, 1951 to make a full and complete investigation of the affairs of the Minerva Mills Ltd., as it was of the opinion that there had been or was likely to be substantial fall in the volume of production. The said Committee submitted its report to the Central Government in January 1971, on the basis of which the Central Government passed an order dated October 19, 1971 under section 18A of the Act of 1951, authorising Respondent 2 to take over the management of the Minerva Mills Ltd. On the ground that its affairs were being managed in a manner highly detrimental to public interest. 236 By these petitions, the petitioners challenge the constitutional validity of certain provisions of the Sick Textile Undertakings (NationaLisation) Act and of the order dated October 19, 1971. We are not concerned with the merits of that challenge at this stage the petitioners further challenge the constitutionality of the Constitution (39th Amendment) Act which inserted the impugned Nationalisation Act as Entry 105 is the 9th Schedule to the Constitution. That raises a question regarding the validity of article 31B of the Constitution with which we propose to deal in another batch of petitions. Finally, the petitioners challenge the constitutionality Of sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976, and it is this contention alone with which we propose to deal in these petitions. The challenge to the validity of section 4 and SS of the 42nd Amendment rests on the ratio of the majority judgment in Kesavanand Bharati (Supra). The several opinions rendered in that case have been discussed and analysed threadbare in texts and judgments too numerous to mention. All the same, we cannot avoid making a brief resume of the majority judgments since the petitioners must stand or fall by them. Those judgments, on the point now in issue, were delivered by Sikri, CJ., Shelat and Grover JJ., Hegde and Mukherjea JJ., Jaganmohan Reddy J. and Khanna J. Sikri, CJ., held that the fundamental importance of the freedom of the individual has to be preserved for all times to come and that it could not be amended out of existence According to the learned Chief Justice, fundamental rights conferred by Part III of the Constitution cannot be abrogated, though a reasonable abridgement of those rights could be effected in public interest. There is a limitation on the power of amendment by necessary implication which was apparent from a reading of the preamble and therefore, according to the learned Chief Justice, the expression "amendment of this Constitution" in Article 368 means any addition or change in any of the provisions of the Constitution within the broad contours of the preamble, made in order to carry out the basic objectives of the Constitution. Accordingly, every provision of the Constitution was open to amendment provided the basic foundation or structure of the Constitution was not damaged or destroyed. Shelat and Grover, JJ. held that the preamble to the Constitution contains the clue to the fundamentals of the Constitution. According to the learned Judges, Parts III and IV of the Constitution which respectively embody the fundamental rights and the directive principles 237 have to be balanced and harmonised. This balance and harmony A between two integral parts of the Constitution forms a basic element of the Constitution which cannot be altered. The word 'amendment ' occurring in Article 368 must therefore be construed in such a manner as to reserve the power of the Parliament to amend the constitution, but not so as to result in damaging or destroying the structure and identity of the Constitution. There was thus an implied limitation in the amending power which precluded Parliament from abrogating or changing the identity of the Constitution or any of its basic features. Hegde and Mukherjea, JJ. held that the Constitution of India which is essentially a social rather than a political document, is founded on a social philosophy and as such has two main features: basic and circumstantial. The! basic constituent remained constant, the circumstantial was subject to change. According to the learned Judges, the broad contours of the basic elements and the fundamental features of the Constitution are delineated in the preamble and the Parliament has no power to abrogate or emasculate those basic elements or fundamental features. The building of a welfare State, the learned Judges said, is the ultimate goal of every Government but that does not mean that in order to build a welfare state, human freedoms have to suffer a total destruction. Applying these tests, the learned Judges invalidated Article 31C even in its unamended form. Jaganmohan Reddy, J., held that the word 'amendment ' was used in the sense of permitting a change, in contra distinction, to destruction, which the repeal or abrogation brings about. Therefore, the width of the power of amendment could not be enlarged by amending the amending power itself. The learned Judge held that the essential elements of the basic structure of the Constitution are reflected in its preamble and that some of the important features of the Constitution are justice, freedom of expression and equality of status and opportunity. The word 'amendment ' could not possibly embrace the right to abrogate the pivotal features and the fundamental freedoms and therefore, that part of the basic structure could not be damaged or destroyed. According to the learned Judge, the provisions of Article 31C. as they stood then, conferring power on Parliament and the State Legislatures to enact laws for giving effect to the principles specified in clauses (b) and (c) of Article 39, altogether abrogated the right given by Article 14 and were for that reason unconstitutional. In conclusion, the learned Judge held that though the power of amendment was wide. it did not comprehend the power to totally abrogate or emasculate or damage any of the fundamental rights or the essential elements on the basic structure of the Constitution or to 238 destroy the identity of the Constitution. Subject to these limitations, Parliament had the right to amend any and every provision of the Constitution. Khanna, J. broadly agreed with the aforesaid views of the six learned Judges and held that the word 'amendment ' postulated that the Constitution must survive without loss of its identity, which meant that the basic structure or framework of the Constitution must survive any amendment of the Constitution. According to the learned Judge. although it was permissible to the Parliament. in exercise of its amending power, to effect changes so as to meet the requirements of changing conditions it was not permissible to touch the foundation or to alter the basic institutional pattern. Therefore, the words "amendment of the Constitution", in spite of the width of their sweep and in spite of their amplitude, could not have the effect of empowering the Parliament to destroy or abrogate the basic structure or framework of the Constitution. The summary of the various judgments in Kesavananda Bharati (Supra) was signed by nine out of the thirteen Judges. Paragraph 2 of the summary reads to say that according to the majority, "Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution". Whether or not the summary is a legitimate part of the judgment, or is per incuriam for the scholarly reasons cited by authors, it is undeniable that it correctly reflects the majority view. The question which we have to determine on the basis of the majority view in Keshavaananda Bharati (Supra) is whether the amendments introduced by sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 damage the basic structure of the Constitution by destroying any of its basic features or essential elements. Section 4 of the 42nd Amendment, which was brought into force with effect from January 3, 1977 amended Article 31C of the Constitution by substituting the words and figures "all or any of the principles laid down in Part IV" for the Words and figures "the principles specified in clause (b) or clause (c) of Article 39". Article 31C. as amended by the 42nd Amendment Act reads thus: "31C. Notwithstanding anything contained in article 13. no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with, or takes 239 away or abridges any of the rights conferred by article 14, A article 19 or article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy: Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. " Section 55 of the Constitution (Forty second Amendment) Act, 1976, which was also brought into force with effect from January 3, 1977 inserted sub sections (4) and (5) in Article 368 which read thus: "(4) No amendment of this Constitution (including the provisions of Part III) made or purporting to have been made under this article (whether before or after the commencement of section 55 of the Constitution (Forty second Amendment) Act, 1976) shall be called in question in any court on any ground. (5) For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this article". We will first take up for consideration the comparatively easier question as regards the validity of the amendments made by section 55 of the 42nd Amendment. It introduces two new clauses in Article 368, namely, clauses 4 and section Clause S speaks for itself and is self explanatory. Its avowed purpose is the "removal of doubts" but after the decision of this Court in Kesavananda Bharati (Supra), there could be no doubt as regards the existence of limitations on the Parliament 's power to amend the Constitution. In the context of the constitutional history of Article 368, the true object of the declaration contained in Article 368 is the removal of those limitations. Clause S confers upon the Parliament a vast and undefined power to amend the Constitution, even, so as to distort it out of recognition. The theme song of the majority decision in Keshvanand Bharati (Supra) is: 'Amend as you may even the solemn document which the founding fathers have committed to your care, for you know best the needs of your generation. But, the Constitution is a precious heritage; therefore, you cannot destroy its identity '. The majority conceded to the Parliament the right to make alterations in the Constitution so long as they are within its basic framework. And 240 what fears can that judgment raise or misgivings generate if it only means this and no more: The Preamble assures to the people of India a polity whose basic structure is described therein as a Sovereign Democratic Republic; Parliament may make any amendments to the Constitution as it deems expedient so long as they do not damage or destroy India 's sovereignty and its democratic, republican character. Democracy is not an empty dream. It is a meaningful concept whose essential attributes are recited in the preamble itself: Justice, social, economic and political; Liberty of thought, expression, belief, faith and worship, and Equality of status and opportunity. Its aim, again as set out in the preamble, is to promote among the people an abiding sense of 'Fraternity assuring the dignity of the individual and the unity of the Nation '. The newly introduced clause S of Article 368 demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever". No constituent power can conceivably go higher than the sky high power conferred by clause (S), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy and substitute for it a totally antithetical form of Government. That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals. The power to destroy is not a power to amend. Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge that very power into an absolute power. Indeed, a limited amending power is one of the basic features of our Constitution and therefore, the limitations on that power cannot be destroyed. In other words, Parliament cannot, under Article 368, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features. The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one. The very 42nd Amendment which introduced clauses 4 and 5 in Article 368 made amendments to the preamble to which no exception can be taken. Those amendments are not only within the framework of the Constitution but they give vitality to its philosophy they afford strength and succor to its foundation. By the aforesaid amendments, what was originally described as a 'Sovereign Democratic Republic ' became a "Sovereign Socialist Secular 241 Democratic Republic" and the resolution to promote the `unity of the Nation ' was elevated into a promise to promote the "unity and integrity of the Nation". These amendments furnish the most eloquent example of how the amending power can be exercised consistently with the creed of the Constitution. They offer promise of more, they do not scuttle a precious heritage. In Smt. Indira Nehru Gandhi vs Raj Narain, Khanna, J. struck down clause 4 of Article 329A of the Constitution which abolished the forum for adjucating upon a dispute relating to the validity of an election, on the ground that the particular Article which was introduced by a constitutional amendment violated the principle of free and fair elections which is an essential postulate of democracy and which, in its turn, is a part of the basic structure of the Constitution. Mathew, J. also struck down the Article on the ground that it damaged the essential feature of democracy. One of us. Chandrachud. J. reached the same conclusion by holding that the provisions of the Article were an outright negation of the right of equality conferred by Article 14, a right which, more than any other, is a basic postulate of the Constitution. Thus whereas amendments made to the preamble by the 42nd Amendment itself afford an illustration of the scope of the amending power, the case last referred to affords an illustration of the limitations on the amending power. Since, for the reasons above mentioned, clause 5 of Article 368 , transgresses the limitations on the amending power, it must be held to be unconstitutional. The newly introduced clause 4 of Article 368 must suffer the same fate as clause 5 because the two clauses are inter linked. Clause 5 purports to remove all limitations on the amending power while clause 4 deprives the courts of their power to call in question any amendment of the Constitution. Our Constitution is founded on a nice balance of power among the three wings of the State, namely the Executive, the Legislature and the Judiciary. It is the function of the Judges, nay their duty, to pronounce upon the validity of laws. If courts are totally deprived of that power, the fundamental rights conferred upon the people will become a mere adornment because rights without remedies are as writ in water. A controlled Constitution will then become uncontrolled. Clause (4) of Article 368 totally deprives the citizens of one of the most valuable modes of redress which is guaranteed by Article 32. The conferment of the right to destroy the identity of the Constitution coupled with the provision that no court of law 242 shall pronounce upon the validity of such destruction seems to us a transparent case of transgression of the limitations on the amending power. If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down. Article 13 of the Constitution will then become a dead letter because even ordinary laws will escape the scrutiny of the courts on the ground that they are passed on the strength of a constitutional amendment which is not open to challenge. Clause 4 of Article 368 is in one sense an appendage of Clause 5, though we do not like to describe it as a logical consequence of Clause 5. If it be true, as stated in clause 5, that the Parliament has unlimited power to amend the Constitution, courts can have no jurisdiction to strike down any constitutional amendment as unconstitutional. Clause 4, therefore, says nothing more or less than what clause 5 postulates. If clause 5 is beyond the amending power of the Parliament, clause 4 must be equally beyond that power and must be struck down as such. The next question which we have to consider is whether the amendment made by section 4 of the 42nd Amendment to Article 31C of the Constitution is valid. Mr. Palkhiwala did not challenge the validity of the unamended Article 31C, and indeed that would not be done. The unamended Article 31C forms the subject matter of separate proceeding and we have indicated therein that it is constitutionally valid to the extent to which it was upheld in Keshvananda Bharati (Supra). By the amendment introduced by section 4 of the 42nd Amendment, provision is made in Article 31C saying that no law giving effect to the policy of the State towards securing "all or any of the principles laid down in Part IV" shall be deemed to be void on the ground that it is inconsistent with or takes away or a bridges any of the rights conferred by Article 14, Article 19 or Article 31. It is manifest that the scope of laws which fall within Article 31C has been expanded vastly by the amendment. Whereas under the original Article 31C, the challenge was excluded only in respect of laws giving effect to the policy of the State towards securing "the principles specified in clause (b) or clause (c) of Article 39" under the amendment. 243 all laws giving effect to the policy of the State towards securing "all or any of the principles laid down in Part IV" are saved from a constitutional challenge under Articles 14 and 19. (The reference to Article 31 was deleted by the 44th Amendment as a consequence of the abolition of the right to property as a fundamental right). The question for consideration in the light of this position is whether section 4 of the 42nd Amendment has brought about a result which is basically and fundamentally different from the one arising under the unamended article. If the amendment does not bring about any such result, its validity shall have to be upheld for the same reasons for which the validity of the unamended article was upheld. The argument of Mr. Palkhivala, who appears on behalf of the petitioners, runs thus : The amendment introduced by section 4 of the 42nd Amendment destroys the harmony between Parts III and IV of the Constitution by making the fundamental rights conferred by Part III subservient to the directive principles of State Policy set out in Part IV of the Constitution. The Constitution makers did not contemplate a disharmony or imbalance between the fundamental rights and the directive principles and indeed they were both meant to supplement each other. The basic structure of the Constitution tests on the foundation that while the directive principles are the mandatory ends of government, those ends can be achieved only through permissible means which are set out in Part III of the constitution. In other words, the mandatory ends set out in Part IV can be achieved not through totalitarian methods but only through those which are consistent with the fundamental rights conferred by Part III. If Article 31C as amended by the 42nd Amendment is allowed to stand, it will confer an unrestricted licence on the legislature and the executive, both at the Centre and in the States. to destroy democracy and establish an authoritarian regime. All legislative action and every governmental action purports to be related, directly or indirectly, to some directive principle of State policy. The protection of the amended article will therefore be available to every legislative action under the sun. Article 31C abrogates the right to equality guaranteed by Article 14, which is the very foundation of a republican form of government and is by itself a basic feature of the Constitution. The learned counsel further argues that it is impossible to envisage that a destruction of the fundamental freedoms guaranteed by Part III is necessary for achieving the object of some of the directive principles like equal justice and free legal aid, organising village panchayat, providing living wages for workers and just and humane conditions of work. free and compulsory education for 244 children, organisation of agriculture and animal husbandry, an protection of environment and wild life. What the Constituent Assembly had rejected by creating a harmonious balance between Parts III and IV is brought back by the 42nd Amendment. Finally, it is urged that the Constitution had made provision for the suspension of the right to enforce fundamental rights when an emergency is proclaimed by the President. Under the basic scheme of the Constitution, fundamental rights were to lose their supremacy only during the period that the proclamation of emergency is in operation. Section 4 of the 42nd Amendment has robbed the fundamental rights of their supremacy and made them subordinate to the directive principles of State policy as if there were a permanent emergency in operation. While Article 359 suspends the enforcement of fundamental rights during the Emergency, Article 31C virtually abrogates them in normal times. Thus, apart from destroying one, of the basic features of the Constitution, namely, the harmony between Parts III and IV, section 4 of the 42nd Amendment denies to the people the blessings of a free democracy and lays the foundation for the creation of an authoritarian State. These contentions were stoutly resisted by the learned Attorney General thus: Securing the implementation of directive principles by the elimination of obstructive legal procedures cannot ever be said to destroy or damage the basic features of the Constitution. Further, laws made for securing the objectives of Part IV would necessarily be in public interest and will fall within Article 19(5) of the Constitution, in so far as clauses (d) and (e) of Article 19(1) are concerned. They would therefore be several in any case. The history of the Constitution. particularly the incorporation of Articles 31(4) and 31(6) and the various amendments made by Articles 31A, 31B and the unamended Article 31C, which were all upheld by this Court, establish the width OB the amending power under Article 368. The impugned amendment therefore manifestly falls within the sweep of the amending Power. The learned Attorney general further argues: A law which fulfils the directive of Article 38 is incapable of abrogating fundamental freedoms or of damaging the basic structure of the Constitution in as much as that structure itself is founded on the principle of justice, social, economic and political. Article 38, which contains a directive principle, provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice. social. economic and political shall inform all the institutions of the national life. A law which complies 245 with Article 38 cannot conceivably abrogate the fundamental freedoms except certain economic rights and that too, for the purpose of minimising inequalities. A law which will abrogate fundamental freedoms will either bring about social injustice or economic injustice or political injustice. It will thereby contravene Article 38 rather than falling within it and will for that reason be outside the protection of Article 31C. In any event, each and every violation of Article 14 or Article. 19 does not damage the basic structure of the Constitution. The learned Additional Solicitor General has submitted a carefully prepared chart of 11 decisions of this Court ranging from Anvar Ali Sarkar to Haji Kader Kutty in order to show the possible impact of amended Article 31C on cases where this Court had held provisions of certain statutes to be violative of Article 14. He urged on the basis of his tabulated analysis that there can be many cases which are not relatable to directive principles and will not therefore be saved by the amended article. Those cases are reported in Anwar Ali Sarkar (Supra), Lachmandas Ahuja, Habib Muhammad, Moopil Nair, Jialal, Hazi Abdul Shakur, Devi Das, Osmania University, New Manek Chowk, Anandji Haridas and Haji Kader Kutty (Supra). He has also submitted a chart of 13 cases involving laws relatable to directive principle in which the fundamental rights were abridged but not abrogated. Since abridgement of fundamental rights in public interest is permissible as it does not damage the basic structure, laws similar to those involved in the 13 cases will not have to seek the protection of the amended article. These illustrative cases are: Ram Prasad Sahi, Rao Manohar Singhji, Kunhikaman. 246 Orissa Cement, Krishnaswami Naidu, Mukanchand, Nallaraja Reddy, Jallan Trading Co., Kamrup, Mizo District Council, Balammal, Rashbehari Pande and R. C. Cooper. The argument of the learned Additional Solicitor General proceeds thus: For extracting the ratio of Keshvananda Bharati (Supra). One must proceed on the basis that there were as many cases as there were declarations sought for by the petitioners therein. The majority in regard to Article 368 is different from the majority in regard to the decision in respect of Article 31C. The binding ratio in regard to Article 368 as well as the ratio resulting in upholding the validity of the first part of the Article 31C will both sustain the validity of section 4 of the 42nd Amendment. In regard to fundamental rights, the ratio of the judgments of 12 out of 13 Judges, i.e., all excepting Jagamohan Reddy J., will empower amendment of each one of the articles in part III, so long as there is no total abrogation of the fundamental rights which constitute essential features of the basic structure of the Constitution. Abrogation of fundamental rights which do not constitute essential features of the basic structure or abridgement of fundamental rights which constitute such essential features is within the permissible limits of amendment. The unamended Article 31C having been upheld by the majority in Kesavanada Bharti both on the ground of stare decisis and on the ground of 'contemporaneous practical exposition ' the amended Article 31C must be held to be valid, especially since it is not brought about a qualitative change in comparison with the provisions of the unamended article. A harmonious and orderly development of constitutional law would require that the phrases 'inconsistent with ' or 'take away ' which occur in Articles 31A, 31B and 31C should be read down to mean 'restrict ' or 'abridge ' and not 'abrogate '. If two constructions of those expressions were reasonably possible, the Court should accept that construction which would render the constitutional amendment valid. 247 The learned counsel further argues: The directive principles, including the one contained in Article 38, do not cover the exercise of each and every legislative power relatable to the Seventh Schedule of the Constitution. Besides, the directive principles being themselves fundamental in the governance of the country, no amendment of the Constitution to achieve the ends specified in the directive principles can ever alter the basic structure of the Constitution. If the unamended Article 31C is valid in reference to laws relatable to Articles 39(b) and (c), no dichotomy can be made between laws relatable to those provisions on the one hand and laws relatable to other directive principles. A value judgment is not permissible to the Court in this area. It is finally urged by the learned Additional Solicitor General that judicial review is not totally excluded by the amended Article 31C because it will still be open to the Court to consider: (i) whether the impugned law has 'direct and reasonable nexus ' with any of the directive principles. (ii) whether the provisions encroaching on fundamental rights are integrally connected with and essential for effectuating the directive principles or are at least ancillary thereto; (iii) whether the fundamental right encroached upon is an essential feature of the basic structure of the Constitution; and (iv) if so, whether the encroachment, in effect, abrogates that fundamental right. Besides these contentions Mr. R. K. Garg has filed a written brief on behalf of the Indian Federation of Working Journalists, opposing the contentions of Mr. Palkhivala. So have the learned Advocates General of the State of Karnataka and Uttar Pradesh. Mr. Aruneshwar Gupta has filed a brief on behalf of the State of Rajasthan supporting the submissions of Mr. Palkhivala. So has the State of Rajasthan. The Advocates General of Maharashtra, Kerala, West Bengal and Orissa appeared through their respective advocates. Both the Attorney General and the Additional Solicitor General have raised a preliminary objection to the consideration of the question raised by the petitioners as regards the validity of Sections 4 and 55 of the 42nd Amendment. It is contended by them that the issue formulated for consideration of the court; "whether the provisions of the Forty Second Amendment of the Constitution which deprived the Fundamental Rights of their Supremacy and, inter alia, made them subordinate to the directive principles of State Policy are 248 ultra vires the amending power of Parliament?" is too wide and academic. It is urged that since it is the settled practice of the court not to decide academic questions and since property rights claimed by the petitioners under articles 19(1)(f) and 31 do not survive after the 44th Amendment, the court should not entertain any argument on the points raised by the petitioners. In support of this submission reliance is placed by the learned counsel on the decisions of the American Supreme Court in Commonwealth of Massachussetts vs Andrew W. Mellon. George Ashwander vs Tennesee Valley Authority, and on Weaver 's Constitutional Law, 1946 Edition and American Jurisprudence. Reliance is also placed on certain decisions of this court to which it is unnecessary to refer because the Attorney General and the Additional Solicitor General are right that it is the settled practice of this Court not to decide academic questions. The American authorities on which the learned counsel rely take the view that the constitutionality of a statute will not be considered and determined by the courts as a hypothetical question, because constitutional questions are not to be dealt with abstractly or in the manner of an academic discussion. In other words, the courts do not anticipate constitutional issues so as to assume in advance that a certain law may be passed in pursuance of a certain constitutional amendment which may offend against the provisions of the Constitution. Similarly, our Court has consistently taken the view that we will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied. It is only when the rights of persons are directly involved that relief is granted by this Court. But, we find it difficult to uphold the preliminary objection because, the question raised by the petitioners as regards the constitutionality of sections 4 and 55 of the 42nd Amendment is not an academic or a hypothetical question. The 42nd Amendment is there for any one to see and by its sections 4 and 55 amendments have been made to Articles 31C and 368 of the Constitution. An order has been passed against the petitioners under section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved. Besides there are two other relevant considerations which must be taken into account while dealing with the preliminary objection. There is no constitutional or statutory inhibition against the decision 249 of questions before they actually arise for consideration. In view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position. Secondly, what we are dealing with is not an ordinary law which may or may not be passed so that it could be said that our jurisdiction is being invoked on the hypothetical consideration that a law may be passed in future which will injure the rights of the petitioners. We are dealing with a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes. We, therefore, overrule the preliminary objection and proceed to determine the point raised by the petitioners. The main controversy in these petitions centres round the question whether the directive principles of State policy contained in Art IV can have primacy over the fundamental rights conferred by Part III of the Constitution. That is the heart of the matter. Every other consideration and all other contentions are in the nature of by products of that central theme of the case. The competing claims of parts III and IV constitute the pivotal point of the case because, Article 31C as amended by section 4 of the 42nd Amendment provides in terms that a law giving effect to any directive principle cannot be challenged as void on the ground that it violates the rights conferred by Article 14 or Article 19. The 42nd Amendment by its section 4 thus subordinates the fundamental rights conferred by Articles 14 and 19 to the directive principles. The question of questions is whether in view of the majority decision in Kesavananda Bharati it is permissible to the Parliament to so amend the Constitution as to give a position of precedence to directive principles over the fundamental rights. The answer to this question must necessarily depend upon whether Articles 14 and 19 which must now give way to laws passed in order to effectuate the policy of the State towards securing all or any of the principles of directive Policy are essential features of the basic structure of the Constitution. It is only if the rights conferred by these two articles are not a part of the basic structure. Of the Constitution that they can be allowed to be abrogated by a constitutional amendment. If they are a part of the basic structure they cannot be obliterated out of existence in relation to a category of laws described in Article 31C or, for the matter of that, in relation to laws of any description whatsoever, passed in order to achieve any object or policy whatsoever. This will serve to bring out the point that a total emasculation of the essential features of the Constitution is, by the ratio in Kesavananda Bharati, not permissible to the Parliament. 250 There is no doubt that though the courts have always attached very great importance to the preservation of human liberties, no less importance has been attached to some of the Directive Principles of State Policy enunciated in Part IV. In the words of Granville Austin,. (The Indian Constitution: Corner Stone of a Nation, p. 50) the Indian Constitution is first and foremost a social document and the majority of its provisions are aimed at furthering the goals of social revolution by establishing the conditions necessary for its achievement. Therefore the importance of Directive Principles in the scheme of our Constitution cannot ever be over emphasized. Those principles project the high ideal which the Constitution aims to achieve. In fact Directive Principles of State policy are fundamental in the governance of the country and the Attorney General is right that there is no sphere of public life where delay can defeat justice with more telling effect than the one in which the common man seeks the realisation of his aspirations. The promise of a better to morrow must be fulfilled to day; day after to morrow it runs the risk of being conveniently forgotten. Indeed so many tomorrows have come and gone without a leaf turning that today there is a lurking danger that people will work out their destiny through the compelled cult of their own "dirty hands". Words bandied about in marbled halls say much but fail to achieve as much. But there is another competing constitutional interest which occupies an equally important place in that scheme. That interest is reflected in the provisions of Part III which confer fundamental rights some on citizens as Articles 15, 16 and 19 do and some on. all persons alike as Articles 14, 20, 21 and 22 do. As Granville Austin says: "The core of the commitment to the social revolution lies in Parts III and IV. These are the conscience of the Constitution. It is needless to cite decisions which have extolled and upheld the personal freedoms their majesty, and in certain circumstances, their inviolability. It may however be profitable to see how the American Supreme Court, dealing with a broadly comparable Constitution, has approached the claim for those freedoms. In Barbara Elfbrandt vs Imogene Russell the U. section Supreme Court was considering the constitutionality of an Arizona Statute requiring State employees to take a loyalty oath. Justice Douglas speaking for the majority, observed while striking down the provision that: "Legitimate Legislative goals 'cannot be pursued by means that broadly stifle fundamental personal liberties when the end can 251 be more narrowly achieved '. "The objectionable quality of. . overbreadth" depends upon the existence of a statute "susceptible of sweeping and improper application. These freedoms are delicate and vulnerable as well as supremely precious in our society. The threat of sanctions may deter their exercise almost as potently as the actual application of sanctions". In United States vs Herbet Guest, though the right to travel freely throughout the territory of the United States of America does not find an explicit mention in the American Constitution, it was held that the right to travel from one State to another occupied a position fundamental to the concept of the Federal Union and the reason why the right was not expressly mentioned in the American Constitution though it was mentioned in the Articles of Confideration, was that "a right so elementary was conceived from the beginning to be a necessary concomitant of the stronger Union the Constitution created". This position was reiterated in Winfield Dunn vs James F. Blumstein. It was held therein that freedom to travel throughout the United States was a basic right under the Constitution and that the right was an unconditional personal right whose exercise may not be conditioned. Therefore, any classification which serves to penalize the exercise of that right, unless shown to be necessary to promote a compelling governmental interest, was unconstitutional. In New York Times Company vs United States the United States Government sought an injunction against the publication, by the New York Times, of the classified study entitled "History of U. section Decision Making Process on Viet Nam Policy". It was held by a majority of six Judges that any system of prior restraints of expression comes to the United States Supreme Court bearing a heavy presumption against its constitutional validity, and a party. who seeks to have such a restraint upheld thus carries a heavy burden of showing justification for the imposition of such a restraint. In National Association for the Advancement of Coloured People vs State of Alabama, a unanimous court while dealing with an attempt to oust the National Association of Coloured People from the State of Alabama held: "In the domain of these indispensable liberties, whether of speech, press, or association, the decisions of this Court recognise that abridgement of such rights, even though unintended, may 252 inevitably follow from varied forms of governmental action". In Frank Palko vs State of Connecticut. Justice Cardozo delivering the opinion of the Court in regard to the right to freedom of thought and speech observed "Of that freedom one may say that it is the matrix, the indispensable condition, of nearly every other form of freedom". In Jesse Cantwell vs State of Connecticut, Justice Roberts who delivered the opinion of the Court observed: "In the realm of religious faith, and in that of political belief, sharp differences arise. In both fields the tenets of one man may seem the rankest error to his neighbour. To persuade others to his own point of view, the pleader, as we know, at times, resorts to exaggeration, to vilification of men who have been or are, prominent in church or state, and even to false statement. But the people of this nation have ordained in the light of history, that, in spite of the probability of excesses and abuses, these liberties are, in the long view, essential to enlightened opinion and right conduct on the part of the citizens of a democracy. The essential characteristic of these liberties is, that under their shield many types of life, character, opinion and belief can develop unmolested and unobstructed, Nowhere is this shield more necessary than in our own country for a people composed of many races and of many creeds. There are limits to the exercise of these liberties. The danger in these times from the coercive activities of those who in the delusion of racial or religious conceit would incite violence and breaches of the peace in order to deprive others of their equal right to the exercise of their liberties, is emphasized by events familiar to all. These and other transgressions of those limits the states appropriately may punish". In Arthur Terminiello vs City of Chicago, Justice Douglas delivering the majority opinion of the Court, while dealing with the importance of the right to free speech, observed: "The vitality of civil and political institutions in our society depends on free discussion. As Chief Justice Hughes wrote in De Jonge vs Oregon, it is only through free debate and free 253 exchange of ideas that government remains responsive to the will of the people and peaceful change is effected, The right to speak freely and to promote diversity of ideas and programmes is therefore one of the chief distinctions that sets us apart from totalitarian regimes. Accordingly a function of free speech under our system of government is to invite dispute. It may indeed best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with conditions as they are, or even stirs people to anger. Speech is often provocative and challenging. It may strike at prejudices and preconceptions and have profound unsettling effects as it presses for acceptance of an idea. That is why freedom of speech, though not absolute (Chaplinsky vs New Hampshire), is nevertheless protected against censorship or punishment unless shown likely to, produce a clear and present danger of a serious substantive evil that rises far above public inconvenience, annoyance, or unrest. See Bridges vs California; Craig vs Horney. There is no room under our Constitution for a more restrictive view. For the alternative would lead to standardization of ideas either by legislatures, courts, or dominant political or community groups. " The history of India 's struggle for independence and the debates of the Constituent Assembly show how deeply our people value their personal liberties and how those liberties are regarded as an indispensable and integral part of our Constitution. It is significant that though Parts III and IV appear in the Constitution as two distinct fasciculus of articles, the leaders of our independence movement drew no distinction between the two kinds of State 's obligations negative and positive. "Both types of rights had developed as a common demand, products of the national and social revolutions, of their almost inseparable intertwining, and of the character of Indian politics itself(4)". The demand for inalienable rights traces its origin in India to the 19th Century and flowered into the formation of the Indian National Congress in 1885. Indians demanded equality with their British rulers on the theory that the rights of the subjects cannot in a democracy be inferior to those of the rulers. Out of that demand grew the plants of equality and free speech. Those and other basic rights found their expression in Article 16 of The Constitution of 254 India Bill, 1895. A series of Congress resolutions reiterated that demand between 1917 and 1919. The emergence of Mahatma Gandhi; on the political scene gave to the freedom movement a new dimension: it ceased to be merely anti British it became a movement for the acquisition of rights of liberty for the Indian Community. Mrs. Besan 't Commonwealth of India Bill, 1925 and the Madras Congress resolution of 1928 provided a striking continuity for that movement. The Motilal Nehru Committee appointed by the. Madras Congress resolution said at pp. 89 90: "It is obvious that our first care should be to have our Fundamental Rights guaranteed in a manner which will not permit their withdrawal under any circumstances. Another reason why great importance attaches to a Declaration of Rights is the unfortunate existence of communal differences in the country. Certain safeguards are necessary to create and establish a sense of security among those who look upon each other with distrust and suspicion. We could not better secure the full enjoyment of religious and communal rights to all communities than by including them among the basic principles of the Constitution. " India represents a mosaic of humanity consisting of diverse religious linguistic and caste groups. The rationale behind the insistence on fundamental rights has not yet lost its relevance, alas or not, The Congress session of Karachi adopted in 1931 the Resolution on Fundamental Rights as well as on Economic and Social change. The Sapru Report of 1945 said that the fundamental rights should serve as a "standing warning" to all concerned that: "what the Constitution demands and expects is perfect. equality between one section of the Community and another in the matter of political and civic rights equality of liberty and security in the enjoyment of the freedom of religion, worship and the pursuit of the ordinary applications of life". (p. 260). The Indian nation marched to freedom in this background. The Constituent Assembly resolved to enshrine the fundamental rights in the written text of the Constitution. The interlinked goals of personal liberty and economic freedom then came to be incorporated in two separate parts, nevertheless parts of an integral, indivisible scheme which was carefully and thoughtfully nursed over half a century. The seeds sown in the 19th Century saw their fruition in 1950 under the leadership of Jawaharlal Nehru and Dr. Ambedkar. To destroy the guarantees given by Part III in order purportedly to achieve the goals of Part IV is plainly to subvert the Constitution by destroying its basic structure. 255 Fundamental rights occupy a unique place in the lives of civilized societies and have been variously described in our Judgments as "transcendental", "inalienable" and "primordial". For us, it has been said in Kesavananda Bharti (p. 991), they constitute the ark of the constitution. The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution. Granville Austin 's observation brings out the true position that Parts III and IV are like two wheels of a chariot, one no less important than the other. You snap one and the other will lose its efficacy. They are like a twin formula for achieving the social revolution, which is the ideal which the visionary founders of the Constitution set before themselves. In other words, the Indian Constitution is founded on the bed rock of the balance between Parts III and IV. To give absolute primacy to one over the other is to disturb the harmony of the Constitution. This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution. This is not mere semantics. The edifice of our Constitution is built upon the concepts crystallised in the Preamble. We resolved to constitute ourselves into a Socialist State which carried with it the obligation to secure to our people justice social, economic and political. We, therefore, put part IV into our Constitution containing directive principles of State policy which specify the socialistic goal to be achieved. We promised to our people a democratic polity which carries with it the obligation of securing to the people liberty of thought, expression, belief, faith and worship; equality of status and of opportunity and the assurance that the dignity of the individual will at all costs be preserved. We, therefore, put Part, III in our Constitution conferring those rights on the people. Those rights are not an end in themselves but are the means to an end. The end is specified in Part IV. Therefore, the rights conferred by Art III are subject to reasonable restrictions and the Constitution provides that enforcement of some of them may, in stated uncommon circumstances, be suspended. But just as the rights conferred by Part III would be without a radar and a compass if they were not geared to an ideal, in the same manner the attainment of the ideals set out in Part IV would become a pretence for tyranny if the price to be paid for achieving that ideal is human freedoms. One of the faiths of our founding fathers was the purity of means. Indeed, under our law, even a dacoit who has committed a murder cannot be put to death 256 in the exercise of right of self defence after he has made good his escape. So great is the insistence of civilised laws on the purity of means. The goals set out in Part IV have, therefore, to be achieved without the abrogation of the means provided for by Part III. It is in this sense that Parts III and IV together constitute the core of our Constitution and combine to form its conscience. Anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our Constitution. It is in this light that the validity of the. amended Article 31C has to be examined. Article 13(2) says that the State shall not make any law which takes away or abridges the rights conferred by Part Ill and any law made in contravention of that clause shall to the extent of the contravention be void. Article 31C begins with a non obstante clause by putting Article 13 out of harm 's way. It provides for a certain consequence notwithstanding anything contained in Article 13. It then denudes Articles 14 and 19 of their functional utility by providing that the rights conferred by these Articles will be no barrier against passing laws for giving effect to the principles laid down in Part IV. On any reasonable interpretation, there can be no doubt that by the amendment introduced by section 4 of the 42nd Amendment, Articles 14 and 19 stand abrogated at least in regard to the category of laws described in Article 31C. The startling consequence which the amendment has produced is that even if a law is in total defiance of the mandate of Article 13 read with Articles 14 and 19, its validity will not be open to question so long as its object is to secure a directive principle of state Policy. We are disposed to accept, the submission of the learned Solicitor General, considering the two charts of cases submitted by him, that it is possible to conceive of laws which will not attract Article 31C since they may not bear direct and reasonable nexus with the provisions of Part IV. But, that, in our opinion, is beside the point. A large majority of laws, the bulk of them, can at any rate be easily justified as having been passed for the purpose of giving effect to the policy of the State towards securing some principle or the other laid down in Part IV. In respect of all such laws, which will cover an extensive gamut of the relevant legislative activity, the protection of Articles 15 and 19 will stand wholly withdrawn. It is then no answer to say, while determining whether the basic structure of the Constitution is altered, that at least. some laws will fall outside the scope of Article 31C. We have to decide the matter before us not by metaphysical subtlety, nor as a matter of semantics, but by a broad and liberal approach. We must not miss the wood for the trees. A total 257 deprivation of fundamental rights, even in a limited area, can amount to abrogation of a fundamental right just as partial deprivation in every area can. An author, who writes exclusively on foreign matters, shall have been totally deprived of the right of free speech and expression if he is prohibited from writing on foreign matters. The fact therefore that some laws may fall. Outside the scope of Article 31C is no answer to the contention that the withdrawal of protection of Articles 14 and 19 from a large number of laws destroys the basic structure of the Constitution. It was repeatedly impressed upon us, especially by the Attorney General, that Article 38 of the Constitution is the king pin of the directive principles and no law passed in order to give effect to the principle contained therein can ever damage or destroy the basic structure of the Constitution. That Article provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. We are unable to agree that all the directive Principles of State Policy contained in part IV eventually verge upon Article 38. Article 38 undoubtedly contains a broad guideline, but the other directive principles are not mere illustrations of the principle contained in Article 38. Secondly, if it be true that no law passed for the purpose of giving effect to the directive principle contained in Article 38 can damage or destroy the basic structure of the Constitution, what was the necessity, and more so the justification. for providing by a constitutional amendment that no law which is passed for giving effect to the policy of the State towards securing any principle laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14 and 19 ? The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6). Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31 was amended to say that the provisions of Article 19, inter alia, cannot be invoked for voiding the laws of the description mentioned in Article 31C. Articles 14 and 19 do not confer any fanciful rights. They confer rights which are elementary for the proper and effective functioning of a democracy. They are universally so regarded, as is evident from the universal Declaration of Human Rights. Many countries in the civilised world have parted with their sovereignty in the hope and belief 258 that their citizens will enjoy human freedoms. And they preferred to be bound by the decisions and decrees of foreign tribunals on matters concerning human freedoms. If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass, Article 32 will be drained of its life blood. Article 32(4) provides that the right. guaranteed by Article 32 shall not be suspended except as otherwise provided for by the Constitution. Section 4 of the 42nd Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32. The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification. By a long series of decisions this Court had held that Article 14 forbids class legislation but it does not forbid classification. The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation. Then again, regional chauvinism will have a field day if Article 19(1)(d) is not available to the citizens. Already, there are disturbing trends on a part of the Indian horizon. Those trends will receive strength and encouragement if laws can be passed with immunity, preventing the citizens from exercising their right to move freely throughout the territory of India. The nature and quality of the amendment introduced by section 4 of the 42nd Amendment is therefore such that it virtually tears away the heart of basic fundamental freedoms. Article 31C speaks of laws giving effect to the policy of the "State". Article 12 which governs the interpretation of Article 3 LC provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude. Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19. The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties. The learned Attorney General argues that the State is under an obligation to take steps for promoting the welfare of the people by bringing about a social order in which social, economic and political justice shall inform all the institutions of the national life. He says that the deprivation of some of the fundamental rights for the purpose 259 of achieving this goal cannot possibly amount to a destruction of the basic structure of the Constitution. We are unable to accept this contention. The principles enunciated in Part IV are not the proclaimed monopoly of democracies alone. They are common to all polities, democratic or authoritarian. Every State is goal oriented and claims to strive for securing the welfare of its people. The distinction between the different forms of Government consists in that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like those conferred by Articles 14 and 19. Those are the most elementary freedoms without which a free democracy is impossible and which must therefore be preserved at all Costs. Besides, as observed by Brandies, J., the need to protect liberty is the greatest when Government 's purposes are beneficent. If the discipline of Article 14 is withdrawn and if immunity from the operation of that article is conferred, not only on laws passed by the Parliament but on laws passed by the State Legislatures also, the political pressures exercised by numerically large groups can tear the country asunder by leaving it to the legislature to pick and choose favoured areas and favourite classes for preferential treatment. The learned Attorney General and the learned Solicitor General strongly impressed upon us that Article 31C should be read down so as to save it from the challenge of unconstitutionality. It was urged that it would be legitimate to read into that Article the intendment that only such laws would be immunised from the challenge under Articles 14 and 19 as do not damage or destroy the basic structure of the Constitution. The principle of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is well known. But we find it impossible to accept the contention of the learned counsel in this behalf because, to do so will involve a gross distortion of the principle of reading down, depriving that doctrine of its only or true rationale when words of width are used inadvertently. The device of reading down is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed. One must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment. Mr. Palkhivala read out to us an extract from the speech of the then Law Minister who, while speaking on the amendment to Article 31 C, said that the amendment was being introduced because the government did not want the "let and hindrance" of the fundamental rights. If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of 260 that power so as to make it limited. The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature. We suppose that in the history of the constitutional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends. In fact, to accept the argument that we should read down Article 31C, so as to make it conform to the ratio of the majority decision in Kesavanda Bharti, is to destroy the avowed purposes of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31A, 31B and 31C are grouped. Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it seems to us impossible to hold that we should still save Article 31C from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose. A part of the same argument was pressed upon us by the learned Additional Solicitor General who contended that it would still be open to the Courts under Article 31C to decide four questions: (1) Does the law secure any of the directive principles of the Stats policy? (ii) Is it necessary to encroach upon fundamental rights in order to secure the object of the directive principles? (iii) what is the extent of such encroachment, if any? and (iv) Does that encroachment violate the basic structure of the Constitution? This argument is open to the same criticism to which the argument of the learned Attorney General is open and which we have just disposed of. Reading the existence of an extensive judicial review into Article 31C is really to permit the distortion of the very purpose of that article. It provides expressly that no law of a particular description shall be deemed to be void on the ground that it violate Article 14 or Article 19. It would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which, according to the learned Additional Solicitor General, the courts are free to undertake. We must also mention, what is perhaps not fully realised, that Article 31C speaks of laws giving effect to the "Policy of the State", "towards securing all or any of the principles laid down in Part IV." ' In the very nature of things it is difficult for a court to determine whether a particular law gives effect to a particular policy. Whether a law is adequate enough to give effect to the policy of the State towards securing a directives principle is always a debatable question 261 and the courts cannot set aside the law as invalid merely because, in their opinion, the law is not adequate enough to give effect to a certain policy. In fact, though the clear intendment of Article 31C is to shut out all judicial review, the argument of the learned Additional Solicitor General calls for a doubly or trebly extensive judicial review than is even normally permissible to the courts. Be it be remembered that the power to enquire into the question whether there is a direct and B. reasonable nexus between the provisions of a law and a directive principle cannot confer upon the courts the power to sit in judgment over the policy itself of the State. At the highest, courts can, under Article 31C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a directive principle. If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow. Indeed, if there is one topic on which all the 13 Judges in Kesavananda Bharati were agreed, it is this: that the only question open to judicial review under the unamended Article 31 was whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39(b) and (c). Reasonableness is evidently regarding the nexus and not regarding the law. It is therefore impossible to accept the contention that it is open to the courts to undertake the kind of enquiry suggested by the Additional Solicitor General. The attempt therefore to drape Article 31C into a democratic outfit under which an extensive judicial review would be permissible must fail. We should have mentioned that a similar argument was advanced in regard to the amendment effected by section 55 of the 42nd Amendment to Article 368, by the addition of clauses (4) and (5) therein. It was urged that we should so construe the word "amendment" in clause (4) and the word "amend" in clause 5 as to comprehend only such amendments as do not destroy the basic structure of thy Constitution. That argument provides a striking illustration of the limitations of the doctrine of reading down. The avowed purpose. Of clauses (4) and (5) of Article 368 is to confer power upon the Parliament to amend the Constitution without any "limitation whatever". Provisions of this nature cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content. The learned Attorney General then contends that Article 31C should be upheld for the same reasons for which Article 31A(1) was upheld. Article 31A (1) was considered as a contemporaneous practical exposition of the Constitution since it was inserted by the very First Amendment which was passed in 1951 by the same body of persons who were members of the Constituent Assembly. We can understand: 262 that Article 31A can be looked upon as a contemporaneous Practical exposition of the intendment of the Constitution, but the same cannot be said of Article 31C. Besides, there is a significant qualitative difference between the two Articles. Article 31A, the validity of which has been recognised over the years excludes the challenge under Articles 14 and 19 in regard to a specified category of laws. If by a constitutional amendment, the application of Articles 14 and 19 is withdrawn from a defined field of legislative activity, which is reasonably in public interest, the basic framework of the constitution may remain unimpaired. But if the protection of those articles is withdrawn in respect of an uncatalogued variety of laws, fundamental freedoms will become a 'parchment in a glass case ' to be viewed as a matter of historical curiosity. An attempt was made to equate the provisions of Article 31 with those of Article 31A in order to lend plausibility to the contention that since Article 31A was also upheld on the ground of stare decisis Article 31 can be upheld on the same ground. We see no merit in this contention. In the first place, as we have indicated above. the five matters which are specified in Article 31A are of such quality, nature, content and character that at least a debate can reasonably arise whether abrogation of fundamental rights in respect of those matters will damage or destroy the basic structure of the Constitution. Article 31C does not deal with specific subjects. The directive principles are couched in broad and general terms for the simple reason that they specify the goals to be achieved. Secondly, the principle of stare decisis cannot be treated as a fruitful source of perpetuating curtailment of human freedoms. No court has upheld the validity of Article 31A on the ground that it does not violate the basic structure of the Constitution. There is no decision on the validity of Article 31A which can be looked upon as a measuring rod of the extent of the amending power. To hark back to Article 31A every time that a new constitutional amendment is challenged is the surest means of ensuring a drastic erosion of the fundamental rights conferred by Part III. Such a process will insidiously undermine the efficacy of the ratio of the majority judgment in Kesavananda Bharati regarding the inviolability of the basic structure. That ratio requires that the validity of each new constitutional amendment must be judged on its own merits. Nor indeed are we impressed by a limb of the same argument that when Article 31A was upheld on the ground of stare decisis, what was upheld was a constitutional device by which a class of subject oriented laws was considered to be valid. The simple ground on which Article 31A was upheld, apart from the ground of contemporaneous practical exposition, was that its validity was accepted and recognised over the years and, therefore, it was not permissible 263 to challenge its constitutionality. The principle of stare decisis does not imply the approval of the device or mechanism which is employed for the purpose of framing a legal or constitutional provision. It was finally urged by the learned Attorney General that if we uphold the challenge to the validity of Article 31C, the validity or clauses (2) to (6) of Article 19 will be gravely imperilled because those clauses will also then be liable to be struck down as abrogating the rights conferred by Article 19(1) which are an essential feature or the Constitution. We are unable to accept this contention. Under clauses (2) to (6) of Article 19, restrictions can be imposed only if they are reasonable and then again, they can be imposed in the interest of a stated class of subjects only. It is for the courts to decide whether restrictions are reasonable and whether they are in the interest of the particular subject. Apart from other basic dissimilarities, Article 31C takes away the power of judicial review to an extent which destroys even the semblance of a comparison between its provisions and those of clauses (2) to (6) of Article 19. Human ingenuity, limitless though it may be, has yet not devised a system by which the liberty of the people can be protected except through the intervention of courts of law. Three Articles of our Constitution, and only three, stand between the heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestrained power. They are Articles 14, 19 and 21. Article 31C has removed two sides of that golden triangle which affords to the people of this country an assurance that the promise held forth by the preamble will be performed by ushering an egalitarian era through the discipline of fundamental rights, that is. without emasculation of the rights to liberty and equality which alone can help preserve the dignity of the individual. These then are our reasons for the order which we passed on May 9, 1980 to the following effect: "Section 4 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it damages the basic or essential features of the Constitution and destroys its basic structure by a total exclusion of challenge to any law on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution, if the law is for giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV of the Constitution." "Section 55 of the Constitution 42nd Amendment Act is beyond the amending power of the Parliament and is void since it removes all limitations on the power of the Parliament to 264 amend the Constitution and confers power upon it to amend the Constitution so as to damage or destroy its basic or essential features or its basic structure. " There will be no order as to costs. BHAGWATI, J. (His Lordship 's Judgment is a common judgment for Waman Rao 's case and Minerva Mill 's case. The petitioners in Writ Petitions Nos. 656 to 660 of 1977 Wamanrao & others etc, vs The Union of India & ors. (hereinafter referred to as Wamanrao 's case) and other allied petitions have challenged the constitutional validity of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961 (herein after referred to as the principal Act) as amended by the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings and (Amendment Act 1972 (hereinafter referred to as Act 21 of 1975) and the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act 1975 (hereinafter referred to as Act 47 of 1975) and the Maharashtra Agricultural Lands (Ceiling on Holdings) Amendment Act 1975 (hereinafter referred to as Act 2 of 1976) on the ground that the amended provisions of the Act are violative of Articles 14, 19(1)(f), 31 and 31A of the Constitution. We shall hereafter for the sake of convenience refer to the principal Act as duly amended by the subsequent Acts 21 of 1975, 47 of 1975 and 2 of 1976 as "the impugned legislation". It is not necessary for the purpose of this opinion to set out the relevant provisions of the impugned legislation but it is sufficient to state that it imposed a maximum ceiling on the holding of agricultural land in the State of Maharashtra and provided for acquisition of land held in excess of the ceiling and for the distribution of such excess land to landless and other persons with a view to securing the distribution of agricultural land in a manner which would best subserve the common good of the people. The impugned legislation recognised two units for the purpose of ceiling on holding of agricultural land. One was person which by its definition in section 2, sub section (2) included a family and 'family ' by virtue of section 2, sub section (11) included a Hindu Undivided Family and in the case of other persons, a group or unit the members of which by custom or usage, are joint in estate or possession or residence and the other was 'family unit ' which according to its definition in section 2(11A) read with section 4, meant a person and his spouse and their minor sons and minor unmarried daughters The impugned legislation created an artificial concept of a 'family unit ' for the purpose of applicability of the ceiling and provided that all lands held by each member of the family unit whether jointly or separately shall be aggregated together and by a fiction of law deemed to be held by the family unit. There were also certain provisions in the impugned legislation which prohibited transfers and acquisitions 265 of agricultural land with a view to effectuating the social policy and economic mission of the law. The impugned legislation also contained provisions prescribing the machinery for implementation of its substantive provisions. Now plainly and unquestionably this was a piece of legislation relating to agrarian reform and was immunised against challenge under Articles 14, 19 and 31 by the protective cloak of Article 31A but even so, by way of abundant caution, it was given additional protection of Article 31B by including the Principal Act and the subsequent amending Acts in the 9th Schedule: vide the Constitution (Seventeenth Amendment) Act 1964 and the Constitution (Fortieth Amendment) Act, 1976. The drastic effect of the impugned legislation was to deprive many land holders of large areas of agricultural lands held by them. Some of them, therefore. preferred writ petitions in the High Court of Bombay at Nagpur challenging the constitutional validity of the impugned legislation and on the challenge being negatived by the High Court, they preferred appeals in this Court. The only contention advanced on behalf of the land holders in support of the appeals was that the impugned legislation in so far as it introduced an artificial concept of a 'family unit ' and fixed ceiling on holding of land by such family unit was violative of the second proviso to cl. (1) of Article 31A and was not saved from invalidation by the protective armour of Article 31B. This contention was negatived by the Constitution Bench and it was held that the impugned legislation did not, by creating an artificial concept of a family unit and fixing ceiling on holding of land by such family unit, conflict with the second proviso to clause (1) of Article 31A and even if it did contravene that proviso, it was protected by Article 31B since the principal Act as well as the subsequent amending Acts were included in the 9th Schedules vide Dattatraya Govind Mahajan vs State of Maharashtra. Now at the time when this hatch of cases was argued before the Court, the emergency was in operation and hence it was not possible for the land holders to raise many of the contentions which they could otherwise have raised and, therefore, as soon as the emergency was revoked, the landholders filed review petitions in this Court against the decision in Dattatraya Govind Mahajan 's case and also preferred direct writ petitions in this Court challenging once again the constitutional validity of the impugned legislation. Now, concededly, Article 31A provided complete immunity to the impugned legislation against violation of Articles 14, 19 and 31 and Article 31B read with he 9th Schedule protected the impugned legislation not only against violation of Articles 14, 19 and 31 but 266 also against infraction of the second proviso to Clause (1) of Article 31A. Moreover, the impugned legislation being manifestly one for giving effect to the Directive Principles contained in Article 39 clauses (b) and (c), it was also protected against invalidation by Article 31C. The petitioners could not therefore successfully assail the constitutional validity of the impugned legislation unless they first pierced the protective armour of Articles 31A, 31B and 31C. The petitioners sought to get Articles 31A, 31B and 31C out of the way by contending that they offended against the basic structure of the Constitution and were. therefore, outside the constituent power of Parliament under Article 368 and hence unconstitutional and void. The argument of the petitioners was that these constitutional amendments in the shape of Articles 31A, 31B and 31C being invalid, the impugned legislation was required to meet the challenge of Articles 14, 19(1)(f), 31 and 31A and tested on the touchstone of these constitutional guarantees. the impugned legislation was null and void. The first and principal question which, therefore, arose for consideration in these cases was whether Articles 31A, 31B and 31C are ultra vires and void as damaging or destroying the basic structure of the Constitution. We may point out here that we were concerned in these cases with the constitutional validity of Article 31C as it stood prior to its amendment by the Constitution (Forty Second Amendment) Act, 1976. because it was the unamended Article 31C which was in force at the dates when. the amending Acts were passed by the legislature amending the principal Act. These cases were heard at great length with arguments ranging over a large areas and lasting for over five weeks and we reserved judgment on 8th March ]979. Unfortunately. we could not be ready with our judgment and hence on 9th May 1980 being the last working day of the Court before the summer vacation we made an order expressing our conclusion but stating that we would give our reasons later. By this order we held that Article 31A does not damage any of the basic or essential features of the Constitution or its basic structure and is therefore valid and constitutional and so is Article 31C as it stood prior to its amendment by the Constitution (Forty Second Amendment) Act, 1976 valid to the extent its constitutionality was upheld in Kesavananda Bharati 's case. So far as Article 31B is concerned, we said that Article 31 as originally introduced was valid and so also are all subsequent amendments including various Acts and Regulations in the 9th Schedule from time to time upto 24th April, 1973 when Kesavananda Bharati 's case was decided. We did not express any final opinion on the constitutional validity of the amendments made in the 9th Schedule on or after 24th April 1973 but we made it clear that, these amendments would be open to 267 challenge on the ground that they or any one or more of them damage the basic or essential features of the Constitution or its basic structure. and are therefore. Outside the constituent power of Parliament. This was The order made by us on 9th May. 1980 and for reasons which I shall mention presently. I propose to set out in this Judgment my reasons for subscribing to this order. So far as Minerva Mills Case is concerned, the challenge of the petitioners was directed primarily against an order dated 19th October, 1971 by which the Government of India, in exercise of the power conferred under Sec. 18A of the Industries (Development and Regulation) Act, 1951, authorised the taking over of the management of the industrial undertaking of the petitioners by the National Textile Corporation under the Sick Textile Undertakings (Nationalisation) Act 1974 (hereinafter referred to as the Nationalisation Act) by which the entire Industrial undertaking and the right, title and interest of the petitioners in it stood transferred to and vested in the Central Government on the appointed date. We are not concerned for the purpose of the present opinion with the challenge against the validity of the Order dated 19th October, 1971, for the question which has been argued before us arises only out of the attack against the constitutionality of the Nationalisation Act. The petitioners challenged the constitutional validity of the Nationalisation Act inter alia on the ground of infraction of Articles 14, 19(1)(f) and (g) and 31 Clause (2), but since the Nationalisation Act has been included in the 9th Schedule by the Constitution (Thirty ninth Amendment) Act, 1975, the petitioners also attacked the constitutionality of the Constitution (Thirty ninth Amendment) Act, 1975, for it is only if they could get the Nationalisation Act out from the protective wing of Article 31B by persuading the Court to strike down the Constitution (Thirty ninth Amendment) Act, 1975, that they could proceed with their challenge against the constitutional validity of the Nationalisation Act Now clauses (4) and (5) which were introduced in Article 368 by section 55 of the Constitution (Forty second Amendment) Act, 1976 and which were in force at the date of the filing of the writ petitions provided that no amendment of the Constitution made or purported to have been made whether before or after the commencement of that section shall be called in question in any Court on any ground and barred judicial review of the validity of a constitutional amendment (obviously, if these two clauses were validly included in Article 368, they would stand in the way of the petitioners challenging the constitutional validity of the Constitution (Thirty ninth Amendment) Act, 1975. The petitioners were, therefore, compelled to go further and impugn the constitutional validity of section 55 of the Constitution 268 (Forty second Amendment) Act, 1976. This much challenge, as shall presently point out, would have been sufficient to clear the path for the petitioners in assailing the constitutional validity of the Nationalisation Act, but the petitioners, not resting content with what was strictly necessary, proceeded also to challenge section 4 of the Constitution (Forty second Amendment) Act, 1976 which amended Article 31C. There were several grounds on which the constitutional validity of the Constitution (Forty second Amendment) Act, 1976 was impugned in the writ petitions and I shall refer to them when I deal with the arguments advanced on behalf of the parties. Suffice it to state for the present, and this is extremely important to point out. that when the writ petitions reached hearing before us, Mr. Palkhiwala, learned counsel appearing on behalf of the petitioners requested the Court to examine only one question, namely, whether the amendments made in Article 31C and Article 368 by section 4 and SS of the Constitution (Forty second Amendment) Act, 1976 were constitutional and valid and submitted that if these constitutional amendments were held invalid, then the other contentions might be examined by the Court at a later date. He conceded before us, in the course of the arguments, that he was accepting the constitutional validity of Articles 31A, 31B and the unamended Article 31C and his only contention vis a vis Article 31C was that it was the amendment made in Article 31C which had the effect of damaging or destroying the basic structure of the Constitution and that amendment was, therefore, beyond the constituent power of Parliament. The learned Attorney General on behalf of the Union of India opposed this plea of Mr. Palkhiwala and urged by way of preliminary objection that though the question of constitutional validity of clauses (4) and (S) of Article 368 introduced by way of amendment by section SS of the Constitution (Forty second Amendment Act, 1976 undoubtedly arose before the Court and it was necessary for the Court to pronounce upon it, the other question in regard to the constitutional validity of the amendment made in Article 31C did not arise on the writ petitions and the counter affidavits and it was wholly academic and superfluous to decide it. This preliminary objection raised by the learned Attorney General was in my opinion well founded and deserved to be sustained. Once Mr. Palkhiwala conceded that he was not challenging the constitutionality of Article 31A, Article 31B and the unamended Article 31C and was prepared to accept them as constitutionally valid, it became wholly unnecessary to rely on the amended Article 31C in support of the validity of the Nationalisation Act, because Article 31B would, in any event, save it from invalidation on the ground of infraction of any of the Fundamental Rights. In fact, if we look at the counter affidavit filed by Mr. T. section Sahani, Deputy Secretary, Government of 269 India in reply to the writ petitions, we find that no reliance has been placed on behalf of the Government on the amended Article 31C. The case of the Union of India is and that is supported by the legislative declaration contained in section 39 of the Nationalisation Act, that this Act was enacted for giving effect to the policy of the State towards securing the principles specified in clause (b) of Article 39 of the Constitution. Neither the Union of India in its counter affidavit nor the learned Attorney General in the course of his arguments relied on any other Directive Principle except that contained in Article 39 clause (b). Mr. Palkhiwala also did not make any attempt to relate the Nationalisation Act to any other Directive Principle of State Policy. Now either the Nationalisation Act was really and truly a law for giving effect to the Directive Principle set out in Article 39 clause (b) as declared in section 39 or it was not such a law and the legislative declaration contained in section 39 was a colourable device. If it was the former, then the unamended Article 31C would be sufficient to protect the Nationalisation Act from attack on the ground of violation of Articles 14, 19 and 31 and it would be unnecessary o invoke the amended Article 31C and if it was the latter, then neither the unamended nor the amended Article 31C would have any application. Thus, in either event, the amended Article 31C would have no relevance at all in adjudicating upon the constitutional validity of the Nationalisation Act. It is difficult to see how, in these circumstances, the Court could be called upon to examine the constitutionality of the amendment made in Article 31C: that question just did not arise for consideration and it was wholly unnecessary to decide it. Mr. Palkhiwala could reach the battle front for challenging the constitutional validity of the Nationalisation Act as soon as he cleared the road blocks created by the unamended Article 31C and the Constitution (Thirty ninth Amendment) Act, 1975 bringing the Nationalisation Act within the protective wing of Article 31B and it was not necessary for him to put the amendment in Article 31C out of the way as it did not block his challenge against the validity of the Nationalisation Act. I am, therefore, of the view that the entire argument of Mr. Palkhiwala raising the question of constitutionality of the amendment in Article 31C was academic and the Court could have very well declined to be drawn into it, but since the Court did, at the invitation of Mr. Palkhiwala, embark upon this academic exercise and spent considerable time over it, and the issues raised are also of the gravest significance to the future of the nation, I think, I will be failing in my duty if I do not proceed to examine this question on merits. I may point out at this stage (that the arguments on this question were spread over a period of about three weeks and considerable 270 learning and scholarship were brought to bear on this question on both sides. The hearing of the arguments commenced on 22nd October 1979 and it ended on 16th November 1979. I hoped after the completion of the arguments on questions of such momentous significance, there would be a 'free and frank exchange of thoughts ' in a judicial conference either before or after the draft judgment was circulated by my Lord the Chief Justice and I would either be able to share the views of my colleagues or if that was not possible, atleast try to persuade them to agree with my point of view. But, I find myself in the same predicament in which the learned Chief Justice found himself in Keshavananda Bharti vs State of Kerala. The learned Chief Justice started his judgment in that case by observing "I wanted to avoid writing a separate judgment of my own but such a choice seems no longer open. We sat in full strength of 13 to hear the case and I hoped that after a free and frank exchange of thoughts, I would be able to share the views of someone or the other of my esteemed brothers, but we were over taken by adventitious circumstances," namely, so much time was taken up by counsel to explain their respective points of view that very little time was left to the Judges "after the conclusion of the arguments, for exchange of draft judgments". Here also, I am compelled by similar circumstances, though not adventitious, to hand down a separate opinion without having had an opportunity to discuss with my colleagues the reasons which weighed with them in striking down the impugned constitutional amendments. Some how or other, perhaps owing to extraordinary pressure of work with which this Court is over burdened. no judicial conference or discussion was held nor was any draft judgment circulated which could form the basis of discussion, though. as pointed out above, the hearing of the arguments concluded as far back as 16th November, 1979. It was only on 8th May, 1980, just two days before the closing of the Court for the summer vacation, that I was informed by the learned Chief Justice that he and the other three learned Judges, who had heard this case along with me, had decided. to pass an order declaring the impugned constitutional amendments ultra vires and void on the ground that they violated the basic features of the Constitution and that the reasons for this order would be given by them later. I found it difficult to persuade myself to adopt this procedure, because there had been no judicial conference or discussion amongst the Judges where there could be free and frank exchange of views nor was any draft judgment circulated and hence I did not have the benefit of knowing the reasons why the learned Chief Justice and the other three learned judges were 271 inclined to strike down the constitutional amendments. If there had been a judicial conference or discussion or the draft judgment setting out the reasons for holding the impugned constitutional amendments Ultra vires and void had been circulated, it would have been possible for me, as a result of full and frank discussion or after considering the reasons given in the draft judgment, either to agree with the view taken by my Lord the Chief Justice and the other three learned judges or if I was not inclined so to agree, then persuade them to change their view and agree with mine. That is the essence of judicial collectivism. It is, to my mind, essential that a judgment of a Court should be the result of collective deliberation of the judges composing the Court and it would, in my humble opinion, not be in consequence with collective decision making, if one or more of the judges constituting the Bench proceed to say that they will express their individual opinion, ignoring their colleagues and without discussing the reasons with them and even without circulating their draft judgment so that the colleagues have no opportunity of participating in the collective decision making process. This would introduce a chaotic situation in the judicial process and it would be an unhealthy precedent which this Court as the highest Court in the land as a model judicial institution which is expected to set the tone for the entire judiciary in the country should not encourage Moreover, I felt that it was not right to pronounce an order striking down a constitutional amendment without giving a reasoned judgment. Ordinarily, a case can be disposed of only by a reasoned judgment and the order must follow upon the judgment. lt is true that sometimes where the case involves the liberty of the citizen or the execution of a death sentence or where the time taken in preparing a reasoned judgment might pre judicially affect the winning party, this Court, does, in the larger interests of justice, pronounce an order and give reasons later, but these are exceptional cases where the requirements of justice induces the Court to depart from the legally sanctioned course. But, there the court had in fact waited for about 5 1/2 months after the conclusion of the arguments and there was clearly no urgency which required that an order should be made though reasons were not ready, the delay of about 22 months in making the order was not going to injure the interests of any party, since the order was not going to dispose of the writ petition and many issues would still remain to be decided which could be dealt only after the summer vacation. Thus there would have been no prejudice to the interests of justice if the order had been made on he re opening of the Court after the summer vacation supported by a reasoned judgment. These were the reasons which compelled me to make my order dated 9th May, 1980 declining to pass an unreasoned order pronouncing on the validity of the impugned constitutional 272 amendments and stating that I would "prefer to pass a final order in this case when I deliver my reasoned judgment". This order unfortunately led to considerable misunderstanding of my position and that is the reason why I have thought it necessary to explain briefly why I acted in the manner I did. There is also one other predicament from which I suffer in the preparation of this opinion. It is obvious that the decision of the questions arising in Wamanrao 's case is closely and integrally connected with the decision of the questions in Minerva Mill 's case and therefore, logically as also from the point of view of aesthetics and practical pragmatics, there should be one opinion dealing with the questions in both the cases. But, unfortunately Minerva Mill 's case was heard by a Bench of five judges different from the Bench which heard Wamanrao 's case. Wamanrao 's case was heard by a Bench consisting of the learned Chief Justice, myself, Krishna Iyer, J., Tulzapurkar, J. and A. P. Sen, J. while Krishna Iyer, J., Tulzapurkar, J. and A. P. Sen, J. were not members of the Bench which heard the Minerva Mill 's case. Since two different Benches heard these cases, there would ordinarily have to be two opinions, one in each case. I. however, propose to write a single opinion dealing with the questions arising in both cases, since that is the only way in which I think I can present an integrated argument in support of my view, without becoming unduly and unnecessarily repetitive. The principal question that arises for consideration in these two cases is whether Article 31A, Article 31B read with the 9th Schedule as amended from time to time and particularly by the Constitution (Seventeenth Amendment) Act, 1964 and the Constitution (Fortieth Amendment) Act, 1976, Article 31C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976 and the amended Article 31C are constitutionally valid; do they fall within the scope of the amending power of Parliament under Article 368. The determination of this question depends on the answer to the larger question as lo whether there are any limits on the amending power of Parliament under Article 368 and if so, what are the limits. This question came up for consideration before a Bench of 13 Judges of this Court the largest Bench that ever sat and after a hearing which lasted for 68 days the longest hearing that ever took place eleven judgments were delivered which are reported in Keshavananda Bharti vs State of Kerala (supra). The earlier decision of this Court in l. C. Golaknath & Ors. vs State of Punjab where, by a majority of six against five, the fundamental 273 rights were held to be unamendable by Parliament under Article 368, was over ruled as a result of the decision in Keshavananda Bharti 's case. But, six out of the thirteen learned Judges (Sikri, C. J. Shelat, Grover, Hegde, Reddy and Mukharjea, JJ. accepted the contention of the petitioners that though Article 368 conferred power to amend the Constitution, there were inherent or implied limitations on the power of amendment and therefore Article 368 did not confer power on Parliament to amend the Constitution so as to destroy or emasculate the essential or basic elements or features of the Constitution. The fundamental rights, according to the view taken by these six learned Judges, constituted basic or essential features of the Constitution and they could not be, therefore, abrogated or emasculated in the exercise of the amending power conferred by Article 368, though a reasonable abridgment of those rights could be effected in the public interest. Khanna, J. found it difficult in the face of the clear words of Article 368 to exclude from their operation Articles relating to fundamental rights and he held that "the word 'amendment ' in Article 368 must carry the same meaning whether the amendment relates to taking away or abridging Fundamental rights in Part II of the Constitution or whether it pertains to some other provision outside Part III of the Constitution. " But proceeding to consider the meaning of the word 'amendment ', the learned Judge held that the power to amend does not include the power to abrogate the Constitution, that the word 'amendment ' postulates that the existing Constitution must survive without loss of identity, that it must be retained though in an amended from. and therefore. the power of amendment does not include the power to destroy or abrogate the basic structure or framework of the Constitution. The remaining six Judges took the view that there were no limitations of any kind on the power of amendment, though three of them seemed willing to foresee the limitation that the entire Constitution could not be abrogated, leaving behind a State without a Constitution. Now some scholars have expressed the view that from the welter of confusion created by eleven judgments running over a thousand pages, it is not possible to extract any ratio decidendi which could be said to be the law declared by the Supreme Court. It is no doubt true that the six judges led by Sikri. C.J., have read a limitation on the amending power of Parliament under Article 368 and so has Khanna, J., have employed the formulations "basic features" and "essential elements" while Khanna. J. has employed the formulation "basic structure and framework" to indicate what in each view is immune from the amendatory process and it is argued that "basic features" and "essential elements" cannot be regarded as synonymous with "basic structure and framework". 274 These scholars have sought to draw support for their view from the following observation of Khanna, J. at page 706 of the Report: "It is then argued on behalf of the petitioners that essential features of the Constitution cannot be changed as a result of amendment. So far as the expression "essential features" means the basic structure or framework of the Constitution. I have already dealt with the question as to whether the power to amend the Constitution would include within itself the power to change the basic structure or framework of the Constitution. Apart from that, all provisions of the Constitution are subject to amendatory process and cannot claim exemption from that process by being described essential features. " Whatever be the justification for this view on merits, I do not think that this observation can be read as meaning that in the opinion of Khanna, J. "basic structure or frame work" as contemplated by him was different from "basic features" or "essential elements" spoken of by the other six learned judges. It was in the context of an argument urged on behalf of the petitioners that the "essential features" of the Constitution cannot be changed that this observation was made by Khanna, J. clarifying that if the "essential features" meant the "basic structure or framework" of the Constitution, the argument of the petitioners would be acceptable, but if the "essential features" did not form part of the "basic structure or framework ' ' and went beyond it, then they would not be immune from the amendatory process. But it does appear from this observation that The six Judges led by Sikri C.J. On the one hand and Khanna, J. On the other were not completely ad idem as regards the precise scope of the limitation on the amendatory power of Parliament. This might have raised a serious argument as to whether there, any ratio decidendi at all can be culled out from the judgments in this case in so far as the scope and ambit of the amendatory power of Parliament is concerned. A debatable question would have arisen whether "basic and essential features" can be equated with "basic structure or framework" of the Constitution and if they cannot be, then can the narrower of these two formulations be taken to represent the common ratio. But it is not necessary to examine this rather difficult and troublesome question, because l find that in Smt. Indira Gandhi vs Raj Narain a Bench of five Judges of this Court accepted the majority view in Keshavanand Bharti 's case to be that the amending power conferred under Article 368, though wide in its sweep and reaching every provision of the Constitution, does not enable Parliament to alter the basic structure or framework 275 of the Constitution. Since this is how the judgments in Keshavananda Bharti 's case have been read and a common ratio extracted by a 'Bench of five Judges of this Court, it is binding upon me and hence I must proceed to decide the questions arising in these cases in the light of the principle emerging from the majority decision that Article 368 does not confer power on Parliament to alter the basic structure or framework of the Constitution. I may mention in the passing that the summary of the judgments given by nine out of the thirteen Judges after the delivery of the judgments also states the majority view to be that "Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution. " of course, in my view this summary signed by nine Judges has no legal effect at all and cannot be regarded as law declared by the Supreme Court under Article 141. It is difficult to appreciate what jurisdiction or power these nine Judges had to give a summary setting out the legal effect of the eleven judgments delivered in the case. Once the judgments were delivered, these nine Judges as also the remaining four became functus officio and thereafter they had no authority to cull out the ratio of the judgments or to state what, on a proper analysis of the judgments, was the view of the majority. What was the law laid down was to be found in the judgments and that task would have to be performed by the Court before whom the question would arise as to what is the law laid down in Keshavananda Bharti 's case. The Court would then hear the arguments and dissect the judgments as was done in Smt. Indira Gandhi 's case (supra) and then decide as to what is the true ratio emerging from the judgments which is binding upon the Court as law laid down under article 141. But here it seems that nine judges set out in the summary what according to them was the majority view without hearing any arguments. This was a rather unusual exercise, though well intentioned. But quite apart from the validity of this exercise embarked upon by the nine judges, it is a little difficult to understand how a proper and accurate summary could be prepared by these judges when there was not enough time, after the conclusion of the arguments, for an exchange of draft judgments amongst the Judges and many of them did not even have the benefit of knowing fully the views of others. I may, therefore, make it clear that I am not relying on the statement of the majority view contained in The Summary given at the end of the judgments in Keshavananda Bharti 's case, but I am proceeding on the basis of the view taken in Smt. Indira Gandhi 's case as regards the ratio of the majority decision in Keshavananda Bharti 's case. I may also at this stage refer to an argument advanced before its on the basis of certain observations in the judgment of Khanna, J. 276 that he regarded fundamental rights as not forming part of the basic structure of the Constitution and therefore, according to him, they could be abrogated or takes away by Parliament by an amendment made under Article 368. If this argument were correct, the majority holding in Keshavanda Bharti 's case would have to be taken to be that the fundamental rights could be abrogated or destroyed in exercise of the power of amendment. because Ray, J., Palekar, J., Mathew, J., Beg, J., Dwivedi, J. and Chandrachud, J. took the view that the power of amendment being unlimited, it was competent to Parliament in exercise of this power to abrogate or emasculate the Fundamental Rights and adding the view of Khanna, J., there would be 7 Judges as against 6 in holding that the Fundamental Rights could be abrogated or taken away by Parliament by a constitutionally amendment. But we do not think that this submission urged or behalf of the respondents is well founded. It is undoubtedly true. that there are certain observations in the judgment of Khanna, J. at the bottom of page 688 of the Report which seem into suggest that according to the learned Judge, the fundamental rights could be abridged or taken away by an amendment under Article 368. For example, he says: "No serious objection is taken to repeal, addition or alteration of provisions of the Constitution other than those in Part III under the power of amendment conferred by Article 368. The same approach in my opinion should hold good when we deal with amendment relating to Fundamental Rights contained in Part III of the Constitution. It would be impermissible to differentiate between the scope and width of the power of amendment when it deals with Fundamental Rights and the scope and width of that power when it deals with provisions not concerned with Fundamental Rights. " Then again at page 707 of the Report, the learned Judge rejects the argument that the core and essence of a Fundamental Right is immune from the amendatory process. These observations might at first blush appear to support the view that, according to Khanna, J., the amendatory power under Article 368 was sufficiently wide to comprehend not only addition or alternation but also repeal of a Fundamental Right resulting in its total abrogation. But if we look art the judgment of Khanna, J. as a whole, we do not think this view can be sustained. It is clear that these observations were made by the learned Judge with a view to explaining the scope and width of the power of amendment under Article 368. The learned Judge held that the amendatory power of Parliament was wide enough to reach every provision of the Constitution including the Fundamental Rights in Part Ill of the Constitution. but while so holding, he proceeded to make it clear that despite all this width the amendatory power was subject to an overriding limitation. 277 namely, that it could not be exercised so as to alter the basic structure or framework of the Constitution. The learned Judge stated in so many words at page 688 of the Report that though "the power of amendment is plenary and would include within itself, the power to add, alter or repeal the various articles including those relating lo fundamental rights", it is "subject to the retention, or the basic structure or framework of the Constitution." The same reservation was repeated by the learned Judge in cl. (vii) of the summary of his conclusions given at the end of his judgment. It will, therefore, be seen that according to Khanna, J. the power of amendment can be exercised by Parliament so as even to abrogate or take away a fundamental right, so long as it does not alter the basic structure or framework of the Constitution. But if the effect of abrogating or taking away such fundamental right is to alter or affect the basic structure or framework of the Constitution, the amendment would be void as being outside the amending power of Parliament. It is precisely for this reason that the learned Judge proceeded to consider whether the right to property could be said to appertain to the basic structure or framework of the Constitution. If the view of Khanna, J. where that no fundamental right forms part of the basic structure or framework of the Constitution and it can therefore be abrogated or taken away in exercise of the amendatory power under Article 368, it was totally unnecessary for the learned Judge to consider whether the right to property could be said to appertain to the basic structure or framework of the Constitution. The very fact that Khanna, J. proceeded to consider this question shows beyond doubt that he did not hold that fundamental rights were not a part of the basic structure. The only limited conclusion reached by him was that the right to property did not form part of the basic structure, but so far as the other fundamental rights were concerned, he left the question open. Therefore, it was that he took pains to clarify in his judgment in Smt. Indira Gandhi 's case (supra) that what he laid down in Keshavananda Bharati 's case was "that no Article of the Constitution is immune from the amendatory process because of the fact that it relates to fundamental right and is contained in Part III of the Constitution", and that he did not hold in That case that "fundamental rights are not a part of the basic structure of the Constitution". Now if this be so, it is difficult to understand how he could hold the Constitution (Twenty ninth Amendment) Act, 1972 unconditionally valid. Consistently with his view, he should have held that the Constitution (Twenty ninth Amendment) Act 1972 would be valid only if the protection afforded by it to the Kerala Acts included in the 9th Schedule was not violative of the basic structure or 278 framework of the Constitution. But merely because the learned Judge wrongly held the Constitution (Twenty ninth Amendment) Act, 1972 to be unconditionally valid and did not uphold its validity subject to the scrutiny of the Kerala Acts added in the 9th Schedule, it cannot follow that he regarded the fundamental rights as not forming part of the basic structure of the Constitution. If the law was correctly laid down by him, it did not become incorrect by being wrongly applied. It is not customary to quote from the writing of a living author, but departing from that practice which, I believe, is no longer strictly adhered to or followed, I may point out that what I have said above finds support from the comment made by Mr. Seervai in the 3rd Volume of his book on Constitutional Law, where the learned author says: "The conflict between Khanna, J. 's views on the amending power and on the unconditional validity of the Twenty Ninth Amendment is resolved by saying that he laid down the scope of the amending power correctly. but misapplied that law in holding Article 31B and Schedule 9 unconditionally valid. " l entirely agree with this perceptive remark of the learned author. The true ratio emerging from the majority decision in Keshavananda Bharati 's case being that the Parliament cannot in the exercise of its amendatory power under Article 368 alter the basic structure or framework of the Constitution. I must proceed to consider whether Article 31A, Article 31B read with 9th Schedule, Article 31C as it stood prior to its amendment and the amended Article 31C are violative of the basic structure or framework of the Constitution, for if they are, they would be unconstitutional and void. Now what are the features or elements which constitute the basic structure of framework of the Constitution or which. if damaged or destroyed, would rob the Constitution of its identity so that it would cease to be the existing Constitution but would become a different Constitution. The majority decision in Keshavananda Bharati 's case no doubt evolved the doctrine of basic structure or framework but it did not lay down that any particular named features of the Constitution formed part of its basic structure or framework. Sikri, C.J. mentioned supremacy of the Constitution, republican and democratic form of government. secular character of the Constitution, separation of powers among the legislature executive and judiciary, federalism and dignity and freedom of the individual as essential features of the Constitution. Shelat and Grover, JJ. added to the list two other features; justice social, economic and political and unity and integrity of the nation. Hegde and Mukherjee, JJ. added sovereignty of India as a basic feature of the Constitution. Reddy, J. thought that sovereign 279 democratic republic, parliamentary form of democracy and the three organs of the State formed the basic structure of the Constitution, Khanna, J. held that basic structure indicated the broad contours and outlines or the Constitution and since the right to property was a matter of detail, it was not a part of that structure. But he appeared to be of the view that the democratic form of government. the secular character of the State and judicial review formed part of the basic structure. It is obvious that these were merely illustrations of what each of the six learned Judges led by Sikri. C.J. thought to be the essential features of the Constitution and they were not intended to be exhaustive. Shelat and Grover, JJ. Hegde and Mukherjea JJ. and Reddy, J. in fact said in their judgments that their list of essential features which form the basic structure of the Constitution was illustrative or incomplete. This enumeration of the essential features by the six learned Judges had obviously no binding authority: first. because the Judges were not required to decide as to what features or elements constituted the basic structure or framework of the Constitution and what each of them said in this connection was in the nature of obiter and could have only persuasive value; secondly, because the enumeration was merely by way of illustration and thirdly, because the opinion of six Judges that certain specified features formed part of the basic structure of the Constitution did not represent the majority opinion and hence could not be regarded as law declared by this Court under Article 141. Therefore, in every case where the question arises as to whether a particular feature of the Constitution is a part of its basic structure, it would have to be determined on a consideration of various factors such as the place of the particular feature in the scheme of the Constitution, its object and purpose and the consequence of its denial on the integrity of the Constitution as a fundamental instrument of country 's governance. Vide the observations of Chandrachud, J. (as he then was) in Smt. Indira Gandhi 's case at page 658 of the Report. This exercise of determining whether certain particular features formed part of the basic structure of the Constitution had to be undertaken by this Court in Smt. Indira Gandhi 's case (supra) which came up for consideration within a short period of four years after the delivery of the Judgments in Keshvananda Bharti 's case. The constitutional amendment which was challenged in that case was the Constitution (Thirty ninth Amendment) Act. 1975, which introduced Article 329A and the argument was that clause (4) of this newly added article was constitutionally invalid on the ground that it violated the basic structure or framework of the Constitution. This challenge was unanimously upheld by a Constitution Bench which consisted of 280 the Chief Justice and four senior most Judges of this Court. It is not necessary for our purpose to analyse the judgments given by the five Judges in this case as they deal with various matters which are not relevant to the questions which arise before us. But it may be pointed out that two of the learned Judges, namely, Khanna and Mathew, JJ. held that democracy was an essential feature forming part of the basic structure and struck down clause (4) of Article 329A on the ground that it damaged the democratic structure of the Constitution. Chandrachud, J. (as he then was) emphatically asserted that, in his opinion, there were four unamendable features which formed part of the basic structure, namely, "(i) India is a sovereign democratic republic; (ii) Equality of status and opportunity shall be secured to all its citizens; (iii) The State shall have no religion of its own and all persons shall be equally entitled to freedom of conscience and the right freely to process, practise and propagate religion and (iv) The nation shall be governed by a government of laws, not of men. " These, according to him, were "the pillars of our constitutional philosophy, the pillars, therefore, of the basic structure of the Constitution." He then proceeded to hold that clause (4) of Article 329A was "an outright negation of the right of equality conferred by Article 14, a right which more than any other is a basic postulate of our Constitution" and on that account declared it to be unconstitutional and void, Mathew, J. however, expressed his dissent from the view taken by Chandrachud, J. as regards the right of equality conferred by Article 14 being an essential feature of the Constitution and stated inter alia the following reason: "The majority in Bharati 's case did not hold that Article 14 pertains to the basic structure of the Constitution. The Majority upheld the validity of the first part of Article 31C; this would show that a constitutional amendment which takes away or abridges the right to challenge the validity of an ordinary law for violating the fundamental right under that Article would not destroy or damage the basic structure. The only logical basis for supporting the validity of Article 31A, 31B and the first part of 31C is that article 14 is not a basic structure. " I shall have occasion to discuss later the concept of equality under the Constitution and whether it forms part of the basic structure. But, one position of a basic and fundamental nature I may make clear at this stage, and there I agree with Mathew, J., that whether a particular feature forms part of the basic structure has necessarily to be determined on the basis of the specific provisions of the Constitution. To quote the words of Mathew, J. in Smt. Indira Gandhi 's case (supra) "To be a basic structure it must be a terrestrial concept having its 281 habitat within the four corners of the Constitution. " What Constitutes basic structure is not like "a twinkling star up above the Constitution." "It does not consist of any abstract ideals to be found outside the provisions of the Constitution. The, Preamble no doubt enumerates great concepts ' embodying the ideological aspirations of the people but these concepts are particularised and their essential features delineated in the various provisions of the Constitution. It is these specific provisions in the body of the Constitution which determine the type or democracy which the founders of that instrument established; the quality and nature of justice, political, social and economic which they aimed to realise, the content of liberty of thought and expression which they entrenched in that document and the scope of equality of status and of opportunity which they enshrined in it. These specific provisions enacted in the Constitution alone can determine the basic structure of the Constitution. These specific provisions, either separately or in combination. determine the content of the great concepts set out in the Preamble. It is impossible to spin out any concrete concept of basic structure out of the gossamer concepts set out in the Preamble. 'The specific provisions of the constitution are the stuff from which the basic structure has to be woven. ( ')" Now, in Wamanrao 's case the broad argument of Mr. Phadke on behalf of the petitioners founded on the doctrine of basic structure was, and this argument was supported by a large number of other counsel appearing in the allied petitions, that the fundamental rights enshrined in Articles 14 and 19 form part of the basic structure of the Constitution and therefore Article 31A, Article 31B read with 9th Schedule and the unamended Article 31C in so far as they exclude the applicability of Articles 14 and 19 to certain kinds of legislation emasculate those fundamental rights and thereby damage the basic structure of the Constitution and they must accordingly be held to be outside the amending power of Parliament and hence unconstitutional and void. I have not made any reference here to Article 31 and treated the argument of Mr. Phadke as confined only to Articles 14 and 19, because, though Article 31 was very much in the Constitution when the arguments in Wamanrao 's case were heard, it has subsequently been deleted by the Constitution (Forty Fourth Amendment) Act, 1978 and reference to it has also been omitted in Articles 31A, 31B and 31C and we are therefore concerned with the constitutional validity of these Articles only in so far as they grant immunity against challenge on the ground of infraction of Articles 14 and 19. Mr. Phadke on behalf of the petitioners also challenged 282 the constitutional validity of the Constitution (Fortieth Amendment). 1976 which included the amending Acts 21 of 1975, 41 of 1975 and 2 of 1976 in the 9th Schedule. On the ground that the Lok Sabha was not in existence at the date when it was enacted. But obviously. in view of clauses (4) and (5) introduced in Article 368 by section 55 , of the Constitution (Forty second Amendment) Act, 1976, it was not possible for Mr. Phadke on behalf of the petitioners to assail the constitutional validity of Article 31A, Article 31B read with the 9th Schedule as amended by the Constitution (Fortieth Amendment) Act. 1976 and the unamended Article 31C. since these two clauses of Article 368 barred challenge to the validity of a constitutional amendment on any ground whatsoever and declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition. variation or repeal, any provision of the Constitution. He therefore. as a preliminary step in his argument challenged the constitutional validity of clauses (4) and (S) of Article 368 on the ground that these clauses damaged the basic structure of the Constitution and were outside the amending power of Parliament. The argument of Mr. Palkhiwala on behalf of the petitioners in the Minerva Mills ' case was a little different. He too attacked the vires of clauses (4) and (5) of Article 368 since they barred at the threshold any challenge against the constitutional validity of the amendment made in Article 31C, but so far as Article 31A, Article 31B and the unamended Article 31C were concerned, he did not dispute their validity and, as pointed out by me earlier, he conceded and in fact gave cogent reasons showing that they were constitutionally valid. His only attack was against the validity of the amendment made in Article 31C by section 4 of the Constitution (Forty second Amendment Act. ]976 and he contended that this amendment, by making the Directive Principles supreme over the fundamental rights. damaged or destroyed the basic structure of the Constitution. He urged that the basic structure of the Constitution rests on the foundation that while the Directive Principles are the mandatory ends of government, those ends have to be achieved only through the permissible means set out in the Chapter on fundamental rights and this balance and harmony between the fundamental rights and the directive Principles was destroyed by the amendment in Article 31C by making the fundamental rights subservient to the Directive Principles and in consequence, the basic structure of the Constitution was emasculated. A passionate plea was made by Mr. Palkhiwala with deep emotion and feeling that if Article 31C as amended was allowed to stand, it would be an open licence to the legislature and the executive, both at the Centre and in the States, to destroy democracy and establish an authoritarian or totalitarian regime, since almost every legislation could be related, 283 directly or indirectly, to some Directive Principle and would thus be able to earn immunity from the challenge of Articles 14 and 19 and the fundamental rights enshrined in these two Articles would be rendered meaningless and futile and would become mere rope of sand. Mr. Palkhiwala vehemently urged that Justice, liberty and equality were the three pillars of the Constitution and they were embodied in Articles 14 and 19 and therefore if the supremacy of the fundamental rights enshrined in these Articles was destroyed and they were made subservient to the directive Principles, it would result in the personality of the Constitution being changed beyond recognition and such a change in the personality would be outside the amending power of Parliament. Mr. Palkhiwala likened the situation to a permanent state of emergency and pointed out by way of contrast that whereas under an emergency the people may be precluded from enforcing their fundamental rights under Articles 14 and 19 for the duration of the emergency, here the people were prevented from moving the court for enforcement of these fundamental rights for all time to come even without any emergency where a law was passed purporting to give effect to any of the Directive Principles. The amendment in Article 31C was thus, according to Mr. Palkhiwala, outside the amending power of Parliament and was liable to be struck down as unconstitutional and void. Logically I must first consider the challenge against the constitutional validity of clauses (4) and (5) of article 368, because it is only if they can be put out of the way that Mr. Phadke and Mr. Palkhiwala can proceed further with their respective challenges against the validity of the other constitutional provisions impugned by them. Both these clauses were inserted in Article 368 by section 55 of the Constitution (Forty second Amendment), Act, 1976 with a view to overcoming the effect of the majority decision in Keshavananda Bharati 's case. Clause (4) enacted that no amendment of the Constitution "made or purporting to have been made under this Article [whether before or after the commencement of section 55 of the Constitution (Forty second Amendment) Act, 1976] shall be called in question in any court on any ground" while clause (5), which begins with the words "For the removal of doubts", declared that "there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this Article. " The question is whether these two clauses transgress the limitations on the amending power of Parliament and are therefore void. I will first take up for consideration clause (4) which seeks to throw a cloak of protection on an amendment made or purporting to have been made in the 284 Constitution and makes it unchallengeable on any ground. It is rather curious in its wording and betrays lack of proper care and attention in drafting. It protects every amendment made or purporting to have been made "whether before or after the commencement of section S of the Constitution (Forty second Amendment Act. " But would an amendment made by any other section of the Constitution (Forty second Amendment) Act, 1976 such as section (4). which would be neither before nor after the commencement of section 55, but simultaneous with it. be covered by this protective provision? This is purely a problem of verbal semantics which arises because of slovenliness in drafting that is becoming rather common these days and I need not dwell on it, for there are more important questions which arise out of the challenge to the constitutional validity of clause (4) and they require serious consideration. I will proceed on the basis that the protection sought to be given by clause (4) extends to every amendment whatsoever and that the parenthetical words "whether before or after the commencement of section SS of the Constitution (Forty second Amendment) Act, 1976" were introduced merely by way of abundant caution with a view to indicating that this protection was intended to cover even amendments made or purporting to have been made before the enactment of the constitution (Forty second Amendment) Act. 1976. Now even a cursory look at the language of clause (4) is sufficient to demonstrate that this is a case of zeal overrunning discretion. Clause (4) provides that no amendment to the Constitution made or purporting to have been made under Article 368 shall be called in question in any court on any ground. The words 'on any ground ' are of the widest amplitude and they would obviously cover even a ground that the procedure prescribed in clause (2) and its proviso has not been followed. The result is that even if an amendment is purported to have been made without complying with the procedure prescribed in sub clause (2) including its proviso, and is therefore unconstitutional. it would still be immune from challenge. It was undisputed common ground both at the Bar and on the Bench, in Keshavananda Bharati 's case that any amendment of the Constitution which did not conform to the procedure prescribed by sub clause (2) and its proviso was no amendment at all and a court would declare it invalid. Thus if an amendment were passed by a simple majority in the House of the People and the Council of States and the President assented to the amendment, it would in law be no amendment at all because the requirement of clause (2) is that it should be passed by a majority of each of the two Houses separately and by not less than two thirds of the members present and voting. But if clause (4) were valid, it would become difficult to challenge the validity of such an amendment and it would prevail though made in defiance of a 285 mandatory constitutional requirement. Clause (2) including its proviso A would be rendered completely superfluous and meaningless and its prescription would become merely a paper requirement. Moreover, apart from nullifying the requirement of clause (2) and its proviso, clause (4) has also the effect of rendering an amendment immune from challenge even if it damages or destroys the basic structure of the Constitution and is therefore outside the amending power of Parliament. So long as clause (4) stands, an amendment of the Constitution though unconstitutional and void as transgressing the limitation on the amending power of Parliament as laid down in Keshavananda Bharati 's case, would be unchallengeable in a court of law. The consequence of this exclusion of the power of judicial review would be that, in effect and substance, the limitation on the amending power of Parliament would from a practical point of view, become non existent and it would not be incorrect to say that, covertly and indirectly, by the exclusion of judicial review, the amending power of Parliament would stand enlarged contrary to the decision of this Court in Keshavananda Bharati 's case. This would undoubtedly damage the basic structure of the Constitution, because there are two essential features of the basic structure which would be violated, namely, the limited amending power of Parliament and the power of judicial review with a view to examining whether any authority under the Constitution has exceeded the limits of its powers. I shall immediately proceed to state the reasons why I think that these two features form part of the basic structure of the Constitution. It is clear from the majority decision in Keshavananda Bharati 's case that our Constitution is a controlled Constitution which confers powers on the various authorities created and recognised by it and defines the limits of those powers. The Constitution is supreme lex, the paramount law of the land and there is no authority, no department or branch of the State, which is above or beyond the Constitution or has powers unfettered and unrestricted by the Constitution. The Constitution has devised a structure of power relationship with checks and balances and limits are placed on the powers of every authority or instrumentality under the Constitution. Every organ of the State, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the limits of such authority. Parliament too, is a creature of the Constitution and it can only have such powers as are given to it under the Constitution. It has no inherent power of amendment of the Constitution and being an authority created by the Constitution, it cannot have such inherent power, but the power of amendment is conferred upon it by the Constitution and it is a limited power which is so conferred. Parliament cannot in exercise of this power so 286 amend the Constitution as to alter its basic structure or to change its identity. Now, if by constitutional amendment, Parliament were granted unlimited power of amendment, it would cease to be an authority under the Constitution, but would become supreme over it, because it would have power to alter the entire Constitution including its basic structure and even to put an end to it by totally changing its identity. It will therefore be seen that the limited amending power of Parliament is itself an essential feature of the Constitution, a part of its basic structure, for if the limited power of amendment were enlarged into an unlimited power, the entire character of the Constitution would be changed. It must follow as a necessary corollary that any amendment of the Constitution which seeks, directly or indirectly, to enlarge the amending power of Parliament by freeing it from the limitation of unamendability of the basic structure would be violative of the basic structure and hence outside the amendatory power of Parliament. It is a fundamental principle of our constitutional scheme, and I have pointed this out in the preceding paragraph, that every organ of the State, every authority under the Constitution. derives its power from the Constitution and has to act within the limits of such power. But then the question arises as to which authority must decide what are the limits on the power conferred upon each organ or instrumentality of the State and whether such limits are transgressed or exceeded. Now there are three main departments of the State amongst which the powers of Government are divided; the Executive, the Legislature and the Judiciary. Under our Constitution we have no rigid separation of powers as in the United States of America, but there is a broad demarcation, though, having regard to the complex nature of governmental functions, certain degree of overlapping is inevitable. The reason for this broad separation of powers is that "the concentration of powers in any one organ may" t(t quote the words of Chandrachud, J. (as he then was) in Smt. Indira Gandhi 's case (supra) "by upsetting that fine balance between the three organs, destroy the fundamental premises of a democratic Government to which were pledged. " Take for example, a case where the executive which is in charge of administration acts to the prejudice of a citizen and a question arises as to what are the powers of the executive and whether the executive has acted within the scope of its powers. Such a question obviously cannot be left to the executive to decide and for two very good reasons. First, the decision of the question would depend upon the interpretation of the Constitution and the laws and this would pre eminently be a matter fit to be decided by the judiciary, because it is the judiciary which alone would be possessed of expertise in this field and secondly, the constitutional 287 and legal protection afforded to the citizen would become illusory. A if it were left to the executive to determine the legality of its own action. So also if the legislature makes a law and a dispute arises whether in making the law the legislature has acted outside the area of its legislative competence or the law is violative of the fundamental rights or of any other provisions of the Constitution, its resolution cannot, for the same reasons, be, left to the determination of the legislature. The Constitution has, therefore, created an independent machinery for resolving these disputes and this independent machinery is the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the legislature. It is the solemn duty of the judiciary under the Constitution to keep the different organs of the State such as the executive and the legislature within the limits of the power conferred upon them by the Constitution. This power of judicial review is conferred on the judiciary by Articles 32 anc! 226 of the Constitution. Speaking about draft Article 25, corresponding to present Article 32 of the Constitution, Dr. Ambedkar, the principal architect of our Constitution, said in the Constituent Assembly on 9th December, 1948: "If I was asked to name any particular article in this Constitution as the most important an article without which this Constitution would be a nullity I could not refer to any other article except this one. It is the very soul of the Constitution and the very heart of it and I am glad that the House has realised its importance". (CAD debates, Vol. VII, p, 953) It is a cardinal principle of our Constitution that no one howsoever highly placed and no authority however lofty can claim to be the sole judge of its power under the Constitution or whether its action is within the confines of such power laid down by the Constitution. The judiciary is the interpreter of the Constitution and to the judiciary is assigned the delicate task to determine what is the power conferred on each branch of Government, whether it is limited, and if so, what are the limits and whether any action of that branch transgresses such limits. It is for the judiciary to uphold the constitutional values and to enforce the constitutional limitations. That is the essence of the rule of law, which inter alia requires that "the exercise of powers by the Government whether it be the legislature or the executive or any other authority, be conditioned by the Constitution and the law". The power of judicial review is an integral part of our constitutional system and without it, there will be no Government of laws and the rule of law would become a teasing illusion and a promise of unreality. I am of the view that if there is one feature of our 288 Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably, to my mind, part of the basic structure of the Constitution. Of course, when I say this I should not be taken to suggest that however effective alternative institutional mechanisms or arrangements for judicial review cannot be made by Parliament. But what I wish to emphasise is that judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution. If by a Constitutional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the Legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of sub version of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile. So also if a. constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be questioned on any ground, even if such amendment is violative of the basic structure. and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the constitutional validity of what it has done and that would. in effect and substance, nullify the limitation on the amending power of Parliament and affect the basic structure of the Constitution. The conclusion must therefore inevitably follow that clause (4) of Article 368 is unconstitutional. and void as damaging the basic structure of the Constitution. That takes us to clause (S) of Article 368. This clause opens with the words "For the removal of doubts" and proceeds to declare that there shall be no limitation whatever on the amending power of Parliament under Article 368. It is difficult to appreciate the. meaning of the opening words "For the removal of doubts" because the majority decision in Keshavananda Bharati 's case clearly laid down and left no doubt that the basic structure of the Constitution was outside the competence of the mandatory power of Parliament and in Smt. Indira Gandhi 's case all the Judges unanimously accepted theory of the basic structure as a theory by which the validity of the amendment impugned before them, namely, Article 329A(4) was to be judged. Therefore, after the decisions in Keshavananda Bharati 's case and Smt. Indira Gandhi 's case, there was no doubt at all that the amendatory. power of Parliament was limited and it was not competent to Parliament to alter the basic structure of the Constitution 289 and clause (5) could not remove the doubt which did not exist. What A clause (S) really sought to do was to remove the limitation on the amending power of Parliament and convert it from a limited power into an unlimited one. This was clearly and indubitably a futile exercise on the part of Parliament. I fail to see how Parliament which has only a limited power of amendment and which cannot alter the basic structure of the Constitution can expand its power of amendment so as to confer upon itself the power of repeal or abrogate the Constitution or to damage or destroy its basic structure. That would clearly be in excess of the limited amending power possessed by Parliament. The Constitution has conferred only a limited amending power on Parliament so that it cannot damage or destroy the basic structure of the Constitution and Parliament cannot by exercise of that limited amending power convert that very power into an absolute and unlimited power. If it were permissible to Parliament to enlarge the limited amending power conferred upon it into an absolute power of amendment, then it was meaningless to place a limitation on the original power of amendment. It is difficult to appreciate how Parliament having a limited power of amendment can get rid of the limitation by exercising that very power and convert it into an absolute power. Clause (S) of Article 368 which sought to remove the limitation on the amending power of Parliament by making it absolute must therefore be held to be outside the amending power of Parliament. There is also another ground on which the validity of this clause can be successfully assailed. This clause seeks to convert a controlled Constitution into an uncontrolled one by removing the limitation on the amending power of Parliament which, as pointed out above, is itself an essential feature of the Constitution and it is therefore violative of the basic structure would in the circumstances hold clause (5) of Article 368 to be unconstitutional and void. With clauses (4) and (S) of Article 368 out of the way, I must now proceed to examine the challenge against the constitutional validity of Article 31A, Article 31B read with the 9th Schedule and the unamended Article 31C. So far as Article 31A is concerned, Mr. Phadke appearing on behalf of the petitioners contended that, tested by the doctrine of basic structure, article 31A was unconstitutional and void, since it had the effect of abrogating Articles 14 and 19 in reference to legislation falling within the categories specified in the various clauses of that Article. He argued that the Fundamental Rights enshrined in Articles 14 and 19 were part of the basic structure of the Constitution and any constitutional amendment which had the effect of abrogating or damaging these Fundamental Rights was outside the amendatory power of Parliament. While considering this 290 argument, I may make it clear that I am concerned here only with constitutional validity of clause (a) of Article 31A since the protection of Article 31A has been claimed in respect of Maharashtra Land Ceiling Acts only under clause (a) of that Article and I need not enter upon a discussion of the constitutional validity of clauses (b) to (e) of Article 31A. I do not think that the argument of Mr. Phadke challenging the constitutional validity of clause (a) of Article 31A is well founded. I shall have occasion to point out in a later part of this judgment that where any law is enacted for giving effect to a Directive Principle with a view to furthering the constitutional goal of social and economic justice, there would be no violation of the basic structure, even if it infringes formal equality before the law under article 14 or any Fundamental Right under Article 19. Here clause (a) of Article 31A protects a law of agrarian reform which is clearly. in the context of the socio economic conditions prevailing in India, a basic requirement of social and economic justice and is covered by the Directive Principles set out in clauses (b) and (c) of Article 39 and it is difficult to see how it can possibly be regarded 1) as violating the basic structure of the Constitution. On the contrary, agrarian reform leading to social and economic justice to the rural population is an objective which strengthens the basic structure of the Constitution. Clause (a) of Article 31A must therefore be held to be constitutionally valid even on the application of the basic structure test. But, apart from this reasoning on principle which in our opinion clearly sustains the constitutional validity of clause (a) of Article 31A. we think that even on the basis of the doctrine of stare decisions, the whole of Article 31A must be upheld as constitutionally valid. The question as to the constitutional validity of Article 31 A first came up for consideration before this Court in Shankari Prasad vs Union of India. There was a direct challenge levelled against the constitutionality of Article 31A in this case on various grounds and this challenge was rejected by a Constitution Bench of this Court. The principal ground on which the challenge was based was that if a constitutional amendment takes away or abridges any of the Fundamental Rights conferred by Part III of the Constitution it would fall within the prohibition of Article 13(2) and would therefore be void. Patanjali Shastri, J., speaking on behalf of the Court, did not accept this contention and taking the view that in the context of Article 13, 'law ' must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the constitution made in exercise of constituent power, be held that 291 Article 13(2) does not affect constitutional amendments. This view in regard to the interpretation of the word 'law ' in Article 13(2) has now been affirmed by this Court sitting as a full Court of 13 Judges in Keshavananda Bharati 's case and it is no longer possible to argue the contrary proposition. It is true that in, this case, the constitutional validity of Article 31A was not assailed on the ground of in fraction of the basic feature since that was a doctrine which came to be evolved only in Keshavananda Bharati 's case, but the fact remains that whatever be the arguments advanced or omitted to be advanced. Article 31A was held to be constitutionally valid by this Court. Nearly 13 years after this decision was given in Shankari Prasad 's case, a strong plea was made before this Court in Sajjan Singh vs State of Rajasthan that Shankari Prasad 's case should be reconsidered, but after a detailed discussion of the various arguments involved in the case, the Constitution Bench of this Court expressed concurrence with the view expressed in Shankari Prasad 's case and in the result, upheld the constitutional validity of Article 31A, though the question which arose for consideration was a little different and did not directly involve the constitutional validity of Article 31A. Thereafter, came the famous decision of this Court in Golak Nath 's case where a full Court of 11 Judges. while holding that the Constitution (First Amendment Act exceeded the constituent power or Parliament, still categorically declared on, the basis of the doctrine prospective overruling that the said amendment, and a few other like amendments subsequently made, should not be disturbed and must be held to be valid. The result was that even the decision in Golak Nath 's case accepted the constitutional validity of Article 31A. The view taken in Golak Nath 's case as regards the amending power of Parliament was reversed in Keshavananda Bharati 's case where the entire question as to the nature and extent of the constituent power of Parliament to amend the Constitution was discussed in all its dimensions and aspects uninhibited by any previous decisions, but the only constitutional amendments which were directly challenged in that case were the Twenty fourth and Twenty fifth and Twenty ninth Amendments. The constitutional validity of article 31A was not put in issue in Keshavananda Bharati 's case and the learned Judges who decided that case were not called upon to pronounce on it and it cannot therefore be said that this Court uphold the vires of Article 31A in that Case. It is no doubt true that Khanna, J. held Article 31A to be valid on the principle of stare decisis. but that was only for the purpose of upholding the validity of Article 31C. 292 because he took the view that Article 31C was merely an extension of the principle accepted in Article 31A and "the ground which sustained the validity of clause (1) of Article 31A, would equally sustain the validity of the first part of Article 31C". So far as the other learned Judges were concerned, they did not express any view specifically on the constitutional validity of Article 31A, since that was not in issue before them. Ray, J., Palekar, J., Mathew, J., Beg, J., Dwiwedi, J. and Chandrachud, J., held Article 31C to be valid and if that view be correct, Article 31A must fortiorari be held to be valid But it must be said that there is no decision of the Court in Keshavananda Bharati 's case holding article 31A as constitutionally valid, and logically, therefore, it should be open to the petitioners in the present case to contend that. tested by the basic structure doctrine, Article 31A is constitutional. We have already pointed out that on merits this argument has no substance and even on an application of the basic structure doctrine. Article 31A cannot be condemned as invalid. But in any event, I do not think that it would be proper to reopen the question of constitutional validity of Article 31A which has already been decided and silenced by the decisions of this Court in Shankari Prasad 's case, Sajjan Singh 's case and Golak Nath 's case. Now for over 28 years, since the decision in Shankari Prasad 's case Article 31A has been recognised as valid and on this view, laws of several States relating to agrarian reform have been held to be valid and as pointed out by Khanna, J. in Keshavananda Bharati 's case "millions of acres of land have changed hands and millions of new titles in agricultural lands have been created". If the question of validity of Article 31A were reopened and the earlier decisions upholding its validity were reconsidered in the light of the basic structure doctrine, these various agrarian reform laws which have brought about a near socio economic revolution in the agrarian, sector might be exposed . to jeopardy and that might put the clock back by settling at naught all changes that have been brought about in agrarian relationship during these years and create chaos in the lives of millions of people who have benefitted by these laws. It is no doubt true that this Court has power to review its earlier decisions or even depart from them and the doctrine of stare decisis cannot be permitted to perpetuate erroneous decisions of this Court to the detriment of the general welfare of the public. There is indeed a school of thought which believes with Cardozo that "the precedents have turned upon us and they are engulfing and annihilating us, engulfing and annihilating the very devotees that worshipped at their shrine" and that the Court should not be troubled unduly if it has to break away from precedents in order to modify old rules and if need be to fashion new ones to meet the challenges and problems thrown upon 293 by a dynamic society. But at the same time, it must be borne in A mind that certainty and continuity are essential ingredients of rule of law. Certainty in applicability of law would be considerably eroded and suffer a serious set back if the highest court in the land were readily to overrule the view expressed by it in earlier decisions even though that view has held the field for a number of years. It is obvious that when constitutional problems are brought before this Court for its decision, complex and difficult questions are bound to arise and since the decision on many of such questions may depend upon choice between competing values, two views. may be possible depending upon the value judgment or the choice of values made by the individual Judge. Therefore, if one view has been taken by the Court after mature deliberation, the fact that another Bench is inclined to take another view would not justify the Court in reconsidering the earlier decision and overruling it. The law laid down by this Court is binding on all Courts in the country and numerous cases all over the country are decided in accordance with the view taken by this Court. Many people arrange their affairs and large number of transactions also take place on the faith of the correctness of the decision given by this Court. It would create uncertainty, instability and confusion if the law propounded by this Court on the faith of which numerous cases have been decided and many transactions have taken place is held to be not the correct law after a number of years. The doctrine of stare decisis has evolved from the maxim "stare decisis et non quita movere" meaning "adhere to the decision and do not unsettle things which are established", and it is a useful doctrine intended to bring about certainty and uniformity in the law. But when I say this, let me make it clear that I do not regard the doctrine of stare decisis as a rigid and inevitable doctrine which must be applied at the cost of justice. There may be cases where it may be necessary to rid the doctrine of its petrifying rigidity. "Stare decisis" as pointed out by Brandeis "is always a desideratum, even in these constitutional cases, but in them, it is never a command". The Court may in an appropriate case overrule a previous decision taken by it, but that should be done only for substantial and compelling reasons. The power of review must be exercised with due care and caution and only for advancing the public well being and not 294 merely because it may appear that the previous decision was based on an erroneous view of the law. It is only where the perpetuation of the earlier decision would be productive of mischief or inconvenience or would have the effect of deflecting the nation from the course which has been set by the Constitution makers or to use the words of Krishna Iyer, J. in Ambika Prasad Misra vs State of U.P. & Ors. "where national crisis of great momenta to the life, liberty and safety of this country and its millions are at stake or the basic direction of the nation itself is in peril of a shake up" that the Court would be justified in reconsidering its earlier decision and departing from it. It is fundamental that the nation 's Constitution should not be kept in constant uncertainty by judicial review every now and then, because otherwise it would paralyse by perennial suspense all legislative and administrative action on vital issues. The Court should not indulge in judicial stabilisation of State action and a view which has been accepted for a long period of time in a series of decisions and on the faith of which millions of people have acted and a large number of transactions have been effected, should not be disturbed. Let us not forget the words of Justice Roberts of the United States Supreme Court words which are equally applicable to the decision making process in this Court: "The reason for my concern is that the instant decision, overruling that announced about nine years ago, tends to bring adjudications of this tribunal into the same days as a restricted rail road ticket good for this day and train only. It is regrettable that in an era marked by doubt and confusion, an era whose greatest need is steadfastness of thought and purpose, this Court which has been looked to as exhibiting consistency in adjudication, and a steadiness which would hold the balance even in the face of temporary ebbs and flows of opinion, should now itself become the breeder of fresh doubt and confusion in the public mind as to the stability of out institutions. " Here the view that Article 31A is constitutionally valid has been taken in atleast three decisions of this Court, namely, Shankari Prasad 's case, Sajjan Singh 's case and Golak Nath 's case and it has held the field for over 28 years and on the faith of its correctness, millions of acres of agricultural land have changed hands and new agrarian relations have come into being, transforming the entire rural economy. Even though the constitutional validity of Article 31A was not tested in these decisions by reference to the basic structure doctrine, I do not think the Court would be justified in allowing the earlier decisions to be 295 reconsidered and the question of constitutional validity of Article 31A A re opened. These decisions have given a quietus to the constitutional challenge against the validity of Article 31A and this quietus should not now be allowed to be disturbed. I may point that this view which I am taking is supported by the decision of this Court in Ambika Prasad Misra vs State of U.P. and ors. (supra). I may now turn to consider the constitutional challenge against the validity of Article 31B read with the 9th Schedule. This Article was introduced in the Constitution alongwith Article 31A by the Constitution (First Amendment) Act, 1951. Article 31A as originally introduced was confined only to legislation for acquisition of an estate or extinguishment or modification of any rights in an estate and it saved such legislation from attack under Articles 14, 19 and 31. Now once legislation falling within this category was protected by article 31A, it was not necessary to enact another saving provision in regard to the same kind of legislation. But, presumably, having regard to the fact that the constitutional law was still in the stage of evolution and it was not clear whether a law, invalid when enacted, could be revived without being re enacted. Parliament thought that Article 31A, even if retrospectively enacted. may not be sufficient to ensure the validity of a legislation which was already declared void by the courts as in Kameshwar Singh 's case, and therefore considered it advisable to have a further provision in Article 31B to specifically by pass judgments striking down such legislation. That seems to be the reason why Article 31B was enacted and statutes falling within Article 31A were included in the 9th Schedule. Article 31B was conceived together with Article 31A as part of the same design adopted to give protection to legislation providing for acquisition of an estate or extinguishment or modification of any rights in an estate. The 9th Schedule of l? Article 31B was not intended to include laws other than those covered by Article 31A. That becomes clear from the speeches of the Law Minister and the Prime Minister during the discussion on the Constitution (First Amendment) Act, 1951. Dr. Ambedkar admitted of the 9th Schedule that prima facie "it is an unusual procedure" but he went on to add that "all the laws that have been saved by this Schedule are laws that fall under Article 31." Jawaharlal Nehru also told Parliament: "It is not with any great satisfaction or pleasure that we have produced this long Schedule. We do not wish to add to it for two reasons. One is that the Schedule consists of a particular type of legislation, generally speaking, and another type should not come in. " (emphasis supplied). Articles 31A and 296 31B were thus intended to serve the same purpose of protecting legislation falling within a certain category. It was a double barelled protection which was intended to be provided to this category of legislation, since it was designed to carry out agrarian reform which was so essential for bringing about a revolution in the socio economic structure of the country. This was followed by the Constitution (Fourth Amendment) Act, 1956 by which the categories of legislation covered by Article 31A were sought to be expanded by adding certain new clauses after clause (a). Originally, in the draft bill in addition to these clauses, there was one more clause, namely, clause (d) which sought to give protection to a law providing for the acquisition or requisitioning of any immovable property for the rehabilitation of displaced persons and, as a corollary to the proposed amendment of article 31A, it was proposed in Clause (S) of the Bill to add in the 9th Schedule two more State Acts and four Central Acts which fell within the scope of clauses (d) and (f) of the revised Article 31A. Vide cl. (4) of the Statement of objects and Reasons The two State Acts which were proposed to be included in the 9th Schedule were the Bihar Displaced Persons Rehabilitation (Acquisition of Land) Act. 1950 and the United Provinces Land Acquisition (Rehabilitation of Refugees) Act, 1948. The West Bengal Land Development and Planning Act, 1948, which was struck down by this Court in State of West Bengal vs Bela Banerjee, and the invalidity of which really started the entire exercise of the Constitution (Fourth Amendment) Act. 1955, was however, left out of the 9th Schedule in the draft Bill because it included certain purposes of acquisition which fell outside the proposed clause (d) of Article 31A. But, while the Constitution (Fourth Amendment) Act, 1955 was being debated, an ordinance was issued by the Governor of West Bengal omitting with retrospective effect all the items in the definition of "public purpose" except the settlement of displaced persons who had migrated into the State of West Bengal, with the result that the West Bengal Act as amended by the ordinance came within the category of legislation specified in the proposed clause (d) of article 31A. In view of this amendment, the West Bengal Act was included in the 9th Schedule by way of amendment of the draft Bill. It is significant to note that similar Orissa Statute which provided for acquisition of land for purposes going beyond the proposed clause (d) of Article 31A and which was not amended in the same manner as the West Bengal Act, was not included in the 9th Schedule. A Central Act, namely, the Resettlement of Displaced Persons (Land Acquisition) Act, 1948 fell within the proposed clause (d) of article 31A and it was therefore included in the 297 9th Schedule in the draft Bill. The link between Articles 31A and A 31B was thus maintained in the draft Bill, but when the draft Bill went before the Joint Committee. the proposed clause (d) of Article 31A was deleted and the Bihar, U.P. and West Bengal Acts as also the above mentioned Central Act which were originally intended to be within the scope and ambit of Article 31A, became unrelated to that Article. Even so, barring these four Acts, all the other statutes included in the 9th Schedule fell within one or the other clause of the amended article 31A. Subsequent to this amendment. several other statutes dealing with agrarian reform were included in the 9th Schedule by the Constitution (Seventeenth Amendment) Act, 1964 and no complaint can be made in regard to such addition, because all these statutes partook of the character of agrarian reform legislation and were covered by clause (a) Of Article 31A in view of the extended definition of "estate" substituted by the same amending Act. The validity of the Constitution (Seventeenth Amendment) Act, 1964 was challenged before this Court in Golak Nath 's case (supra) and though the Court by a majority of six against five took the view that Parliament has no power to amend any fundamental right, it held that this decision would not affect the validity of the Constitution (Seventeenth Amendment) Act, 1964 and other earlier amendments to the Constitution and thus recognised the validity of the various constitutional amendments which included statutes in the 9th Schedule from time to time upto that date. Then came the Constitution (Twenty Ninth Amendment) Act, 1972 by which two Kerala agrarian reform statutes were included in the 9th Schedule. The validity of the Twenty Ninth Amendment Act was challenged in Keshavananda Bharati 's case, but by a majority consisting of Khanna. J. and the six learned Judges led by Ray. C.J., it was held to be valid. Since all the earlier constitutional amendments were held valid on the basis of unlimited amending power of Parliament recognised in Shankari Prasad 's case and Sajjan Singh 's case and were accepted as valid in Golak Nath 's case and the Twenty Ninth Amendment Act was also held valid in Keshavananda Bharati 's case. though not on the application of the basic structure test, and these constitutional amendments have been recognised as valid over a number of years and moreover, the statutes intended to be protected by them are all falling within Article 31A with the possible exception of only four Acts referred to above, I do not think, we would be justified in re opening the question of validity of these constitutional amendments and hence we hold them to be valid. But, all constitutional amendments made after the decision in Keshavananda Bharati 's case would have to be tested by reference to the basic structure doctrine, for Parliament would then have no excuse for saying that it did not know the limitation 298 on its amending power. It may be pointed out that quite a large number of statutes have been included in the 9th Schedule by the subsequent constitutional amendments and strangely enough, we find for the first time that statutes have been included which have no connection at all with Article 31A or 31C and this device of Article 3113 which was originally adopted only as a means of giving a more definite and assured protection to legislation already protected under Article 31A, has been utilised for the totally different purpose of excluding the applicability of Fundamental Rights to all kinds of statute which have nothing to do with agrarian reform or Directive Principles. This is rather a disturbing phenomenon. Now out of the statutes which are or may in future be included in the 9th Schedule by subsequent constitutional amendments. if there are any which fall within a category covered by Article 31A or 31C, they would be protected from challenge under Articles 14 and 19 and it would not be necessary to consider whether their inclusion in the 9th Schedule J ' is constitutionally valid, except in those rare cases where protection may be claimed for them against violation of any other fundamental] rights. This question would primarily arise only in regard to statutes not covered by Article 31A or 31C and in case of such statutes the Court would have to consider whether the constitutional amendments including such statutes in the 9th Schedule violate the basic structure of the Constitution in granting them immunity from challenge of the fundamental rights. It is possible that in a given case, even an abridgement of a fundamental right may involve violation of the basic structure. It would all depend on the nature of the fundamental right, the extent and depth of the infringement, the purpose for which the infringement is made and its impact on the basic values of the Constitution. Take for example, right to life and personal liberty enshrined in Article 21. This stands on an altogether different footing from other fundamental rights. I do not wish to express any definite opinion, but I may point out that if this fundamental right is violated by any legislation. it may be difficult to sustain a constitutional amendment which seeks to protect such legislation against challenge under article 21. So also where a legislation which has nothing to do with agrarian reform or any Directive Principles infringes the equality clause contained in Article 14 and such legislation is sought to be protected by a constitutional amendment by including it in the 9th Schedule, it may be possible to contend that such constitutional amendment is violative of the egalitarian principle which forms par of the basic structure. But these are only examples which I am giving by way of illustration. for other situations may arise where infraction. 299 of a fundamental right by a statute, if sought to be constitutionally A protected, might affect the basic structure of the Constitution. In every case, therefore, where a constitutional amendment includes a statute or statutes in the 9th Schedule, its constitutional validity would have to be considered by reference to the basic structure doctrine and such constitutional amendment would be liable to be declared invalid to the extent to which it damages or destroys the basic structure of the Constitution by according protection against violation of any particular fundamental right. I will now turn to consider the challenge against the constitutional validity of the unamended article 31C. This article was introduced in the Constitution by the Constitution (Twenty fifth Amendment) Act, 1971 and it provided in its first part that "Notwithstanding anything contained in article 13, no law giving effect to the policy of the state towards securing the principles specified in Cl. (b) or (c) of article 39 shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by article 14, article 19 or article 31". It is not necessary to reproduce here the second part of the unamended article 31C because that was declared unconstitutional by the majority decision in Keshavananda Bharti 's case and must consequently be treated as non est. The argument of Mr. Phadke against the constitutional validity of the unamended article 31C was the same as in case of article 31A, namely, that it emasculated the fundamental rights in Articles 14 and 19 and was, therefore, destructive of the basic structure of the Constitution. I shall presently examine this argument on merits and demonstrate that it is unsustainable, but before I do so, I may point out at the outset that it is wholly unnecessary to embark upon a discussion of the merits of this argument, because the first part of the unamended article 31C was held to be constitutionally valid by the majority decision in Keshavananda Bharti 's case and that decision being binding upon as, it is not open to Mr. Phadke to reagitate this question. Out of the thirteen Judges who sat on the Bench in Keshavananda Bharti 's case, Ray, J., as he then was, Palekar, J., Dwivedi, J., Khanna, J., Mathew. J., Beg, J., and Chandrachud, J., (as he then was took the view that the first part of the unamended article 31C was constitutionally valid, because the amending power of parliament was absolute and unlimited. Khanna, J. did not subscribe to the theory that Parliament had an absolute and unlimited right to amend the Constitution and his view was that the power of amendment conferred on Parliament was a limited power restricting Parliament from so amending the Constitution as to alter its basic structure, but even on the basis of this limited power, he upheld the constitutional validity of the first part of the unamended Article 31C. There were thus seven 300 out of thirteen Judges who held that the first part of the unamended article 31C was constitutionally valid, though the reasons which prevailed with Khanna, J. for taking this view were different from those which prevailed with the other six learned Judges. The issue as regards the constitutional validity of the first part of the unamended article 31C which directly arose for consideration before the Court was accordingly answered in favour of the Government and the law laid down by the majority decision was that the first part of the unamended article 31C was constitutional and valid and this declaration of the law must be regarded as binding on the court in the present writ petitions. Mr. Phadke, however, disputed the correctness of this proposition and contended that what was binding on the court was merely the ratio decidendi of Keshavananda Bharati 's case and not the conclusion that the first part of the unamended Article 31C was valid. The ratio decidendi of Keshavananda Bharti 's case, according to Mr. Phadke, was that the amendatory power of Parliament is limited and. it cannot be exercised so as to alter the basic structure of the Constitution and it was this ratio decidendi which was binding upon us and which we must apply for the purpose of determining whether the first part of the unamended Article 31C was constitutionally valid. It is no doubt true, conceded Mr. Phadke that the six learned Judges headed by Ray, J. (as he then was) held the first part of the unamended Article 31C to be constitutionally valid but that was on the basis that Parliament had absolute and unrestricted power to amend the Constitution, which basis was, according to the majority decision, incorrect. lt was impossible to say, argued Mr. Phadke, what would have been the decision of the six learned Judges headed by Ray, J. (as he then was if they had applied the correct test and examined the constitutional validity of the first part of the unamended Article 31C by reference to the yardstick of the limited power of amendment, and their conclusion upholding the validity of the first part of the unamended Article 31C by applying the wrong test could not therefore be said to be binding . On the Court in the present writ petitions. This argument of Mr. Phadke is, in my opinion, not well founded and cannot be accepted. I agree with Mr. Phadke that the ratio decidendi of Keshavananda Bharati 's case was that the amending power of Parliament is limited and, Parliament cannot in exercise of the power of amendment alter the basic structure of the Constitution and the validity of every constitutional amendment has therefore to be judged by applying the test whether or not it alters the basic structure of the constitution and this test was not applied by the six learned Judges headed by Ray, J. (as he 301 then was), but there my agreement ends and I cannot accept further argument of Mr. Phadke that for this reason, the conclusion reached by the six learned Judges and Khanna, J., as regards the constitutionality of the first part of the unamended Article 31C has no validity. The issue before the court in Keshavananda Bharti 's case was whether the first part of the unamended Article 31C was constitutionally valid and this issue was answered in favour of the Government by a majority of seven against six. It is not material as to what were the reasons which weighed with each one of the Judges who upheld the validity of the first part of the unamended Article 31C. The reasons for reaching this conclusion would certainly have a bearing on the determination of the ratio decidendi of the case and the ratio decidendi would certainly be important for the decision of future cases where the validity of some other constitutional amendment may come to be challenged, but so far as the question of validity of the first part of the unamended Article 31C is concerned, it was in so many terms determined by the majority decision in Keshavananda Bharati 's case and that decision must be held binding upon us. Mr. Phadke cannot therefore be allowed to reopen this question and I must refuse to entertain the challenge against the Constitutional validity of the unamended article 31C preferred by Mr. Phadke. But even if it were open to Mr. Phadke to dispute the decision in Keshavananda Bharti 's case and to raise a challenge against the constitutional validity of the first part of the unamended Article 31C, I do not think the challenge can succeed. What the first pari of the unamended Article 31C does is merely to abridge the Fundamental Rights in Articles 14 and 19 by excluding their applicability to legislation giving effect to the policy towards securing the principles specified in clauses (b) and (c) of Article 39. The first part of the unamended Article 31C is basically of the same genre as Article 31A with only this difference that whereas Article 31A protects laws relating to certain subjects, the first part of the unamended Article 31C deals with laws having certain objectives. There is no qualitative difference between Article 31A and the first part of the unamended Article 31C in so far as the exclusion of Articles 14 and 19 is concerned. The fact that the provisions to the first part of the unamended Article 31C are more comprehensive and have greater width compared to those of Article 31A does not make any difference in principle. If Article 31A is constitutionally valid, it is indeed difficult to see how the first part of the unamended Article 31C can be held to be unconstitutional. It may be pointed out that the first part of the unamended Article 31C in fact stands on a more secure footing because it accords protection against infraction of Articles 14 and 19 to legislation enacted for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39. 302 The legislature in enacting such legislation acts upon the constitutional mandate contained in Article 37 according to which the Directive Principles are fundamental in the governance of the country and it is the duty of the State to apply those principles in making laws. lt is for the purpose of giving effect to the Directive Principles set out in clause (b) and (c) of article 39 in discharge of the constitutional obligation laid upon the State under Article 37 that Fundamental Rights, in Articles 14 and 19 are allowed to be abridged and I fail to see how a constitutional amendment making such a provision can be condemned as violative of the basic structure of the Constitution. Therefore even on first principle, I would be inclined to hold that the first part of the unamended Article 31C is constitutionally valid. That takes us to the next ground of challenge against the constitutional validity of the Constitution (Fortieth Amendment) Act, 1956 in so far as it included the amending Acts 21 of 1975, 47 of 1975 and 2 of 1976 in the 9th Schedule and the Constitution (Forty second Amendment) Act, 1976 in so far as it introduced cls. (4) and (5) in article 368. The petitioners contended under this head of challenge that the Constitution (Fortieth Amendment) Act, 1976 was passed by the Lok Sabha on 2nd April, 1976 and the Constitution Forty Second Amendment) Act, 1976 sometime in November, 1976, but on these dates the Lok Sabha was not validly in existence because it automatically dissolved on 18th March, 1976 on the expiration of its term of 5 years. It is no doubt true that the House of People (Extension of Duration) Act, 1976 was enacted by Parliament under the Proviso to article 83(2) extending the duration of the Lok Sabha for a period of one year, but the argument of the petitioners was that this Act was ultra vires and void, because the duration of, the Lok Sabha could be extended under the proviso to article 83(2) only during the operation of a Proclamation of an Emergency and, in the submission of the petitioners, there was no Proclamation of Emergency in operation at the time when the House of People (Extension of Duration) Act, 1976 was passed. It may be conceded straight away that, strictly speaking, it is superfluous and unnecessary to consider this argument because, even if the Constitution (Fortieth Amendment) Act, 1976 is unconstitutional and void and the Amending Acts 21 of 1975, 47 of 1975 and 2 of 1976 have not been validly included in the 9th Schedule so as to earn the protection of article 318, they are still as pointed out earlier, saved from invalidation by article 31A and so far as the Constitution Forty second Amendment) Act, 1976 is concerned, I have already held that it is outside the constituent power of Parliament in so far as it seeks to include clauses (4) and (5) in article 368. But since a 303 long argument was addressed to us seriously pressing this ground of challenge, I do not think I would be unjustified in dealing briefly with it. It is clear on a plain natural construction of its language that under the Proviso to article 83(2), the duration of the Lok Sabha could be extended only during the operation of a Proclamation of Emergency and if, therefore, no Proclamation of Emergency was in operation at the relevant time, the House of People (Extension of Duration) Act, 1976 would be outside the competence of Parliament under the Proviso to article 83(2). The question which thus requires to be considered is whether there was a Proclamation of Emergency was in operation at the date when the House of People (Extension of Duration Act, 1976 was enacted. The learned Solicitor General appearing on behalf of the Union of India contended that not one but two Proclamations of Emergency were in operation at the material date. One Proclamation issued by the President on 3rd December, 1971 and the other Proclamation issued on 25th June, 1976. By the first Proclamation, the President in exercise of the powers conferred under cl. (1) of article 352 declared that a grave emergency existed whereby the security of India was threatened by external aggression. This Proclamation was approved by Resolutions of both the Houses of Parliament of 4th December, 1971 as contemplated under cl. 2(c) of article 352 and it continued in operation until 21st March, 1977 when it was revoked by a Proclamation issued by the President under clause 2(a) of article 352. The first Proclamation of Emergency was thus in operation at the date when the House of People Extension of Duration) Act, 1976 was enacted by Parliament. The second Proclamation of Emergency was issued by the President under article 352 cl. (1) and by this Proclamation, the President declared that a grave emergency existed whereby the security of India was threatened by internal disturbance. This Proclamation was also in operation at the date of enactment of the House of People (Extension of Duration) Act, 1976 since it was not revoked by another Proclamation issued under cl. 2(a) of article 35 until 21st March, 1977. The argument of the petitioners however, was that, though the first Proclamation of Emergency was validly issued by the President on account of external aggression committed by Pakistan against India, the circumstances changed soon thereafter and the emergency which justified the issue of the Proclamation ceased to exist and consequently the continuance of the Proclamation was malafide and colourable and hence the Proclamation, though not revoked until 21st March, 1972, ceased in law to continue in force and could not be said to be in operation at the material date, namely, 16th February, 1976. So far as the second Proclamation of Emergency is concerned, the petitioners contended that it was illegal and void on 304 three grounds, namely; whilst the first Proclamation of Emergency was in operation, it was not competent to the President under article 352. clause (1) to issue another Proclamation of Emergency; (2) the second Proclamation of Emergency was issued by the President on the advice of the Prime Minister and since this advice was given by the Prime Minister without consulting the Council of Ministers, which alone was competent under the Government of India (Transaction of Business Rules, 1961 to deal with the question of issue of a Proclamation of Emergency, the second Proclamation of Emergency could not be said to have been validly issued by the President; and (3) there was not threat to the security of India on account of internal disturbance, which could justify the issue of a Proclamation of Emergency and the second Proclamation was issued, not for a legitimate purpose sanctioned by clause (1) of article 352 but with a view to perpetuating the Prime Minister in power and it was clearly malafide and for collateral purpose and hence outside the power of the President under article 352 cl.(1). The petitioners had to attack the validity of both the Proclamations of Emergency, the continuance of one and the issuance of another, because even if one Proclamation of Emergency was in operation at the relevant time, it would be sufficient to invest Parliament with power to enact the House of People (Extension of Duration) Act, 1976. Obviously, therefore, if the first Proclamation of Emergency was found to continue in operation at the date of enactment of the House of People (Extension of Duration) Act, 1976, it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President. I will accordingly first proceed to examine whether the first Proclamation of Emergency which was validly issued by the President ceased to be in force by reason of the alleged change in circumstances and was not operative at the relevant time. It is only if this question is answered in favour of the petitioners that it would become necessary to consider the question of validity of the second proclamation of Emergency. I think it is necessary to emphasize even at the cost of repetition that it was not the case of the petitioners that the first Proclamation of emergency when issued, was invalid. It is a historical fact which cannot be disputed that Pakistan committed aggression against India on 3rd December, 1971 and a grave threat to the security of India arose on account of this external aggression. The President was, therefore, clearly justified in issuing the first Proclamation of Emergency under cl. (1) of article 352. The petitioners, however, contended that the circumstances which warranted the issue of the first Proclamation of Emergency ceased to exist and put forward various facts such as the termination of hostilities with Pakistan on 16th December, 1971, the signing of the Simla Pact on 2nd June, 1972, the resumption of postal and 305 telecommunication links on 4th November, 1974 and the conclusion of trade agreement between India and Pakistan on 24th November, 1974 as also several statements made by the Prime Minister and other Ministers from time to time to show that the threat to the security of India on account of external aggression ceased long before 1975 and there was absolutely no justification whatsoever to continue the Proclamation and hence the continuance of the Proclamation was mala fide and in colourable exercise of power and it was liable to be declared as unconstitutional and void. I do not think this contention of the petitioners can be sustained on a proper interpretation of the provisions of article 352. This Article originally consisted of three clauses, but by section 5 of the Constitution (Thirty eighth Amendment) Act, 1975. clauses (4) and (5) were added in this Article and thereafter, by a further amendment made by sec. 48 of the Constitution Forty second Amendments Act, 1976, another clause (2A) was introduced after cl. The whole of this Article is not relevant for our purpose but I shall set out only the material provisions thereof which have a bearing on the controversy between the parties; 352(1): "If the President is satisfied that a grave emergency exists hereby the Security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance, he may, by Proclamation, make a declaration to that effect (in respect of the whole of India or cf such part of the territory thereof as may be specified in the Proclamation; (2) A Proclamation issued under cl. (1) (a) may be revoked (or varied) by a subsequent Proclamation; (b) shall be laid before each House of Parliament; (c) shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament. . . . . . . . . . . . . . . . . . . (2A). . . . . . . . . . . . . . . . . . (3) A Proclamation of Emergency declaring that the security of India or of any part of the territory thereof is threatened by war or by external aggression or by internal disturbance may be made before the actual occurrence of war or of any such aggression or disturbance if the President is satisfied the there is 306 imminent danger thereof. (4) The power conferred on the President by this article shall include the power to issue different Proclamations on different grounds, being war or external aggression or internal disturbance or imminent danger of war or external aggression or internal disturbance whether or not there is a Proclamation already issued by the President under cl. (1) and such Proclamation is in operation. (5) Notwithstanding anything in this Constitution: (a) the satisfaction of the President mentioned in clauses (1) and (3) shall be final and conclusive and shall not be questioned in any Court on any ground; (b) subject to the provisions of cl. (2), neither the Supreme Court nor any other court shall have jurisdiction to entertain any question, on any ground, regarding the validity of (i) a declaration made by Proclamation by the President to the effect stated in clause (1); or (ii) the continued operation of such Proclamation. " Now it is obvious on a plain natural construction of the language of cl. (1) of article 352 that the President can take action under this clause only if he is satisfied that a grave emergency exists whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance. The satisfaction of the President "that a grave emergency exists whereby the security of India. is threatened whether by war or external aggression or internal disturbance" is a condition precedent which must be fulfilled before the President can issue a Proclamation under article 352 cl. When this condition precedent is satisfied, the President may exercise the power under cl. (1) of article 352 and issue a Proclamation of Emergency. The constitutional implications of a declaration of emergency under article 352 cl. (1) are vast and they are provided in Articles 83(2), 250, 353, 354, 358 and 359. The emergency being an exceptional situation arising out of a national crisis certain wide and sweeping powers have been conferred on the Central Government and Parliament with a view to combat the situation and restore normal conditions. One such power is that given by article 83 (2), which provides that while a Proclamation of Emergency is in operation, Parliament may by law extend its duration for a period not exceeding, one year at a time. Then another power conferred is that under article 250 which says that, while a Proclamation of Emergency is in operation, Parliament shall have the power to make laws for the 307 whole or any part of the territory of India with respect to any of the matters enumerated in the State List. The effect of this provision is that the federal structure based on separation of powers is put out of action for the time being. Another power of a similar kind is given by article 353 which provides that during the time when a Proclamation of Emergency is in force, the executive powers of the Union shall extend to the giving of directions to any State as to the manner in which the executive power thereof is to be exercised. This provision also derogates from the federal principle which forms the basis of the Constitution. Then we come to article 354 which confers power on the President, during the operation of a Proclamation of Emergency, to direct that provisions relating to distribution of revenues under articles 268 to 270 shall have effect subject to such modifications or exceptions as he thinks fit. Another drastic consequence of the Proclamation of Emergency is that provided in Article 358 which suspends the operation of the Fundamental Rights guaranteed under article 19 while a Proclamation of Emergency is in operation. article 359 cl (1) em powers the President during the operation of a Proclamation of Emergency to make an order suspending the enforcement of any of the Fundamental Rights conferred by Part III and cl. (A) introduced by the Constitution (Thirty Eighth Amendment) Act, 1975 suspends the operation of those Fundamental Rights of which the enforcement has been suspended by the President by an order made under clause (1). These are the drastic consequences which ensue upon the making of a declaration of emergency. The issue of a Proclamation of Emergency makes serious inroads into the principle of federalism and emasculates the operation and efficacy of the Fundamental Rights. The power of declaring an emergency is therefore a power fraught with grave consequences and it has the effect of disturbing the entire power structure under the Constitution. But it is a necessary power given to the Central Government with a view to arming it adequately to meet an exceptional situation arising out of threat to the security of the country on account of war or external aggression or internal disturbance or imminent danger of any such calamity. It is therefore a power which has to be exercised with the greatest care and caution and utmost responsibility. It will be convenient at this stage to consider the question as to whether and if so to what extent, the Court can review the constitutionality of a Proclamation of Emergency issued under Article 352 cl. There were two objections put forward on behalf of the respondents against the competence of the Court to examine the question of validity of a Proclamation of Emergency. One objection was that the question whether a grave emergency exists whereby the security of India or any part thereof is threatened by war or external aggression 308 or internal disturbance is essentially a political question entrusted by the Constitution to the Union Executive and on that account, it is not justiciable before the court. It was urged that having regard to the political nature of the problem, it was not amenable to judicial determination and hence the court must refrain from inquiring into it. The other objection was that in any event by reason of clauses (4 and 5) of Article 352, the Court had no jurisdiction to question the satisfaction of the President leading to the issue of a Proclamation of Emergency or to entertain any question regarding the validity of the Proclamation of Emergency or its continued operation. Both these objections are in my view unfounded and they do not bar judicial review of the validity of a Proclamation of Emergency issued by the President under Article 352 cl. My reasons for saying so are as follows: It is axiomatic that if a question brought before the court is purely a political question not involving determination of any legal or constitutional right or obligation, the court would not entertain it, since the court is concerned only with adjudication of legal rights and liabilities. But merely because a question has a political complexion, that by itself is no ground why the court should shrink from performing its duty under the Constitution, if it raises an issue of constitutional determination. There are a large number of decisions in the United States where the Supreme Court has entertained actions having a political complexion because they raised constitutional issue. Vide Gomallion vs Lightfoot and Baker vs Carr. The controversy before the court may be political in character, but so long as it involves determination of a constitutional question, the court cannot decline to entertain it. This is also the view taken by Gupta, J. and myself in State of Rajasthan vs Union of India. I pointed out in my judgment in that case and I still stand by it, that merely because a question has a political colour, the court cannot fold its hands in despair and declare "Judicial hands off". So long as the question is whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the court. Indeed it would be its constitutional obligation to do so. I have said before I repeat again that the Constitution is suprema lex the paramount law of the land, and there is no department or branch of government above or beyond it. Every organ of government, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the limits of its authority and whether it has done so or not is for the Court to decide. The Court is H 309 the ultimate interpreter of the Constitution and when there is manifestly unauthorised exercise of power under the Constitution, it is the duty of the Court to intervene. Let it not be forgotten, that to this Court as much as to other branches of government, is committed the conservation and furtherance of constitutional values. 'the Court 's task is to identify those values in the constitutional plan and to work them into life in the cases that reach the court. "Tact and wise restraint ought to temper any power but courage and the acceptance of responsibility have their place too. " The Court cannot and should not shirk this responsibility, because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country. It would not therefore, be right for the Court to decline to examine whether in a given case there is any constitutional violation involved in the President issuing a Proclamation of Emergency under cl. ( I) of Article 352. But when I say this, I must make It clear that the constitutional jurisdiction of this Court does not extend further than saying whether the limits on the power conferred by the Constitution on the President have been observed or there is transgression of such limits. Here the only limit on the power of the President under Article 35 cl. (1) is that the President should be satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened whether by war or external aggression or internal disturbance. The satisfaction of the President is a subjective, one and cannot be decided by reference to any objective tests. It is deliberately and advisedly subjective because the matter in respect to which he is to be satisfied is of such a nature that its decision must necessarily be left to the Executive branch of Government. There may be a wide range of situations which may arise and their political implications and consequences may have to be evaluated in order to decide whether there is a situation of grave emergency by reason of the security of the country being threatened by war or external aggression or internal disturbance. It is not a decision which can be based on what the Supreme Court of the United States has described as "judiciably discoverable and manageable standards". It would largely be a political judgment based on assessment of diverse and varied factors, fast changing situations. potential consequences and a host of other imponderables. It cannot therefore, by its very nature, be a fit subject matter for adjudication by judicial methods and materials and hence it is left to the subjective satisfaction of the Central Government which is best in a position to decide it. The court cannot go into the question of correctness or adequacy of the facts and circumstances on which the satisfaction of the Central Government is based. That would be a dangerous exercise for the Court, both because it is not a fit instrument for determining a question of this kind and also because the court would thereby usurp 310 the function of the executive and in doing so, enter the "political thicket" which it must avoid, if it is to retain its legitimacy with the people. But one thing is certain that if the satisfaction is mala fide or is based on wholly extraneous and irrelevant grounds, the court would have jurisdiction to examine it, because in that case there would be no satisfaction of the President in regard to the matter on which he is required to be satisfied. The satisfaction of the President is a condition precedent to the exercise of power under article 352 cl. (1) and if it can be shown that there is no satisfaction of the President at all, the exercise of the power would be constitutionally invalid. It is true that by reason of clause (5)(a) of Article 352, the satisfaction of the President is made final and conclusive, arid cannot be assailed on any ground, but, as I shall presently point out, the power of judicial review is a part of the basic structure of the Constitution and hence this provision debarring judicial review would be open to attack on the ground that it is unconstitutional and void as damaging or destroying the basic structure. This attack against constitutionality can, however, be averted by reading the provision to mean and that is how I think it must be read that the immunity from challenge granted by it does not apply where the challenge is not that the satisfaction is improper or unjustified but that there is no satisfaction at all. In such a case, it is not the satisfaction arrived at by the President which is challenged but the existence of the satisfaction itself. Where therefore the satisfaction is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground, it would be no satisfaction at all and it would be liable to be challenged before a court, notwithstanding clause (5)(a) of Article 352. It must, of course, be conceded that in most cases it would be difficult if not impossible, to challenge the exercise of power under Article 352 clause (1) even on this limited ground, because the facts and circumstances on which the satisfaction is based would not be known, but where it is possible, the existence cf the satisfaction can always be challenged on the ground that it is mala fide or based on a wholly extraneous or irrelevant ground. It is true that so far there is no decision of this court taking the view that the validity of a Proclamation of Emergency can be examined by the court though within these narrow limits. But merely because there has been no occasion for this Court to pronounce on the question of justiciability of a Proclamation of Emergency no inference can be drawn that a Proclamation of Emergency is immune from judicial scrutiny. The question whether or not a Proclamation of Emergency can be judicially reviewed on the ground that it is mala fide or an abuse of power of the President did arise before this Court in Gulam Sarwai vs Union of India. but the court declined to 311 express any opinion on this question since no material was placed before the Court making out a case of mala fides or abuse of power. Undoubtedly, in the subsequent decision of this Court in Bhutnath Mato vs State of West Bengal there are one or two observations which might seem to suggest at first blush that a Proclamation of Emergency being a political matter is "de hors our ken", but if one looks closely at the judgment of Krishna Iyer, J. in that case, it will be apparent that he does not lay down that a Proclamation of Emergency cannot be reviewed by the judiciary even on a limited ground and leaves that question open and rejects the contention of the petitioner challenging the continuance of Emergency only on the ground that "the onus of establishing the continuation of Emergency and absence of any ground whatever for the subjective satisfaction of the President, heavy as it is, has hardly been discharged, "and consequently it would be an academic exercise in constitutional law to pronounce on the question of judicial reviewability of a Proclamation of Emergency. There is thus no decision of this court holding that a Proclamation of Emergency is beyond the judicial ken and I am not fettered by any such decision compelling me to take a view different from the one which I have expounded in the preceding paragraph of this opinion. In fact, the judgment of Gupta, J. and myself in State of Rajasthan vs Union of India (supra) completely supports me in the view I am taking. A Proclamation of Emergency is undoubtedly amenable to judicial review though on the limited ground that no satisfaction as required by Article 352 was arrived at by the President in law or that the satisfaction was absurd or perverse or mala fide or based on an extraneous or irrelevant ground. Now the question arises whether the continuance of a Proclamation of Emergency valid when issued can be challenged before the court on the ground that the circumstances which necessitated or justified its issuance have ceased to exist. Can the court be asked to declare that the Proclamation of Emergency has ceased to exist and is no longer in force or does the Proclamation continue to be in force until it is revoked by another Proclamation under clause 2(a) of Article 352. The answer to this question depends on the interpretation of clause (2) of Article 352. That clause says in sub clause (a) that a Proclamation of Emergency issued under clause (1) may be revoked by a subsequent Proclamation. Sub clause (b) of that clause requires that a Proclamation issued under clause (1) shall be laid before each House of Parliament and under sub clause (c) such a Proclamation ceases to operate at the expiration of two months, unless it has been approved by both Houses of Parliament before the expiration of two 312 months. It is clear from this provision that a Proclamation of Emergency validly issued under clause (1) would continue to operate at least for a period of two months and if before the expiration of that period, it has been approved by resolutions of both Houses of Parliament, it would continue to operate further even beyond the period of two months, and the only way in which it can be brought to an end is by revoking it by another Proclamation issued under clause 2(a). There is no other way in which it can cease to operate. Neither Article 352 nor any other Article of the Constitution contains any provision saying that a Proclamation of Emergency validly issued under clause (1) shall cease to operate as soon as the circumstances warranting its issuance have ceased to exist. It is, therefore, clear on a plain natural interpretation of the language of sub clauses (a) to (c) of clause (2 that so long as the Proclamation of Emergency is not revoked by another Proclamation under sub clause (2) (a), it would continue to be in operation irrespective of change of circumstances. It may be pointed out that this interpretation of the provision of clause (2) of Article 352 is supported by the decision of this Court in Lakhan Pal vs Union of India where dealing with a similar contention urged on behalf of the petitioner that the continuance of the emergency which was declared on 26th October, 1962 was a fraud on the Constitution. this Court speaking through Sarkar, C. J. pointed out that "the only way a proclamation ceases to have effect is by one of the events mentioned in this clause" and since neither had happened, the Proclamation must be held to have continued in operation. The petitioner urged in that case that armed aggression which justified the issue of the Proclamation of Emergency had come to an end and the continuance of the Proclamation was therefore unjustified. But this contention was negatived on the ground that the Proclamation having been approved by the two Houses of Parliament within a period of two months of its issuance, it could cease to have effect only if revoked by another Proclamation and that not having happened, the Proclamation continued to be in force. It is true that the power to revoke a Proclamation of Emergency is vested only in the Central Government and it is possible that the Central Government may abuse this power by refusing to revoke a Proclamation of Emergency even though the circumstances justifying the issue of Proclamation have ceased to exist and thus prolong baselessly the state of emergency obliterating the Fundamental Rights and this may encourage a totalitarian trend. But the Primary and real safeguard of the citizen against such abuse of power lies in "the good sense of the people and in the system of representative and responsible Government" which is provided in the Constitution. Additionally, it may be possible for the citizen in a given case to move 313 the court for issuing a writ of mandamus for revoking the Proclamation of Emergency if he is able to show by placing clear and cogent material before the court that there is no justification at all for the continuance of the Proclamation of Emergency. But this would be a very heavy onus because it would be entirely for the executive Government to be satisfied whether a situation has arisen where the Proclamation of Emergency can be revoked. There would be so many facts and circumstances and such diverse considerations to be taken into account by the executive Government before it can be satisfied that there is no longer any grave emergency whereby the security of India is threatened by war or external aggression or internal disturbance. 'this is not a matter which is a fit subject matter for judicial determination and the court would not interfere with the satisfaction of the executive Government in this regard unless it is clear on the material on record that there is absolutely no justification for the continuance of the Proclamation of Emergency and the Proclamation is being continued mala fide or for a collateral purpose. The court may in such a case, if satisfied beyond doubt, grant a writ of mandamus directing the Central Government to revoke the Proclamation of Emergency. But until that is done, the Proclamation of Emergency would continue in operation and it cannot be said that, though not revoked by another Proclamation, it has still ceased to be in force. Here, in the present case it was common ground that the first Proclamation of Emergency issued on 3rd December 1971 was not revoked by another Proclamation under clause 2(a) of Article 352 until 21st March 1977 and hence at the material time when the House of People (Extension of Duration) Act, 1976 was passed, the first Proclamation of Emergency was in operation. Now if the first Proclamation of Emergency was in operation at the relevant time, it would be sufficient compliance with the requirement of the proviso to clause (2) of Article 83 and it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President. But, contended the petitioners, the House of People (Extension of Duration) Act, 1976 on a proper interpretation of section 2 postulated the operational existence of both the Proclamations of Emergency and if either of them was not in existence at the material date, the Act would be inoperative and would not have the effect of extending the duration of the Lok Sabha. It was therefore not enough for the respondents to establish that the first Proclamation of Emergency was in operation at the relevant date, but it was further necessary to show that the second Proclamation of Emergency was also in operation and hence it was necessary to consider whether the second Proclamation of Emergency was validly issued by the President. The respondents sought to answer this contention 314 of the petitioners by saying that on a proper construction of the language of section 2, it was not a condition precedent to the operation. of the House of People (Extension of Duration Act, 1976 that both the Proclamations of Emergency should be in operation at the date when the Act was enacted. The House of People (Extension of Duration) Act, 1976 no doubt referred to both the Proclamations of Emergency being in operation but that was merely, said the respondents, by way of recital and it was immaterial whether this recital was correct or in correct, because so long as it could be objectively established that on Proclamation of Emergency at least was in operation, the requirement of the proviso to Article 83 clause (2) would be satisfied and the Act would be within the competence of Parliament to enact. These rival contentions raised a question of construction of section 2 of the House of People (Extension of Duration) Act, 1976. It is a simple question which does not admit of much doubt or debate and a plain grammatical reading of section 2 is sufficient to answer it. It would be convenient to reproduce section 2 which co incidentally happens to be the only operative section of the Act: "Sec. 2: The period of five years (being the period for which the House of the People may, under clause (2) of Article 83 of the Constitution, continue from the date appointed for its first meeting) in relation to the present House of the People shall, while the Proclamations of Emergency issued on the 3rd day of December, 1971 and on the 25th day of June, 1975, are both in, operation, be extended for a period of one year: Provided that if both or either of the said Proclamations cease or ceases to operate before the expiration of the said period of one year, the present House of the People shall, unless previously dissolved under clause (2) of Article 83 of the Constitution,. continue until six months after the cesser of operation OF the said Proclamations or Proclamation but not beyond the said period of one year. " While interpreting the language of this section, it is necessary to bear in mind that the House of People (Extension of Duration) Act, 1976 was enacted under the proviso to clause (2) of Article 83 for the purpose of extending the duration of the Lok Sabha and it was a condition precedent to the exercise of this power by Parliament that there should be a Proclamation of Emergency in operation at the date when the Act was enacted. Now according to Parliament there were two Proclamations of Emergency which were in operation at the material date, one issued on 3rd December 1971 and the other on 25th June 1975 and the condition precedent for the exercise of the power under the proviso to cl. (2) of Article 83 to enact the House of People (Extension 315 of Duration) Act, 1976 was satisfied. It was, from the point of view of legislative drafting, not necessary to recite the fulfillment of this condition precedent, but the draftsman of the Act, it seems, thought it advisable to insert a recital that this condition precedent was satisfied and he, therefore, introduced the words "while the Proclamations of Emergency issued on the 3rd day of December, 1971 and on the 25th day of June, 1975 are both in operation" before the operative part in sec. 2 of the Act. These words were introduced merely by way of recital of the satisfaction of the condition precedent for justifying the exercise of the power under the proviso to clause (2) of Article 83 and they were not intended to lay down a condition for the operation of sec. 2 of the Act. Section 2 clearly and in so many terms extended the duration of the Lok Sabha for a period of one year and this extension was not made dependent on both the Proclamations of Emergency being in operation at the date of the enactment of the Act. It was for a definite period of one year that the extension was effected and it was not co extensive with the operation of both the Proclamations of Emergency. The extension for a period of one year was made once and for all by the enactment of section 2 and the reference to both the Proclamations of Emergency being in operation was merely for the purpose of indicating that both the Proclamations of Emergency being in operation. Parliament had competence to make the extension. It was therefore not at all necessary for the efficacy of the extension that both the Proclamations of Emergency should be in operation at the date of enactment of the Act. Even if one Proclamation of Emergency was in operation at the material date, it would be sufficient to attract the power of Parliament under the proviso to article 83 clause (2) to enact the Act extending the duration of the Lok Sabha. Of course, it must be concerned that Parliament proceeded on the assumption that both the Proclamations of Emergency were in force at the relevant date and they invested Parliament with power to enact the Act, but even if this legislative assumption were unfounded, it would not make any difference to the validity of the exercise of the power, so long as there was one Proclamation of Emergency in operation which authorised Parliament to extend the duration of the Lok Sabha wader the proviso to clause (2) of Article 83. It is true that the proviso to sec. 2 enacted that if both or either of the Proclamations of Emergency cease or ceases to operate before the expiration of the extended period of one year, the Lok Sabha shall continue until six months after the cesser of operation of the said Proclamations or Proclamation, not going beyond the period of one year, but the opening part of this proviso can have application only in relation to a Proclamation of Emergency which was in operation at the date of enactment of the Act. If such a Proclamation of Emergency which was in operation at the 316 material date ceased to operate before the expiration of the extended period of one year, then the term of the Lok Sabha would not immediately come to an end, but it would continue for a further period of six months but not so to exceed the extended period of one year. This provision obviously could have no application in relation to the second Proclamation of emergency if it was void when issued. In such a case, the second Proclamation not being valid at all at the date of issue would not be in operation at all and it could not cease to operate after the date of enactment of the Act. The proviso would in that event have to be read as relating only to the first Proclamation of Emergency, and since that Proclamation of Emergency continued until it was revoked on 21st March, 1977, the duration of the Lok Sabha was validly extended for a period of one year from 18th March, 1976 and hence there was a validly constituted Lok Sabha on the dates when the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976 were passed by Parliament. On this view it is not at all necessary to consider whether the second Proclamation of Emergency was validly issued by the President. It is the settled practice of this Court not to say more than is necessary to get a safe resting place for the decision and I do not think that any useful purpose will be served by examining the various grounds of challenge urged against the validity of the second Proclamation of Emergency, particularly since clause (3) has been introduced in article 352 by the Constitution (Forty Fourth Amendment) Act, 1978 requiring that a Proclamation of Emergency shall not be issued by the President unless the decision of the Union Cabinet recommending the issue of such Proclamation has been communicated to him in writing and clause (9) of Article 352 introduced by the Constitution (Thirty eighth Amendment) Act. 1975 and renumbered by the Constitution (Forty Fourth Amendment) Act, 1978 empowers the President to issue different Proclamations on different grounds. I would, therefore. reject the challenge against the validity of the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976 based on the ground that on the dates when these Constitution Amending Acts were enacted, the Lok Sabha was not validly in existence. That takes me to the challenge against the constitutional validity of the amendment made in Article 31. by section 4 of the Constitution (Forty second Amendment) Act, 1976. This amendment substitutes the words "all or any of the principles laid down in Part IV" for the words "the principles specified in clause (b) or clause (c) of Article 39" and so amended; Article 31C provides that "Notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing all or any of the principles laid dow. in Part IV shall 317 be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14 or Article 19". The amended Article 31C gives primacy to Directive Principles over Fundamental Rights in case of conflict between them and the question is whether this amendment is in any way destructive of the basic structure of the Constitution. To answer this question satisfactorily, it is necessary to appreciate the inter relationship between Fundamental Rights and Directive Principles and for this purpose it would be useful to trace briefly the history of their enactment in the Constitution. The genesis of Fundamental Rights and Directive Principles is to be found in the freedom struggle which the people of India waged against the British rule under the aegis of the Indian National Congress led by Mahatma Gandhi, Jawaharlal Nehru and other national leaders. These great leaders realised the supreme importance of the political and civil rights of the individual. because they knew from their experience of the repression under the British rule as also from the recent events of history including the two World Wars that these rights are absolutely essential for the dignity of man and development of his full personality. But, at the same time, they were painfully conscious that in the socio economic conditions that prevailed in the country. only an infinitesimal fraction of the people would be able to enjoy these civil and political rights. There were millions of people in the country who were steeped in poverty and destitution and for them, these civil and political rights had no meaning. It was realised that to the large majority of people who are living an almost sub human existence in conditions of object poverty and for whom life is one long unbroken story of want and destitution, notions of individual freedom and liberty, though representing some of the most cherished values of free society, would sound as empty words bandied about only in the drawing rooms of the rich and well to do and the only solution for making these rights meaningful to them was to re make the material conditions and usher in a new social order where socio economic justice will inform all institutions of public life so that the pre conditions of fundamental liberties for all may be secured. It was necessary to create socio economic conditions in which every citizen of the country would be able to exercise civil and politically rights and they will not remain the preserve of only a fortunate few. The national leaders, therefore, laid the greatest stress on the necessity of bringing about socio economic regeneration and ensuring social and economic justice. Mahatma Gandhi, the father of the nation, said in his inimitable style in words, full of poignancy: "Economic equality is the master key to non violent independence. A non violent system of Government is an impossibility so long as the wide gulf between the rich and the hungry 318 millions persists. The contrast between the palaces of New Delhi and the miserable hovels of the poor labouring class cannot last one day in a free India in which the poor will enjoy the same power as the rich in the land. A violent and bloody revolution is a certainty one day, unless there is voluntary abdication of riches and the power that riches give and sharing them for common good". Jawaharlal Nehru also said in the course of his presidential address to the Lahore Congress Session of 1929: "The philosophy of socialism has gradually permeated the entire structure of the society, the world over and almost the only point in dispute is the phase and methods of advance to its full realisation. India will have to go that way too if she seeks to end her poverty and inequality, though she may evolve her own methods and may adapt the ideal to the genius of her race. Then again, emphasizing the intimate and inseverable connection between political independence and social and economic freedom, he said: "If an indigenous Government took the place of the foreign Government and kept all the vested interests intact, this would not be even the shadow of freedom . . . . . . . . . . . . . India 's immediate goal can only be considered in terms of the ending of the exploitation of her people. Politically, it must mean independence and cession of the British connection, economically and socially, it must mean the ending of all special class privileges and vested interests. " The Congress Resolution of 1929 also emphasized the same theme of socio economic reconstruction when it declared: "The great poverty and misery of the Indian people are due, not only to foreign exploitation in India, but also to the economic structure of society, which the alien rulers support so that their exploitation may continue. In order therefore to remove this poverty and misery and to ameliorate the condition of the Indian masses, it is essential to make revolutionary changes in the present economic and social structure of society and to remove the gross inequalities. " The Resolution passed by the Congress in 1931 proceeded to declare that in order to end the exploitation of masses, political freedom must include social and economic freedom of the starving mil lions. The Congress Election Manifesto of 1945 also reiterated the same thesis when it said that "the most vital and urgent of India 's 319 problems is how to remove the curse of poverty and raise the standard of masses" and for that purpose it is "necessary. . . . . to prevent the concentration of wealth and power in the hands of individuals and groups and to prevent vested interests inimical to society from "growing". This was the socio economic philosophy which inspired the framers of the Constitution to believe that the guarantee of individual freedom was no doubt necessary to be included in the Constitution, but it was also essential to make provisions for restructuring the socio economic order and ensuring social and economic justice to the people. This was emphasized by Jawaharlal Nehru when, speaking on the resolution regarding the aims and objectives before the Constituent Assembly, he said: "The first task of this Assembly is to free India through a new Constitution, to feed the starving people and clothe the naked masses and give every Indian fullest opportunity to develop himself according to his capacity. In fact, as pointed out by K. Santhanan, a prominent southern member of the Constituent Assembly, there were three revolutions running parallel in India since the end of the first World War. The political revolution came to an end on 15th August, 1947 when India became independent but clearly political freedom cannot be an end in itself. it can only be a means to an end, "that end being" as eloquently ex pressed by Jawaharlal Nehru "the raising of the people,. . . . to higher levels and hence the general advancement of humanity. " It was therefore necessary to carry forward and accomplish the social and economic revolutions. The social revolution was meant to get India "out of the mediavalism based on birth, religion, custom and community and reconstruct her social structure on modern foundations of law, individual merit and secular education," while the economic revolution was intended to bring about "transition from primitive rural economy to scientific and planned agriculture and industry. " Dr. Radhakrishnan who was a member of the Constituent Assembly and who later became the President of India also emphasised that India must have a socio economic revolution designed not only to bring about the real satisfaction of the fundamental needs of the common man hut to go much deeper and bring about "a fundamental change in the structure of Indian society. " It was clearly realised by the framers of the Constitution that on the achievement of this great social and economic change depended the survival of India. "If we cannot solve this problem soon", Jawaharlal Nehru warned the Constituent Assembly "all our paper Constitutions will become useless and purposeless." The objectives Resolution which set out the and 320 objectives before the Constituent Assembly in framing the Constitution and which was passed by the Constituent Assembly in January 1947 before embarking upon the actual task of Constitution making, therefore, expressed the resolve of the Constituent Assembly to frame a constitution "wherein shall be guaranteed and secured to all the people of India justice, social, economic and political, equality of status and of opportunity before the law; freedom of thought, expression, belief, faith, worship, vocation, association and action subject to law and public morality and wherein adequate safeguards shall be provided for minority, backward and trial areas and depressed and other backward classes." These objectives were incorporated by the Constitution makers in the Preamble of the Constitution and they were a sought to be secured by enacting Fundamental Rights in Part III and Directive Principles in Part IV. It is not possible to fit Fundamental Rights and Directive Principles in two distinct and strictly defined categories, but it may be stated broadly that Fundamental Rights represent civil and political rights while Directive Principles embody social and economic rights. Both are clearly part of the broad spectrum of human rights. If we look at the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 18th December 1948. we find that it contains not only rights protecting individual freedom (See Articles 1 to 21) but also social and economic rights intended to ensure socio economic justice to every one (See Articles 22 to 29). There are also two International Covenants adopted by the General Assembly for securing human rights, one is the International Covenant on Civil and Political Rights and the other is the International Covenant on Economic, Social and Cultural Rights. Both are international instruments relating to human rights. It is therefore not correct to t say that Fundamental Rights alone are based on human rights while Directive Principles fall in some category other than human rights. The socio economic rights embodied in the Directive Principles are as much a part of human rights as the Fundamental Rights. Hegde and Mukherjea, JJ. were. to my mind, right in saying in Keshavananda Bharati 's case at page 312 of the Report that "the Directive Principles and the Fundamental Rights mainly proceed on the basis of human Rights. " Together, they are intended to carry out the objectives set out in the Preamble of the Constitution and to establish an egalitarian social order informed with political, social and economic justice and II ensuring dignity of the individual not only to a few privileged persons but to the entire people of the country including the have nots and the handicapped, the lowliest and the lost, 321 Now it is interesting to note that although Fundamental Rights and Directive Principles appear in the Constitution as distinct entities, there was no such demarcation made between them during the period prior to the framing of the Constitution. If we may quote the words of Granville Austin in his book; "Both types of rights had developed as a common demand, products of the national and social revolutions, of their almost inseparable intertwining. and of the character of Indian politics itself". They were both placed on the same pedestal and treated as falling within the same category compendiously described as "Fundamental Rights". The Sapru Committee in its Constitutional Proposals made in 1945, recommended that the declaration of Fundamental Rights in its wider sense was absolutely necessary and envisaged these rights as falling in two classes; one justiciable and the other non justiciable the former being enforceable in Courts of law and the latter, not. The Committee however, felt difficulty in dividing the Fundamental Rights into these two classes and. left the whole issue to be settled by the Constitution making body with the observation that though the task was difficult, it was by no means impossible. This suggestion of the Sapru Committee perhaps drew its inspiration from the Irish Constitution of 1937, which made a distinction between justiciable and non justiciable rights and designated the former as Fundamental Rights and the latter as Directive Principles of Social Policy. Dr. Lauter pacht also made a similar distinction between justiciable and non justiciable rights in his "International Bill of the Rights of Men". The substantial provisions of this Bill were in two parts; Part I dealt with personal or individual rights enforceable in Courts of Law while Part II set out social and economic rights incapable of or unsuitable for such enforcement. Sir B. N. Rau, who was the Constitutional Adviser to the Government of India, was considerably impressed by these ideas and he suggested that the best way of giving effect to the objectives set out in the objectives Resolution was to split up the objectives into Fundamental Rights and Fundamental Principles of State Policy, the former relating to personal and political rights enforceable in Courts of Law and the latter relating to social and economic rights and other matters, not so enforceable and proposed that the Chapter on Fundamental Rights may be split up into two parts; Part A dealing with the latter kind of rights under the heading "Fundamental Principles of Social Policy" and Part dealing with the former under the heading "Fundamental Rights". The Fundamental Rights Sub Committee also recommended that "the list of fundamental rights should be prepared in two parts, the first part consisting of rights enforceable by appropriate legal process and the second consisting of Directive Principles of Social Policy". A week later, while moving for consideration, the Interim Report of Fundamental Rights, Sardar Vallabhbhai Patel said: 322 "This is a preliminary report or an interim report because the Committee when it sat down to consider the question of fixing the fundamental rights and its incorporation into the Constitution. came to the conclusion that the Fundamental Rights should be divided into two parts the first part justiciable and the other non justiciable. " This position was reiterated by Sardar Vallabhbhai Patel when he said while presenting the Supplementary Report: "There were two parts of the Report; one contained Fundamental Rights which were justiciable and the other part of the Report referred to Fundamental Rights which were not justiciable but were directives. " It will, therefore, be seen that from the point of view of importance and significance no distinction was drawn between justiciable and non justiciable rights and both were treated as forming part of the rubric of Fundamental Rights, the only difference being that whereas the former were to be enforceable in Courts of Law, the latter were not to be so enforceable. This proposal of dividing the fundamental rights into two parts, one part justiciable and the other non justiciable, was however not easy of adoption, because it was a difficult task to decide in which category a particular fundamental right should be included. The difficulty may be illustrated by pointing out that at one time the right to primary education was included in the draft list of Fundamental Rights, while the equality clause figured in the draft list of Fundamental Principles of Social Policy. But ultimately a division of the Fundamental Rights into justiciable and non justiciable rights was agreed upon by the Constituent Assembly and the former were designated as "Fundamental Rights" and the latter as "Directive Principles of State Policy". It has sometimes been said that the Fundamental Rights deal with negative obligations of the State not to encroach on individual freedom, while the Directive Principles impose positive obligations on the State to take certain kind of action. But, I find it difficult to subscribe to this proposition because, though the latter part may be true that the Directive Principles require positive action to be taken by the State, it is not wholly correct to say that the Fundamental Rights impose only negative obligations on the State. There are a few fundamental rights which have also a positive content and that has been. to some extent, unfolded by the recent decisions of this Court in Hussainara Khatton vs State of Bihar, Madhav Hayawadanrao Hoskot vs State of Maharashtra and Sunil Batra etc. vs Delhi Administration & Ors. There are new dimensions of 323 the Fundamental Rights which are being opened up by this Court and the entire jurisprudence of Fundamental Rights is in a stage of resurgent evolution. Moreover, there are three Articles, namely, article 15(2), article 17 and article 23 within the category of Fundamental Rights which are designed to protect the individual against the action of other private citizens and seem to impose positive obligations on the State to ensure this protection to the individual. I would not, therefore, limit the potential of the Fundamental Rights by subscribing to the theory that they are merely negative obligations requiring the State to abstain as distinct from taking positive action. The only distinguishing feature, to my mind, between Fundamental Rights and Directive Principles is that whereas the former are enforceable in a Court of Law, the latter, are not. And the reason for this is obvious; it has been expressed succinctly by the Planning Commission in the following words: "The non justiciability clause only provides that the infant State shall not be immediately called upon to account for not fulfilling the new obligations laid upon it. A State just awakened to freedom with its many pre occupations might be crushed under the burden unless it was free to decide the order, the time, the place and the mode of fulfilling them. " The social and economic rights and other matters dealt with in the Directive Principles are by their very nature incapable of judicial enforcement and moreover, the implementation of many of those rights would depend on the state of economic development in the country, the availability of necessary finances and the Government 's assessment of priority of objectives and values and that is why they are made non justiciable. But merely because the Directive Principles are non justiciable, it does not follow that they are in any way subservient or inferior to the Fundamental Rights. The Indian Constitution is first and foremost a social document. The majority of its provisions are either directly aimed at furthering the goals of the socio economic revolution or attempt to foster this revolution by establishing the conditions necessary for its achievement. Yet despite the permeation of the entire Constitution by the aim of national renascence, says Granville Austin, "the core of the commitment to the social revolution lies . . . in the Fundamental Rights and the Directive Principles of State Policy. " These are the conscience of the Constitution and, according to Granville Austin, "they are designed to be the Chief instruments in bringing 324 about the great reforms of the socio economic revolution and realising the constitutional goals of social, economic and political justice for all. The Fundamental Rights undoubtedly provide for political justice by conferring various freedoms on the individual, and also make a significant contribution to the fostering of the social revolution by aiming at a society which will be egalitarian in texture and where the rights of minority groups will be protected. But it is in the Directive Principles that we find the clearest statement of the socioeconomic revolution. The Directive Principles aim at making the Indian masses free in the positive sense, free from the passivity engendered by centuries of coercion by society and by nature, free from the object physical conditions that had prevented them from fulfilling their best salves. The Fundamental Rights are no doubt important and valuable in a democracy. but there can be no real democracy without social and economic justice to the common man and to create socio economic conditions in which there can be social and economic justice to every one, is the theme of the Directive Principles. It is the Directive Principles which nourish the roots of our democracy, provide strength and vigour to it and attempt to make it a real participatory democracy which does not remain merely a political democracy but also becomes social and economic democracy with Fundamental Rights available to all irrespective of their power, position or wealth. The dynamic provisions of the Directive Principles fertilise the static provisions of the Fundamental Rights. The object of the Fundamental Rights is to protect individual liberty, but can individual liberty be considered in isolation from the socio economic structure in which it is to operate. There is a real connection between individual liberty and the shape and form of the social and economic structure of the society. Can there be any individual liberty at all for the large masses of people who are suffering from want and privation and who are cheated out of their individual rights by the exploitative economic system ? Would their individual liberty not come in conflict with the liberty of the socially and economically more powerful class and in the process, get mutilated or destroyed ? It is axiomatic that the real controversies in the present day society are not between power and freedom but between one form of liberty and another. Under the present socio economic system, it is the liberty of the few which is in conflict with the liberty of the many. The Directive Principles therefore, impose an obligation on the State to take positive action 325 for creating socio economic conditions in which there will be an egalitarian social order with social and economic justice to all, so that individual liberty will become a cherished value and the dignity of the individual a living reality, not only for a few privileged persons but for the entire people of the country. It will thus be seen that the Directive Principles enjoy a very high place in the constitutional scheme and it is only in the framework of the socio economic structure envisaged in the Directive Principles that the Fundamental Rights are intended to operate, for it is only then they can become meaningful and significant for the millions of our poor and deprived people who do not have even the bare necessities of life and who are living below the poverty level. The Directive Principles are set out in Part IV of the Constitution and this Part starts with Article 37 which, to my mind, is an Article of crucial importance. It says: "The provisions contained in this Part shall not be enforceable in any court but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. " It is necessary, in order to appreciate the full implications of this Article, to compare it with the corresponding provision in the Irish Constitution which, as pointed out above, provided to some extent the inspiration for introducing Directive Principles in the Constitution. Article 45 of the Irish Constitution provides: "The principles of social policy set forth in this Article are E intended for the general guidance of the Directives. The application of those principles in the making of laws shall be the care of the Direchtas exclusively and shall not be cognizable for any court under any of the provisions of this Constitution. " It is interesting to note that our Article 37 makes three significant departures from the language of Article 45; first whereas Articles 4. provides that the application of the principles of social policy shall not be cognizable by any court, Article 37 says that the Directive Principles shall not be enforceable by any court: secondly whereas Article 45 provides that the principles of social policy are intended for the general guidance of the Direchtas, Article 37 makes the Directive Principles fundamental in the governance of this country; and lastly, whereas Article 45 declares that the application of principles of social policy in the making of laws shall be the care of the Direchtas exclusively, Article 37 enacts that it shall be the duty of the State to apply the Directive Principles in making laws. The changes made by the framers of the Constitution are vital and they have the effect of bringing about a total transformation or metamorphosis o f this provision, fundamentally altering its significance and efficacy, 326 It will be noticed that the Directive Principles are not excluded from the cognizance of the court, as under the Irish Constitution: they are merely made non enforceable by a court of law for reasons already discussed But merely because they are not enforceable by the judicial process does not mean that they are of subordinate importance to any other part of the Constitution. I have already said this before, but I am emphasizing it again, even at the cost of repetition, because at one time a view was taken by this Court in State of Madras vs Champkan Dorairajan that because Fundamental Rights are made enforceable in a court of law and Directive Principles are not. "the Directive Principles have to conform to and run as subsidiary to the Chapter on Fundamental Rights. " This view was patently wrong and within a few years, an opportunity was found by this Court in the Kerala Education Bill, 1959 SCR 995 to introduce a qualification by stating that: "Nevertheless in determining the scope and ambit of the Fundamental Rights relied on by or on behalf of any person or body, the court may not entirely ignore these Directive Principles of State Policy laid down in Part IV of the Constitution but should adopt the principle of harmonious construction and should attempt to give effect to both as much as possible." But even this observation seemed to give greater importance to Fundamental Rights as against Directive Principles and that was primarily because the Fundamental Rights are enforceable by the Judicial process while the Directive Principles are expressly made non enforceable I am however, of the opinion, and on this point I agree entirely with the observation of Hegde, J. in his highly illuminating Lectures on the "Directive Principles of State Policy" that: "Whether or not a particular mandate of the Constitution is enforceable by court, has no bearing on the importance of that mandate. The Constitution contains many important mandates which may not be enforceable by the courts of law. That does not mean that those Articles must render subsidiary to the Chapter on Fundamental Rights . it would be wrong to say that those positive mandates", that is the positive mandates contained in the Directive Principles, "are of lesser significance than the mandates under Part III. " Hegde, J. in fact pointed out at another place in his Lectures that: "Unfortunately an impression has gained ground in the organs of the State not excluding judiciary that because the Directive Principles set out in Part IV are expressly made by Article 37 non enforceable by courts, these directives are mere pious hopes 327 not deserving immediate attention. I emphasize again that no Part of the Constitution is more important that Part IV To ignore Part IV is to ignore the sustenance provided for in the Constitution, the hopes held out to the nation and the very ideals on which our Constitution is built up." (Emphasis supplied). I wholly endorse this view set forth by Hegde, J and express my full concurrence with it. I may also point out that simply because the Directive Principles do not create rights enforceable in a court of law, it does not follow that they do not create any obligations on the State. We are so much Obsessed by the Hohfeldian Classification that we tend to think of rights, Liberties, powers and privileges as being invariably linked with the corresponding concept of duty, no right, liability and immunity. We find it difficult to conceive of obligations or duties which do not create corresponding rights in others. But the Hohfeldian concept does not provide a satisfactory analysis in all kinds of jural relation ships and breaks down in some cases where it is not possible to say that the duty in one creates an enforceable right in another. There may be a rule which imposes an obligation on an individual or authority and yet it may not be enforceable in a court of law and therefore not give rise to a corresponding enforceable right in another person. But it would still be a legal rule because it prescribes a norm or con duct to be followed by such individual or authority. The law may provide a mechanism for enforcement of this obligation, but the existence of the obligation does not depend upon the creation of such mechanism. The obligation exists prior to and independent of the mechanism of enforcement. A rule imposing an obligation or duty would not therefore cease to be a rule of law because there is no regular judicial or quasi judicial machinery to enforce its command. Such a rule would exist despite of any problem relating to its enforcement. Otherwise the conventions of the Constitution and even rules of International Law would no longer be liable to be regarded as rules of law. This view is clearly supported by the opinion of Professor A. L. Goodhart who, while commenting upon this point, says: "I have always argued that if a principle is recognised as, binding on the legislature, then it can be correctly described as a legal rule even if there is no court that can enforce it. Thus most of Dicey 's book on the British Constitution is concerned with certain general principles which Parliament recognises as binding on it. " It is therefore. to my mind, clear beyond doubt that merely because the Directive Principles are not enforceable in a court of law, it does not mean that they cannot create obligations or duties binding on the 328 State. The crucial test which has to be applied is whether the Directive Principles impose any obligations or duties on the State; if they do, the State would be bound by a constitutional mandate to carryout such obligations or duties, even though no corresponding right is created in any one which can be enforced in a court of law. Now on this question Article 37 is emphatic and makes the point in no uncertain terms. It says that the Directive Principles are "nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. " There could not have been more explicit language used by the Constitution makers to make the Directive Principles binding on the State and there can be no doubt that the State is under a constitutional obligation to carry out this mandate contained in Article 37. In fact, non compliance with the Directive Principles would be unconstitutional on the part of the State and it would not only constitute a breach of faith with the people who imposed this constitutional obligation on the State but it would also render a vital part of the Constitution meaningless and futile. Now it is significant to note that for the purpose of the Directive Principles, the "State" has the same meaning as given to it under Article 13 for the purpose of the Fundamental Rights. This would mean that the same State which is injuncted from taking any action in infringement of the Fundamental Rights is told in no uncertain terms that it must regard the Directive Principles as fundamental in the governance of the country and is positively mandated to apply them in making laws. This gives rise to a paradoxical situation and its implications are for reaching. The State is on the one hand, prohibited by the constitutional injunction in Article 13 from making any law or taking any executive action which would infringe any Fundamental Right and at the same time it is directed by the constitutional mandate in Article 37 to apply the Directive Principles in the governance of the country and to make laws for giving effect to the Directive Principles. Both are constitutional obligations of the State and the question is, as to which must prevail when there is a conflict between the two. When the State makes a law for giving effect to a Directive Principle, it is carrying out a constitutional obligation under Article 37 and if it were to be said that the State cannot make such a law because it comes into conflict with a Fundamental Right, it can only be on the basis that Fundamental Rights stand on a higher pedestal and have precedence over Directive Principles. But, as we have pointed out above, it is not correct to say that under our constitutional scheme, Fundamental Rights are superior to Directive Principles or that Directive Principles must yield to Fundamental Rights. Both are in fact equally fundamental and the courts have therefore in recent times tried to 329 harmonise them by importing the Directive Principles in the construction of the Fundamental Rights. It has been laid down in recent decisions of this Court that for the purpose of determining the reasonableness of the restriction imposed on Fundamental Rights, the Court may legitimately take into account the Directive Principles and where executive action is taken or legislation enacted for the purpose of giving effect to a Directive Principle, the restriction imposed by it on a Fundamental Right may be presumed to be reasonable. I do not propose to burden this opinion with reference to all the decided cases where this principles has been followed by the Court, but I may refer only to one decision which, I believe, is the latest on the point, namely, Pathumma vs State of Kerala, where Fazal Ali, J. summarised the law in the following words: "one of the tests laid down by this Court is that in judging the reasonableness of the restrictions imposed by clause (5) of article 19, the Court has to bear in mind the Directive Principles of State Policy". So also in the State of Bihar vs Kameshwar Singh, this Court relied upon the Directive Principle contained in article 39 in arriving at its decision that the purpose for which the Bihar Zamindary Abolition legislation had been passed was a public purpose. The principle accepted by this Court was that if a purpose is one falling within the Directive Principles, it would definitely be a public purpose. It may also be pointed out that in a recent decision given by this Court in M/s Kasturi Lal Lakshmi Reddy etc. vs The State of Jammu & Kashmir & Anr, has been held that every executive action of the Government, whether in pursuance of law or otherwise, must be reasonable and informed with public interest and the yardstick for determining both reasonableness and public interest is to be found in the Directive Principle and therefore, if any executive action is taken by the Government for giving effect to a Directive Principle, it would prima facie be reasonable and in public interest. It will, therefore, be seen that if a law is enacted for the purpose of giving effect to a Directive Principle and it imposes a restriction on a Fundamental Right, it would be difficult to condemn such restriction as unreasonable or not in public interest. So also where a law is enacted for giving effect to a Directive Principle in furtherance of the constitutional goal of social and economic justice it may conflict with a formalistic and doctrinaire view of equality before the law, but it would almost always conform to the principle of equality before the law in its total magnitude and dimension, because the equality clause in the Constitution does not speak of more formal equality before the law but embodies the concept of real and 330 substantive equality which strikes at inequalities arising on account of vast social and economic differentials and is consequently an essential ingredient of social and economic justice. The dynamic principle of egalitarianism fertilises the concept of social and economic justice; it is one of its essential elements and there can be no real social and economic justice where there is a breach of the egalitarian principle. If, therefore, there is a law enacted by the legislature which is really and genuinely for giving effect to a Directive Principle with a view to promoting social and economic justice. it would be difficult to say that such law violates the principle of egalitarianism and is not in accord with the principle of equality before the law as understood not in its strict and formalistic sense, but in its dynamic and activist magnitude. In the circumstances, the Court would not be unjustified in making the presumption that a law enacted really and genuinely for giving effect to a Directive Principle in furtherance of the cause of social and economic justice, would not infringe any Fundamental Right under Article 14 or 19. Mr. C. H. Alexandrowick, an eminent jurist, in fact, says: "Legislation implementing Part IV must be regarded as permitted restrictions on Part III". Dr. Ambedkar, one of the chief architects of the Constitution, also made it clear while intervening during the discussion on the Constitution (First Amendment Bill in the Lok Sabha on 18th May 1951 that in his view "So" far as the doctrine of implied powers is concerned, there is ample authority in the Constitution itself, namely, in the Directive Principles to permit Parliament to make legislation, although it will not be specifically covered by the provisions contained in the Part on Fundamental Rights". If this be the correct interpretation of the constitutional provisions, as I think it is, the amended Article 31C does no more than codify the existing position under the constitutional scheme by providing immunity to a law enacted really and genuinely for giving effect to a Directive Principle, so that needlessly futile and time consuming controversy whether such law contravenes Article 14 or 19 is eliminated. The amended Article 31C cannot in the circumstances be regarded as violative of the basic structure of the Constitution. But I may in the alternative, for the purpose of argument. assume that there may be a few cases where it may be found by the court. perhaps on a narrow and doctrinaire view of the scope and applicability of a Fundamental Right as in Karimbil Kunhikoman vs State of Kerala where a law awarding compensation at a lower rate to holders of larger blocks of land and at higher rate to holders of smaller blocks of land was struck down by this Court as violative of the equality clause, that a law enacted really and genuinely for giving effect to a Directive Principle is violative of a Fundamental Right under Article 14 or 19. Would such a law enacted in discharge of the. 331 constitutional obligation laid upon the State under Article 37 be invalid, because it infringes a Fundamental Right ? If the court takes the view that it is invalid, would it not be placing Fundamental Rights above Directive Principles, a position not supported at all by the history of their enactment as also by the constitutional scheme already discussed by me. The two constitutional obligations, one in regard to Fundamental Rights and the other in regard to Directive Principles, are of equal strength and merit and there is no reason why, in case or conflict. the former should be given precedence over the latter. I have already pointed out that whether or not a particular mandate of the Constitution is justiciable has no bearing at all on its importance and significance and justiciability by itself can never be a ground for placing one constitutional mandate on a higher pedestal than the other. The effect of giving greater weightage to the constitutional mandate in regard to Fundamental Rights would be to relegate the Directive Principles to a secondary position and emasculate the constitutional command that the Directive Principles shall be fundamental in the governance of the country and it shall be the duty of the State to apply them in making laws. It would amount to refusal to give effect to the words "fundamental in the governance of the country" and a constitutional command which has been declared by the Constitution to be fundamental would be rendered not fundamental. The result would be that a positive mandate of the Constitution commanding the State to make a law would be defeated; by a negative constitutional obligation not to encroach upon a Fundamental Right and the law made by the legislature pursuant to a positive constitutional command would be delegitimised and declared unconstitutional. This plainly would be contrary to the constitutional scheme because, as already pointed out by me, the Constitution does not accord a higher place to the constitutional obligation in regard to Fundamental Rights over the contractional obligation in regard to Directive Principles and does not say that the implementation of the Directive Principles shall only be within the permissible limits laid down in the Chapter on Fundamental Rights. The main thrust of the argument of Mr. Palkhiwala was that by reason of the amendment of Article 31C, the harmony and balance between Fundamental Rights and Directive Principle are disturbed because Fundamental Rights which had. prior to the amendment, precedence over Directive Principles are now, as a result of the amendment, made subservient to Directive Principles. Mr. Palkhiwala picturesquely described the position emerging as a result of the amendment by saying that the Constitution is now made to stand on its head instead of its legs. But in my view the entire premise on which this argument of Mr. Palkhiwala is based is fallacious because it is not correct to say, and I have in the preceding portions 332 of this opinion, given cogent reasons for this view, that prior to the amendments Fundamental Rights had a superior or higher position in the constitutional scheme than Directive Principles and there is accordingly no question at all of any subversion of the constitutional structure by the amendment. There can be no doubt that the intention of the Constitution makers was that the Fundamental Rights should operate within the socio economic structure or a wider continuum envisaged by the Directive Principles, for then only would the Fundamental Rights become exercisable by all and a proper balance and harmony between Fundamental Rights and Directive Principles secured. The Constitution makers therefore never contemplated that a conflict would arise between the constitutional obligation in regard to Fundamental Rights and the constitutional mandate in regard to Directive Principles. But if a conflict does arise between these two constitutional mandates of equal fundamental character how is the conflict to be resolved ? The Constitution did not provide any answer because such a situation was not anticipated by the Constitution makers and this problem had therefore to be solved by Parliament and some modus operandi had to be evolved in order to eliminate the possibility of conflict howsoever remote it might be. The way was shown in no uncertain terms by Jawaharlal Nehru when he said in the Lok Sabha in the course of discussion on the Constitution (First Amendment) Bill: "The Directive Principles of State Policy represent a dynamic move towards a certain objective. The Fundamental Rights represent something static, to preserve certain rights which exist. Both again are right. But somehow and sometime it might so happen that dynamic movement and that static standstill do not quite fit into each other. The dynamic movement towards a certain objective necessarily means certain changes taking place: that is the essence of movement. Now it may be that in the process of dynamic movement certain existing relationships are altered, varied or affected. In fact, they are meant to affect those settled relationships and yet if you come back to the Fundamental Rights they are meant to preserve, not indirectly, certain settled relationships. There is a certain conflict in the two approaches, not inherently. because that was not meant, I am quite sure. But there is that slight difficulty and naturally when the courts of the land have to consider these matters they have to lay stress more on the Fundamental Rights than on the Directive Principles. The result is that the whole purpose behind the Constitution, which was meant to be a dynamic Constitution leading to a certain goal step 333 by step, is somewhat hampered and hindered by the static element A being emphasized a little more than the dynamic element. . If in the protection of individual liberty you protect also individual or group inequality, then you come into conflict with that Directive Principle which wants, according to your own Constitution. a gradual advance, or let us put it in another way, not so gradual but more rapid advance, whenever possible to a State where . there is less and less inequality and more and more equality. If any kind of an appeal to individual liberty and freedom is construed to mean as an appeal to the continuation of the existing inequality, then you get into difficulties. Then you become static, unprogressive and cannot change and you cannot realize the ideal of an egalitarian society which I hope most of us aim at" Parliament took the view that the constitutional obligation in regard to Directive Principles should have precedence over the constitutional obligation in regard to the Fundamental Rights in Articles 14 and 19, because Fundamental Rights though precious and valuable for maintaining the democratic way of life, have absolutely no meaning for the poor, down trodden and economically backward classes of people who unfortunately constitute the bull of the people of India and the only way in which Fundamental Rights can be made meaningful for them is by implementing the Directive Principles, for the Directive Principles are intended to bring about a socio economic revolution and to create a new socio economic order where there will be social and economic justice for all and every one, not only a fortunate few but the teeming millions of India, would be able to participate in the fruits of freedom and development and exercise the Fundamental Rights. Parliament therefore amended Article 31C with a view to providing that in case of conflict Directive Principles shall have precedence over the Fundamental Rights in Articles 14 and 19 and the latter shall yield place to the former. The positive constitutional command to make laws for giving effect to the Directive Principles shall prevail over the negative constitutional obligation not to encroach on the Fundamental Rights embodied in Articles 14 and 19. Parliament in making this amendment was moved by the noble philosophy eloquently expressed in highly in spiring and evocative words. full of passion and feeling. by Chandrachud, J. (as he then was) in his judgment in Keshavananda Bharati 's case at page 991 of the Report 1 may quote here what Chandrachud, J. (as he then was) said on that, occasion, for it sets out admirably the philosophy which inspired Parliament in enacting the amendment in Article 31C The learned Judge said: "I have stated in the earlier part of my judgment that the Constitution accords a place of pride to Fundamental Rights and 334 a place of permanence to the Directive Principles. I stand by what I have said. The Preamble of our Constitution recites that the aim of the Constitution is to constitute India into a Sovereign Democratic Republic and to secure to "all its citizens", Justice Social, economic and political liberty and equality. Fundamental Rights which are conferred and guaranteed by Part III of the Constitution undoubtedly constitute the ark of the Constitution and without them a man 's reach will not exceed his grasp. But it cannot be overstressed that, the Directive Principles of State Policy are fundamental in the governance of the country. What is fundamental in the governance of the country cannot surely be less significant than what is fundamental in the life of an individual. That one is justiciable and the other not may show the intrinsic difficulties in making the latter enforceable through legal processes but that distinction does not bear on their relative importance. An equal right of men and women to an adequate means of livelihood; the right to obtain humane conditions of work ensuring a decent standard of life and full enjoyment of leisure, and raising the level of health and nutrition are not matters for compliance with the Writ of a Court. As I look at the provisions of Parts IIl and IV, I feel no doubt That the basic object of conferring freedoms on individuals is the ultimate achievement of the ideals set out in Part IV. A circumspect use of the freedoms guaranteed by Part III is bound to subserve the common good but voluntary submission to restraints is a philosopher 's dream. Therefore, article 37 enjoys the State to apply the Directive Principles in making laws. The freedom of a few have them to be abridged in order to ensure the freedom of all. It is in this sense that Parts, III and IV, as said by Granville Austin, together constitute "the conscience of the constitution". The Nation stands today at the cross roads of history and exchanging the time honoured place of the phrase, may I say that the Directive Principles of State Policy should not be permitted to become "a mere rope of sand. " If the State fails to create conditions in which the Fundamental freedoms could be enjoyed by all, the freedom of the few will be at the mercy of the many and then all freedoms will vanish. In order, therefore, to preserve their freedom, the privileged few must part with a portion of it. " This is precisely what Parliament achieved by amending Article 3lC. Parliament made the amendment in Article 31C because it realised that "if the State fails to create conditions in which the fundamental freedoms could be enjoyed by all, the freedom of the few will be at 335 the mercy of then manly and then all freedoms will vanish" and "in order, therefore, to preserve their freedom, the privileged few must part with a portion of it. " I find it difficult to understand how it can at all be said that the basic structure of the Constitution its affected when for evolving a modus vivandi. for resolving a possible remote conflict between two constitutional mandates of equally fundamental character, Parliament decides by way of amendment of Article 31C that in case of such conflict, the constitutional mandate in regard to Directive Principles shall prevail over the constitutional mandate in regard to the Fundamental Rights under Articles 14 and 19. The amendment in Article 31C far from damaging the basic structure of the Constitution strengthens and reenforces it by giving fundamental importance to the rights of the members of the community as against the rights of a few individuals and furthering the objective of the Constitution to build an egalitarian social order where there will be social and economic justice for all, every on including the low visibility areas of humanity in the country will be able to exercise Fundamental Rights and the dignity of the individual and the worth of the human person which are cherished values will not remain merely the exclusive privileges of a few but become a living really for the many. Additionally, this question may also be looked at from another point of view so far as the protection against violation, of Article 14 is concerned. The principle of egalitarianism, as I said before, is an essential element of social and economic justice and, therefore, where a law is enacted for, giving effect to a Directive Principle with a view to promoting social and economic justice, it would not run counter to the egalitarian principle and would not therefore be violative of the basic structure, even if it infringes equality before the law in its narrow and formalistic sense. No law which is really and genuinely for giving effect to a Directive Principle can be inconsistent with the egalitarian principle and therefore the protection granted to it under the amended Article 31C against violation of Article 14 cannot have the effect of damaging the basic structure. I do not therefore see how any violation of the basic structure is involved in the amendment of Article 31C. In fact. Once we accept the proposition laid down by the majority decision in Keshavananda Bharati 's case that the unamended Article 31C was constitutionally valid, it could only be on the basis that it did not damage or destroy the basic structure of the Constitution and moreover in the order made in Waman Rao 's case on 9th May, 1980 this Court expressly held that the unamended Article 31C "does not damage any of the basic or essential features of the Constitution or its basic structure," and if that be so, it is difficult to appreciate how the amended 336 Article 31C can be said to be violative of the basic structure. If the exclusion of the Fundamental Rights. embodied in Articles 14 and 19 could be legitimately made for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 without affecting the basic. structure. I fail to see why these Fundamental Rights cannot be excluded for giving effect to the other Directive Principles. If the constitutional obligation in regard to the Directive Principles set out in clauses (b) and (c) of Article 39 could be given precedence over the constitutional obligation in regard to the Fundamental Rights under Articles 14 and 19, there is no reason in principle why such precedence cannot be given to the constitutional obligation in regard. to the other Directive Principles which stand on the same footing. It would, to my mind, be incongruous to hold the amended Article 31C invalid when the unamended Articles 31C has been held to be valid by the majority decision in Keshavananda Bharati 's case and by the order made on 9th May, 1980 in Waman Rao 's case. Mr. Palkhiwala on behalf of the petitioners however contended that there was a vital difference between Article 31C as it stood prior to its amendment and the amended Article 31C, in as much as under the unamended Article 31C only certain categories of laws, namely, those enacted for the purpose of giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 were protected against challenge under Articles 14 and 19, while the position under the amended Article 31C was that practically every law would be immune from such challenge because it would be referable to one Directive Principle or the other and the result would be that the Fundamental Rights in Articles 14 and 19 would become meaningless and futile and would, for all practical purposes, be dead letter in the Constitution. The effect of giving immunity to laws enacted for the purpose of giving effect to any one or more of the Directive Principles would, according to Mr. Palkhiwala, be in reality and substance to wipe out Articles 14 and 19 from the Constitution and that would affect the basic structure of the Constitution. Mr. Palkhiwala also urge that the laws which were protected by the amended Article 31 C were laws for giving effect to the policy of the State towards securing any one or more of the Directive Principles and every law would be comprehended within this description since it would not be competent to the court to enter into questions of policy and determine whether the policy adopted in a particular law is calculated to secure any Directive Principle as claimed by the State. The use of the words "law giving effect to the policy of the State", said Mr. Palkhiwala, introduced considerable uncertainty in the, yardstick with which to decide whether a particular law falls within the description in the 337 amended Article 31C and widened the scope and applicability of the A amended Article so as to include almost every law claimed by the State to all within such description. This argument was presented by Mr. Palkhiwala with great force and persuasiveness but it does not appeal to me and I. cannot. accept it. It is clear from the Language of the amended Article 31C that the law which is protected from challenge under Articles 14 and 19 is law giving effect to the policy of the State towards securing all or any of this Directive Principles. Whenever, therefore, any protection is claimed for a law under the amended Article 31C, it is necessary for the court to examine whether this law has been enacted for giving effect to the policy of the State towards securing any one or more of the Directive Principles and ii is only if the court is so satisfied as a result of judicial scrutiny, that the court would accord the protection of, the amended Article 31C to such law. Now it is undoubtedly true that the words used in the amended Article are "law giving effect to the policy of the Stale", but the policy of the State which is contemplated there is the policy towards securing one or more of the Directive Principles. It is the constitutional obligation of the State to secure the Directive Principles and that is the policy which the State is required to adopt and when a law is enacted in pursuance of this policy on implementing the Directive Principles and it seeks to give effect to a Directive Principle, it would, both from; the point of view of grammar and language, be correct to say that it is made for giving effect to the policy of the State towards securing such Directive Principle. The words "law giving effect to the policy of the State" are not sc. wide as Mr. Palkhiwala would have it, but in the context and collocation in which they occur, they are intended to refer only to a law enacted for the purpose on implementing or giving effect to one or more of the Directive Principles. The Court before which, protection for a particular law is claimed under the amended Article 31C would therefore have to examine whether such law is enacted for giving effect to a Directive Principle, for then only it would have the protection of the amended Article 31C. Now the question is what should be the test or determining whether a law is enacted for giving effect to a Directive Principle. One thing is clear that a claim to that effect put forward by the State would have no meaning or value; it is the court which would have to determine the question. Again it is not enough that there may be some connection between a provision of the law and a Directive Principle. The concoction has to be between the law and the Directive Principle and it must be a real HE and substantial connection. To determine whether a law satisfies this test, the court would have to examine the pith and substance, the true 338 nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope. If on such examination, the court finds that the dominant object of the law is to give effect to the Directive Principle, it would accord protection to the law under the amended Article 31C. But if the court finds that the law though passed seemingly for giving effect to a Directive Principle, is, in pith and substance. One for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle, such law would not have the protection of the amended Article 31C. To take the illustration given by Khanna, J. in Keshavananda Bharati 's case ' at page 745 of the Report, "a law might be made that as the old residents in the State are economically backward and those who have not resided in the State for more than three generations have an affluent business in the Stale or have acquired property in the State they shall be deprived of their business and property with a view to vest the same in the old residents of the State. " It may be possible, after performing what I may call an archaeological operation, to discover some remote the tenuous connection between such law and some Directive Principle, but the dominant object of such law would be, as pointed out by Mr H. M. Seeravi at Page 1559 of the second Volume of his book on "Constitutional Law of India", to implement "the policy of the State to discriminate against citizens who hail from another State, and in a practical sense, to drive them out of it", and such law would not be protected by the amended Article 31C. Many such examples can be given but I do not wish to unnecessarily burden this opinion. The point I wish to emphasize is that the amended Article 31 does not give protection to a law which has merely some remote or tenuous connection with a Directive Principle. What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principle, and that is a matter which the court would have to decide before any claim for protection under the amended Article 31C can be allowed. There is also one other aspect which requires to be considered before protection can be given to a law under the amended Article 31C. Even where the dominant object of a law is to given effect to a Directive Principle. it is not every provision af the law which is entitled to claim protection. The words used in the amended Article 31C are: "Law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV" and these words, on a plain natural construction. do not include all the provisions on the law but only those which give effect to the Directive 339 Principle. But the question is how to identify these provisions giving effect to the Directive Principle in order to accord to them the protection of the amended Article 31C. The answer to this question is analogically provided by the decision of this Court in Akadasi Padhan vs State of Orissa. There the question was as to what was the precise connotation of the expression la relating to" a State monopoly which occurs in Article 19(6). This Court held that "a law relating to" a State monopoly cannot include all the provisions contained in such law but it must be construed to mean, "the law relating to the monopoly in its absolutely essential features" and it is only those provisions of the law "which are basically and essentially necessary for creating the State monopoly" which are protected by Article 19(6). This view was reiterated in several subsequent decisions of this Court which include inter alia Rashbihari Pande etc. vs State of Orissa, Vrajla Manilal & Co. & ors vs State of Madhya Pradesh & Ors and R. C. Cooper vs Union of India. I would adopt the same approach in the construction of Article 31C and hold that it is not every provision of a statute which , has been enacted with the dominant object of giving effect to a Directive Principle, that it entitled to protection. but only those provisions of the statute which are basically and essentially necessary for giving effect to the. Directive Principles are protected under the amended Article 31C. If there are any other provisions in the statute which do not fall within this category, they would not be entitled to protection and their validity would have to be judged reference to Articles 14 and 19. Where, therefore, protection is claimed in respect of a statute under the amended Article 31C, the court would have first to determine whether there is real and substantial connection between the law and a Directive Principle and the predominant object of the law is to give effect to such Directive Principle and if the answer to this question is in the affirmative, the court would then have to consider which are the provisions of the law basically and essentially necessary for giving effect to the Directive Principle and give protection of the amended Article 31C only to those provisions. The question whether any particular provision of the law is basically and essentially necessary for giving effect to the Directive Principle. would depend, to a large extent, on how closely and integrally such provision is connected with the implementation on the Directive Principle. If the court finds That a particular provision is subsidiary 340 or incidental or not essentially and integrally connected with the implementation of the Directive Principle or is of such a nature that, though seemingly a part of the general design of the main provisions of the statute, its dominant object is to achieve an unauthorised purpose, it would not enjoy the protection of the amended Article 31C and would be liable to be struck down as invalid if it violates. Article 14 or 19 These considerations which I have discussed above completely answer some of the difficulties raised by Mr. Palkhiwala. He said that if the amended Article 31C were held to be valid, even provision, like Section 23(e) and 24(1)(a) of the Bombay Prohibition Act, 1949 C which were struck down in State of Bombay vs F. N. Balsari as violating freedom of speech guaranteed under Article 19(1)(a), would have to be held to be valid. I do not think that freedom and democracy in this country would be imperilled if such provisions were held valid. In fact, after the amendment of Article 19(2) by the Constitution (First Amendment Act, 1951, it is highly arguable that both such provisions would fall within the protection of Article 19(2) and would be valid. And even otherwise, it is difficult to see how any violation of the basic structure is involved if a provision of a law prohibiting a person from commending any intoxicant, the consumption or use of which is forbidden by the law (except under a licence issued by the State Government) is protected against infraction of Article 19(1)(a). The position would perhaps be different if a provision is introduced in the Prohibition Act saying that no one shall speak against the prohibition policy or propagate for the repeal of the Prohibition Act or plead for removal of Article 47 from the Directive Principle. Such a provision may not and perhaps would not be entitled to the protection of the amended Article 31C, even though it finds a place in the Prohibition Act, because its dominant object would not be to give effect to the Directive Principle in Article 47 but to stifle freedom of speech in respect of a particular matter and it may run the risk of being struck down as violative of Article 19(1)(a). If the Court finds that even in a statute enacted for giving effect to a Directive Principle, there is a provision which is not essentially and integrally connected with the implementation of the Directive Principle or the dominant object of which is to achieve an unauthorised purpose, it would be outside the protection of the amended Article 31C and would have to meet the challenge of Articles 14 and 19. Lastly, I must consider the argument of Mr. Palkhiwala that almost any and every law would be within the protection of the 341 amended Article 31C because it would be referable to some Directive Principle or the other. I think this is an argument of despair. Articles 39 to 51 contain Directive Principles referring to certain specific objectives and in order that a law should be for giving effect to one of those Directive Principles. there would have to be a real and substantial connection between the law and the specific objective set out in such Directive Principle. Obviously, the objectives set out in these Directive Principles being specific and limited, every law made by a legislature in the country cannot possibly have a real and substantial connection with one or the other of these specific objectives. It is only a limited number of laws which would have a real and substantial connection with one or the other of specific objectives contained in these Directive Principles and any and every law would not come within this category. Mr. Palkhiwala then contended that in any event, the Directive Principle contained in Article 38 was very wide and it would cover almost any law enacted by a legislature. This contention is also not well founded. Article 38 is a general article which stresses the obligation of the State to establish a social order in which justice social, economic and political shall inform all the institutions of national life. It no doubt talks of the duty of the State to promote the welfare of the people and there can be no doubt that standing by itself this might cover a fairly wide area but it may be noted that the objective set out in the Article is not merely promotion of the welfare of the people, but there is a further requirement that the welfare of the people is to be promoted by the State, not in any manner it likes, not according to its whim and fancy, but for securing and protecting a particular type of social order and that social order should be such as would ensure social, economic and political justice for all. Social, economic and political justice is the objective set out in the Directive Principle in Article 38 and it is this objective which is made fundamental in the governance of the country and which the State is laid under an obligation to realise. This Directive Principle forms the base on which the entire structure of the Directive Principles is reared and social, economic and political justice is the signature tune of the other Directive Principles. The Directive Principles set out in the subsequent Articles following upon Article 38 merely particularise and set out facets and aspects of the ideal of social, economic and political justice articulated in Article 38. Mr. Palkhiwala 's complaint was not directed against the use of the words 'political justice ' in Article 38 but his contention was that the concept of social and economic justice referred to in that Article was so wide that almost any legislation could come within it. I do not agree. The concept 342 of social and economic Justice may not be very easy of definition but its broad contours are to be found in some of the provisions of the Fundamental Rights and in the Directive Principles and whenever a question arises whether a legislation is for giving effect to social and economic justice, it is with reference to these provisions that the question would have to be determined. There is nothing so vague or indefinite about the concept of social or economic justice that almost any kind of legislation could be justified under it. Moreover, where a claim for protection is made in respect of a legislation on the ground that it is enacted for giving effect to a Directive Principle, the Directive Principle to which it is claimed to be related would not ordinarily be the general Directive Principle set out in Article 38, but would be one of the specific Directive Principles set out in the succeeding Articles, because as I said before, these latter particularise the concept of social and economic justice referred to in Article 38. I cannot therefore subscribe to the proposition that if the Amendment in Article 31C were held valid, it would have the effect of protecting every possible legislation under the sun and that would in effect and substance wipe out Articles 14 and 19 from, the Constitution. This is a tall and extreme argument for which I find no justification in the provisions of the Constitution. I would therefore declare Section 55 of the Constitution (Forty second Amendment) Act, 1976 which inserted sub sections (4) and (5) in Article 368 as unconstitutional and void on the ground that it damages the basic structure of the Constitution and goes beyond the amending power of Parliament. But so far as Section 4 of the Constitution (Forty second Amendment) Act, 1976 is concerned. I hold that, on the interpretation placed on the amended Article 31C by me, it does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and I would therefore declare the amended Article 31C to be constitutional and valid. I have also given my reasons in this judgment for subscribing to the order dated 9th May, 1980 made in Waman Rao 's case and this judgment ill so far as it sets out those reasons will be formally pronounced by me when Waman Rao 's case is set down on board for judgment.

Minerva Mills Ltd. is a limited company dealing in textiles. On August 20, 1970 the Central Government appointed a committee under section IS of the Industries (Development Regulation) Act, 1951 to make a full and complete investigation of the affairs of the Minerva Mills Ltd as it was of the opinion that there had been or was likely to be substantial fall in the volume of production. The said Committee submitted its report to the Central Government in January 1971, on the basis of which the Central Government passed an order dated October 19, 1971 under section 18A of the 1951 Act, authorising the National Textile Corporation Ltd., to take over the management of the Mills on the ground that its affairs are being managed in a manner highly detrimental to public interest. This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974. The petitioners challenged the constitutional validity of certain provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974 and of the order dated October 19, 1971, the constitutionality of the Constitution (Thirty Ninth Amendment) Act which inserted the impugned Nationalisation Act as Entry 105 in the Ninth Schedule to the Constitution, the validity of Article 31B of the Constitution and finally the constitutionality of sections 4 and 55 of the Constitution (Forty Second Amendment) Act, 1976 on the ratio of the majority judgment in Kesavananda Bharati 's case, namely, though by Article 368 of the Constitution Parliament is given the power to amend the Constitution, that power cannot be exercised so as to damage the basic features of the Constitution or so as to destroy its basic structure. Opining that sections 4 and 55 of the Constitution (Forty Second Amendment) Act are void and beyond the amending power of the Parliament, the Court by majority (Per Chandrachud. C.J., on behalf of himself, A. Gupta. N.L. Untwalia & P.S. Kailasam, JJ.) ^ HELD: (1) The newly introduced clause S of Article 368 transgresses the limitations on the amending power of Parliament and is hence unconstitutional. It demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever". No constituent power can conceivably go higher than the sky high power conferred by clause (5), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy. 207 and substitute for it a totally antithetical form of Government. That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals. The power to destroy is not a power to amend. [240C E] Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge that very power into an absolute power. Indeed, a limited amending power is one of the basic features of Indian Constitution and therefore, the limitations on that power cannot be destroyed. In other words, Parliament cannot, under Article 368, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features. The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one. [240E G] Smt. Indira Nehru Gandhi vs Raj Narain, , followed. (2) The newly introduced clause (4) of Article 368 is equally unconstitutional and void because clauses (4) and (5) are inter linked. While clause (5) purports to remove all limitations on the amending power, clause (4) deprives the courts of their power to call in question any amendment of the Constitution. [241E F] Indian Constitution is founded on a nice balance of power among the three wings of the State namely, the Executive, the Legislature and the Judiciary. It is the function of the Judges, may their duty, to pronounce upon the validity of laws. If courts are totally deprived of that power, the fundamental rights conferred upon the people will become a mere adornment because rights without remedies are as writ in water. A controlled Constitution will then become uncontrolled. Clause (4) of Article 368 totally deprives the citizens of one of the most valuable modes of redress which is guaranteed by Article 32. The conferment of the right to destroy the identity of the Constitution coupled with the provision that no court of law shall pronounce upon the validity of such destruction is a transparent case of transgression of the limitations on the amending power. [241H, 242A] If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down. Article 13 of Constitution will then become a dead letter because even ordinary laws will escape the scrutiny of the courts on the ground that they are passed on the strength of a constitutional amendment which is not open to challenge. [242A C] (3) Though it is the settled practice of the Supreme Court not to decide academic questions and the Court has consistently taken the view that it will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied, it is difficult to uphold the preliminary objection to the consideration of the question raised by the petitioners as regards the validity of sections 4 and 55 of the Forty second Amendment. In the instant case, the question raised as regards the constitutionality of sections 4 and 55 of the Forty Second Amendment is not an academic or a hypothetical question. Further an order has been passed against the petitioners under section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved. [248C, E G] 208 Besides, there is no constitutional or statutory inhibition against the decision of questions before they actually arise for consideration. Here, in view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position. Secondly, what the court is dealing with is not an ordinary law which may or may not be passed so that it could be said that the court 's jurisdiction is being invoked on the hypothetical consideration that a law may be passed in future which will injure the rights of the petitioners. What the court is dealing with is a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes. [248G, 249A B] Commonwealth of Massachusetts vs Andrew W. Mellon, 67 Lawyers ' Edition, 1078, 1084; George Ashwander vs Tennessee Valley Authority, 80 Lawyers ' Edition, 688, 711, quoted with approval. (4) The answer to the question whether in view of the majority decision in Kesavananda Bharati it is permissible to the Parliament to so amend the Constitution as to give a position of precedence to directive principles over the fundamental rights, must necessarily depend upon whether Articles 14 and 19, which must now give way to laws passed in order to effectuate the policy of the State towards securing all or any of the principles of Directive Policy, are essential features of the basic structure of the Constitution. It is only if the rights conferred by these two articles are not a part of the basic structure of the Constitution that they can be allowed to be abrogated by a constitutional amendment. If they are a part of the basic structure, they cannot be obliterated. out of existence in relation tn a category of laws described in Article 31C or, for the matter of that, in relation to laws of any description whatsoever, passed in order to achieve any object or policy whatsoever. This will serve to bring out the point that a total emasculation of the essential features of the Constitution is, by the ratio in Keshavananda Bharati, not permissible to the Parliament. [249E H] (5) The importance of Directive Principles in the scheme of our Constitution cannot ever be over emphasized. Those principles project the high ideal which the Constitution aims to achieve. In fact Directive Principles of State Policy are fundamental in governance of the country and there is no sphere of public life where delay can defeat justice with more telling effect than the one in which the common man seeks the realisation of his aspirations. But to destroy the guarantees given by Part III in order purportedly to achieve the goals of Part IV is plainly to subvert the Constitution by destroying its basic structure. Fundamental rights occupy a unique place in the lives. of civilized societies and have been variously described as "transcendental", "inalienable" and "primordial" and as said in Kesavananda Bharati they constitute the ark of the Constitution. [250B C, 254H, 255A] The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution. Parts III and IV are like two wheels of a chariot, one no less important than the other. Snap one and the other will lose its efficacy. They are like a twin formula for achieving the social revolution which is the ideal which the visionary founders of the Constitution set 209 before themselves. In other words, the Indian Constitution is founded on the bed rock of the balance between Parts III and IV. To give absolute primacy to one over the other is to disturb the harmony of the Constitution. This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution. [255B D] The edifice of Indian Constitution is built upon the concepts crystallized in the Preamble. Having resolved to constitute ourselves into a Socialist State which carried with it the obligation to secure to our people justice social, economic and political, Part IV has been put into our Constitution containing directive principles of State Policy which specify the socialistic goal to be achieved. Having promised the people a democratic polity which carries with it the obligation of securing to the people liberty of thought, expression, belief, faith and worship, equality of status and of opportunity and the assurance that the dignity of the individual will at all costs be preserved, Part III has been put in our Constitution, conferring those rights on the people. Those rights are not an end in themselves but are the means to an end. The end is specified in Part IV. Therefore, the rights conferred by Part III are subject to reasonable restrictions and the Constitution provides that enforcement of some of them may, in stated uncommon circumstances, be suspended. But just as the rights conferred by Part III would be without a radar and a compass if they were not geared to an ideal, in the same manner the attainment of the ideals set out in Part IV would become a pretence for tyranny if tho price to be paid for achieving that ideal is human freedoms. One of the faiths of our founding fathers was the purity of means. The goals set out in Part IV have, therefore, to be achieved without the abrogation of the means provided for by Part III. It is in this sense that Parts III and IV together constitute the core of our Constitution and combine to form its conscience. Anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our Constitution. [253D H, 256A B] (5A) on any reasonable interpretation, there can be no doubt that by the amendment introduced by section 4 of the Forty Second Amendment, Articles 14 and 19 stand abrogated at least in regard to the category of laws described in Article 31C. The startling consequence which the amendment has produced is that even if a law is in total defiance of the mandate of Article 13 read with Articles 14 and 19, its validity will not be open to question so long as its object is to secure a directive principle of State Policy. [256D E] (6) No doubt, it is possible to conceive of laws which will not attract Article 31C, since they may not bear direct and reasonable nexus with the provisions of Part IV. However, a large majority of laws, the bulk of them, can at any rate be easily justified as having been passed for the purpose of giving effect to the policy of the State towards securing some principle or the other laid down in Part IV. In respect of all such laws, which will cover an extensive gamut of the relevant legislative activity, the protection of Articles 14 and 19 will stand wholly withdrawn. It is then no answer to say, while determining whether the basic structure of the Constitution is altered, that at least some laws will fall outside the scope of Article 31C. [256E H] (7) A total deprivation of fundamental rights, even in a limited area, can amount to abrogation of a fundamental right just as partial deprivation in every area can. The fact, therefore that some laws may fall outside the scope of Article 31C is no answer to the contention that the withdrawal of protection of Articles 14 and 19 from a large number of laws destroys the basic structure of the Constitution. [256H, 257A B] 210 (8) Article 38 provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. It is not correct that all the Directive Principles of State Policy contained in Part TV eventually verge upon Article 38. Article 38 undoubtedly contains a broad guideline, but the other Directive Principles are not mere illustrations of the principle contained in Article 38. Secondly, if it be true that no law passed for the purpose of giving effect to the Directive principle in Article 38 can damage or destroy the basic structure of the Constitution, there was no necessity and more so the justification, for providing by a Constitutional amendment that no law which is passed for giving effect to the policy of the State towards securing any principle laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14 and 19. [257C F] The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6). Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights. It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31C was amended to say that the provisions of Article 19, inter alia cannot be invoked for voiding the laws of the description mentioned in Article 31C. [257F G] (9) Articles 14 and 19 do not confer any fanciful rights. They confer rights which are elementary for the proper and effective functioning of a democracy They are universally so regarded, as is evident from the Universal Declaration of Human Rights. If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass Article 32 will be drained of its life blood. [257G H, 258A] Section 4 of the Forty Second Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32. The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification. By a long series of decisions the Supreme Court has held that Article 14 forbids class legislation but it does not forbid classification. The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation. Then again, regional chauvinism will have a field day if Article 19(1)(d) is not available to the citizens. Already, there are disturbing trends on a part of the Indian horizon. Those trends will receive strength and encouragement if laws can be passed with immunity, preventing the citizens from exercising their right to move freely throughout the territory of India. The nature and quality of the amendment introduced by section 4 of the Forty Second Amendment is, therefore, such that it virtually tears away the heart of basic fundamental freedoms. [258B E] Article 31C speaks of laws giving effect to the policy of the "State". Article 12 which governs the interpretation of Article 31C provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other 211 authorities within the territory of India or under the control of the Government of India. Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude. Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19. The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties. [258E G] (10) The principles enunciated in Part IV are not the proclaimed monopoly of democracies alone. They are common to all polities, democratic or authoritarian. Every State is goal oriented and claims to strive for securing the welfare of its people. The distinction between the different forms of Government consists in that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like those conferred by Articles 14 and 19. Those are the most elementary freedoms without which a free democracy is impossible and which must, therefore, be preserved at all costs. If the discipline of Article 14 is withdrawn and if immunity from the operation of that article is conferred, not only on laws passed by the Parliament but on laws passed by the State Legislatures also, the political pressures exercised by numerically large groups can tear the country asunder by leaving it to the legislature to pick and choose favoured areas and favourite classes for preferential treatment. [259A D] (11) The device of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed. Article 31C cannot be read down so as to save it from the challenge of unconstitutionality because to do so will involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently one must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment. [259E G] If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited. The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature. In the history of the constitutional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends. In fact, reading down Article 31C so as to make it conform to the ratio of the majority decision in Kesavananda Bharati is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31A, 31B and 31C are grouped. Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it is impossible to hold that the court should still save Article 31C from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose. [259H, 280A C] (12) Reading the existence of an extensive judicial review into Article 31C is really to permit the distortion of the very purpose of that Article. It provides expressly that no law of a particular description shall be deemed to be void on the ground that it violates Article 14 or Article 19. It would be sheer 212 adventurism of a most extraordinary nature to undertake such a kind of judicial enquiry. [260F G] (13) In the very nature of things it is difficult for a court to determine whether a particular law gives effect to a particular policy. Whether a law is adequate enough to give effect to the policy of the State towards securing a directive principle is always a debatable question and the courts cannot set aside the law as invalid merely because, in their opinion, tho law is not adequate enough to give effect to a certain policy. The power to enquire into the question whether there is a direct and reasonable nexus between the provisions of a law and a Directive Principle cannot confer upon the Courts the power to sit in Judgment over the policy itself of the State. At the highest, courts can, under Article 31C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a Directive Principle. If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow. Indeed, if there is one topic on which all the 13 Judges in Kesavananda Bharti were agreed, it is this: that the only question open to judicial review under tho unamended Article 31C was whether there is a direct and reasonable nexus. between the impugned law and tho provisions of Articles 39(b) and (c). Reasonableness is evidently regarding the nexus and not regarding the law. The. attempt therefore to drape Article 31C into a democratic outfit under which an extensive judicial review would be permissible must fail. [260H, 261A E] (14) The avowed purpose of clauses (4) and (5) of Article 368 is to confer power upon the Parliament to amend the Constitution without any "limitation whatever". Provisions of this nature cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content. [261F G] (15) Article 31A(1) can be looked upon as a contemporaneous practical exposition of the intendment of the Constitution, but the same cannot be said of Article 31C. Besides there is a significant qualitative difference between the two Articles. Article 31A, the validity of which has been recognised over the years, excludes the challenge under Articles 14 and 19 in regard to a specified category of laws. If by a constitutional amendment, the application of Articles 14 and 19 is withdrawn from a defined field of legislative activity, which is reasonable in public interest, the basic framework of the constitution may remain unimpaired. If the protection of those articles is withdrawn in respect of an uncatalogued variety of laws, fundamental freedoms will become a 'parchment in a glass case ' to be viewed as a matter of historical curiosity [262A C] (16) There is no merit in the contention that since article 31A was also upheld on the ground of state decisis. article 31C can be upheld on the same ground. The five matters which are specified in Article 31A are of such quality, nature, content and character that at least a debate can reasonably arise whether abrogation of fundamental rights in respect of those matters will damage or destroy the basic structure of the Constitution. Article 31C does not deal with specific subjects. The directive principles are couched in broad and ' general terms for the simple reason that they specify the goals to be achieved. The principle of state decisis cannot be treated as a fruitful source of perpetuating curtailment of human freedoms. No court has upheld the validity of Article 31A on the ground that it does not violate the basic structure of the Constitution. There is no decision on the validity of Article 31A which can be looked upon as a measuring rod of the extent of the amending power. To 213 hark back to Article 31A every time that a new constitutional amendment is challenged is the surest means of ensuring a drastic erosion of the Fundamental Rights conferred by Part III. Such a process will insidiously undermine the efficacy of the ratio of the majority judgment in Kesavananda Bharati regarding the inviolability of the basic structure. That ratio requires that the validity of each new constitutional amendment must be judged on its own merits. [262C G] (17) It is not correct to say that when Article 31A was upheld on the ground of state decisis, what was upheld was a constitutional device by which a class of subject oriented laws was considered to be valid. The simple ground on which Article 31A was upheld, apart from the ground of contemporaneous practical exposition, was that its validity was accepted and recognised over the years and, therefore, it was not permissible to challenge its constitutionality. The principle of stare decisis does not imply the approval of the device. Or mechanism which is employed for the purpose of framing a legal or constitutional provision. [262G H, 263A B] (18) Under clauses (2) to (6) of Article 19, restrictions can be imposed only if they are reasonable and then again, they can be imposed in the interest of a stated class of subjects only. It is for the courts to decide whether restrictions are reasonable and whether they are in the interest of the particular subject. Apart from other basic dissimilarities, Article 31C takes away the power of judicial review to an extent which destroys even the semblance of a comparison between its provisions and those of clauses (2) to (6) of Article 19. Human ingenuity, limitless though it may be, has yet not devised a system by which the liberty of the people can be protected except through the intervention of courts of law. [263B D] Three Articles of the Indian Constitution and only three stand between the heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestrained power. They are Articles 14, 19 and 21. Article 31C has removed two sides of that golden triangle which affords to the people of this country an assurance that the promise held forth by the Preamble will be performed by ushering an egalitarian era through the discipline of fundamental rights, that is, without emasculation of the rights to liberty and equality which alone can help preserve the dignity of the individual. [263D E] Per Bhagwati, J. (concurring) (1) Since the question in regard to the constitutional validity of the amendment made in Article 31C did not arise in the writ petitions and the counter affidavits, it was wholly academic and superfluous to decide it. Once it is conceded that Articles 31A, 31B and the unamended Article 31C are constitutionally valid it became wholly unnecessary to rely on the unamended Article 31 in support of the validity of Sick Textiles Undertaking (Nationalisation) Act, 1974 because Article 31B would, in any event, save it from invalidation on the ground of infraction of any of the fundamental rights. [268F H] (2) Now either the Nationalisation Act was really and truly a law for giving effect to the Directive Principles set out in Article 39 clause (b) as declared in section 39 of the Act or it was not such a law and the legislative declaration contained in section 39 was a colourable device If it was the 214 former then the unamended Article 31C would be sufficient to protect the Nationalisation Act from attack on the ground of violation of Articles 14, 19 and 31 and it would be unnecessary to involve the amended Article 31C and if it was the latter, then neither the unamended nor the amended Article 31C would have any application. Thus in either event, the amended Article 31C would have no relevance at all in adjudicating upon the constitutional validity of the Nationalisation Act. In these circumstances, the court could not be called upon to examine the constitutionality of the amendment made in Article 31C. [269B E] Dattatraya Govind Mahajan v State of Maharashtra, ; , followed. (3) Clause (4) of Article 368 of the Constitution is unconstitutional and void as damaging the basic structure of the Constitution. [288E] The words "on any ground" in clause (4) of Article 368 are of the widest amplitude and they would obviously cover even a ground that the procedure prescribed in clause (2) and its proviso has not been followed. The result is that even if an amendment is purported to have been made without complying with the procedure prescribed in sub clause (2) including its proviso, and is therefore unconstitutional, it would still be immune from challenge. [284F F] As per Kesavananda Bharati 's case any amendment of the Constitution which did not conform to the procedure prescribed by sub clause (2) and its proviso was no amendment at all and a court would declare it invalid. Thus if an amendment was passed by a simple majority in the House of the People and the Council of States and the President assented to the amendment, it would, in law, be no amendment at all because the requirement of clause (2) is that it should be passed by a majority of each of the Houses separately and by not less than two third of the Members present and voting. But if clause (4) was valid it would become difficult to challenge the validity of such an amendment and it would prevail though made in defiance of a mandatory constitutional requirement. Clause (2) including its proviso would be rendered completely superfluous and meaningless and its prescription would become merely a paper requirement. Moreover, apart from nullifying the requirements of clause (2) and its proviso, clause (4) has also the effect of rendering an amendment immune from challenge even if it damages or destroys the basic structure of the Constitution and is, therefore, outside the amending power of Parliament. So long as clause (4) stands, an amendment of the Constitution, though unconstitutional and void as transgressing the limitation on the amending power of Parliament as laid down in Kesavananda Bharati 's case, would be unchallengeable in a court of law. The consequence of this exclusion of the power of judicial review would be that, in effect and substance, the limitation on the amending power of Parliament would, from a practical point of view, become non existent and it would not be incorrect to say, for covertly and indirectly by the exclusion of judicial review the amending power of Parliament would stand enlarged contrary to the decision of this Court in Kesavananda Bharati 's case. This would, undoubtedly, damage the basic structure of the Constitution because there are two essential features of the basic structure which would be violated, namely, the limited amending power of the Parliament and the power of judicial review with a view to examining whether any authority under the Constitution has exceeded the limits of its powers. [284F H, 285A D] Our Constitution is a controlled constitution which confers powers on the various authorities created and recognised by it and defines the limits of those 215 powers. The Constitution is suprema lex, the paramount law of the land and there is no authority, no department or branch of the State which is above or beyond the Constitution or has powers unfettered and unrestricted by the Constitution. The Constitution has devised a structure of power relationship which checks and balances and limits are placed on the powers of every authority of instrumentality under the Constitution. Every organ of the State, be it the Executive or the Legislature or the Judiciary, derives its authority from the Constitution and it has to act within the limits of such authority. Parliament too is a creature of the Constitution and it can only have such powers as are given to it under the Constitution. It has no inherent power of amendment of the Constitution and being an authority created by the Constitution, it cannot have such inherent power but the power of amendment is conferred upon it by the Constitution and it is a limited power which is so conferred. Parliament cannot in exercise of this power so amend the Constitution as to alter its basic structure or to change its identity. Now, if by constitutional amendment, Parliament was granted unlimited power of amendment, it would cease to be an authority under the Constitution, but would become supreme over it because it would have power to alter the entire Constitution including its basic structure and even to put an end to it by totally changing its identity. Therefore, the limited amending power of Parliament is itself an essential feature of the Constitution, a part of its basic structure, for if the limited power of amendment was enlarged into an unlimited power the entire character of the Constitution would be changed. It must follow as a necessary corollary that any amendment of the Constitution which seeks, directly or indirectly, to enlarge the amending power of Parliament by freeing it from the limitation of unamendability of the basic structure would be violative of the basic structure and, hence, outside the amendatory power of Parliament. [285E H, 286A C] It is a fundamental principle of our Constitution that every organ of the State, every authority under the Constitution derives its powers from the Constitution and has to act within the limits of such power. The three main departments of the State amongst which the powers of Government are divided are: the Executive, the Legislature and the Judiciary. Under our Constitution there is no rigid separation of powers but there is a broad demarcation though, having regard to the complex nature of governmental functions, certain degree of overlapping is inevitable. The Constitution has created an independent machinery, namely, the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the Legislature. It is a solemn duty of the judiciary under the Constitution to keep the different organs of the State, such as the Executive and the Legislature, within the limits of the power conferred upon them by the Constitution. This power of judicial review is conferred on the judiciary by Articles 32 and 226 of the Constitution. [286D, E, 287B C]. It is a cardinal principle of our Constitution that no one, howsoever highly placed and no authority however lofty, can claim to be the sole judge of its power under the Constitution or whether its actions are within the confines of such power laid down by the Constitution. The judiciary is the interpreter of the Constitution and the judiciary is assigned the delicate task to determine what is the power conferred on each branch of Government, whether it is limited, and if so, what are the limits and whether any action of that branch transgresses such limits. It is for the judiciary to uphold the constitutional values and to enforce the constitutional limitations. That is the essence of the rule of law, which inter alia requires that "the exercise of powers by 216 the Government whether it be the legislature or the executive or any other authority, be conditioned by the Constitution and the law". The power of the judicial review is an integral part of our constitutional system and without it, there will be no Government of Laws and the rule of law would become a teasing illusion and a promise of unreality. If there is one feature of our Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably a part of the basic structure of the Constitution. However, effective alternative institutional mechanism arrangements for judicial review cannot be made by Parliament. Judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution. If by a constitutional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of subversion of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile. So also if a constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be questioned on any ground, even if such amendment is violative of the basic structure and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the constitutional validity of what it has done and that would, in effect and substance, nullify the limitation on the amending power of Parliament and effect the basic constructure of the Constitution. [287F H, 288A E] (4) Clause (5) of Article 368 of the Constitution is unconstitutional and void. [289E F] After the decisions of Kesavananda Bharati 's case and Smt. Indira Gandhi 's case there was no doubt at all that the amendatory power of Parliament was limited and it was not competent to Parliament to alter the basic structure of the Constitution and clause (5) could not remove the doubt which did not exist. What clause (5) really sought to do was to remove the limitation on the amending power of Parliament and correct it from a limited power into an unlimited one. This was clearly and indubitably a futile exercise on the part of the Parliament. [288G H, 289A] The Constitution has conferred only a limited amending power on Parliament, so that it cannot damage or destroy the basic structure of the Constitution and Parliament by exercise of that limited amending power convert that very power into an absolute and unlimited power. If it were permissible to Parliament to enlarge the limited amending power conferred upon it into an absolute power of amendment, then it was meaningless to place a limitation on the original power of amendment. Parliament having a limited power of amendment cannot get rid of the limitation of exercising that very power and convert it into an absolute power. Clause (5) of Article 368 which sought to remove the limitation on the amending power of Parliament by making it absolute, therefore, is outside the amending power of Parliament. However, clause (5) seeks to convert a controlled Constitution into an uncontrolled one by removing the limitation on the amending power of Parliament which is itself an essential feature of the Constitution and it is, therefore, violative of the basic structure. [289B E] 217 Per contra: (5) Section 4 of the Constitution (Forty second Amendment) Act, 1976 making amendments in Article 31C and giving primacy to Directive Principles over Fundamental Rights, in case of conflict between them, does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and therefore amended Article 31C is constitutional and valid. [342E F]. (i) It is not correct to say that Fundamental Rights alone are based on Human Rights while Directive Principles fall in some category other than Human Rights. Fundamental Rights and Directive Principles cannot be fitted in two distinct and strictly defined categories. Broadly stated, Fundamental Rights represent civil and political rights, while Directive Principles embody social and economic rights. Both are clearly part of broad spectrum of human rights. Even, the universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10th December, 1948 contains not only rights protecting individual freedom (Articles 1 to 21) but also social and economic rights intended to ensure socio economic justice to every one (Articles 22 to 29). The two other International Covenants adopted by the General Assembly for securing human rights, namely, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights are also to the same effect. The socio economic rights embodied in the Directive Principles are as much a part of human rights as the Fundamental Rights. Together, they are intended to carry out the objectives set out in the preamble of the Constitution and to establish an egalitarian social order informed with political, social and economic justice and ensuring dignity of the individual not only to a few privileged persons but to the entire people of the country including the have nots and the handicapped, the lowliest and the lost. [320C H] Kesavananda Bharati vs State of Kerala, [1973] Supp. SCR, referred to. (ii) Although Fundamental Rights and Directive Principles appear in the Constitution as distinct entities, there was no such demarcation made between them during the period prior to the framing of the Constitution. From the point of view of importance and significance, no distinction was drawn between justiciable and non justiciable rights by the Fathers of the Constitution and both were treated as forming part of the rubric of Fundamental Rights, the only difference being that whereas the Fundamental Rights were enforceable in Courts of Law, the Directive Principles of social policy were not to be enforceable. [321A B, 322C D] (iii) To limit the potential of Fundamental Rights on the ground that they are merely negative obligations requiring the State to abstain as distinct from taking positive action is impermissible. [323D C] No doubt, it is said that the Fundamental Rights deal with negative obligations of the State not to encroach on individual freedom, while the Directive principles impose positive obligations on the State to take certain kind of actions. Though the latter part may be true that the Directive Principles require positive action to be taken by the State, it is not wholly correct that the Fundamental Rights impose only negative obligations on the State. There are a few Fundamental Rights which have also a positive content, with the result that new dimensions of the Fundamental Rights are being opened up by the Supreme Court and the entire jurisprudence of Fundamental Rights is in a 218 stage of resurgent evaluation. Moreover, there are three Articles, namely, Article 15(2), Article 17 and Article 23 within the category of Fundamental Rights which are designed to protect the individual against the action of other private citizens and seem to impose positive obligations on the State to ensure this protection to the individual. [322 F H, 323 A B]. Hussainara Khatoon vs State of Bihar, ; Madhav Hayawadanrao Hoskot vs State of Maharashtra, ; and Sunil Batra etc. vs Delhi Administration & Ors. ; , , followed. (iv) The only distinguishing feature between Fundamental Rights and Directive Principles of State Policy is that whereas the former are made enforceable in a Court of Law the latter are not. They are not justiciable be cause the social and economic rights and other matters dealt with in the Directive Principles are by their very nature incapable of judicial enforcement and moreover, the implementation of many of those rights would depend on the. state of economic development in the country, the availability. Of necessary finances and the government 's assessment of priority of objectives and values. But merely because the Directive Principles are non justiciable, it does not follow that they are in any way subservient or inferior to the Fundamental Rights. [323 B C, E F]. (v) The Indian Constitution is first and foremost a social document. The majority of its provisions are either directly aimed at furthering the goals cf the socio economic revolution or attempt to foster this revolution by establishing the conditions necessary for its achievement. The Fundamental Rights are no doubt important and valuable in a democracy, but there can be no real democracy without social and economic justice to the common man and to create socio economic conditions in which there can be social and economic justice to everyone, is the theme of the Directive Principles. It is the Directive Principles which nourish the roots of a democracy, provide strength and vigour to it and attempt to make it a real participatory democracy which does not remain merely a political democracy but also becomes a social and economic democracy with Fundamental Rights available to all irrespective of their power, position or wealth. The dynamic provisions of the Directive Principles fertilise the static provisions of the Fundamental Rights. The object of the Fundamental Rights is to protect individual liberty, but individual liberty cannot be considered in isolation from the socio economic structure in which it is to operate. There is a real connection between individual liberty and the shape and form of the social and economic structure of the society. There cannot be any individual liberty at all for the large masses of people who are suffering from want and privation and who are cheated out of their individual rights by the exploitative economic system. Their individual liberty would come in conflict with the liberty of the socially and economically more powerful class and in the process get mutilated or destroyed. The real controversies in the present day society are not between power and freedom but between one form of liberty and another. Under the present socio economic system, it is the liberty of the few which is in conflict with the liberty of the many. The Directive Principles, therefore, impose an obligation on the State to take positive action for creating socio economic conditions in which there will be an egalitarian social order with social and economic justice to all so that individual liberty will become a cherished value and the dignity of the individual a living reality, not only for a few privileged persons but for the entire people of the 219 country. Thus, the Directive Principles enjoy a very high place in the constitutional scheme and it is only in the framework of the socio economic structure envisaged in the Directive Principles that the Fundamental Rights are intended to operate, for it is only then they can become meaningful and significant for the millions of our poor and deprived people, who do not have even the bare necessities of life and who are living below the poverty level. [323F G, 324C H, 325A B]. (vi) Article 37 of the Constitution is an Article of crucial importance unlike the Irish Constitution which provided the inspiration for introducing Directive Principles in our Constitution. Article 37 says that the Directive Principles shall not be enforceable by any court, makes the Directive Principles fundamental in the governance of the country and enacts that it shall be the duty of the State to apply the Directive Principles in making laws. The changes made by the framers of the Constitution are vital and they have the effect of bringing about a total transformation or metamorphosis of this provision, fundamentally altering the significance and efficacy. The Directive Principle are not excluded from the cognizance of the court, as under the Irish Constitution; they are merely made non enforceable by a court of law. Merely because the Directive Principles are not enforceable in a court of law, it does not mean that they are of subordinate importance to any part of the Constitution or that they cannot create obligations or duties binding on the State. The crucial test which has to be applied is whether the Directive Principles impose any obligations or duties on the State, if they do, the State would be bound by a constitutional mandate to carry out such obligations or duties, even though no corresponding right is created in any one which can be enforced in a court of law. On this question Article 37 is emphatic and make the point in no uncertain terms There could not have been more explicit language used by the Constitution makers to make the Directive Principles binding on the State and there can be no doubt that the State is under a constitutional obligation to carry out this mandate contained in Article 37. In fact, non compliance with the Directive Principles would be unconstitutional on the part of the State and it would not only constitute a breach of faith with the people who imposed this constitutional obligation on the State but it would also render a vital part of the Constitution meaningless and futile. For the purpose of the Directive Principles, the "State" has the same, meaning as given to it under Article 13 for the purpose of the Fundamental Rights. This would mean that the same State which is injuncted from taking any action in infringement of the Fundamental Rights is told in no uncertain terms that it must regard the Directive Principles as fundamental in the governance of the country and is positively mandated to apply them in making laws. This gives rise to a paradoxical situation and its implications are far reaching. The State is on the one hand prohibited by the constitutional injunction in Article 13 from making any law or taking any executive action which would infringe any Fundamental Right and at the same time it is directed by the constitutional mandate in Article 37 to apply the Directive Principles in the governance of the country and to make laws for giving effect to the Directive Principles. Both are constitutional obligations of the State. When the State makes a law for giving effect to a Directive Principle, it is carrying out a constitutional obligation under Article 37 and if it were to be said that the State cannot make such a law because it comes into conflict with a Fundamental Right, it can only be on the basis that Fundamental Rights stand on a higher pedestal and have precedence over Directive Principles. But it is not correct to say that under 220 our constitutional scheme Fundamental Rights are superior to Directive Principles or that Directive Principles must yield to Fundamental Rights. Both are in fact equally fundamental and the courts have, therefore, tried to harmonise them by importing the Directive Principles in the construction of the Fundamental Rights. For the purpose of determining the reasonableness of the restriction imposed on Fundamental Rights the court may legitimately take into account the Directive Principles and where executive action is taken or legislation enacted for the purpose of giving effect to a Directive Principle, the restriction imposed by it on a Fundamental Right may be presumed to be reasonable. [325C, E H, 326A D, 327H, 328A H, 329A B]. State of Bihar vs Kameshwar Singh, ; Pathumma vs State of Kerala, ; ; M/s. Kasturi Lal Lakshmi Reddy etc. vs The State of Jammu & Kashmir & Anr., [1980] 3 SCR p. 1338, applied. State of Madras vs Champkam Dorairajan, dissented from. In Re Kerala Education Bill, [1959] SCR 995, Referred to. (vii) If a law is enacted for the purpose of giving effect to a Directive Principle and it imposes a restriction on a Fundamental Right, it would be difficult to condemn such restriction as unreasonable or not in public interest. So also where a law is enacted for giving effect to a Directive Principle in furtherance of the constitutional goal of social and economic justice it may conflict with a formalistic and doctrinaire view of equality before the law, but it would almost always conform to the principle of equality before the law in its total magnitude and dimension, because the equality clause in the Constitution does not speak of mere formal equality before the law but embodies the concept of real and substantive equality which strikes at inequalities arising on account of vast social and economic differentials and is consequently an essential ingredient of social and economic justice. The dynamic principle of egalitarianism fertilises the concept of social and economic justice; it is one of its essential elements and there can be no real social and economic justice where there is a breach of the egalitarian principle. If, therefore, there is a law enacted by the legislature which is really and genuinely for giving effect to a Directive Principle with a view to promoting social and economic justice, such law does not violate the principle of egalitarianism and is in accord with the principle of equality before the law as understood not in its strict and formalistic sense, but in its dynamic and activist magnitude. In the circumstances, the Court would not be unjustified in making the presumption that a law enacted really and genuinely for giving effect to a Directive Principle in furtherance of the cause of social and economic justice, would not infringe any Fundamental Right under Article 14 or 19. This being the correct interpretation of the constitutional provisions, the amended Article 31C does no more than codify the existing position under the constitutional scheme by providing immunity to a law enacted really and genuinely for giving effect to a Directive Principle, so that needlessly futile and time consuming controversy whether such law contravenes Article 14 or 19 is eliminated. The amended Article 31C cannot in the circumstances be regarded as violative of the basic structure of the Constitution. [329F H, 330A F]. (viia) A law enacted really and genuinely for giving effect to a Directive Principle, in discharge of the constitutional obligation laid down upon the State under Article 37, would not be invalid, because it infringes a fundamental right. If the Court takes the view that it is invalid, it would be placing Fundamental Rights above Directive Principles, a position not supported at all by 221 the history of their enactment as also by the constitutional scheme. The two A constitutional obligations, one in regard to Fundamental Rights and the other in regard to Directive Principles, are of equal strength and merit and there is no reason why, in case of conflict, the former should be given precedence over the latter. Whether or not a particular mandate of the Constitution is justiciable has no bearing at all on its importance and significance and justiciability by itself can never be a ground for placing one constitutional mandate on a higher pedestal than the other. The effect of giving greater weightage to the constitutional mandate in regard to Fundamental Rights would be to relegate the Directive Principles to a secondary position and emasculate the constitutional command that the Directive Principles shall be fundamental in the governance of the country and it shall be the duty of the State to apply them in making laws. It would amount to refusal to give effect to the words fundamental in the governance of the country" and a constitutional command which has been declared by the Constitution to be fundamental would be rendered non fundamental. The result would be that a positive mandate of the constitution commanding the State to make a law would be defeated by a negative constitutional obligation not to encroach upon a Fundamental Right and the law made by the legislature pursuant to a positive constitutional command would be delegitimised and declared unconstitutional. This plainly would be contrary to the constitutional scheme because the Constitution does not accord higher place to the constitutional obligation in regard to Fundamental Rights over the constitutional obligation in regard to Directive Principles and does not say that the implementation of the Directive Principles shall only be within the permissible limits laid down in the Chapter on Fundamental Rights. [330A, 331A F]. Karimbil Kunhikoman vs State of Kerala, [1962] I SCR 319 (supra) referred to. (viii) It is not correct to say that consequent to the amendment of Article 31C the Constitution is now made to stand 'on its head and not on its legs. ' Prior to the amendments, Fundamental Rights had a superior or a higher position in the constitutional scheme than Directive Principles and there is accordingly no question at all of any subversion of the constitutional structure by the amendment. There can be no doubt that the intention of the Constitution makers was that the Fundamental Rights should operate within the socioeconomic structure or a wider continuum envisaged by the Directive Principle, for then only would the Fundamental Rights become exercisable by all and a proper balance and harmony between Fundamental Rights and Directive Principles secured. The Constitution makers, therefore, never contemplated that a conflict would arise between the constitutional obligation in regard to Fundamental Rights and the constitutional mandate in regard to Directive Principles. But if a conflict does arise between these two constitutional mandates of equal fundamental character, since the Constitution did not provide any answer and perhaps for the reason that such a situation was not anticipated, the problem had to be solved by Parliament and some modus operandi had to be evolved in order to eliminate the possibility of conflict howsoever remote it might be. [331G H, 332A D]. Parliament took the view that the constitutional obligation in regard to Directive Principles should have precedence over the constitutional obligation in regard to the Fundamental Rights in Articles 14 and 19, because Fundamental Rights though precious and valuable for maintaining the democratic way of life, have absolutely no meaning for the poor, down trodden and economically 222 backward classes of people who unfortunately constitute the bulk of the people of India and the only way in which Fundamental Rights can be made meaningful for them is by implementing the Directive Principles, for the Directive Principles are intended to bring about a socio economic revolution and to create a new socio economic order where there will be social and economic justice for all and every one, not only a fortunate few but the teeming millions of India, would be able to participate in the fruits of freedom and development and exercise the Fundamental Rights. Parliament, therefore, amended Article 31C with a view to providing that in case of conflict Directive Principles shall have precedence over the Fundamental Rights in Articles 14 and 19 and the latter shall yield place to the former. The positive constitutional command to make laws for giving effect to the Directive Principles shall prevail over the negative constitutional obligation not to encroach on the Fundamental Rights embodied in Articles 14 and 19. [333C F]. Parliament made the amendment in Article 31C because it realised that "if the State fails to create conditions in which the fundamental freedoms could be enjoyed by all, the freedom of the few will be at the mercy of the man and then all freedoms will vanish" and "in order, therefore, to preserve their freedom, the privileged few must part with a portion of it." Therefore, it cannot at all be said that the basic structure af the Constitution is affected when for evolving a modus vivandi for resolving a possible remote conflict between two constitutional mandates of equally fundamental character, Parliament decides by way of amendment of Article 31C that in case of such conflict the constitutional mandate in regard to Directive Principles shall prevail over the constitutional mandate in regard to the Fundamental Rights under Articles 14 and 19. The amendment in Article 31C far from damaging the basic structure of the Constitution strengthens and re enforces it by giving fundamental importance to the rights of the members of the community as against the rights of a few individuals and furthering the objective of the Constitution to build an egalitarian social order where there will be social and economic justice for all, every one including the low visibility areas of humanity in the country will be able to exercise Fundamental Rights and the dignity of the individual and the worth of the human person which are cherished values will not remain merely the exclusive privileges of a few but become a living reality for the many [334H, 335A D]. (ix) The principle of egalitarianism is an essential element of social and economic justice and, therefore, where a law is enacted for giving effect to a Directive Principle with a view to promoting social and economic justice, it would not run counter to the egalitarian principle and would not therefore be violative of the basic structure, even if it infringes equality before the law in its narrow and formalistic sense. No law which is really and genuinely for giving effect to a Directive Principle can be inconsistent with the egalitarian principle and therefore the protection granted to it under the amended Article 31C against violation of Article 14 cannot have the effect of damaging the basic structure. Therefore, there is no violation of the basic structure involved in the amendment of Article 31C. In fact, one it is accepted that the unamended Article 31C was constitutionally valid, it could only be on the basis that it did not damage or destroy the basic structure of the Constitution, it cannot be said that the amended Article 31C is violative of the basic structure. If the exclusion of the Fundamental Rights embodied in Articles 14 and 19 could be legitimately made for giving effect to the Directive Principles set out in clauses (b) and (e) of Article 39 without affecting the basic structure. these 223 Fundamental Rights cannot be excluded for giving effect to the other Directive Principles. If the constitutional obligation in regard to the Directive Principles set out in clauses (b) and (c) of Article 39 could be given precedence over the constitutional obligation in regard to the Fundamental Rights under Articles 14 and 19, there is no reason in principles why such precedence cannot be given to the constitutional obligation in regard to the other Directive Principles which stand on the same footing. It would be incongruous to hold tho amended Article 31C invalid when the unamended Article 31C has been held to be valid by the majority decision in Kesavananda Bharati 's and by the order, in Waman Rao 's case, dated 9th May, 1980. [335E H, 336A C]. (x) It is clear from the language of the amended Article 31C that the law which is protected from challenge under Articles 14 and 19 is law giving effect to the policy of the State towards securing or any of the Directive Principles. Whenever, therefore, any protection is claimed for a law under the amended Article 31C, it is necessary for the Court to examine whether the law has been enacted for giving effect to the policy of the State towards securing any one or more of the Directive Principles and it is only if the court is so satisfied as a result of judicial scrutiny that the court would accord the protection of the amended Article 31C to such law. Now it is undoubtedly true that the words used in the amended Article are "law giving effect to the policy of the State" but the policy of the State which is contemplated there is the policy towards securing one or more of the Directive Principles it is the constitutional obligation of the State to secure the Directive Principles and that is the policy which the State is required to adopt and when a law is enacted in pursuance of this policy of implementing the Directive Principles and it seeks to give effect to a Directive Principle, it would both from the point of grammar and language, be correct to say that it is made for giving effect to the policy of the State towards securing such Directive Principle. The words "law giving effect to the policy of the State" are not so wide but in the context and collocation in which they occur, they are intended to refer only to a law enacted for the purpose of implementing or giving effect to one or more of the Directive Principles. [337A F]. (xi) The Court before which protection for a particular law is claimed under the amended Article 31C would, therefore, have to examine whether such law is enacted for giving effect to a Directive Principle, for genuinely it would have the protection of the amended Article 31C. A claim that a particular law is enacted for giving effect to Directive Principles put forward by the State would have no meaning or value; it is the court which would have to determine the question. Again it is not enough that there may be some connection between a provision of the law and a Directive Principle. The connection has to be between the law and the Directive Principle and it must G be a real and substantial connection. To determine whether a law satisfies this test, the court would have to examine the pith and substance, the true nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope. If on such examination, the court finds that the dominant object of the law is to give effect to the Directive Principle, it would accord protection to the law under the amended Article 31C. But if the court finds that the law though passed seemingly for giving effect to a Directive Principle, is, in pith and substance, one for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle such law would not have the protection of the amended Article 31C. The amended Article 31C does not give protection to 224 a law which has merely some remote or tenuous connection with a Directive. Principle. What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principle, and that is a matter which the court would have to decide before any claim for protection under the amended Article 31C can be allowed. [337F H, 338A B, F G]. The words used in the amended Article 31C are: "law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV" and these words on a plain natural construction do not include all the provisions of law but only those which give effect to the Directive Principle. Therefore, it is not every provision of a statute which has been enacted with the dominant ' object of giving effect to a Directive Principle that is entitled to protection but only those provisions of the statute which are basically and essentially necessary for giving effect to the Directive Principles are protected under the amended Article 31C. If there are any other provisions in the statute which do not fall within this category, they would not be entitled to protection and their validity would have to be judged by reference to Articles 14 and 19. Where, therefore, protection is claimed in respect of a statute under the amended Article 31C, the court would have first to determine whether there is real and substantial connection between the law and a Directive Principle and the predominant object of the law is to give effect to such Directive Principle and if the answer to this question is in the affirmative, the court would then have to consider which are the provisions of the law basically and essentially necessary for giving effect to the Directive Principle and give protection of the amended Article 31C only to those provisions. The question whether any particular provision of the law is basically and essentially necessary for giving effect to the Directive Principle, would depend, to a large extent, on how closely and integrally such provision is connected with the implementation of the Directive Principle. If the court finds that a particular provision is subsidiary or incidental or not essentially and integrally connected with the implementation of the Directive Principle or is of such a nature that though seemingly a part of the general design of the main provisions of the statute, the dominant object is to achieve an unauthorised purpose, it would not enjoy the protection of amended Article 31C and would be liable to be struck down as invalid if it violates Article 14 or 19. [338 G H, 339A, D H, 340A D] Akadasi Padhan vs State of Orissa, [1963] 2 Supp. SCR 691; Rashbihari Panda etc. vs State of orissa; , ; M/s. Vrailal Manilal & Co. & ors. vs State of Madhya Pradesh & Ors. , ; and R. C. Cooper vs Union of India, ; , followed. (xii) If the Court finds that even in a statute enacted for giving effect to a Directive Principle, there is a provision which is not essentially and integrally connected with the implementation of the Directive Principle or the dominant object of which is to achieve an unauthorised purpose it would be outside the protection of the amended Article 31C and would have to meet the challenge of Articles 14 and 19. [340F H] (xiii) Articles 39 to 51 contain Directive Principles referring to certain specific objectives and in order that a law should be for giving effect to one of those Directive Principles, there would be a real and substantial connection between the law and the specific objective set out in such Directive Principle. Obviously, the objectives set out in these Directive Principles being specific and limited, every law made by a legislature in the country cannot possibly have a real and substantial connection with one or the other of these specific 225 objectives. It is only a limited number of laws which would have a real A and substantial connection with one or the other of the specific objectives contained in these Directive Principles and any and every law would not come within this category. [341A C]. (xiv) Article 38 is a general article which stresses the obligation of the State to establish a social order in which justice social, economic and political shall inform all the institutions of national life. It no doubt talks of the duty of the State to promote the welfare of the people and there can be no doubt that standing by itself this might cover a fairly wide area but the objective set out in the Article is not merely promotion of the welfare of the people? but there is a further requirement that the welfare of the people is to be promoted by the State, not in any manner it likes, not according to its whim and fancy, but for securing and protecting a particular type of social order and that social order should be such as would ensure social, economic and political justice for all. Social, economic and political justice is the objective set out in the Directive Principle in Article 38 and it is this objective which is made fundamental in the governance of the country and which the State is laid under an obligation to realise. This Directive Principle forms the base on which the entire structure of the Directive Principles is reared and social, economic and political justice is the signature tune of the other Directive Principles. The Directive Principles set out in the subsequent Articles following upon Article 38 merely particularise and set out facets and aspects of the ideal of social, economic and political justice articulated in Article 38. [341C G]. (xv) The concept of social and economic justice may not be very easy of definition but its broad contours are to be found in some of the provisions of the Fundamental Rights and in the Directive Principles and whenever a question arises whether a legislation is for giving effect to social and economic justice, it is with reference to these provisions that the question would have to be determined. There is nothing so vague or indefinite about the concept of social or economic justice that almost any kind of legislation could be justified under it. Moreover, where a claim for protection is made in respect of a legislation on the ground that it is enacted for giving effect to a Directive Principle, the Directive Principle to which it is claimed to be related would not ordinarily be the general Directive Principle set out in Article 38, but could be one of the specific Directive Principles set out in the succeeding Articles because these latter particularise the concept of social and economic justice referred to in Article 38. Therefore, it is not correct to say that if the amendment in Article 31C were held valid, it would have the effect of protecting every possible legislation under the sun and that would in effect and substance wipe out Articles 14 and 19 from the Constitution. This is a tall and extreme argument, not justified in the provisions of the Constitution. [341H, 342A D]. HELD further (concurring with the majority): 6. Clause (a) of Article 31A is constitutionally valid even on the application of the basic structure test. [290D]. Where any law is enacted for giving effect to a Directive Principle with the view to furthering the constitutional goal of social and economic justice, there would be no violation of the basic structure, even if it infringes formal equality before the law under Article 14 or any fundamental right under Article 19. Here, clause (a) of Article 31A protects a law of agrarian reform which is clearly in the context of the socio economic conditions prevailing in 226 India, a basic requirement of social and economic justice and 15 covered by the Directive Principals set out in clause (b) and (c) of Article 39 and it cannot be regarded as violating the basic structure of the Constitution. On the contrary, agrarian reforms leading to social and economic justice to the . rural population is an objective which strengthens the basic structure of the Constitution. [290B D]. Even on the basis of the doctrine of stare decisions the whole of Article 31A is constitutionally valid. The view that Article 31A is constitutionally valid has been fallen in atleast three decisions of the Supreme Court, namely, Shankri Prasad 's case, Sajjan Singh 's case and Golaknath 's case and it has hold the field for over 28 years and on the faith of its correctness millions of acres of agricultural land have changed hands and now agrarian relations have come into being transferring the entire rural economy. Even though the constitutional . validity of Article 31A was not tested in these decisions by reference to the basic structure doctrine, the court would not be justified in allowing the earlier decisions to be reconsidered and the question of constitutional validity of Article 31A re opened. These decisions have given a quietus to the constitutional challenge against the validity of Article 31A and this quietus should not now be allowed to be disturbed. [290E, 292D, 294G H 295A]. Shankri Prasad vs Union of India, [19621 2 SCR 89; Sajjan Singh vs State of Rajasthan, [1965] I SCR 933; I.C. Golaknath vs Union of India, ; ; Ambika Prasad Mishra vs State of U.P. and Ors., [1980] 3 SCR . followed It is no doubt true that the Supreme Court has power to review its earlier decisions or even depart from them and the doctrine of stare decisions cannot be permitted to perpetuate erroneous decisions of the court to the detriment of the general welfare of the public. Certainty and continuity are essential ingredients of rule of law. Certainty and applicability of law would be considerably eroded and suffer a serious set back if the highest court in the land were ready to overrule the views expressed by it in! earlier decisions even though that view has held the field for a number of years. It is obvious that when constitutional problems are brought before the Supreme Court for its decision, complete and difficult questions are bound to arise and since the decision of many of such questions may depend upon choice between competing values, two views may be possible depending upon the value judgment or the choice of values made by the individual judge. Therefore. if one view has been taken by the court after mature deliberation the fact that another Bench is inclined to take another view would not justify the court in reconsidering the earlier decision and overrule it. The law laid down by the Supreme Court is binding on all the courts in the country and numerous questions all over the country are decided in accordance with the view taken by the Supreme Court. Many people arrange their affairs and large number of transactions also take place on the faith of the correctness of the decision given by the Supreme Court. It would create uncertainty, unstability and confusion if the law propounded by the Supreme Court on the face of which numerous cases have been decided and many transactions have taken place is held to be not the correct law after a number of years. The doctrine of stare decisions is evolved from the maxim "stare decisions et non quita movere" meaning "adhere to the decision and not unsettle things which are established" and it is a useful doctrine intended to bring about certainty and uniformity in the law. But the doctrine of stare decisions cannot be regarded as a rigid 227 and inevitable doctrine which must be applied at the cost of justice There may be cases where it may be necessary to rid the doctrine of its petrifying rigidity. The court may in an appropriate case overrule a previous decision taken by it, but that should be done only for substantial and compelling reasons. The power of review must be exercised with due care and caution and only for advancing the public well being and not merely because it may appear that the previous decision was based on an erroneous view of the law. It is only where the perpetuation of the earlier decision would be productive of mischief or inconvenience or would have the effect of deflecting the nation from the course which has been set by the Constitution makers or "where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake or the basic direction of the nation itself is in peril of a shake up", that the court would be justified in reconsidering its earlier decision and departing from it. It is fundamental that the nation 's constitution should not be kept in constant uncertainty by judicial review every now and then, because otherwise it would paralyse by perennial suspense all legislative and administrative action on vital issues. The court should not indulge in judicial stabilisation of State action and a view which has been accepted for a long period of time in a series of decisions and on tho faith of which millions of people have acted and a large number of transactions have been effected should not be disturbed. [292G H, 293A H, 294A D]. Ambika Prasad Mishra vs State of U.P. and Anr., [1980] 3 SCR p. 1159. followed. (7) Article 31B was conceived together with Article 31A as part of the same design adopted to give protection to legislation providing for acquisition of an estate or extinguishment or modification of any rights in an estate. [295E F]. The Ninth Schedule of Article 31B was not intended to include laws other than those covered by Article 31A. Articles 31A and 31B were thus intended to serve the same purpose of protecting the legislation falling within a certain category. It was a double barreled protection which was intended to be provided to this category of legislation, since it was designed to carry out agrarian reform which was so essential for bringing about a revolution in the socio economic structure of the country: [295F, H, 296A] Since all the earlier constitutional amendments were held valid on the basis of unlimited amending power of Parliament recognised in Shankri Prasad 's case and Sajjan Singh 's case and were accepted as valid in Golakhnath 's case and the Twenty Ninth Amendment Act was also held valid in Kesavananda Bharati 's case, though not on the application of the basic structure test and these constitutional amendments have been recognised as valid over a number of years and moreover, the statutes intended to be protected by them are all falling within Article 31A with the possible exception of only four Acts, it would not be justified in re opening the question of validity of these constitutional amendment and hence these amendments are valid. [297F H]. But all constitutional amendments made after the decision in Kesavananda Bharati 's case would have to be decided by reference to the basic structure doctrine, for Parliament would then have no excuse for saying that it did not known the limitation on its amending power. Now out of the statutes which are or may in future be included in the Ninth Schedule by subsequent constitutional amendments, if there are any which fall within a category covered 228 by Article 31A or 31C, they would be protected from challenge under Articles 14 and 19 and it would not be necessary to consider whether their inclusion. in the Ninth Schedule is constitutionally valid, except in those rare cases where protection may be claimed for them against violation of any other. fundamental rights. This question would primarily arise only in regard to statutes not covered by Article 31A or 31C and in case of such statutes, the Court would have to consider whether the constitutional amendments including such statutes in the Ninth Schedule violate the basic structure of the Constitution in granting them immunity from challenge of the fundamental rights. It is possible that in a given case even an abridgement of a fundamental right may involve violation of the basic structure. It would all depend on the nature of the nature of the fundamental right, the extent and depth of the infringement, the purpose for which the infringement is made and its impact on the basic values of the Constitution. For example, right to life and personal liberty enshrined in Article 21, stands on an altogether different footing from other fundamental rights. If this fundamental right is violated by any legislation, it may be difficult to sustain a constitutional amendment which seeks to protect such legislation against challenge under Article 21. So also where a legislation which has nothing to do with agrarian reform or any Directive Principles infringes the equality clause contained in Article 14 and such legislation is sought to be protected by a constitutional amendment by including it in the Ninth Schedule, it may be possible to contend that such constitutional amendment is violative of the egalitarian principle which forms part of the basic structure. However, other situations may arise where infarction of a fundamental right by a statute, is sought to be constitutionally protected might effect the basic structure of the Constitution. In every case, therefore, where a constitutional amendment includes a statute or statutes in the. Ninth Schedule, its constitutional validity would have to be considered by E. reference to the basic structured doctrine and such constitutional amendment would be liable to be declared invalid to the extent to which it damages or destroys the basic structure of the Constitution by according protection against violation of any particular fundamental right. [297H, 298C H, 299A B]. (8) Even on principle, the first part of the unamended Article 31C is constitutionally valid. In view of the fact that the first part of the unamended Article 31C was held to be constitutionally valid by the majority decision in Keshavananda Bharati 's case, the question of its constitutional validity cannot be again reopened. It is true, that the ratio decidendi of Keshavananda Bharati 's case was that the amending power of Parliament is limited and Parliament cannot in exercise of the power m f amendment alter the basic structure of the Constitution and the validity of every constitutional amendment has, therefore, to be judged by applying the test whether or not it alters the basic structure of the Constitution and this test was not applied by the six learned Judges, though their conclusion regarding constitutionality of the first part of the unamended Article 31C is valid. Irrespective of the reasons which weighed with each one of the Judges who upheld the validity of the first part of the unamended Article 31C, the reasons for reaching the said conclusion would certainly have a bearing on the determination of the ratio decidendi of the case and the ratio decidendi would certainly be important for the decision of future cases where the validity of the first part or the unamended Article 31C is concerned, it was in so many terms determined by the majority decision in Keshavananda Bharati 's case, and that decision binds. [300E H, 301A D, 302C] 229 What the first part of the unamended Article 31C does is merely to abridge the fundamental rights in Articles 14 and 19 by excluding the applicability to legislation giving effect to the policy towards securing the principles specified in clauses (b) and (c) of Article 39. The first part of the unamended Article 31C is basically of the same genre as Article 31A with only this difference that whereas Article 31A protects laws relating to certain subjects, the first part of the unamended Article 31C deals with laws having certain objectives. There is no qualitative difference between Article 31A and the first part of the unamended Article 31C in so far as the exclusion of Articles 14 and 19 is concerned. The fact that the provisions to the first part of the unamended Article 31C are more comprehensive and have greater width compared to those of Article 31A does not make any difference in principle. If Article 31A is constitutionally valid, the first part of the unamended Article cannot be held to be unconstitutional. The first part of the unamended Article 31C, in fact, stands on a more secure footing because it accords protection against infraction of Articles 14 and 19 to legislation enacted for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39. The legislature in enacting such legislation acts upon the constitutional mandate contained in Article 37 according to which the Directive Principles are fundamental in the governance of the country and it is the duty of the State to apply those principles in making laws. It is for the purpose of giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 in discharge of the constitutional obligation laid upon the State under Article 37 that fundamental rights in Articles 14 and 19 are allowed to be abridged. A constitutional amendment, therefore, making such a provision cannot be condemned as violative of the basic structure of the Constitution. [301E H, 302A C]. (9) Even if the Constitution (Fortieth Amendment Act, 1976 is unconstitutional and void and the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1972 (Act 11 of 1975), the . Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1975, (Act XLVII of 1945) and the Maharashtra Lands (Ceiling on holdings) Amendment Act, 1975, (Act II of 1976) have not been validly included in the Ninth Schedule so as to earn the protection of Article 31B, they are still saved from invalidation by Article 31A and so far as the Constitution (Forty Second Amendment) Act, 1976, is concerned, it is outside the constituent power of Parliament in so far as it seeks to include clauses (4) and (S) in Article 368. [302C D, G H]. It is clear on a plain natural construction of its language that under the proviso to Article 83(2) the duration of the Lok Sabha could be extended only during the operation of a proclamation of emergency and if, therefore, no proclamation of emergency was in operation at the relevant time, the House of People (Extension of Duration) Act, 1976 would be outside the competence of Parliament under the proviso to Article 83(2). Again the language of Article 352 (1) makes it clear that the President can take action under this clause only if he satisfies that a grave emergency exists whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance. The satisfaction of the President "that a grave emergency exists whereby the security of India. is threatened whether by war or external aggression or internal disturbance" is a condition precedent which must be fulfilled before the President can issue a proclamation under Article 352 clause (1). When this condition precedent is satisfied, the President may exercise the power under clause (1) of Article 352 and issue a proclamation of emergency. The constitutional implications of a 230 declaration of emergency. under Article 352 clause (1) are vast and they are provided in Articles 83(2), 250, 353, 358 and 359. The emergency being an exceptional situation arising out of a national crisis certain wide and sweeping powers have been conferred on the Central Government and Parliament with a view to combat the situation and restore normal conditions. One such power is that given by Article 83(2) which provides that while a proclamation of emergency is in operation, Parliament may by law extend its duration for a period not exceeding one year at a time. Further several drastic consequences ensue upon the making of a declaration of emergency. The issue of a proclamation of emergency makes serious inroads into the principle of federalism and emasculates the operation and efficacy of the Fundamental Rights. The power of declaring an emergency is, therefore, a power fraught with grave consequences and it has the effect of disturbing the entire power structure under the Constitution. But it is a necessary power given to the Central Government with a view to arming it adequately to meet an exceptional situation arising out of threat to the security of the country on account of war or external aggression or internal disturbance or imminent danger of any such calamity. It is, therefore, a power which has to be exercised with the greatest care and caution and utmost responsibility [303A B 306E H, 307E G]. (10) There is no bar to the judicial review of the validity of a proclamation of emergency issued by the President under Article 352 clause (1). [308B C]. If a question brought before the court is purely a political question not involving determination of any legal or constitutional right or obligation, the court would not entertain it, since the court is concerned only with adjudication of legal rights and liabilities. Merely because a question has a political colour the court cannot fold its hands in despair and declare "judicial hands off". So long as the question is whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the court. Indeed it would be its constitutional obligation to do so. The court is the ultimate interpreter of the Constitution and when there is manifestly unauthorised exercise of power under the Constitution, it is the duty of the court to intervene. In fact, to this Court as much as to other Branches of Government is committed the conservation and furtherance of constitutional values. The Court 's task is to identify those values in the constitutional plan and to work them into life in the cases that reach the Court. "Tact and wise restraint ought to temper any power but courage and the acceptance of responsibility have their place too '. The Court cannot and should not shirk this responsibility because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country. It would not, therefore, be right for the Court to decline to examine whether in a given case there is any constitutional violation involved in the President issuing a proclamation of emergency under clause (1) of Article 352. The constitutional jurisdiction of this Court does not extend further than saying whether the limits on the power conferred by the Constitution on the President have been observed or there is transgression of such limits. The only limit on the power of the President under Article 352 clause (1) is that the President should be satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened whether by war or external aggression or internal disturbance. The satisfaction of the President is a subjective one and cannot be decided by reference to any objective tests. It is deliberately and advisedly subjective because the matter in respect ' to 231 which he is to be satisfied is of such a nature that its decision must necessarily be left to the Executive Branch of Government. There may be a wide range of situations which may arise and their political implications and consequences may have to . be evaluated in order to decide whether there is a situation of grave emergency by reason of the security of the country being threatened by war or external aggression or internal disturbance. It would largely be a political judgment based on assessment of diverse and varied factors, fast changing situations, potential consequences and a host of other imponderables. It cannot, therefore, by its very nature, be a fit subject matter for adjudication by judicial methods and materials and hence it is left to the subjective satisfaction of the Central Government which is best in a position to decide it. The Court cannot go into the question of correctness or adequacy of the facts and circumstances on which the satisfaction of the Central Government is based. That would ba a dangerous exercise for the Court, both because it is not a fit instrument for determining a question of this land and also because the Court would. thereby usurp the function of the executive and in doing so enter the "political thicket" which it must avoid if it is to retain its legitimacy with the people. But, if the satisfaction is mala fide or is based on wholly extraneous and irrelevant ground, the Court would have jurisdiction to examine it because in that case there would be no satisfaction of the President in regard to the matter on which he is required to be satisfied The satisfaction of the President is a condition precedent to the exercise of power under Article 352 clause (1) and if it can be shown that there is no satisfaction of the President at all, the exercise of the power would be constitutionally invalid. [309C H, 310A B]. It is true that by reason of clause (5)(a) of Article 352, the satisfaction of the President is made final and conclusive and cannot be assailed on any ground, but, the power of judicial review is a part of the basic structure of the Constitution and hence this provision debarring judicial review would be open to attack on the ground that it is unconstitutional and void as damaging or destroying the basic structure. This attack against constitutionality can, however, be averted by reading the provision to mean that the immunity from challenge granted by it does not apply whore the challenge is not that the satisfaction is improper or unjustified but that there is no satisfaction at all. In such a case it is not the satisfaction arrived at by the President which is challenged but the existence of the satisfaction itself. Where, therefore, the satisfaction is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground it would be no satisfaction at all and it would be liable to be challenged before a court notwithstanding clause (5)(a) of Article 352. No doubt, in most cases it would be difficult if not impossible to challenge the exercise of ' power under Article 352 clause (1) even on this limited ground because the facts and circumstances on which the satisfaction is based would not be known, but where it is possible the existence of the satisfaction can always be challenged on the ground that it is mala fide or based on a wholly extraneous or irrelevant ground. [310C F]. Gormallion vs Lightfoot, ; ; Backer vs Carr; , , quoted with approval. State of Rajasthan vs Union of India, ; , followed. Gulam Sarwant vs Union of India, ; ; Bhutnath Mato vs State of West Bengal, ; , explained. 232 (11) on a plain natural interpreation of the language of sub clauses (a) to (c) of clause (2) that so long as the proclamation of emergency is not revoked by another proclamation under sub clause (2)(a), it would continue to be in operation irrespective of change of circumstances. [312C]. Lakhan Pal vs Union of India, [1966] Supp. SCR 209, applied. It is true that the power to revoke a proclamation of emergency is vested only in the Central Government and it is possible that the Central Government may abuse this power by refusing to revoke a Proclamation of Emergency even though the circumstances justifying the issue of Proclamation have ceased to exist and thus prolong baselessly the state of emergency obliterating the Fundamental Rights and this may encourage totalitarian trend. But the primary and real safeguard of the citizen against such abuse of power lies in "the good sense of the people and in the system of representative and responsible Government" which is provided in the Constitution. Additionally, it may be possible for the citizen in a given case to move the court for issuing a writ of mandamus for revoking Proclamation of Emergency, if he is able to show by placing clear and cogent material before the court that there is no justification at all for the continuance of the Proclamation of Emergency. But this would be a very heavy onus because it would be entirely for the Executive Government to be satisfied whether a situation has arisen where the Proclamation of Emergency can be revoked. There would be so many facts and circumstances and such diverse considerations to be taken into account by the Executive Government before it can be satisfied that there is no longer any grave Emergency whereby the security of India is threatened by war or external aggression or internal disturbance. This is not a matter which is fit for judicial determination and the court would not interfere with the satisfaction of the Executive Government in this regard unless it is clear on the material on record that there is absolutely no justification for the continuance of the Proclamation of Emergency and the Proclamation is being continued mala fide or for a collateral purpose. The court may in such a case, if satisfied, beyond doubt grant a writ of mandamus directing the Central Government to revoke the Proclamation of Emergency. But until that is done the Proclamation of Emergency would continue in operation and it cannot be said that though not revoked by another Proclamation it has still ceased to be in force. In the present case, it was common ground that the first Proclamation of Emergency issued on 3rd December, 1971 was not revoked by another Proclamation under clause (2)(a) of Article 352 until 21st March, 1977 and hence at the material lime when the House of People (Extension of Duration) Act, 1976, was passed the first Proclamation of Emergency was in operation. [312F H, 313A F.]. If the first Proclamation of Emergency was in operation at the relevant time it would be sufficient compliance with the requirement of the proviso to clause (2) of Article 83 and it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President. [313E F]. (12) The House of People (Extension of Duration) Act, 1976, was enacted under the proviso to clause (2) of Article 83 for the purpose of extending the duration of the Lok Sabha and it was a condition precedent to the exercise of this power by Parliament that there should be a Proclamation of Emergency in operation at the date when the Act was enacted. The words "while the Proclamation of Emergency issued on the 3rd day of December, 1971 233 and on the 25th day of June, 1975 are both in operation" were introduced , merely by way of recital of the satisfaction of the condition precedent for justifying the exercise of the power under the proviso to clause (2) of Article 83 and they were not intended to lay down a condition for the operation of section 2 of the Act. Section 2 clearly and in so many terms extended the duration of the Lok Sabha for a period of one year and extension was not made dependent on both the Proclamations of Emergency being in operation at the date of the enactment of the Act. It was for a definite period of one year that the extension was effected and it was not co extensive with the operation of both the Proclamations of Emergency. The extension for a period of one year was made once for all by the enactment of section 2 and the reference to both the Proclamations of Emergency being in operation was merely for the purpose of indicating that both the Proclamations of Emergency being in operation, Parliament had competence to make the extension. It was, therefore, not at all necessary for the efficacy of the extension that both the Proclamations of Emergency should be in operation at the date of enactment of the Act. Even if one Proclamation of Emergency was in operation at the material date it would be sufficient to attract the power of Parliament under the proviso to Article 83 clause (2) to enact the Act extending the duration of the Lok Sabha. No doubt, Parliament proceeded on the assumption that both the Proclamations of Emergency were in force at the relevant date and they invested Parliament with power to enact the Act. but even if this legislative assumption were unfounded it would not make any difference to the validity of the exercise of the power so long as there was one Proclamation of Emergency in operation which authorised Parliament to extend the duration of the Lok Sabha under the proviso to clause (2) of Article 83. It is true that the proviso to section 2 enacted that if both or either of the Proclamations of Emergency cease or ceases to operate before the expiration of the extended period of one year, the Lok Sabha shall continue until six months after the ceaser of operation of the said Proclamations or Proclamation, not going beyond the period of one year, but the opening part of this proviso can have application only in relation to a Proclamation of Emergency which was in operation at the date of enactment of the Act. If such a Proclamation of Emergency which was in operation at the material date ceased to operate before the expiration of the extended period of one year, then the term of the Lok Sabha would not immediately come to an end, but it would continue for a further period of six months but not so to exceed the extended period of one year. This provision obviously could have no application in relation to the second Proclamation of Emergency if it was void when issued. In such a case, the second Proclamation not being valid at all at the date of issue would not be in operation at all and it would not cease to operate after the date of. enactment of the Act. The proviso would in that event have to be read as relating only to the first Proclamation of Emergency, and since the Proclamation of Emergency continued until it was revoked on 21st March, 1977, the duration of the Lok Sabha was validly extended for a period of one year from 18th March, 1976 and hence there was a validly constituted Lok Sabha on the dates when the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976, were. passed by Parliament. (314G H, 315A H, 316A C]. (In view of the settled practice of the Supreme Court not to say any more than is necessary to get a safe resting place for the decision, His Lordship did not consider whether the second Proclamation of Emergency was validly issued.)

longest

Appeals Nos. 711 713 of 1962. Appeals by special leave from the judgments and order dated May 27, 25, 1960, of the Assam High Court in Civil Rule Nos. 3 and 25 of 1960 respectively and December 15, 1959 of the Allahabad High Court in Special Appeal No. 502 of 1958. CIVIL APPEAL No. 614 OF 1962. Appeal by special leave from the order dated April 6, 1961 of the Punjab High Court in Letters Patent Appeal No. 81/1961. CIVIL APPEALS Nos. 837 To 839 of 1963. Appeals from the judgment and order date January 18, 1963 of the Assam High Court in Civil Rule 386 to 388 of 1961. B.C. Ghose and P.K. Chatterjee, for the appellants (in C. A. Nos. 711 to 713/1962). I.M. Lall and V.D. Mahajan, for the appellant (in C.A. Nos. 714 of 1962). S.V. Gupte, Additional Solicitor General, Naunit Lal and R.H. Dhebar, for the respondents (in C.A. Nos. 711 714/1962). C.K. Daphtary, Attorney General, R. Ganapathy Iyar and R.H. Dhebar, for the appellants (in C.A. Nos. 837 839/1963). B.C. Ghosh and P.K. Chatterjee, for the respondents (in C.A. Nos. 837 839/1963). R.K. Garg, M.K. Ramamurthi, S.C. Agarwal and D.P. Singh, for the intervener (in C.A. No. 711/ 1962.) 689 R.K. Garg and P.K. Chatterjee, for the intervener ,(in C.A. Nos. 837 839./1963). December 5, 1963. The Judgment of P.B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah and N. Rajagopala lyyangar, JJ. was delivered by Gajendragadkar J. K. Subba Rao, and K.C. Das Gupta JJ. delivered separate Opinion section J.C. Shah J. delivered a dissenting Opinion. GAJENDRAGADKAR J. These two groups of appeals have been placed before us for hearing together, because they raise a common question of law in regard to the Constitutional validity of Rules 148(3) and 149(3) contained in the Indian Railway Establishment Code, Vol. (hereafter called the Code). The first group consists of four appeals. C.A. Nos. 711 & 712 of 1962 arise from two petitions filed by the appellants Moti Ram Deka and Sudhir Kumar Das respectively in the Assam High Court. Deka was a peon employed by the North East Frontier Railway, whereas Das was a confirmed clerk. They alleged that purporting to exercise its power under Rule 148 of the Code, the respondent, the General Manager North East Frontier ' Railway, terminated their ser vices and according to them, the said termination was illegal inasmuch as the Rule under which the impugned orders of termination had been passed, was invalid. This plea has been rejected by the Assam High Court and the writ petitions filed by the two appellants have been dismissed. It is against these orders of dismissal that they have come to this Court by special leave. Civil Appeal No. 713 of 1962 arises out of a petition filed by the appellant Priya Gupta who was an Assistant Electrical Foreman employed by the North Eastern Railway, Gorakhpur. His services having been terminated by the respondent General Manager of the said Railway, he moved the Allahabad High Court under article 226 of the Constitution and challenged the validity of the order terminating his services on the ground that Rule 148 of the Code was invalid. The appellant 's plea has been rejected 1/SCI/64 44 690 by the said High Court both by the learned single Judge who heard his petition in the first instance and by the Division Bench which heard his Letters Patent Appeal. That is how the appellant has come to this Court by special leave. Civil Appeal No. 714/1962 arises out of a writ petition filed by Tirath Ram Lakhanpal who was a Class A Guard employed by the Northern Railway, New Delhi. His services were terminated by the Respondent General Manager of the said Railway r under Rule 148 of the Code and his writ petition to quash the said order has been dismissed by the Punjab High Court. The learned single Judge who heard this writ petition rejected the pleas raised by the appellant, and the Division Bench which the appellant moved by way of Letters Patent Appeal summarily dismissed his Appeal. It is this dismissal of his Letters Patent Appeal which has brought the appellant to this Court by Special Leave. That is how this group of four appeals raises a common question about the validity of Rule 148. The next group consists of three appeals which challenge the decision of the Assam High Court holding that the orders of dismissal passed by appellant No. 2, the General Manager, North East Frontier Railway, against the three respective respondents S.B. Tewari, Parimal Gupta and Prem Chand Thakur, under Rule 149 of the Code, were invalid. These three respondents had moved the Assam High Court for quashing the impugned orders terminating their services, and the writ petitions having been heard by a special Bench of the said High Court consisting of three learned Judges, the majority opinion was that the impugned orders were orders of dismissal and as such, were outside the purview of Rule 149. According to this view, though Rule 149 may not be invalid, the impugned orders were bad because as orders of dismissal they were not justified by Rule: 149. The minority view was that Rule 149 itself is invalid, and so, the impugned orders were automatically invalid. In the result, the three writ petitions 691 filed by the three respondents respectively were allowed. That is why the Union of India and the General Manager, N.E.F. Railway, appellants 1 & 2 respectively, have come to this Court with a certificate granted by the Assam High Court,. and they challenge the correctness of both the majority and the minority views. Thus, in these three appeals, the question about the validity of Rule 149 falls to be considered. The first group of four appeals was first heard by a Constitution Bench of five Judges for some time. At the hearing before the said Bench, the learned Addl. Solicitor General conceded that the question about the validity of Rule 148 had not been directly considered by this Court on any occasion, and so, it could not be said that it was covered by any previous decision. After the hearing of the arguments before the said Bench had made some progress, the learned Addl. Solicitor General suggested that he was strongly relying on certain observations made in the previous decisions of this Court and his argument was going to be that the said observations are consistent with his contention that Rule 148 is valid and in fact, they would logically lead to that inference. That is why the Bench took the view that it would be appropriate if a larger Bench is constituted to hear the said group of appeals, and so, the matter was referred to the learned Chief Justice for his directions. Thereafter, the learned Chief Justice ordered that the said group should be heard by a larger Bench of seven Judges of this Court. At that time, direction was also issued that the second group of three appeals which raised the question about the validity of Rule 149 should be placed for hearing along with the first group. In fact, the learned counsel appearing for both the parties in the said group themselves thought that it would be appropriate if the two groups of appeals are heard together. That is how the two groups of appeals have come for disposal before a larger Bench; and so, the main question which we have to consider is whether Rule 148(3), and Rule 149(3) which has superseded it are valid. The contention of the 692 railway employees concerned is that these Rules contravene the Constitutional safeguard guaranteed to civil servants by article 311(2). It is common ground that if it is held that the Constitutional guarantee prescribed by article 311(12) is violated by the Rules, they would be invalid; on the other hand the Union of India and the Railway Administration contend that the said Rules do not contravene article 311(2), but are wholly consistent with it. At this stage, it would be. convenient to refer r to the two Rules. Rule 148 deals with the termination of service and periods of notice. Rule 148(1) deals with temporary railway servants; R. 148(2) deals with apprentices, and R. 148(3) deals with other (non pensionable) railway servants. It is with R. 148(3) that we are concerned in the present appeals. It reads thus: "(3) Other (non pensionable) railway servants:The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity." "Note: The appointing authorities are empower ed to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Then follow the respective periods for which notice has to be given. It is unnecessary to refer to these periods. We may incidentally cite Rule 148(4) as well which reads thus: 693 "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " It is thus clear that R. 148(3) empowers the appropriate authority to terminate the services of other nonpensionable railway servants after giving them notice for the specified period, or paying them their salary for the said period in lieu of notice under R. 148(4). The non pensionable services were brought to an end in November, 1957 and an option was given to the non pensionable servants either to opt for pension. able service or to continue on their previous terms and conditions of service. Thereafter, Rule 149 was framed in place of R. 148. Rule 149(1) & (2) like Rule 148(1) & (2) deal with the temporary railway servants and apprentices respectively. Rule 149(3) deals with other railway servants; it reads thus: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity" The Rule then specifies the different periods for which notice has to be given in regard to the different categories of servants, It is unnecessary to refer to these periods. Then follow sub rule (4). The same may be conveniently set out at this place: "(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. Note: The appointing authorites are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Just as under ' Rule 148(3) the services of the railway employees to which it applied could be terminated after giving them notice for the period specified, so under R. 149(3) termination of services of the employees concerned can be brought about by serving them with a notice for the requisite period, or paying them their salary for the said period in lieu of notice under R. 149(4). Rule 149(3) applies to all servants other than temporary servants and apprentices. The distinction between pensionable and non pensionable servants no longer prevails. The question which we have to consider in the present appeals is whether the termination,of services of a permanent railway servant under Rule 148(3) or Rule 149(3)amounts to his removal under article 311(2) of the Constitution. If it does,the impugned Rules are invalid; if it does not, the said Rules are valid. That takes us to the question as to the true scope and effect of the provisions contained in Art.311(2),and the decision of this question naturally involves the construction of article 311(2) read in the light of Articles 309 and 310. In considering this point, if may be useful to refer very briefly to the genesis of these provisions and their legislative background. In this connection, it would be enough for our purpose if we begin with the Government of India Act, 1833. Section 74 of the said Act made the tenure of all Services under the East India Company subject to His Majesty 's pleasure. These servants were also made subject to the pleasure of the Court of Directors with a proviso which excepted from the said rule those who had been appointed directly by His Majesty. In due course, when the Crown took over the government of this country by the Government of India Act, 1858, section 3 conferred on the Secretary of 695 State all powers which has till then vested in the Court of Directors, while the powers in relation to the servants of the Company which had till then vested in the Director were, by section 37, delegated to the Secretary of State. This position continued until we reach the Government of India Act, 1915. This Act repealed all the earlier Parliamentary legislation and was in the nature of a consolidating Act. There was, however a saving clause contained in section 130 of the said Act which preserved the earlier tenures of servants and continued the rules and regulations applicable to them. Section 96B of this Act which was enacted in 1919 brought about a change in the constitutional position of the civil servants. ' Section 96B(1) in substance, provided that "subject to the provisions of this Act and the rules made thereunder, every person in the civil service of the Crown in India holds office during His Majesty 's pleasures and it added that no person in that service may be dismissed by any authority subordinate to that by which he was appointed. It also empowered the Secretary of State in Council to reinstate any person in that service who had been dismissed, except so far as the Secretary of State in Council may, by rules, provide to the contrary. Section 96B(2) conferred power on the Secretary of State in Council to make rules for regulating the classification of the Civil Services in India, the method of recruitment, the conditions of service, pay and allowances and discipline and conduct while sub section (4) declared that all service rules then in force had been duly made and confirmed the same. In 1935, the Government of India Act 1935 was passed and section 96B( 1) was reproduced in subsection (1) and (2) of section 240, and a new sub section was added as sections (3). By this new sub section, protection was given to the civil servant by providing that he shall not be dismissed or reduced in rank until he had be en given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The definition contained in section 277 of the said 596 act shows that the expression "dismissal" included removal from service. That continued to be the position until the Constitution was adopted in 1950. The Constitution has dealt with this topic in Articles 309, 310 and 311. Art.310 deals with the tenure of office of persons serving the Union or a State, and provides that such office is held during the pleasure of the President if the post is under the Union, or during the pleasure of the Governor if the post is under a State. The doctrine of pleasure is thus embodied by article 310(1). article 310(2) deals with cases of persons appointed under contract, and it provides that if the President or the Governor deems it necessary in order to secure the services of a person having special qualifications, he may appoint him under a special contract and the said contract may provide for the payment to him of compensation if before the expiration of an agreed period, that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate: that post. it is significant that article 310(1) begins with a clause "except as expressly provided by this Constitution" '. In other words,if there are any other provisions in the Constitution which impinge upon it, the provisions of article 310(1) must be read subject to them. The exceptions thus contemplated may be illustrated by ,reference to Articles 124, 148, 218 and 324. Another exception is also provided by article 31 1. In other words, article 311 has to be read as a proviso to article 310, and so, there can be no doubt that the pleasure contemplated by article 310(1) must be exercised subject to the limitations prescribed by article 31 1. article 309 provides that subject to the provisions of the constitution, Acts of the appropriate Legislative may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State. This clearly means that the appropriate Legislature may pass Acts in respect of the terms and conditions of service of persons appointed to public 697 services and posts, but that must be subject to the provisions of the constitution which inevitably brings in article 310(1). The proviso to article 309 makes it clear that it would be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may. direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and prescribing the conditions of service of persons respectively appointed to services and posts under the Union or the State The pleasure of the President or the Governor mentioned in article 310(1) can thus be exercised by such person as the President or the Governor may respectively direct in that behalf, and the pleasure thus exercised has to be exercised in accordance with the rules made in that behalf. These rules, and indeed the exercise of the powers conferred on the delegate must be subject to article 310, and so article 309 cannot impair or affect the pleasure of the President or the Governor therein specified. There is thus no doubt that article 309 has to be read subject to Articles 310 and 31 1, and article 310 has to be read subject to Art 311. It is significant that the provisions contained in article 311 are not subject to any other provision of the Constitution. Within the field covered by them they are absolute and paramount. What then is the effect of the provisions contained in article 311(2)? article 311(2) reads thus: "No such person as aforesaid shall be dis missed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action propo sed to be taken in regard to him. " We are not concerned with the cases covered by the proviso to this article in the present appeals. It may be taken to be settled by the decisions of this Court that since article 311 makes no distinction between permanent and temporary posts, its protection must be held to extend to all government servants holding 698 permanent or temporary posts or officiating in any of them. The protection afforded by article 311(2) is limited to the imposition of three major penalties contemplated by the service Rules, viz., dismissal, removal or reduction in rank. It is true that the consequences of dismissal are more serious than those of removal and in that sense, there is a technical distinction between the two; but in the context, dismissal, removal and reduction in rank which are specified by article 311 (2) represent actions taken by way of penalty. In regard to temporary servants, or servants on probation, every case of termination of service may not amount to removal. In cases falling under these categories, the terms of contract or service rules may provide for the termination of the services on notice of a specified period, or on payment of salary for the said period, and if in exercise of the power thus conferred on the employer, the services of a temporary or probationary servant are terminated, it may not necessarily amount to removal. In every such case, courts examine the substance of the matter, and if it is shown that the termination of services is no more than discharge simpliciter effected by virtue of the contract or the relevant rules, article 311(2) may not be applicable to such a case. If, however, the termination of a temporary servant 's services in substance represents a penalty imposed on him or punitive action taken against him, then such termination would amount to removal and article 311(2) would be attracted. Similar would be the position in regard to the reduction in rank of an officiating servant. This aspect of the matter has been considered by this Court in several recent decisions, vide Jagdish Mitter vs Union of India(1) State of Bihar vs Gopi Kishore ' Prasad(2) State of Orissa & Anr. vs Ram Narayan Das(3) section Sukhbans Singh vs The State of Punjab(4) and Madan Gopal vs The State of Punjab & Qrs. (5) (1) A. 1. R. (3) ; (2) ; (4) ; (5) [1963] 3 section C. R. 716. 699 This branch of the law must, therefore, be taken to be well settled. In regard to servants holding substantively a permanent post who may conveniently be describe hereafter as permanent servants, it is similarly wellsettled that if they are compulsorily retired under the relevant service rules, such compulsory retirement does not amount to removal under article 311 (2). Similarly, there can be no doubt that the retire ment of a permanent servant on his attaining the age of superannuation does not amount to his removal within the meaning of article 311(2). The question which arises for our decision in the present appeals is: if the service of a permanent civil servant is terminated otherwise than by operation of the rule of superannuation, or the rule of compulsory retirement does such termination amount to removal under article 311(2) or not ? It is on the aspect of the question that the controversy between the parties arises before us. Before dealing with this problem, it is necessary to refer to the relevant. Railway Rules themselves Speaking historically, it appears that even while the affairs of the country were in charge of the East India Company, there used to be some regulations which were substantially in the nature of administrative instructions in regard to the conditions of service of the Company 's employees. These regulations were continued by section 130(c) of the Government of India Act, 1915 which provided, inter alia that the repeal shall not affect the tenure of office, conditions of service, terms of remuneration or right to pension of any officer appointed before the commencement of this Act. Section 96B(2) which was inserted in the said Act in 1919, however, provided that the said regulations could be modified or superseded by rules framed by the Secretary of State. In due course, the Secretary of State framed certain rules The first batch of rules was framed in December 1920. They applied to all officers in the All India Provincial as well as Subordinate Services and governed 700 even officers holding special posts. The Local Government had a limited power in respect of officers in the All India Services under their employment and this power was confined to imposing on them punishments of censure, reduction, withholding of promotion and suspension (vide Rule 10); in the case of Provincial Services, however, the powers of the Local Government were plenary They could not only impose the penalties to which we have just referred, but also remove or dismiss them (vide Rule 13). It appears that Rule 14 prescribed the procedure which had to be followed in imposing the penalty of dismissal, removal or reduction; and so, it may be said that for the first time these three major punishments were collated together and a special procedure prescribed in that behalf. No definition of removal was, however, prescribed. Incidentally, we may refer to Rule XX which is included in the group of rules relating to appeals. Under this rule, an appeal would not lie against; (1) the discharge of a person appointed on probation before the end of his probation, and (2) the dismissal and removal of a person appointed by an authority in India to hold a temporary appointment. It would be permissible to point out that this provision would show that the termination of the services of a person permanently employed would not have fallen within the ambit of this rule. The Rules thus framed in 1920 were amended from time to time and were re issued in June, 1924. It appears that subsequent to 1924, fresh rules were made under the Governors Provinces Civil Services (Control and Appeal) Rules and Governors Provinces Civil Services (Delegation) Rules of 1926 which were published in March, 1926. Then followed the Rules framed by the Secretary of State in 1930. These Rules were in force when the Government of India Act, 1935 was enacted, and they continue in force even now by reason of Article 313. We ought to add that these Rules superseded all the earlier rules and constitute an exhaustive code as regards disciplinary matters. Rule 3(b) of these rules excluded the 701 Railway Servants from the application of said rules, and that furnishes the historical background why separate Fundamental Rules for Railway corresponding to the Fundamental Rules in other public services, came to be framed. Before we proceed to the relevant Railway Rule we may incidentally mention Rule 49 of the Rules framed by the Secretary of State in 1930. This provides that penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the clauses (1) to (5) specified in Rule 14. These penalties. number seven in all. Amongst them are mentioned reduction to a lower post, dismissal and removal. Then follows an explanation which is useful for our purpose. Before quoting that explanation it may be. pointed out that the said explanation which was originally introduced under Rule 49, was subsequently amended once in 1948, then in 1950 lastly in 1955 when explanation No. 2 was added Thus amended, the two explanations read as follows: "Explanation 1 The termination of employment (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, does not amount to removal or dismissal within the meaning of this rule or of rule 55. Explanation II: Stopping a Government Servant at an efficiency bar in the time scale of his pay on the ground of his unfitness to cross the bar does not amount to withholding of increments or promotions within the meaning of this rule. " 702 Looking at clauses (a), (b) and (c) of Explanation 1, it would be apparent that these clauses deal with persons appointed on probation, or appointed as temporary servants, or engaged on a contract, and the effect of the said explanation is that the termination of the services of such persons does not amount to removal or dismissal within the meaning of Rule 49 or Rule 55. In other words, R. 49 read along with explanation 1, would,prima facie, inferentially support the contention that in regard to a permanent civil servant, the termination of his services otherwise than under the rule of superannuation or compulsory retirement would amount to removal. Let us then consider the relevant Railway Fundamental Rules which have a bearing on the point with which we are concerned. Paragraph 2003 of the Code, Vol. 11 which corresponds to Fundamental Rule 9 contains definitions. Fundamental Rule 9(14) defines a lien as meaning the title of a Railway servant to hold substantively, either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substantively. An officiating servant is defined by F.R. 9(19) as one who performs the duties of a post on which another person holds a lien, or when a competent authority appoints him to officiate in a vacant post on which no other railway servant holds a lien. There is a proviso to this definition which is not relevant for our purpose. That takes us to the definition of a permanent post which under F.R. 9(22) means a post carrying a definite rate of pay sanctioned without limit of time. A, temporary post, on the other hand, means under F.R. 9 (29) a post carrying a definite rate of pay sanctioned for a limited time, and a tenure post means under F. R. 9 (30) a permanent post which an individual railway servant may not hold for more than a limited period. It is thus clear that as a result of the relevant definitions, a permanent post carries a definite ate of pay without a limit of time and a servant who substantively holds a permanent post has 703 a title to hold the post to which he is substantively appointed, and that, in terms, means that a permanent servant has a right to hold the post until, of course he reaches the age of superannuation, or until he is compulsorily retired under the relevant rule. It is in the light of this position that we must now proceed to examine the question as to whether the termination of the permanent servant 's services either under Rule 148(3) or R. 149(3) amounts to his removal or not. On this point, two extreme contentions have been raised before us by the parties The learned Addl. Solicitor General contends that in dealing with the present controversy, we must bear in mind the doctrine of pleasure which has been enshrined in article 310(1). He argues that every civil servant holds his office during the pleasure the President or the Governor. It is true that in the present cases, we are dealing with rules framed under the proviso to article 309 and in that sense, the question of pleasure on which so much stress is laid by the learned Addl. Solicitor General may not directly arise; but it must be conceded that the point raised for our decision may have some impact on the doctrine of pleasure, and so it needs to be examined. The argument is that all civil service is strictly speaking precarious in character. There is no guarantee of any security of tenure, because the pleasure of the President or the Governor can be exercised at any time against the civil servant. It is true that this pleasure would not be exercised capriciously, unjustly or unfairly, but the existence of the doctrine of pleasure inevitably imposes a stamp of precarious character on the tenure enjoyed by the civil servant, and so it is urged whether Rule 148 or R. 149 is made or not, it would be open to the President or the Governor to terminate the services of any civil servant to whose case article 110(1) applies. The learned Addl. Solicitor General has also impressed upon us the necessity to construe article 310(1) and article 311 in such a manner that the pleasure contemplated by article 310(1) does not become illusory or is not completely obliterated. He, therefore, suggests that article 311(2) which is in the nature of a proviso or an exception to article 310(1) must be strictly construed and in all cases falling outside the scope of the said provision, the pleasure of the President or the Governor must be allowed to rule supreme. On the other hand, it has been urged by the learned counsel appearing for the railway servants concerned before us that the pleasure of the President is controlled by article 311 and if the argument of the learned Addl. Solicitor General is accepted and full scope given to the exercise of the said pleasure, article 311 itself would become otiose. It is urged that the employment in civil service can be terminated only after complying with article 311 and any rule which violates the guarantee provided by the said Article would be invalid. In fact, the argument on the other side is that the word "removal" should receive a much wider denotation than has been accepted by this Court in its decisions bearing on the point, and that all terminations of services in respect of all categories of public servants should be held to constitute removal within article 311(2). We are inclined to hold that the two extreme contentions raised by both the parties must be rejected. There is no doubt that the pleasure of the President on which the learned Addl. Solicitor General so strongly relies has lost some of its majesty and power, because it is clearly controlled by the provisions of article 31 1, and so, the field that is covered by article 311 on a fair and reasonable construction of the re levant words used in that article, would be excluded from the operation of the absolute doctrine of pleasure. The pleasure of the President would still be there, but it has to be exercised in accordance with the requirements of article 311. Besides, as this Court has held in the State of Bihar vs Abdul Majid(1), the rule of English Law pithily expressed in the latin phrase "duranto bene placito" ("during pleasure") has not been fully adopted either (1) ; , 799. 705 by section 240 of the Government of India Act, 1935, or by article 3 1 0(1). To the extent to which that rule has been modified by the relevant provisions of: section 240 of the Government of India Act, 1935, or article 311 the Government servants are entitled to relief like any other person under the ordinary law and that relief must be regulated by the Code of Civil Procedure. It is mainly on the basis of this principle that this Court refused to apply the doctrine against abdul Majid that a civil servant cannot maintain suit against a State or against the Crown for the recovery of arrears of salary due to him. Thus, the extreme contention based on the doctrine of pleasure enshrined in article 310(1) cannot be sustained. Similarly, we do not think it would be possible to accept the argument that the word "removal" in article 311(2) should receive the widest interpretation. Apart from the fact that the said provision is in the nature of a proviso to article 3 1 0(1) and must, therefore, be strictly construed, the point raised by the contention is concluded by the decisions of this Court and we propose to deal with the present appeals on the basis that the word " removal" like the two other words "dismissal" and "reduction in rank" used in article 311(2) refer to cases of major penalties which were specified by the relevant service rules. Therefore, the true position is that Articles 310 and 311 must no doubt be read together, but once the true scope and effect of article 311 is determined, the scope and effect of article 310(1) must be limited in the sense that in regard to cases falling under article 311(2) the pleasure mentioned in article 310(1) must be exercised in accordance with the requirements of article 311. It is then urged by the learned Addl. Solicitor General that article 310 does not permit of the concept of tenure during good behaviour. According to him, in spite of the rule of superannuation, the services of a civil servant can be terminated by the President exercising his pleasure at any time. The rule of superannuation on this contention merely gives an indication to the civil servant as to the length of time 1/SCI/64 45 706 he may expect to serve, but it gives him no right to continue during the whole of the said period. In fact, the learned Addl. Solicitor General did not disguise the 'act that according to his argument Whether or not a rule of superannuation is framed and whether or not Rule 148 or R. 149 is issued, the President 's pleasure can, be exercised independently of these Rules and the action taken by the President in exercise of his pleasure cannot be "questioned under article 311(2). Alternatively,_ he contends that if article 311(2) is read in a very general and wide sense, even the rule as to the age of superannuation may be questioned as being invalid, because it does put an end to the service of a civil servant. We are not impressed by this argument. We will no doubt have to decide what cases of termination of services of permanent civil servants amount to removal; but once that question is determined, wherever it is shown that a permanent civil servant is removed from his service, article 311(2) will apply and article 310(1) cannot be invoked independently with the object of justifying the contravention of the provisions of article 311(2). In regard to the age of superannuation, it may be said prima facie that rules of superannuation which are prescribed in respect of public services in all modem States are based on considerations of life expectation, mental capacity of the civil servants having regard to the climatic conditions under which they work, and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. Therefore, no analogy can be suggested between the rule of superannuation and .Rule 148(3) or Rule 149(3). Besides., nobody has questioned the validity of the rule of superannuation, and so, it would be fruitless and idle to consider whether such a rule can be challenged at all. Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules, what is the true position? A person Who 707 substantively holds a permanent post has a right to continue in service, subject, of course, to the rule of superannuation and the rule as to compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is, in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to his removal, and so, if by R. 148(3) or IC. 149(3) such a termination is brought about, the Rule clearly contravenes article 311(2) and must be held to be invalid. It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by article 311(2) been followed. We appreciate the argument urged by the learned Addl. Solicitor General about the pleasure of the President and its significance; but since the pleasure has to be exercised subject to the provisions of article 31 1, there would be no escape from the conclusion that in respect of cases falling under article 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly. In this connection, it is necessary to emphasise that the rule making authority contemplated by article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(1). article 311(1) is intended to afford a sense of security to public servants who are substantively appointed to a permanent post and one of the principal benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules. It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffective or illusory. Once the scope of article 311(1) and (2) is duly determined, it must be held that no Rule 708 framed under article 309 can trespass on the rights guaranteed by article 311. This position is of basic importance and must be borne in mind in dealing with the controversy in the present appeals. At this stage, we ought to add that in a modern democratic State the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority. If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straightforward and efficient permanent civil servants, it is of utmost importance even from the point of view of the State that they should enjoy a sense of security which alone can make them independent and truly efficient. In our opinion, the sword of Damocles hanging over the heads of permanent railway servants in the form of R. 148(3) or R. 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused. In this connection, no distinction can be made between pensionable and non pensionable service. Even if a person is holding a post which does not carry any pension, he has a right to continue in service until he reaches the age of superannuation and the said right is a very valuable right. That is why the invasion of this right must inevitably mean that the termination of his service is, in substance, and in law, removal from service. It appears that after Rule 149 was brought into force in 1957, another provision has been made by Rule 321 which seems to contemplate the award of some kind of pension to the employees whose services are terminated under Rule 149(3). But it is significant that the application of R. 149(3) does not require, as normal rules of compulsory retirement do "that the power conferred by the said Rule can be exercised in respect of servants who have 709 put in a prescribed minimum period of service. Therefore, the fact that some kind of proportionate pension is awardable to railway servants whose services are terminated under R. 149(3) would not assimilate the cases dealt with under the ' said Rule to cases of compulsory retirement. As we Will presently point out, cases of compulsory retirement which have been considered by this Court were all cases where the rule as to compulsory retirement came into operation before the age of superannuation was reached and after a Prescribed minimum period of service had been put in by the servant. It is true that the termination of service authorised by R. 148(3) or R. 149(3) contemplates the right to terminate on either side. For all practical purposes, the right conferred on the servant to terminate his services after giving due notice to the employer does not mean much in the present position of unemployment in this country; but apart from it, the fact that a servant has been given a corresponding right cannot detract from the position that the right which is conferred on the railway authorities by the impugned Rules is inconsistent with article 311(2), and so, it ha to be struck down in spite of the fact that a simila right is given to the servant concerned. It has, however, been urged that the railway servants who entered service with the full knowledge of these Rules cannot be allowed to complain that the Rules contravene article 311 and are, therefore invalid. It appears that under Rule 144 (which was originally Rule 143), it was obligatory on railway servants to execute a contract in terms of the re levant Railway Rules. That is how the argument based on the contract and its binding character arise If a person while entering service executes a contract containing the relevant Rule in that behalf with open eyes, how can he be heard to challenge the validity of the said Rule, or the said contract? In our opinion this approach may be relevant in dealing with purely commercial cases governed by rules of contract but it is wholly inappropriate in dealing with a case 710 where the contract or the Rule is alleged to violate a constitutional guarantee afforded by article 311(2); land even as to commercial transactions, it is wellknown that if the contract is void, as for instance, under section 23 of the Indian Contract Act, the plea that it was executed by the party would be of no avail. In any case, we do not think that the argument of contract and its binding character can have validity in dealing with the question about the constitutionality of the impugned Rules. Let us then test this argument by reference to the provisions of article 311(1). article 311(1) provides that no person to whom the said article applies shall be dismissed or removed by an authority subordinate to that by which he was appointed. Can it be suggested that the Railway Administration can enter into a contract with its employees by which authority to dismiss or remove the employees can be delegated to persons other than those contemplated by article 311 (1)? The answer to this question is obviously in the negative, and the same answer must be given to the conten tion that as a result of the contract which embodies the impugned Rules, the termination of the railway servant 's services would not attract the provisions of article 311(2), though, in law, it amounts to removal. If the said termination does not amount to removal, then, of course, article 311(2) would be inapplicable and the challenge to the validity of the impugned Rules would fail; but if the termination in question amounts to a removal, the challenge to the validity of the impugned Rules must succeed notwithstanding the fact that the Rule has been included in a contract signed by the railway servant. There is one more point which still remains to be considered and that is the point of construction. The learned Add1. Solicitor General argued that in construing the impugned Rule 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so framed as to avoid conflict with, or non compliance of, the provisions of article 311(2), and so, he suggests that we should 711 adopt that interpretation of the Rule which would be consistent with article 311(2). The argument is that the termination of services permissible under the impugned Rules really proceeds on administrative grounds or considerations of exigencies of service. If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount to his removal because the termination of his services is not based on any consi deration personal to the servant. In support ' of this argument, the Addl. Solicitor General wants us to test the provision contained in the latter portion of the impugned Rules. We are not impressed by this argument. What the latter portion of the impugned Rules provides is that in case a railway servant is dealt with under that portion, no notice need be served on him. The first part of the Rules can reason ably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the specified period or salary in lieu of such notice is give to the railway servant. There is no doubt that on a fair construction, the impugned Rules authorise the Railway Administration to terminate the services of all the permanent servants to, whom the Rules apply merely on giving notice for the specified period, or on payment of salary in lieu thereof, and that clearly amounts to the removal of the servant in question, we are satisfied that the impugned Rules are invalid in as much as they are inconsistent with the provision contained in article 311(2). The termination of the permanent servants" tenure Which is authorised the said Rules is no more and no less than, their removal from service, and so, article 311(2) must come into play in respect of such cases, 'That being so. the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid. It is now necessary to examine some of the cases on which the learned Addl. Solicitor General has 712 relied. In fact, as we have already indicated, his main argument was that some of the observations made in some of the decisions to which we will presently refer support his contention and logically lead to the conclusion that the impugned Rules are valid. That naturally makes it necessary for us to examine the said cases very carefully. In Satish Chandra Anand vs The Union of India(1), this Court was dealing with the case of a person who had been employed by the Government of India on a five year contract in the Resettlement and Employment Directorate of the Ministry of Labour. When his contract was due to expire, a new offer was made to him to continue him in service in his post temporarily for the period of the Resettlement and Employment Organization on the condition that he would be governed by the Central Civil Services (Temporary Service) Rules, 1949. The relevant rule in that behalf authorised the termination of the contract on either side by one month 's notice. Subsequently, his services were terminated after giving him one month 's notice. He challenged the validity of the said order, but did not succeed for the reason that neither article 14 nor article 16 on which he relied really applied. This Court held that it is competent to the State to enter into contracts of temporary employment subject to the term that the contract would be terminated on one month 's notice on either side. Such a contract was not inconsistent with article 311(2). This case, therefore, is of no assistance in the present appeals. In Gopal Krishna Potnay vs Union of India & Anr. (2) a permanent railway employee who was discharged from service after one month notice brought a suit challenging the validity of the order terminating his services. The point about the validity of the Rule was not agitated before the Court. Questions which were raised for the decision of the Court were, inter alia, whether the agreement in question lad been executed by the servant and whether the (1) ; (2) A.I.R. 1954 S.C. 632. 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India(1) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did not amount to removal. It is true that in dealing with the argument about the loss of benefit, this Court observed that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it proceeded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die of be otherwise incapacitated from serving a day long and cannot, therefore, be regarded in the eye of law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India( ) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did no amount to removal. It is true that in dealing with th argument about the loss of benefit, this Court observe that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it preceded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die or be otherwise incapacitated from serving a day longer and cannot, therefore, be regarded in the eye of the law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 714 to the said Rule to which we have already referred, was taken into account in rejecting the argument a that a loss of future service cannot be said to be a relevant factor in determining the question as to whether compulsory retirement is removal or not. The judgment does not show that the invasion of the right which a permanent servant has, to remain in service until he reaches the age of superannuation, was pressed before the Court, and naturally the same has not been examined. Confining itself to the special features of compulsory retirement which was effected under article 465 A and Note I appended thereto, the Court came to the conclusion that compulsory retirement was not removal, We may add that subsequent decisions show that the same view has been taken in respect of compulsory retirement throughout and so, that branch of the law must be held to be concluded by the series of decisions to which we shall presently refer. We would, however, like to make it clear that the observation made in the judgment that every termination of service does not amount to dismissal or removal should, in the context, be confined to the case of compulsory retirement and should not be read as a decision of the question with which we are directly concerned in the present appeals. That problem did not arise before the Court in that case, was not argued before it, and cannot,therefore, be deemed to have been decided by this decision. Then we have a batch of four decisions reported in 1958 which are relevant for our purpose. In Hartwell Prescott Singh vs The Uttar Pradesh Government & Ors.(1) a civil servant held a post in a temporary capacity in the Subordinate Agriculture Service, Uttar Pradesh, and was shown in the gradation list as on probation. He was later appointed with the approval of the Public Service Commission of the United Provinces to officiate in Class II of the said Service. After about 10 years, he was reverted to his original temporary appointment and his services were there after terminated under Rule 25(4) of the Subordinate 1) ; 715 Agriculture Service Rules. Dealing with the said civil servant 's objection that the termination of his services contravened article 311(2), this Court held that reversion from a temporary post held by a person does not per se amount to reduction in rank. To decide whether the reversion is a reduction in rank, the post held must be of a substantive rank and further it must be established that the order of reversion was by way of penalty. As we have already discussed, the cases of temporary servants, probationers and servants holding posts in officiating capacities stand on a different footing and the principles applicable to them are now firmly established and need not detain us. The next decision in the same volume is the State of Bombay vs Saubhagchand M. Doshi(1). This was a case of compulsory retirement under Rule 165 A of the Bombay Civil Services Rules as amended by the Saurashtra Government. In I so far as, this case dealt with the compulsory retirement of a civil servant,, it is unnecessary to consider the Rule in question or the facts relating to the compulsory retirement of the civil servant. It is of interest to note that in dealing with the question as to whether compulsory retirement amounted to removal or not the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant. It is, however, significant that in considering the objection based on the contravention of article 311(2), Venkatarama Aiyar J. took the precaution of adding that "questions of the said character could arise only when the rules fix both an age of superannuation and an age for compulsory 'retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311 (2). " It would be noticed that the rule providing (1) 716 for compulsory retirement was upheld on the ground that such compulsory retirement does not amount to ,removal under article 311(2) because it was another mode of retirement and it could be enforced only between the period of age of superannuation prescribed and after the minimum period of service indicated in the rule had been put in. If, however, no such minimum period is prescribed by the rule of compulsory retirement, that according to the judgment, would violate article 311(2) and though the termination of a servant 's services may be described as compulsory retirement, it would amount to dismissal or removal within the meaning of article 311(2). With respect, we think that this statement correctly represents the true position in law. The third case in the said volume is the case of parshotam Lal Dhingra vs Union of India.(1) In this case, Das C.J. who spoke for the Bench considered comprehensively the scope and effect of the relevant constitutional provisions, service rules and their impact on the question as to whether reversion of Dhingra offended the provisions of article 311(2). Dhingra was appointed as a Signaller in 1924 and promoted to the post of Chief Controller in 1950. Both these posts were in Class III Service. In 1951, he was appointed to officiate in Class 11 Service as Asstt. Superintendent, Railway Telegraphs. On certain adverse remarks having been made against him, he was reverted as a subordinate till he made good the short comings. Then, Dhingra made a representation. This was followed by a notice issued by the General Manager reverting him to Class III appointment. It was this order of reversion which was challenged by Dhingra by a writ petition. It would thus be seen that the point with which the Court was directly concerned was whether the reversion of an officiating officer to his permanent post constituted reduction in rank or removal under article 311(2). The decision of this question was somewhat complicated by the fact that certain defects were noticed in the work of Dhingra (1) ; 717 and the argument was that his reversion was in the nature of a penalty, and so, it should be treated as reduction under article 311(2). This Court rejected Dhingra 's contention and held that the reversion of an officiating officer to his substantive post did not attract the provisions of article 311(2). Though the decision of the question which directly arose before this Court thus lay within a very narrow compass, it appears that the matter was elaborately argued before the Court and the learned Chief Justice has exhaustively considered all the points raised by the parties. For our present purpose, it is unnecessary to summaries the reasons given by the learned Chief Justice for holding that the reversion of Dhingra did not amount to reduction in rank. The only point which has to be considered by us is whether the observations made in the course of this judgment in regard to permanent servants assist the learned Addl. Solicitor General and if they do, what is their effect? Broadly stated, this decision widened the scope of article 311 by including within its purview not only permanent servants, but temporary servants and servants holding officiating posts also. The decision further held that dismissal, removal and reduction represent the three major penalties contemplated by the relevant service rules and it is only where the. impugned orders partake of the character of one or the other of the said penalties that article 311(2) can be invoked. In the course of his judgment the learned Chief Justice has referred to Rule 49 and the explanation attached thereto. The explanation to the Rule clearly shows that it refers to persons appointed on probation, or persons holding temporary appointments and contractual posts. It is in the light of this explanation that the learned Chief Justice proceeded to examine the contention raised by Dhingra that his reversion amounted to reduction in rank and so, it became necessary to examine whether any loss of benefit already accrued had been incurred or any stigma had been attached to the servant before he was reverted. It is in that connection that the Court also held that though a kind of enquiry may have 718 been held and the short comings in the work of Dhingra may have weighed in the mind of the authority who reverted him, the said motive could not alter the character of reversion which was not reduction within the meaning of article 311(2). All those points have been considered and decided and so far as the temporary servants probationers, or contractual servants are concerned, they are no longer in doubt. In regard to permanent servants, the learned Chief Justice has made some observations which it is now necessary to consider very carefully. "The appointment of a government servant to a permanent post," observed the learned C.J., "may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a lien on the post. "(p. 841) On the same subject, the learned C.J has later added that "in the absence of any special contract, the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years ' service, or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him." (p. 843). Reading these two observations together, there can be no doubt that with the exception of appointments held under special contract, the Court took the view that wherever a civil servant was appointed to a permanent post substantively, he had a right to hold that post until he reached the age of superannuation or was compulsorily retired, or the post was abolished. In all other cases, if the services of the said servant were terminated, they would have to be in conformity with the provisions of article 311(2), because termination in such cases amounts to removal. The two statements of the law to which we have just 719 referred do not leave any room for doubt on this point. Later during the course of the judgment, learned C.J. proceeded to examine Rule 49 and the explanations added to it, and then reverting to the question of permanent servants once again, he observed that "it has already been said that where a person is appointed substantively to a permanent 'post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired and in the absence of a contract, express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings about a premature end of his employment." (pp. 857 58). With respect we ought to point out that though the learned C. J at this place purports to reproduce what had already been stated in the judgment, he has made two significant additions because in the present statement he refers to a contract or service rules which may permit the authority to terminate the services of a permanent servant without taking the case under article 311(2), though such termination may not amount to ordinary or compulsory retirement. The absence of contract, express or implied, or a service rule, which has been introduced in the present statement are not to be found in the earlier statements to which we have already referred, and addition of these two Clauses apparently is due to the fact that the learned C.J. considered Rule 49 and the explanations attached thereto and brought them into the discussion of a permanent servant, and that, we venture to think is not strictly correct. As we have already seen Explanation No. 1 to R. 49 is confined to the through categories of officers specified by it in its clauses (a) 720 (b) and (c), and it has no relevance or application to the cases of permanent servants. Similarly, the same statement is repeated with the observation "as already stated, if the servant has got a right to continue in the post, then, unless ,the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within article 31 1, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances." (p. 862). With respect, we wish to make the same comment about this statement which we have already made about the statement just cited. In this connection, it may be relevant to add that in the paragraph where this statement occurs, the learned C.J. was summing up the position and the cases there considered are cases of Satish Chandra Anand, (1) and Shyam Lal(2). These two cases were concerned with the termination of a temporary servant 's services and the compulsory retirement of a permanent servant respectively, and strictly speaking, they do not justify the broader proposition enunciated at the end of the paragraph. At the conclusion of his judgment, the learned C.J. has observed that "in every case, the Court has to apply the two tests mentioned above, namely, (1) whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to." (p. 863) It would be noticed that the two tests are not cumulative, but are alternative, so that if the first test is satisfied, termination of a permanent servant 's services would amount to removal because his right to the post has been prematurely invaded. The learned C.J. himself makes it clear by adding (1) ; (2) ; 721. that if the case satisfies either of the two tests, the it must be held that the servant had been punished and the termination of his services must be held to be wrongful and in violation of the constitutional rights of the servant. It would thus be noticed that the first test would be applicable to the cases of permanent servants, whereas the second test would be relevant in the cases of temporary servants, probationers and the like. Therefore, we do not think the learned Addl. Solicitor General is justified in contending that all the observations made in the course of this judgment in regard to permanent servant considered together support his contention. Besides if we may say so, with respect, these observations are in the nature of obiter dicta and the learned Add1 Solicitor General cannot rely solely upon them for the purpose of showing that R. 148(3) or R. 149(3) should be held to be valid as a result of the said observations. The last decision on this point rendered by this Court in 1958 (vide P. Balakotaiah vs The Union of India & Others(1) dealt with the case of Balakotaiah who was a permanent railway servant and whose services had been terminated for reasons of national security under section 3 of the Railway Services (Safe guarding of National Security) Rules, 1949.It appears that in this case, Balakotaiah who challenged the order terminating his services before the High Court of Nagpur, failed because the High Court held that the said order was justified under Rule 148(3) of the Railway Rules. In his appeal before this Court, it was urged on his behalf that the High Court was in error in sustaining the impugned order under the said Rule when the Union of India had not attempted to rely on the said Rule, and the impugned order did not purport to have been passed under it. The argument was that the impugned order had been passed under R. 3 of the Security Rules and the High Court should have considered the matter by reference to the said Rule and not to R. 148(3). This plea was (1) ; 1/SCI/64 46 722 upheld by this Court, and so, Balakotaiah 's challenge to the validity of the impugned order was examined by reference to security rule 3. The scheme of the relevant Security Rules was then considered by this Court and it was held that the said Rules did not contravene either article 14 or article 19(1)(c) of the Constitution as contended by the appellant. Having held that the impugned rule was not unconstitutional, this Court proceeded to examine the further contention that the procedure prescribed by the said rules for hearing of the charges does not satisfy the requirement of article 311 and as such, the said Rules are invalid. Rules, 3, 4 and 5 of the Security Rules which dealt with this point do contemplate some kind of an enquiry at which an opportunity is given to the railway servant concerned to show cause against the action proposed to be taken against him. Rule 7 also provides that a person who is compulsorily retired or whose service is terminated under Rule 3, shall be entitled to such compensation, pension, gratuity and/or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided. The contention was that the nature of the enquiry contem plated by the relevant Rules did not satisfy the re quirements of article 311(2), and so, the Rules should be struck down as being invalid and the order terminating the services of Balakotaiah should therefore, be held to be invalid. This argument was rejected by this Court, and relying upon the earlier decisions in the cases of Satish Chandra Anand(1), Shyam Lal(2) Saubhagchand M. Doshi(3) and Parshotam Lal Dhingra (4) it was held that the order terminating the services of the railway, employee which can be (1) ; (3) ; (2) ; (4) ; 723 passed under R. 3 is not an order of dismissal or removal, and so, article 311(2) is inapplicable. On that view, the validity of R. 3 was sustained. In recording its conclusion on this point, this Court observed that the order terminating the services under R. 3 stands on the same footing as an order of discharge under Rule 148 and it is neither one of dismissal nor of removal within the meaning of Art 311. Naturally, the learned Addl. Solicitor General relies on this statement of the law. In appreciating the effect of this observation, it is necessary to bear in mind that in the earlier portion of the Judgment, this Court has specifically referred to the argument that the Security Rules had an independent operation of their own quite apart from Rule 148, and has observed that the Court did not desire to express any final opinion on that question "as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules without reference to R. 148. That renders it necessary to decide whether the Security Rules are unconstitutional as contended by the appellant. " It would thus be noticed that having upheld the contention of the appellant Balakotaiah that the High Court was in error in referring to and relying upon R. 148(3) for the purpose of sustaining the impugned order terminating his services, this Court had naturally no occasion to consider the validity, the effect or the applicability of the said Rule to the case before it, and so, the attention of the Court centered round the question as to whether the relevant security rule was valid and whether it justified the order passed against the appellant. In dealing with this aspect of the matter, this Court no doubt came to the conclusion that the termination of Balakotaiah 's services under R. 3 did not amount to his removal or dismissal; but since no argument was urged before the Court in respect of R. 148(3), the reference to the said Rule made by the judgment is purely in the nature of an obiter, and so, we are not prepared to 724 read that statement as a decision that R. 148(3) is valid. To read the said statement in that manner would be to ignore the fact that this Court had reversed the conclusion of the High Court that the impugned order was valid under R. 148(3) specifically on the ground that case had not been made out by the Union of India and should not have been adopted by the High Court. It is thus clear that as, the case was argued before this Court and considered, R. 148(3) was outside the controversy between the parties. That is why it would be unreasonable to rely on the reference to R. 148 in the statement made in the judgment on which the learned Addl. Solicitor General relies. There is another aspect of this question to which we may incidentally refer before we part with this case. We have already quoted the observation of Veinkatarama Aiyar J.; in the case of Subhagchand M. Doshi (1) to the ' effect that if compulsory retirement is permitted by any service rule without fixing the minimum period of service after which the Rule can be invoked, termination of the services of a permanent civil servant by the application of such a Rule would be dismissal or removal under article 311(2), and we have indicated that we regard that statement as correctly representing the true legal position in the matter. It appears that when this Court decided the case of Balakotaiah, this aspect of the matter 'was not argued before the Court and the observation to which we have just referred was not brought to its notice. One more case which still remains to be considered in this context is the decision in Dalip Singh vs The State of Punjab (2). In this case, Dalip Singh was compulsorily retired from service by the Rajpramukh of Pepsu exercising his power under Rule 278 of the Patiala State Regulations, 1931. In the quit from which the appeal before this Court arose he alleged that the order of retirement passed against him amoun (1) ; (2) 725 ted to his dismissal, and so, he claimed to recover Rs. 26,699 13 0 on that basis. The validity of R. 278 was not put in issue in the proceedings at any stage. The only point raised, 'was that the said Rule was not applicable to his case, and it was urged that in the circumstances, the order was an ' order of dismissal. This Court. held that R. 278 applied to the case, And so, the preliminary objection against the applicability of the Rule was rejected. Dealing with the main contention raised before this Court that the compulsory retirement of Dalip Singh was removal from service within the meaning of article 311(2), this Court applied the tests laid down in the case of Shyam Lal(1) and Saubhagchand Doshi(2) and held that the said retirement did not amount to removal. Dalip Singh had not lost the benefit which he earned and though considerations of alleged misconduct or inefficiency may have weighed with the Government in compulsorily retiring him that did not affect the character of the order;in fact full pension had been paid to the officer, and so, it was held that the order of retirement is clearly not by way of punishment. At the end of this judgment, this Court added that the observations made in the case of Doshi(2) which we have already cited, should not be read as laying down the law that retirement under R. 278 would be invalid for the reason that a minimum period of service had not been prescribed before the said Rule could be enforced against the civil servant. It would be recalled that in the case of Doshi(2) Venkatarama Aiyar J. had observed that if the two periods are not prescribed one for superannuation and the other for enforcing the rule of compulsory retirement, compulsory retirement of the officer would amount to dismissal or removal under article 311(2). In Dalip Singh 's case (2), it was stated that the said observation should not be taken to have laid down any rule of universal application in that behalf. The (1) (1955] 1 S.C.R. 26 (2) (1958] 1 S.C.R. (3) 726 learned Addl. Solicitor General has naturally relied on these observations. It is however, necessary to point out that the said observations were made on the assumption that the Patiala Rules did not lay down any minimum period of service which had to be put in by civil servant 'before he could be compulsorily retired under Rule 278. We have already seen that the validity of R. 278 was not challenged before the Court in Dalip Singh 's case; besides, we have now been referred to the relevant Patiala Rules, and it appears that the combined operation of Rules 53, 54, 125, 236, 239, 240, 243 and 278 would tend to show that no officer ,could have been compulsorily retired under R. 278 unless he had put in at least 12 years ' service. We are referring to this aspect of the matter for the purpose of showing that the assumption made by this Court in making the observations to which we have just referred may not be well founded in fact. Apart from that, we think that if any Rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that Rule would be invalid and the so called retirement ordered under the said Rule would amount to removal of the civil servant within the meaning of article 311(2). At this stage, we ought to make it clear that in the present appeals, we are not called upon to consider whether a rule of compulsory retirement would be valid, if, having fixed a proper age of superannuation,, it permits a permanent servant to be retired at a very early stage of his career. We have referred to the decisions dealing with cases of compulsory retirement only for the purpose of ascertaining the effect of the obiter observations made in some of those decisions in relation to the question with which we are directly concerned. The question raised by the orders of compulsory retirement so far as it is covered by the said decisions must be deemed to be concluded. Our conclusion, therefore, is that rules 127 148(3) and 149(3) which permit the termination of a permanent railway servant 's services in the manner provided by them, are invalid because the termination of services which the said Rules authorise is removal of the said railway permanent servant and it contravenes the constitutional safeguard provided by article 311(2). After this Court pronounced its decision in the case of Shyam Lal(1) the question about the validity of Rule 148(3) has been considered by several High Courts and it must be conceded that with the exception of two decisions of the Calcutta High Court in Union of India vs Someswar Banerjee(2) and Fakir Chandra Chiki vs section Chakravarti & Ors(3) which have held that R. 1709 and R. 148(3) of the Railway Rules are respectively invalid, the consensus of judicial opinion is in favour of the contention raised by the learned Add1. Solicitor General. These decision have held that R. 148(3) is constitutionally valid (vide Biswanath Singh vs District Traffic Supdt. , N.E Railway, Sonepur(4), The Union of India vs Askaran (5) Hardwari Lal vs General Manager, North Eastern Railway, Gorakhpur(6) and Anr., Kishan Prasad vs The Union of India (7) and D.S. Srinath vs General Manager Southern Railway, Madras(8). In fairness, we ought to add that all these decisions proceeded on the basis that the observations made by this Court either in the case of Shyam Lal (1) or in the case of Dhingra(9) in respect of permanent servants amounted to a decision on that point and were, therefore, binding on the High Courts. Some decisions purport to adopt the said observations and extend them logically in dealing with the question about the validity of Rule 148(3). With respect, we must hold that these decisions do not correctly represent the true legal position in regard to the character of R. 148(3). (1) ; (3) A.I.R. 1954 Cal. (5) A.I.R. 1957 Rajastban 836. (7) A.I.R. 1960 Cal. (2) A.I.R. 1954 Cal. (4) A.I.R. 1956 Patna 221 (6) A.I.R. 1959 All. 439. (8) A.I.R. 1962 Mad 379. (9) ; 728 There is still one more point which must be considered and that is the challenge to the validity of Rules 148(3) and 149(3 on the ground that they contravene article 14 of the Constitution. The pleadings on this part of the case filed by both the parties are not very satisfactory; but as to the broad features '.of the Rules on which the challenge rests, there is no serious dispute. We have already seen the Rules; it is urged that they purport to give no guidance to the authority which would operate the said Rules. No principle is laid down which should guide the decision of the authority in exercising its power under the said Rules. Discretion is left in the authority completely unguided in the matter and the Rules are so worded that the power conferred by them can be capriciously exercised without offending the Rules. It is also not disputed by the learned Addl. Solicitor General that no other branch of public services either under the States or under the Union contains any rule which corresponds to the impugned Rules. Therefore, basing themselves on these two features of the impugned Rules it is argued by the Railway employees before us that the Rules offend article 14. In support of the first argument, it is suggested that though the impugned Rule may not in terms enact a discriminatory rule and in that sense may not patently infringe article 14, it may, nevertheless, contravene the said article if it is so framed as to enable an unequal or discriminatory treatment to be meted out to persons or things similarly situated; and in support of this point, reliance is placed on the decision of this Court in Jyoti Pershad vs The Administrator for the Union Territory of Delhi(1). Such a result, it is said, would inevitably follow where the rule vests a discretion in an authority as an executive officer and does not lay down any policy and fails to disclose any tangible, intelligible, or rational purpose which the power conferred by it is intended to serve. (1) ; at P. 137. 729 On the other hand, the Addl. Solicitor General has contended that the very purpose of the Rule gives guidance to the appropriate authority exercising its power under it; in exercising the said power the appropriate authority will have to take into account all the relevant circumstances in regard to the nature and quality of the work of the railway servant in question and will have to decide whether there are circumstances which require that the services of the said servant should be terminated. In dealing with such a question, it is plain that the appropriate authority would naturally have regard for consideration of public interest and the interest of the Railway Administration. Therefore, it is suggested that the Rule cannot be struck down on the ground that it confers absolute, unguided and uncanalised power on the appropriate authority. Since we have come to the conclusion that the second attack made against the validity of the Rule under article 14 ought to be sustained we do not propose to express any opinion on this part of the controversy between the parties. The other aspect of the matter arises from the fact that no other branch of public service contains such a rule for its civil servants. The true scope and effect of article 14 has been considered by this Court on several occasions. It may, however, be sufficient to refer to the decision of this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolker & Ors.(1) After examining the Article and the relevant decisions of this Court bearing on it, Das C.J. who spoke for the Court stated the position in the form of propositions, (a) to (f). Propositions (a) and are relevant for our purpose. "The decisions of this Court establish," said Das C.J., "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or: reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; and (f) that while good faith and knowledge of the existing conditions on the part (1) ; at P. 297. 730 of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on Which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. " Applying these two principles, it is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purpose of framing the impugned Rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, why should such a Rule not have been framed in the Posts & Telegraph Department to take only one instance. The learned Additional Solicitor Generaf frankly conceded that the ' affidavits filed by the Railway Administration or the Union of India afforded no material on which the framing of the Rule only in respect of one sector of public service can be justified. We appreciate the argument that the nature of services rendered by employees in different sectors of public service may differ and the terms and conditions governing employment in all public sectors may not necessarily be the same or uniform; but in regard to the question of terminating the services of a civil servant after serving him with a notice for a specified period, we are unable to see how the Railways can be regarded as constituting a separate and distinct class by reference to which the impugned Rule can be justified in the light of article 14. If there is any rational connection between the making of such a Rule and the object intended to be achieved by it, that connection would clearly be in existence in several other sectors of public service. What has happened is that a provision like R. 148(3) pr R. 149(3) was first made by the Railway Companies when employment with the Railways was a purely commercial matter governed by the ordinary rules of contract. After the Railways were taken over by the State, that position has essen 731 tially altered, and so, the validity of the Rule is now exposed to the challenge under article 14. Therefore we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed. There is one more point which we ought to mention before we part with these appeals. In dealing with the validity of R. 149, Nayudu J. of the Assam High Court who has delivered the minority judgment in the case of Shyam Behari Tewari & Ors V. Union of India & Anr.(1), has observed that the Rule would be invalid for the additional reason that it purports to give power to the Railway Administration to terminate the services of any person in permanent employment in railway service on notice at the sweetwill and pleasure of the Railway Administration Such a power, said the learned Judge, can only be exercised by the President in the instant cases where the service is under the Union and not by any other whereas the Rule in question purports to give that power to the Railway Administration. In support of this conclusion, the learned Judge has relied on the observations made in the majority judgment delivered by this Court in The State of Uttar Pradesh and ors (2) vs Babu Ram Upadhya. We ought to point out that the learned Judge has misconstrued the effect of the observations on which he relies. What the said Judgment has held is that while article 310 provides for a tenure at pleasure of the President or the Governor, article 309 enables the legislature or the executive as the case may be, to make any law or rule in regard inter alia, to conditions of service without impinging upon the overriding power recognised under article 310. In other words, in exercising the power conferred by article 309, the extent of the pleasure recognised by article 310 cannot be affected, or impaired In fact, while stating the conclusions in the form of propositions, the said judgment has observed that the Parliament or the Legislature can make a law regulating the conditions of service without affecting (1) A.I.R. 1963 Assam 94 (2) 732 the powers of the President or the Governor under article 310 read with article 311. It has also been stated at the same place that the power to dismiss a public servant at pleasure is outside the scope of article 154 and, therefore, cannot be delegated by the Governor to a subordinate officer and can be exercised by him only in the manner prescribed by the Constitution. In the context, it would be clear that this latter observation is not intended to lay down that a law cannot be made under article 309 or a Rule cannot be framed under the proviso to the said Article prescribing the procedure by which, and the authority by whom, the said pleasure can be exercised. This observation which is mentioned as proposition number (2) must be read along with the subsequent propositions specified as (3), (4), (5) & (6). The only point made is that whatever is done under article 309 must be subject to the pleasure prescribed by article 310. Naidu J. was, therefore, in error in holding that the majority decision of this Court in the case of Babu Ram Upadhya(1) supported his broad and unqualified conclusion that R. 149(3) was invalid for the sole reason that the power to terminate the services had been delegated to the Railway Administration. In the result, the four appeals in the first group succeed and are allowed. The writ petitions filed by the four appellants in the three High Courts are granted and orders directed to be issued in terms of the prayers made by them. The appellants would be entitled to their costs from the respondents. The three appeals in the second group fail and are dismissed with costs. One set of hearing fees in each group. SUBBA RAO J I agree that the impugned rules infringe both article 14 and article 311(2) of the Constitution and are, therefore, void. On 1 article 14, 1 have nothing more to say. But on the impact of the said rules on article 311 of the Constitution, I would prefer to give my own reasons. The short but difficult question is whether 148 of the Indian Railway Establishment Code, (1) ; 733 Vol. 1 (1951) and r. 149 of the revised edition of the said Code of the year 1959 replacing r. 148 of the Code of 1951 edition impinge upon the constitutional safeguard given to a person holding a civil post under the Union Government under article 311(2) of the Constitution. While article 311(2) of the Constitution prohibits the State from dismissing or removing or reducing in rank a civil servant until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him, rr. 148 and 149 of the said Code in effect enable the Government to terminate his services after issuing the prescribed notice thereunder ' Prima facie the said rules are in conflict with article 311(2) of the Constitution. Broadly stated, the contention of the State is that a Union civil servant holds his office during the pleasure, of the President, that article 311 is not really a limitation on the exercise,of that pleasure, that it only prescribes safeguards against the imposition on him of three unmerited specified penalties, viz., dismissal, removal and reduction in rank, and that the termination of his services for a reason other than misconduct personal to the civil servant is not comprehended by any of the said penalties. The further argument is that the "doctrine of pleasure" implies that a civil servant has no right to an office even in a case where he has a substantive lien on a post and that in any event he has none when there is a specific rule that his services can be terminated after the prescribed notice. This Bench of seven Judges has been constituted to steer clear of conflicting observations, if any, found in the judgments of this Court and to arrive at a conclusion of its own unhampered by such observations. I would, therefore, proceed to consider the relevant provisions in accordance with the natural tenor of the expressions used therein and then to scrutinize whether any of my conclusions would be in conflict with any of the decisions of this Court. At the outset I must make it clear that I propose to confine my discussion only to the question of termi 734 nation of services of a permanent civil servant. None of the observations I may make is intended to have any bearing on the question of termination of the services of other categories of servants. As the argument of the learned Additional Soli citor General is based upon the doctrine of pleasure, it would be convenient at the outset to ascertain the precise scope of the doctrine in the context of the Indian Constitution. Article 309 is subject to the provisions of the Constitution and, therefore, is subject to article 310 thereof Article 311 imposes two limitations on the doctrine of pleasure declared in article 310. The gist of the said provisions is this: Under article 309 of the Constitution the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or any State; and until provision in that behalf is made, the President or such person as he may direct may make rules regulating the recruitment and conditions of service of persons appointed to the said services and posts in connection with the affairs of the Union. In its ordinary meaning the expression "conditions of service" takes in also the tenure of a civil servant. Under article 310, such a civil servant holds office during the pleasure of the President; but article 311 imposes two conditions to be satisfied before a civil servant can be dismissed, or removed or reduced in rank, namely, (i) he shall not be dismissed, removed or reduced in rank by an authority subordinate to that by which he was appointed, and (ii) he shall be given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. A combined reading of these provisions indicates that the rules made under article 309 are subject to the doctrine of pleasure; and that the doctrine of pleasure is itself subject to two limitations imposed thereon under article 31 1. This tenure at pleasure is a concept borrowed from English law, though it has been modified to suit the Indian conditions. 735 The English law on the doctrine of tenure at pleasure has now become fairly crystallized. Under the English law, all servants of the Crown. hold office during the pleasure of the Crown. The right to dismiss at pleasure is an implied term in every contract of employment under the Crown. This doctrine is not based upon any prerogative of the Crown but on public policy. If the terms of appointment definitely prescribe a tenure for good behavior or expressly provide for a power to determine for a cause, such an implication of a power to dismiss at pleasure is excluded, and an Act of Parliament can abrogate or amend the said doctrine of public policy in the same way as it can do in respect of any other part of common law. (see The State of U.P. vs Babu Ram Upadhya (1). Section 96 B of the Government of India Act, 1915, for the first time in 1919, by an amendment, statutorily recognized this doctrine, but it was made subject to a condition that no person in the service might be dismissed by an authority subordinate to that by which he was appointed. Section 240 of the Government of India Act, 1935, imposed another limitation, namely, that a reasonable opportunity of showing cause against the action proposed to be taken in regard to a person must be given to him. But neither of the two Acts empowered the appropriate Legislature to make a law abolishing or amending the said doctrine. The Constitution of India practically incorporated the provisions of section 240 and section 241 of the Government of India Act, 1935, in articles 309 and 310. The English doctrine has been enlarged in one direction and restricted in another: while Parliament has no power to deprive the President of his pleasure, the said pleasure is made subject to two limitations embodied in article 311. The English concept is considerably modified to suit the conditions of our country. It is, therefore, not correct to say that article 311 is not a limitation on the power of the President to terminate the services of a Union civil servant at his pleasure. To accept the argument that the (1) ; , 696. 736 relevant expression in article 311 shall be so construed as to give full sway to the doctrine is to ignore the limitations on that doctrine. Both article 310 and article 311 shall be read together and, if so read, it is manifest that the said doctrine is subject to the said two conditions. What is the scope of the relevant words, "dismissed" and "removed ' in article 311 of the Constitution? The general rule of interpretation which is common to statutory provisions as well as to constitutional provisions is to find out the expressed intention of the makers of the said provisions from the words of the provisions themselves. It is also equally well settled that, without doing violence to the language used, a constitutional provision shall receive a fair, liberal and progressive construction, so that its true objects might be promoted. Article 311 uses two well known expressions, "dismissed" and "removed". The Article does not, expressly or by necessary implication, indicate that the dismissal or removal of a Government servant must be of a particular category. As the said Article gives protection and safeguard to a Government servant who will otherwise be at the mercy of the Government, the said words shall ordi narily be given a liberal or at any rate their natural meaning, unless the said Article or other Articles of the Constitution, expressly or by necessary implication, restrict their meaning. I do not see any indication anywhere in the Constitution which compels the Court to reduce the scope of the protection. The dictionary meaning, of the word "dismiss" is "to let go; to relieve from duty". The word " remove ' " means "to discharge, to get rid off, to dismiss". In their ordinary parlance, therefore, the said words mean nothing more or less than the termination of a person 's office. The effect of dismissal or removal of one from his office is to discharge him from that office. In that sense, the said words comprehend every termination of the services of a Government servant. Article 311(2) in effect lays down that before the services of a Government servant are so terminated, 737 he must be given a reasonable opportunity of showing cause against such a termination. There is no justification for placing any limitation on the said expressions, such as that the dismissal or removal should have been the result of an enquiry in regard to the Government servant 's misconduct. The attempt to imply the said limitation is neither warranted by the expressions used in the Article or by the reason given, namely, that otherwise there would be no point in giving him an opportunity to defend himself If this argument the correct, it would lead to an extraordinary result, namely, that a Government servant who has been guilty of misconduct would be entitled to a "reasonable opportunity" whereas an honest Government servant could be dismissed without any such protection. In one sense the conduct of a party may be relevant to punishment; ordinarily punishment is meted out for misconduct, and if there is no misconduct there could not be punishment. Punishment is, therefore, correlated to misconduct, both in its positive and negative aspects. That is to say punishment could be sustained if there was misconduct and could not be meted out if there was no misconduct. Reasonable opportunity given to a Government servant enables him to establish that he does not deserve the punishment, because he has not been guilty of misconduct. That apart, a Government servant may be removed or dismissed for many other reasons, such as retrenchment, abolition of post, compulsory retirement and others. If an opportunity is given to a Government servant to show cause against the proposed action, he may plead and establish that either there was no genuine retrenchment or abolition of posts or that others should go before him. Now let me see whether the history of this constitutional provision countenances any such limitation on the meaning of the said expressions. As we have already noticed, the concept of tenure at pleasure was first introduced in the Government of India Act, 1919. Under section 96 B of that Act, 1/SCI/64 47 738 "(1) Subject to the provisions of this Act and of rules made thereunder, every person in the civil service of the Crown in Ind ia holds office during His Majesty 's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any authority subordinate to that by which he was appointed. " It will be seen that under this section the said concept was introduced subject to a condition; it may also be noticed that the section used only one word "dismissed". In England, under that doctrine, services of a Government servant, whether he is a permanent or a temporary servant, can be terminated without any cause whether he is guilty of misconduct or not. Therefore, when the word "dismissed" is used in section 96 B of the Act in the context of the exercise of His Majesty 's pleasure, that word must have been used in the natural meaning it bears, i.e. terminated. But that section was subject to the provisions of the rules 'made under that Act. In exercise of the power conferred under the Act on the Secretary of State for India in Council, he framed certain rules in December 1920 and with subsequent modifications they were published on May 27, 1930. The said rules were designated as the Civil Services (Classification, Control and Appeal) Rules. Rule 49 of those Rules provided for certain penalties and cl. (6) thereof dealt with "Removal from the civil service of the Crown, which does not disqualify from future employment", and cl. (7) provided for dismissal from the civil service of the Crown, "which ordinarily disqualified from future employment". The explanation to that rule read thus: The termination of employment: (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or 739 (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, in accordance with the terms of his contract does not amount to removal or dismissal within the meaning of this rule or of rule 55. " The explanation makes it clear that the three specified categories of termination covered by the explanation would amount to dismissal or removal but for the explanation. That is to say, the expression "termination" is synonymous with the term "dismissal" or "removal". Rule 55 of the Rules provided a machinery for dismissing or removing or reducing in rank a Government servant; he should be given thereunder an adequate opportunity to defend himself. Then came the Government of India Act, 1935. In section 240 thereof, the expression used was "dismissed" and that term, in the context of the exercise of His Majesty 's pleasure, could have meant only "termination" of services, though in view of the explanation to r. 49 of the Rules quoted above, the three specified categories of termination mentioned in the explanation might, by construction, be excluded from the natural meaning of the word "dismissal". Then we come to article 311 of the Constitution, which with certain modifications incorporated the provisions of section 240 of the Government of India Act, 1935. It introduced the expression "removed" in addition to the word "dismissed" presumably inspired by rr. 49 and 55 of the Rules. The natural meaning of the said terms takes in every act of termination of service; but, if construed with the help of r. 49 of the Rules, their meaning may be cut down by excluding the three categories of termination covered by the explanation in the manner prescribed therein. If the termination was otherwise than that prescribed therein, it would still be dismissal or removal. If so, the history of the constitutional provisions may 740 lead to the conclusion that though the words "dismissed" and "removed" are words of widest connotation, namely "termination" of service of any category held under the Union, they were used in the limited sense they bear in r. 49 of the Rules, that is to say termination of employment excluding the three categories mentioned in the explanation. So far the words "removed" and "dismissed" are concerned, r. 49 shows that there is no appreciable difference between the two except in the matter of future employment; and article 31 1, presumably, copied the two words from r. 49. Therefore, whether the natural and dictionary meanings of the words "dismissal" and "removal" were adopted or the limited meanings given to those words by r. 49 were accepted, the result, so far as a permanent employee was concerned, would be the same, namely that in the case of termination of services of a Government servant outside the three categories mentioned in the explanation, it would be dismissal or removal within the meaning of article 311 of the Constitution with the difference that in the former the dismissed servant would not be disqualified from future employment and in the latter ordinarily he would be disqualified from such employment. If so, it follows that if the services of a permanent Government servant, which fall outside the three categories mentioned in the explanation, were terminated, he would be entitled to protection under article 311(2) of the Constitution. With this background let me now scrutinise the leading judgment of this Court on the subject, namely, Parshotam Lai Dhingra vs Union of India (1). That was a case of reversion of a Government servant who was officiating in Class 11 Service as Assistant Superintendent, Railway Telegraphs, to his substantive post in Class III Service. This Court, speaking through Das C.J., gave an exhaustive treatment to the scope of article 311(2) of the Constitution, parti (1)[1958] S.C.R. 828. 741 cularly with reference to the meaning of the expressions "dismissed", "removed" or "reduced in rank" found therein. A careful reading of the judgment shows that this Court has heavily relied upon r. 49 of the Civil Services (Classification, Control and Appeal) Rules, and its explanation, and attempted to give a legal basis for the said provisions. On that basis, having considered the different aspects of the problem, the Court has laid down the following two tests at p. 863, to ascertain whether a person is dismissed or removed within the meaning of article 311 of the Constitution; (1) Whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore reference to i.e., loss of pay and allowances, loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion If an officer had a right to a post or rank and if the termination of his services deprived him of that right the said termination would be dismissal or removal as punishment. So too, if the termination had the effect of the officer being visited with evil consequences then whatever may be the phraseology used for putting an end to his services, it would be dismissal as punishment. The motive operating on the mind of the authority concerned or the machinery evolved or the method adopted to put an end to his services are not relevant in considering the question whether he was dismissed, if he had a right to the office or if he had been visted with evil consequences, though the said circumstances may have some relevance as other decisions of this Court disclose, in ascertaining whether he was discharged with a stigma attached to him. While conceding that this decision does not in terms specifically lay down that even in the case of a person holding a permanent post, if there was an appropriate term in the conditions of service that his services could be terminated by notice, article 311 of the Constitution would not be attracted, it is contended that raison d 'etre of the decision and some passages therein lead to that conclusion. Some of the passages relied upon may be extracted: 742 At pp. 857 858: "It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation o r is com pulsorily retired and in the absence of a contract express or implied, or a service rule he cannot be turned out of his post unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). " At p. 862: "As already stated if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. " These passages certainly lend support to the argument of the learned counsel, but the qualifying clauses on which reliance is placed are only incidental observations. The main principles relevant to the present enquiry were laid down by the Court clearly and precisely at p. 860, thus: "Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment; express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto." The following observation further pinpoints the principle; "One test for determining whether the termi nation of the service of a government servant 743 is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post." This decision, therefore, clearly lays down, without any ambiguity, that if a person has a right to hold office under the service rules or under a contract the termination of his services would attract Art 311 of the Constitution. It also lays down that a person holding a substantive lien on a permanent post has a right to such office. It does not say, expressly or by necessary implication, that even if a person is deprived of such a right, it will not be punishment unless it is inflicted for misconduct in the manner prescribed by the service rules. Learned Additional Solicitor General further relied upon the decisions of this Court holding that a rule empowering the Government to compulsorily retire a permanent Government servant before that age of superannuation did not violate article 311 of the Constitution and contended that, on parity of reasoning, the impugned rules should likewise be valid. It was asked, with considerable force, what relevant distinction there could be between the said two categories of rules in the context of the question whether the termination of services was dismissal or not within the meaning of article 311 of the Constitution? In the case of a Government servant, the argument proceeded, in either case he was deprived of his title to office and, therefore, both cases were equally covered by the principle laid down in Dhingra 's case(1). This argument certainly deserves serious consideration. The relevant rules pertaining to compulsory retirement of a permanent Government servant considered by this Court in the various decisions relied upon by learned counsel may now be noticed. In Shyam Lal 's case (2) which is the sheet anchor of the appellants ' argument, the rule under consideration was Note 1 to article 465 A of the Civil Services Regulations. The said Note read: (1) ; (2) ; 744 "Government retains an absolute right to retire any officer after he has completed twenty five years qualifying service without giving any reasons, and no claim to special compensation on this account will be ' entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of an officer. " The rule considered in The State of Bombay vs Saubhagchand M. Doshi (1) was r. 165 A of the Bombay Civil Services Rules, applicable to the State of Saurashtra, and it read: "Government retains an absolute right to re tire any Government servant after he has com pleted 25 years qualifying service or 50 years of age, whatever the service, without giving any reason, and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency or dishonesty. " Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was under consideration in Balakotaiah vs The Union of India(2) and it read: "A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, (1) ; (2) ; 745 where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained." In Union of India vs Jeewan Ram(1) this Court had to consider sub rr. (3) and (4) of r. 148 of the Indian Railway Establishment Code, Vol. 1. The rule which was under scrutiny in Dalip Singh vs The State Punjab(2) was r. 278 of the Patiala State Regulations, which read: "For all classes of pensions the person who desires to obtain the pension is required to submit his application before any pension is granted to him. The State reserves to itself the right to retire any of its employees on pension on political or on other reasons. " The cases of Shyam Lal and Doshi were decided before Dhingra 's case and the cases of Dalip Singh and Balakotaiah, after Dhingra 'section In all the cases, under the relevant rules the age of superannuation was fixed but the order of compulsory retirement was made before the Government servant reached the age of superannuation. The rule in Shyam Lal 's case ex facie declares that the right will not be exercised except when it is in the public interest to dispensed with the further services of an officer indicating thereby that the compulsory retirement is imposed as punishment for some sort of dereliction of duty on his part and, therefore, the termination of service under that rule necessarily carries a stigma with it. The rule in Doshi 's case(3) iS more emphatic than that in Shyam Lal 's case: the rule in Doshi 's case elaborate what is implicit in the rule considered in Shyam Lal 's case and declares that the right there under shall be exercised by the Government only in the case of inefficiency or dishonesty of the Government servant Rule 3 of the Railway Services (Safeguarding of National Security) Rules considered in Balakotaiah case (4) expressly says that the order of compulsory retirement will be made for misconduct defined therein. (1) A.I.R. 1958 section C. 905. (2) (3) ; (4) 746 The rule in Dalip Singh 's case(1) gives a very wide power to the State to retire any of its employees on pension on political or other reasons before the age of superannuation. In short the rules dealt with in the first three decisions expressly conferred an absolute power on the appropriate authority to terminate the services of a Government servant for misconduct, and the rule in the fourth decision went further and enabled the appropriate authority to dismiss the servant for any reason. It may also be noticed that in Doshi 's cases(2) this Court expressed the view that "when there is no rule fixing the age of compulsory retirement or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311(2) of the Constitution". The emphasis appears to be more on the existence of a rule of compulsory retirement than on the character of the termination itself. But this reservation was not accepted by the Court in Dalip Singh 's case(1), that is to say, the emphasis is shifted to the existence of a rule of termination detracting from the permanency of the post. Pausing here a moment, I ask myself the question whether these decisions can be reconciled with the aforesaid principles laid down in Dhingra 's case(3). In Dhingra 's case this Court held that a termination of the services of a Government servant, who has substantive lien on a permanent post, that is to say a title to his office, is dismissal or removal within the meaning of article 311(2) of the Constitution. In the aforesaid three decisions the Government servant concerned had substantive lien on a permanent post, but he was compulsorily retired before the age of superannuation depriving him of his title to the post. it is neither the phraseology used in respect of nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are (1) (3) ; (2) ; 747 terminated by giving him 15 days ' notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal, in the latter case it must be equally so. I would, prefer the principle laid down in Dhingra 's case (1) in the matter of termination of the services of a permanent Government servant to that laid down in the said other decisions. Rule 148 of the Railway Establishment Code, Vol. 1, was considered both in Balakotaiah 's case (2) and in Jeewan Ram 's case(3): in the former, though there were some observations in support of the appellants ' contention, the question of construction of the rule was expressly left open, and in the latter though the Government servant concerned was discharged under that rule, the decision proceeded on the basis that he was expressly removed for misconduct. A number of decisions of the High Courts are cited. I have gone through them carefully. I am not referring to them in detail, as, though some of the judgments contain instructive discussion on though subject, they practically extended the principle of Shyam Lal 's case(4) and held that the termination of service, such as under r. 148(3), was not dismissal within the meaning of article 311 of the constitution As, in my view, Shyam Lal 's case must yield to Dhingra 's case, a further discussion of the said decisions is not called for. The effect of the two rules is the same; the difference is only superficial, which lies more in clever drafting than in their content. Take for instance the following two rules: (i) the Government may terminate the services of a permanent Government servant at any time, or after a specified period but before the normal superannuation age, by way of compulsory retirement; and (ii) the Government may terminate (1) ; (3) A. 1. R. (2) ; (4) ; 748 the services of a permanent civil servant by giving him 15 days ' notice. Arbitrariness is writ large on both the rules: both the rules enable the Government to deprive a permanent civil servant of his office without enquiry. Both violate article 311(2) of the Constitution. Both must be bad or none at all. The following principles emerge from the aforesaid discussion. A title to an office must be distinguished from the mode of its termination. It a person has title to an office, 'he will continue to have it till he is dismissed or removed therefrom. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of terminating it. If under such rules a person acquires title to an office, whatever mode of termination is prescribed, whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service; and that situation inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitu tional protection given to Government servants, who have title to office, against arbitrary and summary dismissal. It follows that Government cannot by rule evade the provisions of the said Article. The parties cannot also contract themselves out of the constitutional provision. Once that principle is accepted the cases dealing with compulsory retirement before the age of superannuation cannot also fall outside the scope of article 311 of the Constitution. Age of superannuation is common to all permanent civil servants: it depends upon an event that inevitably happens by passage of time, unless the employee dies earlier or resigns from the post. It does not depend on the discretion of the employer or the employee; it is for the benefit of the employee who earns a well earned rest with or without pensionary benefits for the rest of his life; it has, by custom and by convention, become 749 an inextricable incident of Government service; and it is an incident of a permanent post. Notwithstanding the rule fixing an age of superannuation, a person appointed to such a post acquires title to it. The same cannot be said of a compulsory retirement before the age of superannuation. It is not an incident of the tenure; it does not work automatically it is not conceived in the interest of the employee it is a mode of terminating his employment at the discretion of the appointing authority. In effect whatever may be the phraseology used in terminating the services of a Government employee, it is punishment imposed on him, for it not only destroys his title but also inevitably carries with it a stigma such a. termination is only dismissal or removal within the meaning of article 311 of the Constitution. I would, therefore, with greatest respect, follow the principle laid down in Dhingra 's case(1) in respect of permanent servants in preference to that accepted by Shyam Lal 's case(2) and the subsequent decisions following it. Now let me turn to the relevant rules of the Indian Railway Establishment Code, hereinafter called that Code. The Code is in two volumes. The first volume embodies all rules governing the service conditions of railway servants with the exception of those rules which correspond to the Fundamental Rules, Supplementary Rules, Pension Rules and the Civil Service Regulations applicable generally to all civil servants under the Government of India. The excepted rules are included in Vol. 11 of the Code. Fundamental Rules embodied in Vol. 11 of the Code describe, inter alia the cadre strength, the different posts in the cadre and the nature of the appointments made in respect of such posts. Broadly the posts are divided as permanent, officiating, temporary and for definite periods. Rule 2003 (14) defines lien to mean th title of a railway servant to hold substantively either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substan (1) ; (2) 750 tively. Under r. 2006, "Unless in any case it be otherwise provided in these Rules, a railway servant. on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post". Under r. 2009, "A railway servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post. " Rule 2042 provides that the pay and allowances of a railway servant who is removed or dismissed from service ceases from the date of the order of removal or dismissal. Rule 2046, under the heading "Compulsory Retirement", fixes the age of superannuation for different categories of service. These rules clearly lay down that a. railway servant on a substantive appointment to a permanent post acquires a lien on that post and he does not lose it till he attains the age of superannuation or is dismissed or removed in the manner prescribed; that is, he acquires a title to hold substantively a permanent post. It is not of much relevance to give any particular nomenclature to that post. It may not be a life tenure. It may not also be a permanent post in the literal sense of the term, but it confers a title to that post with all the advantages appertaining to that post and ordinarily it comes to an end only on the incumbent attaining the age of superannuation, with or without pensionary benefits. Briefly stated, the aforesaid Fundamental Rules embodied in Vol. 11 of the Code create offices of stability and security which for all practical purposes are permanent posts. If so, the termination of services of such a servant can only be dismissal or removal, for he will be deprived of his title to the said office. If that was the legal position, for the reasons already given, the said r. 148(3) And r. 149, conferring a power on the appointing authority to remove such a permanent servant on notice would infringe the constitutional protection given to a Government servant under article 311 of the Constitution. A permanent post and such rules cannot stand together: the latter must inevitably yield to the former. 751 I therefore, hold that r. 148(3) and r. 149 of the Railway Establishment Code, being violative of the provisions of articles 14 and 311 of the Constitution are void and unenforceable. In the result, I agree that Civil Appeals Nos 711 to 713 of 1962 and Civil Appeal No. 714 of 196 should be allowed with costs and that Civil Appeal Nos. 837 to 839 of 1963 should be dismissed wit costs. DAS GUPTA J. The principal question raised in the four appeals which have been numbered 711 to 714 of 1962 is as regards the validity of Rule 148 (3) of the Indian Railway Establishment Code in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period as prescribed therein. The appellants all railway employees whose services had been terminated on notice in accordance with the above provision and who have failed to obtain relief against the orders of termination challenge the validity of this provision on two grounds. Their first contention is that this Rule in providing for termination of service on mere notice contravenes the provisions of Art 311(2) of the Constitution; secondly, it is contended that the Rule violates article 14 of the Constitution It will be necessary to examine these two grounds separately. Is the termination as provided for in the above provision, in Rule 148 (3) 'removal ' or 'dismissal within the meaning of article 311(2) of the Constitution? That is the question that falls to be answered for deciding the first grounds. To answer this against we have to determine first the connotation of the two words 'removal ' and 'dismissal ' as used in article 311(2). In my opinion, this matter is completely covered by numerous decisions of this Court. Before turning to the decisions however it will be convenient to examine the matter in the context in which article 311 (2) appears in the Constitution and also the historical background of the protection afforded thereby. For this purpose it is necessary first to consider the three Articles of the Constitu 752 tion, viz., articles 309, 310 and 311. They are in these words: "309. Subject to the provisions of this Con stitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State : Provided that it shall be a competent for the President or such persons as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor or Rajpramukh of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts until provisions in that behalf is made by or under an Act of the appropriate Legislature under this Article, and any rules so made shall have effect, subject to the provisions of any such Act. (1) Except as expressly provided by this Constitution every person who is a member of a defence service or of a civil service of the Union or of an all India service or holds and post connected with defence or any civil post under the Union, holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor or, as the case may be, the Raj pramukh of the State. (2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor or Rajpramukh of the State, any contract under which a person, not being a member of a defence service or of an all India service or of civil service of, the 753 Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor or the Rajpramukh as the case may be, deems it necessary in order to secure the services of a perso n having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post. (1) No person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil. post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed. (2) No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Provided that this clause shall not apply (a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b) where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor or Rajpramukh, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity. (3) If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the authority empowered 1/SCI/64 49 754 to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final. " It has to be noticed that both Articles 309 and 310 are subject to article 31 1. In other words, if any rule is made under article 309 as regards the conditions of service of a government servant in the matter of his dismissal or removal or reduction in rank it has to comply with the requirements of article 31 1. Again, before any order dismissing or removing or reducing a government servant in rank is made by the President or the Governor in exercise of his pleasure, the President or the Governor has to comply with the require ments of article 311(2) of the Constitution. Under article 310 all servants of the State hold office at pleasure of the President or the Governor as the case may be. That by itself means that the officer has no right to be heard before his services are terminated. To this article 311 provides an exception in the case of removal or dismissal. It is easy to see that if every termination of service amounted to dismissal or removal the resultant position will be that every officer would have the right to be heard before any action could be taken under article 310. That would leave no field in which article 310 could operate. This by itself is sufficient to show that not all kinds of termination of service were intended to come within article 311. Reading Articles 310 and 311 together it will be reasonable to understand them to say that the officer will have the right to be heard before his services were terminated by dismissal or removal but in all other cases of termination of his service he will not have any such right. I have therefore no hesitation in rejecting the extreme proposition urged on behalf of the appellants that the words dismissal or removal in article 311 include every kind of termination of service. This brings us to the question : what kinds of termination of service come within the words dismissal or removal and what kinds are not. Taking the second Dart of the question first, it is not difficult to mention at least two kinds of termination which 755 cannot reasonably be included within the words dismissal or removal. Take for instance the case where a government servant resigns his post but the resignation is not under the rules effective before it has been accepted by his superiors. Here termination results only when the superior officer accepts the resignation. It may be correct to say that thereby he terminates the service. But it could not reasonably be said that the superior officer has removed the servant from service or dismissed him from service. Such removal or dismissal was not necessary at all because of the resignation. Take again the case of a servant who has been appointed to an office for a period of three years. When the three year period ends he is asked to go. There is termination of service. But nobody would said that the superior officer by asking him to go at the end of the period had dismissed him or removed him from service. The real question however is not so much as what in common parlance would be understood to be the dismissal or removal but what the Constitution intended by these words. In this connection it will be helpful to examine the use of the words dismissal and removal in the earlier Constitution Acts. The Charter Act of 1793 mentions in section 36 that nothing in this Act contained shall extend, or be construed to extend to preclude or take away the power of the Court of Directors of the said Company from removing or recalling any of the officers or servants of the said Company, but that the said Court shall and may at all times have full liberty , to remove, recall, or dismiss any of such officers or servants, at their will and pleasure in the like manner as if this Act had not been passed Section 35 made it lawful to and for the King 's Majesty his heirs and successors, by any writing or instrument under him or their sign manual, countersigned by the President of the Board of Commissioners for the affairs of India, to remove or recall any person or person holding any office, employment, or commission, civil or military, under the said United Company 756 in India for the time being. In the Charter Act of 1833, similar provisions were enacted in sections 74 and 75. Section 74 make it lawful "for His Majesty by any Writing under His Sign Manual,countersigned by the President of the said Board of Commissioners, to remove or dismiss any person holding any office, employment or commission, civil or military, under the said Company in India, and to vacate any Appointment or Commission of any person to any such office or employment. " Section 75 ran thus: "Provided always, and be it enacted, that nothing in this Act contained shall take away the Power of the said Court of Directors to remove or dismiss any of the officers or servants of the said Company but that the said Court shall and may at all Times have full Liberty to remove or dismiss any of such officers or servants at their will and pleasure. . When the Act of 1,858 transferred the government of India to Her Majesty the Queen of England section 38 of the Act provided that. "Any writing under the Royal Sign Manual removing or dismissing any person holding any office employment or commission, civil or military in India, of which, if this Act had not been passed, a copy would have been required to be transmitted or delivered within eight days after being signed by Her Majesty to the Chairman or Deputy Chairman of the Court of Directors, shall, in lieu thereof, be communicated within the time aforesaid to the Secretary of State in Council. " It seems to me that in making these statutory provisions as regards dismissal or removal of public servants the British Parliament had in mind those servants only who had acquired such a right to the post under their conditions of service that but for such statutory provisions their dismissal or removal would have been unlawful. If their service was terminable by the ordinary law of the land there 757 would have been no need in section 36 of the 1793 Act or section 75 of the 1833 Act to speak of the right of the Court of Directors of the Company to remove or dismiss the Company 's officers or servants at their will and pleasure. It is clear that by these provisions the British Parliament was emphasizing the right of the Court of Directors of the Company to remove, or dismiss such servants whose services would not have been terminable under the ordinary law of master and servant. It is also legitimate to read the provisions making it lawful for the King of England to remove or dismiss the Company 's servants (s). 35 in the Charter Act of 1793 and section 75 of the Charter Act of 1833) as intended to terminate the service of the same class of servants, viz., those whose services were not terminable under the ordinary law of the land. In the light of this legislative history, the words removal and dismissal in section 38 :of the Act of 1858 and thereafter in the Government of India Act, 1915 (Section 95 and section 96B ) cannot but be read also to mean termination of service of such servants only who would not have been liable to termination under the ordinary law of master and servant. In other words, only those servants who by their terms and conditions of their appointment to the service bad acquired a right to continue for a particular period which could not under the ordinary law be put an end to were intended to get the benefit of these provisions as regards dismissal or removal. By the time the Government of India Act. , 1935, came to be enacted by Parliament rules had been framed by the Secretary of State in Council under section 96B of the Government of India Act, in which these words, removal and dismissal, were used. Among the rules framed under this section in 1924 was Rule XIII, which was in these words: "Without prejudice to the provisions of any law for the time being in force, the Local Government may for good and sufficient reasons: (1) Censure (2) Withhold promotion from 758 (3) Reduce to a lower post (4) Suspend (5) Remove, or (6) Dismiss any officer holding a post in a provincial or subordinate service or a special appointment. " In the fresh set of rules framed in 1930 Rule 49 took the place of Rule XIII of the earlier Rules and was in these words: "R. 49. The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the classes (1) to (5) specified in Rule XIV namely: (i) Censure, (ii) withholding of increments or promotion (iii) reduction to a lower post or time scale, or to a lower stage in a time scale, (iv) recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders (v) suspension, (vi) removal from the civil service of the crown, which does not disqualify from future employment, (vii) dismissal from the civil service of the crown, which ordinarily disqualifies from future employment. Explanation The discharge (a) of a person appointed on probation, during the period of probation, (b) of a person appointed otherwise than under contract to hold a temporary appointment, on the expiration of the period of the appointment, 759 (c) of a person engaged under contract, in accordance with the terms of his contract, does not amount to removal or dismissal within the meaning of this Rule. " These Rules show that the Secretary of State in Council considered removal and dismissal from the service of the Crown only as penalties. Explanation to Rule 49 of the 1930 Rules also shows that discharge from service of a person who had not acquired a right to the post was not considered to be removal or dismissal. When the British Parliament made special provision in the Government of India Act, 1935 as regards removal or dismissal of persons in the civil service of the Crown it had before it not only the history of these words removal and dismissal in the Charter Act 1793, Charter Act of 1833, Government of India Act, 1858, the Government of India Act, 1915 but also these Rules framed by the Secretary of State in Council. It is reasonable to think therefore that in making these special provisions in the 1935 Act the British Parliament proceeded on the basis that only terminations of service by way of punishment which could not have been inflicted under the ordinary law of master and servant would come within these words removal and dismissal. Primarily such terminations by way of punishment could be made only in respect of those servants who had not acquired a right to continue in service. It might however be said that even where there was no such right and termination could have been effected therefore under the ordinary law of contract between master and servant any termination which carried with it loss of benefits already acquired, say, forfeiture of pension or of provident fund was also contemplated to come within these words. Termination in no other case could be said to be by way of punishment and in the light of the previous history of the use of the words removal and dismissal in connection with the civil servants of the crown it appears to be abundantly clear that 760 in the Government of India Act, 1935 the words removal and dismissal were not intended to include such other terminations. When the Constitution was framed the provisions as regards removal and dismissal as contained in section 240 of the Government of India Act were embodied 'in articles 310 and 311 with practically little change. Nothing has been shown to us to indicate that the Constitution makers could have meant by these words removal and dismissal in article 31 1, anything different from what the British Parliament had intended to include under those words in the Government of India Act, 1935. The above consideration of the context an previous legislative history leads to the conclusion that the words 'removal ' or 'dismissal ' in article 311 meant only such terminations of service where the servant had acquired a right to continue in the post which right was cut short by the termination and such other terminations even where there was no such right, as resulted in loss of acquired benefits. Turning now to the decided cases we find that the question now under consideration was fully discussed in this Court 's decision in Parshotam Lal Dhingra vs Union of India(1). After an exhaustive discussion of appointments of Government servants to a permanent or temporary post, substantively or on probation or on an officiating basis, and numerous rules of service in connection with such appointments, Das C.J. speaking for the majority of the Court recorded the conclusion thus: "It follows therefore that if the termination of service is sought to be brought about otherwise than by way of punishment, then the government servant whose service is so terminated cannot claim the protection of article 311(2). " The learned Chief Justice went on to say: "The foregoing conclusion however does not solve the entire problem, for it has yet to (1) 761 be ascertained as to when an order for the termination of service is inflicted as and by way of punishment and when it is not. It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired, and in the absence of a contract express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings abo ut a pre mature end of his employment. Again, where a person is appointed to a temporary post for a fixed term of say five years his service can not, in the absence of a contract or a service rule permitting its premature termination be terminated before the expiry of that period unless he has been guilty of some misconduct, negligence inefficiency or other disqualifications and appropriate proceedings are taken under the rules read with article 311(2). The premature termination of the service of a servant so appointed will prima facie be a dismissal or removal from service by way of punishment and so within the purview of article 311(2). At page 862, the learned Chief Justice again observed: In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so article 311 is not attracted But even if the Government has, by contract or under the rules, the right to terminate the 762 employment without going through the procedure prescribed for inflicting the punishment of dismissal, or removal or reducing in rank, the Government may nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of article 311 must be complied with. " At page 863, the learned Chief Justice observed thus: "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of Promotion, then that circumstance may indicate that although in form the government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and, reality the Government has terminated the employment as and by way of penalty. " Several years before this the question : what is meant by the words 'removal ' or 'dismissal. ' had been considered by this Court in Shyam Lal vs The State of Uttar Pradesh(1). Shyam Lai, the appellant, had been ordered to retire compulsorily under the provisions of article 465A of the Civil Service Regulations. On behalf of the appellant it was urged inter alia that this order was invalid as the provisions of article 311(2) of the Constitution had not been complied with. In deciding that the compulsory retirement did not amount to dismissal or removal within the meaning of article 311(2) of the Constitution the Court laid down that (1) every termination of service does not amount to removal or dismissal and (2) that dismissal or removal is a punishment imposed on an officer as a penalty which involves loss of benefit already earned (1) ; It was pointed out that on compulsory retirement an officer would not suffer any diminution of the accrued benefit and though in a wide sense the officer might consider himself punished by the deprivation of the chance of serving and getting his pay till he attains the age of superannuation and thereafter to get an enhanced pension, there is clearly a distinction between the loss of benefit already earned and the loss of prospect of earning something more; where the officer did not lose the benefit already earned the same was not dismissal or removal. At page 42 of the Report the Court said: "Finally, Rule 49 of the Civil Service (Classification, Control and Appeal) Rules clearly indicates that dismissal or removal is a punishment. This is imposed on an officer as a penalty It involves loss of benefit already earned. " In Doshi 's Case( ) the Court had to consider an order of compulsory retirement made under Ruled 165A of the Bombay Civil Service Rules as amended by the Saurashtra Government which gave the Government an absolute right to retire any government servant after he had completed 25 years of qualifying service or 50 years of age whatever his service without giving any reason. It was held that such an order was not 'removal ' or 'dismissal ' under article 311 of the Constitution. Speaking for the Court Venkatarama Aiyar J. said: "Now the policy underlying article 311(2) is that when it is proposed to take action against a servant by way of punishment and that will entail forfeiture of benefits already earned by him, he should be heard and given an opportunity to show cause against the order. But that consideration can have no application where the order is not one of punishment and results in no loss of benefits already accrued, and in such a case there is no reason why the terms of employment and the rules of service should not (1) ; 764 be given effect to. Thus, the real criterion for deciding whether an order terminating the services of a servant is one of dismissal or removal is to ascertain whether it involves any loss or benefits previously earned. Applying this test, an order under R. 165A cannot be held to be one of dismissal or removal, as it does not entail forfeiture of the proportionate pension due for past services. " Hartwell 's Case I was one of termination of a temporary servant under the U.P. Subordinate Agricultural Service, who for some time served in a temporary capacity in the U.P. Agricultural Service. He was first reverted to his original appointment in the Subordinate Agricultural Service by an order dated May 3, 1954 and later a notice dated September 13, 1954 was served on him terminating his services in the Subordinate Agricultural Service. The notice purported to be under Rule 25 Cl. 4 of the Subordinate Agricultural Service Rules. The Court held that the termination of the appellant 's services under this rule did not amount to dismissal or removal within the meaning. of article 311 as it was in accordance with the terms of the conditions of service applicable to the appellant. Imam J. speaking for the Court observed: "In principle, we cannot see any clear distinction between the termination of the services of a person under the terms of a contract governing him and the termination of his services in accordance with the terms of his conditions of service. The order complained against did not contravene the provisions of article 311 and was therefore a valid order." The proposition that it is not every termination of service of an employee that falls within the operation of article 31 1 and that it is only when the order is by way of punishment that it is one of dismissal or removal was reaffirmed by this Court in Balakotich vs The Union of India (3 ). Reaffirming also the criteria indicated in Dhingar 's Case(3) as to what amounted (1) ; (2) ; (3) 765 to punishment for the purpose of article 311, Venkatarama Aiyar J. speaking for the Court observed: "The question as to what would amount to punishment for the purposes of article 311 was also fully considered in Parshotam Lal Dhingra 'section Case(1) It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a premature termination of his service would result in loss of benefits already earned and accrued, that would also be punishment. " Proceeding to apply this proposition to the facts of the case before it the Court said: "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of pre mature termination arises. Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. It was stated for the appellants that a person who was discharged under the rules was not eligible for reemployment, and that was punishment. But the appellants are unable to point to any rule imposing that disability. The order terminating services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The law as thus settled by this Court was again applied in Dalip Singh vs State of Punjab. (2) Dalip Singh who had been Inspector General of Police, PEPSU, was compulsorily retired from service by the Rajpramukh by an order dated August 18, 1950 which ran as follows "His Highness the Rajpramukh is pleased to retire from service Sardar Dalip Singh, Inspector (1) (2) 766 General of Police, PEPSU, (on leave) for ad ministrative reasons with effect from the 18th August, 1950. " The appellant brought his suit asking for a declaration that the order by which he was removed from the post of Inspector General of Police was unconstitutional, illegal, void, ultra vires and inoperative. Among the grounds on which this declaration was sought was that the compulsory retirement of the appellant which had been made under Regulation 278 of the Patiala State Regulations, was removal from service within the meaning of article 31 1 of the Constitution. Admittedly the requirements of article 311(2) had not been complied with in this case and so the question had to be decided whether such a retirement was removal or dismissal within the meaning of article 31 1. The question was answered by this Court in the negative for the reasons that the order did not amount to punishment because though an enquiry had been held against him the charges or imputations against him had not been made the condition of the exercise of the power of retirement and further because the officer was not losing the benefits he had already earned, as full pension was ordered to be paid. To emphasis the point that where compulsory retirement was in accordance with the rules of service it could not ordinarily be said to be by way of punishment, the Court pointed out that where a rule of service provided for compulsory retirement at any age whatsoever irrespective of the length of service put in, a retirement understand a rule would not be regarded as dismissal or removal. An observation in Doshi 's Case(1) which might appear to indicate otherwise was not followed it being pointed out that in Doshi 's Case this matter did not fall to be considered. Under Rule 278 he State reserved to itself the right to retire any of its employees on pension on political or on other reasons. It did not mention any particular age for retirement under this Rule. Care was taken in this case to mention that if the rule would result in loss (1) ; 767 of pension already earned, the termination would amount to removal or dismissal. It is thus clear both on principle and on authority that the words removal and dismissal in article 311 of the Constitution mean and include only those terminations of service, where a servant had acquired a right to continue in the post on the basis of terms and conditions of service, and such other terminations, where though there were no such right, the order has resulted in loss of accrued benefits; and that terminations of service which did not satisfy either of these two tests do not come within any of these words. Applying these tests to the termination of service under the provision of Rule 148 (3) of the Railway Code that "the service of other (non pensionable) railway servants shall be liable to termination on notice on either side. " I am of opinion that neither of these is satisfied. There is no doubt that this Rule applies not only to temporary railway servants but also to those railway servants who have been substantively appointed to permanent posts in the railways. A "permanent post", under the Fundamental Rules applicable to the railways means a post carrying a definite rate of pay sanctioned without limit of time. On substantive appointment the government servant has a lien on such post, i.e., the right to hold it substantively The right however is limited by all the terms and conditions of service. One of such conditions is in the provision in the Rule for compulsory retirement Rule 2046 of the Railway Code which corresponds to Fundamental Rule 56 provides that generally the date of compulsory retirement of a railway servant, other than a ministerial servant, is the date on which he attains the age of 55 years. He may be retained in service after the date of compulsory retirement with the sanction of the competent authority on public grounds, which must be recorded in writing, but he must not be retained after the age of 60 years except in very special circumstances. Clause 2 of Rule 2046 provides the rule of compulsory retirement for ministerial servants. Those government servants 768 who have entered government service on or after the 1st April, 1938, and those who being in government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date, shall ordinarily be required to retire at the age of 55 years, but if he continues to be efficient, should ordinarily be retained in service upto the age of 60 years but that he must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority. These rules have been modified from time to time but generally speaking a rule has always existed fixing the age beyond which a railway servant will not be allowed to be retained in service. If such a rule of compulsory retirement had not existed, the servant would have had the right to continue in the service till his death. The rule however limits that right, by providing in effect that the service would be terminated at a certain age. Rule 148(3) is just another rule, limiting the servant 's right to continue in ' service. It is as much a condition of service as Rule 2046 and in deciding the nature and extent of the right of a railway servant to whom Rule 148(3) applies to continue in service, Rule 148(3) is of as much importance as Rule 2046. A railway servant to whom Rule 148(3) applies has two limitations put on his right to continue (1) termination on attaining a certain age and (2) termination on service of a notice under Rule 148(3). Where the service is terminated by the order of retirement under Rule 2046, the termination is of a service where the servant has not the right to continue. So, it is not 'removal ' or 'dismissal '. Equally clearly and for the same reason, when the service is terminated by notice under Rule 148(3), the termination is not &removal ' or 'dismissal '. It has not been suggested that the second test of loss of accrued benefits is satisfied in terminations under Rule 148(3). If in any particular instance the order of termination entails loss of accrued benefits that will happen not because of anything in R. 148(3) 169 but for some extraneous action. Where that happens it will be right to consider such terminations as removal or dismissal. But that consideration is foreign to the provisions of Rule 148(3). 1 have therefore come to the conclusion that the first ground raised by the appellants in challenging the validity of Rule 148(3). , viz., that it contravenes the provisions of article 311 of the Constitution must be rejected. It is necessary now to consider the second ground urged by the appellants, viz., that Rule 148(3) contravenes article 14 of the Constitution. Two contentions are urged in support of this ground. First, it is urged that the Rule gives no guidance to the authority who would take action on it as regards the principle to be followed in exercising the power. Secondly, it is urged that the Rule discriminates between railway servants and other public servants. In my opinion, there is considerable force in the first contention. Classifying the statutes which may come up for consideration on a question of its validity under article 14 of the Constitution in Ram Krishna Dalmia vs Justice S.R. Tendolkar & Ors. "I this Court observed under the third class of such statutes thus: "A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of the selection or classification." (1) ; 1/SCI/64 49 770 Applying the principle laid down in the above case to the present rule 1 find on scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification. Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken. The Rule thus enables the authority concerned to discriminate between two railway servants to both of whom Rule 148(3) equally applied by taking action in one case and not taking it in the other. In the absence of any guiding principle in the exercise of the discretion by the authority the Rule has therefore to be struck down as contravening the requirements of article 14 of the Constitution. It is unnecessary for me to consider the other contention as mentioned above, which has been urged in support of this ground. My conclusion therefore is that though the provisions of Rule 148(3) in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period prescribed therein does not contravene article 311(2) of the Constitution, it contravenes article 14 of the Constitution and consequently is void. I would accordingly allow with costs the four appeals (C.A. Nos. 711 713/62 and C.A. No. 714/62) set aside the order of the High Court and order that appropriate writs be issued in favour of the appellant as prayed for. The other three appeals (C.A. Nos. 837 839 of 1963) challenge the decision of the Assam High Court in favour of three railway servants whose services had been terminated under Rule 149 of the Railway Code, that these terminations were invalid. Rule 149(3) is in practically the same terms as Rule 148(3) and provides for the termination of certain railway servants on notice on either side for the period prescribed. As, however, before November 1957 non 771 pensionable service had been brought to an end, and option was given to non pensionable servants either to opt for pensionable service or to continue under their previous terms and conditions of service, Rule 149(3) mentions permanent railway servants generally without any reference to their being nonpensionable. The validity of his Rule was attacked on behalf of railway servants on the same ground as have been considered with regard to Rule 148(3). For the reasons already given when discussing Rule 148(3) I am of opinion that Rule 149(3) does not contravene article 311(2) of the Constitution but contravenes article 14 of the Constitution. The terminations of service under Rule 149(3) of the Railway Code were therefore rightly held by the High Court to be invalid. I would accordingly dismiss these appeals with costs. SHAH J. Except as expressly provided by the Constitution, every member of the defence services or of a civil service of the Union or an all India service holds office during the pleasure of the President and every member of a civil service of a State holds office during the pleasure of the Governor of the State: article 310(1). This is the normal tenure of office of persons serving the Union or the State. The doctrine of holding office at pleasure applies even to a person with special qualifications employed under a contract, with the reservation that compensation may be paid to such person if before the expiry of the agreed period the office is abolished, or for reasons not connected with misconduct on his part, he is required to vacate that post: article 310(2). The power to terminate at pleasure vested by the Constitution in the President or the Governor, as the case may be, is not liable to be restricted by any enactment of the Parliament or the State Legislature: it may be exercised only in the manner prescribed by the Constitution and being outside the scope of articles 53 and 154 of the Constitution cannot be delegated : State of Uttar Pradesh vs Babu Ram Upadhya(1) It is open to the (1) ; 772 Parliament and the State Legislatures to enact Acts subject to the provisions of the Constitution to regulate recruitment and conditions of services and posts in connection with the affairs of the Union or a State (article 309), and until such legislation is enacted, it may be observed that the Union Parliament has not enacted any general legislation governing public servants employed by the Union the President or the Governor or such person as may be directed in that behalf may make rules regulating the recruitment and conditions of service of persons appointed to such services and posts, and the rules so made by the President or the Governor shall have effect, subject to the provisions of any such Acts. The power of the President or the Governor under article 310 (which is wholly independent of the power conferred by the rules or legislation under article 309), and the power conferred by legislation enacted or rules made or continued by virtue of article 309 are subject to certain restrictions contained in articles 311 & 314. Article 314 grants certain special protections to members appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India and who continue on and after the commencement of the Constitution to serve under the Government of India or a State. Article 311 provides, subject to the proviso to cl. (2), two safeguards to all public servants who are members of the civil service of the Union or an all India service or a civil service of a State who hold civil posts under the Union or the States. These safeguards are "(1) that such members of the service shall not be dismissed or removed by an authority subordinate to that by which he was appointed; and (2) that he shall not be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him." 773 The proviso to cl. (2) of article 311 excludes three specific classes of cases from the protection of the second guarantee. Guarantees under article 311 are, except to the extent specifically provided, absolute and are not subject to the exercise of power, legislative or executive. Accordingly the pleasure of the President or of the Governor cannot be exercised in a manner inconsistent with cl. (2) of article 311. Article 310 must therefore be read subject to article 311(2), and the rules made or legislation enacted under article 309 must also be read subject to article 31 1. It must be emphasized that the guarantees protect all servants, whether appointed to substantive posts, or employed temporarily or on probation, or for limited duration under contracts, but they do not encompass all penalties or terminations of employment. The guarantee under cl. (1) is against dismissal or removal by an authority subordinate to that by which the public servant was appointed, and under cl. (2) against dismissal, removal or reduction in rank without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The guarantee under cl. (2) does not affect the investment of power to dismiss, remove or reduce in rank a member of the civil service; it merely places restrictions upon the exercise of the power. Temporary servants on probation, officiating servants and even those holding posts under contracts all have the protection of article 31 1. But the consequences of mere determination of employment in the very nature of things must vary according to the conditions or terms of employment. Mere determination of employment of temporary servants, or probationers, and of servants whose tenure is governed by contracts, will not ordinarily amount to dismissal or removal, for, dismissal or removal according to the rules implies determination as a disciplinary measure. The appellants in appeals Nos. 711 to 714 of 1962 are public servants employed in the Railways under the management of the Government of India 774 and were governed by the rules made under article 309, and their services were terminated in purported exercise of powers under Rule 148(3). Rule 148, the validity of which is challenged by the appellants in these appeals, was originally framed in 1951 in exercise of the authority conferred by article 309, and was later modified so as. to exclude from its operation determination of employment operating as dismissal or removal as a disciplinary measure. The first clause deals with a temporary railway servant who holds no lien on a permanent post under the Union. Such a person need be given no notice of termination of employment, if the termination is due to the expiry of sanction to the post, or of the officiating vacancy or is due to mental or physical incapacity, or where it amounts to removal or dismissal as a disciplinary measure. Clause (2) deals with apprentices. Clause (3) deals with (non pensionable) railway servants, who are substantively appointed to permanent posts. Clauses (3) & (4) provide: "(3) Other (non pensionable) railway servants The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity: (a) Probationary officers and officers on probation other than those in the Medical Department 3 months ' notice (b) Officers on probation in the Medical Department `month 's notice (c) Permanent Gazetted Officers 6 months ' notice (d) Permanent Non gazetted employees `month 's notice. 775 "(4) In lieu ' of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " In this group of appeals (Nos. 711 714 of 1962) the principal question raised by the appellants is that the third clause of Rule 148 is invalid. The clause declares that the service of any railway servant who holds non pensionable employment is liable to be terminated on notice on either side of the periods set out in the Rule, but notice terminating employment by the Railway Administration is not a condition of dismissal or removal or of retirement on attaining the age of superannuation and of termination of service due to mental or physical incapacity. The clause prescribes the mode of determination of employment of non pensionable railway servants by notice and proceeds to state that in the specified cases no notice for termination of employment by the Railway Administration shall be necessary. It, ' however, does not follow that in the excepted classes of cases of the right of the Railway Administration to terminate employment is absolute or unrestricted: it is merely intended to be enacted by cl. (3) that notice will be necessary where on compliance with other appropriate conditions, there is retirement on attaining the age of superannuation, or determination of employment in compliance with the provisions of the Constitution, or for mental or physical incapacity. Clause (3) of Rule 148 is impugned by the appellants on two principal grounds: (1) that it is inconsistent with the protection which is guaranteed to all public servants by article 311(2); and (2) that it contravenes the fundamental freedom under article 14 of the Constitution in that certain classes of railway servants are selected for special prejudicial treatment when no such conditions of service are applicable in any other public employment and that in 776 any event an arbitrary power is conferred upon the authority competent in that behalf under the rules to terminate employment without any principle to guide him. Under the first head it is urged that termination by ,.notice of employment of non pensionable servants under Rule 148(3) being removal from service, in the absence of rules prescribing machinery for affording a reasonable opportunity of showing cause against the action proposed to be taken in regard to such employees, the Rule infringes the constitutional guarantee under article 311 and is void. This plea assumes that every termination of employment by notice under Rule 148(3) amounts to removal. But on the plain text of cl. (3) it is evident that the right to determine employ ment by notice cannot be exercised in the excepted cases and since dismissal or removal as a disciplinary measure falls within those excepted cases, the President has, by framing cl. (3) of Rule 148, clearly 1 expressed the intention that determination of employment which amounts to dismissal or removal cannot be effected by notice. In terms the clause makes a distinction between determination of employment by notice and determination of employment as a disciplinary measure, retirement on superannuation, and termination for reasons of physical or mental incapacity: it does not confer authority upon the Railway Administration to terminate employment of a public servant holding a substantive post, as a disciplinary measure. The Rule is framed under article 309, and undoubtedly makes the tenure of a public servant appointed even substantively to hold a permanent post precarious. Ordinarily a railway servant appointed substantively to a permanent post would, under the rules governing employment, continue in service till he attains the age of superannuation but that tenure is made subject to compulsory retirement after he attains the prescribed age if the railway servant belongs to certain specified classes: vide Rule 2046(2) & (3) of the Railway Code, 1958, and to discharge from employment under Rule 148(3) if his service is non pensionable. Inci 777 dents relating to termination of employment on superannuation, on orders of compulsory retirement and on discharge from service under Rule 148(3) are parts. of an organic scheme of rules governing the tenure of office of railway servants which also includes provisions relating to dismissal, removal or reduction in rank as a disciplinary measure. By being appointed to a post a railway servant becomes entitled to the pay and allowances, increments subject to efficiencybar, leave, gratuity, pension etc. These are also incidents of employment of the same character as the incident of determination of employment by compulsory retirement, discharge by notice and dismissal or removal. In considering what the expression "dismissed or removed" used in article 311 means, a brief review of the relevant legislative history dealing with the tenure of office of civil servants in the employment of the Government of India may be useful. It is sufficient to note that since the earliest time all persons holding office civil or military under the East India Company were liable to be removed at the pleasure of the King of England: see section 35 Charter Act 1793 (33 Geo. III Ch. 2): and 74 Charter Act 1833 (3 & 4 will IV Ch. 85). These provisions however did not take away the power of the Court of Directors to remove or dismiss any of its officers or servants not appointed by the Crown in England. The same tenure of service prevailed after the British Crown took over the governance of India, the power to make regulations in relation to appointments and admission to services and matters connected therewith being vested in the Secretary of State in Council: section 37 Govern ment of India Act 1858 (21 & 22 Vict. Ch. 106). For the first time under the Government of India Act, 1919 (9 & 10 Geo. V. Ch. 101) some protection was conferred upon the civil servants. By the first clause of section 96 B the tenure of office of every employee under the civil service of the Crown was during pleasure of His Majesty, but dismissal from service by an authority subordinate to that by which the officer 678 was appointed was prohibited. The power of the Secretary of State for India in Council to make rules regulating classification of civil services, method of recruitment, conditions of service, pay, allowances, discipline and conduct was reaffirmed. This was followed by sections 240 to 243 of the Government of India Act, 1935 (26 Geo. V. & 1 Ed. 8 Ch. 2) which made detailed provisions relating to the tenure of office of persons employed in civil capacities, recruitment and conditions of service and rules to be made in that behalf including rules applicable to railway, custom, postal and telegraph services, and special provisions relating to the police. By section 240, a guarantee against dismissal without being afforded an opportunity of showing cause to persons employed in civil capacities was provided. By cl. (1) except as provided by the Act, every member of a civil service held office during His Majesty 's pleasure: by cl. (2) it was enacted that "no such person shall be dismissed from service, by any authority subordinate to that by which he was appointed" and by cl. (3) it was enacted that "No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him". This was the guarantee of protection conferred by the Government of India Act 1935 upon members of the civil services and has since been affirmed by the Constitution in article 311 in almost the same terms the slight verbal alteration substituting "dismissed or removed" for "dismissed" having made no variation in the content of the guarantee. In 1930 Rules were promulgated by the Secretary of State for India in Council under. 96 B(2) of the Government of India Act, 1919,called the Classification, Control and Appeal Rules. These Rules did not in terms apply to railway servants, who were governed by a set of rules published as the Railway Establishment Code, but these were for all practical purposes in terms similar to the Civil Services (Classification, Control and Appeal) Rules, which may be called 'the General Rules '. Under cl. 49 of the General Rules penalties which could be imposed 679 upon civil servants were enumerated and cl. 55 provided that no order of dismissal, removal or reduction shall be passed upon a civil servant unless he has been informed in writing of the grounds on which it is proposed to take action and he has been afforded adequate opportunity of showing cause against the action proposed to be taken. These Rules remained in force after the Government of India Act, 1935, was brought into operation. Even after the Constitution was brought into force, the rules continued to remain in operation till 1955, when a new set of rules were promulgated, but thereby in Rules 49 & 55 no substantial variation was made It is clear that, under the scheme of rules governing the employment of civil servants which obtained prior to the Constitution dismissal. or removal had acquired a definite connotation, and when the Constitution makers adopted the scheme of protection of public servants in the same form in which it prevailed earlier, an intention to attribute to the expression "dismissed and removed" the same content may be assumed in the absence of any expressed intention to the contrary. Since the constitutional guarantee of protection to public servants is couched in the same terms, the expression "removal" in the Service Rules having the same meaning as "dismissal" i.e., determination of employment as a disciplinary measure for misconduct, subject to the slight variation that an employee removed from service is not disqualified from future employment in public service, whereas a dismissed employee is so disqualified, it may reasonably be held that in the context of this development under the Constitution the expression "dismissed or removed" has not acquired a wider signification to include all terminations of public employment, whatever be the cause. Apart from the historical evolution of the guarantee, there is inherent indication in the constitutional provisions that it was not the intention of the Constitution makers to include in the expression "dismissed or removed" all terminations of employ 780 ment. Guarantee of reasonable opportunity of showing cause against the action proposed to be taken in regard to a public servant, would, be wholly inappropriate in cases of superannuation, expiry of the contractual priod of employment, expiry of the priod of probation or temporary employment, and resignations. It would be futile in such cases to provide for "showing cause". The use of the expression "action proposed to be taken in regard to him" also suggests that termination of employment is of the nature of penal action. There is yet another ground which must be taken into account. For nearly two centuries prior to the Constitution tenure of public servants has been expressly declared to be during the pleasure of the British Crown and that tenure has been repeated in the Constitution in article 310(1) with appropriate variations entrusting the power to the President or the Governor, as the case may be. Vitality of this declaration is emphasized in cl. (2) of article 310 so as to enable the President or the Governor to terminate even contractual employments at their respective pleasure. If the Constitution makers intended that every termination of employment amounted to dismissal or removal within article 311, the provision of article 310, solemnly declaring that members of the services civil and defence hold office during the pleasure of the President is reduced to a meaningless formula having no practical content. The argument that it continues to apply to probationers and temporary employees ignores the plain words of the Constitution, beside unduly minimising the content of the guarantee in article 311 which protects all public servants temporary, probationers, contractual as well as those holding substantive posts. There is also a consistent body of authority which has taken the view that the expression "dismissed or removed" within the meaning of article 311 of the Constitution involves determination of employment as a disciplinary measure that is termination of employment on some ground personal to the officer concerned, such as incapacity or imputation 781 of charge against him which renders it inexpedient undesirable that he should continue in public employment: Satish Chandra Anand vs Union of India(1) Shyam Lal vs State of Uttar Pradesh & The Union of India(2); and Parshotam Lal Dhingra vs Union of India (3). In considering whether termination of employment of a. public servant amounts to dismissal or removal, the primary test settled by a uniform course of authority is: does the termination amount to punishment of the public servant, i.e., has it the effect of depriving the public servant concerned of the right which he has already acquired as a public servant, or does it involve evil consequences such as forfeiture of pay or allowances or other benefits which by the rules governing the tenure he has earned, or impute a stigma? A public servant appointed substantively to a post normally acquires a right to hold the post until he attains the age of superannuation, and in the absence of a contract or service rules governing the tenure, discharge from service would deprive him of the right he has to the post. Such deprivation of rights already accrued, or involving evil consequences, must in all cases amount to dismissal or removal, for, it amounts to imposing. punishment. But mere termination of the right to hold a post not as a discip linary measure, but according to the contract or rules governing his appointment and tenure, cannot be so regarded, because the rules which govern his right to the post make determination in the manner provided inherent in the right. By appointment to an office a public servant does not acquire a right to hold it for his natural life time or even during good behaviour His right to hold it is during the pleasure of the President or the Governor, according as his employment is under the Union or the State: the right is also subject to the contract or rules governing the employ ment. Rules framed under article 309 relating to super annuation, to compulsory retirement on attaining (1) ; (2) (1955] 1 S.C.R. (3) ; 782 a certain age, or completing a specified period of service, or to determination of employment of temporary or quasi permanent servants, or those on probation, form conditions of service, and govern the tenure, and it is difficult to perceive any distinction between those conditions of service, and the condition which expressly provides for determination of employment otherwise than as a matter of disciplinary measure. The title of a railway servant holding a non pensionable office is subject to the condition of determination by notice under Rule 148(3) which as the clause expressly provides is not according to its terms exercisable as a disciplinary measure. It cannot be assumed that on acquisition of the office, a railway servant becomes entitled to a right to the post free from the conditions attaching thereto by the rules governing his employment. He is liable to ' vacate the office on superannuation, on compulsory retirement, on notice of determination, and on dismissal or removal alike, i.e., on the supervention of the prescribed conditions determination of employment of the prescribed class results, and not otherwise. Terminations resulting from causes other than dismissal or removal are solely governed by the rules, but in the matter of dismissal or removal, beside the conditions prescribed by the appropriate rules, the overriding provisions of the Constitution must be complied with. Under the Indian Railway Establishment Code, Vol. 11, "lien" is defined in Rule 2003(14) as meaning the title of a railway servant to hold substantively, either immediately or on the termination of a priod or periods of absence, a permanent post, including a tenure post to which he has been appointed substantively. Evidently lien is the title which the railway servant has to a post, and a public servant appointed substantively must always till he is superannuated have lien on a specific post. On substantive promotion his lien would attach to another post, his earlier lien being superseded. While a railway servant appoin 783 ted to another post substantively must have a lien to that post, it cannot be assumed that his lien continues to attach to any particular post. The lien is however subject to the rules: it does not in any manner confer a right to hold a post indefinitely. Counsel for the appellants contended that all the appellants in this group of appeals were permanent employees, and even superannuation did not put an end to employment, since under the rules the superannuated employees had a right to pension. it is impossible to hold that a superannuated employee continues to remain employed. His employment is at an end: he is under no obligation to serve and earns no remuneration. The pension is but a payment made by the State for services already rendered and not in lieu of services being rendered, or which the public servant may be called upon to render There can therefore be no distinction in principle between termination of employment of the employee attaining the prescribed age of superannuation, and termination of services in the manner prescribed by the rules, by notice, or by an order of compulsory retirement. In all cases employment comes to an end Though the causes which result in termination are different, the effect is the same, viz., the public servant ceases to be employed. The argument that on being appointed to a public service, the employee acquires right to continue in employment, proceeds upon a misconception of the nature of appointment to a public post. Appointment to a public post is always subject to the pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution A person appointed substantively to a post does not acquire a right to hold the post till he dies, he acquires thereby merely a right to hold the post subject to the rules i.e., so long as under the rules the employment is not terminated. If the employment is validly terminated, the right to hold the post is determined even apart from the exercise of the pleasure of the President or the Governor. There is in truth no permanent 784 appointment of a public servant under the Union or the State. Nor is the appointment to a public post during good behaviour, i.e., a public servant cannot claim to continue in office so long as he is of a good behaviour. Such a concept of the tenure of a public servant 's office is inconsistent with articles 309 and 310 of the Constitution. It may be recalled that the guarantee under article 311 protects a public servant against dismissal or removal or reduction in rank as a disciplinary measure. But if the determination of service does not amount to dismissal or removal as a disciplinary measure, there is nothing in the Constitution which prohibits such determination provided it is consistent with article 309 of the Constitution. The tenure of office is subject to article 310, prescribed by article 309 that is the governing code. The rules cannot undoubtedly provide for dismissal or removal otherwise than in a manner consistent with article 311. Nor can an authority acting under the rules validly terminate an appointment to a post in a manner contrary to the Constitution or the rules. Article 311 however covers only a part of the field governing the tenure of employment and in substance provides for a procedure for exercising the right to determine employment in certain specified classes of cases. To hold that this determination of employment must in all cases, whatever may be the source or the power in the exercise of which it is determined, is to attribute to it a more exalted effect than is warranted by the scheme of the Constitution disclosed by articles 309 and 310. The view which I have expressed is consistent with an overwhelming body of uniform authority dealing with different classes of cases in this Court, and we are asked to ignore the principle derived from that body of authority not on the ground of any demonstrable error but on the sole ground of a possible misuse of the powers entrusted to the Railway Administration and that was, as I understood, practically the only argument advanced at the Bar to justify a 785 departure from the settled course of authority. But in considering whether cl. (3) of Rule 148 infringes, the constitutional guarantee under article 311(2), the Court will not assume that in exercising the power to determine employment the authority competent in that. behalf may not act honestly. The presumption always is that the high officials in whom the power is vested Will perform the duties of their office honestly. A mere possibility that the power may in some cases be misused or abused, will not per se induce the Court to deny validity to the entrustment of the power. The impact of article 311 upon Rule 148(3), must be adjudged in the light of action which may be taken bona fide under the Rule. If in a given case the order is not bona fide, and is intended to camouflage an order of removal from service as a disciplinary measure, the protection of article 311(2) would undoubtedly be attracted, for such an order cannot be regarded as made in exercise of authority conferred by Rule 148(3). But the Court will not adjudge the rule invalid on the assumption that the rule may possibly be abused and may be made a cloak for imposing a punishment on a public servant or that the provision might be utilised for a collateral purpose. I will briefly refer to some of the illustrative decisions of this Court. In Satish Chandra Anand 's case(1) discharge from service by notice of a public servant employed under a contract for the duration of the Resettlement and Employment Organisation of the Union was held not to attract the protection of article 311 of the Constitution. The public servant in Satish Chandra Anand 's case(1) was continued in service after expiry of the period of his original employment, under a contract for the duration of the Organisation on condition that he was to be governed by the Central Civil Services (Temporary Service) Rules, 1949, which provided, inter alia, for termination of the contract by a month 's notice on either side. This Court held that to termination of his service (1) ; 1/SCI/64 50 786 by notice according to the 'rules governing his employment, article 311 had no application. In the view of the court the case was not of dismissal or removal from service, because the State has power to enter into contracts of temporary employment and impose special terms not inconsistent with the Constitution, and those who chose to accept the terms and entered into the contract were bound by them, even as the State was bound. This was a case of a premature termination of a contractual employment in exercise of a power reserved by Rules. The view expressed in Satish Chandra Anand 's case(1) was approved in Parshotam Lal Dhingra 's case(2) . Several cases dealing with termination of employment of temporary employees or employees on probation have since arisen, and it has consistently been held that mere termination of employment of these employees not on the ground of any misconduct did not amount to dismissal or removal within the meaning of article 311. In Hartwell Prescott Singh vs The Uttar Pradesh Government and others(3) an order discharging a temporary employee from service by giving him a month 's notice as prescribed by Rule 25(4) of the U.P. Subordinate Agriculture Service Rules, by which he was governed, was held not to amount to dismissal or removal within the meaning of article 31 1. It was observed in that case that in principle there was no distinction between the termination of service under the "terms of a contract" and that in accordance with the "terms of conditions of service". In Parshotam Lal Dhingra 's case (2), Das, C.J., who entered upon an exhaustive review of the Rules governing service conditions of public servants of different classes (and with him all other members of the Bench except Bose J., agreed) observed at p. 842: ". in the case of an appointment to permanent post in a Government service on (1) [19531 S.C.R. 6 5. (2) ; (3) [19581 section C. R. 509. 787 probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time. Likewise an appointment to a temporary post in a Govern ment service may be substantive or on probation or on an officiating basis. Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no right to the post and his service can be terminate d at any time except in one case, namely when the appointment to a temporary post is for a definite period. " In The State of Bihar vs Gopi Kishore Prasad(1) Sinha C.J., speaking for the Court summarised certain propositions governing the tenure of temporary public servants of which the following two are material: "(1) Appointment to a post on probation gives to the person so appointed no right to the post and his service may be terminated, without any taking recourse to the proceedings laid down in the relevant rules for dismissing a public servant or removing him from service. (2) The termination of employment of a person holding a post on probation without any enquiry whatsoever cannot be said to deprive him of any right to a post and is, therefore, no punishment. " In The State of Orissa and another vs Ram Narayan das (2) this Court held that a probationer may be discharged in the manner provided by Rule 55 B of the Civil Services (Classification, Control and Appeal) Rules, and to such discharge from service article 311(2) did not apply, for mere termination of employment does not carry with it any evil consequences and an order discharging a public servant, even if he is a (1) ; (2) ; 788 probationer, on the result of an enquiry on charges of misconduct, negligence, inefficiency or other dis qualification, may appropriately be regarded as one by way of punishment, but an order discharging a probationer after an enquiry to ascertain whether he was fit to be confirmed, is not of that nature. In section Sukhbans Singh vs The State of Punjab(1) it was held that the protection of article 311 is available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment, and one of the tests for ascertaining whether the termination of service was by way of punishment is whether under the Service Rules, but for such termination, the servant has the right to hold the post. The same view. was expressed in Union Territory, Tripura vs Gopal Chandra Datta(2) and in Ranendra Chandra Bannerjee vs The Union of India(3). Two cases on the other side of the line, which emphasize the distinction between a mere order of discharge of a temporary servant, and an order dismissing a public servant as a disciplinary measure may be noticed. In Madan Gopal vs The State of Punjab and others(4), this Court pointed out that where the employment of a temporary government servant, even though liable to be terminated by notice of one month without assigning any reason, is not so terminated, and the appointing authority holds an enquiry into his alleged misconduct, the termination of service is by way of punishment, because it casts a stigma on his competence and thus affects his career. In such a case the public servant is entitled to the protection of article 311(2) of the Con stitution. In Jagdish Mitter vs The Union of India (5) it was held that an order discharging a temporary servant from employment b notice after recording that he was "found undesirable to be retained in Government service" was one casting a stigma, and (1) ; (2) [1963] Supp. 1 S.C.R. 266. (3) ; (4) [1963] 3 S.C.R. 716. (5) A. I. R. 789 was therefore an order of dismissal attracting the application of article 311 (2) of the Constitution. There is still another class of cases which illustrate the rule that termination of employment otherwise as a disciplinary measure does not amount to dismissal or removal. This Court has held that rules providing for compulsorily retiring public servants holding posts substantively are valid, and that termination of employment consequent upon such compulsory retirement does not amount to dismissal or removal from service so as to attract the protection of article 311(2). In Shyam Lal 's case(1) challenge to the validity of termination of employment of a member of the Indian Service of Engineers compulsorily retired after be completed service for 25 years was discountenanced by this Court on the ground that compulsory retirement under the Civil Services (Classification, Control and Appeal) Rules, after a public servant had served for 25 years, did not amount to dismissal or removal within the meaning of article 311 of the Constitution. It was observed that the word "removal" used synonymously with the term "dismissal" generally implied that the officer was regarded as in some manner blameworthy or deficient, the action of removal being founded on some ground personal to the officer involving leveling of some imputation or charge against him. But there was no such element of charge or imputation in the case of compulsory retirement which did not involve any stigma or implication of misbehavior or incapacity, for, by the compulsory retirement the person concerned did not lose any benefit he had earned and loss of future prospects of earning could not be taken into account in considering whether the order of compulsory retirement amounted to imposing punishment. In The State of Bombay vs Subhagchand M. Doshi(2) it was held that Rule 165 A of the Bombay Civil Services (Conduct, Discipline and Appeal) Rules adopted by the State of Saurashtra, subject to amendment, authorising the State Government to compulsorily (1) ; (2) ; 790 retire any public servant who had completed 25 years of qualifying service or had attained the age of 50 'years, without giving any reason was not violative of article 311(2) of the Constitution, as the order made under Rule 165 A was not one of dismissal or removal. Venkatarama Aiyar, J., observed at p. 579 (obiter as was pointed out in a later case): "It should be added that questions of the above character could arise only when the rules fix both an age of superannuation and an age for compulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be reregistration only as dismissal or removal within article 311(2)." In P. Balakottaiah vs The Union of India and others(1) an order for compulsory retirement under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was challenged as contravening article 311(2). The public servants concerned in those appeals were railway servants and their services were terminated on the ground that the General Manager of the Railways had reason to believe that they were guilty of "subversive activities". Notices were issued to them under section 3 of the Rules to show cause against certain charges. The Committee of Advisers enquired into the charges and the explanations furnished by the public servants found the charges true. The General Manager acting on the report of the Committee terminated the services of the railway servants concerned giving them a month 's salary in lieu of notice. It was held by this Court that it is not every termination of the services of an employee that falls within the operation of article 311, and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article. It was further observed at p. 1065: (1) ; 791 "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of prema ture termination arises. Rule 7 of the Security Rules preserves the rights of the employees to all the benefits of ' pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The Court in that case appeared to express the opinion, though it was not necessary for deciding the case, that an order of discharge under Rule 148(3) was neither one of dismissal nor removal within the meaning of article 311(2). In Parshotam Lal Dhingra 's case (1) the Court also considered the question whether an order of compulsory retirement of a public servant under the appropriate rules governing him amounts to dismissal or removal from service. At p. 861, Das C.J., speaking for the majority of the Court observed: " . every termination of service is not dismissal, removal or reduction in rank. A termination of service brought about by the exercise of a contractual right is not per se dismissal or removal, Likewise the termination of service by compul sory retirement in terms of a specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract article 311(2), as has also been held by this Court in Shyam Lal vs The State of Uttar Pradesh. In either of the two above mentioned cases the termination of the service did not carry with it the penal consequences of loss of pay, or allowances under r. 52 of the Fundamental Rules." (1) ; 792 .lm0 In a still more recent case Dalip Singh vs State of Punjab(1) it was held by this Court that an order of compulsory retirement of a public servant for administrative reasons under R. 278 of the Patiala State Regulations which Regulations did not fix the minimum age or length of service after which an order of compulsory retirement could be made,was not one of dismissal or removal from service within the meaning of article 311(2) of the Constitution, because retirement under a Service Rule which provided for compulsory retirement at any age irrespective of the length of service put in, cannot necessarily be regarded as dismissal or removal within the meaning of article 311, and the observations (hereinbefore quoted) made by Venkatarama Aiyar, J., in Saubhagchand Doshi 's case(2) were for the purposes of deciding that case obiter, and that it was not a general rule that an order of compulsory retirement not amounting to dismissal or removal can take place only under a rule fixing the age of compulsory retirement. These decisions which examine diverse facets of the tenure of employment of public servants, establish beyond doubt that mere determination of employment of a public servant whether he be a temporary employee, a probationer, a contractual appointee or sub stantively holding a permanent post will not attract the provisions of article 311 (2) of the Constitution, unless the determination is imposed as a matter of punishment. All these decisions weave a clear pattern of employment of public servants who are governed by Rules providing for premature determination of employment. Such determination of service, founded on a right flowing from contract or the service rules, is not punishment and carries with it no evil consequences. It does not deprive the public servant of his right to the post, it does not forfeit benefits already acquired., and casts no stigma upon him. A railway employee who has accepted employment on the conditions contained in the rules cannot after having obtained employment, claim that the (1) ; 88 (4) ; (2) [1958] S.C.R. 1052. 793 conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard, the exception being founded not on any right in the public servant to elect, but on the invalidity of the covenant or regulation. If the principle of the binding nature of the rules as condition of employment is valid, I am unable to see any distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement, terminating contracts, terminating temporary employment, or employments on probation, and orders terminating employment after notice under Rule 148(3). If Rule 165 A of the Bombay Civil Services (Classification, Control and Appeal) Rules, as amended, which fell to be considered in Saubh Chand Doshi 's case (1) was not invalid, if Rule of the Railway Services (Safeguarding of National Security) Rules, 1949, which fell to be considered in P. Balakottaiah 's case(2) was not invalid, if Rule 278 of the Patiala State Regulations which fell to be considered in Dalip Singli 's case (3) was not invalid, if Rule 5(a) of the Central Government Services (Temporary Service) Rules, 1949, which fell to be considered in Satish Chandra Anand 's case (4) was also not invalid, it is difficult to appreciate any ground either of logic or of law on which the vice of invalidity as infringing article 311(2) may be attributed to Rule 148(3). The termination of employment under Rule 148(3) does not involve the public servant concerned in loss of any right which he has already acquired, it does not amount to loss of a post to which he is entitled under the terms of his employment, because the right to the post is necessarily circumscribed by the conditions of employment which include Rule 148(3) and does not cast any stigma upon him. In the result I am unable to agree that (1) ; (2) ; (3) (4) (1953] S.C.R. 655. 794 Rule 148(3) was invalid as infringing the guarantee of constitutional protection under article 311(2). In appeals Nos. 837 839 of 1963 the question as to the validity of the Rule 149(3) falls to be determined. That Rule was substituted for the original Rule 148(3) some time in year 1959. Rule 149 deals, by its first clause, with temporary railway servants and cl. (2) deals with apprentices. We are not concerned in these appeals either with temporary railway servants or with apprentices. In this Rule cl. (3) deals with the other railway servants. It provides: "The service of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or phvsical incapacity. The Rule then proceeds to set out the different periods for which notice may be given terminating employment. Clause (4) of the Rule provides for payment in lieu of notice. Rule 149(3) makes a departure from Rule 148(3). The latter Rule applied only to members of the non pensionable service, whereas Rule 149(3) applies to all members of the railway service holding substantive appointments, and brings within its fold all employees even those who have entered employ ment before the date on which the Rule was framed. But if by the terms of his appointment a railway servant who was not governed by Rule 148(3) is brought within Rule 149(3) so as to make his employment precarious by exposing him to liability to termination of employment, different considerations may apply. For reasons which I have already set out the conditions of service validly made under article 309 of the Constitution and in existence on the date when a public servant enters service would be binding upon him. There is nothing in Rule 149(3) which renders determination of employment in the 795 manner provided therein per se inconsistent with article 311. But exercise of the power by the Railway Administration to determine employment of persons who were otherwise not subject to the new condition of service would, in my judgment, amount to imposing a penalty of dismissal or removal. Therefore termination of services of a person who held appointment to a substantive post and was entitled under the previous rules to continue until he attained the age of superannuation, or till compulsory retirement, Rule 149(3) made applicable to him after he entered service would per se amount to dismissal or removal and it would be inconsistent with article 311. This is not because the Rule is invalid, but because it would expose the public servant concerned to forfeiture, by amendment of the rules which were in existence at the time when he entered service, o rights which he had already acquired. The alternative ground of invalidity that the rule infringes the fundamental right of equal protection of the laws under article 14 of the Constitution may now be considered. This ground was set up under two broad heads. (1) There is no other public employment under the Government of India in which conditions similar to these contained in Rule 148(3) or Rule 149(3) exist, and therefore discrimination between public servants employed in Railways and public servants employed in other branches of public undertakings or Administrative Services without any rational basis to support it, infringing the equal protection of laws guaranteed by article 14 of the Constitution, results. The argument posed in this form does not appear to have been raised before the High Court and no investigation has been made whether similar conditions of service do or do not exist in other public employments. In any event, employment in the Railways is in a vitally important establishment of the Union in which the employees are entrusted with 796 valuable equipment and a large measure of confidence has to be reposed in them and on the due discharge of the duties the safety of the public and the efficient functioning of the governmental duties depend. Not only the travelling public, but the Union and the States have in a considerable measure to depend upon rail transport for the functioning of the governmental machinery and its welfare activities. It would be possible even for one or a few employees of the Railway to paralyse communications and movement of essential supplies leading to disorder and confusion. The Railway service has therefore a special responsibility in the smooth functioning of our body politic and a doctrinaire approach to equality of conditions of service in different branches of public employment, irrespective of the nature of the duties performed, irrespective of the possibility of harm to the community which misguided members or units may be capable of doing, and irrespective of the necessity to entrust special powers to terminate employment in deserving cases may not be permitted. If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the Rule which authorises termination of employment to the liability to be struck off as infringing article 14. Article 14 undeniably forbids class legislation, but it does not forbid reasonable classification for the purpose of legislation. Legislation satisfying the test of classification founded on an intelligible differential distinguishing persons, objects or things grouped together from others left out of the. group, such differentia having a rational relation to the object sought to be achieved by the statute, has consistently been regarded as not open to challenge on the ground of infringing the equality clause of the constitution. The special conditions in which the Railways have to operate and the interests 797 of the nation which they serve justify the classification, assuming the argument of classification to be factually correct. It need hardly be pointed out that the basis of classification need not be expressly mentioned by the impugned statute: it may be gathered from the surrounding circumstances known to or brought to the notice of the Court. (2) Rules 148(3) and Rule 149(3) are so framed as to lead to discriminatory treatment of Railway servants, because by the exercise of the arbitrary and uncontrolled power thereby conferred, exercise of which is not to be tested by any objective standard, service of any public servant falling within the classes to which they apply may be terminated Conferment of such a power leads to denial of the equal protection of the laws. Rule 148(3 ) as it stood applied only to non pensionable services and not to pensionable services, and Rule 149(3) applies to all railway servants holding posts pensionable and non pensionable. In dealing with a similar argument in Satish Chandra Anand 's case(1) in the context of termination of employment of a servant employed on a contract for the duration of an Organisation but whose tenure was governed by the Central Civil Services (Temporary Service) Rules, 1949, Bose, J., observed at p. 659: "There was no compulsion on the petitioner to enter into the contract he did. He was as free under the law as any other p erson to accept or to reject the offer which was made to him. Having accepted, he still has open to him all the right and remedies available to other persons similarly situated to enforce any rights under his contract which have been denied to him, assuming there are any, and to pursue in the ordinary courts of the land such remedies for a breach as are open to him to exactly the same extent as other persons similarly situated. He has not been discriminated against and he has not been denied the protection (1) ; 798 of any laws which others similarly situated could claim. " These observations in my judgment would, with appropriate variations, be applicable in considering the validity of Rules 148(3) & 149(3). In adjudging 'whether there is by the impugned rules a denial of the equal protection of the laws, no rational ground of distinction can be found between an employee who is but for the rule for termination of em ployment by notice, by the contract entitled to continue in employment for a specified duration, and one who is appointed to a substantive post till superannuation. In one case the employment is. for a period defined or definable, in the other there is employment till superannuation, and in both cases liable to be terminated by notice. If with his eyes open, a candidate for employment accepts a post permanent or temporary, tenure of which is governed by Rules, he cannot after accepting the post seek to avoid the onerous terms of employment. This is not to say that acceptance of covenants or rules which are inconsistent with the Constitution is binding upon the public servant by virtue of his employment. Such covenants or rules which in law be regarded as void, would not affect the tenure of his office. The law which applies to railway servants falling within the class to which Rules 148(3) and 149(3) apply is the same. There are no different laws applicable to members of the same class. The applicability of the law is also not governed by different considerations. It is open to the appointing authority to terminate appointment of any person who falls within the class. There is therefore neither denial of equality before the law, nor denial of equal protection of the laws. All persons in non pensionable services were subject to Rule 148(3). There was no discrimination between them: the same law which protected other servants in the same group non pensionable servants protected the appellants in appeals Nos. 711 714 of 1962, and also provided for determination of their employment. 799 The Rule, it is true, does not expressly provide for guidance to the authority exercising the power conferred by Rule 148, but on that account the Rule, cannot be said to confer an arbitrary power and be unreasonable, or be in its operation unequal. The power is exercisable by the appointing authority who normally is, if not the General Manager, a senior officer of the Railways. In considering the validity of an order of determination of employment under Rule 148, an assumption that the power may be exer cised mala fide and on that ground discrimination may be practised is wholly out of place. Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of the power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully, and possibility of abuse of power will not invalidate the conferment of power. Conferment of power has necessarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power. If in the scheme of the rules, a clear policy relating to the circumstances in which the power is to be exercised is discernible, the conferment of power must be regarded as made in furtherance of the scheme, and is not open to attack as infringing the equality clause. It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers 800 conferred thereby. The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger interests of the public being served by retaining the public servant concerned in service. In my view Rule 148(3) cannot, therefore, be regarded as invalid either as infringing article 311(2) of the Constitution or as infringing article 14 of the Constitution. For the same reasons Rule 149(3) cannot also be regarded as invalid. But the orders imposing upon the public servants determination of employment in exercise of the powers under Rule 149(3) made applicable to them when prior to the date on which the Rule was framed they were not applicable to them would be void as infringing article 311(2) of the constitution As, however, on this part of the case there has been no investigation by the High Court, I would remand appeals Nos. 837 839 of 1963 to the High Court and dismiss appeals Nos. 711 714 of 1962. ORDER BY COURT In accordance with the opinion of the majority Civil Appeals Nos. 711 713 of 1962 and Civil Appeal No. 714 of 1962 are allowed with costs. The writ petitions filed by the four appellants in the three High Courts are granted and Orders directed to be issued in terms of the prayers made by them. Civil Appeals Nos. 837 839 of 1963 are dismissed with costs. One set of hearing fees in each group.

Moti Ram Deka was a peon employed by the North East Frontier Railway and Sudhir Kumar Das was a confirmed clerk. General Manager, North East Frontier Railway, terminated th services under R. 148(3) of Indian Railway Establishment Co Vol. They challenged the termination of their services but th writ petitions were rejected by the Assam High Court and t came to this court by special leave. Priya Gupta was an Assistant Electrical Foreman in North Eastern Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal challenging termination of his services having been rejected by Allahabad High Court, he came to this Court by special leave. Tirath Ram Lakhanpal was a Guard employed by the Northen Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal were dismissed by Punjab High Court and he came to this court by special leave. S.B. Tewari, Parimal Gupta and Prem Chand Thakur employed in the. North Eastern Frontier Railway. Their service were terminated under R. 149. Their writ petitions challenging termination of their services were accepted by the Assam High Court and Union of India came to this Court after getting a certificate of fitness from the Assam High Court. The only question involved was the constitutional validity or otherwise of Rules 148(3) and 149(3) of the Indian Railway Establishment Code on the ground that they violated articles 14 and 311(2) of Constitution of India. Held: By majority by Gajendragadkar, Wanchoo, Hidaya tullah, Ayyangar, Subba Rao and Das Gupta JJ.(Shah J. dissenting) 684 that Rules 148(3) and 149(3) of Indian Railway Establishment Code were invalid. Per Gajendragadkar, Wanchoo, Hidayatullah and Ayyangar, jj. Rules 148(3) and 149(3) are invalid inasmuch as they are inconsistent with the provisions of articles 311(2). The termination of the services of a permanent servant which is authorised by those rules, is no more and no less than his removal from service and hence article 311(2) must come into play in respect of such cases. The rule which does not require compliance with the procedure prescribed under article 311(2) must be struck down as invalid. A person who substantively holds a permanent post has a right to continue in service, subject to the rules of superannuation and compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on ground of superannuation or compulsory retirement, must per se amount to his removal and if by R. 148(3) or R. 149(3), such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid. Rules 148(3) and 149(3) contravene article 14 of the Constitu tion. It is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purposes of framing the impugned rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, such rules should have been framed in other departments also. The pleasure of the President has lost some of its majesty and power as it is controlled by the provisions of article 311. Rules of superannuation are based on considerations of life expectation, mental capacity of civil servants having regard to climatic conditions under which they work and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. There can be no analogy between the rule of superannuation and rules 148(3) and 149(3) of the Code. If any rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2). 685 Where a rule is alleged to violate the constitutional guarantee afforded by article 311(2), the argument of contract between the parties and its binding character is wholly inappropriate. Per Subba Rao, J. Rules 148(3) and 149(3) which confer a power on the appointing authority to remove a permanent servant on notice, infringe the constitutional protection guaranteed a Government servant under articles 14 and 311 of the Constitution A permanent post and rules such as 148(3) and 149(3) cannot stand together and the latter must inevitably yield to the former. It is neither the phraseology nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are terminated by giving him 15 day 's notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal,in the latter case,it must be equally so. In both cases, article 311(2) is attracted. Compulsory retirement before age of superannuation is not an incident of tenure. It does not work automatically. It is not conceived in the interest of the employee. It is a mode of terminating his employment at the discretion of the appointing authority. As a matter of fact, whatever the language used in that connection, it is a punishment imposed on him. It not only destroys his title but also inevitably carries with it a stigma and hence such a termination is dismissal or removal within the meaning of article 311. A title to an office must be distinguished from the mode of its termination. If a person has title to an office, he will continued to have it till he is dismissed or removed from there. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of protecting it. If under such rules, a person acquires title to an office, whatever mode of termination is prescribed and whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service and that inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitutional protection given to Government servants, who have title to office against their arbitrary and summary dismissal. Government cannot by rule evade the provisions of article 311. Parties also cannot contract themselves out of the constitutional provision Per Das Gupta, J. Rule 148(3) does not contravene Art 311(2). A railway servant to whom R. 148(3) applied has two 686 limitations put on his right to continue in service, viz., termination on attaining a certain age and termination of service on a notice under R. 148(3). Where service is terminated by order of retirement under R. 2046, the termination is of a service where the servant has no right to continue and it is not removal or dismissal. Likewise when service is terminated by notice under R. 148(3) that termination is not removal or dismissal. The words 'removal ' and 'dismissal ' in article 311 mean and include only those terminations of service where a servant has acquired a right to continue in the post on the basis of terms and conditions of service and such other terminations where though there is no such right, the order has resulted in loss of accrued benefits. Terminations of service which do not satisfy either of these two tests do not come within any of these words. Both articles 309 and 310 are subject to article 311. If any rule is made under article 309 as regards conditions of service of a Government servant in the matter of his dismissal or removal or reduction in rank, it has to comply with the requirements of article 31 1. Before an order dismissing or removing or reducing a Government servant in rank is made by President or Governor in exercise of his pleasure, President or Governor has to comply with the requirements of 311(2). Under Art 310, all servants of the State hold office during the pleasure of the President or Governor as the case may be. That means that the officer has no right to be heard before his services are terminated. Article 311 provides an exception in the case of removal or dismissal. However, R. 148(3) contravenes article 14 as it does not give any guidance for exercise of discretion by the authority concerned and hence is invalid. Per Shah, J.Rules 148(3) and 149(3) do not infringe Art.311(2) or article 14of the Constitution. There is neither logic nor law in support of the contention that r. 148(3) contravenes article 311(2). The termination of employment under r. 148(3)does not involve the public servant concerned in loss of any right which he has already acquired. It does not amount to loss of a post to which he is entitled under the terms of his employment because the right to a post is necessarily circumscribed by the conditions of employment which include r. 148(3). It also does not cast any stigma upon him. Mere determination of employment, of a public servant, whether he is a temporary employee, a probationer, a contractual appointee or appointed substantively to hold a permanent post, will not attract the provisions of article 311(2) unless the determination is imposed as a matter of punishment. A railway servant who has accepted employment on the conditions contained in the rules, cannot after having obtained employment, claim that the conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the 687 condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard. This exception is founded not on any right in the public servant to elect, but on t invalidity of the covenant or regulation. There is no distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement terminating temporary employment or employment on probation and orders terminating employment after notice under R. 148(3) An appointment to a public post is always subject to th pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution. A person appointed substantively to a post does not acquire a right t hold the post till he dies. He acquires merely a right t hold the post subject to the rules. If employment is validly terminated, the right to hold the post is determined even apart from th exercise of the pleasure of the President or the Governor. public servant cannot claim to remain in office so long as he is of good behavior. Such a concept of the tenure of a public servant 's post is inconsistent with articles 309 and 310 of the Constitution. Rules 148(3) and 149(3) do not infringe article 14 of the Constitution. article 14 forbids class legislation but it does not forbid reasonable classification for the purpose of legislation. special conditions in which the railways have to operate and t interests of the nation which they serve, justify the classification If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the rule which authorises termination of employment to the liability to be struck off as infringing article 14. It is true that R. 148(3) does not expressly provide for guidance to the authority exercising the power conferred by it, but on that account, the rule cannot be said to confer an arbitrary power and be unreasonable or be in its operation unequal. The power exercisable by the appointing authority who normally is if not the General Manager, a Senior Officer of the Railways. In considering the validity of an order of determination of employment under r. 148, an assumption that the power may be exercised mala fide and on that ground discrimination may be practiced, is wholly out of place. Because of the absence of specific directions in R. 148, governing the exercise of authority conferred the by the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority when having regard to the nature of the employment and the service to be rendered, importance of the efficient functioning of the rail transport in the interest of national economy and the 688 status of the authority invested with the exercise of power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest or on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully and possibility of abuse of power will not invalidate the conferment of power. Case law referred to.

longest

o. 160 of 1952) under article 32 of the Constitution of India for the enforcement of fundamental rights. The facts of the case and arguments of the counsel are stated fully in the judgment. Petitioner No. I (Aswini Kumar Ghosh) in person. B. Sen for the respondents. N. C. Chatterjee (S.N. Mukherjee and B. Sen, with him) for the Incorporated Law Society, Calcutta High Court (Intervener No. 1) Dr. N. C. Sen Gupta (A. K. Dutt and V. N. Sethi, with him) for the Secretary, Bar Association, Calcutta High Court (Intervener No. 2). N. C. Chatterjee (B. Sen, with him) for Secretary, Bar Library, Calcutta High Court (Intervener No. 3). C. K. Daphtary, Solicitor General for India (G. N. Joshi and J. B. Dadachanji, with him) for the Secretary, Bar Association, Bombay High Court (Intervener No. 4). K. B. Naidu for Secretarv, Advocates ' AssociationMadras High Court (Intervener No. 5). M. C. Setalvad, Attoney General for India (Intervener No. 6). October 27. The The judgment of Patanjali Sastri C.J. and Vivian Bose and Ghulam Hasan JJ. was delivered by Patanjali Sastri C. J. Mukherjea and, Das JJ. delivered separate judgments. 5 PATANJALI SASTRI C. J. This is an application under article 32 of the Constitution for relief in respect of an alleged infringement of the fundamental right of the petitioners under article 19 (1) (g) or, alternatively, under article 136 for special leave to appeal from a judgment of the High Court of Judicature at Calcutta rejecting their application for the same relief under article 226. As the petitioners would clearly be entitled to relief under the one or the other form of remedy if their claim was well founded, no objection was taken to the maintainability of the present proceeding, and we desire to guard ourselves against being taken to have decided that a proceeding under article 32 would lie after an application under article 226 for the same relief the same facts had been rejected after due enquiry by a High Court. We express no opinion that point. The facts leading to this proceeding are not in dispute and may be briefly stated. The first petitioner is an Advocate of this Court and his name is also the roll of Advocates of the High Court of Calcutta. As an Advocate of the latter Court he is entitled, under the relevant rules there in force, both to act and to plead the Appellate Side but not to act or to appear, unless instructed by an Attorney, the Original Side. 18th July, 1951, he filed in the Registry the Original Side a warrant of authority executed in his favour by the second petitioner to defend the latter in a pending suit. The warrant was returned 27th July, 195 1, with the endorsement that it "must be filed by an Attorney of this Court under the High Court Rules and Orders, Original Side, and not by an Advocate". The return was made by an Assistant in charge of Suit Registry Department, who is called as the first respondent to this petition. The second respondent is the Registrar, Original Side, who is alleged to have refused the same ground to accept a warrant filed earlier in a company matter. It is conceded that the action of the respondent would be 6 valid apart from the right claimed by the first petitioner as an Advocate of this Court under the Supreme Court Advocates (Practice in High Courts) Act, 1951, (hereinafter referred to as the new Act) which provides that such Advocates are " entitled as of right to practise" in any High Court in India. The petitioners, however, claimed that the right to practise thus conferred included also the right to act as well as to appear without the intervention of an Attorney the Original Side, and moved the High Court under article 226 for issue of appropriate writs orders or directions to the respondent for enforcement of the right denied to them. A Special Bench consisting of Trevor Harries C.J., Chakravartti and Banerjee JJ. heard the motion and dismissed it, holding that the first petitioner did not, being enrolled as an Advocate of the Supreme Court, become entitled to act the Original Side of the Court. The second petitioner has since dropped out of these proceedings, and the first petitioner, who appeared in person and argued his case before us, is hereinafter referred to as the petitioner. I As the issues involved are of far reaching importance to certain sections of the Bar at Calcutta and at Bombay, this Court directed notice of the proceeding to be served the Incorporated Law Society, Secretary Bar Association, and Secretary, Advocates ' Association, Calcutta High Court, and Secretary, Bar Association, Bombay High Court, and all of them appeared by their learned counsel, while the Attorney General appeared in person as intervener. We have thus had the advantage of a full argument from all points of view. A brief historical survey of the functions, rights and duties of legal practitioners in this country may facilitate appreciation of the contentions of the parties. Before the Indian High Courts Act of 1861 (24 and 25 Vic. 104) was enacted, there were, in the territories subject to the British rule in India, Supreme Courts exercising jurisdiction mainly in the 7 Presidency Towns and Sudder Courts exercising jurisdiction over the mofussil. Though the Supreme Courts were given, by the Charter Acts and the Letters Patent establishing them, power to enroll Advocates who could be authorised by the rules to act as well as to plead in the Supreme Courts, rules were made empowering Advocates only to appear and plead and not to act, while Attorneys were enrolled and authorised to act and not to plead. In the Sudder Courts and the Courts subordinate thereto, pleaders who obtained a certificate from those Courts were allowed both to act and plead. When the Supreme Courts and the Sudder Courts were abolished and their jurisdictions were transferred to High Courts under the statute of 1861, this differentiation in the functions of legal practitioners was continued in the High Courts under the notion, apparently, that the High Court, in the exercise of its Ordinary Original Jurisdiction, was the successor of the Supreme Court, and that, the Appellate Side, it inherited the jurisdiction and powers of the Sudder Courts, with the result that Advocates were allowed only to appear and plead instructed by Attorneys empowered to act the Original Side as in the Supreme Court, while the Appellate Side, they were allowed both to act and plead as in the Sudder Courts. There was also another class of practitioners known as Vakils who were neither allowed to act nor to plead the Original Side, but were allowed both to act and plead the Appellate Side. Within a short time, however, the Vakils at Madras were permitted by a rule made by the High Court to appear, plead and act the Original Side as wel1 vide In the Matter of the Petition of the Attorneys(1) but the cleavage between the two jurisdictions, Original and Appellate, was maintained in the Calcutta and Bombay High Courts with modi fications by means of rules framed by the respective High Courts from time to time. While this was the position in the High Courts in the three Presidency Towns of Calcutta, Bombay and Madras, no distinction (1) (1876 78) I.L.R. I Mad. 24. 8 was drawn between Advocates and Vakils (except in the matter of authorisation by their clients) as regards their right to appear, plead and act in the other High Courts subsequently established in British India without original jurisdiction. The position in these Courts was correctly stated by a Full Bench of the Allahabad High Court thus: " Not only by the Letters Patent but by the Civil Procedure Code, an Advocate may act for his client in this Court in the manner in that statute set forth and do all things that a Pleader, that is, a Vakil, may do, provided always that he. be upon the Roll of the Court 's Advocates": Bakhtawar Singh vs Sant Lal(1). In this situation, the , (Act XVIII of 1879) which consolidated and amended the law relating to Legal Practitioners was passed. By section 4 it empowered the Advocates and Vakils enrolled in any High Court to "practise" in all subordinate courts and in any other High Court with the "permission" of the latter Court. No Vakil or 'Pleader, however, was to be entitled to "practise" in a High Court exercising jurisdiction in a Presidency Town. By section 5 all persons enrolled as Attorneys in any High Court became "entitled to practise" in all courts .subordinate to such High Court and in any court in British India other than a High Court established by Royal Charter the roll of which he is not entered. It is worthy of note that the right to practise thus conferred included the right to plead a,; well as to act in all the courts referred to above. Then came the , which was enacted in response to a demand by the legal profession for unification and autonomy of the Bar, and it achieved a certain measure of both, eliminating the two grades of practitioners, the Vakils and the Pleaders, by merging them in the class of Advocates who, were "entitled as of right to practise" in the High Courts in which they were enrolled and in any other court in British India, subject to certain (1) (1887) 9 All. 617, 621. 9 exceptions. It also provided for the constitution of Bar Councils for the High Courts with power to regulate the admission of Advocates, to prescribe their qualifications and to inquire into any case of miscouduct that may be referred to them. But the right to practise and the power to make rules were not to limit or in any way affect the unlimited powers of the High Courts at Calcutta and Bombay to make rules allowing or disallowing Advocates to practise their Original Side: (vide section 9 (4) and section 14). While such was the position of Advocates in the courts in what used to be known as British India, it is not a matter of dispute that Advocates practising in the courts of what were known as Indian States were allowed to appear, plead and act behalf of suitors. It will thus be seen that legal practitioners, by whatever name called, practising in all the High Courts in India, except the Original Side of the Calcutta and Bombay High Courts, and in the innumerable subordinate courts all over India were always entitled to plead as well as to act. In the Original Side of the Calcutta and Bombay High Courts alone, where the cleavage between the Original and Appellate jurisdictions continued to be marked, due, as we have seen, to historical reasons, the functions of pleading and acting, which a legal practitioner normally combines in his own person, were bifurcated and assigned, following "the usage and the peculiar constitution of the English Bar" (per Lord Watson in the case cited below), to Advocates and Attorneys respectively. In this situation, the establishment of the Supreme Court of India, exercising appellate jurisdiction over all the High Courts naturally stimulated the demand for the unification of the Bar in India, and Parliament enacted the new Act as a step towards that end. It is a brief enactment intituled "an Act to authorise Advocates of the Supreme Court to practise as of right in any High Court" and consists of only two 10 sections. Section I describes the short title of the Act and section 2 enacts (so far as material here : "Notwithstanding anything contained in the , or in any other law regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court may, be permitted to practise in that High Court every Advocate of the Supreme Court shall be entitled as of right to practise in any High Court whether or not he is an Advocate of that High Court: Provided that nothing in this section shall be deemed to entitle any person, merely by reason of his being an Advocate of the Supreme Court, to practise in any High Court of which he was at any time a judge, if he bad given an undertaking not to practice therein after ceasing to hold office as such judge. " According to the petitioner 's contention, an Advocate of the Supreme Court becomes entitled as of right to appear and plead as well as to act in all the High Courts including the High Court in which he is already enrolled, without any differentiation being made for this purpose between the various jurisdictions exercised by those courts. The word "practise" as applied to an Advocate in India includes both the functions of acting and pleading, and there is nothing in section 2 to warrant the cutting down of that statutory right to pleading only the Original Side of the Calcutta High Court as the respondents seek to do. the other hand, the respondents contend that the non obstante clause in the first part of the section furnishes the key to the proper interpretation of its scope, and inasmuch as that clause supersedes only those pro visions of the Bar Councils Act, and of any other law which exclude persons not entered in the roll of Advocates of a High Court from the right to practise in that Court, the enacting clause must be construed as conferring only a right co extensive with the disability removed by the opening clause; that is to say, the section is designed only to enable Advocates of the Supreme Court who are not enrolled as 11 Advocates of any High Court to practise nevertheless in that High Court. The petitioner, who is already an Advocate of the Calcutta High Court, could derive no additional right from the section in relation to that Court, as he does not fall within the purview of the section. Alternatively, even if the provision is read as conferring Advocates of the Supreme Court the right to practise in relation to all the High Courts in India, including the High Courts in which they are already enrolled, the section does no more than entitle them to practise in conformity with the conditions subject to which advocates are permitted to practise in those Courts, for the word "practise" is a term of indefinite import and, as applied to an Advocate, it may mean pleading or acting or both, according to the conditions under which the profession of an Advocate is exercised in the court concerned. Both branches of this contention have found favour with the learned Judges of the court below. A third view was also suggested in the course of the debate before us. An Advocate of the Supreme Court is entitled under the Rules of that Court only to appear and plead and not to act, while Agents who are enrolled as such are entitled only to act but not to appear and plead. In dealing with the right of Advocates of the Supreme Court to "practise" in the High Courts, Parliament must therefore be taken to have used that word in the sense only of appearing and pleading, the object of section 2 being only to confer the Supreme Court Advocates the right to appear and plead in all the High Courts and no further or other right. Having given the matter our most careful and anxious consideration, we have come to the conclusion that the petitioner 's contention is correct and must prevail. As we have already seen, there are in this country more than 20 High Courts (including the Judicial Commissioners ' Courts which are treated as High Courts for this purpose), and in all these 12 High Courts excepting the original jurisdiction of the Calcutta and Bombay High Courts and in all the numerous subordinate courts, both civil and criminal, existing all over the country, an Advocate combines in himself both the functions of acting and pleading which constitute the. normal activities of all legal practitioners except members of the English Bar whose "usage and peculiar constitution" allow them only to appear and plead and not to act. It would seem that this peculiar British system of division of functions between Barristers and Attorneys is not in vogue even in all the British Dominions and Colonies. For instance, in the report of the case Queen vs Doutre(1), we find counsel for the respondent stating in the course of his argument that "In all the Provinces of Canada the functions of Barristers and Solicitors are united in the same person and the rules of the English Bar do not apply there". In upholding in that case the right of counsel to sue for and recover a quantum meruit in respect of professional services rendered by him, the Judicial Committee remarked: "Their Lordships entertain serious doubts whether in an English Colony where the common law of England is in force, they (i.e., general considerations of public policy) could have any application to the case of a lawyer who is not a more advocate or pleader and who combines in his own person various functions which are exercised by legal practitioners of every class in England all of whom, the Bar alone excepted, can recover their fees by an action at law. " It seems reasonable, therefore, to assume that the practice of law in this country generally involves the exercise of both the functions of acting and pleading, behalf of a litigant party; in other words, the Bar in India, generally speaking, is organised as a single agency. Accordingly, when the Legislature confers upon an Advocate "the right to practise" in a Court, it is legitimate to understand that expression as authorising him to appear and plead as well as to (1)(1883) 9 App. 13 act behalf of suitors in that Court. It is true that the word "practice" used in relation to a given profession means simply the pursuit of that profession and involves the exercise of the functions which are cordinarily exercised by the members of the pro fession. But it seems to be fallacious to relate that expression, as applied to an Advocate, either, the one, hand, to the Court in which the Advocate is enrolled or, the other, to the Court in which he seeks to exercise the statutory right conferred him. It must, in our opinion, be related to the general constitution of the Bar in India as a single agency in dealing with the litigant public, a system which prevails all over this vast country except in two small pockets where adual agency imported from England was maintained, owing, as we have seen, to historical reasons. We are accordingly unable to accept the suggestion that because the Advocates of the Supreme Court are not, under the Rules of that Court, entitled to act, the word "practise" as used by Parliament in section 2 must be understood in the restricted sense of appearing and pleading only. Parliament was, of course, aware that the right of the Advocates of the Supreme Court to practise in that Court was confined only to appearing and pleading, but the object of section 2 was to confer upon a designated body of persons, namely, the Advocates of the Supreme Court, a right to practise in other courts, viz., the various High Courts in India, whether or not they were already enrolled in such courts. This statutory right, which is conferred the Supreme Court Advocates in relation to other courts and which they did not have before) cannot, as a matter of construction, be taken to be, controlled by reference to what they are allowed or not allowed to do in the Supreme Court under the Rules of that Court. Such Rules are liable to be altered at any time in exercise of the rule making power conferred by article 145 of the Constitution. The scope and 14 content of the new statutory right conferred in relation to the High Courts could not have been intended to depend the varying scope of the functions which the Supreme Court Advocates are allowed to, exercise in that Court from time to time. Besides, the consequences of such a construction would be somewhat startling. For instance, if an Advocate of the Supreme Court not entered the Roll of the Allahabad High Court desired to practise in the latter Court where there are no Attorneys or Agents, he would find himself in a difficult situation. It was said that a, local Advocate could be engaged to instruct him, acting for the client. Even if it were permissible to substitute a local Advocate for an "Agent" to overcome the disability imposed by Order IV, Rule 11, of the Supreme Court Rules which prohibits an Advocate from appearing "unless he is instructed by an Agent", it would be tantamount to introducing a new type of dual agency where it does not exist at present, an innovation which, we think, could hardly have been contemplated. Such an interpretation would also render the right conferred by the new Act largely illusory in practice. The construction adopted by the learned Judges of the High Court, which relates the word "practise" in section 2 to the High Court in which the Supreme Court Advocate seeks to exercise his right, seems to us to be equally open to objections. In their view, that word as applied to the same Advocate should be understood in a wider or narrower sense in relation to different High Courts, and indeed, to different jurisdictions of the same High Court, according to the rules there in force. They say: "Since the section applies to a number of different High Courts where different conditions of practice prevail, the word 'practice ' has no one particular and invariable meaning in the section but its meaning must vary according as the section is applied to one High Court or another. In its application to each High Court it will have the meaning which an Advocate 's right to practise bears in that Court at 15 the time under the local rules and regulations. This meaning may be wider in relation to one High Court and narrower in relation to another, and even in relation to the same High Court it may not always remain the same, for a High Court may enlarge the professional rights of its Advocates and if it does so, Advocates of the Supreme Court will, thereafter, have the enlarged rights in that Court. But at any given point of time the rights of an Advocate of the Supreme Court to practise in any particular High Court in exercise of the power conferred him by section 2 can at most be co extensive with but no greater than the right which Advocates of that Court themselves possess at the time. " We are unable to agree with this ambulatory inter pretation of section 2. It may be that the full sense of the word "practise" as including. , both acting and pleading may be out down by the context in which it is used in a particular statute. But we do not find any such context in the language of the new Act or in its object as we conceive it. The construction which the learned Judges have placed section 2 was supported before us by attributing to the word ((practise" the "dictionary meaning", as it was called, of exercising a profession and postulating the exercise by the Advocate of the Supreme Court of different professions in different High Courts in which he may seek to appear. Thus, he exercises the profession of a Madras Advocate while appearing in Madras; the profession of an. Appellate Side Advocate or of an Original Side Advocate, as the case may be, while appearing those sides of the Calcutta and the Bombay High Courts, and so . The object of this curious differentiation is to read the different conditions under which. an Advocate exercises his professsion in each of those Courts or jurisdictions into the word "practise" itself as the necessary implication of its dictionary meaning so as to bring in the exclusion of acting the Original Side as part of its connotation. We find it difficult to appreciate this view. The Advocate of the Supreme Court in all the cases 16 referred to above seeks to practise only one profession, namely, the profession of an Advocate. As such he would be bound to observe the rules of practice of each Court, that is, the prescribed procedure for conducting legal proceedings in the Court concerned; but a rule which denies to him the right to exercise an essential part of his function by insisting a dual agency the Original Side is much more than a rule of practice and the power of making such a rule, unless expressly reserved by the new Act, as it was reserved in section 9 (4) and section 14(3) of the Bar Councils Act, would be repugnant to the right conferred by section 2. In this connection, it may be pertinent to point out that the power of the High Courts to make rules of practice regulating the procedure to be followed in the conduct of proceedings before them and the power to frame rules regulating the admission and conduct of legal practi tioners were always derived from distinct sources originally under different clauses of the Letters Patent establishing them and later from the Civil Procedure Code and the Bar Councils Act. The learned Judges have also overlooked an important distinction between the position of an Advocate of the Calcutta or the Bombay High Court in relation to his Court and that of an Advocate of the Supreme Court in relation to those Courts. The former is not entitled to practise "as of right" the Original Side of his High Court as his right to practise is made under section 14(1) (a) expressly subject to section 9(4) which reserves the power of those Courts to exclude him from such right so far as the Original Side is concerned. In other words,the local Advocate is not entitled "as of right" to practise the Original Side of those two High Courts, whereas it is open to argument and indeed is now argued that the Advocate of the Supreme Court becomes under the new Act entitled to practise "as of right" in all High Courts without any distinction in the matter of the jurisdictions exercised by them, because no, such power is preserved and continued in the new Act. In view of this 17 difference, which is vital to the petitioner 's contention, it is not correct to say that the right conferred the Supreme Court Advocate "can at most be co extensive with but no greater than the right which Advocates of that Court themselves possess at the time". Here, indeed, we reach the crux of the whole case. Now, section 14(1) (a) of the Bar Councils Act enacts 14.(1) An Advocate shall be entitled as of right to practise (a) subject to the provisions of subsection (4) of section 9, in the High Court of which he is an Advocate," and Section 9(4) provides: "Nothing in this section or in any other, provision of this Act shall be deemed to limit or in any way affect the powers of the High Courts of Judicature at Fort William in Bengal and at Bombay to prescribe the qualifications to be possessed by persons applying to practise in those High Courts respectively in the exercise of their original jurisdiction or the powers of those High Courts to grant or refuse, as they think fit, any such application, or to prescribe the conditions under which such persons shall be entitled to practise or plead." Section 14(3) reads "Nothing in this section shall be deemed to limit or in anyway affect the power of the High Court of Judicature at Fort William in Bengal or of the High Court of Judicature at Bombay to make rules determining the persons who shall be entitled respectively to lead and to act in the High Court in the exercise of its original jurisdiction. " It is to be noted that by virtue of the last two provisions to which the right of local Advocates is made expressly subject, the High Courts of Calcutta and Bombay have the power to "grant or refuse as they think fit" the application of any person applying to practise in the Original Side of those Courts, and the power to make rules laying down who shall plead and 18 who shall act that side. It is in exercise of these powers that the High Courts have framed the rules, to which reference has been made, cutting down the right of the Advocates of those Courts to practise the Original Side to appearing and pleading only and otherwise imposing restrictions that right, such as, that they shall not appear unless instructed by an Attorney. That is to say, the Advocates of those Courts are not entitled to practise as of right the Original Side. As the powers thus reserved are exercisable only in regard to the Original Side, the Advocates of these Courts are under section 14(1) (a) entitled as of right to practise in the appellate and other jurisdictions exercised by those Courts. Similarly, under section 2 of the new Act every Advocate of the Supreme Court is entitled as of right to practise in any High Court. But it is significant that no power is reserved, to the Calcutta or the Bombay High Courts to cut down this statutory right and confine it to pleading alone the Original Side. Why were the reservations which the Legislature took care to insert in the Bar Councils Act in conferring a statutory right of practice Advocates of the High Courts omitted in the new Act in conferring a similar right in similar terms the Advocates of the Supreme Court in relation to the High Courts? Why this departure from the pattern of what is, in this respect, a closely analogous piece of legislation? The respondents made two,answers to this question neither of which seems to us satisfactory. One was that the word "practise" itself connoted, in relation to the Original Side of the Calcutta and Bombay High Courts, only pleading and not acting, as Advocates of those Courts practising that side had long been only appearing and pleading instructed by Attorneys who acted for the suitors. This argument we have already rejected. But, even so, why insert section 9(4) in the Bar Councils Act and make the right under section 14(1) (a) subject to the overriding powers under section 9(4)? If the argument were valid, such provisions would have been wholly unnecessary, for, 19 even in their absence, the word "practise" would con . note only pleading and not acting. This indeed is an additional ground for rejecting that construction. It is legitimate, therefore, to conclude that the Legiglature used the word "practise" both in the Bar Councils Act and in the new Act in its full sense of acting and pleading, but while in the case of Advocates of the Calcutta and Bombay High Courts it has expressly preserved and continued the power of those courts to restrict or exclude the right of practice the Original Side, it has reserved no such overriding power under the new Act with the result that any restrictive rule cutting down the statutory right would be repugnant to section 2 and therefore void and inoperative. A similar view of the effect of section 14(1) (a) of the Bar Councils Act was expressed by a Full Bench of the Madras High Court in Powers of Advocates, In re (1), where it was held that a rule made by that Court excluding the Advocates enrolled there from acting the Insolvency Side became invalid and inoperative after the enactment of that Act, and we entirely agree with that decision. The learned Judges below attempted to distinguish that case, as Mr. Chatterjee for the respondents did before us, by observing that because the Bar Councils Act made no distinction between the different jurisdictions of the Madras High Court and the rules of that Court allowed the Advocates to act and plead the Original as well as the Appellate jurisdiction thereof, the learned Judges construed the word "practise" in section 14 to mean both acting and pleading. That is not a correct view of the reasoning employed by the Full Bench. The learned Judges failed to see that such reasoning would indeed lead to the opposite conclusion. As a matter of, fact, there was a rule under which the local Advocates were prevented from acting and they had accordingly not acted in the insolvency jurisdiction of that Court, so that if "practise" in section 14(1) (a) were to be construed (1) Mad. 92, 20 in the light of what the Advocates bad been doing in the past under the rules of that Court, the Court would have had to hold that the Advocates acquired no new right by virtue of section 14(1) (a) But the Full Bench held that they did and the gist of their reasoning was thus put by Kumaraswami Sastri J. who delivered the leading judgment: "The word 'practise ' ordinarily means 'appear, act and plead, unless there is anything in the subject or context to limit its meaning. I am of opinion that where an Act confers rights to a party in general terms and entitles him to perform more than one function, the cutting down of those rights by a rule would make that rule repugnant to the provisions of the Act. " It was next suggested that no support for the petitioner 's contention could be derived from the absence in the new Act of reservations like those contained in sections 9 (4) and 14 (1) (a) of the Bar Councils Act because the power of framing rules regarding legal practitioners given to the Chartered High Courts under their respective Letters Patent could be exercised only in respect of the Advocates enrolled in those Courts, and the reservation of a power so limited would be meaningless in the new Act which deals with the rights of the Supreme Court Advocates. This argument overlooks that those High Courts had unfettered discretion to admit or to refuse admission to any person to practise as an Advocate, Vakil or Attorney. Clause 9 of the Letters Patent of the Calcutta High Court, for instance, empowers that Court "to approve, admit and enroll such. . Advocates, Vakils and Attorneys as to the said High Court shall seem meet". The Bar Councils Act also assumed that a power to exclude any person from practising the Original Side existed in the High Courts, as is shown by section 9 (4) which provides that nothing contained in that Act shall be deemed to affect the power of the Calcutta and the Bombay High Courts to grant or refuse the application of "persons " applying to practise the Original Side of 21 those Courts or their power to prescribe the conditions under which " such persons" could practise that side. Be it noted that the word used is not " Advocates " which, in view of the definition in section 2 (1) (a), would indicate a power confined to the Advocates of those Courts. And when that Act proceeded to empower by section 14 (1) (a) an Advocate enrolled in a High Court to practise as of right in that Court, it took care to make it clear that the right so conferred was subject to the exercise of the power reserved under section 9 (4). But, as pointed out already, it is significant that Parliament, in conferring a similar right under the new Act the Supreme Court Advocates, did not reserve any such overriding power. In the absence of such reservation, the statutory right of a Supreme Court Advocate to plead as well as to act in the High Courts of Calcutta, and Bombay in the exercise of their original jurisdiction cannot be taken away or curtailed by those Courts, and any rules which they may have made in the past purporting to. exclude any Advocate from acting their Original Side, or from appearing and pleading unless he is instructed by an Attorney cannot affect such right. Turning now to the non obstante clause in section 2 of the new Act, which appears, to have furnished the whole basis for the reasoning of the Court belowand the argument before us closely, followed 'that reasoning we find the learned Judges begin by inquiring what are the provisions which that clause seek , to supersede and then place upon the enacting clause such Construction as would make the right conferred by it co extensive with the disability im posed by the superseded provisions. The meaning of the section will become clear", they, obser, "if we examine a little more closely what the, section in fact supersedes or repeals. The disability which the section removes and the right which it confers are coextensive. " This is not, in our judgments a correct approach, to the construction of section 2. It should 4 22 first be ascertained what the enacting part of the section provides, a fair construction of the words used according to, their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment. We will revert to this clause again presently. Following their line of approach, the learned Judges reached two conclusions: first, that section 2 confers no new right an Advocate of the Supreme Court in relation to the High Court in which he is already enrolled, but gives him the right to practise in the High Courts in: the roll of which he was not entered as, an Advocate. The petitioner was accordingly not within the purview of the section in relation to the Calcutta High Court of which. he was already an Advocate; and secondly, that the only pro visions superseded by the non obstante clause are section 8 (1) and section 14 (2) of the Bar Councils Act and Rule 38 of Ch. V of the Original Side Rules of the Calcutta High Court and a similar rule framed under section,15 (b) of the Bar Councils Act by the Calcutta Bar, Council, which prescribe the conditions subject to which Advocates of other High Courts are permitted to practise the Original and Appellate Sides of. that Court and the corresponding rules then in force in, the Bombay High Court. These provisions alone, it was said fell within the description " regulating the conditions subject to which a person not eptered in the roll of Advocates of a High Court may be. permitted to practise in that High Court. " All other provisions of the Bar Councils Act,, including sections 9 (4) and 14 (3), as well as other rules of the Original. Side of both Calcutta and Bombay High Courts have not been superseded or repealed by section 2 of the new, Act but continue in force. We now proceed to examine whether these conclusions are well founded. Much ado was made an both sides ;about the comina occurring just before the word " or " in the 23 non obstante clause, the petitioner stressing its importance as showing that the adjectival clause " regulating the conditions etc. " does not qualify the words " " which are separated by the comma and that, therefore, the whole of that Act is superseded, while 'learned counsel for the respondents insisted that in construing a statute punctuation marks should be left out of consideration. Nothing much we think, turns the comma, as it seems I grammatically more correct to take the adjectival clause as qualifying " law ". Having 'regard to the words anything contained" and the preposition "in" used after the disjunctive "or", the qualifying clause cannot reach back to the words " Bar Councils Act ". But, whichever way we take it, it must be admitted that, in framing the non obstante clause, the draftsman had primarily in, mind those Provisions which stood in the way of an Advocate not enrolled in any particular High Court practising in that Court. It does not, however, necessarily follow that section 2 is concerned only with the right of Advocates of the Supreme Court to practise in the High Courts in which they are not enrolled. The true scope of the enacting clause must, as we have observed, be determined a fair reading of the words used in their natural and ordinary meaning, and in the present case, there is not much room for doubt the point. The words " every Advocate " and " whether or not he is an Advocate of that High Court" make it plain that the section was designed to apply to the Advo cates of the Supreme Court not only in relation. to the High Courts of which they are not Advocates but also in relation to those High Courts in which they have been already enrolled. The learned Judges below dismissed the words " whether or not etc. " with the remark that " they are not very apposite ",,as " no one who is an Advocate of a particular High Court requires to be an Advocate of the Supreme Court in order to practise in that Court". While it may be true to say that section 2 does not give Advocates of many of the High Courts any additional right 24 in relation to their own Courts, it would, according to the petitioner 's contention, give at least to the Advocates of the Calcutta and Bombay High Courts some additional right in the Original Side of those Courts, and that may well have been the purpose of using those words. It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute. Nor can we read the non obstante clause as specifically repealing only the particular provisions which the learned Judges below have been at pains to pick out from the Bar Councils Act and the Original Side Rules of the Calcutta and Bombay High Courts. If, as we, have pointed out, the enacting part of section 2 covers all Advocates of the Supreme Court, the non obstante clause can reasonably be read as overriding " anything contained" in any relevant existing law which is inconsistent with the new enactment, although the draftsman appears to have had primarily in his mind a particular type of law as conflicting with the new Act. The enacting part of a statute must, where it is clear, be taken to control the non obstante clause where both cannot be read harmoniously; for, even apart from such clause, a later law abrogates earlier laws clearly inconsistent with it. Posteriores leges priores contrarias abrogant (Broome 's Legal Maxims, 10th Edn., p. 347). Here, section 2 entitles every Advocate of the Supreme Court as of right to practise in any High Court in India. The phrase " entitled as of right " has evidently been adopted from the Bar Councils, Act, and we have already indicated our view that; the word "Practise as applied to a legal practitioner in,,, India includes, in the absence of any limiting or restrictive; context, both the functions of acting and pleading. The phrase " entitled as of right to practise " is an emphatic affirmation of a right to plead, and to act independently,of the will or discretion of any other person. Could it be said that sections 9 (4)and 14 (3) 25 of the Bar Councils Act are consistent with the existence of such a right ? As we have seen already, section 9 (4) preserves the powers of the High Courts at Calcutta and Bombay, among other things, " to grant or refuse, as they think fit " the applications of persons to practise in those High Courts in the exercise of their original jurisdiction How could a person be said to be entitled as of right to practise in a High Court if that Court has unfettered power to reject his application to practise an important side of its jurisdiction ? Similarly, bow Could a person be said to be entitled as of right to pleadin a High Court if that Court has the power to frame a rule which pre cludes him from pleading in the original jurisdiction of ;that Court unless he is instructed by an Attorney? Obviously, sections 9 (4) and 14 (3) of the Bar Councils Act and section 2 of the new Act entitling an Advocate of the. Supreme Court as of right to practise in any High Court cannot stand together. Whether by force of the non obstante clause liberally construed as indicated above or of the wellestablished maxim of construction already referred to, the new Act must have the effect of abrogating the powers reserved and continued in the High Courts by the aforesaid provisions of the Bar Councils Act. We cannot, therefore, agree with the learned Judges below that the said two provisions have not been superseded or repealed by section 2. As we have already observed, if such reservations bad also been inserted in the new Act, the analogy with section 14 (1) (a) of the Bar Councils Act would have been complete and the petitioner as an Advocate of the Supreme Court could be prevented by rules made in appropriate terms from acting the Original Side of the Calcutta and the Bombay High Courts. But, in the absence of such reservations in the new Act, his claim in these proceedings must succeed. It has been said in the course of the argument that, notwithstanding the absence of such reservations in the new Act, it must be assumed that the Advocates of the Suprme Court have become entitled to practise 26 in any High Court only subject to the rules and regulations of that Court or, as the High Court put it " section 2 does not confer Ian uncharted freedom the Advocates of the Supreme Court to practise in any High Court in any way they like, but only puts them, in each different High Court, a par with the; Advocates of that Court, where they must submit to the same terms and conditions as bind those Advocates". Otherwise, it was said, the Supreme Court Advocates would be "let loose" to practise in all Courts freed of all obligations to observe the rule and regulations of those Courts and the result would be confusion and chaos. Therefore, it was urged, the rules of the Calcutta and Bombay High Courts, which preclude Advocates of those Courts from acting the Original Side of their jurisdiction or from pleading without the intervention of an Attorney, are binding upon Supreme Court Advocates as well. We see no force in the argument which seems to proceed a misconception. The right of an Advocate to practise, as we have seen, normally Comprises the exercise of his two fold function ' of acting and pleading without the intervention of anybody else. Any rule or condition that prevents him from exercising one of those functions is plainly a cutting down of his right to practise and, affecting as it does the sub stance of his right, is in its operation, quite unlike the rules and conditions of practice under which all Advocates normally carry their business in courts. No one suggests that a Supreme Court Advocate is, by becoming entitled to practise in the High Courts, freed from all. obligation to conform to the ruler, of practice and regulations as, to costume and Such other matters, according to which the profession of law must be exercised in the various High Courts. There is a vital distinction between such rules and regulations and the rules which seek to out down the sub stance of an Advocate 's right to act and to plead by excluding him from the exercise of the one or the other of those two functions. The Bar Councils Act recognises this distinction by expressly reserving the 27 power of the High Courts of Calcutta and Bombay to exclude or impose restrictions upon the right of Advocates to plead and to act the Original Side, whereas no similar reservation has been considered necessary in respect of the power to make rules and regulations of the former type, because they were not regarded as derogating from the substance of the statutory right to practise. Suppose, for instance, the Calcutta, High Court made a rule that no person other than those mentioned in Rule 2 (1), Chapter I of the Original Side Rules (i.e., practising Barristers in England, N. Ireland, etc.) will be entitled to appear and plead its Original Side, could it reasonably be suggested that such a rule was only a matter of "internal administration" and, as such, would bind all Advocates practising in that Court even apart, from section 9 (4) ? Any rules which prevent an Advocate from acting the Original Side or appearing that side without the intervention of an Attorney constitute a serious invasion of his statutory right to practise, and unless the power to make such rules is reserved in the statute which confers the right they cannot prevail against that right. Reference was also made in this connection to the difficulty of exercising disciplinary control over the Supreme Court Advocates practising in the High Courts in which they are not enrolled but such difficulty, if any, may arise under both the interpretations contended for before us. It is not denied that a Supreme Court Advocate is entitled to, appear and plead and act the Appellate Side of all the High Courts and the question as to how disciplinary jurisdiction is to be exercised over him in relation to his activities the Original Side will have to be determined the same lines as in relation to his activities the Appellate Side and the possibility of any such difficulty arising cannot be more of an objection to the one construction than to the other. There was much argument before us as to the ob ject which Parliament had in view in passing, the; new, Act, each side suggesting an object which would 28 support the construction which it sought to place upon section 2. Each side relied upon the "statement of objects and reasons" annexed to the Bill in support of its own contentions. Reference was also made to speeches made the floor of the House by members during the debate the Bill. Our attention was also called to the form of the Bill as originally introduced in the House and its amendment by omitting part (a) of the proviso to clause (2) thereof. As regards the speeches made by the members of the House in the course of the debate, this Court has recently held that they are not admissible as extrinsic aids to the interpretation of statutory provisions: The State of Travancore Cochin & Another vs The Bombay Co. Ltd. etc.(1). As regards the propriety of the reference to the statement of objects and reasons, it must be remembered that it seeks only to explain what reasons induced the mover to introduce the Bill in the House and what objects he sought to achieve. But those objects and reasons may or may not correspond to the objective which the majority of members had in view when they passed it into law. The Bill may have undergone radical changes during its passage through the House or Houses, and there is no guarantee that the reasons which led to its introduction and the objects thereby sought to be achieved have remained the same throughout till the Bill emerges from the House as an Act of the Legislature for they do not form part,of the Bill and are not voted upon by the members. We, therefore, consider that the statement of objectsand reasons appended to the Bill should be, ruled out as an aid to the construction of a statute. The omission of part (a) of the proviso to clause (2) of the Bill seems to us to stand no higher footing. It sought to exclude from the purview of the Bill the right of an Advocate of the Supreme Court to plead or to act in any, High Court in the exercise of its original jurisdiction,. Its omissions was strongly relied by the petitioner as indicating the intension of (1) ; 29 Parliament that the right of a Supreme Court Advocate to plead and to act should prevail also the Original Side of a High Court. It was urged that acceptance or rejection of amendments to a Bill in the course of Parliamentary proceedings forms part of the pre enactment history of a statute and as such might throw valuable light the intention of the legislature when the language used in the statute admitted of more than one construction. We are unable to assent to this proposition. The reason why a particular amendment was proposed or 'accepted or rejected is often a matter of controversy, as it happened to be in this case, and without the speeches bearing upon the motion, it cannot be ascertained with any reasonable degree of certainty. And where the legislature happens to be bicameral, the second Chamber may or may not have known of such reason when it dealt with the measure. We hold accordingly that all the three forms of extrinsic aid sought to be resorted to by the parties in this case must be excluded from consideration in ascertaining the true object and intention of the Legislature. In the result, treating this proceeding as an appeal from the judgment of the High Court, we set aside the order of that Court and direct the respondents to receive any warrant of authority which the first; petitioner may produce from the legal representative of the second petitioner who is reported to have died in the course of the proceeding. We make no order as to costs. MUKHERJEA J. This case has been argued before us with elaborate fulness by the 'petitioner No. 1, Mr. Aswini Kumar Ghosh, who appeared in person, as well as by a number of eminent counsel representing the Barristers ' and Advocates ' Associations in the three principal High Courts in India. Having given their learned arguments the best consideration that I am capable of, I have come to the conclusion that this application cannot succeed. 30 The matter in controversy is a very short one. The petitioner No. I is an Advocate of the Calcutta High Court entitled to practise both its Original and Appellate Sides. This means, that he can both plead and act the Appellate Side of the Court and plead only its Original Side. Mr. Ghosh later got himself enrolled as an Advocate of the Supreme Court and after the passing of the Supreme Court Advocates (Practice in High Courts) Act, 1951, he asserted his right, the strength of the provision of that enactment, to " or act" also the Original Side of the Calcutta High Court. He actually filed "a warrant of power and appearance" behalf of the petitioner No. 2 in a suit pending in the Original Side of that Court in which the latter figures 'as the defendant. The warrant was returned to him by the Suit Registrar, Original Side, with an endorsement it, that it must be filed by an Attorney of the Court under the rules and orders of the Original Side of the High Court, and not by an Advocate. Being aggrieved by this refusal, the petitioners presented an application before the Calcutta High Court under article 226 of the Constitution, complaining of infraction of the right conferred upon the first petitioner by Act XVIII of 1951 and praying for an appropriate writ or order to enforce the same. A rule was granted this application by Bose J. sitting singly; and eventually, having regard to the importance of the question involved in the application, the rule was heard by a Special Bench of three Judges, con sisting of Trevor Harries C.J. and Chakravartti and Banerjee JJ. By the judgment, which was delivered by Mr. Justice Chakravartti 21st December, 1951, the rule was discharged and the application of the petitioner was dismissed. The petitioners have now come up to this court a substantive petition under article 32 of the Constitution and have also prayed for special leave to appeal against the judgment of the Calcutta High Court. We admitted the petition and issued notices to the Attorney General of India as well as to the Barristers ' and Advocates "Associations in those High Courts in India which are likely, 31 to be affected by the decision in the case. A number of them, as said above, appeared before us through counsel and we had also the advantage of hearing the learned Attorney General the points that were raised in course of hearing. The sole point for consideration in this case is, whether the petitioner No. 1, who is an Advocate of the Supreme Court ' can, in addition to exercising his right of pleading the Original Side of the Calcutta High Court which is not challenged by anybody, claim, by virtue of the provision of section 2 of Act XVIII of 1951, the right to "act" the Original Side of that Court, although according to the rules framed under the Letters Patent an Advocate of the Calcutta High Court may not appear in the Original Side unless instructed by an Attorney: (vide Chapter 1, Rule 37, of the Original Side Rules). To decide this question we will have to investigate the precise extent of the right that has been conferred upon the Supreme Court Advocates by section 2 of the Act mentioned above and ascertain what exactly is the meaning of the word "practise '. ' as used in that section '. The Act is a very short one and consists only of two sections. The first section gives the name and description of the Act which is intituled "The Supreme Court Advocates (Practice in High Courts) Act" and the object, as stated at the, outset before the enacting clause commences, is to "authorise Advocates of the Supreme Court to practise as of right in any High Court". The entire provision of the Act is contained in section 2 which runs thus "Notwithstanding anything contained in the (XXXVIII of 1926) or in any other law regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court, may be permitted to practise in that High Court every Advocate of the Supreme Court shall be entitled as of right to ' practise in any High Court whether or not he is an Advocate of that High Court". 32 Upon this,aproviso is engrafted to the following effect that"nothing in this section shall be deemed to entitle any person merely by reason of his being an Advocate of the Supreme Court to practise in a High Court of which he was at any time a Judge, if he had given an undertaking not to practise therein after ceasing to hold office as such Judge". Then follows a short explanation which simply lays down that the expression "High Court" in the section includes the Court of a Judicial Commissioner and the statute ends there. It may be mentioned at the outset that the Supreme Court was established in the year 1950 and article 145(1) of the Constitution empowered the Court to make rules "for regulating generally the practice and procedure of the court" including (a) rules as to the persons practising before the Court '. The Supreme Court Advocates were not entitled to practise as of right in any of the High Courts/in India. The rules made by the different High Courts impose considerable restrictions and disabilities upon the Advocates of other High Courts who wanted to appear and conduct cases before them. The power to grant or withhold permission to these outside Advocates lay for the most part in the exercise of an unfettered discretion by the Chief Justice of the Court, and that too in individual cases, and instances were not rare of such permission being refused to lawyers of acknowledged eminence belonging to other High Courts. After the establishment of the Supreme Court in India and with the prospect of a united Bar looming in the minds of the people, this was felt to be extremely unjust and anomalous. It was primarily to remedy this defect in the existing law, that this particular enactment was passed by the legislature and the legislative purpose, as is disclosed in the language of the enactment, is to allow the Supreme Court Advocates access to the other High Courts in India as of right, untrammelled by any restriction or condition that the High Courts themselves might lay down in respect to the "Outside 33 Advocates. So far there is little room for any controversy. The dispute centers round the point as to the extent of right that the legislature conferred upon the Supreme Court Advocates in achieving this legislative purpose. The question is, what meaning is to be attributed to the word "practise" as used in the section ? Mr. Ghosh argues that the word "practise" in its ordinary and literal sense would mean the right to appear, plead and to act 'as well; and it is an established rule of construction that a literal interpreta tion should not be departed from unless there are adequate grounds for such departure. It is said next that the literal meaning of the word "practise" cannot be out down or controlled in any way by the language of the opening clause in section 2 of the Act; and that clause which maybe described as a non obstante clause is not confined in its operation to removal of the disabling provisions affecting those whose names are not entered as Advocates the roll of a particular High Court, but has the effect of excluding all the provisions of the Bar Councils Act for purposes of this enactment. It is further argued that the words "whether or not he is an Advocate of that High Court" occurring in section 2 unmistakably indicate that the legislature had not in mind the removal of disabilities attaching to outside Advocates merely, but that it intended to confer certain privileges domestic Advocates as well who happened to be enrolled as Advocates of the Supreme Court. All these matters require to be examined carefully. The word "practise" when used with reference to a profession means "to follow, pursue, work at, or exercise such profession". The profession Of an Advocate may contemplate both acting and pleading; under certain circumstances it may mean pleading alone without acting, but it can never mean acting simply, for those who are entitled to act only and have no right to plead do not come within the description of Advocates at all. There are other classes of nonAdvocate lawyers who like Solicitors and Agents can 34 act only but cannot plead, and to the carrying of their profession also the same expression practise" is applied. What is to be remembered in this connection is that the profession of an Advocate can be carried only in a court of law and within the framework of the rules and regulations that obtain in such court. The word "practise" when used with reference ,to an Advocate is an elastic expression, having no rigid or fixed connotation and the precise ambit of its contents can be ascertained only by reference to the rules of the particular forum in which the profession is exercised. Thus in the Supreme Court Rules the expression "Advocate" has been defined to mean "a person entitled to appear and plead before the Supreme Court". He has no right of acting at all. In Order IV, Rule 31, of the Rules, this right of an Advocate to 'appear and plead has been spoken of as the right of "practising"; while in the rule that follows, the function of an Agent, who can only act and not plead, has also been spoken of as "practice" before the Court. In the Bar Councils Act the right of practice as an Advocate has been defined in section 14 (1) which lays down that "an Advocate shall be entitled as of right to practise (a) subject to the provisions of subsection (4) of section 9, in the High Court of which he is an Advocate". The word "practise" has apparently been used here in the general sense of both pleading and acting and these rights have been limited by and made subject to the rules which the High Courts of Calcutta and Bombay may make, determining the persons who shall be entitled to plead and to act in these High Courts in the exercise of their original jurisdiction. Sections 9 (4) and 14 (3) of the Bar Councils Act expressly reserve to the Calcutta and the Bombay High Courts the power to make rules in this respect and under the rules framed by them an Advocate is not permitted to appear the Original Side unless he is instructed by an Attorney 35 The words "entitled to practise as of right" which occur in section 14 (1) mentioned above have also been used in other parts of the Bar Councils Act, to wit, in sections 4 (2), 5 (1) and 8 (1) of the Act; but the word "practise" in all these provisions does not mean pleading find acting in an unlimited sense. It connotes the same rights and the same limitations which are prescribed in section 14 of the Act. The same expression has been used in section 2 of the Supreme Court Advocates Act apparently in the same sense and with the same implications and it cannot be argued that it connotes an unrestricted right of pleading and acting because the reservations mentioned in section 14 (1) of the Bar Councils Act have not been repeated there. Mr. Ghosh has in this connection drawn our attention to two reported cases, one of which is a pronouncement of the Patna High Court and the other of the Madras High Court. In the Patna case(1) the question &rose as to whether an Advocate or Vakil whose name appeared the roll of any High Court could "act" behalf of his client by presenting an application for review of a judgment in a case which was tried by a court subordinate to the High Court. The question was answered in the affirmative and reliance was placed upon section 4 of the which lays down that "an Advocate or Vakil enrolled any High Court 'shall be entitled to practise in all courts subordinate to the court the roll of which he is entered". This case, it is to be noted, deals with Advocates ' right to practise in subordinate courts where no distinction at all exists between pleading and acting. Consequently, the word "practise" in this context does include both pleading and acting. In the Madras case(1) the point for consideration was, whether an Advocate enrolled in the High Court of Madras 'under the was entitled not only to appear and plead (1) Laurentius Ekka vs Dhuki, Pat 766. (2) In re the Powers of the Advocates, [1928] I.L.R.52 Mad. 92, 36 but also to "act" in the insolvency jurisdiction of the court, in spite of the provision in Rule 128 of the Insolvency Rules of the High Court, which gave such right only to the Attorneys. It was held that the Advocate had the right to "act" by reason of the provision contained in section 14 (1) of the Bar Councils Act which entitled an Advocate to practise as of right in the High Court in which he is an Advocate; and because so far as the Madras High Court was concerned the Bar Councils Act made no distinction between different jurisdictions of the court and did not save the powers of the court to frame rules in respect of the original and insolvency jurisdictions. In these circumstances, a rule which cut down the right conferred by sections 8 and 14 of the Bar Councils Act would be deemed to be repealed under section 19 (2) of the Act as being repugnant to its provisions. It was expressly stated in the judgment that the position was different in regard to the Bombay and Calcutta High Courts and so far as these courts were concerned, their powers were expressly saved by the Bar Councils Act. This decision clearly shows that the 'expression " practise" would not include "acting" if with regard to particular jurisdictions of a High Court there are valid rules to the contrary. The question for our consideration really is, what exactly is the position of a Supreme Court Advocate who wants to avail himself of the right of practising in any High Court in India in terms of section 2 of the Supreme Court Advocates Act? Is he to exercise the right only as a Supreme Court Advocate and in accordance with the rules which the Supreme Court itself has laid down in this respect, or is his position, when he appears before a High Court, the same as that of an Advocate enrolled in the said court and he has the same rights and disabilities which attach to such persons under its rules? The only other alternative that is or can be suggested and has been put forward behalf of the petitioner is that he is not ' fettered by any rules either of the Supreme Court or of the particular High Courtr in,which he appears; 37 and as the extent of his right depends upon the language of the section itself, the legislature by using the word "practise" has conferred upon him the righ of both pleading and acting in any High Court he chooses, irrespective of the rules of practice which obtain in such court. The first view does not appear to me to be tenable. 'I If it is held, that what the section contemplates is that a Supreme Court Advocate in exercising his right of practice in any High Court should be governed by the Supreme Court Rules, the Act itself would be altogether unworkable. It is laid down in Order IV, Rule 12, of the Supreme Court Rules that "no person shall appear as Advocate in any case unless he is instructed by an Agent. By "Agent" is meant an Agent of the Supreme Court and under no provision of law is such Agent entitled to act in any High Court in India. The result, therefore, is that if the Supreme Court Rules are applied, no Advocate would be entitled to appear in any High Court at all. It cannot be argued that even though the rules of the Supreme Court may not be strictly applicable, the intention of the legislature is that a Supreme Court Advocate in appearing before a High Court either the Original or the Appellate Side shall have only the right of pleading and he has to be instructed by an Attorney or a local Advocate who is competent to act. Whatever the merits of this view might otherwise be, the language of the section does not at all warrant such a construction and it cannot seriously be suggested that the word " practise ",.must in all cases be confined to pleading only. The result of such a construction would be to extend the dual system which is at present confined to the Original Sides of the Calcutta and the Bombay High Courts to all the High Courts in India, in all their jurisdictions and to the subordinate courts as well a possibility which the legislature could never have contemplated. To me it seems that when section 2 speaks of a Supreme Court Advocate being entitled as of right to practise in any High Court, what it actually means is 38 that he would, be clothed by reason of this statutory provision with all the rights which are enjoyed by an Advocate of that Court and his right to plead or to act would depend upon. the provisions of the Bar Councils Act and the rules validly framed by the said Court, subject to this that no rule or provision of law would be binding, which would affect in any way his statutory right to practise in that Court solely by reason of his being enrolled as an Advocate of the Supreme Court. It is suggested that if this was the intention of the legislature, nothing could have been easier for it than to state explicitly that a Supreme Court Advocate would have the right to practise in any High Court in the same way as an Advocate of that Court. In my opinion, that is the implication of the general word It practise " that has been used. As said already, the practice of an Advocate must always have reference to a court and it must imply the carrying of the profession according to the rules which. are binding that court, except to the extent that the rules themselves are invalidated expressly or by necessary implication. If the legislature had expressly stated that an Advocate qualified under section 2 of the Act would have the right of both pleading and acting in any High Court in India or if that was the clear intendment. and implication of the language used, any rule conflicting with that provision could certainly have been held to be invalid; but I am unable to say that the use of the word " practise " which has only a general import, by itself, would have that effect. Looked at from this standpoint, the third view indicated above, which has been pressed vehemently behalf of the petitioner, cannot certainly be supported. So long as the rules relating to pleading and acting in particular jurisdictions of specified High Courts are allowed to remain valid and binding, no intention can be imputed to the legislature, without clear words to that effect, of abrogating these rules with regard to the few persons who happen to be enrolled as Advocatess of the Supreme Court. Far 39 from achieving uniformity in any sense of the word, such step would lead to serious anomaly and practical difficulties of an enormous character. the original jurisdictions of the Calcutta and the Bombay High Courts, where the dual system subsists, there are elaborate rules regarding the functions of the Solicitors who alone are competent to act that side, both in 'relation to the courts and to the litigants. The whole procedure is of a different type, dissimilar in many respects to that which is laid down in the Civil Procedure Code. It would be difficult, if not impossible, for an Advocate of the Supreme Court, who chooses to act the Original Side of the Calcutta or the Bombay High Court, to fit himself within the framework of these rules. He cannot possibly carry unless a fresh set of rules is prepared and the framing of new rules, which must exist side by side with the old rules, would lead to further complications and diversities. The position would certainly have been understandable if it could be held that the legislature wanted to do away with the dual system altogether and introduce one set of rules which would apply uniformly to all classes of lawyers. Speaking for myself, I would consider that to be an extremely desirable change; but I look in vain for expression of any such legislative intent either in the enactment itself or even in its historical background. The object of the legislation is quite simple. It is only to allow Advocates of the Supreme Court the right to practise in all the High Courts in India irrespective of the rules framed by them imposing restrictions the right of Advocates whose names do not appear their rolls. From the mere use of the word it practise ", the connotation of which is not at all definite, I am unable to hold that it was the intention of the legislature to introduce such sweeping changes in the existing rules which the acceptance of this view would imply. This leads me to an examination of the other parts of section 2 of the Act to discover, what light, if any, they throw upon the present question. 40 It is one of the settled rules of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase or sentence is to be considered in the light of the general purpose and object of the Act itself. Mr. Justice Chakravartti of the Calcutta High Court laid very great stress the opening clause of section 2 of the Act which excludes the operation of certain statutory provisions, and this negative part of the section constitutes, according to the learned Judge, the measure and criterion of the right which the positive part formulates. The first question is, to what extent the provisions of any existing law have been eliminated by the opening clause of section 2 The language of the clause is as follows: " Notwithstanding anything contained in the Bar Councils Act (XXXVIII of 1926), or in any other law regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court may be permitted to practise in that High Court. . . . ." Mr. Justice Chakravartti is of opinion that this clause purports to remove all those provisions of the Bar Councils Act or of any other law which imposed restrictions upon persons not enrolled as Advocates of a particular court in the matter of practising in that court. The exclusion is to this extent and no further; and consequently all the other provisions contained in the Bar Councils Act or other statutes which lay down the conditions 'under which an Ad vocate enrolled in a High Court is entitled to practise in the Original Side of that Court, stand unaffected by that clause. If these provisions remain valid and effective, it is quite reasonable to hold that the word "practise " in the section must mean " practise " in accordance with these rules and not in supersession of them. The contention of Mr. Ghosh is that a proper construction of the language of the claue the whole of the Bar Councils Act and not merely those provisions in it, which relate to disabilities attaching to 41 Advocates of other High Courts, must be deemed to be eliminated, so that the right of practising that is conferred by the section is to be exercised without the restrictions or limitations flowing from any of the provisions of the Bar Councils Act. In support of his contention that the whole of the Bar Councils Act is excluded by the opening clause, Mr. Ghosh lays great stress a comma, which separated the Bar Councils Act and the figures and words that follow, from the expression " or in any other law " which comes immediately after that. He says further that under the ordinary rules of interpretation the adjectival phrase " regarding the conditions etc." should be taken to apply to the word or phrase immediately preceding it and not to the remoter antecedent term or expression. These arguments, though they have an air of plausibility about them, do not impress me much, Punctuation is after all a minor element in the construction of a statute, and very little attention is paid to it by English, courts. Cockburn C.J. said. in Stephenson vs Taylor (1) : " the Parliament Roll there is no punctuation and we therefore are not bound by that in the printed copies". It seems, however, that in the Vellum copies printed since 1850 there are some cases of punctuation, and when they occur they can be looked upon as a sort of contemporanea expositio(2). When a statute is carefully punctuated and there is doubt about its meaning, a weight should undoubtedly be given to the punctuation(1). I need not deny that punctuation may have its uses in some cases, but it cannot certainly be regarded as a controlling element and cannot be allowed to control the plain meaning of a text(4). Similarly, although a relative or a qualifying phrase is normally taken with the immediately. preceding term or expression, yet this rule has got to be discarded if it is against common sense and natural (i) (i861) 1 B. & section page 101. (2) See Craies Statute Law, page 185. (3) Vide Crawford Statutory Construction, Page 343. (4) lbid. 42 meaning of the words and the expressions used. I find considerable force in the opinion expressed by Chakravartti J. that in the present case the effect. of the position of the comma or the particular array of ,words in the sentence has been completely neutralised I by the use of the word " other " occurring in the #phrase " or in any other law ". The result is, as the learned Judge has said, that the Bar Councils Act has been posited as an alternative to other laws and both have been subjected to the qualification contained in the qualifying clause. Assuming, however, for argument 's sake that Mr. Ghosh is right and that the whole of the Bar Councils Act is eliminated by the opening clause of the section, I do not think that even then it really improves his position. The Bar Councils Act itself does not make any provision relating to the rights of pleading and acting in the Original Side of any High Court. Sections 9(4) and 14(3) of the Act save only the rights of the High Courts of Calcutta and Bombay to make rules in relation thereto ; and these rules are made by these courts in the exercise of their powers under the Letters Patent. Section 19(2) of the Bar Councils Act lays down as follows: " When sections 8 to 16 come into force in respect of any High Court of Judicature established by Letters Patent, this Act shall have effect in respect of such Court notwithstanding anything contained in such Letters Patent, and such Letters Patent shall, in so far as they are inconsistent with this Act or any rules made there under, be deemed to have been repealed. " If the entire Bar Councils Act is excluded for purposes of section 2 of Act XVIII of 1951, the rules framed by the High Courts of Calcutta and Bombay under the Letters Patent would remain valid and effective of their own force even without the saving provision contained in the above mentioned section of the Bar Councils Act, and section 19(2) of the Act being out of the picture, the Letters Patent would 43 also remain fully alive. The result will be that Rule 37, Chapter I, of the Original Side Rules of the Calcutta High Court or Rule 40(2) of Chapter II of the Bombay High Court Rules, under which no Advocate can appear in the Original Side of these courts unless instructed by an Attorney, would not come within the purview of the opening clause of Section 2, as they do not relate to matters regulating the conditions of outside Advocates. Rule 6, Chapter I, of the Bombay High Court Rules, to which our attention was drawn by the learned Attorney General, lays down that an Advocate of any other High Court may appear in a particular case, with the permission of the Chief Justice, the Original Side of the Court, provided he is instructed by an Attorney, and an Advocate of the Bombay High Court appears along with him. In my opinion, the whole of this provision must be deemed to be invalid for purposes of section 2 of Act XVIII of 1951, and a Supreme Court Advocate,, who wants to appear and plead in a case in the Original Side of the Bombay High Court, has neither to take the permission of the Chief Justice nor is it necessary that he should have along with him an Advocate of that court. He should certainly be instructed by an Attorney, but that is because of the other provisions, which I have already mentioned, and which apply to the Advocates of the Bombay High Court itself. I would be quite prepared to hold that what has been excluded by the opening clause of section 2 of the Act may not be the exact measure of the new right that the section purports to create. In my opinion, the section its negative side eliminates so far as the Supreme, Court Advocates are concerned, all disabling provisions existing under any law in regard to persons who are not enrolled as .Advocates of any particular High Court. the positive Side, the section confers Supreme Court Advocates the statutory privilege of practising as of right, in any High Court in India, no matter whether he is enrolled as an Advocate of that court or not. 44 It is this positive aspect that has been emphasised by the words "whether or not he is an Advocate of that court" which occur at the conclusion of the section. It may not be strictly correct to say that these words are altogether inappropriate, for the section aims at conferring, though indirectly, ' certain privileges those who are enrolled as Advocates of the particular High Court as well. Section 9 (4) of the Bar Councils Act lays down: "Nothing in this section or in any other provision of this Act shall be deemed to limit or, in any way affect the powers of the High Courts of Judicature at Fort William in Bengal and at Bombay to prescribe the qualifications to be possessed by persons applying to practise in those High Courts respectively in the exercise of their original jurisdiction or the powers of those High Courts to grant or refuse, as they think fit, any such application (or to prescribe the conditions under which such persons shall be entitled to practise or plead). " Provisions of this type are to be found in the Rules of both the Bombay and the Calcutta High Courts. Under Rule 1, Chapter I, of the Calcutta, Original Side Rules, even an Advocate of that court has to make an application for being entitled to appear and plead the Original Side and he can exercise that right only after that permission is granted. Such rules would have no effect after the passing of Act XVIII of 1951 and an Advocate of the Supreme Court will be entitled to plead in the Original Side of the Calcutta High Court as a matter of right and without complying with any of the formalities that may be prescribed by the rules of that court. Mr. Justice Chakravartti expressed doubt as to whether an Advocate of the Supreme Court, who presumably is not an Advocate of the Calcutta High Court, can, as such, plead in the Original Side of the Calcutta High Court. In my opinion, there is no room for doubt this point at all. He is entitled to appear and plead as a matter of right under the express provision of section 2 of the, Act, 45 Mr. Ghose finally attempts to support his Contention that the intention of the legislature was to confer upon the Supreme Court Advocates the right to plead as well as to act in all High Courts in India by calling in aid three other facts. It is said first of all that in the statement of objects and reasons which accompanied the original bill, the right to practise was expressly stated to include both pleading and acting. In the second place it is pointed out that proviso (a) to section 2 which occurred in the original bill and which excluded the right of both pleading and act ing in the Original Side of the High Courts from the operation of section 2 was dropped altogether and the Act was passed without that proviso. Lastly it is urged that the expression "practise", which has been employed in the existing proviso to the section, obviously means both pleading and acting, and it is against sound rules of construction to attach different meanings to the same word used in, two parts of the same section. There are weighty pronouncements of English courts as well as of the Judicial Committee of the Privy Council which lay down that in construing a statute all negotiation previous to the Act or the original form of the bill must be dismissed from consideration. "We cannot interpret the Act" said Lord Halsbury, "by any reference to the bill, nor can we determine its construction by any reference to its original form"(1). It is not permissible to ascertain the meaning of the word used in an Act by reference to the proceedings in the Legislative Council, and the language of a "Minister of the Crown" in proposing a measure in Parliament which eventually becomes law is inadmissible(2). In a, Calcutta case the learned Judges refused to look into the statement of objects and reasons accompanying an enactment as an aid to its construction(3). The (i)Vida Herron V. Rathmins (1802] A.C. 492 at 5o2. (2)Vida Krishna Ayyangar vs Nellaperumal[1920] 47 I.A 33; Assam. Railway & Trading Co. Ltd. vs Inland Revenue Commissioners (1935] A.C, 443; Administrator General of Bengal vs Premlal [1895] 12 I.A. 107 (3) Vida Debendra vs Jogendru, A.I.R. 1936 Cal. 46 judicial opinion this point is certainly not quite uniform and there are American decisions to the effect that the general history of a statute, and the various steps leading up to an enactment including amendments or modifications of the original bill and reports of Legislative Committees can be, looked at for ascertaining the intention, of the legislature where it is in doubt; but they hold definitely that the legislative history is inadmissible when there is no obscurity in the meaning of the statute(1). Even assuming that the latter view is correct, it does not appear to me that the first and the second contentions of the petitioner indicated above are really of any assistance to him. It is true that in the statement of, objects and reasons which was circulated ' along with the original bill, the word "practise" was said to include both Pleading and acting; but at the same time the original bill did not purport to confer at all upon the Supreme Court Advocates, the ' right either of pleading or of acting in any High Court in the exercise of its original jurisdiction. This was expressly laid down in the original proviso (a) to section 2 and the concluding portion of the statement of objects and reasons stood thus: "The present bill is intended to achieve such unanimity by providing that every Advocate of the Supreme Court shall be entitled to practise as of right, in any High Court otherwise than its Original Side." Conceding that Mr. Ghosh is entitled to rely the fact that the first; proviso, which excluded the original jurisdiction of the High Courts from the purview of section 2 was subsequently dropped the dropping of the proviso by itself proves nothing. What the proviso intended was to confine the right of practising which section 2 of the Act conferred Supreme Court ' Advocates exclusively to the appellate jurisdiction of the High Courts. A Supreme Court Advocate as such was not entitled under the proviso to act or plead in the Original Side of any (1) Vide Crawford Oil statutory Construction page 383 47 High Court in India. It is to be noted that this prohi bition had nothing to do with the dual system that exists in the original jurisdiction of the Calcutta and the Bombay High Courts and it was totally unconnected with the provisions of the Bar Councils Act, or the rules of the Calcutta and the Bombay High it Courts in relation thereto. the other hand, if, as I have already stated, section 2 of the Act purported to confer the Supreme Court Advocates the right of practice in the different High Courts in India in the same way as the Advocates enrolled in those, courts are entitled to do, the original proviso (a) purported to cut down that right to a considerable extent. Under this proviso the, Supreme Court Advocates were denied the right of pleading the Original Side of the Calcutta and the Bombay High Courts and they could neither act nor plead the Original Side of the Madras High Court, although they would have those rights under the Bar Councils Act. The dropping of the proviso might mean nothing else than this that this restriction was withdrawn and the rights created by the section without the proviso stood intact. Be that as it may, it is, in my opinion, a most risky thing to attempt to construe the meaning of a word in a statute with the aid of a nonexistent provision. We do not know the reasons why the legislature deleted this clause and it is not permissible for us to speculate these matters. A reference to the legislative debates or the speeches that were actually delivered in the floor of the House is, in my opinion, inadmissible to ascertain the meaning of the words used in the enactment. The use of the word "practise" in the, proviso to section 2, as it now stands, is also a matter of no im portance. Section 2 confers certain additional rights upon the Supreme Court Advocates and they have the right of practising in all the High Courts in India subject, as I have said, to the rules and regulations binding the Advocates in each one of them. The proviso makes an exception to this rule, and in case 48 an Advocate of an particular High Court, who became a Judge of that court, gave an undertaking at the time when he assumed his office that he would not practise in that court after he ceased to be a Judge, the provision in the section could not be availed of by him in the face of his undertaking. This is the plain meaning of the proviso. Apparently the legislature was not in the least concerned when it enacted this proviso with the extent of right which such Advocate possessed when be became a Judge; and the extent of the right would certainly depend upon the rules and regulations of the High Court in which he carried his practice. My conclusion is that the view taken by the Calcutta High Court is the right and proper view to take and this application must fail. I make no order as to costs. DAS J. The present proceedings before us have been initiated a petition by two petitioners. The first petitioner is 'Sri Aswini ' Kumar Ghosh who is an advocate of the Calcutta High Court enrolled the Original Side as well as the Appellate Side of that Court. As such advocate of the Calcutta High Court, he is entitled to act and plead the Appellate Side, but only to plead the Original Side. He has since been enrolled also in this Court as an advocate which term is defined in Order ' 1, rule 2, of the Rules of this Court as meaning a person entitled to appear and plead before the Supreme Court. May 26, 1951, petitioner Aswini Kumar Ghosh served notices the Registrars of the Original Side as well as of the Appellate Side of the Calcutta High Court intimating that, in exercise of the right conferred by the Supreme Court Advocates (Practice in the High Courts) Act, 1951, he, would thenceforth "practise, i.e., act and plead", in the said High Court at Calcutta also as a Supreme Court advocate. July 14, 1951, petitioner Aswini Kumar Ghosh, as a Supreme Court advocate, tendered what he calls a warrant of appearance under rule 58 of the Indian Companies Rules framed by the Calcutta High "Court in the matter of 49 a winding up petition regarding a company. That "warrant of appearance" was returned by the Registrar evidently because rule 58 requires a person who intends to appear the hearing of the winding up petition to leave with or sent to the petitioner or to his attorney a notice of such intention signed 'by him or by his attorney" and does not authorise the filing of a notice signed by an advocate. The second petitioner is one Sri Jnanendra Nath Chatterjee who is the defendant in Suit No. 2270 of 1951 pending the Original Side of the Calcutta High Court. July 18, 1951, petitioner Jnanendra Nath Chatterjee as defendant in the said Suit No. 2770 of 1951 executed a "warrant of appearance and power" in the said suit in favour of the petitioner Aswini Kumar Ghosh. The petitioner Aswini Kumar Ghosh as advocate for the petitioner Jnanendra Nath Chatterjee 'filed the warrant with the Assistant in charge of the Suit Registry Department of the Original Side. This was, clearly done in purported compliance with the provi sions of Chapter 8, rule 15, of the Original Side Rules. That rule, however, requires the defendant to enter his appearance to a writ of summons by filing a memorandum in writing containing the name and place of business of the defendant 's attorney or stating that the defendant defends in person and containing his name and place of business. That rule does not in terms contemplate an advocate acting for a defendant. It is, therefore, not surprising at all that July 27, '1951, the "warrant of appearance" was returned by the respondent Arabinda Bose, the Assistant in the Suit Registry ]Department of the Original Side of the Calcutta High Court, with the endorsament that "the warrant must be filed by an attorney of this Court under High Court Rules and Orders, Original Side, and not by an Advocate". The petitioner Jnanendra Nath Chatterjee thereupon entered appearance in person July 30, 1951, and has been defending the suit in person. The two petitioners, however, moved the Calcutta High Court under article 226 of the Constitution 50 and obtained a Rule calling upon the two respondents Sri Arabinda Bose, the Departmental Assistant, and Sri section N. Banerjee, the Registrar of the Original Side, to show cause why an order or direction in the nature of an appropriate writ should not be issued for the enforcement of the fundamental right of the petitioner Aswini Kumar Ghosh "to practise, i.e., to act and plead the Original Side of this Court", as conferred him by Act XVIII of 1951 and guaranteed by article 19 (1) (g) of the Constitution of India and why consequential orders therein mentioned should not be made. The Rule was heard by a Special Bench of the Calcutta High Court consisting of Harries C.J. and Chakravartti and Banerjee JJ. who discharged the Rule December 21, 1961, and dismissed the petition. As will appear from the judgment of the High Court ' the argument addressed to it "made no reference to the alleged fundamental right and that the petitioner confined his argument to the provisions of the Supreme Court Advocates ( Practice in the High Courts) Act, 1951. " The powers of the High Court under article 226 not being confined to the enforcement of fundamental rights it was possible for the petitioner to rely the rights under the last mentioned Act. The petitioners did not apply for or obtain the leave of the High Court to appeal to this Court. Long after the time fixed by the rules for applying for special, leave to apppal to this Court had expired the petitioners filed the present petition against the same respondents. The. petition is intituled as an application under articles 22 (1), 32 (1) and (2), 135 and 136 (1) of the Constitution of India. In the prayer portion of the petition, the petitioners ask for directions, orders or appropriate writs the respondents for the enforcement of their fundamental rights guaranteed under articles 19 (1) (g) and 22 (1) of the Constitution, an order declaring the right of the petitioner Aswini Kumar, Ghosh act behalf of his clients the Original Side of all, High Courts in India including Calcutta, an order upholding the 51 right of the petitioner Jnanendra Nath Chatterjee to be defended in the said suit by the petitioner Aswini Kumar Ghosh and other consequential reliefs. There is an alternative prayer asking this Court to treat the petition as an application, under article 136, for special leave to appeal against the judgment and order of, the Special, Bench of the Calcutta High Court dismissing the petitioners ' application, under article 226 of the Constitution and for condonation of the delay in presenting the present petition. At the hearing before us it has not been seriously suggested that the rights of the petitioner Jnanendra Nath Chatterjee, fundamental or otherwise, have in any way been infringed. Nor was the petition presented before us as one for the enforcement of any fundamental right of the petitioner Aswini Kumar Ghosh guaranteed by article 19 of the Constitution. What Was pressed before us by the petitioner Aswini Kumar Ghosh, who appeared in, person, was the right said to have been conferred him as an advocate of this Court by section 2 of the Supreme Court Advocates (Practice in the High Courts) Act (Act XVII of 1951) hereinafter in this judgment referred to as "the Act". In the circumstances the petition has not seriously been presented before us as one under article 32 of the Constitution and it is not necessary for me to express any opinion as to whether a petitioner whose application for enforcement of an alleged fundamental right under article 226 has been rejected by the High Court can maintain an application under article 32 to this Court for the same relief based precisely the same facts and grounds. The petition, however,. has been presented before us as an application under article 136 of the Constitution for special leave to appeal from the judgment of the Special Bench of the Calcutta High Court. We have been pressed to proceed with the matter the footing as if special leave to appeal has been given and the delay in the presentation thereof has been condoned by this Court. I deprecate this suggestion ' for I do not desire to encourage the belief that an intending 52 appellant who has not applied for or obtained, the ,leave of the High Court and who does not say a word by way of explanation in the petition as to why be did not apply to the High Court and as to why there ' has been such delay in applying to this Court should nevertheless get special leave from this Court for the mere asking. As, however, the matter has been proceeded with as an appeal, I express my views the questions that have been canvassed before us. There is no dispute that the Act has conferred some new rights the Supreme Court Advocates. The controversy is as to the ambit and scope of the. right so conferred and it has centred round the expression "to practise" used in section 2 of the Act. In order to resolve that controversy we have to ascertain the true meaning of that expression as used in the Act. The provisions of the Act quite clearly apply to and affect all High Courts in India. It is, therefore, necessary to bear in mind the status and position of advocates as they prevail in the different High Courts. The Indian High Courts Act, 1861 (24 & 25 Vic. C. 104) by section I authorised Her Majesty, by Letters Patent, to erect and establish High Courts for the three Presidencies of Bengal, Madras and Bombay. Section 9 of that statute provided that each of the High Courts to be so established should have and exercise civil, criminal and other jurisdiction, original and appellate, as therein mentioned and all such powers and authority for and in relation to the administration of justice in the presidency for which it is established, "as Her Majesty may by such Letters Patent as aforesaid grant and direct. " Section 16 of that statute also empowered Her Majesty to establish a High Court in and for any portion of the territories within Her Majesty 's dominions in India, not included within the limits of the local jurisdiction of another High Court. Pursuant to this authority High Courts were established by Letters Patent at Fort William in Bengal, Madras and Bombay. Clause 9 of the Letters Patent of each of the three Presidency High 53 Courts authorised and empowered each of the said High Courts: "to approve, admit, and enrol such and so many Advocates, Vakils, and Attorneys as to the said High Court shall seem meet; and such Advocates, Vakils and Attorneys shall be and are here by authorised to appear for the suitors of the said High Court, and to plead or to act, or to plead and act, for the said suitors, according as the said High Court may by its rules and directions determine, and subject to such rules and directions. Subsequently other, High Courts were established from time to time by Letters Patent at different places, e.g. Allahabad, Patna,, Lahore and Nagpur, and similar power was, by clause 7 of the respective Letters Patent, conferred each of the said High Courts to make similar,rules. It is well known that each of the High Courts actually framed rules for the admission of advocates, vakils and attorneys. The High Courts of Calcutta, Madras and Bombay divided their jurisdictions into two broad categories, namely, ,original jurisdiction and appellate jurisdiction, and by their Rules made an 'internal classification of the advocates, vakils and attorneys. Thus the advocates or vakils enrolled the Appellate Side were empowered "to appear, act and plead" but the advocates enrolled the Original Side were permitted only "to appear and plead", the "acting" the Original Side being reserved for the attorneys for whom a separate roll was maintained. The, Madras High Court has, however, done away with this internal classification and advocates of that High Court may now appear, act and plead/ the Original Side as well as the Appellate Side. The Calcutta and Bombay High Courts, however, maintained the distinction. Chapter I , rule 37, of the Rules of the Original Side of the Cal cutta High Court provides that persons to whom the rules contained in that chapter are applicable may not appear unless instructed by an attorney. Chapter I. rule 40, of the Rules of the Original Side :of the 54 Bombay High Court is the same lines. Although the remaining Letters Patent High Courts in India have extraordinary original jurisdiction, both civil and criminal, they did not make any distinction between original and appellate jurisdiction as in Calcutta and Bombay and the advocates enrolled in those High Courts were and are permitted "to appear, act and plead" in all their jurisdictions. Apart from the several Letters Patent High Courts other High Courts, e.g., the High Courts of Assam and Orissa, and the High Courts of Part B States, also have framed rules of their own for admission of advocates and according to those rules the advocates of all these High Courts can ((appear, act and plead". The position, therefore, was that, at the date of the Act, all advocates of all High Courts including those of the Appellate Side of Calcutta and Bombay High Courts but excluding only the Original Side advocates of Calcutta and Bombay could "appear, act and plead" in their own High Courts in all jurisdictions but the advocates of the Original Side of those two High Courts could only "appear and plead" the Original Side. Apart from the bar against acting imposed by the High Courts of Calcutta and Bombay their own Original Side advocates, all the High Courts, by their respective rules, prescribed certain conditions subject to which alone an advocate who was not their rolls could "appear and plead" in such High Courts. Chapter I, rule 38, of the Original Side of the Calcutta High Court provides as follows: "An Advocate of any other High Court or Chief Court may with the permission of the Chief Justice appear and plead for parties in matters arising in or out of the original jurisdiction, or in or out of appeals therefrom, provided he is a member of the Bar of England or of Northern Ireland, or a member of the Faculty of Advocates in Scotland, or a person entitled to appear and plead the Original Side of the High Court of Judicature at Bombay, and that he is properly instructed by an Attorney " 55 There is also a rule framed under section 15 (b) of the which applies to the Appellate Side of the Calcutta High Court prescribing that an advocate of another High Court can "appear and plead" the Appellate Side of the Calcutta High Court in a particular case or cases only with the previous permission of the Chief Justice. Reference may in this connection be made to Chapter I, rule 6, of the Bombay Rules applicable to the Original Side and the rule framed under the which applies to the Appellate Side of Bombay High Court and is set out in Schedule II of of the Appellate Side Rules. There is no dispute that each of the other High Courts have rules in pari materia imposing conditions advocates not its roll in the matter of their appearing and pleading in such High Court. Thus it is clear that an advocate not the rolls of a particular High Court could not as of right "appear and plead" in that High Court. He had to satisfy the conditions laid down by that High Court before he could "appear and plead" in that High Court. It should be particularly noticed that under these rules foreign advocates who satisfied the conditions were permitted only to "appear and plead". There never was any question or claim of a foreign advocate being permitted to "act" in a High Court of which, he was not an advocate. The legislature which enacted the Act now under our consideration had full knowledge of the internal classification of the advocates of the Calcutta and Bombay High Courts into Original Side advocates and Appellate Side advocates, the disability of the Original Side advocates of those two High Courts, namely, that they were not permitted "to act" the Original Side and could only ', 'appear and plead", the instruction of an attorney and that the attorneys alone were permitted "to act" that side of those two High Courts. Further the legislature was well aware of the bar imposed foreign advocates, i.e., advocates not the roll of a High Court in the matter of their appearing and pleading in that High 56 Court and the fact that eminent advocates of one High Court were not, many occasions in the past, given permission "to a ' pear and plead" in another High Court. The legislature knew that under Order I, rule 2, of the Supreme Court Rules an advocate had been defined as a person entitled "to appear and plead" before the Supreme Court and that Order IV, rule 30, precluded an advocate from acting as agent and an agent as advocate in any circumstances whatsoever. Finally, the legislature was cognisant of the fact that a Supreme Court advocate was a, foreign advocate in all High Courts other than the one, where he was enrolled and as such was not entitled as of right "to appear and plead" in those High Courts. With knowledge of all these facts and circumstances the legislature proceeded to enact this Act and, therefore, the provisions of the Act have to be considered in the light of these prevailing circumstances which undoubtedly form the background ' of this enactment and which cannot be overlooked or ignored. Turning now to the text of the Act, one cannot but be impressed at once with 'the wording of the full title of the Act. Although there are observations in earlier English cases that the title is not a part of the statute and is, therefore, to be excluded from consideration in construing the statute, it is now settled law that the title of a statute is an important part of the Act and may be referred to for the purpose of ascertaining its general scope and of throwing light its construction, although it cannot override the clear meaning of the enactment. (See Maxwell the Interpretation of Statutes, 9th Edn. P. 44 and the cases cited therein). The full title 'of the Act now under consideration runs thus: "An Act to authorise Advocates of the Supreme Court to practise as of right in any High Court. " One cannot fail to note the words " as of right and the words " in any High Court " which follow immediately. Those two sets of words at once convey 57 to my mind that the act is directly and intimately concerned with the disability imposed by a High Court advocates not its roll in the way of their appearing and pleading in such High Court without the permission of the Chief Justice and without satisfying other conditions if any, and that their purpose is to remove and supersede that disability, so far as the Supreme Court advocates are concerned, by authorising them to do so as of right. The words " as of right " are quite clearly indicative of an independent statutory right as opposed to the conditional right dependent the sweet will of the Chief Justice concerned. Those words are used byway of antithesis and bring out prominently the object of the Act. In view of that well known disability which naturally was irksome, those words cannot fail to convey to one 's mind the conviction that the purpose of the Act, as indicated by its title, is to confer the advocates of the Supreme Court a right which was denied to them by the Rules of the High Courts referred to above. The language in which the title of the Act has been, expressed appears to me to be a good and cogent means of finding out the true meaning and import of the Act, and, as it were, a key to the understanding of it. The matter, however, does not rest the title of the Act alone and I pass to section 2 of the Act which is expressed in the following terms: " Notwithstanding anything contained in the ' (XXXVIII of 1926), or in any other,law regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court may be permitted to practise in that High Court every Advocate. of the Supreme Court shall be entitled as of right to practise in any High Court whether or not he is an Advocate of that High Court. Provided that nothing in this section shall be deemed to entitle 'any person merely by reason of his being all Advocate of the Supreme Court to practise 58 in a High Court of which he was at any time a Judge, if he had given an undertaking not 'to practise therein after ceasing to hold office as such Judge. " It will be noticed that the main body of the section consists of two parts, namely, a non obstante clause beginning with the words " Notwithstanding anything" and ending with the words "permitted to practise in that High Court " and a positive part beginning with the words " every Advocate of the Supreme Court " and ending with the words " of that High Court. " To clear the ground it will be useful, at the outset, to ascertain the 'scope and ambit of the non obstante clause. The controversy this clause has raged round the question whether the adjectival clause, namely, "regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court may be permitted. to practise in that High Court " governs the words " the " as well as the words "any other law" which immediately precede that clause. If that clause also attaches to and qualifies the words "the " then there can remain no manner of doubt that the ambit, scope and purpose of the non obstante clause are to supersede, not the whole of the but, only that part of it which regulates the conditions subject to which a person not entered in the roll of Advocates of a High Court may be permitted to practise in that High Court, that is to say, that the supersession of the Indian Bar Councils. Act is only to the same extent to which that adjectival clause supersedes "any other law". Conscious that such a construction will run counter to his contention, it has been the endeavour of the petitioner Aswini Kumar Ghosh to keep the adjectival clause separated from the words "". For this purpose he fastens the comma appearing after the bracket and before the word "or" and contends that the comma indicates that the qualifying clause does not govern the . 59 The High Court has rejected the contention of the petitioner Aswini Kumar Ghosh two grounds. In the first place it has been said that the comma was no part of the Act. That the orthodox view of earlier English Judges was that punctuation formed no part of the statute appears quite clearly from the observations of Willes J. in Claydon vs Green(1). Vigorous expression was given to this view also by Lord Esher, M. R. in Duke of Devonshire vs Connor(1) where he said In an Act of Parliament there are no such things as brackets any more than there are such things as stops. " This view was also adopted by the Privy Council in the matter of interpretation of Indian statutes as will appear from the observations of Lord Hobhouse in Maharani of Burdwan vs Murtunjoy Singh(1), namely, that " it is an error to rely punctuation in construing Acts of the Legislature. " Same opinion was expressed by the Privy Council in Pugh vs Ashutosh Sen(4). If, however, the rule regarding the rejection of punctuation for the purposes of interpretation is to be regarded as of imperfect obligation and punctuation is to be taken at least as contemporanea expositio, it will nevertheless have to be disregarded if it is contrary to the plain meaning of the statute. If punctuation is without sense or conflicts with the plain meaning of the words, the Court will not allow it to cause a meaning to be placed upon the words which they otherwise would not have. This leads me to the second ground which mainly the High Court rejected the plea of the petitioner Aswini Kumar Ghosh, namely, that the Word "other" in the phrase "any other law" quite clearly connects the with other laws as alternatives and subjects both to the qualification contained in the adjectival clause. I find myself in complete (1) at P. 522. (2) (1890) L.R.Q.13.D 468. (3) (1886) L.R. 14 I.A. 30 at P. 35. (4) (1928) L.R. 56 I.A. 93 at p. zoo, 60 agreement with the High Court this point. If the intention wag that the adjectival clause should not qualify the , then the use of the word "other" was wholly inapposite and unnecessary. The use of that word 'unmistakably leads to the conclusion that the adjectival clause also qualifles something other than "other law". If the intention were that the should remain unaffected by the qualifying phrase and should be superseded in toto for the purposes of this Act the legislature would have said "or in any law regulating the conditions etc. " It would have been yet simpler not to refer to the at all and to drop the adjectival clause and to simply say "Not withstanding anything contained in any law". In the light of the true meaning of the title of the Act as I have explained above and having regard to the use of the word " other " I have, no hesitation in holding, in agreement with the High Court, that what the non obstante clause intended to exclude or supersede was not the whole of the Indian Bar, Councils Act but to exclude or supersede that Act and any other law only in so far as they or either of them purported to regulate the conditions subject to which a person not entered in the roll of advocates of a High Court might be permitted to practise in that High Court and that the comma, if it may at all be looked at,, must be disregarded as being contrary to this plain meaning of the statute. Assuming, however, that the qualifying clause does not attach to the words "", that circumstance will, nevertheless, make no difference in the legal position. 'Section 8(1) of the Indian. Bar Councils A et provides as follows: "No person shall be entitled as of right to practise in auy HighCourt,unless his name is entered in the roll of the advocates of the High Court maintained under this Act: Provided that nothing in this sub section shall apply to any attorney of the High Court. " 61 Section 14(2) runs thus: "Where rules have been made by any High Court within the meaning of clause (24) of section 3 of the , or in the case of a High Court for which a Bar Council has been constituted under this Act, by such Bar Council under section 15, regulating the conditions subject to which advocates of other High Courts may be permitted to practise in the High Court, such advocates shall no be entitled to practise therein otherwise than subject to such conditions." Section 15(b) authorises the Bar Council, with the previous sanction of the High Court, to make rules to provide for and regulate "the conditions subject to which advocates of other High Courts may be permitted to practise in the High Court". As already stated, a rule has been framed under this section by the Calcutta Bar Council as well as by the Bombay Bar Council. These three provisions are the only provisions of the or the rules thereunder which place a bar against an advocate, not the roll of a Hiah Court, from practising in such High Court. It is interesting to note that the nonobstante clause in section 2 of the Act we are construing is couched in language which has unmistakably been taken from sections 14 (2) and 15 (b). There can be no question that a supersession of the will supersede those provisions of that Act and the rules thereunder which " 'regulate the conditions subject to which advocates of other High Courts may be permitted to practise in the High Court". Apart from this I find nothing in the which has any direct bearing section 2 of the Act we are construing or whose supersession is necessary to give effect to it. It is said that the rules of the Calcutta and Bombay High Courts do prescribe the qualifications to be possessed by persona applying to practise in those Courts and the conditions under which such persons will be entitled to practise and reserve to those Courts the right to grant. ' 62 or refuse any application for enrolment. It is also pointed out that the rules of the Original Sides of ' those two High Courts do determine the persons who shall respectively plead and act in those High Courts in the exercise of their original jurisdictions. It is next pointed out that sections 9 (4) and 14 (3) of the preserve these rules and it is contended that a supersession of the in its entirety will do away with sections 9(4) and 14(3) and the protection of those sections having been withdrawn, those rules will con sequently stand abrogated, so as to facilitate the operation of the provisions of section 2 of the Act under review. I am unable to accept, this argument as sound. Sections 9(4) and 14(3) do not purport to give any fresh validity to the rules of the Calcutta and Bombay High Courts. All that those sections do is to declare that nothing in the shall be deemed to limit or affect the powers of those two High Courts which exist in dependently of those two. sections and flow from their respective Letters Patent. Therefore, if the whole of the including sections 9(4) and 14(3) stand abrogated such abrogation will not affect the existence or validity of the rules of those High Courts which will, nevertheless, continue in full force the strength of the Letters Patent of those High Courts. It is clear, therefore, that even if the adjectival clause does not qualify the and if, consequently, the nonobstante clause under review is taken to supersede the whole of the , the effect of such supersession will, for the purposes of section 2, be only to do away with the provisions of sections 8(1) and 14(2) and the rule made under section 16(b) of the in so far as they "regulate the conditions subject to which advocates of other High Courts may be permitted to practise in the High Court" just as it will abrogate all other laws in so far as they regulate those very conditions. The supersession of the whole of the Indian Bar Councils 63 Act will not, therefore, affect the validity of the rules framed by the High Courts under their respective Letters Patent determining the persons who will act and who will plead or who will act and plead and those rules will prevail their own strength and efficacy, although the rules regulating the conditions subject to which foreign advocates can be permitted to appear and plead will stand abrogated by reason of the non obstante clause. In the premises, the result of the construction sought to be founded by the petitioner Aswini Kumar, Ghosh the existence of the comma in the non obstante clause will be precisely the same as it would have been if the comma had not been there and the adjectival clause "regulating the conditions etc." also attached to and qualified the words "Indian Bar, Councils Act. " In short, there is no escape from the, conclusion that the ambit, scope and effect of the non obstante clause are, to supersede the and any other Act only in so far as they regulate the conditions referred to therein. I again emphasise that the rules of the different High Courts regulated the conditions subject to which a foreign advocate would be permitted "to appear and plead. " There was no question of the foreign advocate "acting" in a High Court of which he was not an advocate. The purpose of the non obstante clause is to supersede only the provisions of the and the rules which regulated those, identical conditions. It is not seriously disputed that the legislature in passing the non obstante clause had only those conditions in mind. There can be no manner of doubt, therefore, that the words "to practise" in the non obstante clause mean, in the context, "to appear and plead". The petitioner Aswini Kumar Ghosh then falls back on a second line of reasoning. He urges that whatever may be the meaning, scope and effect of the non obstante clause, it cannot possibly cut down the meaning of the positive words in the operative part of the section. His contention is that the High Court war, wrong in holding that the non obstante clause was 64 coextensive with the operative part. While it may be true that the non obstante clause need not necessarily be coextensive with the operative part, there can be no doubt and the petitioner and Dr. N. C. Sen Gupta appearing for the Calcutta Bar Association and supporting the petitioner do not dispute that ordinarily there should be a close approximation between the two. What he urges is that the Court should not create an ambiguity in the operative part and then use the non obstante clause to cut down the meaning of the plain words used in the operative part of the section. The argument is that the words "to practise" cover both acting and pleading and that, therefore, the operative part of the section authorises the advocate of the Supreme Court as of right "to practise", that is, "to act and plead", in any High Court. The whole case of the petitioner is founded this plea. It is necessary, therefore, to consider whether the critical words have that invariable and fixed meaning when used in relation to an advocate. The verb "practise" according to the Oxford English Dictionary, Vol. VIII, p. 1220, means : to work at, exercise, pursue (an occupation, pro fession or art) ; to exercise the profession of law or of medicine. Similar meaning is to be found assigned to the word in Dr. Annandale 's New Gresham Dictionary. According to this meaning doctors "practise", consulting architects "practise" as well as lawyers "practise" but we know that each of them does different things. Coming to lawyers we find that there are different categories of lawyers all of whom "practise", although all of them do not do the same thing. Thus attorneys "practise" in the Original Sides of the High Courts of Calcutta and Bombay and the agents "practise" in the Supreme Court but we know that under the rules of those Courts the attorneys, and agents only "act". The advocates also, "Practise" but we know that all of them do not perform the same functions. The advocates of all High Courts including those of the Appellate Sides of the Calcutta and 65 Bombay High Courts , under the rules of their respective High Courts, "act and plead" and, as the ambit of the profession of such advocates extends to acting and pleading, the words "to practise" in their application to those advocates undoubtedly mean "to act and plead". The advocates of the Original Sides of those two High Courts can, under the rules, 'only " plead". the Original Side and the ambit and scope of the profession of these Original Side advocates being limited only to pleading, the words "to practise" used in reference to these advocates must mean "to plead" only. There are thus different species of lawyers, some of whom, e.g., attorneys of the Original Sides of Calcutta and Bombay High Courts and agents of this Court, only "act", some others of whom, e.g., the Original Side advocates of those two High Courts and of this Court, only "plead" and all the remaining advocates of all the High Courts both "act and plead". The scope of the professional activities of the different categories of lawyers thus varies but, nevertheless, they are all said "to practise". These words, therefore, connote the general idea of exercising the legal profession, which is their dictionary meaning, and in that general sense apply to all lawyers as a class or genus but at the same time they are capable, in their application to particular species or categories of lawyers, to connote the different professional attributes of those different categories or species. Turning to the we find that the expression "to practise" has been used in various sections in the generic sense I have mentioned. Let me illustrate my meaning by reference to a few sections. Section 4 of that Act deals with the composition of Bar Councils. Sub section (1) provides that every Bar Council shall consist of 15 members, of which 10 shall be elected by the advocates. Sub section (2) then provides : "(2) , Of the elected members of every Bar Council not less than five shall be persons who have for not less than ton years been entitled as of right to 66 practise in the High Court for which the Bar Council has been constituted . " If we give the general dictionary meaning to the words "to practise" used in this sub section then this sub section becomes easily intelligible, but if we say that they mean "to act and plead" then the eligibility will be confined to the advocates who, under the rules, can "act and plead", i.e., to the Appellate Side advocates, and the result of that construction will be that the advocates of the Original Sides of Calcutta and Bombay High Courts even though they are of ten years ' standing will not be eligible for election, for, such advocates do not and indeed cannot, under the rules, "act and plead". Such surely cannot be the case. It follows, therefore, that the words "to practise" in this sub section have been used in their generic sense although they connote different things when applied to different categories of advocates all of whom are within the subsection. Sub section (3) rung thus: (3). Of the elected members of the Bar Councils to be constituted for the High Courts of Judicature at Fort William in Bengal and at Bombay such proportion as the High Court may direct in each case shall be persons who have for such minimum. period as the High Court may determine, been entitled to practice in the High Court in the exercise of its original jurisdiction, and such number as may be fixed by the High Court out of the said proportion shall be barristers of England or Ireland or members of the Faculty of Advocates in Scotland. " If we give the words "to practise" their ordinary dictionary meaning,then the sub section will be quite easy of comprehension but if we say that those words mean "to act and plead " then the sub section will become meaningless, for those words in that sub section refer to the practice of the Original Side advocates only who do not and indeed under the rules cannot at all act on the Original side. It is, there 'fore, clear that the words " to practise " have been used in both sub sections in their generic meaning which is also their dictionary meaning, namely, " to 67 exercise their profession", although in their application to the different species who are within the sub , sections they mean different professional attributes. Thus, in sub section (3) which applies to Original Side advocates only they must mean "to plead" whereas in sub section (2) which applies to all categories of advocates the words have different meanings, that is to say, in relation to advocates other than Original Side advocates they mean "to act and plead" and in relation to the Original Side advocates they mean only "to plead". Same remarks apply to section 5 (1). It will be futile to refer to the principle that the same word should be given the same meaning wherever it occurs in the Act, for the context excludes the application of that principle. Take section 8 (2) of the which provides: "8. (1). . . . (2) The High Court shall prepare and maintain a roll of advocates of the High Court in which shall be entered the names of ' (a) all persons who were, as advocates, vakils or pleaders, entitled as of right to practise in the High Court immediately before the date which this section comes into force in respect thereof;. . . It we do not give to the words "to practise ' in clause (a) their dictionary meaning but read them as meaning "to act and plead" the advocates practising, i.e., only pleading the Original Sides of the Calcutta and Bombay High Courts, will not find their names in the rolls maintained by their respective High Courts under this section. That exclusion is certainly not the purpose of this subsection. Therefore, in this sub section also the words "to practise", means "to exercise their profession". Same remarks apply to the proviso to section 8 (3) (b). I come next to section 14 which provides inter alia: "14. (1) An Advocate shall be entitled as of right to practise (9) subject to the provisions of sub section (4) of section 9, in the High Court of which he is an Advocate;. . 68 By sub section (3) nothing in this section shall be deemed to limit or affect the power of the Calcutta and Bombay High Courts to make rules determining the persons who are respectively to plead and to act the Original Sides of those High Courts. Both those High Courts have made rules under which an Original Side advocate can only "plead", the acting having been reserved exclusively for the attorneys. In the light of the context what is the meaning of the words "to practise" in sub section (1) above ? If we put the ordinary dictionary meaning the words "to practise", namely, "to exercise his profession", the section will be found to be quite intelligible and workable; but if we take them to mean only "to act and plead" then the Original Side advocates who do not "act" but only "plead" will not, strictly speaking, be within the section and consequently will not be able to avail themselves of the protection of section 14 (1) (a). Can it, for a moment, be said that the section gives protection and security to all advocates other than the Original Side advocates and that the latter are not entitled as of right "to practise", i.e., "to plead", in the High Court of which he is an advocate? That cannot be so. The very fact that the right is subject to the provisions of section 9 (4) and that the rule making power of the two High Courts is not affected by virtue of section 14 (3) quite clearly show that the Original Side advocates who cannot act the Original Side are intended also to be included in the term advocate used in sub section (1). If, therefore, this section is to give any security ' to the Original Side advocates, as it does to the Appellate Side advocates, then we must read the words "to practise" in their ordinary dictionary meaning, namely "to exercise his profession". It is thus clear that the words "to practise" have been used throughout the in their general dictionary meaning mentioned above except at the end of section 9 (4). In the same way the word "practising" has been used in Order IV, rule 31, of the Supreme Court Rules in the same generic sense and being used in relation to 69 advocates of this Court it must mean appearing and pleading". In the next following rule the same word has been used in its dictionary meaning although having been used in relation to agents of this Court it must mean "acting". The same ' generic meaning given to the words to practise" will make, section 4 of the easily intelligible and workable The petitioner Aswini Kumar Ghosh, the other hand, relies article 220 of the Constitution and points out that while the words used in the body of the article forbid judges "to plead or act" the marginal note to the article describes the subject matter of the article as "prohibition of practising" and concludes that " to practise " means "to act and plead". In agreement with the High Court I am unable to accept this reasoning., Even assuming that the marginal note may by looked at in considering the article it only means that the draftsman of the marginal note considered that the single word " practise " would be a compendious one. Nobody disputes that the words "to practise" may, in a particular context, mean "to plead or act" but it does not follow that it invariably has that meaning. Further it is clear, as the High Court points out, that what the draftsman did was to find a word which would cover both acting and pleading without attempting to bring out the technical distinction between the two. Nor do I think, for reasons stated by the High Court, that entry 78 of List I in the Seventh Schedule lends any support to the petitioner 's contentions The petitioner then refers us to the decision in Laurentius Ekka vs Dhuk Koeri(1) in support of his contention that the judicial accepted meaning of words "to practise" is "to appear, act and plead" In that case the question was whether an advocate the roll.of the Patna High Court, could present and move a review petition in a subordinate court unless he filed 'a Vakalatnama or was instructed by a pleader (1) (1925) I.L.R. 4 Pat. 766 19 70 of the subordinate court. It was held that an advocate of the High Court, unlike a pleader, aid not need to be appointed in writing to act behalf of his client and even when verbally appointed he could under Order III, rule 1, of the Code of Civil Procedure appear, plead and act behalf of his client and, therefore, when section 4 of the , provided that every person entered as an advocate or vakil the role of any High Court under the Letters Patent should be entitled to "practise" in all Courts subordinate to such High Court, the word " practise" as applied to an advocate of the Patna High Court meant "appear, plead and act". The ratio of the decision is obvious. The scope and ambit of the Patna High Court advocate 's profession covered acting and pleading, and when such an advocate was given the right to practise" in the subordinate court be was authorised to exercise his profession in full, i.e., to act and plead in the subordinate court. In short, the advocate carried the attributes of his profession with him even when he went to exercise his profesSion in the lower court. This decision is no authority for the proposition that the words "to practise" have a fixed and invariable meaning comprising acting and pleading in all cases. The petitioner Aswini Kumar Ghosh then referred us to the case of In re Powers of Advocates(1). , In Madras the High Court in exercise of its powers under clause 9 of the Letters Patent framed a rule empowering advocates to appear, act and plead the Original Side. That rule was held to have been validly made in two earlier decisions. But Rules 128 and 129 of the Insolvency Rules permitted an advocate only to " appear and plead" in 'the Insolvency Jurisdiction and the attorney to act there. In these circumstances the question arose in the Madras case whether advocates enrolled under the , were entitled to "act" in the Insolvency jurisdiction of the Madras High Court,notwithstanding that under the rules framed by the High Court they were (2) Mad. 71 only entitled to "plead" and the Full Bench answered the question in the affirmative. The reasoning underlying this decision, as I understand it, was that the general ambit and scope of the profession of a Madras High Court advocate being, according to its rule, "to appear, act and plead" in the Original Side, the words "to practise" used in section 8 (1) and section 14(1) of the must, in relation to him, mean "to appear, act and plead". Rules 128 and 129, however, said that he could only appear and plead but not act. There being no saving of the power of the Madras High Court as there was of that of the Calcutta and Bombay High Courts by section 9 (4) and section 14 (3) and those insolvency rules being inconsistent with the provisions of sections 8(1) and 14(1) as construed by the Full Bench, that rule should, under sections 19(2) be deemed to have been repealed. I am unable to accept the correctness of this reasoning. The combined effect of the two sets of rules was that & Madras advocate was entitled to act and plead throughout the Original Side except in Insolvency Court which was also a part of the Original Side. It was, therefore, not correct to say that the Madras advocate was entitled to act and plead in the Original Side. The passage in the judgment of Kumaraswami Sastri J. at p. 103, namely that "the word 'practise ' ordinarily means 'appear, act and plead ', unless there is anything in the subject or context to limit its meaning" is not supported by any authority and appears ,to me to be too wide. Indeed, the learned Judge himself recognised this, for throughout the judgment it was emphasised that the word "practise", when applied to a Madras Advocate, meant "to appear, act and plead". It is clear from, that judgment that, according to the learned ' Judge, the words had not that wide meaning in their application to the Original Side Advocates of the Calcutta and Bombay High Courts. In any event, that passage should, in the context,, be limited in its application to the Madras High Court advocates and all advocates of all other High Courts who, by their rule6, are permitted to act 72 Pand plead, for it cannot possibly have that meaning in relation to an Original Side,advocate who is permittad only to plead. This passage in the Madras decision could not have been intended as an enumeration of the professional activities of an advocate as forming the invariable contents of the words "to practise" or as an enunciation of a fixed meaning of general application. In this country where there exists, as a historical fact, a clear division of legal practitioners into three separate classes, namely, those who act only, those who only plead and those who do both act and plead such a definition will be wholly inaccurate. It is necessary, therefore, to give to those words their generic meaning I have mentioned. In this view of the matter, I agree with the High Court that the ,petitioner can derive no support for his contention from either of these two decisions. My attention has also been drawn to the case of The Queen Doutre(1) where it was held that in Canada ,where. the functions of Barristers, and Solicitors are united in the same person, the rules of English law which precludes a Barrister to sue for his fees do not apply and that a Quebec advocate could sue for his remuneration a quantum meruit basis. I do not see how that case throws any light the problem before us. In Queen all advocates "act and plead" and as regards Quebec advocates the critical words may cover both acting and pleading, but how can that circumstance assist us in ascertaining the meaning of those words in enactments of our country where we bave a clear division, of the legal practitioners into three categories I have, mentioned ? The result of the foregoing discussion as to the meaning of the words "to practise" appears to me to be that in relation to lawyers as a class they mean "to exercise their profession" which is their dictionary meaning and which is wide enongh, to cover the activities of the entire genus of lawyers. They are words of indeterminate import and have no fixed connotation or content. In their application to particular (1) 73 species of lawyers their meaning varies according to the scope and ambit of the profession of that particular species in relation to whom they may be used, and such meaning has to be ascertained by reference to the subject or context. Further, the Legislative technique, as is evident from the , the and the Rules of the Supreme Court to which reference has been made, is to use these neuter words in a generic sense although in their application to specific categories or species of lawyers they have different connotations which are to. be ascertained from the context in which they are used. The question, therefore, at once arises: What in the context and a true construction of the Act we are considering, is the meaning of the words "to practise"? The petitioner Aswini Kumar Ghosh urges that the words "to practise," in relation to all advocates of all the 20 High Courts, except the Original Side advocates of the Calcutta and Bombay High Courts only, mean "to act and plead" and seeing that this is the meaning applicable to the vast majority of advocates, those words must be given that meaning. Am I to apply the rule of majority in construing a statute? Am I to assume that the Legislature had forgotten or deliberately ignored the hard historical fact that there exists a large body of advocates,of not inconsiderable importance who "practise", that is only "plead" the Original Side of two premier High Courts in India? Or am I to assume that the Legislature intended, by the use of a dubious expression of indefinite import, to swamp one whole class of legal practitioners, namely, the Attorneys of those two High Courts? I find not the slightest indication of such intention anywhere in this Act. the contrary, the title of the Act and the non obstante clause of section 2 itself run counter to such contention. I have already pointed out that the words "to practise" have been used in the non obstante clause in the sense of "appearing and pleading" only and that nobody can for a moment doubt that in 'the non obstante clause the 74 Legislature had in mind the provisions of the and the rules of the High Courts regulating the conditions subject to which a foreign advocate was permitted "to appear and plead" in a High Court of which he was not an advocate. If that be so, it is legitimate to infer that the Legislature in the operative part of the section gave expression and effect to what it had in its mind when enacting the non obstante clause. If the intention of the legislature were otherwise, why did not the Legislature say openly and in a straightforward way that it gave the Supreme Court advocate the right "to act and plead" in any High Court ? Why did it use the dubious words "to practise" ? It is not correct to say that those words have been used in the only in the sense of "acting and pleading". As already explained, those words have been used in their ordinary dictionary meaning, namely, "to exercise his or their profession" so as to cover the entire genus or class of Advocates, although in their application to different categories or species they have different connotations as explained above. Seeing that the legislative practice is to use those words in their general dictionary meaning, there is no reason to suppose that the Legislature intended to depart from this practice while enacting this piece of legislation. It is asked: why did not the Legislature then insert in this Act a saving clause like sections 9(4) and 14(3) of the ? The argument is that the absence of such a saving clause in this Act constitutes a departure from the legislative practice followed in the and, therefore, the words "to practise" in the operative part of section 2 must have their widest meaning. A little reflection will show that this argument is not sound. The rule making power of the High Courts under clause 9 of the Letters Patent was and is with respect to advocates, vakils and attorneys admitted and enrolled by the, High Courts. The dealt with advocates enrolled by the High Courts and, ' therefore, it was 75 considered safer to provide that nothing in th a Act should affect or limit the rule making powers of the High Court. Indeed, if the critical words were, as I think, used in a generic sense, the saving clauses must have been inserted ex abundanti cautela. Be that as it may, as the High Courts ' power to make rules under clause 9 extended only to the advocates, vakils and attorneys enrolled by them and as the also dealt with advocates enrolled by the High Courts, the insertion of the saving clauses in the last mentioned Act is intelligible. But a saving of the rule making powers of High Courts over their own advocates etc., is entirely out of place ' in an Act which is concerned not with High Court advocates but with Supreme Court advocates only ' The High Courts have no power under clause 9 of the Letters Patent to make any rule to govern the conduct and activities of the Supreme Court advoCates and this Act only deals with Supreme Court advocate and confers a new right them. Therefore a saving of the High Courts ' rule making power over their advocates would have been wholly meaningless and inappropriate, for such saving clause would not have given the High Courts any power to make any rules with respect to the Supreme Court advocates There was, therefore, no necessity or occasion for inserting any saving clause the lines of sections 9 (4) and 14 (3) of the . NO , thing can, therefore, be founded the absence of a saving clause the lines of that Act. The petitioner Aswini Kumar Ghosh argues that the text of the original Bill, the statement of objects and reasons over the signature of the Law Minister attached thereto and the debates in the Legislature resulting in the deletion of what was clause (a) of the proviso as it existed in the original Bill will clearly show what the intention of the Legislature was. In the original Bill as introduced in the Legislature there was a proviso to section 2 which ran thus: "Provided that nothing in this section shall be deemed to entitle any person, merely by reason of his being an Advocate of the Supreme Court 76 (a) to plead or to act in any High Court in the exercise of its original jurisdiction ; or (b) to practise in a High Court of which he was at any time a Judge, if he had given an undertaking not to practise therein after ceasing to hold office as such Judge. " The argument is that the objects and reasons clearly show that the intention was that section 2 should not affect the Original Sides of the two High Courts, and clause (a) was inserted in the proviso in order to achieve that purpose. This shows that if clause (a) was not there, section 2 would have, entitled the Supreme Court advocate "to practise", i.e., "to appear, act and plead" in all High Courts in all their several jurisdictions. This conclusively shows that the words 'to practise" were used in that larger sense. Indeed in the objects and reasons those words were expressly stated to be synonymous with "to act and plead". The argument is apparently formidable but reflecttion will be found to be devoid of any substance. There is authority for the proposition that the proceedings of the Legislative Council are to be excluded from consideration in the judicial construction of an Act and that the debates in the Legislative Council, reports of select committees and statements of objects and reasons annexed to a Bill may not be referred to: Administrator General of Bengal vs Prom Lal(1). When construing section 68 of the Indian Companies Act, 1,882, the Privy Council in Krishna Ayyangar vs Nella Perumal(2) observed that no statement made the introduction of the measure or its discussion can be looked at as affording any guidance is to the meaning of the words. It is neither necessary nor profitable to go into the numerous decisions all of which it may be difficult to reconcile but it is quite clear from the decision of this Court in the case of A. E. Gopalan vs The State of Madras(3) that the debates and speeches in the Legislature which, reflect the individual opinion of the speaker cannot (1) (1895) 22 I.A. 107. (3) ; , (1920) 17 33. 77 be referred to for the purpose of construing the Act as it finally emerged from the Legislature and so the debates must be left out of consideration. The statement of objects and reasons attached to the Bill only depicts the object which the sponsor of the Bill had in mind, but it throws no light the object which the Legislature as a body had in mind when passing the Bill into an Act. If I may borrow and adapt the felicitous language used by my Lord the present Chief Justice in that case those objects and reasons may at best be indicative of the subjective intention of the Law Minister who sponsored the Bill but they could not reflect the inarticulate mental processes lying behind the majority vote which carried the Bill. Nor is it reasonable to assume that the minds of all those legislators were in accord. The first Privy Council decision referred to above rejected any reference to the debates or the objects and reasons. So did M. N. Mukherji J. in Debendra Narain Roy vs Jogendra Narain Deb(1). Reference may also be made to Craies Interpretation of Statutes, 5th Edn., at p. 123, regarding the memoranda attached to the Bill. In my opinion it is safer to follow the orthodox English view and leave the objects and reasons out of consideration. The petitioner Aswini Kumar Ghosh points out that in Gopalan 's case (supra) this Court did look at the original draft of what eventually became article 21 of the Constitution as throwing some light the construction of that article and urges that we should look at the original Bill and draw appropriate inferences from the fact of the omission of clause (a) of the proviso from the Act. What was looked at in that case was the Report of the Drafting Committee appointed by the Constituent Assembly. That Report was akin to a Report of a Select Committee made after consideration of a Bill referred to it by the Legislature for consideration. In that Report the Drafting Committee recommended the substitution of the expression "except according to procedure established (1936) A.I. R. at p. 619. 78 by law" taken from the Japanese Constitution for the words "without due process of law" which occurred in the original draft "as the former is more specific." The Drafting Committee further explained that they had attempted to make the fundamental rights conferred by the article in question and the limitations to which they must necessarily be subject as definite as possible since the Courts may have to pronounce upon them. The Constitution as it was finally adopted showed that the Constituent Assembly had accepted the amendment suggested by the Drafting Committee. The fact that the Drafting Committee was, in a sense, the agent of the Constituent Assembly, and that the amendment proposed by the Drafting Committee was in fact adopted by the Constituent Assembly, may conceivably lead to the inference that the reasons given by the Drafting Committee were also accepted by the Constituent Assembly and that the intention of the agent, the Drafting Committee, reflected the intention of the principal, the Constituent Assembly. This, I apprehend, was the underlying reason why the majority of this Court expressed the view that the Report of the Drafting Committee could be looked at as historical material throwing some light the question of construction of the article 21. That underlying reasoning does not, however, apply to the present case. This Court, consistently with the principles laid down in numerous judicial decisions, some of which I have cited above, held that recourse could not be had to the debates in the Legislature in construing the Act. ' To keep out the debates which may, in some degree, have disclosed the considerations operating the minds of the vocal section of the Legislature and the intention with which they moved the amendment and then to refer to the text of the original Bill and the fact that some words or clauses thereof do not find a place in the Act as eventually passed in order to ascertain the state of mind of the members of the Legislature who passed the Act will, to my mind, be indicative of a mental process which can hardly be 79 for my learned colleagues who had pronounced upon the admissibility of the Report of the Drafting Committee, I feel pressed to adhere to and abide by the views expressed by them that point, I am certainly not prepared to go further and to extend the principle of that decision that question by permitting a reference to the original Bill. Assuming that the reasoning of the decision in Gopalan 's case(1) regarding admissibility of the Report as an aid to construction may, in certain circumstances, be applicable to the original Bill, we have yet to consider whether in the case now before us the original Bill should be referred to. In Gopalan 's case(1) Kania C. J. said at p. 110: " The report may be read not to control the meaning of the articles, but may be seen in case of ambiguity." Again at p. 111 the learned Chief Justice stated:"Resort may be had to these sources with great cautiou and only when latent ambiguities are to be resolved." In point of fact the learned Chief Justice did not find the words of article 21 to be ambiguous so as to require recourse to the Report of the Drafting Committee to ascertain the intention of the Constituent Assembly. My Lord the present Chief Justice and Fazl Ali J. and Mukherjea J. did refer to the Report. In the view taken by Mahajan J. it was not necessary for him to express any opinion this instant problem. I did not refer to the debates or to the Report of the Drafting Committee and stated at p. 297 and at p. 323 that I would express no opinion as to the admissibility of the Report or the debates. It is, however, clear from the passages I have quoted, from the judgment of the late Chief Justice that the Report of the Drafting Committee could be looked at only to resolve ambiguity and not to control the meaning of the article if it was otherwise plain, for the intention of the Constituent Assembly was to be gathered primarily ' from (1) ; 80 the words used in the Constitution. The question at once arises: is there any ambiguity in section 2 as it now stands which requires a reference to the original Bill for its solution ? Having regard to the state of the law as it existed before this Act was passed, namely, that by the rules of all High Courts an advocate of one High Court could only "appear and plead" in another High Court if he could obtain the permission of the Chief Justice ' of the latter Court the mischief that followed from these rules and was unprovided for, namely, that even eminent advocates were. not accorded such permission for no apparent reason and. the fact that the object of this Act, as indicated in the full title and the non obstante clause in section 2 was undoubtedly to remedy this defect. So far as the Supreme Court advocates were concerned all which circumstances are to be taken into consideration in construing an Act as stated in Heydon 's case (1) and finally the legislative practice of using the words "to practise" in their ordinary dictionary meaning, as I have explained already, I find no ambiguity whatever in the operative part of section 2. The meaning and intent of the section appear to me reasonably plain and I do not consider it necessary to have recourse to the original Bill at all to ascertain the meaning and intent of the words used in the section. It is wrong to imagine or create ambiguity and then to call in aid the original Bill and to speculate as to the intention of the Legislature. Again, assuming that the original Bill has to be looked at in ascertaining the meaning of section 2, I do not derive any assistance from the mere circumstance that clause (a) of the proviso which appeared in the original Bill does not find a place in the Act as it finally emerged from the legislative anvil. The mere fact that that proviso was omitted from the Act as finally passed does not by any means lead us to the conclusion that the construction put upon the section by the petitioner Aswini Kumar Ghosh must be correct. There is no reason to assume that the (1) ; 81 legislators read the words"to Practise" as meaning "to appear, act and plead" If they read the words to mean " to appear and plead only, which is the ambit and scope of the profession of Supreme Court advocates under the rules of this Court and of the Original Side advocates of those two High Courts then, in so far as the proviso purported not to extend the application of the section to " 'acting" the Original Side it was wholly unnecessary and may have accordingly been deleted as not being necessary. Further, if the intention was to give the Supreme Court advocates a right to appear and plead only in any High Court in any of its jurisdictions, then the proviso, in so far as it purported not to extend the section to pleading the Original Side of those two High Courts, could not be retained. If, therefore, the intention of the operative part of the section was that the Supreme Court advocate would have the right only "to appear and plead", which is consonant with the functions of a Supreme Court advocate and also co extensive with the rights of the Original Side advocates of the Calcutta and Bombay High Courts under the rules, the proviso had to be deleted in full and, therefore, no argument can be founded the fact of such deletion. We have, therefore, to construe the operative part of the section by reference to the intention we can gather primarily from the language used in the section and other parts of the Act itself. The Legislature which enacted the statute was well aware of the state of the law as embodied in the rules of different High Courts preventing an advocate of one High Court from, as of right, " appearing and pleading " in another High Court of which he Was not an advocate. The mischief of withholding of the permission by the Chief Justices no better ground than the absence of reciprocity between the High Courts was notorious. The Act set out to remedy that mischief as is obvious from the full title and the non obstante clause in section 2 of the Act as I have herein before explained. It was known to the Legislature that an advocate was by Order 1, rule 2, of the Supreme 82 Court Rules defined as a person entitled only "to appear and plead" before the Supreme Court, that under Order IV,rule 11, no person could appear as an advocate unless instructed by an agent and that under Order IV, rule 30, such an advocate could in no circumstances "act" as an agent, In short, the Legislature knew that the scope or ambit of the Supreme Court advocate 's profession was only "to appear and plead". With all this knowledge the Legislature enacted section 2 authorising every advocate of the Supreme Court "to practise as of right in any High Court". Applying the dictionary meaning to the word "practise," the section authorises every Supreme Court advocate "to exercise his profession as of right in any High Court". The scope and ambit of the Supreme Court advocate 's profession being only "to appear and plead" there can be no escape from the conclusion that the section authorises the Supreme Court advocate only "to appear and plead" in any High Court. The reasoning is the same as that adopted or involved in the Patna case referred to above. An advocate of the Patna High Court was, under its rules, entitled "to appear, act and plead" in that High Court. When section 4 of the authorised such advocate "to practise" in the subordinate Court it was held in the Patna case to mean that the advocate could do all that he could do in the High Court, namely, "appear, act and plead". The words "to practise" were held to cover all these activities not because those words had that invariable ,meaning but because those words had that meaning only in relation to advocates who by the rule of the High Courts were entitled "to appear, act and plead In short, the content of those words varies with the ambit and scope of the profession of the advocate with regard to whom they are use a parity of reasoning, the Supreme Court advocate being entitled only "to appear and plead", when section 2 authorised him "to practise" in any High Court, it must be taken to have meant that he was authorised to do in the High Courts all that he was entitled to do in the 83 Supreme Court, namely, "to appear and plead" only. This construction appears to me to be quite logical and calculated to give effect to the object of the Act. It brings about a close approximation between the non obstante clause and the operative part of the section which should be the aim of every well drawn statute. It is asked: bow can a Supreme Court advocate who can only "appear and plead" when he is instructed by an agent, "appear and plead" in any High Court where there are no Supreme Court agents to instruct him ? This, in my opinion, is taking an extremely narrow view of the matter. The Supreme Court advocate 's profession being confined only to appearing and pleading, when he is authorised "to practise", i.e., to exercise his profession in any High Court, he must carry with him his professional limitations but must be governed by those rules of High Courts which regulate the practice of advocates who can only " appear and plead" ' in the High Courts, for he cannot practise in vacuo. Seeing that there are persons authorised "to act" in every High Court who may instruct another advocate, no practical difficulty can arise in the way of the Supreme Court advocate appearing and pleading in the High Court. Under Ch. I, rule 38, of the Calcutta Original Side Rules a Barrister advocate of any other High Court or an Original Side advocate of Bombay is permitted to "appear and plead" in the Original Side of the Calcutta High Court with the permission of the Chief Justice. Surely, nobody has ever suggested that such a foreign advocate must carry with him an instructing advocate or attorney of his own court who is competent to act in order to instruct him when he appears and pleads in the Calcutta High Court. He is instructed by an attorney of the Original Side of the Calcutta High Court without any difficulty. Same remarks apply when an Original Side advocate of Calcutta goes to appear and plead the Original Side of Bombay under Ch. I, rule 6, of the Bombay rules, for surely such an advocate does not carry a Calcutta attorney with him but is quite satisfactorily 84 instructed by a Bombay attorney. An Original Side advocate of the Calcutta or Bombay High Court who cannot appear the Original Side unless instructed by an attorney can and frequently does appear and plead the Appellate Side the instruction of an advocate of the Appellate Side who being entitled to act can instruct the Original Side advocate to appear and plead. If we adopt this construction, the Act becomes workable, but if we adopt the construction suggested by the petitioner, then the Supreme Court advocates practising in High Courts by virtue of the Act will become freelances creating chaos and confusion as I shall hereinafter more fully explain. In my opinion there is no substance at all in this objection of the petitioners. It is next pointed out that the result of this construction will be to make the new right illusory in that a Supreme Court advocate will not be entitled to "act" even the Appellate Side of a High Court where he is not enrolled and such a resuIt will militate against the principle of the unification of the Indian Bar. This objection is obviously based the assumption that the object of this Act is to bring about such a drastic and far reaching result. There is no warrant which I can see for any such assumption. I have already mentioned that the point of controversy this subject was that an advocate the roll of one High Court could not as of right "appear and plead" in other High Courts but had to depend the good graces of the Chief Justices of such other High Courts who frequently. withheld the requisite permission even to very. eminent advocates. There was hardly ever any claim made by an advocate of one High Court "to act" as an advocate of another High Court of which he was not an advocate. The limited object of this Act appearing from its full title and the non obstante clause as explained above was to remedy only this particular defect by providing that an advocate of the Supreme Court would be entitled as of right "to practise", i.e., exercise his profession, i.e., "to appear and plead", in any High Court even though 85 he was not ' the roll of that High Court. This certainly was an important step in the process of bringing about uniformity in the Indian Bar, for it did bring into,: being a category of advocates who might "appear and plead" in all Court 's throughout India and form the nucleus of an all India Bar. More than this was not within the scope and object of this Act as I apprehend it. To adopt a construction which will permit a Supreme Court advocate who is also enrolled in the High Court of, say Travancore Cochin in the south or off the State popularly called Pepsu in the north, to go and "act" in the Original Sides of the High Court of Calcutta or Bombay which the advocates of those High Courts cannot do, will lead to no end of confusion as will be explained more fully hereafter and that consideration alone should induice me to discard the petitioners ' construction and adopt a construction which will not give rise to practical inconvenience. It is pointed out that while this construction may bring about a perfect approximation between the non obstante clause and the operative part of section 2 by entitling only foreign Supreme Court advocates "to appear and plead" in any High Court as of right,, it runs counter to the concluding words of the operative part of section 2, namely, "whether or not he is an Advocate of that High Court", for, it is urged, those words clearly indicate that the section purports to confer a Supreme Court advocate the right to practise not only in a High Court of which he is not an advocate, but also to give him some right in rela tion to his own High Court. The Court below has held that the words "whether or not" are not quite apposite and that what was meant was that a right was given to every Supreme Court advocate "to practise" in any High Court even if he was not an advocate of that High Court. In other words, the Act itself gives a right to the Supreme Court advocate to practise as of right in any High Court and that being so it was immaterial to consider whether he was an advocate of a particular High Court or not, i.e., 86 irrespective of his being or not being an advocate of that High Court. I am inclined to agree with this view. Let me, however, test the soundness of the view propounded by the petitioner the strength of the words "whether or not etc. " Take the case of an advocate of the Madras High Court. Under the rules of the Madras High Court be is entitled "to appear, act and plead" in all its jurisdictions. When such an advocate is enrolled as an advocate of the Supreme Court, section 2 of the Act, as construed by the petitioner, really gives him no additional right in relation to his own High Court, for already he is entitled "to appear, act and plead" there. That is the position also with regard to the advocates of all High Courts, other than the High Courts of Calcutta and Bombay in the matter of their right to practise in their respective High Courts. Seeing that the advocates of 18 High Courts did not in fact get any new right in their respective High Courts, it cannot reasonably be said that the object of the Act was to give any right to an advocate of a particular High Court in respect of his own High Court. It is pointed out that an advocate enrolled the Appellate Sides of the Bombay and Calcutta High Courts is not, as of right, entitled to appear, act and plead the Original Side and the object of the Act was to give those Appellate Side advocates of the Calcutta and Bombay High Courts some additional rights in the Original Side of their own High Courts. In view of the fact that the Act gives no additional right to the advocates of any of the 18 High Courts in relation to their respective High ' Courts it is difficult to imagine that the object of the Act was to bestow some special favours only the. advocates of the Appellate Sides of the Calcutta and Bombay High Courts. Therefore, it appears to me that the words "whether or not etc." read in the light of the purpose of the Act appearing from the full title and the non obstante clause only emphasise that the object was to give the Supreme Court advocate a statutory right to practise in any High Court 87 of which he was not an advocate, irrespective of his other rights, if any. It is a new right given by the Act proprio vigore to a class of foreign advocates. Further, if the use of the words "whether or not etc." must necessarily mean that the object of the Act was to give a special right to an Appellate Side advocate of the Calcutta and Bombay High Courts in relation to his own High Court it does not necessarily follow ' that the words "to practise" must be given such a wide meaning as would also cover acting, for if the words ' "to practise" are read as extending only to appearing and pleading, even then the Appellate Side advocates of the Calcutta and Bombay High Courts would get some additional right in their own High Courts in that they become entitled by virtue of their position as Supreme Court advocates "to appear and plead" the Original Side without having to take steps under the respective rules of those High Courts to entitle them to appear and plead the Original Side. In this view of the matter also the con cluding words "whether or not etc. " cannot affect the construction put by me the operative part of the section. Even if I am wrong in adopting the foregoing line of reasoning, the petitioner will yet have to meet an alternative construction which has commended itself to the learned Judges of the High Court and my learned brother Mukherjea, and which I am also prepared to accept as a cogent alternative. The Act authorises every advocate of the Supreme Court as of right " to practise " in any High Court. The use of the words "to practise " in relation to an advocate clearly indicates that he is to exercise the profession of an advocate. To exercise the profession of an advocate in a High Court must involve the observance of the rules of practice of 'that High Court. It is urged that this construction amounts, in reality, to adding words to the section, namely, as an advocate of that Court" or "according to the rules of that Court. " This contention is founded a clear misaprehension, for I am really not adding anything at 88 all but I am only stating what is implicit in the section as it stands. , In other words, I am construing the words of the section and ascertaining its true meaning and import. The necessary implication of the fact that the Supreme Court advocate is to exercise his profession in any High Court may well be that he becomes entitled to do whatever an advocate (if that particular High Court can do under the, rules of practice of that High Court. Thus when the Supreme Court advocate goes to practise in the, Appellate Side be will be entitled to act and plead as an Appellate Side advocate does and when he goes to practise in the Original Side he will only plead as an Original Side advocate does and in either case be must abide by the relevant rules, for he must practise. as an advocate of the particular High Court does, namely, under and subject to the rules. Nobody has ever suggested that an advocate or vakil authorised to practise in subordinate courts or in any other High Court under section 4 of the was not bound by the rules of the Court where he went to practise. It is argued that the rules of the High Courts of which the Supreme Court advocate is not an advocate cannot in terms apply to him when he chooses to exercise the right given to him by the Act, for those rules apply to the advocates of those High Courts. This again, I conceive, is taking a narrow view of the matter. The rules of the High Court certainly apply to the advocates entitled to practise in that High Court and when an Act invests an advocate, who is not an advocate of a particular High Court, with the right to practise in that High Court, for all intents and purposes such an advocate becomes, as it were, a statutory advocate of that High Court and as such becomes invested with the rights as well as the obligations of an advocate of that, Court. In other words, the Act proprio vigore makes him a person entitled to practise in that Court and as such amenable to and governed by all the rules applicable to and regulating the practice of persons entitled 'to 89 practise in that Court, except, of course, such of the rules as are contrary to, i.e., destructive of this new statutory right and which must, therefore, as regards him, be deemed to be inoperative. Surely the Supreme Court advocate cannot practise in vacuo. To accede to the contention of the petitioner is to say that a body of professional men, namely, the Supreme Court advocates, have been let loose "to practise", i.e., to "act and plead" ' in all High Courts in all their jurisdictions untramelled by any rules of practice a proposition which, in my opinion, ha , only to be stated to be rejected. It is fraught with grave dangers and, at any rate, will inevitably lead to practical inconvenience and to no end of utter confusion. If that view were accepted the Supreme Court advocate will be entitled to walk in and walk out of the High Court in any costume that his fancy may choose. He may throw to the winds the rules of precedence of advocates including that of the Advocate General. According to the rules of the Original Side of Calcutta an attorney is authorised to cause service of notice of motion and chamber summons but the opposite party will not be bound to accept service from the Supreme Court advocate who is not so authorised. According to the Calcutta Original Side rules an attorney is personally responsible for the requisition fees, deposition fees etc. , but a Supreme Court advocate acting in the Original Side will not be so responsible at all. Nor will the High Court be able to get at the Supreme Court advocate to realise the fees if he is not to be governed by the rules governing the conduct of persons who act the Original Side. ' The attorneys acting in the Original Side cannot charge the client with a pice over and above the fees prescribed in the rules of taxation as between attorney and client but a Supreme Court advocate acting in the Original Side, not being in terms bound by the taxation rules, will be free to fleece the client to any extent he can. The attorneys being officers of the Court are under the rules and the Letters Patent amenable to the disciplinary jurisdiction of the High 90 Court but a Supreme Court advocate may with impunity snap his fingers at the High Court, for under no provision of law as it exists except section 2 of the Act can the High Court exercise disciplinary jurisdiction such advocates. It is unnecessary to multiply instances of confusion. This one consideration of inconvenience and confusion is enough to discard the construction sponsored by the petitioners ' for the true rule of construction is that if two constructions are possible, that which leads to absurdity and brings about practical inconvenience and encourages confusion and chaos must be eschewed. Neither of the two constructions suggested by me will have any such consequence and either of them will make the section workable in practice and at the same time accomplish a considerable measure of unification of the Indian Bar. The petitioners see the difficulty and to get over it suggest that the Supreme Court advocate practising in a High Court will and can be bound by the existing ordinary rules of practice except those that prevent him from acting and pleading or that the High Court may frame separate rules for the Supreme Court advocates practising before them. This very concession at once gives away the whole case of the petitioners. As I have already stated clause 9 of the Letters Patent empowers the High Courts to approve, admit and enrol advocates, vakils and attorneys and such advocates, vakils and attorneys I emphasise the word " such "are authorised to appear in the High Courts and to plead or to act or to do both according to the rules made by the High Courts. The High Courts ' rule making power as to enrolment of advocates, vakils and attorneys and their respective functions and powers is thus quite clearly confined to advocates, vakils and attorneys admitted and enrolled by them and does not and cannot extend to Supreme Court advocates who are not their rolls. Section 119 of the Code of Civil Procedure excludes the application of the rules of practice relating to advocates and pleaders from Original Side of High Courts unless adopted by them by rules framed 91 under the Letters Patent which,as already stated, governs only their own advocates. The Supreme Court of India, under article 145, can only make rules for regulating generally the practice and procedure of the Supreme Court including rules as to the persons practising before it. That article does not authorise the Supreme Court to make rules regulat ing the practice and procedure of High Courts or the conditions subject to which the Supreme Court advocates may practise before the High Courts. The Act we are considering does not confer any power the High Courts to frame rules subject to which the Supreme Court advocates shall exercise in the High Court their newly acquired statutory right under this Act. The Bar Councils ' rule making power under section 15 is limited only to High Court advocates, clause (b) having been superseded by, section 2 of this Act. There is, therefore, no provision of law except section 2 itself which will enable the High Courts to prescribe any rules of conduct 'for the Supreme Court advocates or to oblige them to conform to any rule of practice when they go to practise in any High Court. Therefore, if we accept either of the two constructions suggested by me it will prevent this absurd and undesirable result, for then the Supreme Court advocates when they go 'to practise in any High Court will appear and plead or, alternatively, do what an. advocate of the High Court can do, and in either case be subject to the relevant rules by which the advocates of the particular High Court are bound. If that were not the meaning of section 2, then the Supreme Court advocates will be untrammelled by any rule of practice at all. Further, the petitioners ' construction, even if the High Courts have power to make rules with regard to Supreme Court advocates practising before them, any the least obligation or restriction imposed by such rules the Supreme Court advocates by way of making them personally liable for any fees etc., or bringing them under the disciplinary jurisdiction or the High Courts will certainly be 92 challenged as a fetter placed their statutory right to practise, in the High Court and as such not binding ton them. Finally there will be two sets of rules, namely, the existing rules governing the attorneys who act the original Side and some new rules to be made for the supreme Court advocates who may choose to act the Original Side. The resulting creation of a now and distinct class of actors in the Original Sides of the two High Courts will indeed be a sad commentary the supposed intention of the Legislature to achieve uniformity and unification of the Indian Bar. The petitioners ' construction must, therefore, be rejected. It is next said that this alternative construction the rights of a Supreme Court advocate will vary from High Court to High Court and that will not be con sistent with the policy of uniformity underlying the Act. In the first place it is an assumption, without any warrant, that the Act was out to achieve perfect symmetry and uniformity of the kind which we may consider desirable. Secondly,no serious inconvenience will follow if the rights of a Supreme Court advocate vary from High Court to High Court. The status and rights of advocates of different High Courts do vary under their respective rules and such variation has existed of or long time without any inconvenience. This Act does not at all purport to eliminate those differences amongst the advocates of the different High Courts which will yet continue. The construction sought to be put the section by the petitioner Aswini Kumar Ghosh will, therefore, only create fresh differences by bringing into being a new variety of practitioners who will have yet different rights in all the High Courts. the other hand, the construction suggested above will cause the least possible inconvenience and at the same time remedy the long , standing grievance of advocates of High Courts account of the bar against their " appearing and pleading" in High Courts of which they are not advocates by authorising them, after being enrolled as Supreme Court advocates to do so as of right and 93 without the necessity of their obtaining the sanction of the Chief Justices of the High Courts concerned. The Act permits a well defined body of professional men, namely, the Supreme Court advocates, to exercise the profession of an advocate in any High Court. That this certainly was a forward step in achieving uniformity cannot possibly be denied. Nothing more was within the purview of the Act as expressed in its full title and the non obstante clause. Finally, reference is made to the proviso as it now appears in section 2 and it is claimed that the word "practise" in the operative part of the section must mean "appear, act and plead" because that word as appearing in the proviso obviously has that meaning, and reliance is placed the rule of construction that the same word should be given the same meaning wherever it occurs in the Act. All that this proviso says is that nothing in this section shall be deemed to entitle a post Constitution Judge who might be an advocate of the Supreme Court to practise in a High Court of which he was at any time a Judge, if he had given an undertaking not to practise there after ceasing to hold office as such Judge. In other words, all that the proviso does is to say that the right created by the section shall not extend to a Tudge if he had given an undertaking not to practise in that Court. In the first place this proviso was wholly redundant in view of the constitutional prohibition contained in article 220. Further, the language of the proviso is inept in that it seems to suggest that if such a Judge had not given an undertaking he would be free to practise which certainly is contrary to article 220. Finally there is no difficulty in giving to the word "practise" occurring in the proviso the same general meaning given to that word in the operative part of the section, namely, "to exercise the profession". It is said that if the words "to practise" mean only "to plead", then a post Constitution Judge after his retirement would be entitled "to act" in the High Court of which he was at any time a Judge. There is no force in this argument because such lb Judge 94 will be prevented from acting and pleading anywhere by virtue of the provisions of article 220 of the Constitution. It is, therefore, not necessary to give the word "practise" the wider meaning contended for by the petitioner Aswini Kumar Ghosh. We must also remember that the general rule relied upon may be excluded by the subject,or context. For reasons stated above, whether we adopt one or the other method of construction suggested above, in my opinion,, this petition cannot succeed and must be dismissed. Appeal allowed. Agent for Intervener No. 1 : P. K. Mukherjee. Agent for Intervener No. 2: Sukumar Ghose. Agent for Intervener No. 3: I N. Shroff, for P. K. Bose. Agent for Intervener No 4: Bajinder Narain.

Section 2 of the Supreme Court Advocates (Practice in High Courts) Act, 1951, provided that "notwithstanding anything contained in the (XXVIII of 1926), or any other law regulating the conditions subject to which a person not entered in the roll of advocates of a High Court may be permitted to practise in that High Court every advocate of the Supreme Court shall be entitled as of right to practise in any High Court whether or not he is an advocate of that High Court " : Held by the Court (PATANJALI SASTRI C.J., VlvIAN BosE, and GHULAM HASAN JJ. MUKHERJEA and DAS JJ. dissenting) The practice of law in India generally involves the exercise of both the functions of acting and pleading behalf of litigant parties, and when section 2 of the abovesaid Act conferred upon an advocate of the Supreme Court the right to " practise " in any High Court, it is legitimate to understand that expression as authorising him to appear and plead as well as to act behalf of suitors in all the High Courts including the Original Side thereof. It is fallacious to relate that expression as applied to an advocate either, the one band, to the court in which the advocate is enrolled, or,, the other, to the court in which he seeks to exercise the statutory right conferred him. It must be related to the general constitution of the Bar in India as a single agency in dealing with the litigant public. A rule made by a High Court which denies to an ' advocate the right; to exercise an essential part of his function by insisting a dual agency the Original Side is much more than, a rule of practice and constitutes a serious invasion of his statutory right to practise, and the power of making such a rule, Unless expressly reserved (as it 'was reserved by the Bar Councils Act) would be repugnant, to the right conferred by section 2; and as the, Act does not reserve any such power, the statutory right, of a Supreme Court advocate under section 2 to plead as well as 'to act in the High Courts of Calcutta, and Bombay in the exercise 2 of their Original Jurisdiction can not be taken away or curtailed by the rules of those courts, and any rule which the Calcutta High Court may have made in the past purporting to exclude any advocate from practising the Original Side or from appearing and pleading unless he is instructed by an attorney cannot affect such right. MUKHERJEA J. The word " practise" when used with reference to an advocate is an elastic expression having no rigid or fixed connotation and the precise ambit of its contents can be ascertained only by reference to the rules of the particular forum in which the profession is exercised. When a. 2 of the Supreme Court Advocates (Practice in High Courts) Act, 1951, speaks of a Supreme Court advocate being entitled as of right to practise in any High Court, what it actually means is that he would be clothed by reason of this statutory provision with all the rights which are enjoyed by an advocate of that court, and his right to plead and to act would depend the Bar Councils Act and the rules validly framed by that court, subject to this that no rule or provision of law would be binding which would affect in any way his statutory right to practise in that court solely by reason of his being enrolled as an advocate of the Supreme Court. DAS J. The words "to practise", used in relation to lawyers as a class, mean "to exercise their profession" which is their dictionary meaning and which is wide enough to cover the activities of the entire genus of lawyers. They are words of indeterminate import and have no fixed connotation or content. In their application to particular species of lawyers their meaning varies according to the scope and ambit of the profession of the particular species in relation to whom they may be used and such meaning has to be ascertained by reference to the subject or context. A Supreme Court advocate being entitled only,"to appear and plead" in that court, when section 2 autborised him to practise" in any High Court it must be taken, to have meant that he was authorised to do in the High Courts all that he was entitled to do in the Supreme Court, namely, to appear and plead only. Alternatively the section must be taken to authorise every Supreme Court advocate to practise as of right in any High Court as advocates of that High Court do and the exercise of the profession of an advocate in a High Court by a Supreme Court advocate must involve the observance of the rules of practice of that High Court except to the extent they are abrogated by section 2. That sec tion has made the Supreme Court advocate a statutory advocate ' of the High Court where he goes to practise and as such he is bound by the rules of such High Court except, such of them as are contrary to this new statutory right. Whichever of the two constructions is adopted, a Supreme Court advocate cannot appear in the Original Side of the Calcutta or Bombay High Courts unless he is instructed by an attorney. Queen vs Doutre (L.R. 9 App. Cas. 745), Powers of Advocates, ln re (I.L.R. and Laurentius Ekka vs Dukhi Koeri (I.L.R. 4 Pat. 766) referred to. 3 Per PATANJALI SASTRI C.J., VIVIAN BOSE, and GHULAM HASAN JJ. The non obstante clause in section 2 can reasonably be read as overriding "anything contained" in any relevant existing law which is inconsistent with the new enactment. Sections 9(4) and 14(3) of the Bar Councils Act and section 2 of the new Act cannot stand together. Whether by force of the non obstante clause liberally construed or of the well established maxim of construction that the enacting part of an Act must, when it is clear, control the non obstante clause when both cannot be read harmoniously, the new Act must have the effect of abrogating the powers reserved and continued in the High Courts by sections 9(4) and 14(3) of the Bar Councils Act . MUKHERJEA and DAS JJ. The non obstante clause in section 2 of the said Act removes only those provisions contained in the Bar Councils Act, 1926, and in any other law, which regulate the conditions subject to which a person not entered in the roll of advocates of a High Court may be permitted to practise in that High Court. Other provisions contained in the Bar Councils Act or other statutes, which lay down the conditions under which an advocate enrolled in the High Court is entitled to practise in the Original Side of that court stand unaffected by the Act. Even if the entire Bar Councils Act is excluded for the purpose of section 2, the rules framed by the Calcutta and Bombay High Courts under their Letters Patent would remain valid and effective of their own force even without the saving provision contained in the Bar Councils Act and the Letters Patent would also remain in full force. Per PATANJALI SASTRI C. J., MUKHERJEA, DAB, VIVIAN BosE, and GHULAM HASAN JJ. Speeches made by members of the House of Parliament the floor of the House are not admissible as extrinsic aids to the interpretation of statutory provisions. State of Travancore Cochin and Another vs Bombay Co. Ltd. etc, ([1952] S.C.R. 1112), Administrator General of Bengal vs Prem Lal ( [1895] 22 I.A. 107), Krishna Aiyangar vs Nella Perumal ( [1920] 47 I.A. 33), A.K. Go`alan vs The State of Madras ( ; and Debendra Narain Roy vs Jogesh Chandra Deb (A.I.R. referred to. Held per PATANJALI SASTRI C.J., DAs, VIVIAN BOSE and GHULAM HASAN JJ. The statement of objects and reasons annexed to a Bill, the form of the original Bill and the fact that certain words: or phrases were added to or omitted from the original Bill are also not admissible as aids to the construction of a, statute. MUKHERJEA J. Judicial opinion the point whether in construing a statute the, statement of objects and reasons or the original form of the Bill or reports of committees can be referred to is not uniform. English Courts and the Privy Council have laid down that such extrinsic aids must be dismissed from consideration. But there are American decisions to the effect that the general history of a statute and the various steps leading up to an enactment including amendments or modifications of the original Bill and reports of Legislative Committees can, be looked I at for 4 ascertaining the intention of the legislature where it is in doubt. The legislative history is, however, clearly inadmissible where there is no obscurity in the meaning of a statute. Per MUKHERJEA and DAS JJ. Punctuation is after all a minor element in the construction of a statute, and even if the orthodox view that it forms no part of the statute is to be regarded as of imperfect obligation and it can be looked at as contemporanea, expositio, it is clear that it cannot be allowed to control the plain meaning of a text. Stephenson vs Taylor ( [1861] 1 B.S. 101), Clawdon V. Green , Duke of Devonsshire vs Conor (L.R. , Maharani of Burdwan vs Murtanjoy Singh ([1886] 14 I.A. 30), Pugh vs Ashutosh Sen ( (1928]55 I.A. 63) referred to. Judgment of the Calcutta High Court reversed.

longest

Civil Appeal Nos. 1280, 1279, 1327 1330 of 1978 and 35 of 1979. Appeals by special leave from the Judgment and Order dated 2 8 1978 of the Andhra Pradesh High Court in Writ Petition Nos. 718, 5505, 3618, 5506, 5518, of 1975 and 604/78 and 4814/1975. L. N. Sinha, K. Srinivasa Murthy, Naunit Lal and M. Panduranga for the Appellants in CA Nos. 1279, 1280, 1327 1330/78. section N. Kackar, Sol. Genl., Venkatarao and G. N. Rao for R. 1 in CA 1280, RR 1 3 in CAs. 1327 & 1329 and RR 1 & 2 in 1328 & 1330. H. section Gururaja Rao and section Markendaya for RR 2 3 in CA 1280 and R. 4 in CA 1279. K. M. K. Nair for R. 4 in CA 1329 section Balakrishnan for R. 8 in CA 1329 G. Narasimhulu for R. 3 in CA 1330 B. Parthasarthi for the Appellant in CA 35/79. B. Kanta Rao for the RR 4 5 in CA 35/79. The following Judgments were delivered CHANDRACHUD, C.J. Article 30(1) of the Constitution provides: All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice. The question which arises in these appeals is whether certain provisions of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 11 of 1975, offend against the fundamental right 933 conferred on minorities by article 30 (1). The appellants are unquestionably minority educational institutions, having been established by members of the Christian community. My learned Brothers, Murtaza Fazal Ali and Kailasam, have examined the authorities bearing on the question before us. The reasons which impelled me to write a separate judgment are my inability to agree wholly with the various observations made by Justice Fazal Ali and with some of the propositions which he has formulated as emerging from the decisions referred to by him, as also with the conclusion to which Justice Kailasam has come. I do not consider it necessary to examine all the decisions of this Court in which article 30(1) has received a full and careful consideration. These decisions are reported in Re Kerala Education Bill 1957, Rev. Sidhajbhai Sabhai vs State of Bombay Rev. Father W. Proost vs The State of Bihar State of Kerala vs Very Rev. Mother Provincial D. A. V. College vs State of Punjab The Ahmedabad St. Xaviers College Society vs State of Gujarat Gandhi Faizeam College Shahajahanpur vs University of Agra and Lilly Kurian vs Sr. Lewina Almost each succeeding judgment has considered and analysed the previous judgment or judgments. I regard the matter arising before us as well settled, especially after the 9 Judge Bench decision in Ahmedabad St. Xaviers College Society (supra) and the recent judgment of the Constitution Bench in Lilly Kurian, All that we have to do in this case is to apply the law laid down in these decisions. These decisions show that while the right of the religious and linguistic minorities to establish and administer educational institutions of their choice cannot be interfered with, restrictions by way of regulations for the purpose of ensuring educational standards and maintaining the excellence thereof can be validly prescribed. For maintaining educational standards of an institution, it is necessary to ensure that it is competently staffed. Conditions of service which prescribe minimum qualifications for the staff, their pay scales. their entitlement to other benefits of service and the laying down of safeguards which must be observed before they are removed or dismissed from service or their services are terminated are all permissible measures 934 of a regulatory character. As observed by Das C.J., in Re: Kerala Education Bill, (supra) "Right to administer cannot obviously include the right to mal administer", and in the words of Shah J., in Rev. Sidhajbhai, (supra) "The right is subject to reasonable restrictions in the interest of efficiency of instruction, discipline, health, sanitation, morality, public order and the like". Hidayatullah C.J. said in Very Rev. Mother Provincial (supra) that "Standards of education are not a part of management as such", that the "minority institutions cannot be permitted to fall below the standard of excellence expected of educational institutions" and that "the right of the State to regulate education, educational standards and the allied matters cannot be denied". Justice Jaganmohan Reddy, in D. A. V. College (supra) reiterated while upholding clause 18 of the Guru Nanak University, Amritsar Act, 1961 that regulations governing recruitment and service conditions of teachers of minority institutions, which are made in order to ensure their efficiency and excellence do not offend against their right to administer educational institutions of their choice. In the case of institutions that receive State aid, it is the duty and obligation of the Government which grants aid to see that public funds are usefully and properly expended. If the expenditure incurred for paying the emoluments of the staff is subsidised or financed from out of State funds, it becomes the duty of the State to see that no one who does not possess the minimum qualifications is appointed on the staff, the pay and other emoluments of the staff are guaranteed and their service conditions secured. Minority institutions which receive State aid cannot complain of conditions subject to which the aid is granted, so long as such conditions do not amount to discrimination against them on the ground of language or religion and so long as the aid is not made to depend upon the performance or observance of conditions which amount to deprivation of the right guaranteed by article 30(1). There is also no doubt that minority institutions cannot be discriminated against in the matter of granting State aid. No institution, minority or majority, has a fundamental right to recognition by the State or affiliation to the University, but since recognition and affiliation are indispensable for an effective and fruitful exercise of the fundamental right of minorities to establish and administer educational institutions of their choice, they are entitled to recognition and affiliation if they agree to accept and comply with regulatory measures which are relevant for granting recognition and affiliation, which are directed to ensuring educational excellence of 935 the institution concerned and which, largely and substantially, leave unimpaired the right of administration in regard to internal affairs of the institution. The impugned Act, by reason of section 1 (3), applies to all private educational institutions, whether or not they are established by minorities. The appellants ' contention is that several provisions of the Act violate the guarantee contained in article 30(1) by permitting or compelling interference with the internal administration of private educational institutions established by minorities. The appellants are particularly aggrieved by the provisions of sections 3 to 7 of the Act, the validity whereof in challenged on the ground that they deprive the appellants of their right to administer the affairs of minority institutions by vesting the ultimate administrative control in an outside authority. These contentions having been rejected by the High Court of Andhra Pradesh, the appellants have filed these appeals by special leave. Section 3 (1) of the Act provides that, subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated, except with the prior approval of the competent authority. The proviso to the section says that if any educational institution contravenes the aforesaid provision, the teacher affected by the contravention shall be deemed to be in service. Section 3 (2) requires that where the proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, that authority shall approve the proposal, if it is satisfied that there are adequate and reasonable grounds for the proposal. For appreciating their true meaning and effect, sections 3 (1) and 3 (2) have to be read together. The requirement of prior approval of the competent authority to an order of dismissal, removal, etc. may not by itself be violative of article 30 (1) because it may still be possible to say, on a reasonable construction of the provision laying down that requirement, that its object is to ensure compliance with the principles of natural justice or the elimination of mala fides or victimisation of teachers. But I find it difficult to read down section 3 (1) so as to limit its operation to these or similar considerations. In the first place, the section does not itself limit its operation in that manner; on the contrary, it gives an unqualified mandate that no teacher shall be dismissed, removed, etc. except with 936 the prior approval of the competent authority. Under the proviso contravention of the section results in a total invalidation of the proposed action. If the section is contravened the teacher shall be deemed to be in service. Secondly, section 3 (1) not only applies to cases in which a teacher is, what is generally termed as 'punished ', by an order of dismissal, removal or reduction in rank, but it also applies to cases in which an appointment is otherwise terminated. An order of termination simpliciter which involves no stigma or aspersion and which does not result in any evil consequences is also required to be submitted for the prior approval of the competent authority. The argument that the principles of natural justice have not been complied with or the argument of mala fides and victimisation has seldom any relevance if the services are terminated in accordance with the terms of a contract by which the tenure of the employment is limited to a specified period. This shows that the true object of section 3 (1) is not that which one could liberally assume by reading down the section. Section 3 (1) is subject to any rules that may be made in behalf of the matter covered by it. If the State Government were to frame rules governing the matter, there would have been some tangible circumstances or situations in relation to which the practical operation of section 3(1) could have been limited. But in the absence of any rules furnishing guidelines on the subject, it is difficult to predicate that, in practice, the operation of the section will be limited to a certain class of cases only. The absence of rules on the subject makes the unguided discretion of the competent authority the sole arbiter of the question as to which cases would fall within the section and which would fall outside it. Any doubt as to the width of the area in which section 3(1) operates and is intended to operate, is removed by the provision contained in section 3 (2), by virtue of which the competent authority "shall" approve the proposal, "if it is satisfied that there are adequate and reasonable grounds" for the proposal. This provision, under the guise of conferring the power of approval, confers upon the competent authority an appellate power of great magnitude. The competent authority is made by that provision the sole judge of the propriety of the proposed order since it is for that authority to see whether there are reasonable grounds for the proposal. The authority is indeed made a judge both of facts and law by the conferment upon it of a power to test the validity of the proposal on the vastly subjective touch stone of adequacy and reasonableness. Section 3 (2), in my opinion, leaves no scope for reading down the provisions of section 937 3 (1). The two sub sections together confer upon the competent authority, in the absence of proper rules, a wide and untrammeled discretion to interfere with the proposed order, whenever, in its opinion, the order, is based on grounds which do not appear to it either adequate or reasonable. The form in which Section 3 (2) is couched is apt to mislead by creating an impression that its real object is to cast an obligation on the competent authority to approve a proposal under certain conditions. Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is so satisfied. The confernment of such a power on an outside authority, the exercise of which is made to depend on purely subjective considerations arising out of the twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by article 30 (1). I find it difficult to save sections 3 (1) and 3 (2) by reading them down in the light of the objects and reasons of the impugned Act. The object of the Act and the reasons that led to its passing are laudable but the Act, in its application to minority institutions, has to take care that it does not violate the fundamental right of the minorities under article 30(1). Sections 3(1) and 3(2) are in my opinion unconstitutional in so far as they are made applicable to minority institutions since, in practice, these provisions are bound to interfere substantially with their right to administer institutions of their choice. Similar provisions were held to be void in Very Rev. Mother Provincial, D. A. V. College and Lilly Kurian. (supra) There is no distinction in principle between those provisions and the ones contained in sections 3 (1) and 3 (2). For these reasons, I am in agreement with Brother Fazal Ali that Sections 3 (1) and 3 (2) of the impugned Act cannot be applied to minority institutions, since to do so will offend against Article 30 (1). Section 3 (3) (a) provides that no teacher employed in any private educational institution shall be placed under suspension except when an inquiry into the gross misconduct of such teacher is contemplated. Section 3 (3) (b) provides that no such suspension shall remain in force for more than a period of two months and if the inquiry is not completed within that period the teacher shall, without prejudice to the inquiry, be deemed to have been restored as 938 a teacher. The proviso to the sub section confers upon the competent authority the power, for reasons to be recorded in writing, to extend the period of two months for a further period not exceeding two months if, in its opinion, the inquiry could not be completed within the initial period of two months for reasons directly attributable to the teacher. With respect, I find it difficult to agree with Brother Fazal Ali that these provisions are violative of article 30 (1). The question which one has to ask oneself is whether in the normal course of affairs, these provisions are likely to interfere with the freedom of minorities to administer and manage educational institutions of their choice. It is undoubtedly true that no educational institution can function efficiently and effectively unless the teachers observe at least the commonly accepted norms of good behaviour. Indisciplined teachers can hardly be expected to impress upon the students the value of discipline, which is a sine qua non of educational excellence. They can cause incalculable harm not only to the cause of education but to the society at large by generating a wrong sense of values in the minds of young and impressionable students. But discipline is not to be equated with dictatorial methods in the treatment of teachers. The institutional code of discipline must therefore conform to acceptable norms of fairness and cannot be arbitrary or fanciful. I do not think that in the name of discipline and in the purported exercise of the fundamental right of administration and management, any educational institution can be given the right to 'hire and fire ' its teachers. After all, though the management may be left free to evolve administrative policies of an institution, educational instruction has to be imparted through the instrumentality of the teachers; and unless, they have a constant assurance of justice, security and fair play it will be impossible for them to give of their best which alone can enable the institution to attain the ideal of educational excellence. Section 3 (3) (a) contains but an elementary guarantee of freedom from arbitrariness to the teachers. The provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher nor indeed does it place an unreasonable restraint on its power to do so. It assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall not be suspended unless an inquiry into his conduct is contemplated and unless the inquiry is in respect of a charge of gross misconduct. Fortunately, suspension of teachers is not the order of the day, for which reason I do not think that these restraints which bear a reasonable nexus with the attainment of educational excellence can be considered to be violative of the right given 939 by article 30 (1). The limitation of the period of suspension initially to two months, which can in appropriate cases be extended by another two months, partakes of the same character as the provision contained in section 3 (3) (a). In the generality of cases, a domestic inquiry against a teacher ought to be completed within a period of two months or say, within another two months. A provision founded so patently on plain reason is difficult to construe as an invasion of the right to administer an institution, unless that right carried with it the right to maladminister. I therefore agree with Brother Kailasam that sections 3 (3) (a) and 3 (3) (b) of the Act do not offend against the provisions of article 30 (1) and are valid. Section 4 of the Act provides that any teacher employed in a private educational institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions of service are altered or interpreted to his disadvantage, may prefer an appeal to such authority or officer as may be prescribed. This provision in my opinion is too broadly worded to be sustained on the touchstone of the right conferred upon the minorities by article 30 (1). In the first place, the section confers upon the Government the power to provide by rules that an appeal may lie to such authority or officer as it designates, regardless of the standing or status of that authority or officer. Secondly, the appeal is evidently provided for on all questions of fact and law, thereby throwing open the order passed by the management to the unguided scrutiny and unlimited review of the appellate authority. It would be doing no violence to the language of the section to interpret it to mean that, in the exercise of the appellate power, the prescribed authority or officer can substitute his own view for that of the management, even in cases in which two views are reasonably possible. Lastly, it is strange, and perhaps an oversight may account for the lapse, that whereas a right of appeal is given to the aggrieved teacher against an order passed by the management, no corresponding right is conferred on the management against an order passed by the competent authority under section 3 (2) of the Act. It may be recalled that by section 3 (1), no teacher can be dismissed, removed, etc. except with the prior approval of the competent authority. Section 3 (2) confers power on the competent authority to refuse to accord its approval if there are no adequate and reasonable ground for the proposal. In the absence of the provision for an appeal against the order of the competent authority refusing to approve the action proposed by the management, the management is placed in a gravely disadvantageous position vis a vis 940 the teacher who is given the right of appeal by section 4. By reason of these infirmities I agree with the conclusion of my learned Brothers that section 4 of the impugned Act is unconstitutional, as being violative of article 30 (1). Section 5 is consequential upon section 4 and must fall with it. Section 6 provides that where any retrenchment of a teacher is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be effected with the prior approval of the competent authority. With respect, I find myself unable to share the view of Brother Fazal Ali that retrenchment of teachers is a purely domestic affair of minority institutions and that the decisions of the management in the matter of retrenchment of teachers is beyond the scope of statutory interference by reason of article 30 (1). Section 6 aims at affording a minimal guarantee of security of tenure to teachers by eschewing the passing of mala fide orders in the garb of retrenchment. As I look at the section, I consider it to be implicit in its provisions that the limited jurisdiction which it confers upon the competent authority is to examine whether, in cases where the retrenchment it stated to have become necessary by reason of an order passed by the Government, it has in fact so become necessary. It is a matter of common knowledge that Governmental orders relating to courses of instruction are used as a pretence for terminating the services of teachers. The conferment of a guided and limited power on the competent authority for the purpose of finding out whether, in fact, a retrenchment has become necessary by reason of a Government order, cannot constitute an interference with the right of administration conferred by article 30 (1). Section 6 is therefore valid. I would, however, like to add that in the interests of equal justice, the legislature ought to provide for an appeal against the orders passed by the competent authority under section 6. If and when the provision for an appeal is made, care must be taken to ensure that the appeal lies to an officer not below the prescribed rank. Section 7 provides that the pay and allowances of a teacher shall be paid on or before such day of a month, in such manner and by or through such authority, officer or person, as may be prescribed. I agree with my learned Brothers that this provision is regulatory in character and is, therefore, valid. These are all the sections the validity of which was questioned in the Writ Petitions filed in the High Court. It is therefore not neces 941 sary to consider whether the other provisions of the Act are valid or not. I concur in the final order proposed by Brother Kailasam that we need not go into the merits of each of the Writ Petitions filed in the High Court. Learned counsel appearing for the schools sought the decision of the High Court on the constitutional issue only. He specifically asked the High Court not to decide each case on its merits. That may, accordingly, be left to the High Court to decide in the light of the majority opinion rendered by us. We have, by a majority, held that sections 3 (3) (a), 3 (3) (b), 6 and 7 are valid while sections 3 (1), 3 (2), 4 and 5 are invalid in their application to minority education institutions. It must follow that such institutions cannot be proceeded against for violation of provisions which are not applicable to them. In conclusion, all the Civil Appeals before us will go back to the High Court of Andhra Pradesh for final disposal on merits in the light of our decision. There will be no order as to costs. FAZAL ALI, J.: This batch of civil appeals by special leave is directed against the judgment of the Andhra Pradesh High Court before whom the appellants filed writ petitions under Article 226 of the Constitution challenging the constitutional validity of several sections of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975, hereinafter referred to as the Act which contained 21 sections in five Chapters and was brought into force with effect from 5th October, 1974. This Act was also applicable to 19 Educational Institutions situated in the State of Andhra Pradesh and the appellants being admittedly minority educational institutions within the meaning of Article 30 of the Constitution of India have challenged the vires various sections of the Act which we shall indicate later. Some of the appeals have been filed by Christian Schools established by Roman Catholic Church and some by Christian Colleges established by the Christian community: The main grounds of challenge are that the provisions of the Act directly interfere with the internal management of the institutions and has completely curbed the constitutional freedom which has been guaranteed to them by Article 30(1) of the Constitution of India and being violative of Article 30(1) of the Constitution are ultra vires and therefore, wholly inapplicable to the appellants institutions. It is now well settled by a long course of decisions of this Court that our Constitution which seeks to establish a secular State contains 942 sufficient checks and balances, safeguards and guarantees to protect the rights of the minorities, the establishment of educational institutions being one of them. Article 46 which contains the constitutional directive to promote educational and economic interests of the weaker sections runs thus: "46. Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections: The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation. Article 30(1) confers a fundamental rights on the minorities to establish and administer educational institutions of their choice. Article 30(2) enjoins on the State that in granting aid to the educational institutions it shall not discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language. Thus, it would appear that Article 30(2) extends the guarantee contained in Article 30(1) even in the matter of receiving aid by the educational institution established by the minority community. While adverting to this aspect of the matter this Court in Re: Kerala Education Bill, 1957 observed as follows: "Nevertheless, in determining the scope and ambit of fundamental rights relied on by or on behalf of any person or body the court may not entirely ignore these directive principles of State policy laid down in Part IV of the Constitution but should adopt the principle of harmonious construction and should attempt to give effect to both as much as possible". Another important factor which has to be noticed is that the terms in which Article 30 is couched are absolute and unconditional as compared to Article 19 which is hedged in by reasonable restrictions which may be imposed by the State in public interest. Thus, in a way the fundamental right contained in Article 30 is more effective and wider than the fundamental rights contained in Part III of the Constitution. This, however, does not mean that the State is completely deprived of even the right to regulate the working of the minority institutions and to make rules in order to improve the standards 943 of education imparted therein so as to achieve excellence and efficiency in the educational standards of these institutions. Regulatory measures cannot in any sense be regarded as placing restrictions or curbing the administrative autonomy of the institutions concerned. But care must be taken by the State to see that in passing regulatory measures it does not transcend its limits so as to interfere with the internal administration of the management of the institutions concerned so as to violate the spirit and policy of Article 30. The question of the scope and ambit of Article 30 of the Constitution of India was very exhaustively considered as far back as in 1959 in Re: Kerala Education Bill (Supra). This case arose when the President of India called for the opinion of the Supreme Court on a Reference being made to it under Article 143(1) of the Constitution of India. The Reference was heard by 7 Judges of this Court out of which 6 of them excepting Venkatarama Aiyar, J. gave a unanimous opinion regarding various clauses of the Bill. The provisions of the Kerala Education Bill are not pari materia with the provisions of the Act with which we are concerned in this case, but this Court while delivering its opinion has laid down a number of salutary principles which throw a flood of light on the scope and interpretation of Article 30 of the Constitution of India. I would, therefore, like to extract certain important passages from the opinion of the Court which dealt with the scope and application of Article 30. I would, however, like to mention that some of the principles laid down by this Court in the aforesaid case may not apply to the present day conditions because there have been numerous changes in all aspects of life and even the concept of equality has undergone a revolutionary change. But the observations made by this Court would afford a very valuable guideline to determine the question in controversy in the present case. While indicating the width of the right conferred on the minority institutions by Article 30(1) this Court pointed out that the right to administer does not envisage a right to indulge in mal administration. In this connection, Das, C.J. speaking for the majority observed as follows: "The right to administer cannot obviously include the right to maladminister. The minority cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without any competent teachers, possessing any semblance of qualification, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars. It stands to reason, then, that the constitutional right to ad 944 minister an educational institution of their choice does not necessarily militate against the claim of the State to insist that in order to grant aid the State may prescribe reasonable regulations to ensure the excellence of the institutions to be aided". Again, while sounding a note of caution to the Government that no step should be taken by it which amounts to the institution surrendering its personality merely because the institution is receiving aid from the State, said the Chief Justice thus: "No educational institution can in actual practice be carried on without aid from the State and if they will not get it unless they surrender their rights they will, by compulsion of financial necessities, be compelled to give up their rights under Article 30(1). . . The State Legislatures cannot, it is clear, disregard or override those provisions merely by employing indirect methods of achieving exactly the same result. Even the Legislature cannot do indirectly what it certainly cannot do directly". Considering the provisions of the Kerala Education Bill particularly Clauses 6, 7, 9, 10, 11, 12, 14 and 15 the Court held that although these provisions constitute serious inroads on the right of administration of the institution and appear perilously near violating that right, yet in view of the peculiar facts of that case and having regard to the fact that clauses 9, 11 and 12 were designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes the Court as at present advised may treat these clauses as permissible regulations. These observations were based on the peculiar circumstances of the provisions of the Education Bill and the objects which they sought to sub serve may not be applicable to the present case where the circumstances are quite different because admittedly most of the appellant institutions are not receiving any aid from the Government. Even so, this Court found it impossible to support clauses 14 and 15 which according to them were totally destructive of the rights guaranteed by Article 30(1). In this connection, the Court observed as follows: "But considering that those provisions are applicable to all educational institutions and that the impugned parts of clauses 9, 11 and 12 are designed to give protection and 945 security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are prepared, as at present advised, to treat those clauses 9, 11(2) and 12(4) as permissible regulations which the State may impose on the minorities as a condition for granting aid to their educational institutions. We, however, find it impossible to support cls. 14 and 15 of the said Bill as mere regulations. The provisions of those clauses may be totally destructive of the rights under Article 30(1)". The Court had made it very clear that the observations extracted above applied to those categories of educational institutions which had sought not only recognition but also aid from the State. In the instant case. however, most of the appellant institutions have been established by mustering their own resources and have not been receiving substantial aid from the Government. Similarly, the Court made it clear that although the minority institutions had no fundamental right to recognition by the State yet to deny recognition on terms which may amount to complete surrender of the management of the institution to the Government would be violative of Article 30(1) of the Constitution. In this connection, Das, C.J. Observed as follows: "There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to the educational institutions except upon terms tantamount to the surrender of their Constitutional right of administration of the educational institutions of their choice is in truth and in effect to deprive them of their rights under Article 30(1). We repeat that the legislative power is subject eto the fundamental rights and the legislature cannot indirectly take away or abridge the fundamental rights which it could not do directly and yet that will be the result if the said Bill containing any offending clause becomes law" Again dwelling on the special character of the minority institutions Das, C.J. speaking for the Court observed thus: "It is obvious that a minority community can effectively conserve its language, script or culture by and through educational institutions and, therefore, the right to establish and maintain educational institutions of its choice is a necessary concomitant to the right to conserve its distinctive language, script or culture and that is what is conferred on all minorities by Article 30(1) which has hereinbefore been quoted in full. " 946 Describing the nature of the fundamental rights enshrined in Article 30 the Court observed as follows: "There can be no manner of doubt that our Constitution has guaranteed certain cherished rights of the minorities concerning their language, culture and religion. These concessions must have been made to them for good and valid reasons. Article 45, no doubt, requires the State to provide for free and compulsory education for all children, but there is nothing to prevent the State from discharging that solemn obligation through Government and aided schools and Article 45 does not require that obligation to be discharged at the expense of the minority communities. So long as the Constitution stands as it is and is not altered, it is, we conceive, the duty of this Court to uphold the fundamental rights and thereby honour our sacred obligation to the minority communities who are of our own." Similarly, Venkatarama Aiyer, J. who gave a dissenting opinion agreed however with the scope of Article 30 as expounded by the majority opinion. In this connection, the learned Judge observed as follows: "Article 30(1) belongs to the same category as articles 25, 26 and 29, and confers on minorities, religious or linguistic, the right to establish and maintain their own educational institutions without any interference or hindrance from the State. The true intention of that Article is to equip minorities with a shield whereby they could defend themselves against attacks by majorities, religious or linguistic, and not to arm them with a sword whereby they could compel the majorities to grant concessions. " Various shades and aspects of the matter were again considered by this Court in the case of Rev. Sidhajbhai Sabhai and Ors. vs State of Bombay & Anr. In this case it appears that the Government of Bombay issued an order directing the concerned institution which was controlled by the United Church of Northern India to reserve 80% of the seats in the training colleges run by the institution for teachers in non Government training colleges. These teachers, were to be nominated by the Government. Accordingly, the Educational Inspector ordered the Principal of the Training College not to admit without specific permission of the Education Department private students in excess of 20% of the total strength in each class. The institution took 947 serious exception to this order of the Government as amounting to A direct interference in the management of the affairs of the institution. The institution filed a writ petition under Article 32 of the Constitution before this Court which was heard by 6 Judges who after considering the facts of the case and the nature of the order passed by the Government observed as follows: "Unlike Article 19, the fundamental freedom under clause (1) of Article 30, is absolute in terms; it is not made subject to any reasonable restrictions of the nature the fundamental freedoms enunciated in Article 19 may be subjected to. All minorities, linguistic or religious have by Article 30(1) an absolute right to establish and administer educational institutions of their choice; and any law or executive direction which seeks to infringe the substance of that right under Article 30(l) would to that extent be void. This, how ever, is not to say that it is not open to the State to impose regulations upon the exercise of this right. Regulation made in the true interests of efficiency of instruction, discipline, health, sanitation, morality, public order and the like may undoubtedly be imposed. Such regulations are not restrictions on the substance of the right which is guaranteed; they secure the proper functioning of the institution, in matters educational". This Court refused to uphold the order of the Government on the ground, that this was only a regulatory measure. The Court pointed out that the regulation in order to be valid must satisfy a dual test, namely, (1) that it should be reasonable, (2) that it should be purely regulative of the educational character of the institution so as to make the institution an effective vehicle of education for the minority community. This Court observed thus : "The right established by Article 30(1) is a fundamental right declared in terms absolute. Unlike the fundamental freedoms guaranteed by Article 19, it is not subject to reasonable restrictions. It is intended to be a real right for the protection of the minorities in the matter of setting up of educational institutions of their own choice. The right is intended to be effective and is not to be whittled down by so called regulative measures conceived in the interest not of the minority educational institution, but of the public or the nation as a whole. If every order which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable 948 because it is in the public or national interest, though not in its interest as an educational institution, the right guaranteed by Article 30(1) will be put a "teasing illusion", a promise of unreality. Regulations which may lawfully be imposed either be legislative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institution effective as an educational institution. Such regulation must satisfy a dual test the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it. " On an examination of the provisions of the impugned Act in the instant case, it is manifest that the Act contains provisions harsher and more offensive than the order passed by the Government of Bombay in the Bombay case (supra) referred to above. In the case of Rev. Father W. Proost & Ors. vs The State of Bihar and Ors. Hidayathullah, C. J. speaking for the Court observed as follows: "In our opinion, the width of Article 30(1) cannot be cut down by introducing in it consideration on which Article 29(1) is based. The latter article is a general protection is given to minorities to conserve their language, script or culture. The former is a special right to minorities to establish educational institutions of their choice. This choice is not limited to institution seeking to conserve language, script or culture and the choice is not taken away if the minority community having established an educational institution of its choice also admits members of other communities. That is a circumstance irrelevant for the application of Article 30 (1) since, no such limitation is expressed and none can be implied. The two Article create two separate rights, although it is possible that they may meet in a given case. " The extent to which the State could interfere with the administrative autonomy of the minority institutions in view of the guarantee contained in Article 30(1) of the Constitution was again fully discussed and explained in the case of State of Kerala etc. vs Very Rev. Mother Provincial etc. In this case the Court was considering the 949 constitutionality of certain provisions of the Kerala University Act, 1969 which was passed with a view to reorganise the University of Kerala and establish a teaching, residential and affiliating University of private Colleges including institutions founded by the minority community. The Court was concerned only with some of the pro visions of the aforesaid Act and struck down the offending provisions as amounting to a blatant interference with the rights guaranteed to the minorities under Article 30(1) of the Constitution. Before analysing the facts of that case, I might indicate that in the instant case it is not disputed by the parties that all the appellants are minority institutions and had a governing body of their own. It is also not disputed that apart from the Christians others were also admitted to the institutions and received education. Even some of the members of the staff were also non Christians. In the background of these facts. I have to see how far the decision of this Court referred to above applies to the present appeals. While explaining the scope and ambit of management or administration Hidayatullah, C.J. speaking for the Court observe as follows: "Administration means 'management of the affairs ' of the institution. This management must be free of control so that the founders or their nominees can mould the institution as they think fit, and in accordance with their ideas of how the interests of the community in general and the institution in particular will be best served. No part of this management can be taken away and vested in another body without an encroachment upon the guaranteed right. There is, however, an exception to this and it is that the standards of education are not a part of management as such. These standards concern the body politic and are dictated by considerations of the advancement of the country and its people. Therefore, if universities establish syllabi for examinations they must be followed, subject however to special subjects which the institutions may seek to teach, and to a certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of students. Such regulations do not bear directly upon management as such although they may indirectly affect it. Yet the right of the State to regulate education, educational standards and the allied matters cannot be denied. The minority institutions cannot be allowed to fall below the standards of excellence expected of educational institutions, of under the guise of exclusive right of management, to decline to 950 follow the general pattern. While the management must be left to them, they may be compelled to keep in step with others". These observations, therefore, establish three important tests which would determine whether or not the action of the Government amounts to interference with the management of the institution (1) In order that the management of the institution is free from outside control, the founders must be permitted to mould the institution as they think fit; (2) no part of the management could be taken away by the Government and vested in another body without an encroachment upon the guaranteed right enshrined in Article 30(1) of the Constitution; (3) There is however an exception to. this general rule which is that the Government or the University can adopt regulatory measures in order to improve the educational standards which concern the body politic and are dictated by considerations of the advancement of the country and its people, so that the managing institution may not under the guise of autonomy or exclusive right of management be allowed to fall below the standard of excellence that is required of educational institutions. Having laid down these tests the Court proceeded to analyse some of the offending sections of the Kerala Act and came to the conclusion that according to some of the sections the governing body set up by education society was to consist of 11 members and the Managing Council of 21 members. 11 members of the government body were (i) the principal of the private college, (ii) the manager of the private college, (iii) a person nominated by the University in accordance with the provisions in that behalf contained in the statute (iv) a person nominated by the Government and (v) a person elected in accordance with the procedure laid down on the Act. Sub section (2) had the effect of making these bodies into bodies corporated having perpetual succession and a common seal. Sub section (6) laid down the powers and functions of the governing body, the removal of members thereof and the procedure to be followed by it, including the delegation of its powers to persons prescribed by the Statutes. Sub section (7) laid down that the decision in either of the two bodies shall be taken at the meetings on the basis of simple majority of the members present and voting. Thus, if these provisions were to apply to the minority institutions, it is manifest that it would amount to a direct interference in the internal management of the institution and would tantamount to the institution surrendering its educational personality. In other words, the governing body appointed by the University would replace the governing body of the founders of the institutions and thus the founders 951 would have no right to administer the institution in any way they like. A Adverting to this aspect of the matter Hidayatullah, C.J. Observed as follows : "These sections were partly declared ultra vires of Article 30(1) by the High Court as they took away from the founders the right to administer their own institution. It is obvious that after the election of the governing body or the managing council the founders or even the community has no hand in the administration. The two bodies are vested with the complete administration of the institutions. These bodies have a legal personality distinct from the educational agency or the corporate management. They are not answer able to the founders in the matter of administration The Constitution contemplates the administration to be in the hands of the particular community. However desirable it might be to associate nominated members of the kind mentioned in sections 48 and 49 with other members , of the governing body or the managing council nominees, it is obvious that their voice must play a considerable part in management Situations might be conceived when they may have a preponderating voice. In any event, the administration goes to a distinct corporate body which is in no way answerable to the educational agency or the corporate management. The founders have no say in the selection of the members nominated by them. It is, therefore, clear that by the force of sub sections (2), (4) and (6) of sections 45 and 49 the minority community loses the right to administer the institution it has founded. Sub section (S) also compels the governing body or the managing council to follow the mandates of the University in the administration of the institution. " Their Lordships then proceeded to consider the vires of sub sections (2) and (4) of section 56 which laid down the conditions of service of the teachers of private colleges. Sub section (2) provided that no teacher of a private college could be dismissed, removed or reduced in rank by the governing body or managing council without the previous sanction of the Vice Chancellor or placed under suspension by the governing body or managing council for a continuous period exceeding fifteen days without such previous sanction. Further sub section (4) provided that a teacher against whom disciplinary action is taken shall have a right of appeal to the Syndicate, and the Syndicate shall have, power to order reinstatement of the teacher in cases of wrongful removal or dismissal and to order such other reme 952 dial measures as it deems fit, and the governing body or managing council, as the case may be, shall comply with the order. It is thus obvious that in view of the provisions of sub sections (2) and (4) of section 56 the managing body had no discretion in the matter and the right of the management was completely taken away and vested in some other body. In the instant case, although the Act does not at all provide any rules or regulations by which the conditions of service of the teachers are to be governed yet it prohibits dismissal or removal of teachers without prior sanction of a competent authority to be declared by the Government. Similarly, it provides for an appeal to an appellate authority without laying down any guidelines and no right of appeal is given to the management. These provisions are contained in section 3, sub sections (2), (3) and (4) and section 4. This Court also considered the effect of section 58 of the Kerala Act by which a teacher of a college who was elected as a member of the Legislative Assembly or Parliament could not be debarred on his election, but would be allowed to continue. Upholding the decision of the High Court and commenting on the constitutionality of section 56 sub sections (2) and (4) and section 58 this Court observed as follows: "These provisions clearly take away the disciplinary action from the governing body and the managing council and confer it upon the University." "This enables political parties to come into the picture of the administration of minority institutions which may not like this interference. When this is coupled with the choice of nominated members left to Government and the University by sub s.1(d) of sections 48 and 49 it is clear that there is much room for interference by persons other than those in whom the founding community would have confidence." In the end while making it clear that there was no element of malafides in the Act passed by the Legislature, the provisions of the Act unfortunately robbed the founders of their right of administration and were, therefore, hit by Article 30(1) of the Constitution. In this connection, the Court observed as follows: "We have no doubt that the provisions of the Act were made bona fide and in the interest of education but unfortunately they do affect the administration of these institutions and rob the founders of that right which the Constitution desires should be theirs. The provisions, even if salutary, cannot stand in the face of the constitutional guarantees". 953 In the case of D.A.V. College etc. vs State of Punjab & Ors this Court was considering the provisions of Chapter V Clauses 2(1)(a), 17 and 18 read with clauses 1(2) and (3). Clause 2(1) (a) provided that a college applying for admission to the privileges of the University had to send a letter of application to the Registrar and would have to satisfy the Senate (1) that the College shall have a regularly constituted governing body consisting of not more than 20 persons approved by the Senate (2) that among those persons there should be two representatives of the University and the Principal of the College Exofficio. Clause 17 provided that any staff initially appointed shall be approved by the Vice Chancellor and any subsequent changes made must be reported to the University for approval. It was also provided that in the case of training institutions the teacher pupil ratio shall not be less than 1:12. The constitutional validity of these provisions was challenged before this Court on the ground that it violated Article 30(1) of the Constitution because the College was a minority institution being a College established by the Arya Samaj. On a consideration of these provisions, this Court upheld the contention of the appellants and observed thus: "It will be observed that under clause 1(3) if the petitioners do not comply with the requirements under 1 (a) their affiliation is liable to be withdrawn. Similarly it is stated that clause 17 also interferes with the petitioners right to administer their College as the appointment of all the staff has to be approved by the Vice Chancellor and that subsequent changes will also have to be reported to the University for Vice Chancellor 's approval. We have already held that the Petitioners institutions are established by a religious minority and therefore under Article 30 this minority has right to administer their educational institutions according to their choice. Clause 2(a) (a) and 17 of Chapter in V our view certainly interfere with that right. " The matter was again fully considered by this Court by a Bench consisting of 9 Judges in all its aspects. In the case of The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat & Anr and this is the leading case on the subject. This case has been relied on by counsel for both the parties in support of their respective Contentions. In this case it appears that certain provisions of the Gujarat University Act 1949 were challenged. Section 5 of the Act provided 954 that no educational institution situated within the University could be associated in any way with or seek admission to any privilege of any other University save and except with the sanction of the State Government. Section 33A(1)(a) of the Act provided that every college other than a Government college or a college maintained by the Government shall be under the management of a governing body which includes among others, the Principal of the College, a representative of the University nominated by the Vice Chancellor and (ii) in the case of selection of a member of the teaching staff of the College a selection committee would be constituted consisting of the Principal and a representative of the University nominated by the Vice Chancellor. Subsection (3) of the section provided that the provisions of section 33A (1) shall be deemed to be a condition of affiliation of every College referred to in that sub section. In other words, according to this provision, even the Colleges which were minority institutions would fall within the mischief of the section. Section 39 provided that within the University area all post graduate instruction, teaching and training shall be conducted by the University or by such affiliated College or institution and in such subjects as may be prescribed by statutes. Section 40(1) enacted that Court of the University may determine that all instructions, teaching and training in the courses of studies in respect of which the University was to hold examination shall be conducted by the University and shall be imparted by the teachers of the University. Section 41(1) stated that all Colleges within the University area which were admitted to the privilege of the University under section 5(3) and all Colleges within the said area which may hereafter be affiliated to the University shall be constituent colleges of the University, and their relations with the University would be governed by statutes made by the University in that behalf. As regards the conditions of service of the teachers appointed by the University section 51A(a) (b) enacts that no member of the teaching or other academic and non teaching staff of an affiliated college shall be dismissed, or removed or reduced in rank except after an enquiry in accordance with the procedure prescribed in clause (a) and the penalty to be inflicted on him is to be approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf. Section 52A(1) provided that any dispute between the governing body and any member of the teaching staff shall on a request of the governing body or of the member concerned be referred to a Tribunal or arbitration consisting of one member nominated by the governing body of the college, one member nominated by the member concerned and an umpire appointed by the Vice Chancellor. In view of the provisions referred to above, 955 the question that felI for consideration in that case was whether these k provisions interfere with the internal management of the minority institutions so as to compel them to surrender all their administrative powers to the University or the Vice Chancellor or the officers nominated by the Vice chancellor. There can be no doubt that if these provisions are construed against the background of the objective of the Act the idea was not to leave any controlling voice either in the courses of studies or in the matter of disciplinary action against the staff and the teacher in the management of the institution but to take over the entire management by the University authorities giving nominal representation to the management of the institution. Before we analyse the decision in St. Xaviers case (supra) we must note that as far back as 1959 in Re Kerala education Bill this Court had clearly pointed out that while the minority institution had no constitutional right to be affiliated to any college or University the right to be affiliated flowed from the language of Article 30(1) of the Constitution and the University concerned could not either refuse affiliation or impose such conditions which may result in complete surrendering of the management of the minority institution. Thus, the central question to be decided in this case was whether by virtue of the provisions of the Act set out above, Article 30(l) had been violated and if so to what extent. So far as the question of affiliation was concerned the entire court held that although there was no fundamental right to affiliation but recognition or affiliation was necessary for meaningful exercise of the right to establish and administer educational institution conferred on the minority institutions under Article 30(l) of the Constitution. In this connection, the Court observed as follows: "The consistent view of this Court has been that there is no fundamental right of a minority institution of affiliation. An explanation has been put upon that statement of law. It is that affiliation must be a real and meaningful exercise for minority institutions in the matter of imparting general secular education. Any law which provides for affiliation on terms which will involve abridgement of the right of linguistic and religious minorities to administer and establish educational institutions of their choice will offend Article 30(1). The educational institutions set up by minorities will be robbed of their utility if boys and girls cannot be trained in such institutions for University degrees. Minorities will virtually lose their right to equip their children for ordinary careers if affiliation be on terms which wouId 956 make them surrender and lose their rights to establish and administer educational institutions of their choice under Article 30. . . . . The establishment of a minority institution is not only ineffective but also unreal unless such institution is affiliated to a University for the purpose of conferment of degrees n on students". Relying on the previous decision in the case of State of Kerala etc. vs Very Rev. Mother Provincial etc. (supra) Ray, C.J. reiterated the principles laid down by the previous case and observed as follows: "when minority applies for affiliation, it agrees to follow the uniform courses of study. Affiliation is regulating the educational character and content of the minority institutions. These regulations are not only reasonable in the interest of general secular education but also conduce to. the improvement in the stature and strength of the minority institutions. . . . . . . . . . . Affiliation mainly pertains to the academic and educational character of the institution. Therefore, measures which will regulate the courses of study, the qualifications and appointment of teachers, the conditions of employment of teachers, the health and hygiene of students, facilities for libraries and laboratories are all comprised in matters germane to affiliation of minority institutions. These regulatory measures for affiliation are for uniformity, efficiency and excellence in educational courses and do not violate any fundamental right of the minority institutions under Article 30". Thus, to a limited extent affiliation of the minority institution to the University or Colleges concerned was held to be a regulatory measures provided it was aimed at improving the educational standards and laying down the conditions of employment of the teachers. This Court repeated that the minority institutions have the right to administer the institution and shorn of some checks and balances in the shape of regulatory measures the right to administer cannot be tampered with. In this connection, Ray, C.J. Observed as follows: "The minority institutions have the right to administer institutions. The right implies the obligation and duty of the minority institutions to render the very best to the students. In the rights of administration, checks and balances 957 in the shape of regulatory measures are required to ensure the appointment of good teachers and their conditions of service. The right to administer is to be tempered with regulatory measures to facilitate smooth administration. The best administration will reveal no trace or colour of minority. A minority institution should shine in exemplary eclectism in the administration of the institution. . . Regulations which will serve the interest of the students, regulations which will serve the interests of the teachers are of paramount importance in good administration. Regulations in the interest of efficiency of teachers, discipline and fairness in administration are necessary for pre serving harmony among affiliated institutions". C As regards the provision of the Act concerned by which the minority institution became a constituent College this was expressly struck down by this Court where Ray, C.J. speaking for the Court observed as follows: "once an affiliated college becomes a constituent college within the meaning of section 41 of the Act pursuant to a declaration under section 40 of the Act it becomes integrated to the university. A constituent college does not retain its former individual character any longer. The minority character of the college is lost. Minority institutions become part and parcel of the university. The result is that section 40 of the Act cannot have any compulsory application to minority institutions because it will take away their fundamental right to administer the educational institutions of their choice". Explaining what the concomitants of an autonomy in administration meant Ray, C.J. observed as follows: "Autonomy in administration means right to administer effectively and to manage and conduct the affairs of the institutions. The distinction is between a restriction on the right of administration and a regulation prescribing the manner of administration. The right of administration is day to day administration. The choice in the personnel of management is a part of the administration. The university will always have a right to see that there is no maladministration. If there is maladministration, the university will take steps to cure the same. There may be control and check on administration in order to find out whether the 958 minority institutions are engaged in activities which are not conducive to the interest of the minority or to the requirements of the teachers and the students . . . . The provisions contained in section 33A(1) (a) of the Act have the effect of displacing the management and entrusting it to a different agency. The autonomy in administration is lost. New elements in the shape of representatives of . different type are brought in. The calm waters of an institution will not only be disturbed but also mixed. These provisions in section 33A(1)(a) cannot therefore apply to minority institution". It follows from what had been held in the aforesaid case was that there should be no interference in the right of day to day administration of the institution of in the choice of the personality of the managing committee or governing body of the institution. This Court struck down section 33A(1) (a) of the Gujarat Act on the ground that the management of the college was completely displaced and was substituted by the university authorities. In other words, the position appears to be that although the university to which the minority institution was affiliated may exercise supervision in so far as the syllabi or the courses of studies are concerned, it cannot be allowed to be associated with the managing committee or the governing body of the institution so as to have a controlling voice in the matters at issue and thereby destroy the very administrative autonomy of the minority institution. This appears to be the main reason why Ray, C.J. was of the opinion that section 33A(1)(a) was violative of Article 30(1), and, therefore, not applicable to the minority institutions. The Court then dealt with the provisions of sections 51A and 52A of the Gujarat Act. Under section 51A no member of the teaching, other academic and non teaching staff of an affiliated college should be dismissed, removed or reduced in rank except after an enquiry in which he has been informed of the charges and given a reasonable opportunity of being heard and until he had been given a reasonable opportunity of making a representation on any such penalty proposed to be inflicted on him and the penalty to be inflicted on him was to be approved by the Vice Chancellor or any officer o ' the University authorised by him. This Court held that this is a blanket power given to the Vice Chancellor without any guidance, and observed as follows: "The approval of the Vice Chancellor may be intended to be a check on the administration. The provision contained in section 51A, clause (b) of the Act cannot be said to be a permissive regulatory measure inasmuch as it confers f ' 959 arbitrary power on the Vice Chancellor to take away the A right of administration of the minority institutions, Section 51A of the Act cannot, therefore, apply to minority institutions. " Dealing with the provisions contained in Section 52A of the Gujarat Act which contemplated a reference of any dispute between the governing body and any member of the teaching or academic and non teaching staff of an affiliated college which was connected with the conditions of service of such member to a. Tribunal of Arbitration consisting of one member nominated by the governing body of the college, one member nominated by the member concerned and an Umpire appointed by the Vice Chancellor, the learned Chief Justice was of the opinion that the introduction of such an arbitration to a Tribunal would start a spate of fruitless litigation and was likely to impair the excellence and efficiency maintained by the educational institution concerned. In this connection, the learned Chief Justice observed as follows: D "These references to arbitration will introduce an area of litigious controversy inside the educational institution. The atmosphere of the institution will be vitiated by such proceedings. The governing body has its own disciplinary authority. The governing body has its domestic jurisdiction. This jurisdiction will be displaced. A new jurisdiction will be created in administration. The provisions contained in section 52A of the Act cannot, therefore, apply to minority institution." Jaganmohan Reddy, J. agreeing with the majority judgment delivered by the Hon 'ble Chief Justice endorsed his conclusions regarding the constitutional validity to sections 40, 41, 33A(1) (a), 33A(1) (b), 51A and 52A of the Act and observed thus: "We agree with the Judgment of Hon 'ble the Chief Justice just pronounced and with his conclusions that sections 40, 41, 33A(1) (a), 33A(1) (b), 51A and 52A of the Act violate the fundamental rights of minorities and cannot, therefore, apply to the institutions established and administered by them." Dwelling on the importance of the fundamental right enshrined in Article 30, the learned Judge held that the right under Article 30 7 138 SCT/80 960 could not be exercised in vacuo, and in this connection observed as follows: . "The right under Article 30 cannot be exercised m vacuo. Nor would it be right to refer to affiliation or recognition as privileges granted by the State. In a democratic system of Government with emphasis on education and enlightenment of its citizens, there must be elements which give protection to them. The meaningful exercise of the right under Article 30(l) would and must necessarily involve recognition of the secular education imparted by the minority institutions without which the right will be a mere husk. This Court has so far consistently struck down all attempts to make affiliation or recognition on terms tentamount to surrender of its rights under Article 30(l) as 1, abridging or taking away those rights. Again as without affiliation there can be no meaningful exercise of the right under Article 30(l), the affiliation to be given should be consistent with that right, nor can it indirectly try to achieve what it cannot directly do. " Similar view was taken by Khanna, J. who also held that management of a minority institution should be kept free from governmental or other interference because the wonds "of their choice" appearing in Article 30 have special significance and would actually lose their value and utility if too much interference or unnecessary curbs are placed in the administration of the affairs of the minority institution. The learned Judge observed thus: "Administration connotes management of the affairs of the institution. The management must be free of control so that the founders or their nominees can mould the institution as they think; fit and in accordance with their ideas of how the interest of the community in general and the institution in particular will be best served. The words "of their choice" qualify the educational institutions established and administered by the minorities need not be of some particular class; the minorities have the right and freedom to establish and administer such educational institutions as they choose". Similarly, explaining the scope and ambit of Articles 29 and 30 the learned Judge observed as follows: "The broad approach has been to see that nothing is done to impair the rights of the minorities in the matter of their 961 educational institutions and that the width and scope of A the provisions of the Constitution dealing with those rights are not circumscribed. The principle which can be discerned in the various decisions of this Court is that the Catholic approach which led to the drafting of the provisions relating to minority rights should not be set at naught by narrow judicial interpretation. The minorities are as much children of the soil as the majority and the approach has been to ensure that nothing should be done as naught deprive the minorities of a sense of belonging, of a feeling of security, of a consciousness of equality and of the awareness that the conservation of their religion, culture! language and script as also the protection of their educational institutions is a fundamental right enshrined in the Constitution. The same generous, liberal and sympathetic approach should weigh with the courts in construing Articles 29 and 30 as marked the deliberations of the Constitution makers in drafting these Articles and making them part of the fundamental rights". The learned Judge held that although it was permissible for the authority concerned to prescribe regulations but such regulations should not impinge upon the right conferred on the minority institutions under Article 30(l). A just balance had to be struck between the two objectives, namely, passing of regulatory measures and preserving the fundamental rights of the minority institutions. The learned Judge observed as follows: "It is, therefore, permissible for the authority concerned to prescribe regulations which must be complied with before an institution can seek and retain affiliation and recognition. Question can arise whether there is any limitation on the prescription of regulations for minority educational institutions. So far as this aspect is concerned, the authority prescribing the regulations must bear in mind that the Constitution has guaranteed a fundamental right to the minorities for establishing and administering their educational institutions. Regulations made by the authority concerned should not impinge upon that right. Balance has, therefore, to be kept between the two objectives, that of ensuring the standard of excellence of the institution and that of preserving the right of the minorities to establish and administer their educational institutions. Regula 962 tions which embrance and reconcile the two objectives can be considered to be reasonable." The learned Judge further held that any law which interferes with the minorities choice of a governing body would be violative of Article 30(1 ) and observed thus : "In the light of the above principles, it can be stated that a law which interferes with the minorities choice of a governing body or management council would be violative of the right guaranteed by Article 30(l). " Criticising the constitutional validity of Section 52A of the Gujarat Act Khanna, J. shared the view taken by Ray, C.J. which has been referred to above. The learned Judge observed as follows: "The provisions of section 52A would thus not as a spoke in the wheel of effective administration o f an educational institution. It may also be stated that there is nothing objectionable to selecting the method of arbitration for settling major disputes connected with conditions of service of staff of educational institutions. It may indeed be a desideratum. What is objectionable, apart from what has been mentioned above, is the giving of the power to the Vice Chancellor to nominate the Umpire. Normally in such disputes there would be hardly any agreement between the arbitrator nominated by the governing body of the institution and the one nominated by the concerned member of the staff. The result would be that the power would vest for all intents and purposes in the nominee of the Vice Chancellor to decide all disputes between the governing body and the member of the staff connected with the latter conditions of service. The governing body would thus be hardly in a position to take any effective disciplinary action against a member of the staff. This must cause an inroad in the right of the governing body to administer the institution. Section 52A should, therefore, be held to be violative of Article 30(l) so far as minority educational institutions are concerned. " Similarly, while striking down sections 40 and 41 of the Gujarat Act, the learned Judge found that the affiliated colleges would become constituent colleges as a result of the provisions of these sections and held that these provisions could not apply to the minority institutions. In this connection, Khanna, J. Observed as follows: "A provision which makes it imperative that teaching in , under graduate courses can be conducted only by the Uni 963 versity and can be imparted only by the teachers of the University plainly violates the rights of minorities to establish and administer their educational institution. Such . a provision must consequently be held qua minority institutions to result in contravention of Article 30(1). I would, therefore, strike down section 40 so far as minority educational institutions are concerned as being violative of Article. 30(1)". Mathew, J. while striking down the constitutional validity of section 33A(1) of the Gujarat Act observed as follows: "The heart of the matter is that no educational institution established by a religious or linguistic minority can claim total immunity from regulations by the legislature or the university if it wants affiliation or recognition; but the character of the permissible regulations must depend upon their purpose. In every case, when the reasonableness of a regulation comes up for consideration before the court, the question to be asked and answered is whether the regulation is calculated to subserve or will in effect sub serve the purpose of recognition or affiliation, namely, the excellence of the institution as a vehicle for general secular education to the minority community and to other persons who report to it. The question whether a regulation is in li: the general interest of the public has no relevance, if it does not advance the excellence of the institution as a vehicle for general secular education as, ex hypothesi, the only permissible regulations are those which secure the effectiveness of the purpose of the facility, namely, the excellence of the educational institutions in respect of their educational standards. " Similarly, the learned Judge took strong exception to the provisions of section 33A which required that the college should have a governing body which should include persons other than those who are members of the society of Jesus, struck provisions of section 33A and observed as follows: "We think that the provisions of sub sections (1) (a) and (l)(b) of section 33A abridge the right of the religious minority to administer educational institutions of their choice. The requirement that the college should have a governing body which shall include persons other than those who are members of the governing body of the society of Jesus 964 would take away the management of the college from the governing body constituted by the Society of Jesus and vest it in a different body. The right to administer the educational institution established by a religious minority is vested in it. It is in the governing body of the Society of Jesus that the religious minority which established the college has vested the right to administer the same. The requirement that the college should have a governing body including persons other than those who constitute the governing body of the Society of Jesus has the effect of divesting that body of its exclusive right to manage the educational institution The learned Judge further pointed out that under the guise of preventing mal administration the right of the governing body to manage the affairs of the minority institution should not be take away and in the same token observed as follows: "Under the guise of preventing mal administration, the right of the governing body of the college constituted by the religious minority to administer the institution cannot be taken away. The effect of the provision is that the religious minority virtually loses its right to administer the institution it has founded. "Administration" means 'management of the affairs ' of the institution. This management must be free of control so that the founders or their nominees can mould the institution according to their way of thinking and in accordance with their idea of how the interests of the community in general and the institution in PARTICULAR will be best served. No part of this management can be taken away and vested in another body without an encroachment upon the guaranteed right." Similarly, analysing various provisions of the Gujarat Act like sections 51A(1) (a) and 51A(l) (b) etc. the learned Judge observed as follows: "The relationship between the management and a teacher is that of an employer and employee and it passes one 's understanding why the management cannot terminate the services of a teacher on the basis of the contract of employment. Of course, it is open to the State in the exercise of its regulatory power to require that before the services of a teacher are terminated he should be given an opportunity of being heard in his defence. But to require 965 that for terminating the services of a teacher after all inquiry has been conducted, the management should have the approval of an outside agency like the Vice Chancellor or of his nominee would be an abridgement of its right to administer the educational institution. No guide lines are provided by the legislature to the Vice Chancellor for the exercise of his power. The fact that the power can be delegated by the Vice Chancellor to any officer of the university means that any petty officer to whom the power is delegated can exercise a general power of veto. There is no obligation under the sub sections (1) (b) and (2) (b) that the Vice Chancellor or his nominee should give any reason for disapproval. As we said a blanket power without any guideline to disapprove the action of the management would certainly encroach upon the right of the management to dismiss or terminate the services of a teacher after an enquiry. " Beg, J. speaking in the same strain observed as follows : "It is true that, if the object of an enactment is to compel a minority institution even indirectly, to give up the exercise of its fundamental rights, the provisions which have this effect will be void or inoperative against the minority institution. The price of affiliation cannot be a total abandonment of the right to establish and administer a minority institution conferred by Article 30(1) of the Constitution. This aspect of the matter, therefore, raises the question whether any of the provisions of the Act are intended to have that effect upon a minority institution. Even if that intention is not manifest from the express terms of statutory provisions, the provisions may be vitiated if that is their necessary consequence or effect. " Even Dwivedi, J. who had sounded a discorded note held that so far as section 33A(1) (a) was concerned it was obnoxious to Article 30(1) of the Constitution. In the case of Gandhi Faizeam College Shahajahanpur vs University of Agra and Anr. the majority judgment consisting of V. R. Krishna Iyer and A.C. Gupta, JJ. Observed as follows: "What is the core of the restriction clamped down by Statute 14 A? What is the conscience and tongue of Article 30 ? If the former is incongruous with the latter, it 966 withers as void; otherwise, it prevails and binds. That is the crux of the controversy. " "The thrust of the case is that real regulations are desirable, necessary and constitutional but, when they operate on the 'administration ' part of the right, must be confined to chiselling into shape, not cutting down out of shape, the individual personality of the minority." Mathew, J. who gave a dissenting opinion and whose opinion follows the principles laid down by the Court in St. Xavier 's case (supra) observed as follows: "The determination of the composition of the body to administer the educational institution established by a religious minority must be left to the minority as that is the core of the right to administer. Regulations to prevent maladministration by that body are permissible. As the right to determine the composition of the body which will and minister the educational institution is the very essence of the right to administer guaranteed to the religious or linguistic minority under Article 30(1), any interference in that area by an outside authority cannot be anything but an abridgement of that right. The religious or linguistic minority must be given the freedom to constitute the agency through which it proposes to administer the educational institution established by it as that is what Article 30(l) guarantees. The right to shape its creation is one thing: the right to regulate the manner in which it would function after it has come into being is another. Regulations arc permissible to prevent maladministration but they can only relate to the manner of administration after the body which is to administer has come into being. " The entire case law as fully reviewed by this Court recently in the case of Lilly Kurian vs Sr. Lewin & ors. In this case, Sen, J. speaking for the court and after a deep dichotomy and adroit analysis of St. Xavier 's case (supra) and the case which preceded that case summed up the law thus: "An analysis of the judgments in St. Xaviers College 's case (supra) clearly shows that seven out of nine Judges held that the provisions contained in clauses (b) of sub sections (1) and (2) of section 51A of the Act were not applicable to an educational institution established and managed by 967 religious or linguistic minority as they interfere with the disciplinary control. Of the management over the staff of its educational institutions. The reasons given by the majority were that the power of the management to terminate the ser vices of any members of the teaching or other academic and non academic staff was based on the relationship between an employer and his employees and no encroachment could be made on this right to dispense with their services under the contract of employment, which was an integral part of the right to administer, and that these provisions conferred on the Vice Chancellor or any other officer of the University authorised by him, uncanalised, unguided and unlimited power to veto the actions of the management." "The power of appeal conferred on the Vice Chancellor under ordinance 33(4) is not only a grave encroachment on the institution 's right to enforce and ensure discipline in its administrative affairs but it is uncanalised and unguided in the sense that no restrictions are placed on the exercise of the power. The extent of the appellate power of the Vice Chancellor is not defined; and, indeed, his powers arc unlimited. The grounds on which the Vice Chancellor can interfere in such appeals are also not defined. He may not only set aside an order of dismissal of a teacher and order his reinstatement, but may also interfere with any of the punishments enumerated in items (ii) to (v) of ordinance 33(2); that is to say, he can even interfere against the infliction of minor punishments. In the absence of any guidelines, it cannot be held that the power of the Vice Chancellor under ordinance 33 (4) was merely a check on maladministration. As laid down by the majority in St. Xavier College 's case (supra) such a blanket power directly interferes with the disciplinary control of the managing body of a minority educational institution over its teachers". Thus, on an exhaustive analysis of the authorities of this Court and the views taken by it from time to time during the last two decades on various aspects, shades and colours, built in safeguards, guarantees, scope and ambit of the fundamental right enshrined in Articles 30(1), the principles and propositions that emerged may be summarised as follows: 1. That from the very language of Article 30(1) it is clear that it enshrines a fundamental right of the 968 minority institutions to manage and administer their educational institutions which is completely in consonance with the secular nature of our democracy and the Directives contained in the Constitution itself. That although unlike Article 19 the right conferred on the minorities is absolute, unfettered and unconditional but this does not mean that this right gives a free licence for maladministration so as to defeat the avowed object of the Article, namely, to advance excellence and perfection in the field of education. While the State or any other statutory authority has no right to interfere with the internal administration or management of the minority institution, the State can certainly take regulatory measures to promote the efficiency and excellence of educational standards and issue guidelines for the purpose of ensuring the security of the services of the teachers or other employees of the institution. At the same time, however, the State or any University authority cannot under the cover or garb of adopting regulatory measures tend to destroy the administrative autonomy of the institution or start interfering willy nilly with the core of the management of the institution so as to render the right of the administration of the management of the institution concerned nugatory or illusory. Such a blatant interference is clearly violative of Article 30(1) and would be wholly inapplicable to the institution concerned. Although Article 30 does not speak of the conditions under which the minority educational institution can be affiliated to a college or University yet the section by its very nature implies that where an affiliation is asked for, the University concerned cannot refuse the same without sufficient reason or try to impose such conditions as would completely destroy the autono mous administration of the educational institution. The induction of an outside authority however high it may be either directly or through its nominees in the governing body or the managing committee of the minority institution to conduct the affairs of the institution would be completely destructive of the fundamental right guaranteed by Article 30(1) of the 969 Constitution and would reduce the management to a helpless entity having no real say in the matter and thus destroy the very personality and individuality of the institution which is fully protected by Article 30 of the Constitution. Perhaps there may not be any serious objection to the introduction of high authorities like the Vice Chancellor or his nominee in the administration particularly that part of it which deals with the conditions of service of the teachers yet such authorities should not be thrust so as to have a controlling voice in the matter and thus over shadow the powers of the managing committee. Where educational institutions have set up a particular governing body or the managing committee in which all the powers vest, it is desirable that such powers should not be curbed or taken away unless the Government is satisfied that these powers are grossly abused and if allowed to continue may reduce me efficacy or the usefulness of the institution. It is, therefore, open to the Government or the University to frame rules and regulations governing the conditions of service of teachers in order to secure their tenure of service and to appoint a high authority armed with sufficient guidance to see that the said rules are not violated or the members of the staff are not arbitrarily treated or innocently victimised. In such a case the purpose is not to interfere with the internal administration or autonomy of the institution, but it is merely to improve the excellence and efficiency of the education because a really good education can be received only If the tone and temper of the teachers are so framed as tc make them teach the students with devotion and dedication and put them above all controversy. But while setting up such an authority care must be taken to see that the said authority is not given blanket and uncanalised and arbitrary powers so as to act at their own sweet will ignoring the very spirit and objective of the institution. It would be better if the authority concerned associates the members of the governing body or its nominee in its deliberation so as to instil confidence in the founders of the institution or the committees constituted by them. 970 8. Where a minority institution is affiliated to a University the fact that it is enjoined to adopt the courses of study or the syllabi or the nature of books prescribed and tho holding of examination to test the ability of the students of the Institution concerned does not violate the freedom contained in article 30 of the Constitution. While there could be no objection in setting up a high authority to supervise the teaching staff so as to keep a strict vigilance on their work and to ensure the security of tenure for them, but the authority concerned must be provided with proper guidelines under the restricted field which they have to cover. Before coming to ally decision which may be binding on the managing committee, the Head of the institution or the senior members of the managing committee must be associated and they should be allowed to have a positive say in the matter. In some cases the outside authorities enjoy absolute powers in taking decisions regarding the minority institutions without hearing them and these orders are binding on the institution. Such a course of action is not constitutionally permissible so far as minority institution is concerned because it directly interferes with the administrative autonomy of the institution. A provision for an appeal or revision against the order of the authority by the aggrieved member of the staff alone or the setting up of an Arbitration Tribunal is also not permissible because Ray, C.J. pointed out in St. Xaviers case (supra) that such a course of action introduces an arena of litigation and would involve the institution in unending litigation, thus imparing educational efficiency of the institution and create a new field for the teachers and thus draw them out of purely educational atmosphere of the minority institutions for which they had been established. In other words, nothing should be done which would seek to run counter to the intentions of the founders of such institutions. These are some of the important principles that have been clearly laid down by the Supreme Court in the cases discussed above. I shall now endeavour to examine the provisions of the impugned Act in the light of the principles enunciated above. I shall point out hereafter that some of the provisions of the Act are so harsh and arbitrary and 971 confer uncanalised powers on some of the authorities appointed under the Act so as to amount to a direct and thoughtless interference with the management of the institution Coming to the provisions of the Act one significant feature may be noticed here. Unlike other Acts passed by some of the States the impugned Act, while it takes within its sweep even the minority institutions, does not at all lay down any rules, regulations governing the conditions of service of the teachers of the institution, nor does it provide any guidelines on the basis of which the rules could be made, nor does it contain a mandate directing the minority institution to frame proper rules and conditions of service of its teachers. Mr. Lal Narayan Sinha appearing for the appellants submitted that this is a most serious lacuna in the Act which makes it completely violative of Article 30 of the Constitution and other provisions read in the light of this lacuna also lose their legal sanctity. Section 1(3) provides that the Act applies to all private educational institutions that is to say including minority institutions. In the instant case all the appellants are institutions established by the Christian community. Sub section (4) of section 1 says that the Act shall be deemed to have come into force on the 5th October, 1974. Sections 2 is the definition clause which defines various terms used in the Act and it is not germane for our purpose to deal with the various definitions which is more or less a formality. Learned counsel appearing for the appellants has challenged the constitutional validity of sections 3, 4, 5, 6, 7, 10, 11, 12, 16 and 17 of the Act. Section 3(1) of the Act may be extracted thus: "3(1) Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed removed or reduced in rank nor shall his appointment be otherwise terminated, except with the prior approval of the competent authority.; Provided that if any educational management, agency or institution contravenes the provisions of this sub section, the teachers affected shall be deemed to be in service". A perusal of this section would clearly reveal that while no rules regulating the conditions of service of the teachers employed in private institutions had been made, the power to do so has been reserved with the Government. The proviso enjoins that any contravention of the provisions would not affect the teachers who would be deemed to be in service. It is manifest that in the absence of any rules the proviso would have no application. Even if the proviso applies it would 972 amount to a serious inroad on the fundamental right of the minority institutions to administer or manage their own affairs. Thus section 3(1) as also the proviso is clearly violative of own affairs article 30 is wholly inapplicable to the minority institutions. Serious exception on has been taken by counsel for the appellants to sub sections (2), (3) and (4) of section 3. Section 3(2) may be extracted thus : "3 (2) Where me proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority that authority shall, if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment". This sub section seeks to control the power of the institution concern ed in the matter of dismissal, removal or reduction in rank or termination of the appointment of any teacher employed by any private educational institution and enjoins that any action taken against the teacher will be of no consequence unless it is approved by the said competent authority. It will be rather interesting to note that the competent authority has not been given any guidelines under which it can act. The Solicitor General (Mr. section N. Kacker) submitted that the word 'satisfy ' as used in the section is a strong term and regulates the powers of the competent authority and the words "adequate and reasonable grounds" contain sufficient guidelines to exclude exercise of any arbitrary power. I am, however, unable to agree with this contention. In the first place, it was the inherent and fundamental right of the institution to deal with its employees or teachers and take necessary action against them. If the State wanted to regulate the conditions of service of the teachers it should have taken care to make proper rules giving sufficient powers to the management in the manner in which it was to act. Secondly, the induction of an outside authority over the head of the institution and making its decision final and binding on the institution was a blatant interference with the administrative autonomy of the institution. Sub section (2) does not contain any provision that while giving approval the competent authority was to ascertain the views of the governing body or the managing committee so as to know their view point and the reason why action has been taken against a particular teacher or teachers. Similarly, the words "adequate and reasonable" are too vague and do not lay down any objective standard to judge the discretion which is to be exercised by the competent authority whose order will be binding on the institution. Thirdly, 973 while section 4 gives a right to the aggrieved teacher to file an appeal before the appellate authority, no such right has been given to the management to file an appeal against the order of the competent authority if it refuses to grant sanction to the order of the managing committee of the institution. Thus, in my opinion, sub section (2) suffers from the Vice of excessive delegation of powers and confers undefined, uncanalised, absolute and arbitrary powers to grant or to refuse sanction to any action taken by the managing committee and almost reduces the institution to a helpless position. Such a provision, therefore, not only interferes with the right of the management of the institution but is completely destructive of the right conferred on the institution under Article 30(1) of the Constitution. Even C the competent authority mentioned in the sub section is merely the District Educational officer and it appears from the record that it is not a very high authority such as, the Director of Public Instruction or the Vice Chancellor which may be presumed to act objectively and reasonably. Another material defect in section 3(2) is that no time limit has been fixed by the statute within which the competent authority is to give its approval. If the competent authority either due to over work endeavours or some other reason chooses to sit over the matter for a pretty long time a stalemate would be created which will seriously impair the smooth running of the institution. Indeed if sub section (2) would have been cast in a negative form so as to provide that the sanctioning authority was bound to give approval to any action taken by the institution against its teachers unless it was, after hearing the teacher and the management of the institution, satisfied that the order passed by the institution or the action taken by it was in violation of the principles of natural justice, against the statutory provisions of law or tainted with factual or legal malice no objection could be taken. If the section would have been worded in this manner, then its validity could have been upheld on the ground that it was a sound regulatory measure which does not destroy the administrative autonomy of the institution but is meant to ensure the security of tenure of the teaching staff of the institution. But as this is not so, the validity of the provision cannot be supported. For these reasons, therefore, I am satisfied that subsection (2) is unconstitutional being violative of Article 30(1) of the Constitution and would have no application to any minority institution Sub section (3) of section 3 runs thus: "3 (3) (a) No teacher employed in any private educational institution shall be placed under suspension, except 974 when an inquiry into the gross misconduct of such teacher is contemplated. (b) No such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed within that period, such teacher shall, without prejudice to the inquiry, be deemed to have been restored as teacher. Provided that the competent authority may, for reasons to be recorded in writing, extend the said period of two months, for a further period not exceeding two months, if, in the opinion of such competent authority, the inquiry could not be completed within the said period of two months for reasons directly attributable to such teacher". These provisions deprive the minority institution of the power to suspend any teacher unless an inquiry into the gross misconduct of such teacher is contemplated. One could understand if the word 'misconduct ' alone was used in sub section (3) (a) but as it is qualified by the adjective gross, it almost destroys the power of suspension which the minority institution might possess. Even so, sub section (3) (b) makes it clear that no suspension shall remain in force for a period of more than two months from the date of suspension and if no inquiry is completed within this period, the teacher would have to be reinstated. This is indeed a most peculiar provision and gives an unqualified right to a teacher in the matter of suspension. Even a Government servant to whom Article 311 of the Constitution or the statutory rules apply does not enjoy such a liberal facility. Moreover, the rules make a mockery of any order of suspension passed pending an inquiry. It is very difficult to predicate how long an inquiry would last and yet to limit the period of suspension to two months irrespective of the nature, length and the scope of the inquiry to only two months is really to completely curb the power of suspension. The proviso to section 3 (3) again empowers the competent authority to extend the period of suspension. Thus the cumulative effect of sub sections (3)(a), 3(b) and the proviso is to interfere with the internal administration of the minority institution and curb the power of suspension and thus deprive the institution of the right of or taking any disciplinary action against the teacher to such an extent that the institution becomes almost a figure head. Such a provision, therefore, cannot be upheld as it is clearly violative 975 Of Article 30(1) of the Constitution of India. It is obvious that whenever an institution suspends a teacher, it is bound to pay subsistence allowance and any express provision like sub section (4) of section 3 is wholly unnecessary and makes a serious inroad on the internal autonomy of the institution. Thus, in our opinion, section 3 in its entirety is ultra vires as being violative of Article 30(1) of the Constitution and is wholly inapplicable to the appellants who are admittedly minority institutions. Section 4 of the Act may be quoted thus: "4. Any teacher employed in any private education institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions or service are altered or interpreted to his disadvantage, by any order; may prefer an appeal against the order to such authority or officer as may be prescribed; and different authorities or officers may be prescribed for different classes of private educational institutions. Explanation: In this section, the expression 'order ' includes any order made on or after the date of the commencement of this Act in any disciplinary proceeding which was pending on that date". This section gives a right of appeal to a teacher who is dismissed, removed or reduced in rank and whose services are terminated. No guideline are provided in which manner this power is to be exercised nor does it contain any provision which may entitle the minority institution to be heard by the appellate authority. No principles or norms are laid down on the basis of which the order passed by the institution could be examined by the appellate authority. Even what would amount to misconduct has not been defined or qualified in sections 2, 3 or 4. It is, therefore, difficult to understand how the appellate . court would exercise this power in deciding whether or not the teacher was guilty of misconduct and what is the correlation between the degree of misconduct and the appropriate punishment which may have been awarded by the institution and approved by the competent authority. The conferment of such an 8 138 SCI/80 976 absolute and unguided power on the appellate authority which if passed against the management it cannot even file a civil suit to set aside this order amounts not only to a direct interference with the right enshrined in Article 30(l) of the Constitution but makes the minority institution a limp, lifeless and powerless body incapable of effective teaching and/or attaining excellence in the standards of education. such a course of action is bound to hurt the feelings of the founders of the institution. For these reasons, therefore, I and of the opinion that section 4 is also ultra vires as violative of Article 30 of the Constitution and would, therefore, have no application to the minority institutions who are appellants in this case. Section 5 merely provides for transfer of an appeal pending before any authority to the appellate authority and if section 4 falls and is inapplicable to the minority institution section 5 also follows the same fate and will not apply to the minority institution. Section 6 runs thus: "6. Where any retrenchment of any teacher employed in any private educational institution is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be effected with the prior approval of the competent authority". I This section deals with the contingencies under which the institution may be compelled to retrench any teacher employed in the school. Whatever be the position in other private educational institutions so far as the minority institution is concerned, this is purely a domestic matter of the institution and cannot be interfered with by any statute. The words "administer educational institutions of their choice" clearly indicate that the institution has an absolute right to select teachers, retain them or retrench them at its sweet will according to the norms prescribed by the institution or by the religious order which has founded the institution. As almost all the minority institutions in the present case are not receiving any substantial aid from the Government but have established the institution by their own moneys and are bearing all the expenses themselves, it is none of the business of any outside authority to interfere with or dictate to the institution as to which member of the staff should be retrenched and which should be retained. The provisions of section 6 directly interfere with this valuable right of the institution by providing that the retrenchment shall be made with the approval of the competent authority. The power is uncanalised and unguided and , suffers from the same vices as has been pointed out in the case of 977 section 3 of the Act. For these reasons, therefore, section 6 will have no application to the institution. Section 7 may be extracted thus: "7. l he pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person, as may be prescribed". This is purely an innocuous provision which is meant for the benefit of the institution itself by providing how the salaries of the employees of the institution should be paid and is purely a regulatory measure which does not at all touch or effect the administrative autonomy of the minority institution. So far as sections 8 and 9 are concerned, they would obviously not apply to the minority institutions because these institutions do not receive any aid from the Government and are, therefore, not liable to maintain or furnish accounts to the University authorities or to the Government, nor the prescribed authority has any right to inspect or pass audit of the accounts kept by the institution. For these reasons, sections 8 and 9 also do not apply to the minority institutions. Section 10 relates to the inspection or inquiry in respect or private educational institution, its buildings, laboratories etc. , or any other matter connected with the institution which may be necessary. Subsections (2), (3) and (4) of section 10 provide the mode in which the inspection or inquiry is. to be made and a report submitted to the concerned authority. These provisions are also in the nature of sound regulatory measures and appear to be in the larger interest of the functioning of the institution itself and, therefore, do not offend Article 30 of the Constitution. Section 11 runs thus: "11. Every educational agency shall, within such time or within such extended time as may be fixed by the competent authority in this behalf, furnish to the competent authority such returns statistics and other information as the competent authority may, from time to time require. " This section also contains purely a regulatory measure and is in the best interest of the institution and cannot be said to violate Article 30( 1) of the Constitution. 978 Section 12 and 13 relate to penalties for contravention of the provisions of the Act which have been held by me to be violative of Article 30 and, therefore, inapplicable to the appellants because that would amount to destroying the very foundation and personality of the minority institution. These sections are also not applicable to the minority institution except n respect of provisions of the Act which have been upheld by me. Section 15 contains the revisional power and provides that the Government may delegate its powers, or make rules regarding the exercise of such a power. I have already pointed out that the setting up of a competent authority to sanction or approve the order passed by the institution in respect of a member of the staff where sufficient guidelines and grounds for approval have been prescribed is purely a regulatory measure and does not attract article 30 of the Constitution. The conferment of a right of revision against any order of the minority institution under the Rules framed which provide sufficient guidelines and allow the minority institutions an opportunity to be heard, is an innocuous provision and does not impinge on the autonomy of the minority institution. I am, therefore, of opinion that such a provision is in the best interests of the institution and does not in any way harm the personality of the institution or destroy the image so as to interfere with its autonomous functioning. I, therefore, hold that section 15 is constitutionally valid and I might hasten to add that its constitutionality was not challenged before this Court. Section 16 bars a civil court from deciding the questions which fall under this Act and section 17 contains an indemnity clause. As I have held that almost all the operative and important provisions of this Act are ultra vires, these sections also would have no application to the minority institution. In fact, section 16 suffers from a serious defect, viz., that if it was held by me that the provision regarding appeal to the appellate authority was valid then section 16 completely bars the right of the management to file a suit to challenge the validity of the order of the appellate authority. To this extent, therefore, this Section makes a serious inroad on the fundamental right of the minority institution and must be held to be inapplicable to the minority institution. I have gone through the judgment of the High Court which does not appear to have considered the various aspects and features of the matter set out by me, hor has it properly applied the propositions summarised by me as culled out from the various decisions of this 979 Court starting from 1959 (Re: Kerala Education Bill 's case) (supra) to 1979 (Lily Kurian 's case) (supra). For these reasons, I hold the sections 3 (alongwith its sub section, 4, 5, 6, 8, 9, 12, 13, 16 and 17 are violative of Article 30 of the Constitution and have no application to the appellants which are minority institutions and which fall within the protection guaranteed by the Constitution under Article 30. I accordingly allow all these appeals, set aside the order of the High Court and quash all the directions which may have been issued by the Government or other authorities under the Act to the appellants except such steps as are taken under those provisions of the Act which have been upheld by me, viz., sections 7, 10, 11, 14 and 15. In the peculiar circumstances of the case, I leave the parties to bear their own costs. KAILASAM, J. These appeals are by special leave against the judgment of the High Court of Judicature at Andhra Pradesh. Several writ petitions questioning the validity of certain provisions of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975 (hereinafter called the Act) were heard. These writ petitions were disposed of by a common judgment by the Andhra Pradesh High Court. Aggrieved by the judgment of the High Court helding that the impugned sections of the Act is intra vires of the Constitution, not void and operative on schools and institutions of the minorities, the present appeals by special leave have been preferred. The purpose of the legislation is set out in the Statement of objects and Reasons to the Bill. It is stated : "Of late. several instances have come to the notice of the State Government regarding the various irregularities committed by the managements of private educational institutions in matters relating to suspension, dismissal, removal or other wise termination, of members of the teaching staff on flimsy grounds without framing charges and without giving an opportunity to explain. The said managements are also flouting the orders or instructions of Director of Public Instruction or the Universities or the Government in respect of such matters. Having regard to the above circumstances, the Government have decided to regulate the service conditions of teachers employed in the private educational institutions to ensure security of service of the said teachers, and also to exercise certain control on such institutions in the matter of their accounts, etc., by undertaking suitable legislation in this regard. " 980 The salient features of the Bill are given as under: (i) to safeguard the service conditions of teaching staff in the recognised private educational institutions in the matter of suspension, removal, dismissal and retrenchment; (ii) to make it compulsory for the private managements to obtain the prior permission of the competent authority before a teacher is visited with any of the aforesaid major penalties; (iii) to provide that the suspension of a teacher pending enquiry, should be for a period of two months only after which the teacher should be deemed to have been restored to duty, unless the competent authority extends the suspension period by another two months; thereby making it specific that in any case the teachers shall not be under suspension for more than four months; (iv) to provide that no teacher should be retrenched with out the prior permission of the competent authority; (v) to provide for payment of salaries to teachers on the specified day of the month in such manner and by or through such authorities, officer or persons, as may be laid down in the rules; (vi) to provide for conducting enquiries into the affairs of the recognised private educational institutions and also for issue of suitable directions to the managements of such institutions based on such enquiry, which shall be binding on the managements. The writ petitions challenged the validity of sections 3 to 7 of the Act. Sections 3 to 7 occur in Chapter II relating to terms and conditions of service of teachers. It is necessary to set out the impugned sections : "Dismissal, removal or reduction in rank or suspension of teachers employed in private educational institutions. Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall he dismissed, removed or reduced in rank nor shall his appointment be other wise terminated, except with the prior approval of the competent authority. 981 Provided that if any educational management, agency or institution contravenes the provisions of this sub section, the teachers affected shall be deemed to be in service. (2) Where the proposal to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, that authority shall, if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment. (3a) No teacher employed in any private educational institution shall be placed under suspension, except when an inquiry into the gross misconduct of such teacher is contemplated. (b) No such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed within that period, such teacher shall, without prejudice to the inquiry, be deemed to have been restored as teacher. Provided that the competent authority may, for reasons to be recorded in writing, extend the said period of two months for a further period not exceeding two months, if, in the opinion of such competent authority, the inquiry could not be completed within the said period of two months for reasons directly attributable to such teacher. (4) Every such teacher as is placed under suspension under subsection (3) shall be paid subsistence allowance at such rates as may be prescribed during the period of his suspension. Appeal against orders of punishment imposed on teachers employed in private educational institutions. Any teacher employed in any private educational institution (a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated; or (b) whose pay or allowances or any of whose conditions of service are altered or interpreted to his disadvantage, by any order; may prefer an appeal against the order to such authority or officer as may be prescribed; and different authorities or officers may be prescribed for different classes of Private educational institutions. Explanation In this section, the expression 'order ' includes any order made on or after the date of the commencement of this Act in any disciplinary proceeding which was pending on that date. Special provision regarding appeal in certain past disciplinary cases. 982 5. (1) If, before the date of the commencement of this Act, any teacher employed in any private educational institution has been dismissed or removed or reduced in rank or his appointment has been otherwise terminated and any appeal preferred before that date (a) by him against such dismissal or removal or reduction in rank or termination; or (b) by him or the educational agency against any order made before that date in the appeal referred to in clause (a); is pending on that date, such appeal shall stand transferred to the appellate authority prescribed under section 4 (2) If any such appeal as is preferred in sub section (1) has been disposed of before the date of the commencement of this Act, the order made in any such appeal shall be deemed to be an order made under this Act and shall have effect accordingly. Retrenchment of teachers. Where any retrenchment of any teacher employed in private educational institution is rendered necessary consequent on any order of the Government relating to education or course of instruction or to any other matter, such retrenchment may be affected with the prior approval of the competent authority. Pay and allowances of teachers employed in private educational institution to be paid in the prescribed manner. The pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person, as may be prescribed. " The object of the legislation in general and the impugned provisions in particular is to regulate the service conditions of the teachers and to ensure their security of service. The main attack on the validity of the impugned sections is that the provisions are violative of the rights conferred on the minorities to establish and administer their institutions under articles 29 and 30 of the Constitution. The plea is that their right to administer their institutions is taken away by imposing unjustified and complete control with the authorities specified in the Act. Before considering the provisions of each of the sections impugned it is necessary to refer to the nature of the right conferred on the minorities. The relevant article is article 30 of the Constitution and it is necessary to refer to the article and the important decisions rendered by this Court under the Article. 983 "Right of minorities to establish and administer educational institutions. article 30. (1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice. (2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language. " The educational institutions established and administered by the minorities in the exercise of the rights conferred under article 30 may be classified into 3 categories (1) those which do not seek either aid or recognition from the State or affiliation from the University; (2) those which seek aid and (3) those that seek either recognition or affiliation but not aid. We are not concerned with institutions which do not seek either aid or recognition from the State or affiliation from the University. The institutions which require aid may again be classified into two classes namely those which are by constitution expressly made eligible for receiving grants and (2) which are not entitled to any grant by virtue of the express provisions of the Constitution. Here again we are not concerned with the first category. We are only concerned with the institutions which are not entitled to any grant by any express provision in the Constitution. Articles 28(3), 29(2) and 30(2) deal with educational institutions receiving aid out of State Funds. Certain restrictions are placed a obligations cast on institutions recognised by the State or receiving aid article 28(3) provides "No person attending any educational institutional recognised by the State or receiving aid out of State funds shall be required to take part in any religious instructions that may be imparted in such institutions or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto. Under the sub article a person attending an institution recognised by the State or receiving aid cannot be compelled by the institution to take part in any religious instruction or to attend religious worship without his consent. article 29(2) provides that no citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them. Under article 29(2) institutions receiving aid, a citizen is entitled to seek admission and the institutions is forbidden tn deny admission to a citizen on grounds of 984 religion, race, caste or language. While article 28(3) and 29(2) impose certain restrictions on institutions receiving aid, article 30(2) forbids the State from discriminating against any educational institution in granting aid on the ground that it is under the management of a minority, whether based on religion or language. The Constitution does not confer any right on the institution to receive any aid. It however forbids the State in granting aid to educational institutions from discriminating an educational institution on the ground that it is under the management of a minority whether based on religion or language. This would imply that the State has right to grant or not to grant aid. It may be that the State is not in a position to grant aid to education institutions. In such circumstances nobody can force the State to grant aid. But if the State grants aid to educational institutions there should not be any discrimination. It is open to the State to prescribe relevant conditions and insist on their being fulfilled before any institution becomes entitled to aid. No institution which fails to conform to the requirements thus validly prescribed would be entitled to any aid. Educational institutions receiving aid whether they are managed and administered by minority or not have to conform to the requirements prescribed by the State in order to enable the institutions to receive aid. The requirements prescribed shall not be discriminatory on the ground that it is under the management of a minority whether based on religion or language. The character of the minority institution should not also be destroyed. The right of the State to ensure that its funds are properly spent cannot be denied. In Re: Kerala Education Bill, at p. 1062 Chief Justice Das ruled that "the minority cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without, any competent teachers possessing any semblance of qualification, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars. " The learned Chief Justice proceeded to observe : "It stands to reason, then, that the constitutional right to administer an educational institution of their choice does not necessarily militate against the claim of the State to insist that in order to grant aid the State may prescribe reasonable regulations to ensure the excellence of the institution to be aided. " The scope of the reasonable regulations that can be imposed is clearly explained by the question framed by the Attorney General and the answer furnished by the Court at p. 1063. The State cannot say "I 985 have money and I shall not give you any aid unless you surrender to me your right of administration" (emphasis supplied) The Court held that regulations prescribed under the various clauses except sub clause (5) of Cl. 3 which made the educational institution subject to clauses 14 and 15, valid. The Kerala Education Bill which was referred to this Court for the n purpose of opinion contained several clauses. A summary of the clauses is given in the judgment from pages 1023 to 1030 of the Reports, Clauses 6, 7 9, 10, 11, 12, 14, 15 and 20 relate to the management of aided schools. The Court expressed its view that the provisions in clauses 7, 10, 11(1), 12(1), (2), (3) and (S) may easily be regarded as reasonable regulations or conditions for the grant of aid. (Vide p. 1064). Clause 7 is extracted at p. 1025. It confers powers enumerated in the clause on the managers. Clause 10 requires the Government to prescribe the qualifications to be possessed by persons for appointment as teachers in Government Schools and in private schools which by the definition means aided or recognised schools. The State Public Service Commission is empowered to select candidates for appointment as D. teachers in Government and aided schools according to the procedure laid down in cl. 11. Clause 12 prescribes the conditions of service of the teachers of aided schools obviously intended to afford some security of tenure to the teachers of aided schools. It provides that the scales of pay applicable to the teachers of Government schools shall apply to all the teachers of aided schools whether appointed before or after the commencement OF this clause. Rules applicable to the teachers of the Government schools arc also to apply to certain teachers of aided schools as mentioned in sub cl. Sub cl. (4) provided that no teachers of an aided school shall be dismissed, removed or reduced in rank or suspended by the Manager without the previous sanction of the authorised officer. With regard to sub cl. 12(1) (2) and (3) which related to conditions of service and security of tenure, the Court held that the purpose may easily be regarded as reasonable regulations or conditions for grant of the aid. It was submitted that clauses 9, 11(2) and (4) went beyond the permissible limit as by taking over the collections of fees, etc. and by undertaking to pay the salaries of the teachers and other state the Government is in reality confiscating the school fund and under cl. l l the power of management is taken away by providing that the appointment of a teacher should be out of the panel to be prepared by the Public Service Commission. Similarly it was submitted that by requiring previous sanction by the authorised officer before dismissal, removal or reduction in rank of a teacher, the H. right to administer was taken away. Chief Justice Das observed at p. 1064 of the Reports: "These are no doubt serious inroads on the right 986 of administration and appear perilously near violating that right. But considering that those provisions are applicable to all educational institutions and that the impugned parts of cls. 9, 11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are prepared, as at present advised, to treat these clauses 9, 11(2) and 12(4) as permissible regulations which the State may impose on the minorities as a condition for granting aid to their educational institutions. " It is clear that so far as aided institution are concerned conditions similar to those that are mentioned can be validly imposed on the institutions. The only prohibiting is that the conditions should not be of such a nature as to deprive the character of the minority institutions in their exercise of the rights conferred on them as minority institutions. So long as there are rules for the purpose of maintaining the excellence of educational institutions and not discriminating against the minority educational institutions they will be valid. The decisions rendered subsequent to the Kerala Education Bill case may now be referred to see how for the views expressed had been modified. In Rev. Sidhajbhai Sabhai & Ors. vs State of Bombay & Anr.(1) a Bench of 6 Judges held that the order of the Government directing that 80% of seats in the training colleges should be reserved for Government nominee with a threat that if the order was disobeyed, grant and recognition would be withdrawn. was invalid. The Court laid down that reasonable restrictions in the interest of the efficiency of instruction, discipline, health, sanitation and the like may be imposed as those regulations will not be restrictions on the substance of the right guaranteed, for they secured the proper functioning of the institution in educational matters. The Court held that "if every order which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable because it is in the public or national interest, though not in its interest as an educational institutions, the right guaranteed by article 30(l) will be but a "teasing illusion", a promise of unreality. Regulations which may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institution elective as an educational institution. The dual test prescribed is the test of reasonableness and the test that is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of the education of the minority community or the persons who resort to it. The requirements of reservation of 80% of the seats will 987 destroy the right to management as a minority institution and as such cannot be imposed even in the case of institutions receiving aid. Conditions of such a nature that would result in surrender of the fundamental right to administer cannot be imposed. After referring to the decision in the Kerala Educational Bill case, the Court observed that it did not decide that a regulation would be deemed unreasonable only if it was totally destructive of the right of the minority to administer n the educational institution. This view was affirmed in the St. Xavier 's College case ; The test laid down requires that the regulation must be for regulating the educational institution for the minority committee as well other persons who resort to it. (emphasis supplied) The case of Rev. Father W. Proost and ors. vs The State of Bihar and Ors.(1) relates to affiliation. This Court was considering the validity of section 48 A of the Bihar University Act. Under section 48 A a University Service Commission for affiliated Colleges was established. It was provided amongst others that subject to the approval of the University, appointments, dismissals, removals, termination of service or reduction in rank of teachers of an affiliated college not belonging to the State Government shall be made by the governing body of the College on the recommendation of the Commission. While the petition was pending before this Court the Governor of Bihar promulgated an ordinance by inserting Sec. 48 B which exempted Colleges established and administered by the minorities from the operation of the provisions of clauses (6), (7), (8), (9), (10) and (11) of section 48 A. After the introduction of section 48 B the petitioners before this Court claimed protection under section 48 B and submitted that affiliated Colleges established by minorities are exempt from the operation of the impugned provisions of section 48 A. It may be noted that under section 48 B the governing body of an affiliated college established by a minority shall be entitled to make appointments, dismissals, removals, termination of service or reduction in rank of teachers or take other disciplinary action subject only to the approval of the Commission and the Syndicate of the l university. The petitioners did not challenge the provisions which provided that appointments, dismissals, removals, termination of service and reduction in rank of teachers or other disciplinary measures will be subject to the approval of the Commission and the Syndicate of the University. What was objected to was the provisions under section 48 A which established an University Service Commission on whose recommendations alone appointments, dismissals, removals, terminations of service or reduction in rank of teachers of an affiliated college 988 can be effected. A provision requiring prior approval of the Commission or Syndicate was not challenged as objectionable. In State of Kerala vs Very Rev. Mother Province(1), the constitutional validity of certain provisions were challenged on the ground that they interfered with the rights of the minority institutions. The Kerala University Act, 1979 was passed to reorganise the University of Kerala with a view to establishing a teaching, residential and affiliating University for the Southern Districts of the State of Kerala. Ss. 48 and 49 dealt with the Governing Bodies of private colleges. The Educational Agency of a private College was required to set up a Governing Body for a private College or a managing council for private colleges under one corporate management. The section provided for the composition of two bodies so as to include Principal:; and Managers of private colleges, nominees of the University and Government as well as elected representatives of teachers. Sub section (2) provided that the new bodies would be having corporate perpetual succession and the members would hold office for four years. Sub section cast a duty on the new governing body or the managing council to administer the private college or colleges in accordance with the pro visions of the Act. The provisions of section 53, sub sections (1), (2), (3) and (9) conferred on the Syndicate of the University power to veto the decision of the Governing Council. A right of appeal was provided for any person aggrieved. Section 56 conferred ultimate power on the University and the Syndicate in disciplinary matters in respect of teachers. This Court held that sub section (2) and (4) of Ss. 48 and 49 as ultra vires. The Court agreed that the High Court was right in declaring that sub sections (1) and (2), (9) and of section 53, sub sections (.2) and (4) of section 56 as ultra vires. In D.A.V. College etc. vs State of Punjab & ors(2) the validity of cl. 18 which required that non governmental Colleges shall comply with the requirements laid down in the ordinances governing service of teachers in non governmental Colleges as may be framed by the University was considered. Clause 18 so far as it is applicable to the minority institutions empowered the University to prescribe by regulation governing the service of teachers which is enacted in the larger interest of the institution to ensure their efficiency and excellence. Tho Court held: "It may for instance issue an ordinance in respect of age of superannuation or prescribe minimum qualifications for teachers to be employed by such institutions either generally or in particular sub 989 jects. Uniformity in the conditions of service and conduct of teachers A in all non Government Colleges would make for harmony and avoid frustration. " A reading of the decisions referred to above make it clear that while the right to establish and administer a minority institution cannot be interfered with restrictions, by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed. For maintaining the educational standard of the institution as a whole it is necessary to ensure that it is properly staffed. Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature have been held to be valid. In the case of institutions that receive aid it is the duty of the Government who grants aid to see that the funds are properly utilised. As the Government pays for the staff it is their bounden duty to see that well qualified persons are selected their pay and other emoluments are guaranteed and service conditions secured. So far as the institutions receiving aid are concerned if the regulations are made for the purpose of safeguarding the rights of the staff the validity cannot be questioned as long as the regulations do not discriminate the minority institution on the ground of religion or language. The minority institutions have no fundamental right to demand recognition by the State or affiliation by the University but as recognition and affiliation is necessary for the effective exercise of the fundamental right of minorities to establish and administer their institutions, they are entitled to recognition and affiliation if reasonable conditions that are imposed by the Government or the University relevant for the purpose of granting recognition or affiliation are complied with. Before granting recognition or affiliation it is necessary that the concerned Government or the University is satisfied that the institution keeps up with the required minimum standard. As has been held by Das C.J., "Right to administer cannot obviously include the right to mal administer" and in the words of Shah, J. "The right is subject to reasonable restrictions in the interest of efficiency of instruction, discipline, health, sanitation and the like." Justice Jaganmohan Reddy has made it clear in upholding cl. 18 of the Guru Nanak University, Amritsar Act, 1961 that regulations relating to the recruitment and service conditions of the teachers of the institution are valid. The decision of 9 Judges ' Bench in The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat & Anr. ( ') may now 990 be considered. All the 9 Judges were unanimous that the right to aid or recognition was not a fundamental right but that aid or recognition cannot be offered on conditions which would involve a surrender of those rights. But the rights of recognition and affiliation are subject to regulations which are necessary for maintenance of the educational institutions. In the St. Xaviers College case (supra), section 33A(1) was challenged. It provided that every college was to be under the management of a governing body which must include a representative of the University and representatives of teachers, non teaching staff and students of the college. Eight of the nine Judges held that section 33A (1)(a) violated article 30(l) and could not be applied to minority institutions. This Court in a subsequent decision in G.F. College Shahajahanpur vs University of Agra and Anr.(l) held that it would not be unconstitutional to direct that the Principal and the Senior Teacher appointed by the Governing body itself be taken into the managing committee. The Court in St. Xavier 's College case also considered the validity of section 51 A(l) (a), (2) (a) and 51 A(1) (b) . Section 51 A(1)(a) and (2)(a) provided that no member of the teaching?, other academic and non teaching staff was to be dismissed, removed or reduced in rank except after an inquiry in which he had been informed of the charges against him and had been given a reasonable opportunity of being heard and making a representation on the penalty proposed to be inflicted. No termination of service not amounting to dismissal or removal was to be valid unless, such member had been given a reasonable opportunity of showing cause against the proposed termination. The two clauses were held to be valid, as being reasonable. However, the Court held that section 51 A(l)(a) and (2)(b) as violative of article 30(l). Section 51 A(l)(b) provided that the penalty to be inflicted on him must be approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf. Similarly, section 51 A(2) (b) provided that "such termination is approved by the Vice Chancellor or any officer of the University authorised by the Vice Chancellor in this behalf." Section 51 A(1) (b) required the approval of the Vice Chancellor, or other officer authorised by him. for the penalty to be inflicted under sub s l (a), and section 51 A(2) (b) required similar approval for the termination of service under sub section (2) (a). The Court also held that section 52 A which required that any dispute between the governing body and any member of the teaching, other academic and non teaching staff of an affiliated college? connected with the terms of service of such member. must be referred to a Tribunal of Arbitration consisting of one member each appointed by the governing body and by the member of the 991 staff and an umpire appointed by the Vice Chancellor was not valid. A Seven out of 9 Judges held that section 52 A violated article 30(l) and could not be applied to minority institution. Minority institutions seeking affiliation will have to follow statutory measures intended to regulate the conduct of the educational institution. Ray, C.J. p. 193 held : "With regard to affiliation a minority institution must follow the statutory measures regulating educational standards and efficiency the prescribed courses of study, courses of instructions and the principles regarding the qualification of teachers educational qualifications for entry of students into educational institutions etc. When a minority institution applies to a University to be affiliated, it expresses its choice to participate in the system of general education and courses of instruction prescribed by that University: * * * * * * There fore, the measures which will regulate the courses of study the qualifications and appointment of teachers, the condition of employment of teachers,* * * * * * * are all comprised in matters germane to affiliation of minority institutions. These regulatory measures for affiliation arc for uniformity efficiency and excellence in educational] courses and do not violate any fundamental right of the minority institutions under article 30" (emphasis supplied) Ray C.J. held that section 51A(1) (b) and section 51A(2) (b) is not applicable to minority institutions as they "cannot be said to be permissive regulatory measures in as much as it confers arbitrary power on the Vice Chancellor to take away the right of administration of the minority institutions . " Agreeing with the view of the Chief Justice, regarding his conclusion about section 51A(1) (a) and (2) (b), Khanna, J. at p. 243 observed : "Although disciplinary control over the teachers of a minority educational institution would be with the governing council, regulations in my opinion, can be made for ensuring proper conditions of service of the teachers and for securing a fair procedure in the matter of disciplinary action against the teachers. Such provisions which are calculated to safe guard the interest of teachers would result in security of tenure and thus inevitable attract competent persons for the posts of teachers. * * * * * Regulations made for this 9 138 SCI/80 992 purpose should be considered to be ill the interests of minority educational institutions and as such they would not violate article 30(1)". (emphasis supplied) Regarding section 51A, the learned Judge while holding that provisions under. (a) of sub sections (1) & (2) of section 51A which make provision R for giving a reasonable opportunity of showing cause against a penalty to be proposed on a member of the staff would be valid. (b) of the sub section which gives a power to the Vice Chancellor and officer of the University authorised by him to veto the action of the managing body of an educational institution in awarding punishment to a member of the staff, interferes with the disciplinary control of the managing body over its teachers. He was of the view that the power conferred on the Vice Chancellor or other officer is a blanket power and no guide lines were laid down for the exercise of that power and it is not provided that the approval is to be withheld only in case the dismissal, removal, reduction in rank or termination of service is mala fide by way of victimisation or other similar cause. The conferment of such blanket power on the Vice Chancellor or other officers authorised for vetoing the disciplinary action of the managing body of a educational institutional made serious inroads on the right of the managing body to administer an educational institution. Mathew, J. in dealing with section 51A(1)(a) and (b) at p. 273 observed: The exact scope of the power of the Vice Chancellor or of the officer of the University authorised by him in this sub section is not clear. If the purpose of the approval is to see that the provisions of sub section 51A(1)(a) are complied with, there can possibly be no objection in lodging the power of approval even in nominee of the Vice Chancellor. But an uncanalised power without any guideline to withhold approval would be a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty after conducting an enquiry." (emphasis sup plied) The learned Judge proceeded to observe: "Of course it is open to the State in the exercise of its regulatory power to require that before the service of a teacher are terminated, he should be given opportunity of being heard in his defence. But to require that for terminating the services of a teacher after 993 an enquiry has been conducted, the management . should have the approval of an outside agency like the Vice Chancellor or of his nominee would be an abridgement of its right to administer the educational institution. No guidelines are provided by the legislature to the Vice Chancellor for the exercise of his power. The fact that the power can be delegated by the Vice Chancellor to any officer of the university means that any petty officer to whom the power is delegated can exercise a general power of veto. There is no obligation under the sub sections 1(b) and 2(b) that the Vice Chancellor or his nominee should give any reason for disapproval. As we said a blanket power with out any guideline to disapprove the action of the management would certainly encroach upon the right of the management to dismiss or terminate the services of teacher after an enquiry". The extracts from the judgments of Ray, J. Khanna, J. and Mathew, J. show that regulations can be made for ensuring the pro per conditions of service of the teachers and for securing fair procedure in the matter of disciplinary action against them. Prescribing uniformity in the conditions of service and conduct of teachers in all non governmental colleges would promote harmony, avoid frustration and is permissible. It is thus seen that the university or the authority granting recognition can prescribe the conditions of service of teachers providing them with security of service. The rules may require that no Principal of the teaching or non teaching staff of a recognised or a approved institution shall be dismissed, removed or reduced in rank except after an enquiry in which he has been informed the charges against him and given a reasonable opportunity of being heard in respect of those charges and making representation on any penalty proposed to be inflicted on him. The Government which grants recognition or the University which gives affiliation are entitled to sec that proper conditions of service of the teachers are ensured and fair procedure is observed by the institutions when disciplinary action is taken against them. If the regulations require the approval by the competent authority for safeguarding the rights of the teachers and for securing the procedure there could be no objection. Such authority can also interfere with the decision of the private institutions when the punishment is awarded mala fide or by way of victimisation or for similar causes. In Kerala Education Bill, 1957 Cl. 14(4) provided that no teacher of an aided school shall be dismissed, removed or reduced in rank or 994 suspended by the Manager without the previous sanction of the authorised officer. This requirement of sanction related to schools that sought aid from the Government. While upholding the validity of cl. 14, Das C.J. Observed that there could be no doubt that these are serious inroads in the right of the administration and appear perilously near violating that right. But considering that those provisions are applicable to all educational institutions and that the impugned parts of cls. 9, 11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes we are prepared, "as at present advised to treat clauses 9, 11 (2) and 12 (4) as permissible regulations the State may impose on the minorities as a condition for granting aid to their educational institutions. Ray C.J. in St. Xavier College case, observed that though the opinion was given in Kerala Education Bill on an order of reference under article 143 is not binding on this court in any subsequent matter wherein a concrete case the infringement of the rights under any analogous; provision may be called in question, it is entitled to great weight. Ray C.J. proceeded to observe that nonetheless the exposition of the various facets of the rights under article 29(1) and 30 by Das, C.J. speaking for the majority, with utmost clarity, great perspicuity and wisdom has been the text from which Court has drawn its sustenance in the subsequent decisions. To the extent that this Court has applied these principles to concrete cases there can be no question of there being any conflict with what has been observed by Das, C.J. Ray, C.J. was of the view that similar provisions were held to be invalid as they fell with section 48 and 49 of the Kerala Education Act, which was similar to cl. 12(4) was held invalid. Mathew, J. was of the view that though in the Kerala Education Bill case, the Court upheld the provisions similar to those in section 51A(1) (b) and 51 (A) (2) (b), the subsequent decisions of this Court left no doubt that the. requirement of subsequent approval for dismissing or terminating the services of teachers would be offending article 30. (Learned Judge referred to D.A.V. College case). In the Kerala Education Act case (supra), the validity of sub sections 2 & 4 of section 48, section 49, section 53, Sub sections 1 9 and sub sections 2 and 4 of section 56 were challenged. Hidayatullah, C.J. speaking for the Court observed that after the erection of the Governing Body of the Managing Council, the founders or even the minority community had no hand in the administration. The two bodies were vested with the complete administration of the institution and were not answerable to the founders in this respect. Sub sections (2), (4) and (5) and (6) of sections 48 and 49 clearly 995 vest the management and administration in the hands of the two bodies with mandates from the university. Coupled with this is the power of the Vice Chancellor and the Syndicate under sub sections (2) and (4) of section 56 to have the final say in respect of disciplinary proceedings against the teachers. In striking down clauses (2) and (4) of section 56, the Learned Chief Justice at p. 746 stated that the result was that sub sections (2) and (4) of section 56 are ultra vires as they fail with sections 48 and 49. The Scheme of the Act was that a Governing Body or Managing Council was to be set up for private colleges and it was provided that the composition of the bodies were to include Principals, Managers of private Colleges and nominees of the University and Government as well as elected representatives of the teachers. This out side body was entrusted with the administration. These two sections 48 and 49 which provide for administration by the Governing Body or the Managing Council was held to be ultra vires. Apart from it, the powers were conferred on the Syndicate of the University to veto the decision of the Governing Council. Regarding disciplinary matters, section 56 conferred ultimate power on the University and the Syndicate in respect of teachers. As the power to take disciplinary action was taken away from the Private or the Minority Institutions and conferred on the Governing Body or the Managing Council constituted under the Act and a provision was made requiring the previous sanction on the Vice Chancellor and provided an unrestricted right to the Syndicate. It will be noted that the Chief Justice found Ss. 56(2) and (4) ultra vires as they had to fail alongwith Ss. 48 and 49 which deprived the institution of the right to manage its own affairs. In the case of D.A.V. College vs State of Punjab (supra), cl. 17 provided that the staff initially appointed shall be approved by the Vice Chancellor and all subsequent changes shall be reported to the University for Vice Chancellor 's approval. section 17 does not, in fact, confer on the Vice Chancellor the power to veto the disciplinary action taken by the private institution. In St. Xavier College case, also the management of the institution was completely taken away under Ss. 40 and 41 of the Act. The Private Institution was required to be a constituent College of the University and was to be governed by the Statutes that may be framed by the University. 31A (1) (a) set up a Governing Body which to include amongst its Principals the representatives of the University nominated by the Vice Chancellor and representatives of the reachers of the non teaching staff and students of the college. In the circumstances, the Court held that the right to administer and to conduct the affairs of the institution, were taken away from the institution. The 996 disciplinary proceedings which were to be conducted against the teachers was required to obtain approval of the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor. Apart from the objection to the power conferred on the Vice Chancellor to nominate any of its subordinate, the power conferred on the Vice Chancellor was found to be unconstitutional as it was a blanket power unguided and uncanalised. In Lilly Kurian vs Sr. Lewina and ors. , the provisions of ordinance 33, Chapter 67 of the ordinances framed by the Syndicate of the University of Kerala, under section 19 (1) of the Kerala University Act, 1957 was challenged. section 33 (1) provided that the management may at any time place a teacher under suspension where a disciplinary proceedings against him is contemplated or is pending. He shall be paid subsistence allowance and other allowances by the Management during the period of suspension at such rates as may he specified by the university. The teacher shall have the right to appeal against the order of suspension to the Vice Chancellor of the University within a period of two months from the date on which he receives the order of suspension. Cl. 4 of ordinance 33 provided that the teacher shall be entitled to appeal to the Vice Chancellor of the University against any order passed by the Management in respect of the penalties referred to in items (ii) to (v). Ordinance 33(4) conferred a right of appeal on the teacher to prefer an appeal against the order of Management to the Vice Chancellor in respect of the penalties imposed on him. Ordinances 33(1) and 33(4) were struck down by this Court on the ground that the conferment of right of appeal an outside authority like the Vice Chancellor under ordinance 33(4) took away the disciplinary power of the minority institution. The Vice Chancellor was given power to veto the disciplinary control which amounted to clear interference with disciplinary power of the minority institution. It was found to be a fetter on the right of administration conferred under article 30(t). The main ground on which the powers were found to be violative of the right conferred under article 30 was that the right of appeal was provided without defining the scope of the appellate authority. In the cases referred to, namely, Very Rev. Mother Provincial, D.A.V. College and Lilly Kurian, the powers conferred on the Vice Chancellor were held to be blanket power, unguided and uncanalised. The back ground of the decisions was that the minority institutions were deprived of the powers of administration by forming a body which deprived the institution of all its powers. In such circumstances, it was found that the power was uncanalised. In the case of Rev. Father W. Proost and 997 Ors. (supra), section 48 was enacted providing that the minority institution shall be entitled to make appointments, dismissal, removal, termination of service and reduction in rank of teachers, subject only to the approval of the Syndicate of the University, which was not challenged. The institution claimed exemption under section 48B. Bearing the facts of the cases set out above, we have to consider the impugned Act and determine whether the impugned provisions infringe the rights conferred on the minority institutions under article 30. The statements of object and reasons and the salient features of the bill as stated in the objects and reasons and the impugned sections have been set out in full at the beginning of the judgment. The main object of the legislation is to regulate the service conditions of the teachers in the private educational institutions and for ensuring the security of service of the teachers. It is further stated that private institution were punishing teachers on flimsy grounds without framing charges and without giving an opportunity to explain. In the preamble it is also stated that the Act is to provide for terms and conditions of service of teachers and to control of the recognised private educational institution. section 3 of the Act provides that no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated except with the prior approval of the competent authority. section 3 (2) will have to be read alongwith section 3 (1) which provides that when a proposal to dismiss, remove or reduced in rank or otherwise terminate the appointment of any teacher employed in any private educational institution is communicated to the competent authority, the competent authority shall if it is satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal, reduction in rank or termination of appointment. The Proviso to section 3(1) states that if any educational management, agency or institution contravenes the provisions of this sub section, the teacher affected shall be deemed to be in service. This section was challenged as conferring a power of taking disciplinary proceedings on an outside authority and as such it should be held as violative of the rights conferred on the minority institutions. If the power of approval conferred on the competent authority is a blanket power uncanalised and without guidelines, it will have to be held as invalid. The question, therefore, arises whether the section provides sufficient guidelines for the exercise of the power by the competent authority. In the State of West Bengal vs Subodh Gopal Bose and ors. it was held that the statement of objects and reasons could be referred to 998 for the limited purpose of ascertaining the conditions prevalent at the time which actuated the sponsor of the bill to introduce the same and the extent of urgency and the evil which he sought to remedy since these matters were relevant for deciding whether the restrictions were reasonable within the meaning of article 19(2) to (6). The object and reasons for the legislation make it very clear that the legislation was intended to regulate the service conditions of teachers employed in private educational institutions and for the security of service of the said teachers. The preamble is also an aid in construing the provisions of the Act. The House of Lords in Att. Gen. vs H.R.H. Prince Earnest Augustus of Hanover, held that when there is a preamble it is generally in its recitals that the mischief to be remedied and the scope of the Act are described. It is, therefore, permissible to have recourse to it as an aid to construing the enacting provisions. The preamble states that the Act it to provide for terms and service conditions of teachers. If the power conferred under section 3 (1) and section 3(2) is restricted to regulating the service conditions of teachers and for ensuring their security of service, the power conferred would be valid. It was submitted by Mr. Lal Narain Sinha the learned counsel for the appellants that the power is uncanalised because the approval can be withheld even on merits which would in fact deprive the disciplinary powers of the minority institutions. It is a well settled rule that in interpreting the provisions of a statute, the court will presume that the legislation was intended to be intra vires and also reasonable. The rule followed is that the section ought to be interpreted consistent with the presumption which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible. Maxwell on interpretation of Statutes, Twelfth Edn., P. 109 under the Caption: "Restriction of operation" States: "Sometimes to keep the Act within the limits of its scope, and not to disturb the existing law beyond what the object requires, it is construed as operative between certain persons, or in certain circumstances, or for certain purposes only, even though the language expresses no such circumscription of the field of operation. " The following passage in Bidie vs General Accident, Fire and Life Assurance Corporation was cited with approval in Kesavananda Bharti vs State of Kerala : 999 "The first thing one has to do, I venture to think, in construing words in a section of an Act of Parliament is not to take those words in vacue, so to speak, and attribute to them what is sometimes called their natural or ordinary meaning. Few words in the English language have a natural or ordinary meaning in the sense that they must be so read that their meaning is entirely independent of their context. The method of construing statutes that I prefer is not to take particular words and attribute to them a sort of prima facie meaning which may have to displace or modify. It is to read the statute as a whole and ask oneself the question: "In this state, in this context, relating to this subject matter, what is the true meaning of that word ?" According to Holmes, J. in Towne vs Eigner, a word is not crystal, transparent and unchanged; it is the skin of living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used. Gwyer, J. in Central Provinces and Berar Act, held: "A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implication of the context, and even by the considerations arising out of what appears to be the general scheme of the Act." To the same effect are the observations of this Court in Kedar Nath Singh vs State of Bihar : "It is well settled that in interpreting an enactment the Court should have regard not merely to the literal meaning of the words used, but also take into consideration the antecedent history of the legislation, its purpose and the mischief it seeks to suppress. (The Bengal Immunity Co. Ltd. vs The State of Bihar and R.M.D. Chamaurbaugwalla vs The Union of India ; cited with approval." This Court has in several cases adopted the principle of reading down the provisions of the Statute. The reading down of a provision of a statute puts into operation the principle that so far as it is reason 1000 ably possible to do so, the legislation should be construed as being within its power. It has the principle effect that where an Act. is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the Court will construe it in a more limits sense so as to keep it within power. Applying the principles laid down in the cases cited above, the power conferred under section 3 (1) and (2) of the impugned Act will have to be construed. This Court has in St. Xavier 's College case (supra) held that the provisions of section 51A (1) of the impugned Act in that case which provided that no member of the other academic and non teaching staff of an affiliated college and recognised or approved institution shall be dismissed, or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges and until he has been given a reasonable opportunity of making representation on any such penalty proposed to be inflicted on him, as a valid condition. Mathew, J. affirmed that if the purpose of the approval is to see that the provisions of sub sec. 51 (A) (1) (a) are complied with, there can possibly be no objection in lodging the power of approval even in nominee of the Vice Chancellor. Khanna, J. has held that if the power is confined only to cases of dismissal, removal or reduction in rank or termination of service as mala fide and by way of victimisation, the power would be valid. Regarding the power of interference with the conclusion of a domestic tribunal in disciplinary matters, this Court has held that the decision can be interfered with if there is want of good faith or when there is victimisation or when the management has been guilty of basic error or violation of principles of natural justice or when the material findings are completely baseless or perverse (Indian Iron and Steel Co. Ltd. vs Their Workmen. It has also been held that the authority interfering is not a Court of Appeal and cannot substitute its own judgment. The impugned legislation was passed in the year 1975. It must be presumed that the legislature was conscious of the limitations of the power which the competent authority can have in granting or withholding approval in the case of disciplinary proceedings conducted by private institution. 12(4) of the Kerala Education Bill (supra) was held to be valid on the ground that it was designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes. If the power is 1001 constrused as conferring unrestricted power and if the provisions are held invalid, it will result in considerable mischief and would result in depriving the protection that is available to the poor teacher regarding their security of service. The legislation was for the specific purpose of regulating the service conditions and providing security of service and for preventing teachers from being punished on flimsy grounds without framing charges and without giving an opportunity to explain. lt is very different from other cases, in which the legislation was aimed at depriving the minority institutions of all its powers. The only aim of the impugned legislation is to provide security of service. As pointed out there are sufficient guidelines in the objects and reasons in the legislation as well as in the preamble. In the circumstances, it is not only reasonable but proper that a restricted meaning is given to the power of prior approval conferred on the competent authority under s.3. S.3(1) and (2) will have to be read together. The procedure contemplated is that when the educational institution proposes to dismiss, remove or reduce in rank or otherwise terminate the appointment of any teacher it should communicate to the competent authority its proposal. The latter part of S.3(2) mentions that the competent authority shall if it is satisfied that there are adequate and reasonable grounds for such proposal approve such dismissal, removal, reduction in rank or otherwise termination of appointment. The approval of an order of dismissal or removal etc. will have to be read alongwith S.3(1) which provides that no teacher shall be dismissed etc. without the previous approval of the competent authority. When a domestic enquiry has been conducted and the teacher is given an opportunity to rebut the charges and show cause against the punishment proposed and when fair procedure has been followed and the authority comes to the conclusion that the disciplinary action should be taken against the teacher the proposal will have to be sent to the competent authority. The competent authority will examine the proposal alongwith the procedure adopted by the institution and such dismissal, removal or reduction in rank or termination of appointment. s(2) requires the competent authority to approve such a proposal if it is satisfied that there are adequate and reasonable grounds for such proposal. The two words "adequate and reasonable" in our opinion furnish sufficient guidelines. The competent authority can interfere if there are no material at all for sustaining the order of punishment or when on the materials found the charge is completely baseless and perverse. The word "adequate" in sub section will have to be understood as being confined to such examination of the proposal. The word "reasonable" would indicate the power of the competent authority is confined to the power of an authority to inter 1002 fere with the enquiry and conclusions arrived at by the domestic Tribunal. The competent authority may satisfy itself that the rules of natural Justice has been satisfied, that the teacher was given an opportunity to defend the charges against him and to show cause against the punishment proposed to be awarded to him and that a fair procedure has been observed. The authority may also be entitled to interfere when the punishment was imposed by the institution due to mala fides or with a view to victimised him or such like grounds. The word "reasonable" cannot be understood as conferring a power to interfere with the enquiry by the domestic tribunal as a Court of Appeal on merits. The law relating to the circumstances under which the proceedings of the tribunal can be interfered with has been clearly laid down. Sufficient guidelines are discernible from the Statements of objects and reason which state that the enactment was for the purpose of preventing private institutions from laking disciplinary action on flimsy grounds without framing charges and without giving an opportunity to explain and for regulating the service conditions of teachers and for ensuring their security of service. We are satisfied that sufficient guidelines are indicated in the Act. The words "adequate and reasonable" should be given a restricted meaning so as to validate the provisions of the section. Thus, understood, the objection raised by Mr. Lal Narain Sinha, learned counsel for the appellant, that S.3(1) and (2) lack guidelines and have conferred a blanket power, cannot be upheld. It was next contended by Mr. Lal Narain Sinha that no question of principles of natural justice arised when the conditions of service between the institution and the teacher are regulated by contract. We are unable to accept this contention for the legislature is competent to enact provisions limiting the power of dismissal and removal. The Legislature has given security of service to employees in industries and in other institutions. It was submitted by the learned counsel that the offence of misconduct has not been classified in the Act and that no procedure for conducting disciplinary enquiry has been prescribed. Such details are not essential. It is within the jurisdiction of the institution to conduct an enquiry and impose punishments. It is also the right of the competent authority to withhold approval on adequate and reasonable grounds. The plea that the competent authority may be any petty officer cannot also be upheld as the competent authority is defined under section 2(1) as meaning any authority, officer or person authorised by notification performing the functions of competent authority under this Act. The competent authority or officers of the educational department who are incharge of administration of educational institutions in the area, cannot be called petty officers. 1003 Section 3(3)(a) and 3(3)(b) relate to suspension of a teacher Sub. section 3(a) requires that a teacher employed in a private institution shall not be placed under suspension. Without an enquiry into the gross misconduct of such teacher is contemplated and sub. s.3(b) requires that the period of suspension shall not exceed two months. If it exceeds two months and the enquiry is not completed within that period, such teacher shall, without prejudice to the enquiry, be deemed to have been restored as teacher. But the proviso enables the authority to extend the period of suspension for another two months if in his opinion the enquiry could not be completed within the period of two months. ss.(a) & (b) of section 3 which relate to suspension are regulatory in nature and are intended to safeguard the teachers from being suspended for unduly long periods without there being an enquiry into gross misconduct. We are unable to say that these provisions interfere with the right of administration of the private institutions. S.3(4) states that every teacher placed under suspension shall be paid subsistence allowance at such rates as may be prescribed during the period of his suspension. This sub section is purely regulatory in nature and unobjectionable. section 4 confers a right of appeal against the order of punishment imposed on teachers employed in private educational institutions. A teacher who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated or whose pay and allowances or any of the whose conditions o service are altered or interpreted to his disadvantage may prefer an appeal to such authority as may be prescribed. This section was challenged by Mr. L. N. Sinha, learned counsel, on the ground that the right of appeal conferred is a blanket power without any restriction. In any event, the submission that the right of appeal is conferred only on the teacher and not on the institution. Though no restriction are placed on the appellate power, we feel it may be possible to read down the section. But the learned counsel is on firm ground when he submits that the right of appeal is confined only to the teachers and not available to institution. This infirmity invalidates S.4. Section 5 is consequential of S.4 in which power is conferred on the competent authority to hear appeal in certain past disciplinary cases. S.5 also will have to fail alongwith S.4. S.6 relates to retrenchment of teachers under certain conditions. It provides that when any retrenchment is rendered necessary, consequent on any order of the Government relating to educational institutions or course of instruction or any other matter such retrenchment may be effected with the prior approval of the competent authority. This section is also intended to provide security of service of the teachers and is regulatory in nature and 1004 the validity of which cannot be questioned. section 7 requires the pay and allowances of any teacher employed in any private educational institution shall be paid on or before such day of every month, in such manner and by or through such authority, officer or person as may be prescribed. This section is also regulatory in nature and is intended for securing regular payment of the teachers. The validity of other sections was not questioned in the writ petitions, and, therefore, it is not permissible to go into it. In the view we have taken, we do not think that we should go into the merits of each of the cases. In C.A. No. 1280 of 1978 The All Saints High School Hyderabad vs The Govt. of Andhra Pradesh and ors. the learned counsel appearing for the school before the High Court sought the decision only on the legal issues and the questions emanating from the provisions of the Act and specifically requested the court not to decide the merits of the case. In some of the petition the facts have been gone into but we would refrain from going into the facts for it has to be decided as to whether the competent authority has acted within the restricted jurisdiction which have been stated with in our judgment. If the competent authority had exceeded its jurisdiction, it would be open to the aggrieved institution to question the validity of such action. These matters will have to be decided on merits. In the circumstances. we remit all the Civil Appeals to the High Court for disposal on merits in the light of this judgment. ORDER In the view of the majority, sections 3(3) (a), 3(3) (b), 6 and 7 of the Andhra Pradesh Recognised Private Educational Institutions Control Act, 1975 are valid while sections 3(1), 3(2), 4 and 5 of the Act are invalid in their application to minority educational institutions. It must follow that such institutions cannot be proceeded against for violation of provisions which are not applicable to them. The matters are remanded to the High Court of Andhra Pradesh for final disposal on merits in the light of the judgments. There will be no order as to costs.

The purported object of the Andhra Pradesh Recognised Private Educational Institutions Control Act 1975 was to regulate the service conditions of teachers in private educational institutions and for ensuring the security of service of the teachers. Section 3(1) of the Act provides "Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated except with the prior approval of the competent authority". The proviso to this sub section states that if any educational management etc. contravenes the provisions of this sub section, the teacher affected shall be deemed to be in service. Where a proposal to dismiss etc. any teacher is communicated to the competent authority, according to sub section (2) of this section, that authority shall, if satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal or reduction in rank or termination of appointment. Clause (a) of sub section (3) of this section states that no teacher employed in any private educational institution shall be placed under suspension, except when an enquiry into the gross misconduct of such teacher is contemplated. Clause (b) provides that no such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed with that period, such teacher shall, without prejudice to the inquiry, be deemed to have been r restored as teacher. The proviso states that the competent authority may, for reasons to be recorded in writing, extend the said period of two months for a further period not exceeding two months, if in his opinion, the inquiry could not be completed within the said period of two months for reasons directly attributable to each teacher. Section 4 gives a right of appeal to teachers employed in private educational institutions against orders of punishment imposed on them. Section 5 deals with special provisions regarding appeal in certain past disciplinary cases. Section 6 which deals with retrenchment of teachers provides that where retrenchment of any teacher is rendered necessary consequent on any order of the Government relating to education or course of instructions or to any other matter, such retrenchment may be effected with the prior approval of the competent authority. Section 7 provides for payment of pay and allowances to teachers in the prescribed manner. 925 The appellants who were minority educational institutions established by members of the Christian community filed writ petitions before the High Court impugning various provisions of the Act as being violative of the guarantee contained in Article 30(1) of the Constitution by permitting or compelling interference with the internal administration of their private educational institutions. In particular they challenged the provisions of sections 3 to 7 of the Act on the ground that they deprive them of their right to administer the affairs of minority institutions by vesting the ultimate administrative control in an outside authority. The contentions having been rejected by the High Court they filed appeals by special leave. ^ HELD s Permajority (Chandrachud, C.J., and Fazal Ali, J. Kailasam,J., dissenting.): Sub sections (1) and (2) of section 3 are invalid and cannot be applied to minority institutions. Per majority (Chandrachud, C.J., and Kailasam J. Fazal Ali, J. dissenting). Clauses (a) and (b) of section 3(3) do not offend against article 30(1) and are valid. By the Court: Sections 4 & 5 are unconstitutional as being violative of article 30(1). Per majority (Chandrachud, C.J., and Kailasam J Fazal Ali, J, dissenting). Section 6 is valid. By the Court: Section 7 is valid. Per Chandrachud, C.J. Section 3(1) and 3(2) are unconstitutional in so far as they are made applicable to minority institutions since in practice these provisions are bound to interfere substantially with their right to administer institutions of their choice. [937E] 1. (a) Section 3(1) gives an unqualified mandate that no teacher shall be dismissed etc. except with the prior approval of the competent authority. Under the proviso, contravention of the section results in a total invalidation of the proposed action. If the section is contravened the teacher shall be deemed to be in service. Secondly, the sub section applies not only to cases in which the teacher is punished by an order of dismissal etc. but to cases in which the appointment is otherwise terminated. An order of termination simpliciter is also required to be submitted for the prior approval of the competent authority. All this shows that the true object of the sub section is not that which one could liberally assume by reading down the section. [935H; 936AB] (b) In the absence of any rules furnishing guidelines on the subject, it is difficult to predicate that in practice the operation of the section would be limited to a certain class of cases only. The absence of rules on the subject makes the unguided discretion of the competent authority the sole arbiter of the question as to which cases would fall within the section and which would fall outside it. [936 E F] (c) Section 3(2), under the guise on conferring the power of approval, confers upon the competent authority an appellate power of great magnitude. That authority is made a judge both of facts and on law by the conferment upon 926 it of a power to test the validity of the proposal on the vastly subjective touchstone of adequacy and reasonableness. The sub section leaves no scope for reading down the provision of section 3(1). The two sub sections together confer upon the competent authority, in the absence of proper rules, a wide and untrammeled discretion to interfere with the proposed order whenever in its opinion the order is based on grounds which do not appear to it either adequate or reasonable. [936G H; 937A] (d) Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is satisfied. The conferment of such a power on an outside authority, the exercise of which is made to depend purely on subjective consideration arising out of twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by article 30(1). [937C] State of Kerala vs Very. Rev. Mother Provincial ; , D.A.V. College vs State of Punjab [1971] Suppl. S.C.R. 688 and Ahmedabad st. Xaviers College Society vs State of Gujarat ; ; referred to. (a) Section 3(3)(a) and 3(3)(b) of the Act do not offend against the provisions of article 30(1) and are valid. [939B C] (b) Clause (a) contains but an elementary guarantee of freedom from arbitrariness to the teachers. The provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher nor does it place an unreasonable restraint on its power to do so. It assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall not be suspended unless an inquiry into his conduct is contemplated and unless the inquiry is in respect of a charge of gross misconduct. These restraints which bear a reasonable nexus with attainment of educational excellence cannot be considered to be violative of the right given by article 30(1). The limitation of the period of suspension initially to two months, which can in appropriate cases be extended by another two months, as provided in clause (b) and its proviso, partakes of the same character as the provisions contained in clause (a). A provision founded so patently on plain reason is difficult to construe as an invasion of the right to administer an institution unless that right carried with it the right to maladminister. [938 G H] 3. Section 4 is unconstitutional as being violative of article 30(1) of the constitution. The section confers upon the government the power to provide by rules that an appeal might lie to such authority or officer as it designates, regardless of the standing or status of that authority or officer. Secondly an appeal is provided for on all questions of fact and law, thereby throwing open the order passed by the management to the unguided scrutiny and unlimited review of the appellate authority, which would mean that, in the exercise of the appellate power, the prescribed authority or officer can substitute his own view for that of the management even in cases in which two views are reasonably possible. Lastly, while a right of appeal is given to the aggrieved teacher against the order passed by the management, no corresponding right is conferred on the management against the order passed by the competent authority under section 3(2) of the Act. In the absence of a provision for appeal against the order of the competent autho 927 rity refusing to approve the action proposed by the management, the management is pleased in a gravely disadvantageous position vis a vis the teacher who is given the right of appeal by section 4. [939D H] Section 5 must fall with section 4. [940B] 4. Section 6 is valid. The section aims at affording a minimal guarantee of security of tenure to teachers by eschewing the passing of mala fide orders in the garb of retrenchment. It is implicit in the provisions of this section that the limited jurisdiction which it confers upon the competent authority is to examine whether, in cases where the retrenchment is stated to have become necessary by reason of an order passed by the Government, it has in fact so become necessary. The conferment of a guided and limited power on the competent authority for the purpose of finding out whether, in fact the retrenchment has become necessary by reason of a Governmental order cannot constitute an interference with the right of administration conferred by article 30(1). [940D F] Section 7 is regulatory in its character and is valid. [940H] Per Fazal Ali, J. On an exhaustive analysis of the authorities of this Court on the various aspects of the fundamental right enshrined in article 30(1) of the Constitution the following propositions of law emerge: (i) Article 30(1) enshrines the fundamental right of the minority institutions to manage and administer their educational institutions. [967H] (ii) Although, the right conferred by this article is absolute, unfettered and unconditional, it does not mean that it gives a licence for maladministration so as to defeat the avowed object of the article, namely to advance excellence and perfection in the field of education. [968B] (iii)While the State or any other statutory authority has no right to interfere with the internal administration of the minority institution, it could take regulatory measures to promote the efficiency and excellence of educational standards and issue guidelines for ensuring the security of the services of the teachers and other employees of the institution. [968C] (iv) Under the garb of adopting regulatory measures, the State or any other authority cannot destroy the administrative autonomy of the institution or interfere with the management of the institution so as to render the right of administration of the management of the institution illusory. [968E] (v) By its very nature article 30 implies that where an affiliation is asked for, the university cannot refuse the same without sufficient reason or try to impose such conditions as would completely destroy the autonomous administration of the educational institution. [968G] (vi) Induction of an outside authority in the governing body of the minority institution to conduct the affairs of the institution would be completely destructive of the fundamental right under article 30(1), where a high authority like the Vice Chancellor or his 928 nominee is appointed in the administration, such authorities should not be thrust so as to have a controlling voice in the matter overshadowing the powers of the managing committee. [968H] (vii)It is open to the Government or the University to frame rules and regulations governing the conditions of service of teachers in order to secure their tenure of service and to appoint a high authority to see that the rules are not violated or the members of the staff are not victimised. In such cases the purpose is not to interfere with the autonomy of the institution but merely to improve the excellence and efficiency of education. Even so, an authority should not be given a blanket uncanalised and arbitrary powers. [969E F] (viii)Where a minority institution affiliated to a university is enjoined to adopt courses of study of the syllabi or the nature of books prescribed and the holding of examination to test the ability of the students of the institution, it does not follow that the freedom contained in article 30(1) of the Constitution is violated. [970A] (ix) Where a high authority is appointed to exercise vigilance on the work of the teachers and to ensure security of tenure for them the authority must be given proper guidelines. Before coming to any decision which may be binding on the managing committee the head of the institution or the senior member of the managing committee must be associated and they should be allowed to have a say in the matter. [970C] Kerala Education Bill, 1957; , ; Sidhajbhai Sabhai and Ors. vs State of Bombay and Anr. ; ; Rev. Father W. Proost & Ors. vs State of Bihar ; ; State of Kerala etc. vs Veru Rev. Mother Provincial etc. ; ; D.A.V. College etc. vs State of Punjab & Ors. and The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat ; ; referred to. (a) Section 3 in its entirety is ultra vires as being violative of article 30(1) and is wholly inapplicable to the appellants who are minority institutions. [975B] (b) The proviso enjoins that any contravention of the provisions would not affect the teachers who would be deemed to be in service. It is manifest that in the absence of any rules the proviso would have no application and even if it applied it would amount to a serious inroad on the fundamental right of the minority institutions to administer or manage their own affairs. [971H] (c) Sub section 2 of section 3 is unconstitutional as being violative of article 30(1). It suffers from the vice of excessive delegation of powers and confers undefined, absolute and arbitrary powers to grant or to refuse sanction to any action taken by the managing committee and almost reduces the institution to a helpless position. [973B C] (d) If the State wanted to regulate the conditions of service of the teachers, it should have taken care to make proper rules giving sufficient 929 powers to the management in the manner in which it was to act. Induction of an outside authority into the institution and making his decision final was a blatant interference with the autonomy of the institution. The words "adequate and reasonable" are too vague and do not lay down any objective standard to judge the discretion to be exercised by the competent authority whose order would be binding on the institution. [972F G] (e) While section 4 gives a right of appeal to the aggrieved teacher no such right has been given to the management to file an appeal against the order of the competent authority if it refuses to grant sanction to the order of the Managing Committee of the institution. The competent authority is only the District Educational Officer who is not a very high authority such as a Director of Public instruction or Vice Chancellor of a University. No time limit has been fixed by the statute within which the competent authority is to give its approval. The cumulative effect of clause (a) and (b) of section 3(3) and the proviso is to interfere with the internal administration of the minority institutions and curb the power of suspension. It deprives the institution of the right of taking any disciplinary action against a teacher. The adjective "gross" before the term "misconduct in clause (a) destroys the power of suspension which the minority institution possesses. The provision contained in clause (b) of section 3(3) providing that no suspension shall remain in force for a period of more than two months from the date of suspension and if no inquiry is completed within this period the teacher would have to be reinstated, gives an unqualified right to a teacher in the matter of suspension which even a government servant does not enjoy. [973A, 974D E] 2. Section 4 is ultra vires and is violative of article 30 of the Constitution. It does not contain any guidelines as to the manner in which the power could be exercised, nor does it contain any provision which may entitle the minority institution to be heard by the appellate authority. The conferment of an absolute and unguided power on the appellate authority would amount to a direct interference with the right enshrined in article 30(1) and makes the minority institution a powerless body. [976B; 975G] 3. If section 4 is inapplicable to the minority institution Section 5 also follows the same fate. [976C] 4. Section 6 which contains an un canalised and unguided power suffers from the same vice as in the case of section 3. The words "administer educational institutions of their choice" in article 30 clearly indicate that the institution has an absolute right to select teachers, retain them or retrench them at its sweet will according to the norms prescribed by the institution or by the religious order which has founded the institution. [976H] 5. Section 7 is an innocuous provision and is valid. [977C] 6. Sections 8, 9, 12 and 13 are inapplicable to the minority institutions. [977D, 978B] 7. Section 16 suffers from a serious defect namely that the provision regarding appeal to the appellate authority was valid then it completely bars the right of the management to file a suit to challenge the validity of the order of the appellant. To this extent the section makes serious inroad on the fundamental right of the minority institutions and is inapplicable to the minority institutions. [978G] Section 17 is inapplicable. [978F] 930 Per Kailasam, J. 1. A reading of the various decisions rendered by this Court on the interpretation of article 30(1) of the Constitution makes it clear that while the right to establish and administer a minority institution cannot be interfered with, restrictions by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed. For maintaining the educational standards of the institution as a whole, it is necessary to ensure that it is properly staffed. Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature are valid. In the case of institutions that receive aid it is the duty of the government who grants aid to see that the funds are properly utilised. Regulations can be made by the government for ensuring the proper conditions of service of the teachers and for securing fair procedure in the matter of disciplinary action against them. Prescribing uniformity in the conditions of service and conduct of teachers in all non governmental colleges would promote harmony, avoid frustration and, therefore, is permissible. Rules prescribed by the university or other authority may require that no member of the teaching or non teaching staff of a recognised or approved institution shall be dismissed etc., except after a proper enquiry. If the regulations require the approval of the competent authority for safeguarding the rights of the teachers and for securing the procedure there can be no objection. Such authority can also interfere with the decision of the private institutions when the punishment awarded is malafide or by way of victimisation or for similar causes. [989B; 993D G] Kerala Education Bill [1959] SCR, 995, Rev. Sidhajbhai Sabhai & Ors. ; , Rev. Father W. Proost and Ors. vs State of Bihar & Ors. ; , State of Kerala vs Very. Rev. Mother Provincial ; , D.A.V. College etc. vs State of Punjab & Ors. [1971] Suppl. S.C.R. 688 and Ahmedabad St. Xaviers College Society and Anr. vs State of Gujarat ; , referred to. 2. It is not only reasonable but proper that a restricted meaning is given to the power of prior approval conferred on the competent authority under section 3 of the Act. It is a well established principle of interpretation that the statement of objects and reasons could be referred to for the limited purpose of ascertaining the conditions prevalent at the time which actuated the sponsor of the Bill to introduce the same and the extent of urgency and the evil sought to be remedied. Clearly the legislation was intended to regulate the service conditions of teachers employed in the private educational institutions and for the security of service of the teachers. The power contained in section 3(1) and 3(2) is restricted to regulating the service conditions of teachers and for ensuring their security of service. [1001C; 998A B] 3. While interpreting a provision of law the Court will presume that the legislation was intended to be intra vires and also reasonable. The section ought to be interpreted consistent with the presumption which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible. A reading down of a provision of a statute puts into operation the principle that so far as it is reasonably possible to do so, the legislation should be construed as being within its power. It has the principle effect 931 that where an Act is expressed in language of generality, which makes it capable, if read literally, of applying to matters beyond the relevant legislative powers, the Court will construe it in a more limited sense so as to keep it within power. [998E F] The State of West Bengal vs Subhodh Gopal Bose and Ors. ; , Att. vs HRH Prince Earnest Augstas of Hanover, , Keshavananda Bharti vs State of Kerala , 101, Towns vs Bigner 245 U.S. , 376 and Kedar Nath Singh vs State of Bihar ; ; referred to. In the instant case it must be presumed that the legislature was conscious of the limitations of the power which the competent authority can have in granting or withholding approval in the case of disciplinary proceedings conducted by private institutions. The object of the legislation in this case was very different from other cases in which the legislation was aimed at depriving the minority institutions of all their powers. Its only aim is to provide security of service. There are sufficient guidelines in the objects and reasons as well as in the preamble. [1001 B C] 4. (a) The contention that section 3(1) and (2) lack guidelines and have conferred a blanket power cannot be accepted. Section 3(1) and (2) must be read together. The words "adequate and reasonable" should be given a restricted meaning so as to validate the provisions of the section. The approval of an order contemplated by sub section (2) will have to be read with sub section (1). Sub section (2) required the competent authority to approve such a proposal if it is satisfied that there are adequate and reasonable grounds for such proposal. The words "adequate and reasonable" furnish sufficient guidelines. The competent authority can interfere if there are no materials at all for sustaining the order of punishment or when on the materials found the charge is completely baseless and preserve. The word "adequate" will have to be understood as being confined to such examination of the proposal. The word "reasonable" would indicate that the power of the competent authority is confined to the power of an authority to interfere with the enquiry and the conclusions arrived at by the domestic tribunal. It cannot be understood as conferring absolute power to interfere with the enquiry by the tribunal as a Court of appeal on merits. [1002E; 1001G H] (b) The plea that the "competent authority" may be any petty officer cannot be upheld because it is defined in section 2(1) to mean "any authority, officer or person authorised by notification performing the functions of competent authority". The officers of the educational department who are incharge of the administration of educational institutions in the area cannot be called petty officers. [1002H] (c) Clauses (a) and (b) of sub section (3) cannot be said to interfere with the right of administration of the private institutions. The two clauses are regulatory in nature and are intended to safeguard the teachers from being suspended for unduly long periods without there being an enquiry into "gross mis conduct." [1003C] (d) Sub section (4) of section 3 which states that every teacher placed under suspension shall be paid subsistence allowance at such rates as may be 932 prescribed during the period of his suspension is purely regulatory in nature and, therefore, unobjectionable. [1003D] 5. Section 4 is invalid. The vice contained in this section is that the right of appeal which is confined only to the teachers is not available to institutions. [1003F] 6. Section 5 which confers power on the competent authority to hear appeals in certain past disciplinary cases will have to fall along with section 4. [1003G] 7. Section 6 is also regulatory in nature and its validity cannot be questioned. [1003H] 8. Section 7 is regulatory in nature and is intended for securing regular payment to the teachers. [1004A]

longest

tition No. 350/ of 1977 etc. Under Article 32 of the Constitution of India. S.K. Jain and S.S. Khanduja for the Petitioners. R.N. Poddar and Ms. A. Subhashini for the Respondents. The following Judgments were delivered 877 CHANDRACHUD, C.J.: A large group of persons holding vacant lands in different urban agglomerations in the country had filed writ petitions in this Court, challenging the validity of some of the key provisions of the Urban Land (Ceiling and Regulation) Act, 33 of 1976. Those writ petitions were disposed of on November 13, 1980 by a Constitution Bench consisting of Krishna Iyer J., Talzapurkar J., A.P.Sen J., and the two of us. Each of our three learned Brethren delivered a full judgment. We delivered a short judgment and stated that fuller reasons will follow later. We had discussed with one another the several points arising in the writ petitions. But, we were running against time, not an unusual predicament, since Krishna Iyer J. was due to retire on November 15, 1980, Tulzarpurkar J. differed from all of us, holding that the impugned Act is not protected under Article 31 C or under Article 31 B since, it did not further the Directive principles contained in clauses (b) and (c) of Article 39 of the Constitution. The learned Judge held further that since Chapter III of the Act, comprising the substratum of the very scheme of the Act was invalid the entire Act had to be struck down as unconstitutional. A.P. Sen J. agreed with us on all the points except that according to him, subsections (1), (2) and (3) of section 23 and the opening words of section 23(4) of the Act are unconstitutional, not being protected by Articles 31 B and 31 C of the Constitution. Krishna Iyer J. concurred with us in holding that the entire Act is valid save and except section 27(1), insofar as that section imposes restrictions on the transfer of any urban or urbanisable land with a building or a portion of such building, which is within the ceiling area. We took the view that the impugned Act was intended to and did in fact implement or achieve the purpose of clauses (b) and (c) of Article 39 and that, the vice from which a few provisions of the Act could be shown to suffer, would not justify a contrary conclusion. We are free to confess that if the full text of the judgment of Krishna Iyer J. were available to us sufficiently in advance we would not have delivered a separate order stating that fuller reasons will follow later. The judgment had to be pronounced on November 13, 1980 since, Krishna Iyer J. was due to retire two days later. As we have stated earlier, all of us had together discussed the various points arising in these cases and we knew the conclusions to which we had respectively come. But, it is not possible to express agreement with the line of reasoning of a judgment, without examining 878 the judgment carefully. That opportunity became available to us latter. We have gone through Krishna Iyer J. 's judgment closely and find that there is nothing that we can usefully add to it. The only further order which we propose to pass now is say that we agree fully with the reasons given by Krishna Iyer J. in his judgment reported in 1981(1) S.C.C. 166. CHANDRACHUD, C.J. We have perused the judgment prepared by Brother Tulzapurkar with care but, with respect, we are unable to agree with him that the Urban Land (Ceiling and Regulation) Act 33 of 1976, does not further the Directive Principles of State Policy in clauses (b) and (c) of Article 39 of the Constitution. The vice from which a provision here or a provision there of the impugned Act may be shown to suffer will not justify the conclusion that the Act is not intended to or does not, by its scheme, in fact implement or achieve the purposes of clauses (b) and (c) of Article 39. The definition of 'family ' in section 2(f), which in relation to a person means the individual, the wife or husband, as the case may be, of such individual, and their unmarried minor children, will not necessarily lead to concentration of wealth in the hands of a few person or families. Such is not the intendment, nor the drive, nor the direct and inevitable consequence of the aforesaid definition of 'family '. Section 23 of the Act is in our opinion valid and does not suffer from any constitutional infirmity. The definition of the word 'industry ' in clause (b) of the Explanation to that section is undoubtedly unduly wide since it includes "any business, profession, trade, undertaking or manufacture". If sub section (1) of section 23 were to stand alone, no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true, though concealed, purpose is to benefit favoured private individuals or associations of individuals. But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub section (4) of section 23 whereby, all vacant lands deemed to have been acquired by the State Government under the Act "shall be disposed of. to subserve the common good". The provisions of sub section (4) are "subject to the provisions of sub sections (1), (2) and (3) "but the provisions of sub section (1) 879 are enabling and not compulsive and those of sub sections (2) and (3) are incidental to the provisions of sub section (1). The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section (4) of section 23, subject to this, that in a given case such land may be allotted to any person; for any purpose relating to, or in connection with, any 'industry ' or for the other purposes mentioned in sub section (1), provided that by such allotment, common good will be subserved. The governing test of disposal of excess land being 'social good ', any disposal in any particular case or cases which does not subserve that purpose will be liable to be struck down as being contrary to the scheme and intendment of he Act. The Preamble to the Act ought to resolve interpretational doubts arising out of the defective drafting of section 23, It shows that the Act was passed with the object of preventing concentration of urban land in the hands of a few persons and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good. 'Common good ' being the writing on the wall, any disposal which does not serve that purpose will be outside the scope of the Act and therefore lacking in competence in diverse senses. Private property cannot under our Constitution be acquired or allotted for private purposes though an enabling power like that contained in sub section (1) of section 23 may be exercised in cases where the common good dictates the distribution of excess vacant land to an industry, as defined in clause (b) of the Explanation to section 23. Section 11(6) which provides that the amount payable under sub section (1) or sub section (5) of section 11 shall, in no case, exceed two lakhs of rupees is valid. The amount thus payable is not illusory and the provision is not confiscatory. Rupees two lakhs is not like a farthing even if the excess land may be a fortune. Finally, we are of the opinion that subsection (1) of section 27 of the Act is invalid in as far as it imposes a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building, which is within the ceiling area. Such property will therefore be transferable without the constraints mentioned in sub section (1) of section 27 of the Act. The Writ Petitions are accordingly dismissed except for the restricted striking down of section 27(1) of the Act. There will be no order as to costs 880 Fuller reasons will follow latter. KRISHAN IYER, J. I agree with the learned Chief Justice both regarding the constitutionality of the legislation and regarding the partial invalidation of section 27 (1). Nevertheless, I consider it necessary to strike a few emphatic notes of concordance having special regard to the discordance of my learned brother Tulzapurkar, J. I have carefully perused the judgment of Tulzapurkar, J, but must express my deferential disagreement because on a few fundamentals there is sharp divergence between us. I proceed to turn the focus only on three issues, namely, the alleged artificiality of "family ' as defined in section 2 (f) of the Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act), the invalidity of section 23 of the Act as discriminatory and, therefore, unconstitutional and the invalidity of section 11 (6) of the Act on the score that the compensation offered is illusory and, therefore, violative of article 31 (2) of the Constitution. The legislation, as its title indicates, is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and fore quitetable distribution of such land to subserve the common good. Article 39 (b) and (c) of the Constitution are directly attracted and there is no doubt that the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good. It is also a notorious fact that concentration of urban land in private hands is an effective forbiddance of the maximum use of such land for industrial purposes at a critical juncture when the nation is fighting for survival through industrialisation. It needs no argument to conclude that the objective of the legislation as set out in the long title and in the statutory scheme is implementation of Part IV of the Constitution. The Directive principles of State policy being paramount in character and fundamental in the country 's governance, distributive justice envisaged in article 39 (b) and (c) has key role in the developmental process of the socialist Republic that India has adopted. The conclusion is inevitable that is a broad measure of State policy, ceiling on and regulation of urban land ownership is an imperative of economic independence and is, therefore, on the national agenda of planned development. Indeed, there was no controversy on this question before us. One of the points which has been argued and has found approval with my learned brother 881 Tulzapurkar, J., turns on the gross inadequacy of compensation fixed under section 11 (6) of the Act. There is a specific case before us that urban land worth a few crores will fall a prey to acquisition under this Act, but thanks to section 11 (6), "the amount" payable in return to the owner shall not exceed Rs. 2 lakhs. This, it is contended, is an illusory compensation in reckless disregard of the market value of the property acquired. I am unable to agree with this submission. The taking over of large conglomerations of vacant land is a national necessity if article 39 is a constitutional reality. "Law can never be higher than the economic order and the cultural development of society brought to pass by that economic order." (Marx). Therefore, if article 38 of the Constitution which speaks of a social order informed by economic justice, is to materialise, law must respond effectively and rise to the needs of the transformation invisioned by the founding fathers. But it is contended that any legislation which violates article 31 (2) or article 19 (1) (f) (both of them have since been deleted by the 44th Amendment to the Constitution although on the relevant date they were part of part III) must fail notwithstanding the fact that articles 31B and 31 C shield the legislation in question. It is said that the Act is vulnerable for the reason that right to property armoured by the above two Articles is inviolable unless the taking is for a public purpose in contrast to a private industry and the payment in return, even if not an equivalent, is be fair enough so as not to be castigated as illusory. The various amendments to article 31 culminating in the present provision which provides for the payment of an "amount" disclose a determined approach by parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as a fundamental right by the private owner and that short of paying a 'farthing for a fortune ' the question of compensation is out of bounds for the court to investigate. The question is whether in the light of Kesavananda Bharati (especially the observations of Chandrachud, J), a sum of Rs. 2 lakhs in section 11 (6) is a farthing for a fortune. I repudiate the proposition that payment of a sum of Rs. 2 lakhs, whatever the total value of the property in the market may be is so fictitious and flimsy as to be a farthing. There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter the judicial verdict. 882 What is the dimension of Indian penury? What is the basis of our constitutional order? What is the goal of the Republic? What is the meaning of the egalitarian ethos of our society? What do we mean by "We, the people of India"? Unless these profound roots of our social constitutional order are probed, we can never reach an effective answer to legal formal issues. The roots and fruits of our National Charter depend on a clear grasp of the constitutional fundamentals. In this context, it is important to remember what, right at the beginning even as the proceedings of the constituent Assembly were culminating, Nehru had warned: If we cannot solve this problem soon, all our paper constitutions will become useless and purposeless. If India goes down, all will go down; if India thrives, all will thrive; and if India lives, all will live. He had repeated with emphasis: The first task of this Assembly is to free India through a new constitution, to feed the starving people and to clothe the naked masses, and to give every Indian the fullest opportunity to develop himself according to his capacity. Indeed, the tryst with destiny that India made when it became free found expression in a historic speech by the then Prime Minister, Jawahar Lal Nehru: The service of India means the service of the millions who suffer. It means the ending of poverty and ignorance and disease and inequality of opportunity. The ambition of the greatest man of our generation has been to wipe every tear from every eye. That may be beyond us, but as long as there are tears and suffering, so long our work will not be over. We must notice the Indian human condition. "Indian poverty, to many who have an acquaintance with poverty in similar societies is unique", writes Segal in his book The Crisis of India: "It is unique in its depths, which seems incapable of supporting life at all; unique in its blatancy, for it is everywhere, in city and village, and concealed among chimneys or trees, not isolated like an epidemic in an 883 inaccessible slum, but everywhere, on the movement of one 's feet, always some where in the circle of one 's sight; unique in its sheer magnitude for in India the poor are not to be numbered in hundreds of thousands, but in hundreds of millions; unique in the quality of its submission, which registers a kind of glazed pride." In this context we may also read what Rajen Babu stated as a framer of the Constitution: To all we give the assurance that it will be our endeavour to end poverty and squalor and its companions hunger and disease, to a abolish distinctions and exploitation and to ensure decent conditions of living. We may have to remember that a galaxy of Constitution makers like Sardar Patel and B. Pant and Rajagopalachari, not to speak of Jawahar Lal Nehru, where doubtful about the court being given the power to pronounce upon the question of compensation when the State acquired property. Indeed, it is revealing to read the debates in condensed form given by Granville Austin: Sardar Patel closed the debate with a speech that sounded like a requiem for land lords. What did 'public use ' mean he wondered. Pant then said: Suppose the government acquires zamindari rights and then abolishes them. Or what if the Government takes over Connaught Place (the central shopping and office area of New Delhi) and then redistributes the buildings to the tenants? The first stage is acquisition. Does that come under this clause? To Ayyar 's answer of 'Certainly ', Pant replied that he opposed the wording if it means that the government would not be free to determine the compensation it would have to pay. If this clause covers all cases of acquisition said Rajagopalachari, then the question of the justness of compensation will go to the courts 'with the result that government functioning will be paralysed '. Panikkar suggested that they should take out the 'just ' so that it would not be justiciable. Pant replied that if this covered acquisition for social purposes, 'then I submit payment of compensation should not even be compulsory '. Patel concluded the discussion. 884 'If the word 'just ' is kept, ' he said, 'we come to the conclusion that every case will go to the Federal Court. ' Therefore "just" is dropped . . The Assembly greeted the committee 's actions favourably. We need not go into the details except to state that even Gandhiji took the view that anything like compensation could possibly not be given when property was taken from the property owners by the State for community benefit. I mention this only to drive home the point that right to property is not part of the basic structure of the Constitution even as right to poverty is not the basic structure of India for ever. The whole adventure of the Constitution is to remove poverty and in that process remove concentration of property, not for a return, but for almost free, if the justice of the situation commended it self to the legislation to take it that way. Of course, it may be a deception to say that an "amount" is paid if nothing is paid except a tittle. So what we have to consider is whether the amount of Rs. 2 lakhs is so utterly deceptive and totally nominal as to be discarded as a farthing with contempt. Having regard to the human condition of a large percentage of pavement dwellers and slum dewllers in our urban areas and proletarian miserables in our rural vastnesses, any one who gets Rs. 2 lakhs can well be regarded as having got something substantial to go by. In a society where half of humanity lives below the breadline, to regard Rs. 2 lakhs as a farthing is farewell to poignant facts and difficult to accept. In my view, with the greatest respect for my learned brother, I am unable to assent to the view that section 11 (6) contravenes article 31 (2) because the Payment stipulated is a mere mockery. To put a ceiling on the maximum amount payable when property is taken is reasonable and does not spell discrimination unless the maximum itself is a hoax, being trivial. In a Constitution which creates a Socialist Republic egalite is the rule of life and where gross inequalities mar the economic order, a measure of equalization is but one strategy of promoting equality and has to be viewed as part of the dynamics of social justice. Indeed, even in the Income Tax Act, at a certain stage, almost all the income is taken away by a steep rate of tax leaving next to nothing to the income earner. We have to be pragmatic and show empathy with the values 885 of the Constitution. Chief Justice Earl Warren 's statement is apposite as a reminder to our judicial conscience: Our judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and of formlessness on the other. Our system faces no theoretical dilemma but a single continuous problem: how to apply to ever changing conditions the never changing principles of freedom. I have no hesitation in holding section 11(6) as invulnerable. 'Family ' as defined in s.2(f) has been held invalid by my learned brother Tulzapurkar, J, as an arbitrary, artificial creation of the statute inconsistent with the natural unit prevalent in the country. Here again. I must emphasise that law is never static and must respond to the challenges of change: The law is not an end in itself, nor does it provide ends. It is preeminently a means to serve what we think is right . .Law is here to serve! To serve what? To serve, insofar as law can properly do so, within limits that I have already stressed, the realization of man 's ends, ultimate and mediate, Law cannot stand aside from the social changes around it. It is possible that in the last century the prevalent concept of family was of a certain pattern. Indeed, in the diversity of Indian social structure the concept of 'family ' has varied from region to region and even from community to community and we cannot postulate any parameters in this behalf. Moreover, fission, not fusion, is the modern trend and wherever might have been the situation in Indian rural life in the 1950s there is no doubt that nuclear families are becoming the vogue in the late 1970s and 1980s of Indian urban life. In the Western countries the family unit consists of the parents and their minor children and the West has invaded the East in life style 886 atleast in our cities. Whatever may be the pastoral life of old or the idyllic picture we may cherish the social facts tell a different tale in contemporary India of the cities. There is hardly space for a unclear family to live in urban conditions and to think of large joint families as the natural unit is to resurrect by gone ways of life and turn the blind eye to the rapid growth of the small family of man and wife 'we two and we shall have two ' is the desideratum and social factum. In these days of family planning and self reliance of the adult we cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a family shall be defined as the parents plus their minor children. I, therefore, hold that 'family ' as defined in section 2(f) of the Act accords with the current lifestyle in urban conditions and is neither artificial nor arbitrary nor violative of Act 14. It is noteworthy that many agrarion legislations have been upheld by this court in a spate of recent cases where the definition of 'family ' is substantially the same. I may permit myself a few observations on section 23 of the Act and the grounds of invalidation relied on by the challengers. The section has been loosely or ambivalently drafted and runs thus: 23. Disposal of vacant land acquired under the Act. (1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the State Government under any other law to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry and it shall be lawful for such person to hold such land in excess of the ceiling limit. Explanation For the purposes of this section, (a) where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by the State Government, than, such land shall be deemed to be vacant land acquired under such other law: 887 (b) "industry" means any business, profession, trade, undertaking or manufacture. . (4) Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose. Certain basics must be remembered as ideological tools of legal interpretation. The purpose of the enactment, garnered from the Preamble, is to set a ceiling on vacant urban land, to take over the excess and to distribute it on a certain basis of priority. The whole story of the legislation, the long gestation of pre legislative consideration, the brooding presence of article 39(b) and (c) and the emphasis in section 23(4) on common good as the guiding factor for distribution point to public purpose, national development and social justice as the cornerstone of the policy of distribution. It is not and never can be compulsory taking from some private owners to favour by transfer other private owners. The prevalent pathology of corrupt use of public power cannot be assumed by the court lest the same charge be levelled against its echelons. The wide definition of 'industry ' or the use of general words like 'any person ' and 'any purpose ' cannot free the whole clause from the inarticulate major premise that only a public purpose to subserve the common good and filling the bill of article 39(b) and (c) will be permissible. Even a private industry may be for a national need and may serve common good. Even a medical clinic, legal aid bureau, engineering consultant 's office, private ambulance garage, pharmacist 's shop or even a funeral home may be a public utility. Professions for the people, trade at the service of the community and industry in the strategic sector of the nation 's development may well be in private hands in the transitional stage of our pluralist economy undergoing a fabian transformation. Why should lands allotted to such private industries or professionals be condemned? The touchstone is public purpose, community good and like criteria. If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo. To presume as probable graft, nepotism, patronage, political cloth, 888 friendly pressure or corrupt purpose is impermissible. The law will be good, the power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. We must interpret wide words used in a statute by reading them down to fit into the constitutional mould. The confusion between the power and its oblique exercise is an intellectual fallacy we must guard against. Fanciful possibilities, freak exercise and speculative aberrations are not realistic enough for constitutional invalidation. The legislature cannot be stultified by the suspicious improvidence or worse of the Executive. I wholly agree with the perspective of my learned brother Sen, J. that Part IV which seeks to build a Social Justice Society, is basic to our constitutional order. Any transgression of article 39(b) and (c) is beyond the scope of section 23(1) and disposal of land thereunder must subserve the common good and not the reverse. This limitation on the wide words of section 23(1) is a matter of semantics and reading down meanings of words with loose lexical amplitude is permissible as part of the judicial process. To sustain a law by interpretation is the rule. To be trigger happy in shooting at sight every suspect law is judicial legicide. Courts can and must interpret words and read their meanings so that public good is promoted and power misuse is interdicted. As Lord Denning said: "A judge should not be a servant of the words used. He should not be a mere mechanic in the power house of semantics". May Lord Denning live long, and his shadow never grow less. " The power of judicial review to stricke at excess or mala fides is always there for vigilant exercise untrammeled by the narrow precedents of Victorian vintage. Prof. H.W.R. Wade 's note of judicial activism, in his recent Hamlyn Lectures, will set the sights right: Brainwashed though British lawyers are in their professional infancy by the dogma of legislative sovereignty, they ought to excuse rather than criticise the logical contortions and evasions to which Judges must resort in their struggle to preserve their powers. I do not see how 889 they can fairly be accused, to borrow words used by Lord Devlin, of moving too far from their base. They would be much more open to criticism if they remained content with the wretchedly narrow base to which they confined themselves 30 years ago, when they took clauses of the "if the minister is satisfied" type at face value. For judicial control, particularly over discretionary power, is a constitutional fundamental. In their self defensive campaign the judges have almost given us a constitution, establishing a kind of entrenched provision to the effect that even Parliament cannot deprive them of their proper function. They may be discovering a deeper constitutional logic than the crude absolute of statutory omnipotence. I have no doubt even the crude drafting of section 23 (4) by the unwanted 'subject to ' will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in article 39 (b) and (c) The question of basic structure being breached cannot arise when we examine vires of an ordinary legislation as distinguished from a constitutional amendment. Kesavananda Bharati cannot be the last refuge of the proprietariat when being legislation takes away their 'excess ' for societal weal. Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure. Peripheral inequality is inevitable when large scale equalisation processes are but into action. If all the judges of the Supreme Court in solemn session sit and deliberate for half a year to produce a legislation for reducing glaring economic inequality their genius will let them down if the essay is to avoid even peripheral inequalities Every large cause claims some martyr, as sociologists will know. Therefore, what is a betrayal of the basic feature is not a mere violation if article 14 but a shocking, unconscienable or unscrupulous travesty of the quintessence of equal justice. If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty. But to permit the Bharati ghost to haunt the corridors of the court brandishing fatal writs for every feature of 890 inequality is judicial paralysation of parliamentary function. Nor can the constitutional fascination for the basic structure doctrine be made a Trojen horse to penetrated he entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the 'basic structure ' missile. Which is more basic? Eradication of die hard, deadly and pervasive penury degrading all human rights or upholding of the legal luxury of perfect symmetry and absolute equality attractively presented to preserve the status quo ante? To use the Constitution to defeat the Constitution cannot find favour whit the judiciary I have no doubt that the strategy of using the missile of 'equality ' to preserve die hard, dreadful societal inequality is a stratagem which must be given short shrift by this court. The imperatives of equality and development are impatient for implementation and judicial scapegoats must never be offered so that those responsible for stalling economic transformation with a social justice slant may be identified and exposed of. Part IV is a basic goal of the nation and now that the court upholds the urban ceiling law, a social audit of the Executive 's implementation a year or two later will bring to light the gaping gap between verbal valour of the statute book and the executive slumber of law in action. The court is not the anti hero in the tragedy of land reform urban and agrarian. After all, in a rapidly changing society running on the rails of the rule of law and operated according to constitutional paradigms, the proprietariat is bound to suffer but the country cannot defer the transformation because, then, hunger will know no law. This is the root of the matter. And then comes the irony of continual litigative Clamour and the periodic chorus for property. Dosn 't thou 'ear my 'erse 's, as they canters awaay? Proputty, proputty, proputty than 's what I 'ears 'em saay. And holders and hoarders of wealth may pensively reflect: Few rich men own their own property. The property owns them. 891 I have not had the leisurely advantage of my learned brothers ' full judgments save some discussions but my impending retirement impels a hurried recording of my reasons for subscribing to the order passed just now. 'Tomorrow to fresh woods and pastures new ', but to day must be fulfilled before tomorrow arrives, and so, I deliver this judgment as is my duty to do, TULZAPURKAR, J. By these writ petitions the petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) and since, according to them, some of the impugned provisions are pivotal and non severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional. The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them. The impugned enactment has its genesis in the resolutions passed by eleven sponsoring States under article 252 (1) of the Constitution. The State Legislatures of Andhra Pardesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have an uniform legislation enacted by Parliament for the imposition of ceiling on urban property for the country as a whole and as required by the first part of article 252 (1) of the Constitution passed a resolution to that effect. Parliament accordingly enacted the Urban Land (Ceiling and Regulation) Act, 1976. It received the assent of the President on February 17, 1976 and, in the first instance, it come into force on that day in all the Union Territories and the 11 States which had passed the requisite resolution under the first part of article 252 (1). Subsequently, the Act was adopted, by passing resolutions under the second part of article 252 (1) by the State Legislatures of Rajasthan on March 9, 1976, Manipur on March 12, 1976, Assam on March 25, 1976, Bihar on April 1, 1976, Meghalaya on April 7, 1976 and Madhya Pradesh on September 9, 1976. Thus, the enactment is in force in 17 States and all the Union Territories in the country. It seeks to impose ceiling on vacant lands in urban agglomerations having a population of two lakhs or more and for that purpose classifies such urban agglomerations in various cities and towns in all the State and Union Territories into four categories 892 and fixes the ceiling limit for each of the categories thus: Ceiling limit on vacant land is fixed at 500 sq. metres for the urban agglomerations of the metropolitan areas of Delhi, Bombay, Calcutta and Madras having a population exceeding ten lakhs falling under category 'A ', at 1,000 sq. metres for urban agglomerations with a population of ten lakhs and above, excluding the four metropolitan areas, falling under category 'B ', at 1,500 sq. metres for urban agglomerations with a population between three lakhs and ten lakhs falling under category 'C ' and at 2,000 sq. metres for urban agglo merations with a population between two lakhs and three lakhs falling under category 'C ': vide s.4 read with Schedule I of the Act. The said Schedule does not mention the urban agglomerations having a population of one lakh and above but if a particular State which passed a resolution under article 252 (1) (first part) or if a State which subsequently adopts the Act by passing a resolution under article 252 (1) (second part) wants to extend the Act to such areas, it could do so by a Notification under section 2 (n) (A) (ii) or section 2 (n) (B), as the case may be, after obtaining the previous approval of the Central Government. Chapter III, being the main Chapter, comprising sections 3 to 24, deals principally with imposition and limits of ceiling on vacant land, acquisition and vesting in the State Government of vacant land in excess of the ceiling limits, payment to be made to the holders for such acquisition, disposal of excess vacant land so acquired and exemptions from the applicability of this Chapter. Chapter IV comprising sections 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes sections 31 to 47, deals with appeals, revisions, offences and punishments and other miscellaneous matters. The primary object and purpose of the Act, as its long title and the Preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State policy contained in article 39 (c) and (b) respectively. The enactment has also been but in the Ninth Schedule as Item 132 by the Constitution (Fortieth Amendment) Act, 1976, in other words, the enactment enjoys the benefit of protective umbrella 893 of both the articles, article 31B and 31C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976. Dealing with these two articles, namely, articles 31B and 31C and the protective umbrella provided by them in the context of the decision in Kesavananda Bharati 's case this Court in Waman Rao and others vs Union of India & others, has by its order passed on May 9, 1980, held thus: "In Kesavananda Bharati decided on April, 24, 1973 it was held by the majority that Parliament has no power to amend the Constitution so as to damage or destroy its basic structure. We hold that all amendments to the Constitution which were made before April 24, 1973 and by which the 9th Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulations therein, are valid and constitutional. Amendments to the Constitution made on or after April 24, 1973 by which the 9th Schedule to Constitution was amended from time to time by the inclusion of various Acts and Regulations therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the parliament since they damage the basic or essential features of the Constitution or its basic structure. We do not pronounce upon the validity of such subsequent constitutional amendments except to say that if any Act or Regulation included in the 9th Schedule by a constitutional amendment made after April 24, 1973 is saved by Article 31C as it stood prior to its amendment by the 42nd Amendment, the challenge to the validity of the relevant Constitutional Amendment by which that Act or Regulation is but in the 9th Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in Articles 14, 19 or 31, will became otiose. 894 Article 31C of the Constitution, as it stood prior to its amendment by section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in kesavonanda Bharati. Article 31C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure. " Since the impugned Act has been put in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976 i. e. after April 24, 1973, the said Constitutional Amendment would be open to challenge on the ground that the same is beyond the constituent power of the Parliament if it damages the essential features or basic structure of the Constitution; but at the same time the impugned Act has, apparently, received the protective umbrella of article 31C as it stood prior to its amendment by 42nd Amendment Act inasmuch as it seems to have been enacted in furtherance of the Directive Principles contained in article 39 (b) and (c) with the result that in order to succeed in their challenge the petitioners will have to cross two hurdles. In the first place they will have to establish that the Act is outside the pale of the protective umbrella of article 31C which they can do by showing that though purporting to do so, it does not, in fact, further any of the said Directive Principles. A scrutiny of the Directive Principles contained in article 39 (b) and (c) clearly shows that the basic postulate underlying the former obviously is that diffusion of ownership and control of the material resources of the community is always in public interest and hence the State is directed to ensure such distribution (equitable) there of as best to subserve the common good, while the postulate underlying the latter obviously is that concentration of wealth as well as means of production in the hands of few is detrimental to common interest and hence the State is directed to ensure such economic system to operate which prevents such concentration. It would, therefore, be clear that if by the impugned enactment the aforesaid objectives of these Directive Principles are not furthered or if the provisions of the enactment run counter to these objectives the Act would lose the benefit of the protective umbrella of article 31 C. Secondly, after crossing this hurdle, the petitioners will have to show further that the 40th Amendment Act by which the impugned Act was included in the Ninth Schedule was beyond the constituent power of the Parliament since it has damaged the basic structure or the 895 essential features of the Constitution as reflected in articles 14, 19 and 31, which of course, they will be able to do by showing that the impugned Act itself flagrantly violates aspects of articles 14, 19 and 31 which constitute the basic structure or the essential features of the Constitution. It may be stated that Counsel for the petitioners principally attacked four provisions of the impugned Act (a) artificial definition of 'family ' given in section 2 (f) in relation to the prescription of ceiling area, (b) provision contained section 11 relating to amounts payable in respect of excess vacant land acquired by the State (c) provision containedins. 23 relating to disposal of excess vacant land acquired by the State and (d) prohibition or restriction on transfer of a building or a part thereof or a flat therein, though unconcerned with excess vacant land, without permission, as being flagrantly violative of those aspects of the petitioners ' fundamental rights under articles 14, 19 and 31 as constitute the essential features or basic structure of the Constitution. Counsel for the petitioners also contended that some of the aforesaid impugned provisions which are pivotal and have an impact on the entire scheme of the Act, in fact, run counter to the Directive Principles of article 39 (b) and (c) and, there fore, but the entire Act outside the pale of the protective umbrella of article 31C of the Constitution. Counsel, therefore, urged that both the 40th Amendment to the extent it inserted the impugned Act in the Ninth Schedule and the impugned Act deserve to be struck down. On the other hand, the learned Attorney General appearing on behalf of the Union of India and counsel for the concerned States of Rajasthan, Andhra Pradesh, Uttar Pradesh and for the concerned competent authorities under the Act, refuted the contentions urged on behalf of the petitioners. It was denied that any provision of the Act runs counter to the Directive Principles of article 39 (b) and (c) of the Constitution. It was pointed out that the impugned Act having been put in the Ninth Schedule and having been enacted in further of the Directive Principles of the State policy contained in article 39 (b) and (c) of the Constitution was protected both under article 31B and 31C of the Constitution. It was disputed that any provision of the Act violated the petitioners ' fundamental rights under articles 14, 19 and 31 and, it was contended that even if there was any such violation, the Act and its provisions could not be 896 challenged by the petitioners on that ground because of the protective umbrella of article 31B and 31C of the Constitution and, therefore, the petitions were liable to be dismissed. I shall first deal with those impugned provisions of the Act, which according to the petitioners, not merely violate their fundamental rights but also have an adverse impact on the protective umbrella afforded by article 31C of the Constitution. In this behalf counsel for the petitioners referred to two provisions, namely. section 2(f) which gives an artificial definition of 'family ' in relation to prescription of ceiling area and section 23 which contains provision relating to disposal of excess vacant land acquitted by the State. Re: section 2(f) in relation to prescription of ceiling area. It is by section 3 of the Act that the ceiling on vacant land in any urban agglomeration is imposed. That section runs thus: "3. Except as otherwise provided in this Act, on and from the commencement in this Act, on person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub section (2) of section 1. " The ceiling limits referred to in the above section, as stated earlier, have been fixed at 500 sq. metres, 1,000 sq. metres, 1,500 sq. metres and 2,000 sq. metres for vacant lands in urban agglomerations falling in categories A,B,C and D respectively under section 4(1). Section 2(i) defines 'person ' as including an individual, a family, a firm, a company, or not association or body of individuals, whether incorporated or not; while section 2(f) defines 'family ' thus: "Family", in relation to a person means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children." And the Explanation to this clause states that "minor" means a person who has not completed his or her age of eighteen years. There is no doubt that the aforesaid definition of 'family ' is an artificial one inasmuch as is evcludes from its scope major children two 897 are normally included in the concept of a family; it further completely ignores the normal Joint Hindu Family. Counsel for the petitioners pointed out that if this artificial definition of 'family ' is considered in the context of ceiling limits prescribed under section 4(1) it produces discriminatory results because of adoption of double standard for fixing the ceiling limit one for the artificial family as defined and another for a normal family which includes major children or for Joint Hindu Family governed by Mitakshara Law obtaining in several parts of the country. For instance, in an urban agglomeration falling under category 'A ' where the ceiling limit is prescribed at 500 sq. metres, a family of a father, mother and say three minor sons (being in all five) together will be entitled to retain for itself only 500 sq. metres of vacant land whereas a family of a father and four major sons (being in all five) will be entitled to retain for itself 2,500 sq. metres of vacant land (500 sq. metres for father as a person and 500 sq. metres each for four sons as persons). Counsel urged that such discrimination or inequality arises from the classification made between minor children and major children belonging to a family but such classification is not based on any intelligible differentia having any nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to a family and as such the same is clearly violative of article 14 of the Constitution. Counsel strongly relied upon two decisions of this Court in this behalf, namely, decisions in Karimbil Kunhikoman vs State of Kerala and A.P. Krishnasami Naidu etc. vs State of Madras, where on similar ground the whole of Chapter III of Kerala Agrarian Relations Act, 1961 and the whole of Chapter II of the Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961, respectively were struck down by this Court inasmuch as the artificial definition of family together with adoption of double standard for fixing ceiling limit formed the basis of the concerned Chapter in each Act. I find considerable force in counsel 's contention. I may point out that when the agricultural ceiling matters were argued before us counsel for the petitioners therein had raised a similar contention in the context of the artificial definition of 'family ' and the adoption of double standard for fixing ceiling limits obtaining in the several concerned Acts and in support of such contention counsel had placed reliance on the aforesaid two decisions of this 898 Court but we rejected the contention on the ground that ample material had been produced before the Court justifying the adoption of artificial definition of 'family ' and double standard for fixing the ceiling limits in those Acts. Production of such justifying material distinguished the agricultural ceiling matters before us from the said two decisions relied upon by counsel but in the instant case no material whatsoever has been placed before the Court by the respondents justifying the adoption of the artificial definition of 'family ' in section 2(f) and double standard of fixation of ceiling in the impugned Act. It has not been shown that the so called nuclear families allegedly in vogue have replaced normal families which include major sons or joint Hindu families in urban areas. Besides, if the object of the impugned Act is to acquire excess vacant land in urban agglomerations after leaving permissible ceiling area to a family the classification made between minor children and major children belonging to a family has no nexus whatsoever to that object. In my view, therefore, the artificial definition of 'family ' given in section 2(f) when considered in relation to the prescription of the ceiling area under section 4(1) is clearly violative of and strikes at the root of the equality clause contained in article 14 of the Constitution. It cannot be disputed that this artificial definition together with the double standard adopted for fixing the ceiling area runs though and forms the basis of Chapter III of the Act and the discriminatory results or inequalities produced thereby are bound to have an impact on the scheme of that Chapter and, therefore, along with it the whole Chapter III must fall as being violative of article 14. There is yet one more aspect which needs consideration in connection with this adoption of the artificial definition of 'family ' given in s.2 (f) and the double standard for fixing ceiling area. Apart from the discriminatory results which it produces the question is what is its impact in the context of the directive principle contained in article 39 (c) of the Constitution? As stated earlier the postulate underlying the said directive principle in that concentration of wealth in the hands of few is deterimental to common interest and as such the State should ensure such economic system which prevents such concentration and the Act has been put on the Statute book professedly to achieve that objective. But, by adopting the artificial definition of 'family ' in section 2(f) and having double standard for fixing ceiling limit a contrary result is obtained inasmuch as the Act actually permits an unwarranted and unjustified concentration of 899 wealth (urban vacant land) in the hands of a family having major sons in it as compared to the family having minor children. In the illustration given above a family of a father with four major sons is allowed to retain with itself 2,500 sq. metres of vacant land while a family of a father mother and three minor sons is permitted to retain only 500 sq. metres. The position becomes more glaring if I take the illustration of a Joint Hindu Family consisting of five brothers, each having five major sons, as, in such a case the said Joint Hindu Family will be entitled to retain 15,000 sq. metres of vacant land as against 500 sq. metres permitted to be retained by the artificial family. It cannot be said that large joint Hindu families are unknown in urban agglomerations in various cities and towns of the country and instances more glaring than the preceding illustration could be multiplied. In other words, by adopting the artificial definition of 'family ' and double standard for fixing the ceiling area the Act enables unwarranted and unjustified concentration of wealth in the hands of few rather than preventing the same and this certainly would be in teeth of and not in furtherance of the directive principle of article 39(c); in fact, it is a negation of that principle. It is not possible to take the view that the Parliament out of inadvertance ignored joint Hindu Family or forgot the possible concentration of vacant land in the hands of major members of large joint Hindu families, because in another context the concept of Joint Hindu Family was present to the mind of the draftsman as is clear from section 4(7) of the Act. In my view, therefore, the adoption of the artificial definition of 'family ' and double standard for fixing ceiling area one for a family with minor children and another for a family with major children and completely ignoring the concept of Joint Hindu Family in relation to prescription of ceiling area clearly lead to results which run counter to the directive principle contained in article 39(c) of the Constitution. The Act which contains such provision being in teeth of that directive principle must fall outside the pale of protective umbrella of article 31C. Re: s.23 relating to disposal of excess vacant land acquired under the Act. It may be stated that under s.6 every person holding vacant land in excess of the ceiling limit at the commencement of the Act is required to file within the period prescribed a statement before the competent authority having jurisdiction giving full particulars there of 890 and also specifying the vacant land within the ceiling limit which he desires to retain. Sections 8 and 9 provide for preparation of draft statement as regards vacant land held in excess of the ceiling limit, holding of an inquiry in that behalf and preparation of final statement and service thereof on the concerned person by the competent authority, Section 10 provides for acquisition of excess vacant land by the concerned State Government and determination of claims of all persons interested in such excess vacant land and under sub s.(3) it is provided that upon the publication of a notification in that behalf such excess vacant land as may be specified therein shall be deemed to have been acquired by the State Government and the same shall vest absolutely in the State Government free from all encumbrances with effect from the date specified in the notification. Then comes s.23 which deals with disposal of such excess vacant land acquired by the State Government under the Act. It runs as follows: "23.(1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit, any vacant land, which is deemed to have been acquired by the State Government under this act or is acquired by the State Government under any other law, to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry and it shall be lawful for such person to hold such land in excess of the ceiling limit. Explanation, For the purposes of this section, (a) Where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by State Government, then, such land shall be deemed to be vacant land acquired under such other law; (b) "Industry" means any business, profession, trade, undertaking or manufacture. (c) In making an order of allotment under sub section (1), the State Government may impose such conditions 901 as may be specified therein including a condition as to the period within which the industry shall be put in operation or, as the case may be, the residential accommodation shall be provided for: Provided that if, on a representation made in this behalf by the allottee, the State Government is satisfied that the allottee could not put the industry in operation, or provide the residential accommodation, within the period specified in the order of allotment, for any good and sufficient reason, the State Government may extend such period to such further period or periods as it may deem fit. (3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances. (4) Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose. (5) Notwithstanding anything contained in sub sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same." Five or six aspects or peculiar features emerge clearly from the provisions contained in section 23 in the context of the entire Act. In the first place unlike agrarian ceiling which deals with land as means of production, urban ceiling under the impugned Act deals with vacant 902 land in urban agglomerations not as a means of production but as a part of the holder 's wealth or capital asset. Secondly, unlike agrarian ceiling which has the objective of distributing surplus agricultural land straightway among landless persons, under the impugned Act excess vacant land in urban agglomerations is acquired by and vests in the State to be disposed of as indicated in the section; clearly a legislation in exercise of the State 's power of eminent domain (i.e. power of compulsory acquisition of private property). Thirdly, such excess vacant land thus acquired is to be disposed of by the State Government "for any purpose relating to or connected with industry or for providing residential accommodation to the employees of any Industry". Fourthly, under cl. (b) of the Explanation, 'industry ' has been very widely defined for the purposes of this section to mean any business, profession, trade, undertaking or manufacture; the word 'any ' clearly suggests that business, profession, trade, undertaking or manufacture even in private sector is included. Fithly. sub section (1) confers absolute power and discretion on the State Government to allot any amount of such excess vacant land to any person for any industry. Reading the fourth and fifth aspects together, it is clear that it is open to the State Government to allot any extent of such excess vacant land to any professional person, say a lawyer a medical practitioner or even an astrologer for the purpose of carrying on his private profession. Sixthly, the section contemplates utilisation of such excess vacant land by the State Government in three ways: (a) allotment for industry (b) allotment to subserve the common good and (c) retention or reservation for the benefit of the public, but, the priorities in the matter of disposal or distribution of such excess vacant land have been peculiarly fixed in the section these priorities, as indicated in sub sections (1) and (4), are:=(i) allotment for the purpose of an industry, namely any business, profession, undertaking trade or manufacture, (ii) allotment for the purpose of construction of houses for the employees of an industry specified in item (i) above and (iii) disposal to subserve the common good which would include allotment of vacant land for governmental purpose or local authorities or for institutions etc. In other words, it is after the disposal of such excess vacant land for items (i) and (ii) above that the balance thereof can be disposed of "to subserve the common good" which means private purposes have precedence over public purposes, and this is clear from the fact that disposal under sub section (4) is "subject to" the prior disposal under sub section (1) for purposes of industry. In fact, disposal of excess vacant land for subserving the common good is last in the priorities Sub. s (5) undoubtedly has an 903 overriding effect over sub sections (1) to (4) but that provision deals not with disposal or distribution of excess vacant land but with retention and reservation of such vacant land by State Government for the benefit of the public like social housing and provision for basic arenities etc. Having regard to the aforesaid peculiar features that energe from a consideration of the provisions contained in s.23, counsel for the petitioners contended that the acquisition of excess vacant land in urban agglomerations cannot be said for a public purpose at all and hence the ehactment which is primarily for compulsory acquisition of private property runs counter to a valid exercise of the State 's power of 'eminent domain '. He pointed out that no scheme for any industrial development for any urban agglomeration has been indicated in the Act, nor any such scheme seems to have been prepared by any State Government or even by the Union Government before undertaking the legislative measure in hand and no definite public purpose of industrialisation with any plan or blue print with set specifications or standards seems to have been within the contemplation of the sponsoring States or the Union Government; at any rate no material in that behalf has been placed on record before the Court and, therefore, according to counsel, compulsory acquisition of all excess vacant land in all urban agglomerations throughout the Union Territories and the 17 States of the country for achieving a bald, indefinite and unspecified objective of an 'industry ' would not be a valid exercise of the power of eminent domain. Alternatively, counsel contended that even if it were assumed for the purpose of argument that a bald, indefinite and unspecified objective of 'industry ' is a public purpose, when that concept of 'industry ' is widely defined so as to include any business, trade or profession in private sector, the purpose sheds its character as a real public purpose, which position is further componded by the priorities laid down in the section and the acquisition becomes acquisition for private purpose amounting to an invalid exercise of the States 's power of eminent domain. Counsel, therefore, urged that section 23 flagrantly violates article 31 (2) and is, therefore, ultra vires and unconstitutional and since it is a pivotal provision having an impact on the entire Ceiling scheme and at the same a non severable provision from the rest of the provisions contained in that chapter, the whole of Chapter III must fall with it. Article 31 of the Constitution has more than one facet, it undoubtedly confers upon individuals (including non citizens) and 904 corporate bodies a fundamental right to property but because of conflict of views in Keshavanada Bharati 's case (supra) it may be debatable whether that right forms part of basic structure or not, but that apart, article 31 incorporates in our Constitution the concept of State 's power of eminent domain i. e. power of compulsory acquisition of private property and prescribes two conditions precedent to the exercise of the power, namely, (i) such acquisition cannot be except for a public purpose and (ii) it must be on payment of compensation (now termed 'amount ') to the claimant having interest in the property. In Kameshwar Singh 's case this position has been clarifie where Mahajan, J., after referring to some authoritative books has summed up the definition of the concept in one sentence thus "Authority is universal in support of the amplified definition of 'eminent domain ' as the power of the sovereign to take property for public use without the owner 's consent upon making just compensation," The requirement of just compensation under the latter condition is diluted to payment of non illusory amount under the 25th Amendment of the Constitution and subsequent decisions of this Court. But it is well settled that these two conditions precedent are sine qua non for the exercise of the State 's power of eminent domain ' and, in my view, represent those aspects of the right to property under article 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of any one of those conditions would damage or destroy the basic structure of our constitution. It is extremely doubtful whether a bald, indefinite and unspecified objective like 'industry ' simpliciter without any attempt at dovetailing it by having a proper scheme for industrial development will constitute a valid public purpose for the exercise of the power of 'eminent domain '. It is because of the absence of any definite scheme for industrial development with plans or blue prints with set specifications or standards for any of the urban agglomerations that wide power has been conferred on the State Government under sub section (1) in vague terms to allot any extent of such excess vacant land to any person for any industry. I am conscious that in Kameshwar Singh 's case (supra) this Court speaking through Mahajan, J., observed that "the phrase 'public purpose ' has to be 905 construed according to the spirit of times in which the particular legislation is enacted" and held that so construed, acquisition of estates for the purpose of preventing the concentration of huge blocks of land in the hands of a few individuals and to do away with intermediaries was for a public purpose. But that case dealt with three statutes (the Bihar Land Reforms Act, 1950, the M. P. Abolition of proprietory Rights Act, 1950 and the U. P. Zamindari Abolition and Land Reforms Act, 1950), the common aim of which, generally speaking, was to abolish zamindaries and other proprietory estates and tenures in the three States, so as to eliminate the intermediaries by means of compulsory acquisition of their rights and interests and to bring the raiyats and other occupants of lands in those areas into direct relation with the Government and therefore, that case is distinguishable and its ratio would not apply to the instant case where the purpose of acquisition of excess vacant (urban) land is a bald objective like 'industry ' simpliciter, surely different considerations would apply. In my view it is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomerations throughout the country for a bald, indefinite and unspecified objective like 'industry ' simpliciter would be a valid exercise of the power of 'eminent domain '. However, it is not necessary for me to decide this larger question inasmuch as in my view the alternative submission of counsel for the petitioners clinches the issue in this case. Assuming that a bald objective of 'industry ' simpliciter partakes of the character of a public purpose, what Parliament intended by the said objective has been expressly clarified by cl. (b) of the Explanation where 'industry ' has been very widely defined so as to include any business, trade or profession in private sector which makes a mockery of such public purpose. Whatever be the merits or demerits of a wide definition of 'industry ' for the purposes of industrial cum labour relations, adoption of such wide definition of the concept in the context of eminent domain is clearly suicidal. By adopting such definition for the purposes of section 23 the State Government has been empowered under sub section (1) to allot any extent of such excess vacant land to any businessman, trader or professional man like a lawyer, doctor and astrologer to enable him to carry on his private business, trade or profession. In other words, acquisition of excess vacant land in urban agglomeration would clearly be for private purposes and what is worse is that under the priorities laid down such private purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good. This clearly smacks of depriving peter of his property to give it to Paul 906 and, therefore, clearly amounts to an invalid exercise of State 's power of 'eminent domain '. Section 23, which thus authorises compulsory acquisitions of property for private purposes flagrantly violates those aspects of article 31 which constitute the essential or basic features of the Constitution and is, therefore, ultra vires and unconstitutional. Further, indisputably it is the most vital, integral and non severable part of the entire scheme of urban ceiling as without it the scheme will merely remain a scheme for unjust and illegal enrichment of the State and, therefore, the whole of Chapter III, in which it occurs, must fall with it. Apart from the unconstitutionality of s.23 as indicated above, it is clear that the wide definition of 'industry ' and the priorities for disposal or distribution of excess vacant land laid down therein have adverse impact on the directive principle contained in Art.39(b). In the first place instead of confining the objective of industrialisation to public sector or cooperative sector and the like where benefit to community or public at large would be the sole consideration, the concept is widely defined to include any business, trade or profession in private sector which enables the disposal or distribution of excess vacant land for private purposes and sub s.(1) authorises the State Government to allot any extent of such land to individuals or bodies for private purposes. Secondly, the priorities in the matter of disposal or distribution of the excess vacant land under sub sections (1) and (4) are as indicated above, which show that disposal or distribution of excess vacant land for subserving the common good comes last in the priorities. I have already indicated that the postulate underlying the directive principle of article 39(b) is that diffusion of ownership and control of the material resources of the community is always in the public interest and, therefore, the State is directed to ensure such distribution (equitable) thereof as best to subserve the common good but the priorities prescribed in sub sections (1) and (4) of s.23 in regard to distribution of material resource produce contrary results or results in the opposite direction inasmuch as private purposes receive precedence over common good. The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of article 39(b) and cannot receive the benefit of the protective umbrella of article 31C. Counsel for the respondents, however, relied upon three aspects to counter act the aforesaid result flowing from the priorities 907 given in section 23(1) and (4). It was urged that the disposal of excess vacant land acquired by the State under the Act will be guided by the Preamble which says that enactment was put on the Statute Book with a view to bringing about the equitable distribution of land in urban agglomerations to subserve the common good. In the first place, it is well settled that it is only when there is some ambiguity in test of any provision in the enactment that the preamble could be looked at and here there is no ambiguity whatsoever in s.23(1) and (4). Secondly, far from there being any ambiguity there is express provision in s.23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the preamble cannot control, guide or direct the disposal or distribution in any other manner. Next, reliance was placed on section 46(1) which empowers the Central Government to make rules for carrying out the provisions of the Act and the disposal or distribution of excess vacant land could be prescribed by rules. It may, however be stated that no rules under s.46 have so far been framed by the Central Government and, in any event, no rules framed thereunder can over ride the express provisions of s.23. Lastly, reliance was placed on certain guidelines issued by the Central Government in its Ministry of Works and Housing under the Act and at page 83 of the "Compendium of Guidelines" (a Govt. of India publication dated February 22, 1977) a note containing guidelines on utilization of excess vacant land acquired under the Act is published. Paragraphs 3 and 4 of the said Note deal with the topic of priorities. In para 3 the disposal or distribution of excess vacant land as per the priorities in section 23 has been set out (which are the same as given above) while para 4 sets out the priorities in accordance with the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development held at Calcutta on the 17th, 18th and 19th December, 1976, which considered the matter and the priorities indicated are: (i) Retention/reservation for the 'benefit of the Public ' like social housing, provision of basic amenities, etc. (ii) Disposal 'to subserve common good ' which may include allotment of vacant land for Government purposes, local authorities, institutions ' etc. (iii) Allotment for the purpose of construction of houses for the employees of industries specified in item (iv) A below (v) Allotment for the purpose of industry, viz., any business, profession trade, undertaking of non polluting manufacture; cottage and small scale and wherever possible ancillary industry; manufacture. It will appear clear that the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development seek to furnish 908 improved guidelines but in the process reverse the priorities given in the section in the matter of disposal or distribution of excess vacant land. It is obvious that the priorities given in section 23 and as have been summarised in para 3 of the Note must prevail over the priorities indicated in the guidelines contained in para 4 of the Note and the latter are of no avail. It is thus clear that the priorities as given in section 23(1) and (4) in the matter of disposal or distribution of excess vacant land acquired under the Act run counter to and in a sense operate to negate the directive principle of Art.39(b). It was then faintly argued by counsel for the respondents that the law in order to receive the protection of article 31C need not fulfil the objectives of both article 39(b) and (c) and even if it fulfils the objective under article 39(c) and not under article 39(b) it will be protected by article 31C. But here section 23 by no stretch deals with the objective of article 39(c) at all but only deals with the objective underlying the directive principle of article 39(b) and its provisions as discussed above clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of article 31C. Faced with the situation that the constitutional invalidity of section 23 was likely to have adverse repercussion not only on Chapter III in which it occurs but also on the entire Act, counsel for the respondents made a valiant effort to salvage the said section by indulging in interpretative acrobatics with a view to relieve it from the two vices attaching to it, namely, (i) the adoption of the wide definition of 'industry ' in cl. (b) of the Explanation which makes a mockery of the Public purpose indicated by the bald objective like 'industry ' simpliciter and (ii) the priorities mentioned therein governing the disposal or distribution of excess vacant land acquired under the Act. It was suggested that the definition of 'industry ' should be read down by the court so as to confine the same to industries in public sector or co operative sector or the like where benefit to community or public at large would be the sole consideration, so that allotment of excess vacant land acquired under the Act to private entrepreneurs for private purposes which runs counter to the doctrine of eminent domain would be completely eschewed. It is impossible to read down the definition in the manner suggested because parliament has for the purposes of the section (i.e. for purposes of disposal or distribution 909 of such excess vacant land) deliberately and in express terms adopted a vary wide definition which includes within its scope not merely trading or manufacturing activity but also any business or profession in private sector and reading down the definition as suggested would be doing violence to the Parliament 's intention stated in express terms. It was then submitted that sub section (1) of section 23 should be construed as an enabling provision which merely permits the State Government to allot excess vacant land for the purposes of industry, while the real obligation in the matter of disposal of excess vacant land arises under sub section (4) which speaks of disposal of such land "to subserve the common good"; in other words, the disposal under sub section (4) should over ride the disposal under sub section (1); at any rate the "common good" spoken of in sub section (4) should permeate the disposal under sub section It is impossible to read sub section (1) of s.23 as containing merely an enabling provision; the scheme of sub sections (1) and (4) read together clearly shows that the disposal of the excess vacant land is first to be done under sub s.(1) and disposal under sub s.(4) comes thereafter. The opening words of sub s.(4) "subject to sub ss.(1), (2) and (3)" cannot be read as constituting a non obstante clause giving an over riding effect to sub section (4) nor can sub s.(4) be read as if the opening words were absent. By indulging in such interpretative acrobatics the Court cannot reach the opposite result than is warranted by the plain text of the provision. Further, to say that every disposal of excess vacant land under sub s.(1) must be for "common good" is to read into that sub section something which is not there; it amounts to re writing that sub section, which cannot be done, the Preamble notwithstanding. It is the conferral of such unrestricted power (not its oblique exercise) that is being attacked and hence the submission to read into sub s.(1) this kind of limitation. These submissions require the re structuring of the entire section a function legitimately falling within the domain of the Legislature. Moreover, sub ss.(1), (2), (3) and (4) of s.23 are integral parts of one whole scheme dealing with disposal of excess vacant land acquired under the Act and as such cannot be severed from one another. The attempt to salvage s.23, either wholly or in part, by seeking to free it from the two vices must, therefore, fail. The next provision challenged by the petitioners as being violative of their fundamental rights is section 11 (6) which puts the maximum limit of Rs. two lakhs on compensation (called 'amount ') payable to the holder of excess vacant land irrespective of the extent of such excess vacant land. For the purpose of determining the 910 quantum of compensation s.11 (1) divides vacant land in urban agglomerations into two categories (i) vacant land from which income is derived and (ii) vacant land from which no income is derived and in regard to the former category cl, (a) of sub section (1) fixes the quantum payable at an amount equal to eight and one third times the net average annual income actually derived from such land during the period of five consecutive years immediately preceding the date of publication of the notification issued under section 10 (1) and the net average annual income is to be calculated in the manner and in accordance with the principles set out in Schedule II, while in respect of the latter category, cl. (b) of sub section (1) fixes the quantum payable at an amount calculated at a rate not exceeding (i) Rs. 10 per sq. metre in the case of vacant land situated in urban agglomerations falling with categories A and B and(ii) Rs.5 per sq. metre in the case of vacant land situated in urban agglomerations falling within categories C and D. In other words, for vacant land yielding income the method of capitalisation of the income for certain number of years is adopted while for vacant land yielding no income maximum rates of compensation for A and B categories at Rs. 10 per sq. metre and for C and D categories at Rs 5 per sq. metre have been fixed. Compensation (called 'amount ') once determined is payable to the holder under section 14 (2) in a certain manner, namely, 25 % there of will be paid in cash and the balance 75% in negotiable bonds redeemable after expiry of 20 years carrying interest at 5% per annum. Section 11 (6) which puts the maximum limit of two lakhs on the quantum payable in respect of excess vacant land acquired under the Act runs thus: "11 (6) Notwithstanding anything contained in sub section (1) or sub section (5) the amount payable under either of the said sub sections shall, in no case, exceed two lakhs of rupees. " Counsel for the petitioners contended that section 11 (6) which puts the maximum limit of Rs. two lakhs on the amount payable to a claimant irrespective of the extent of the excess vacant land acquired under the Act is not only arbitrary but also results in illusory payment and violates articles 14 and 31 (2) respectively. Counsel pointed out that a person holding excess vacant land which at the prescribed rates is of the value of Rs. two lakhs and a person holding such excess vacant land which even at the same prescribed rates 911 is of the value of Rs. two crores are treated alike, that is to say, both will get compensation (termed 'amount ') of Rs. two lakhs only and is this sense prescribing a limit of maximum of Rs. two lakhs is clearly arbitrary and violates article 14. Similarly, for a person who holds excess vacant land which even at the prescribed rates it of the value of Rs. two crores a payment of Rs. two lakhs only (i.e. 1/100th of the value at the prescribed rates) must, by any standard, be regarded as illusory and, therefore, the fixation of maximum limit at Rs. two lakhs under section 11(6) irrespective of the extent of excess vacant land held by a person violates article 31(2) of the Constitution. I find considerable force in both the submissions of counsel for the petitioners. In fact, in my view, this provision which puts the maximum limit of Rs. two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant land held by him is not merely violative of articles 14 and 31(2) of the Constitution in the manner indicated above, but would be a piece of confiscatory legislation, because vacant land in excess of that portion which at the prescribed rates is worth Rs. two lakhs stands confiscated to the State without any payment whatsoever. I do not suggest that a provision putting a maximum limit upon compensation payable to the owner or holder irrespective of the extent of the property acquired whenever or wherever is found in any enactment has to be regarded as a confiscatory provision. I am aware that in enactments involving large schemes of social engineering like abolition of Zamindar is, agrarian reforms, nationalisation of undertakings and businesses and the like, such a provision might be justifiably made. In State of Kerala vs The Gwalior Rayon Silk Mfg. Co. Ltd., this Court upheld the validity of Kerala Private Forest (Vesting and Assignment) Act, 1971 where under private forest lands held on janman right were acquired without payment of any compensation on the ground that such acquisition was for implementing a scheme of agrarian reform by assigning lands on registry or by way of lease to poorer sections of the rural agricultural population, the enactment being protected under article 31A (1) of the Constitution. Again the whereunder the right, title and interest of the owners in relation to their coal mines specified in the schedule to the Act stood transferred to and became vested absolutely in the Central Govt. free from encumbrances in exchange of payment of fixed amounts specified in that schedule was upheld by this Court. 912 But such cases involving large schemes of social engineering where avowedly the benefit of the community or public at large is the sole consideration are distinguishable from the instant case, where 'industry ' has been expressly defined to include business, trade or profession in private sector and where power has been conferred upon the State Government to allot properties acquired under the enactment to individual businessman, trader or professional to enable him to carry on his private business, trade or profession, that is to say, where the legislation is a fraud on State 's power of eminent domain, such a provision of putting a maximum limit on compensation payable in respect of the acquired property irrespective of its extent will have to be regarded as confiscatory in nature. An instance in point is available on the record of these writ petitions. In writ petition No. 350 of 1977 the petitioner who happens to be the ex Ruler of the former Kota State has averred in paragraphs 17 and 20 of the petition that the urban vacant land owned and possessed by him in the city of Kota admeasures 918. 26 acres and that the Assistant Director, Lands and Buildings Tax, Kota in his assessment order dated 20.12. 1976 had valued the same at market rate of Rs. 15.12 per sq. metre at Rs 3,98,05021.84 (say about Rs. four crores) and inclusive of other items of properties the total value was put down at Rs. 4.12 crores and these averments are substantially admitted in the counter affidavit filed by section Mahadeva Iyer on behalf of the Union of India where in para 9 he has stated thus: "In reply to para 20 of the writ petition I submit that the total assessment of the entire property comes to Rs. 4.56 crores. " In other words, in the case of this petitioner the fact that he owns urban vacant land of the value of about Rs. four crores in the city of Kota stands admitted. Now, under section 11(6) for all this urban vacant land worth nearly Rs. four crores the petitioner will get only rupees two lakhs, it works out to a princely sum of eight annas for property worth Rs. 100, which would clearly be an illusory payment. In fact, all his vacant land, in excess of that portion which is worth Rs. two lakhs at the prescribed rates, shall stand conficated without any payment whatsoever. Such a glaring instance, available on the record of these petitions, brings out in bold relief how flagrantly section 11(6) 913 violates articles 14 and 31(2) of the Constitution; it highlights the aspect that such acquisition takes place in breach of the other condition precedent attaching to the power of eminent domain namely, payment of non illusory compensation. However, section 11(6) is clearly a severable provision, and that alone is liable to be struck down as being ultra vires and unconstitutional. The next provision challenged by the petitioners is section 27 occurring in Chapter IV to the extent to which it imposes restriction on transfer of an urban land with building or a flat therein though unconcerned or unconnected with the excess vacant land as unconstitutional being beyond the legislative authorisation as also violative of petitioners ' fundamental rights under Arts 14 and 19(1) (f). Section 27, as its marginal note indicates, deals with the subject of prohibition of transfer of urban property and sub section (1) thereof runs thus: "27. (1) Notwithstanding any thing contained in any other law for the time being in force, but subject to the provisions of sub section (3) of section 5 and sub section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent authority." Inter alia, the aforesaid provision is clearly applicable to a building or a portion of such building which would include a flat therein standing on any urban or urbanisable land falling within the permissible ceiling area which a holder of a vacant land is entitled to retain with himself and under this provision any transfer of such property by way of sale, mortage, gift or lease for ten years or otherwise, is prohibited for the period of ten years from the commencement of the Act except with the previous permission in writing of the competent authority. Under sub section (2) if the holder of such property falling within the permissible ceiling area is desirous of effecting a transfer of the type indicated above has to apply in writing for permission from the competent authority and under sub s.(3) the 914 competent authority has been authorised after making such inquiry as it deems fit to grant the permission or refuse the same, but a refusal has to be accompanied by written reasons, copy whereof is to be furnished to the holder. Sub section (4) provides that if within sixty days of the receipt of the application refusal is not communicated, the permission shall be deemed to have been granted by the competent authority. Counsel for the petitioners made two submissions in regard to aforesaid restriction as made applicable to transfers of built up properties that fall within the limits of ceiling area permitted to be retained by a holder. Firstly, such restriction would be outside the legislative authorisation conferred upon the Parliament as well as beyond the ambit and scope of the Act which has assiduously kept built up properties outside the pale of imposition of ceiling. Secondly, such restriction requiring permission from the competent authority is arbitrary and violative of Art.14 in as much as the power to grant the permission or to refuse it is unguided and untrammeled which is bound to produce arbitrary results. In my view both the submissions have substance in them. It cannot be disputed that though the authorisation was for imposition of ceiling on urban immovable property Parliament deliberately kept out built up properties from the purview of the Act and the Act seeks to impose ceiling only on vacant land in urban agglomerations; that being so any restriction on transfer of built up properties or parts thereof (including flats therein) standing on urban land falling within the permissible ceiling area would be outside the purview of the Act. It was urged for the respondents that such a provision would be incidental or ancillary to the ceiling contemplated by the Act and would fall within the phrase "for matters connected therewith" occurring in the Preamble and the long title of the Act. It is not possible to accept the contention, for, the words "matters connected therewith" occurring in the concerned phrase must be co related to what precedes that phrase, namely, "an Act to provide for ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land" (emphasis supplied) and, therefore, the words "matters connected therewith" must mean matters in relation to the ceiling imposed by the Act. A reference to objective under article 39(b) and (c) (for the achievement of which the enactment is allegedly taken in hand) in the Preamble or long title cannot enlarge 915 the ambit or scope of the Act. Any restriction imposed on built up properties falling within the permissible ceiling area left with the holder would, therefore, be outside the ambit and scope of the Act. The next question is whether the restriction which requires the holder of such property to seek permission of the competent authority before effecting any transfer thereof by way of sale, mortgage or gift, etc. is violative of article 14 of the Constitution. The contention is that the requirement in the absence of any guidelines governing the exercise of the power on the part of the competent authority in the matter of granting or refusing to grant the permission is highly arbitrary, productive of discriminatory results and, therefore, violates the equality clause of article 14. Counsel for the respondents fairly conceded that the section itself does not contain any guidelines but urged that the objectives of "preventing concentration, speculation and profiteering in urban land" recited in the Preamble would afford the requisite guidance for the exercise of the power to grant the permission sought or to refuse the same. Firstly, which of the three objectives mentioned in the Preamble should guide the exercise of power by the competent authority in any given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration, speculation, and profiteering in urban land or urban property and in the absence of any standard being laid down by the Legislature a purely legislative function, it will be difficult to hold that these broad objectives recited in the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the permission and in the absence of guidelines the exercise of the power is bound to produce arbitrary or discriminatory results. It was also said that against the order passed by the competent authority under section 27 an appeal to the Appellate Authority has been provided for under section 33 and revision lies to the State Government under section 34 and in view of such provision for appeal and revision the exercise of the power or discretion vested in the competent authority cannot be regarded as unfettered or arbitrary. Here again I feel that in the absence of any guidelines for the exercise of the power and in the absence of any standards having been laid down by the Legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land and urban property, the provision for appeal and revision would not be of much avail to preventing arbitrariness in the matter of granting or refusing to 916 grant the permission. Section 27 which does not adequately control the arbitrary exercise of the power to grant or refuse the permission sought, is clearly violative of article 14 of the Constitution and as such the requirement of permission contained therein will have to be struck down as being ultra vires and unconstitution. In the result, in view of the aforesaid discussion. I would like to indicate my conclusions thus: (1). The impugned Act, though purporting to do so, does not, in fact, further the directive principles in article 39 (b) and (c). Section 2(f) in relation to prescription of ceiling area, as shown above, permits unwarranted and unjustified concentration of wealth instead of preventing the same and is in teeth of the objective under article 39(c); similarly, section 23, as discussed above, produces results contrary to the objective under article 39(b). Therefore, the impugned Act is outside the pale of the protective umbrella of article 31C. (2) Section 2(f) which contains the artificial definition of 'family ' in relation to the prescription of ceiling area, section 23 which deals with disposal or distribution of excess vacant land acquired under the Act as per priorities laid down therein and section 11(6) which puts a maximum limit on the quantum of the amount payable in respect of excess vacant land acquired from a holder irrespective of the extent of area held by him these three provisions flagrantly violate those aspects of articles 14 and 31 which constitute the essential and basic features of our Constitution and hence the protective umbrella of article 31B is not available to the impugned Act inasmuch as the 40th Constitution Amendment Act 1976 to the extent to which it inserts the impugned Act in the Ninth Schedule is beyond the constituent power of the Parliament as the said Amending Act has the effect of damaging or destroying the basic structure of the Constitution. The artificial definition of 'family ' given in section 2(f) in relation to prescription of ceiling area under section 4(1) is clearly violative of article 14 and as such is ultra vires and unconstitutional. Similarly, section 23 which authories compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates article 31(2) is ultra vires and unconstitutional. Since section 2(f) together with adoption of double standard for fixing ceiling area runs through and forms basis of the whole Chapter III and since section 23 is a vital, Integral and non severable part 917 of the entire scheme of urban ceiling envisaged by the Chapter III, the whole of Chapter III has to fall along with those two provisions and as such that Chapter is also declared to be ultra vires and unconstitutional. Further, it cannot be disputed that Chapter III comprises the substratum of the entire scheme of urban ceiling contemplated by the enactment incorporating its main provisions while the other Chapters deal with arcillary or incidental matters which from the decorative frills of the main fabric. If the substratum is found to be diseased, invalid and bad in law the entire Act has to go and is accordingly struck down as void and unconstitutional. Section 11(6), a severable provision, being violative of petitioners ' fundamental right under article 31 is declared to be ultra vires and unconstitutional. Section 27, being severable, is also declared ultra vires and unconstitutional to the extent indicated above as being beyond the ambit of the Act and violative of article 14 of the Constitution. Before parting with the matter I would like to refer to the manner in which this important and complicated measure came to be enacted. It cannot be doubted that the 11 sponsoring State Legislatures passed their resolutions under article 252(1) with a laudable object, namely to clothe the Parliament with legislative competence to enact a law for the imposition of ceiling on urban immovable property for the country as a whole Though initially a model bill based on the recommendations made by the Working Group in its Report dated July 25, 1970 had been prepared where ceiling was proposed to be imposed on urban property on the basis of monetary value, Parliament later on realized that the implementation of that proposal was beset with several practical difficulties indicated in the Approach Paper prepared by a Study Group, and, therefore, it was though that ceiling in respect of built up properties should be brought about through some fiscal and other measures and ceiling on vacant land in urban agglomerations on the lines of the impugned Act should be undertaken. In other words, State wise deep consideration and consultation for over five years had preceded the preparation of the draft Bill and this Court in V.B. Chowdhari 's (1) 918 case has upheld the legislative competence of Parliament to enact such a measure as a first step towards eventual imposition of ceiling on immovable properties of every other description. However, after the introduction of the Bill on the floor of the house on January 28, 1976, the enactment as drafted in its present form seems to have been rushed through the attenuated Parliament during the Emergency in less than seven hours on February 2, 1976. The Lok Sabha debates clearly show: (a) that the Bill was moved and taken up for consideration at 11.17 hours on that day, (b) that a motion moved by a member that the Bill be circulated for the purpose of eliciting opinion thereon by May 15, 1976 was negatived, (c) that another motion supported by quite a few members that the Bill be referred to a Select Committee with a view to improve the same by removing defects, deficiencies and omissions therein with instructions to the Select Committee to report by April 1, 1976, was also negatived, (d) that though over 150 amendments had been moved (some of which were received by the members on the very day as speeches were in progress), an earnest request to postpone the second reading of the Bill to the following day to enable the members to consider those amendments (many of which were neither formal nor clarificatory but of substance) was also turned down, and (e) that the original time schedule of six hours fixed by the Speaker for the Bill was adhered to and the entire process (including general discussion, clause by clause reading, consideration of the several amendments and the third reading) was completed in undue haste by 18.01 hours. In Rajya Sabha also a request to refer the Bill to a Select Committee went unheeded and the entire process was completed in one day, February 5, 1976. The result is that it has, in the absence of adequate study or discussion about the implications of various provisions thereof, turned out to be an ill conceived and ill drafted measure. The measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying article 39(b) and (c), but as shown above, the enacted provisions misfire and produce the opposite results and also damage or destroy the essential features or basic structure of the Constitution and hence duty bound I am constrained to strike down this impugned piece of purported socioeconomic legislation. The legislative competence of the Parliament being still there a well drafted enactment within the constitutional limitations on the subject would be the proper remedy. I would, therefore, allow the petitions and direct issuance of the appropriate writs sought. 919 SEN J. These writ petitions under Article 32 of the Constitution seek to challenge the constitutional validity of the Urban Land (Ceiling and Regulation) Act, 1976 on various grounds. The Act has been placed as item No. 132 in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976. Questions involved are of far reaching importance affecting the national interest. The history of the legislation is well known. The State Legislatures of eleven States, namely, all the Houses of the Legislatures of the States of Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have a uniform legislation enacted by Parliament for the imposition of a ceiling on urban property in the country as a whole and in compliance with clause (1) of Article 252 of the Constitution passed a resolution to that effect. Parliament accordingly enacted the Urban Land (Ceiling and Regulation) Act, 1976. In the first instance, the Act, came into force on the date of its introduction in the Lok Sabha that is, January 28, 1976 and covered Union Territories and the eleven States which had already passed the requisite Resolution under Article 252(1) of the Constitution. Subsequently, the Act was adopted, after passing resolutions under Article 252(1) of the Constitution by the State of Assam on March 25, 1976, and those of Bihar on April 1, 1976, Madhya Pradesh on September 9, 1976, Manipur on March 12, 1976, Meghalaya on April 7, 1976 and Rajasthan on March 9, 1976. Thus, the Act is in force in seventeen States and all the Union Territories in the country. The legislative competence of Parliament to enact the Urban Land (Ceiling and Regulation) Act, 1976 having been upheld by this Court in Union of India etc vs Valluri Basavaiah Chaudhary,(1) there remains the question of its constitutional validity. Schedule I to the Act lists out all States, irrespective of whether or not they have passed a resolution under article 252(1) authorizing the Parliament to enact a law imposing a ceiling on urban immovable property, and the urban agglomerations in them having a population of two lace or more. The ceiling limit of vacant 920 land of metropolitan areas of Delhi, Bombay, Calcutta and Madras having a population exceeding ten lacs falling under category 'A ' is 500 sq. metres, urban agglomerations with a population of ten lacs and above, excluding the four metropolitan areas falling under category 'B ' is 1000 sq. meters agglomerations with a population between three lacs and ten lacs falling under category 'C ' is 1500 sq. metres and urban agglomerations with a population between two lacs and three lacs falling under category 'D ' is 2000 sq. metres. The schedule does not mention the urban agglomerations having a population of one lac and above; but if a particular state which passed a resolution under article 252(1), or if a State which subsequently adopts the Act, wants to extend the Act to such areas, it could do so by a notification under s.2(n) (B) or s.2 (n) (A) (ii), as the case may be, after obtaining the previous approval of the Central Government. The primary object and the purpose of the Urban Land (Ceiling and Regulation) Act, 1976, 'the Act ' as the long title and the preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good, in furtherance of the Directive Principles of State Policy under article 39(b) and (c). The Statement, of objects and Reasons accompanying the Bill reads as follows: "There has been a demand for imposing a ceiling on urban property also, especially after the imposition of a ceiling on agricultural lands by the State Governments. With the growth of population and increasing urbanisation, a need for orderly development of urban areas has also been felt. It is, therefore, considered necessary to take measures for exercising social control over the scarce resource of urban land with a view to ensuring its equitable distribution amongst the various sections of society and also avoiding speculative transactions relating to land in urban agglomerations. With a view to ensuring 921 uniformity in approach Government of India addressed the State Governments in this regard, eleven States have so far passed resolutions under article 252(1) of the Constitution empowering Parliament to undertake legislation in this behalf. " The Act consists of five Chapters. Chapter I contains the short title and the extant clause and Chapter II contains section 2, which is the definition section. Chapter III deals with 'Ceiling on vacant Land Chapter IV deals with 'Regulation of transfer and use of urban land ' and Chapter V contains miscellaneous provisions, There can be no doubt that the legislative intent and object of the impugned Act was to secure the socialisation of vacant land in urban agglomerations with a view to preventing the concentration of urban lands in the hands of a few persons, speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve to common good, in furtherance of the Directive Principles of State Policy under article 39 (b) and (c). The Act mainly provides for the following: (i) imposition of a ceiling on both ownership and possession of vacant land in urban agglomerations unders. 3, the ceiling being on a graded basis according to the classification of the urban agglomerations under s.4; (ii) acquisition of the excess vacant land by the State Government under s.10(3), with powers to dispose of the vacant land with the object to subserve the common good under s.23; (iii) payment of an amount for the acquisition of the excess land in cash and in bonds under section 14(2), according to the principles laid down in s.11(I) subject to the maximum specified in s.11(6 ) (iv) granting exemptions in respect of vacant land in certain cases under ss.20 and 21; (v) regulating the transfer of vacant land within the ceiling limits under s.26; 922 (vi) regulating the transfer of urban or urbanisable land with any building (whether constructed before or after the commencement of the Act, for a period of ten years from the commencement of the Act or the construction of the building whichever is later under s.27; (vii) restricting the plinth area for the construction of future residential buildings under s.29; and (viii) other procedural and miscellaneous matters. The Act is thus intended to achieve the following objectives: (I) to prevent the concentration of urban property in the hands of a few persons and speculation and profiteering therein; (2) to bring about socialisation of urban land in urban agglomerations to subserve the common good to ensure its equitable distribution, (3) to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials. and (4) to secure orderly urbanisation. Thus the dominant object and purpose of the legislation is to bring about socialisation of urban land. In order to appreciate the rival contentions, it is necessary to set out the relevant provisions: Section 3 which is all important for the purpose of these writ petitions, provides: "3. Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub section (2) of section 1. " Section 4 divides the urban agglomerations into four broad categories, categories A, B, C and D, and fixes the ceiling limits varying from five hundred sq. metres in Category A to two thousand sq. metres in Category D thereof. The word 'person ' is defined in s.2(i) as: "2(i) "person" includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not. " 923 The definition of the word 'family ' in s.2(f) is in the following terms: "2(f) "family" in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children. " In order that the burden of compensation, that is, the amount payable for such excess vacant lands by the Government, may not be high, the Act incorporates a specific provision, namely, sub section (1) of s.11 which fixes the amount broadly on the following basis: (1) eight and one third of the annual net income from the land during the last five years or where such annual income is not being derived, at rates not exceeding Rs. 10 per sq. metre or Rs. 5 per sq. metre in Categories A and B, and C and D urban agglomerations respectively, and classifying the area into different zones. There is also a ceiling on the maximum amount payable in any single case placed by subsection (6) of s.11. Sub section (1) s.27 provides for the freezing of all transfers of urban land with or without a building or portion of a building in all agglomerations for a period of ten years from the date of the commencement of the Act or from the date on which the building is constructed. The constitutional validity of the Act which has been placed in the Ninth Schedule by the Fortieth Amendment, is challenged principally on the ground that, firstly, it is violative of the fundamental rights guaranteed under Arts 14, (19(1)(f) and 31(2), since it seeks to alter the "basic structure" of the Constitution as formulated by this Court in His Holiness Kesavananda Bharti vs State of Kerala and; therefore, has not the protective umbrella of Art.31B, and secondly that it is a law in negation of, and in furtherance of the Directive Principles of State Policy under Art.39(b) and (c) and is, therefore, not protected under Art.31C. In Waman Rao & Ors. vs Union of India Ors. this Court by its order, in the context of the decision in Kesavananda Bharati 's case, has laid down. "Amendments to the Constitution made on or after April 24, 1973 by which the 9th schedule to the Constitution was amended from time to time by the inclusion of 924 various Acts and Regulations therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the Parliament since they damage the basic or essential features of the Constitution or its basic structure. We do not pronounce upon the validity of such subsequent amendments except to say that if any Act or Regulation included in the 9th Schedule by a constitutional amendment made after April 24, 1973 is saved by Article 31.C as it stood prior to its amendment by the 42nd Amendment, the challenge to the validity of the relevant Constitutional Amendment by which that Act or Regulation is put in the 9th Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in Articles 14, 19 or 31, will become otiose. Article 31 C of the Constitution, as it stood prior to its amendment by Section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in Kesavananda Bharati Article 31 C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure. " The validity of the impugned Act is challenged on four grounds Namely the inclusion of an artificial definition of 'family ' in s.2 (f) results in total exclusion of a joint Hindu family from the purview of the Act and also in adoption of double standard between a family with major sons, each of whom is a separate unit by himself, and a family with minor children, which constitutes a family unit for fixing a ceiling and thus s.3 of the impugned Act offends against the equal protection clause in Art.14, as persons similarly situate are differentially treated without any rational basis; (2) the impugned Act is inconsistent with, takes away and abridges the fundamental right guaranteed under article 31 (2) inasmuch as the fixation of the maximum amount payable under sub section (6) of Sec 11, makes the Act confiscatory or at any rate, the amount payable illusory; (3) sub section (1) of section 27 of 925 he Act freezing all transfers by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, of any urban or urbanisable land with a building (whether constructed before or after the commencement of the Act), or a portion of such building, for a period of ten years from such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent authority, even though such vacant land in an urban agglomeration is within the ceiling limits, is an unreasonable restriction on the fundamental right to property guaranteed under article 19 (1); and (4) the 'priorities ' laid down in s.23 of the impugned Act are not in keeping with part IV of the Constitution and, therefore, liable to be struck down. It is urged upon these grounds that the impugned Act is flagrantly violative of those aspects of the petitioners ' fundamental rights under articles 14, 19 and 31 as constitute the basic structure or framework of the Constitution, and therefore, it is not protected under article 31B or 31C. Land in urban areas is a vital physical recourse capable of generating and sustaining economic and social activities. It should be properly utilised by the community for social good. But the attraction of urban areas has led to profiteering and racketeering in land in these areas. There is also mis application of this scarce resource of urban land for undesirable purposes. Therefore, a comprehensive policy of effective control of land covering its use. distribution amongst the various sections of the society and individuals and for different social purposes, and its disposal by owners subject to their sharing the profits with the community at large, has been evolved. The Act has been designed to benefit the weaker sections of the community. It also grants exemptions in favour of public institutions and co operative housing. The imposition of ceiling on land and plinth area of future dwelling units, and regulation of transfer of urban property under the Act, seeks to achieve the objective of social control over the physical resources of land. A unique feature of the Act is that it covers seventeen States and all the Union Territories and provides for aggregation of holdings in urban agglomerations in the different States where the law is applicable for purposes of ceiling limits. In other words, persons holding vacant lands or vacant and other built up property with dwelling units therein in different urban agglomerations throughout the country will have to make a choice of retaining only one piece of vacant land within the ceiling limit and surrender excess vacant lands else where. 926 Since the Act applies to firms, companies, and undertakings, future construction of industrial or commercial premises requiring large areas cannot take place in the notified urban agglomerations without obtaining the requisite land from the Government. This enables Government to regulate and canalise the location of industries and thus serve the broad policy approach in dispersal of economic activity. Hoarding of land by industrialists based on prospects for expansion in the distant future, is thus sought to be avoided. The fundamental issue is: Whether section 23 of the impugned Act impairs the basic structure or framework of the Constitution being violative of article 39 (b) and (c) and Art, 31 (2) of the Constitution and is, therefore, not protected under articles 31 B and 31 C. The impugned Act is designed as a law for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons, and speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good, in furtherance of the Directive Principles under article 39 (b) and (c). The constitutional validity of section 23 of the Act depends on whether in truth and substance these objectives have been translated into action. Section 23 of the Act reads: "23. (1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the state Government under any other law, to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry and it shall be lawful for such person to hold such land in excess of the ceiling limit. Explanation. For the purpose of this section, 927 (a) where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by the State Government, then, such land shall be deemed to be vacant land acquired under such other law; (b) "industry" means any business, profession, trade, undertaking or manufacture. (2) In making an order of allotment under sub section (1), the State Government may impose such conditions as may be specified therein including a condition as to the period within which the industry shall be put in operation or, as the case may be the residential accommodation shall be provided for: Provided that if, on a representation made in this behalf by the allottee, the State Government is satisfied that the allottee could not put the industry in operation, or provide the residential accommodation, within the period specified in the order of allotment, for any good and sufficient reason, the State Government may extend such period to such further period or periods as it may deem fit. (3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances. Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose. 928 (5) Notwithstanding anything contained in sub sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same. " The submission is that though the impugned Act is designed as a law for the imposition of a ceiling on vacant land in urban agglomerations, to subserve the common good, in furtherance of the Directive principles under article 39 (b) and (c), the dominant object of the impugned Act for the acquisition of vacant land in urban agglomerations under section 23 of the Act, was to facilitate the setting up of industries in the private sector and, therefore, the Act was not in furtherance of part IV of the Constitution and void being violative of article 31 (2). It was urged that section 23 of the impugned Act must, therefore, be struck down as unconstitutional, it being not in keeping with part IV of the Constitution was not protected under article 31C and that it cannot also have the protective umbrella of article 31B as it seeks to alter the basic structure of the Constitution. Although the impugned Act is enacted with a laudable object, to subserve the common good, in furtherance of the Directive Principles of state policy under Art, 39 (b) and (c), it appears from the terms of sub ss.(1), (2) and (3) of section 23 that it would be permissible to acquire vacant land in urban agglomerations and divert it for private purpose. The whole emphasis is on industrialisaton. The opening words in section 33 (4) "subject to the provisions of sub sections (1), (2) and (3)" make the provisions of section 23 (4) subservient to section 23 (1) which enables the Government to allot vacant land in an urban agglomeration to any person for any purpose relating to, or in connection with, any industry or for providing residential accommodation of such type as may be approved by the state Government to the employees of any industry. It further makes it lawful for the allottee that is, the industrialist, to hold such land in excess of the ceiling limit. The definition of the word 'industry ' in Explanation (b) to section 23 (1) is wide enough to include any business, profession, trade, undertaking or manufacture, and necessarily includes the private sector. The proviso to section 23 (2) fortifies that construction of mine. It is incomprehensible that vacant lands in all urban agglomerations throughout the country should be acquired for the 929 purpose of setting up industries. More so, that it should permissible to allow setting up of industries for private gain. There is no material placed before us showing that the Government has prepared any blue print for industrialisation of all the urban agglomerations in India in the public sector. In fact, faced with this difficulty, the learned Attorney General attempted to justify the provisions contained in s.23 by submitting that the opening words in section 23(4) "subject to the provisions of sub sections (1), (2) and (3)" must, in the context of the preamble and the Directive Principles under Art 39(b) and (c), be construed to mean "notwithstanding anything to the contrary contained in subsections (1), (2) and (3)" According to him, the "brooding spirit ', of the Preamble permeates through the entire section, and, therefore the provisions of s.23 of the Act should be read in the light of the preamble. The contention cannot be accepted. When the language of the section is clear and explicit, its meaning cannot be controlled by the preamble. It is not for the Court to re structure the section. The re structuring of a statute is obviously a legislative function. The matter is essentially of political expediency, and as such it is the concern of the statesmen and, therefore, the domain of the legislature and not the judiciary. It was, however, urged that s.23(1) of the Act is only an enabling provision, and the real power was under s.23(4), and if there is ambiguity in the language of s 23, it was possible to read the section in the light of the preamble and the Directive Principles under article 39(b) and (c) and as such s.23(1) is subject to s.23(4). The use of the words "subject to the provisions of sub sections (1), (2) and (3)" in s.23(4) takes away the compulsion on the State Government to adhere to the Directive Principles under article 39(b) and (c) in making allotment of the vacant lands in an urban agglomeration acquired under the Act. The words "subject to the provisions of subsections (1), (2) and (3)" in s.23(4), appearing in the context of s.23(1) means 'in addition to; if anything is left over after the allotment under s.23(1) '. I cannot, therefore, read the provisions of sub ss.(1), (2) and (3) s.23 of in the light of the preamble or the Directive Principles under article 39(b) and (c). By no rule of construction can the operation of sub s(1) of s.23 of the Act be controlled by the operation of sub s.(4). 930 A legislation built on the foundation of article 39(b) and (c) permitting acquisition of private property must be for a public purpose, that is, to subserve the common good. In my view, sub sections (1), (2) and (3) of s.23 of the Act negate that principle. Furthermore, article 31(2) consists of three pre requisites namely (i) the property shall be acquired by or under a valid law, (ii) it shall be acquired only for a public purpose, and (iii) the person whose property has been acquired shall be given an amount in lieu thereof. The definition of ' industry ' in Explanation (b) to section 23(1) is wide enough to include any business, trade or vocation carried on for private gain. There cannot be 'mixed purpose ' of public and private to sustain a legislation under article 39(b) and (c). The vice lies in section 23(1) and the Explanation (b) thereto, which on a combined reading, frustrate the very object of the legislation. One is left with the feeling that sub sections (1), (2) and (3) of section 23 of the impugned Act are meant to promote the interests of the business community and further professional interests. While setting up of an industry in the private sector may, at times, be for the public good, there cannot be acquisition of private property for private gain. Acquisition can only be for a public purpose '. That is to say, a purpose, an object or aim in which the general interest of the community as opposed to the particular interest of the individual, is directly and vitally concerned. The concept of 'public purpose ' necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally subserves public interest. If in reality the object of the acquisition under the Act is to set up industries in the private sector as is permissible from the provisions of section 23(1) of the Act, nothing prevents the State from taking recourse to section 40 of the Land Acquisition Act, 1894, for which there must be quid pro quo, that is, payment of compensation according to the market value. Our attention was drawn to the Guidelines issued by the Government of India, Ministry of Works and Housing clarifying the intent and purpose of the provisions of the Act. It may be stated here that these Guidelines cannot supersede or alter any of the provisions of the Act or the rules made thereunder. The Guidelines issued under section 23 are in these terms: 931 "Section 23 of the Urban Land (Ceiling and Regulation) Act, 1976, governs, inter alia, disposal of vacant land acquired under the Act. In brief, this Section enables the State Government to allot any vacant land for the purpose of an industry or to subserve the common good, or to retain or reserve such land for the benefit of the public. For the purpose of the Section 'industry ' has been given a wider meaning so as to cover any business, profession, trade, undertaking or manufacture. The section also enables Government to allot land for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry. Thus the excess vacant land acquired by the State Government under the Act can be dealt with in the following manner: (i) allotted for the purpose of an industry namely, any business, profession, trade, undertaking or manufacture; (ii) allotted for the purpose of construction of houses for the employees of an industry specified in item(i) above; (iii) disposed of to subserve the common good which may include allotment of vacant land for Government purpose, for institutions, etc., and (iv) retained/reserved for the benefit of the public" It appears that the Government issued the following guidelines pursuant to the recommendations made at a conference of State Ministers of Housing and Urban Development with a view to implement the policy of socialisation of urban land: "The 9th Conference of State Ministers of Housing and Urban Development held at Calcutta on the 17th, 18th and 19th December, 1976, considered the matter and 932 recommended that, in order to bring about social objectives of the Act more prominently, the utilisation of the excess vacant land should be according to the priorities set down below subject to the prescribed land uses: (i) Retain/reserve for the benefit of the public for social housing, provision of basic amenities, etc. (ii) Dispose of to subserve common good which may include allotment of vacant land for Government purposes, local authorities, institutions, etc. (iii) Allot for the purpose of construction of houses for the employees of industries specified in item (iv) below. (iv) Allot for the purpose of industry, viz., any business, profession, trade, undertaking of non polluting manufacture; cottage and small scale and wherever possible ancillary industry, manufacture. " It is significant to notice that there was an attempt made in these aforesaid Guidelines to alter the 'priorities ' laid down in section 23. The Guidelines cannot alter the 'priorities ' laid down in the section. The Guidelines are nothing but in the nature of Executive Instructions and cannot obviously control the plain meaning of the section. Where the language of the Act is clear and explicit, we must give effect to it, whatever may be the consequences, for in that case the words of the statute speak the intention of the legislature. The Court cannot be called upon to interpret the provisions of section 23 of the Act in the light of the Guidelines issued by the Government of India, Ministry of Works and Housing. I am, therefore, constrained to hold that the provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) which make the setting up of industries the dominant object for the acquisition of vacant land in urban agglomerations under the Act, are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31 C. 933 A legislation which directly runs counter to the Directive Principles of State Policy enshrined in article 39(b) and (c) cannot by the mere inclusion in the Ninth Schedule receive immunity under article 31B. The Directive Principles are not mere homilies. Though these Directives are not cognizable by the Courts and if the Government of the day fails to carry out these objects no Court can make the Government ensure them, yet these principles have been declared to be fundamental to the governance of the country. Granville Austin considers these Directives to be aimed at furthering the goals of the social revolution or to foster this revolution by establishing the conditions necessary for its achievement. He explains: "By establishing these positive obligations of the State, the members of the Constituent Assembly made if the responsibility of future Indian governments to find a middle way between individual liberty and the public good, between preserving the property and the privilege of the few and bestowing benefits on the many in order to liberate 'the powers of all men equally for contributions to the common good '." In short, the Directives emphasise, in amplification of the preamble, that the goal of the Indian polity is not laissez faire, but a welfare State, where the State has a positive duty to ensure to its citizens social and economic justice and dignity of the individual. It would serve as an 'Instrument of Instructions ' upon all future governments, irrespective of their party creeds. Article 38 requires that the State should make an effort to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. In other words, the promise made by the Constitution to the citizens of India in its Preamble is directly included in one of the Directive Principles of State Policy. Article 39, cl. (a) requires that all citizens shall have a right to adequate means of livelihood. Article 39(b) enjoins that the State shall ensure that the ownership and control of the material resources of the community are so distributed as best to 934 subserve the common good. Article 39(c) mandates that the State shall direct its policy towards securing that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. Dr. P.B. Gajendragadkar in 'Law, Liberty and Social Justice ', observes: "These directive principles very briefly, but eloquently, lay down a policy of action for the different State Governments and the Central Government, and in a sense, they embody solemnly and recognize the validity of the charter of demands which the weaker sections of the citizens suffering from social economic injustice would present to the respective governments for immediate relief." Chandrachud J. (as he then was) in Smt. Indira Gandhi vs Raj Narain(1) after observing that the ratio of the majority in Kesevananda Bharti 's case were merely illustrative of what constitutes the basic structure and are not intended to be exhaustive, observes: I consider it beyond the pale of reasonable controversy that if there be any unamendable features of the of the Constitution, on the score that they form a part of the basic structure of the Constitution, they are that: (i) India is a Sovereign Democratic Republic; (ii) Equality of status and opportunity shall be secured to all its citizens, (iii) The State shall have no religion of its own and all persons shall be equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion and that (iv) the Nation shall be governed by a Government of laws, not of men. These in my opinion, are the pillars of our constitutional philosophy, the pillars therefore of the basic structure of the Constitution." According to him, the pillars of the Constitution are Sovereign Democratic Republic, Equality of Status and Opportunity, Secularism, Citizen 's right to religious worship, and the Rule of Law. With respect, I would add that the concept of social and economic justice to build a Welfare State is equally a part of the basic structure or 935 the foundation upon which the Constitution rests. The provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) are the very antithesis of the idea of a Welfare State based on social and economic justice. Since these provisions permit acquisition of property under the Act for private purposes, they offend against the Directive Principles of State Policy of article 39(b) and (c) and are also violative of article 31(2) and therefore, not protected under article 31B. I would, therefore, declare that the provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) are ultra vires of the Parliament. With the striking down of the invalid provisions what remains, that is, the remaining provisions of the impugned Act, including section 23(4) thereof being in conformity with Part IV of the Constitution and Article 31(2), are valid and, therefore, the impugned Act has the protection of both Article 31 B and Article 31 C. I find no justification to strike down the whole Act as it would be against the national interest. Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits of the organic law of the Constitution it must be allowed to stand as the true expression of the national will. The provisions of sub sections (1), (2) and (3) of s 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4), which are, in my view, invalid, cannot effect the validity of the Act as a whole. The test to be applied when an argument like the one addressed in this case is raised, has been summed up by the Privy Council in Attorney General for Alberta vs Attorney General for Canada in these words: "The real question is whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or, as it has sometimes been put, whether on a fair review of the whole matter it can be assumed that the legislature would have enacted what survives without enacting the part that is ultra vires at all. " 936 It is quite clear that the provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) struck down by me are not inextricably bound up with the remaining provisions of the Act, and it is difficult to hold that the legislature would not have enacted the Act at all without including that part which is found to be ultra vires. The Act still remains the Act as it was passed, i.e., an Act for imposition of ceiling on urban land. In determining the effect of the law upon the individual 's right to property, the Court must take judicial notice of the fact of vast inequalities in the existing distribution of property in the country. The Court 's concern lies not merely with applying the pre existing sets of theories, concepts, principles and criteria with a view to determining what the law is on a particular point. The proper approach should be to view the principles with the realisation that the ultimate foundation of the Constitution finds its ultimate roots in the authority of the people. This demands that constitutional questions should not be determined from a doctrinaire approach, but viewed from experience derived from the life and experience or actual working of the community, which takes into account emergence of new facts of the community 's social and economic life affecting property rights of the individual, whenever, among others, the validity of a law prescribing preference or discrimination is in question under the "equal protection" guarantee. It should be remembered that the Directive Principles cannot be regarded only as idle dreams or pious wishes merely by reason of the fact that they are not enforceable by a court of law. A rule of law in facts does not cease to be such because there is no regular judicial or quasi judicial machinery to enforce its commands. An attempt to create a truly social Welfare State also carries with it the idea that in a country like India concentration of wealth in the country must be done away with and its distribution on an equitable basis effected in order to bridge the gap between the rich and the poor. The very purpose of creating such a state is to benefit the weaker and poorer sections of the community to a much greater extent than the rich persons so that the living standards of the people in general may improve. In fact, in such a State, all welfare schemes in their operation generally tend to benefit the poor people to a much greater extent than others. If an equal protection guarantee were enough to invalidate such schemes, improvement in the economic 937 and social conditions of the country would be impossible. One should not be swayed away by emotions but should be guided by the real needs of the country. Hence a paradoxical situation should be avoided by refusing to perpetuate the existing inequality among the social classes and maintain that gap to the same extent as before by intending to pay to the rich compensation at the same full rates as in the case of the poorer sections of the community. The impugned Act is meant to remove inequalities with a view to promote 'the greatest happiness of the greatest number '. During the last thirty years much has been done to implement the State 's policy of socialisation of agricultural land by imposition of a ceiling on agricultural holding. There is much that still remains to be done. There is need for prevention of concentration of wealth in a few hands in the urban areas and to provide for equitable distribution of vacant land among others. The great disparity between the rich and the poor is more visible in the urban areas particularly in the great cities. A majority of the people in the urban areas are living in abject poverty. They do not even have a roof over their heads. Concentration of wealth in a few hands is not conducive to the national well being. The challenge to the validity of the artificial definition of 'family ' in s.2(f) of the impugned Act must fail. The Court has recently upheld the validity of an identical definition of 'family ' appearing in the different State laws relating to imposition of ceiling on agricultural land. Some marginal hardship is inevitable in the working of the legislation. The ultimate object is to reduce inequalities in the larger interest. That takes us to the question whether the definition of 'family ' in s.2(f) of the Act results in the exclusion of a joint Hindu family. The definition of 'family ' contained in s.2(f) is in the following terms: "2.(f) "family" in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children. " As a result of the artificial definition of 'family ' in s.2(f), there is no denying the fact that a joint Hindu family is excluded from the purview of the Act. Section 3 of the Act provides that no person, on 938 and from the commencement of the Act, shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applied. The word 'person ' is defined in s.2(i) as: "2.(i) "person" includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not;" The question is whether the total exclusion of joint Hindu family renders the Act void and unconstitutional as violative of Art.14. I do not think that this is so. Parliament deliberately excluded a joint Hindu family from the purview of s.3 of the impugned Act. As already pointed out in Vasavaiah Chaudhary 's case, Parliament was beset with difficulties in imposing a ceiling on urban immovable property. While dealing with imposition of ceiling on vacant urban land it was presumably faced with another difficulty, viz., the institution of a joint Hindu family. According to the Mitakshara School of Hindu Law, there is community of interest and unity of possession. Under the Mitakshara School a copartner cannot predicate the extent of his share, while under the Dayabhaga school a member of joint Hindu family takes as a tenant in common. We, therefore, do not find anything wrong in excluding a joint Hindu family. The impugned Act applies to Hindus, Mohamedans and Christian alike. By the exclusion of a joint Hindu family the members of a joint Hindu family, whether governed by the Mitakshara School or the Dayabhaga School, were brought at par with others. The contention that the impugned Act offends against Art.14 must, therefore, fail. The contention that the amount fixed by sub s.(6) of s.11 of the impugned Act is totally arbitrary and illusory since there is no nexus between the value of the property and the amount fixed and, therefore, the maximum amount fixed under sub s.(6) makes the Act confiscatory in total abrogation of the fundamental right guaranteed under Art.31(2) cannot be accepted. The Constitution (25th Amendment) Act, 1971, which came into force on April 20, 1972, by s.2(a) substituted the word 'amount ' for the word 'compensation ' in the new Art.31(2), which reads: "31(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or 939 requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash. " Under the original Art.31(2), no property could be acquired for a public purpose under any law, unless it provided for compensation of, or acquired and either fixed the amount of the compensation, or specified the principles on which, and the manner in which, the compensation was to be determined and given. It will be seen that Art.31(2) provides for acquisition or requisitioning of the property for an amount which may be fixed by such law, or which may be determined in accordance with such principles and given in such manner as may be specified in such law. No such law can be called in question on the ground that the amount is not adequate, or that the whole or any part of it is to be given otherwise than in cash. Section 2(b) of the 25th Amendment Act inserted a new clause (2B) to Art.31 which provides: "31.(2B) Nothing in sub clause (f) of clause (1) of article 19 shall affect any such law as is referred to in clause (2). " The substitution of the neutral word 'amount ' for the word 'compensation ' in the new Art.31(2) still binds the legislature to give to the owner a sum of money in cash or otherwise. The legislature may either lay down the principles for the determination of the amount or may itself fix the amount. The choice open to the legislature is that the amount should be directly fixed by or under the law itself or alternatively, the law may fix principles in accordance with which the amount will be determined. Sub section (1) of s.11 reads: "11(1) Where any vacant land is deemed to have been acquired by any State Government under sub section (3) 940 of section 10, such State Government shall pay to the person or persons having any interest therein, (a) in a case where there is any income from such vacant land, an amount equal to eight and one third times the net average annual income actually derived from such land during the period of five consecutive years immediately preceding the date of publication of the notification issued under sub section (1) of section 10; or (b) in a case where no income is derived from such vacant land, an amount calculated at a rate not exceeding (i) ten rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category, A or category B specified in Schedule 1; and (ii) five rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category C or category D specified in that schedule." In order that the burden of compensation, that is, the amount payable under Art.31(2) for taking over vacant land in excess of the ceiling limit in sub section (3) of s.10 by the government may not be high, the Act incorporates a specific provision in sub section (6) of s.11 to fix a ceiling on the maximum amount payable in any single case. The sub section reads: "11(6) Notwithstanding anything contained in sub section (1) or sub section (5), the amount payable under either of the said sub sections shall, in no case, exceed two lakhs of rupees. " It is not suggested that sub s.(1) of section 11 does not lay down any principles for determination of the amount payable for the taking of excess vacant lands in an urban agglomeration or that the principles laid down in sub s.(1) are not relevant for the determination of the amount payable. It is also not suggested that payment of the amount at the rate of Rs. 10 per sq. metre and Rs. 5 per sq. metre, 941 for the vacant land in categories and B, and categories C and D respectively, makes the amount illusory or the Act confiscatory. The submission is that the fixation of the maximum amount payable at Rs. 2 lacs in a single case by sub s.(6) makes the amount payable under sub s (1) wholly illusory and, therefore, the Act is confiscatory. That cannot be so, because the fixation of ceiling on the maximum at Rs. 2 lacs under s.11(6) implies that it would affect only persons owning 20,000 sq. metres of vacant land in metropolitan cities like Delhi, Calcutta, Bombay and Madras or large cities like Hyderabad, Bangalore, Poona, Kanpur and Ahmedabad falling in categories A and B, or persons owning 40,000 sq. meters in big cities like Lucknow, Allahabad, Nagpur, Jaipur etc. falling in categories C and D. One is left to wonder how many own such vast tracts of vacant land in such cities. If any, very few indeed. Even if there are, the amount cannot be related to the value of the property taken. It is pure arithmetics. Twenty thousand sq. metres would make 23,920 sq. yards and forty thousand sq. metres 47,840 sq. yards. In a city like Delhi, Calcutta, Bombay and Madras the value of a square yards of vacant land would depend upon the situation of the land. If that be the criteria, then there can be no ceiling on vacant land in urban agglomerations, much less geiling on immovable property in such cities, when it comes to be imposed. The State has not the capacity to bear the burden. If the contention were to prevail, then no law for the implementation of the Directive Principles of State Policy under article 39(b) or (c) can ever be implemented. We may recall the words of Pandit Jawaharlal Nehru, who while introducing the Constitution (Fourth Amendment) Act, 1955, said in Parliament: "If we are aiming, as I hope we are aiming and verepeatedly say we are aiming, at changes in the social structure, then inevitably we cannot think in terms of giving what is called full compensation. Why ? Well, firstly because you cannot do it, secondly because it would be improper to do it, unjust to do it, and it should not be done even if you can do it for the simple reason that in all those social matters, laws etc., they are aiming to bring about a certain structure of society different from what it is at present. In that different structure among other things that will change is this, the big, difference between the have 's and the havenot 'section Now, if we are giving full 942 compensation, the have 's remain the have 's and the have not 's, have not 'section It does not change in shape or form if compensation takes place. Therefore, in any scheme of social engineering, if I may say so, you cannot give full compensation apart from the patent fact that you are not in a position nobody has the resources to give it. " There can be no scheme for nationalisation of any industry, there can be no socioeconomic measures enacted if the concept of 'just equivalent ' were to be introduced even after the 25th Amendment. To emphasise the point that the amount of Rs. 2 lacs fixed under sub s.(6) of s.11 makes the Act confiscatory, our attention was drawn to the fact that the petitioner in writ Petition No. 350 of 1977, Maharao Saheb shri Bhim Singhji, the former Maharana of Kotah owns 971.50 acres of vacant land appurtenant to and covered under his Umed Bhawan Palace in the city of Kotah, which is an urban agglomeration falling under category 'D ', and which stands requisitioned under s.23(1) of the Defence and Internal Security of India Act, 1971. There is no dispute that the property of the Maharana is valued for the purposes of the Rajasthan Lands and Buildings Tax Act, 1964, at Rs. 4,12,27,726.84. Does it mean that the amount should be geared to the value of the vacant land taken under sub section (3) of s 10? When the Court has no power to question the adequacy of the amount under Art.31(2), can it be said that the amount fixed determined according to the principles laid down in sub s.(1) of s.11, subject to the maximum fixed under sub s.(6) thereof is illusory merely because of inadequacy? Who are we to say that it should be 10 per cent or less, or 50 per cent or more. The legislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable. That is a legislative judgment and the Court has no power to question it. Seeravai in his book on Constitution, 2nd Ed., vol. I, p.656, while dealing with the Fourth Amendment states that in permitting 'inadequate compensation ' the 4th Amendment removed a fixed yard stick and made all discussion about 'relevant ' and 'irrelevant ' principles meaningless. The learned author says: "If the questions were asked, why has the law fixed compensation amounting to 60 per cent and not to 70 or 50 per cent of the market value, the answer would be that in the legislative judgment the amount fixed by the law was 943 a fair and just compensation for the acquisition of property under the at law, and if a law fixing compensation at amounts ranging from 90 to 50 per cent or less, of the market value of the property acquired, cannot be struck down by a Court, equally, principles of compensation cannot be struck down when they produce the same result. The consequences of the transformation brought about by the 4th Amendment is that 'principles of compensation ' do not mean the same thing before and after the 4th Amendment." As the learned author explains, 'considerations of social justice are imponderable and, therefore no fixed money value can be put on them by any principle ', and goes on to say 'The question whether the Court can go into the question whether the amount is illusory is difficult to answer '. The legislature considers a maximum amount of Rs.2 lacs to be a fair and just recompense for the acquisition of excess vacant land in an urban agglomeration. By no standard can an amount of Rs.2 lacs be considered to illusory. The 25th Amendment has placed the matter of adequacy of compensation beyond the pale of controversy by substituting the word 'amount ' for the word 'compensation ' in Art.31(2) and made the adequacy of the amount payable for acquisition or requisition of property nonjusticiable. In Kesavananda Bharti 's case, the Court upheld the constitutional validity of the 25th Amendment. The impact of the new Article 31(2) was also considered as well as the content and meaning of the word 'amount '. According to the majority, the amount fixed or determined to be paid cannot be illusory. But one thing is clear the meaning which the Court placed on the word 'compensation ' in R. C, Cooper 's case of adequacy of compensation and on relevant principles has been held to have been nullified by the 25th Amendment. The two decisions directly in point are the State of Kerala & Anr. vs The Gwalior Rayon Silk Mfg. Co. and State of Karnataka vs Ranganatha Reddy. In Gwalior Rayon 's case the Court upheld 944 the validity of the Kerala Private Forests (Vesting and Assignment) Act, 1971, which provided for the vesting of private forest lands held in Janman rights, even though there was no provision for payment of compensation. The Court held that since the Act envisaged a scheme of agrarian reform, it was protected under Art.31A and could not be challenged on the ground that it take aways, a bridges or abrogates the fundamental rights guaranteed by Arts.14, 19 and 31. In Ranganatha Reddy 's case the Court upheld a scheme for nationalisation of contract carriages in the State, since it laid down the principles for the determination of the amount payable under Art.31(2) and they were not irrelevant for the determination of the amount. Untwalia J. speaking for the majority observed: "On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was difficult rather impossible to argue that the amount so fixed will be arbitrary or illusory. In some respects it may be inadequate but that cannot be a ground for challenge of the constitutionality of the law under Article 31(2)." Krishna Iyer J. in a separate but concurring judgment after deducing the discernible principles from the decision in Kesavananda Bharati 's case, held that the 25th Amendment bars the Court 's jurisdiction to investigate the adequacy of the amount. In view of these two decisions, the contention that fixation of maximum amount by sub section (6) of section 11 renders the amount payable under sub section (1) illusory or in the alternative makes the Act confiscatory cannot be accepted. There still remains the contention regarding the invalidity of sub section (1) of section 27, which reads: "27. (1) Notwithstanding anything contained in any other Law for the time being in force, but subject to the provisions of sub section (3) of section 5 and sub section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever 945 is later, except with the previous permission in writing of the competent authority. " It is urged that sub section (1) of section 27 confers arbitrary and uncontrolled powers on the competent authority to grant or refuse permission for transfer and that the conferral of such uncontrolled and uncanalised power without any guidelines renders the provision illegal and void and unenforceable being an unreasonable restriction on the right to acquire, hold and dispose of property guaranteed under article 19(1(f). It is said that the matter is left to the whim and fancy of the competent authority, and the power so conferred is capable of misuse and thus be an instrument of great oppression. The learned Attorney General tried to meet the contention by urging that there was no reason to think that the competent authority would refuse to grant permission where the transaction is bona fide. According to him, the competent authority would be justified in refusing to grant permission where the transaction is calculated to defeat the provisions of the Act. It is said that the whole object of freezing of the transactions was to hold the price line of urban land. He drew our attention to the guidelines issued by the Government of India, Ministry of Works and Housing to the various State Governments directing that all applications for grant of permission under sub section (1) of section 27 of the Act should be dealt with expeditiously with a view to prevent any inconvenience to the members of the public and further that permission should be granted, as a matter of course, within three days of the receipt of such application. In my judgment, there is no justification at all for the freezing of transactions by way of sale mortgage, gift or lease of vacant land or building for a period exceeding ten years, or otherwise, for a period of ten years from the date of the commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits. In Excel Wear vs Union of India & Ors. the Court held that the right to carry on a business guaranteed under article 19(1) (g) carries with it the right not to carry on business. It must logically follow, as a necessary corollary, that the right to acquire, hold and dispose of property guaranteed to a citizen under article 19(1)(f) carries with it the right not to hold any property. It is difficult to appreciate how could a citizen be compelled to own property against his will. 946 If vacant land owned by a person falls within the ceiling limits for an urban agglomeration, he is outside the purview of section 3 of the Act. That being so, such a person is not governed by any of the provisions of the Act. When this was pointed out to the learned Attorney General, he was unable to justify the imposition of the restriction imposed by sub section (1) of section 27 in case of land falling within the ceiling limits as a reasonable restriction. It must, accordingly, be held that the provision of sub section (1) of section 27 of the impugned Act is invalid insofar as it seeks to affect a citizen 's right to dispose of his urban property in an urban agglomeration within the ceiling limits. I would for the reasons stated, declare sub sections (1) (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) of the Urban Land (Ceiling and Regulation) Act, 1976 as ultra vires of the Parliament and that these provisions are not protected under Articles 31 B and 31 C of the Constitution, and further declare that sub section (1) of section 27 of the Act is invalid insofar as it imposes a restriction on transfer of urban property for a period of ten years from the commencement of the Act, in relation to vacant land or building thereon, within the ceiling limits. Having struck down sub sections (1) (2) and (3) of section 23 and the opening words "subject to the provisions of Sub sections (1), (2) and (3)" in section 23(4) of the Act, I would declare the remaining provisions of the Urban Land (Ceiling and Regulation) Act, 1976, including sub section (4) of section 23 thereof as valid and constitutional. In the result, the writ petitions, except to the extent indicated, must fail and are dismissed. There shall be no order as to costs. S.R. Petitions dismissed.

The Urban Land (Ceiling and Regulation) Act, 1976 (Act XXXIII of 1976) is in force in 17 States and all the Union Territories in the country. It seeks to impose a ceiling on vacant lands in urban agglomerations having a population of two lakhs or more and for that purpose classifies such urban agglomerations in various cities and towns in all the States and Union Territories into four categories and fixes the ceiling limit for each such category. The primary object and purpose of the Act, as its long title and the Preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land for matters connected there with, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State Policy contained in Article 39(c) and (b) respectively. The enactment has also been put in the Ninth Schedule as Item 132 by the Constitution (Fortieth Amendment) Act, 1976; in other words, the enactment enjoys the benefit of protective umbrella of both the articles, Article 31 B and 31 C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976. By these writ petitions the petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (XXXIII of 1976) and since, according to them, some of the impugned provisions are pivotal and non severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional. The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them. Dismissing the petitions and upholding the constitutional validity save and except section 27(1) by a majority of 4:1 (A P. Sen, J partially dissenting on the validity of sub sections (1),(2), (3) and the opening words of sub section (4) of section 23), the Court. ^ HELD: Permajarity: (Y.V. Chandrachud, C.J., P.N. Bhagwati, V.R, Krishna Iyer and an. jj; V.D, Tulzapurkar, J. dissenting). 864 1. The Urban Land (Ceiling and Regulation) Act, 1976 is constitutionally valid save and except section 27(1) in so far a it imposes a restriction on transfer of any urban of urbanisable land with a building or of a portion of such building. which is within the ceiling area. [877 E F] Per Chandrachud. C.J. and P.N. Bhagwati, J. 1. The Urban Land (Ceiling and Regulation) Act. 1976 is valid. The vice from which a provision here or a provision there of the impugned Act may be shown to suffer will not justify the conclusion that the Act is not intended to or does not, by its scheme; in fact implement or achieve the purposes of clauses (b) and (c) of Article 39 of the Constitution.[878 C D] 2. The definition of "family" in section, 2(f) of the Act, which in relation to a person means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children, will not necessarily lead to concentration of wealth in the hands of a few persons or families. Such is not the intendment, nor the drive, nor the direct and inevitable consequences of the definition of "family", [873 D E] 3. Section 11(6) of the Urban Land (Ceiling and Regulation) Act, 1976 which provides that the amount payable under sub section (I) or sub section (5) of section 11 shall, in no case, exceed two lakhs of rupees is valid. The amount thus payable, is not illusory and the provision is not confiscatory Rupees two lakhs is not like a farthing even if the excess land may be a fortune. [879 F] 4. Section 23 of the Urban Land (Ceiling and Regulation) Act is valid and does not suffer from any constitutional infirmity. Sub section (4) of section 23 is the prepondering provisio governing the disposal of excess vacant land acquired under the Act. Though it is "subject to the provisions of sub section (1) (2), and (3)", the provisions of sub section (1) are enabling and not compulsive and those of sub sections (2) and (3) are incidental to the provisions of sub section (1). The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section (4) of section 23, subject to this, that in a given case such land may be allotted to any person, for any purpose relating to, or in connection with any "industry" or the other purposes mentioned in sub section (1), provided that by such allotment, a common good will be subserved. The governing test of disposal of excess land being "social good", any disposal in any particular case or cases which does not subserve that purpose will be liable, to be struck down as being contrary to the scheme and intendment of the Act. The preamble to the Act ought to resolve interpretational doubts arising out of the defective drafting of section 23. "Common Good", being the writing on the wall, any disposal which does not serve that purpose will be outside the scope of the Act and, therefore, lacking in competence in diverse senses. Private property cannot under the Constitution be acquired or allotted for private purposes though an enabling power like that contained in sub section (I) of section 23 865 may be exercised in cases where the common good dictates the distribution of excess vacant land to an industry, as defined in clause (b) of the Explanation to Section 23. [878 ' G H; 879 A E] 5. Sub section (I) of section 27 of the Act is invalid insofar as it imposes a restriction on transfer of any urbanisable land with a building or a portion only of such building, which is within the ceiling area. Such property will therefore be transferable without the constraints mentioned in sub section (I) of Section 27 of the Act. Nothing usefully can be added to the Judgment delivered by Krishna Iyer, J and the reasons given therein are fully agreed to. [879 G H] Per Krishna Iyer, J. (Concurring) 1. The legislation on the Ceiling and Regulation of urban lands is constitutionally valid, though section 27(1) is partially invalid. The legislation is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and for equitable distribution of such land to subserve the common good. Article 39(b) and (c) of the Constitution are directly attracted and the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good. [880 E F] 2, Family as defined in section 2(f) of the Act accords with the current life style in urban conditions and is neither artificial nor arbitrary nor violative of Article 14. And the courts, in these days of family planning and self reliance of the adult cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a family shall be defined as the parents plus their minor children. [886 B C] 3.1 The payment, fixed under section 11(6) of the Act of a sum of Rs. two lakhs whatever be the total value of the property in the market is not so fictitious and flimsy as to be a farthing. There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter the judicial verdict. [881 G H] 3.2 The various amendments to Article 31 culminating in the present provision which provides for the payment of the "amount" disclose a determined approach by Parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as fundamental right by the private owner and that short of paying a "farthing for a fortune" the question of compensation is out of bounds for the court to investigate. [881 D F] 3.3 Having regard to the human condition of a large percentage of pavement dwellers and slum dwellers in our urban areas and proletarian miserables in our rural vastnesses, any one who gets Rs. 2 lakhs can well be regarded as having got something substantial to go by. In a society where half of humanity lives below the breadline, to regard Rs. 2 lakhs as a farthing is farewell to poignant facts and difficult to accept. Therefore, section 11(6) is invulnerable and does not contravene Article 31(2) the payment stipulated is reasonable, neither a mere mockery or discriminatory. [884 E F] 866 4. The whole story of the legislation, the long gestation of pre legislative consideration, the brooding presence of Article 39(b) and (c) and the emphasis in Section 23(4) on common good as the guiding factor for distribution point to public purpose, national development and social justice as the cornerstone of the policy of distribution. Any transgression of Article 39(b) and (c) is beyond the scope of Section 23(1) and disposal of land thereunder must subserve the common good and not the reverse. This limitation on the wide words of section 23(1) is a matter of semantics and reading down the judicial process. To sustain a law by interpretation is the rule. To be trigger happy in shooting at sight every suspect law is judicial legicide. Courts can and must interpret words and read their meanings so that public good is promoted and power misuse is interdicted. The wide definition of "industry" or the use of general words like "any person" and "any purpose" cannot free the whole clause from the inarticulate major premise that only a public purpose to subserve the commom on good and filing the bill of Article 39(b) and (c) will be permissible. The touchstone is public purpose, community good and like criteria. If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo. To presume as probable graft, nepotism. patronage, political clout. friendly pressure or corrupt purpose is imper missible. The law will be good, he power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. The power of judicial review to strike at excess or mala fides is always there for vigilant exercise. Hence, even the crude drafting of section 23(4) by the unwanted "subject to" will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in Article 39(b) and (c). [887 D H; 888A; 889D] 5. Section 27(1) of the Act, is invalid, partially. [880 A] 6.1 The question of basic structure being breached cannot arise when examining the vires of an ordinary legislation as distinguished from a Constitutional amendment. Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure. Peripheral inequality is invitable when large scale equalization processes are put into action. What is a betrayal of the basic feature is not a mere violation of Article 14 but a shocking, unconscionable or unscrupulous travesty of the quintessence of equal justice. If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty. But to permit the Bharti ghost to haunt the corridors of the court brandishing fatal writs for every feature of inequality is judicial paralysation of parliamentary function. Nor can the constitutional fascination for the basic structure doctrine be made a Trojan horse to penetrate the entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the basic structure 'misslle. [889 E H; 890A] 6.2 Right to property is not part of the basic structure even his right to develop is not the basic structure of India for ever. The whole adventure of the Constitution is to remove poverty and in that process remove concentration of 867 property, not for a return, but for almost free, if the justice of the situation commended itself to the legislation to take it that way. Kesavanda Bharati vs State of Kerala [1972] Supp. SCR p. I referred to. 6.3 Part IV which seeks to build a Social Justice Society, is basic to our constitutional order. The Directive Principles of State Policy being paramount in character and fundamental in the country 's governance, distributive justice, envisaged in Article 39(b) and (c) has a key role in the developmental process of the Socialist Republic that India has adopted. [888 C; 880 G] Per Tulzapurkar, J. (dissenting) 1. The urban Land (Ceiling and Regulation) Act, 1976, though purporting to do so, does not, in fact, further the directive principles in Article 39(b) and (c). The measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying Article 39(b) and (c) and supported by several State Legislatures as per their resolutions passed under Article 252(1) with a laudable object namely, to clothe the Parliament with legislative competence to enact a law for the imposition of ceiling on urban immovable property for the country as a whole, but the enacted provisions misfire and produce the opposite results and also damage or destroy the essential features or basic structure of the Constitution. Section 2(f) in relation to prescription of ceiling area permits unwarranted and unjustified concentration of wealth instead of preventing the same and is in teeth of the objective under Article 39(c): Similarly section 23 produces results contrary to the objectives under Article 39(b) Therefore, the impugned Act is outside the protective umbrella of Article 31 C. Further, sections 2(f) 23 and 11(6) which puts a maximum limit on the quantum of the amount payable in respect of excess vacant land acquired from a holder irrespective of the extent of area held by him these three provisions flagrantly violate those aspects of Articles 14 and 31 which constitute the essential and basic features of the Constitution and hence the protective umbrella of Article 31 B is not available to the impugned Act inasmuch as the Fortieth Constitution Amendment Act, 1976 to the extent to which it inserts the Act in the Ninth Schedule is beyond the constituent power of the Parliament. Section 23 which authorises compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates Article 31(1) is ultra vires and unconstitutional. Similarly section 27 being severable is partially ultra vires and unconstitutional, being beyond the ambit of the Act and also violative of Article 14 of the Constitution.[916 H, 917A D] The legislative competence of the Parliament bring still there, a well drafted enactment within the constitutional limitations of the subject would be the proper remedy.[198 G H] Union of India vs Valluri Basaviah Chowdhry, ; referred to. 2.1 The artificial definition of " Family" given in section 2(f) of(t) of Act, when considered in relation to the prescriptions of the ceiling area under 868 section 4(1) is clearly violative of and strikes at the root of the equality clause contained in Article 14 of the Constitution. This artificial definition together with the double standard adopted for fixing the ceiling area runs through and forms the basis of chapter III of the Act and the discriminatory result or inequalities produced thereby are bound to have an impact on the scheme of that chapter and, therefore, along with it the whole chapter III must fall being violative of Article 14. [898 C F] 2.2 The classification made between minor children and major children belonging to a family is not based on any intelligible differentia having no nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to the family. It has not been shown that so called nuclear families alleged by in vogue have replaced normal families which include major sons or joint Hindu families in urban areas. [898 B C] Karimbil Kunhikoman vs State of Kerala [1962] Supp. 1 SCR 829; A.P. Krishnasami Naidu vs State of Madras [1964] 7 S.R 82 followed. 2.3 Apart from the discriminatory result which the artificial definition of family in section 2(f) produces, the adoption of the artificial definition of "family" and double standard for fixing ceiling area one for a family with minor children and another for a family with major children and completely ignoring the concept of Joint Hindu Family in relation to prescription of ceiling area clearly lead to results which run counter to the directive principles contained in Article 39 (c) of the Constitution.[899 E F] 3.1 Section 11(6) of the Act, which puts the maximum limit of Rupees Two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant land held by him is not merely violative of Articles 14 and 32(2) of the Constitution, but would be a piece of confiscatory legislation, because vacant land in excess of that portion which at the prescribed rates is worth Rupees Two lakhs stands confiscated to the State without any payment whatsover. [911 C D] 3.2 The enactments involving large schemes of social engineering like abolition of Zamindars, agrarian reforms nationalisation of undertakings and businesses and the like, where avowedly the benefit of the community or public at large is the sole consideration are distinguishable from the instant case, where "industry" has been expressly defined to include business, trade or profession in private sector and where power has been coffered upon the State Government to allot properties acquired under the enactment to individual businessman, trader or professional to enable him to carry on his private business, trade or profession, that is to say, where the legislation is a fraud on State 's power of eminent domain, such a provision of putting a maximum limit on compensation payable in respect of the acquired property irrespective of its extent will have to be regarded as confiscatory in nature. [911E 912 A C] 869 However, section 11 (6) is clearly a severable provision, and, therefore, ultra vires and unconstitutional. [913A] State of Kerala vs The Gwalior Rayon Silk Mfg.Co. Ltd. [1974] I SCR 671 distinguished. 4.1 Section 23 of the Act which authorises compulsory acquisition of property for private purposes flagrantly violates those aspects of Article 31 which constitute the essential or basic features of the Constitution and is, therefore, ultra vires and unconstitutional. Further, indispensably, it is the most vital, integral and non severable part of the entire scheme of urban ceiling as without it the scheme will merely remain a scheme for unjust and illegal enrichment of the State, and therefore, the whole of chapter III in which it occurs, must fall with it. [906 A B] 4.2 Article 31 of the Constitution has more than one facet: it undoubtedly confers upon individuals (including non citizens) and corporate bodies a fundamental right to property and incorporates in our Constitution the concept of State 's power of eminent domain i.e. power of compulsory acquisition of private property and prescribes two conditions precedent to the exercise of that power, namely, (i) such acquisition cannot be except for a public purpose and (ii) it must be on payment of compensation (now termed amount") to the claimant having interest in the property. But these two conditions precedent are sine qua non for the exercise of the State 's power of eminent domain and, represent those aspects of the right to property under Article 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of anyone of those conditions would damage or destroy the basic structure of our Constitution. [903 H, 904A, B E] H.H. Kesavananda Bharati vs Union of India & Ors. [1973] Supp. SCR 1 referred to. State of Bihar vs Kameshwar Singh, [1952]SCR 889 relied on. 4.3 It is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomerations throughout the country for a bald, indefinite and unspecified objective like "industry" simpliciter without any attempt at dovetailing it by having a proper scheme for industrial development will constitute a valid public purpose for the exercise of the power of eminent domain" [905 C D] 4.4 The adoption of a wide definition of a wide definition of industry so as to include any business, trade or profession in private sector not only makes a mockery of "public purpose", but also, in the context of eminent domain is clearly suicidal. What is worse is that under the priorities laid down such private 870 purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good, which clearly smacks of depriving Peter of his property to give it to Paul and, therefore, clearly amounts to an invalid exercise of State 's power of "eminent domain". [905 F,G H,906 A] 4.5 Besides, the wide definition of "industry" and the priorities for disposal or distribution of excess vacant land laid down in sub sections (1) to (5) have adverse impact on the directive principle contained in Article 39(b) in as much as private purposes receive precedence over common good. The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of Article 39(b) and cannot receive the benefit of the protective umbrella of Article 31 C. [906 C D,G H] 4.6 It is well settled that it is only when there is ambiguity in the text of any provision in the enactment that the preamble could be looked into. Here, there is no ambiguity whatsoever in section 23(1) and (4). Far from there being any ambiguity there is express provision in section 23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the Preamble cannot control, guide, or direct the disposal or distribution in any other manner. [907 A C] 4.7 No rules framed under section 46(1), which empowers the Central Government to make rules for carrying out the provisions of the Act, and the disposal or distribution of excess vacant land can override the express provisions of section 23. Here, no rules have so far been framed. 907 C D] 4.8 No reliance can be made on the "Compendium of Guidelines" issued by the Central Government in the Ministry of Works and Housing under the Act either. No doubt, the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development seek to furnish improved guidelines but in the process reverse the priorities given in section 23 in the matter of disposal or distribution of excess vacant land. Hence, the priorities given in section 23 and as have been summarised in para 3 of the Note must prevail over the priorities indicated in the guidelines contained in para 4 of the Note and the latter are of no avail. [907 F G H, 908 A B] 4.9 Section 23 by no stretch deals with the objective of Article 39(c) at all but only deals with the objective underlying the directive principle of Article 39(b) and its provisions clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of Article 31 C. [908 C D] 4.10 The definition of "industry" in section 23 cannot be read down by the Court so as to confine the same to industries is public sector or co operative sector or the like where benefit to community or public at large would be the sole consideration, so that allotment of excess vacant land acquired under the Act to private entrepreneurs for private purposes which runs counter to the 871 doctrine of eminent domain would be completely eschewed, because Parliament has for the purpose of section (i.e. for purposes of disposal or distribution of such excess vacant land) deliberately and in express terms adopted a very wide definition which includes within its scope not merely trading or manufacturing activity but also any business or profession in private sector and reading down the definition would be doing violence to the Parliament 's intention stated in express terms. [908 G H, 909A] 4.11 Nor can sub section (1) of section 23 of the Act be read as containing merely an enabling provision; the scheme of sub sections (1) to (4) read together clearly shows that the disposal of excess vacant land is first to be done under sub section (1) and disposal under sub section (4) comes thereafter. The opening words of sub section (4), "subject to sub sections (1), (2) and (3)" cannot be read as constituting a non obstante clause giving an overriding effect to sub section (4) nor can sub section (4) be read as if the opening words were absent. By indulging in such interpretative acrobatics, the Court cannot reach the opposite result than is warranted by the plain text of the provision. Further, to say that every disposal of excess vacant land under sub section (1) must be for 'common good is to read into that sub section something which is not there; it amounts to rewriting that sub section, which cannot be done, the preamble notwithstanding. Such interpretations require the restructuring of the entire section a function legitimately falling within the domain of legislature. Moreover, sub sections (1), (2), (3) and (4) of section 23 are integral parts of the whole scheme dealing with the disposal of excess vacant land acquired under the Act and as such cannot be severed from one another. The attempt to salvage section 23, either wholly or in part, by seeking to free it from the two vices, namely (i) the adoption of the wide definition of "industry" and (ii) the priorities mentioned therein governing the disposal of excess vacant land acquired under the Act, must, therefore. [909 C G] 5.1 Though the authorisation was for imposition of ceiling on whom immovable property Parliament deliberately kept out built up properties from the purview of the Act and the Act seeks to impose ceiling only on vacant land in urban agglomerations; that being so any restriction on transfer of built up properties or part thereof (including flats therein) standing on urban land falling within the permissible ceiling area would be outside the purview of the Act. [915 E F] 5.2 Such a provision, as in Section 27 of the Act would not be incidental or ancillary to the ceiling contemplated by the Act and would not fall within the phrase "for matters connected therewith" occurring in the Preamble and the long title of the Act, for the words "matters connected therewith" occurring in the concerned phrase must be correlated to what precedes the phrase, namely, "an Act to provide for ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land", and therefore, the words "matters connected therewith" must mean matters in relation to the ceiling imposed by the Act. A reference to objectives under Article 39(b)(c) 872 (for the achievement of which the enactment is allegedly taken in hand) in the Preamble or long title cannot enlarge the ambit or scope of the Act. Any restriction imposed on built up properties falling within the permissible ceiling area left with the holder would, therefore, be outside the ambit and scope of the Act. [914 G H, 915A] 5.3 In the absence of any guidelines for the exercise of the power and in the absence of any standards having been laid down by the Legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land and urban property, it cannot be said that there three broad objectives recited in the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the permission under section 27 and is bound to produce arbitrary or discriminatory results. Further, the provision for appeal under section 33 the Appellate Authority and a revision under section 34 to the State Government would not be of much avail to preventing arbitrariness in the matter of granting of refusing to grant the permission. Section 27 which does not adequately control the arbitrary exercise of the power to grant or refuse the permission sought, is clearly violative of Article 14 of the Constitution and as such the requirement of permission contained therein is ultra vires and unconstitutional, [915 G H,916A B] Per A.P. Sen, J. (concurring) 1.1 Sub sections (2) and (3) of Section 23 and the opening words subject to the provisions of sub sections (1), (2) and (3) "in section 23(4) of the Urban Land (Ceiling and Regulation) Act, 1976 are ultra vires of the Parliament and these provisions are not protected under Article 31 B and 31 C of the Constitution. Sub section (1) of section 27 of the Act is invalid in so for as it imposes a restriction of transfer of urban property for a period of ten years from the commencement of the Act, in relation to vacant land or building thereon, within the ceiling limits. The remaining provisions of the Act, including sub section (4) of section 23 being in conformity with Part IV of the Constitution and Article 31(2) are valid and constitutional. The Act is in furtherance of the directive principles under Article 39(b) and (c) and has the protection of both Article 31 B and 31 C. [946 B F] 1.2 To strike down the whole Act would be against the national interest. Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits of the organic law of the Constitution, it must be allowed to stand as the true expression of the national will. Here, the invalidity of the provisions of sub sections (1) to (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) cannot affect the validity of the Act as a whole, in as much as the said provisions are not inextricably bound up with the remaining provisions of the Act. Further, the legislature would have enacted what survives without enacting the part that is ultra vires. The Act still remains the Act as it was passed i.e. an Act for imposition of ceiling on urban land [935 D E, 9.6 A B] Attorney General for Alberin vs Attorney General for Canada [1947] AC 505 at 518 quoted with approval. 873 1.3 In determining the effect of law upon the individual 's right to property, the Court must take judicial notice of the fact of vast inequalities in the existing distribution of property in the Country. The Court 's concern lies not merely with applying the preexisting sets of theories, concepts, principles and criteria with a view to determining what the law is on a particular point. The proper approach should be to view the principles with the realisation that the ultimate foundation of the Constitution finds its ultimate roots in the authority of the people. And, constitutional questions should not be deter mined from a doctrinaire approach, but viewed from experience derived from the life and experience or actual working of the community, which takes into account emergence of new facts of the community 's social and economic life affecting property rights of the individual, whenever, among there, the validity of a law prescribing preference or discrimination is in question under the "equal protection" guarantee. [936 B E] 2. The artificial definition of family in section 2 (f) of the Act is valid. As a result of the artificial definition of "family" in section 2(f), a Joint Hindu family is excluded from the purview of section 2 of the Act, but such a total exclusion of Joint Hindu Family does not render the Act void and unconstitutional as violative of Article 14. Parliament deliberately excluded a joint family from the purview of the section as it was beset with difficulties in imposing a ceiling. The Act applies to Hindus, Mohammedans and Christians alike. By the exclusion of a Joint Hindu Family the members of a Joint Hindu family, whether governed by the Mitakshara school or the Dayabhaga school were brought at par with others. Therefore, there is nothing wrong in the exclusion. [937E H, 938A, C E] 3.1 The contention that the amount fixed by sub section (6) of section (1) of the impugned Act is totally arbitrary and illusory since there is no nexus between the value of the property and the amount fixed and, therefore, the maximum amount fixed under sub section (6) makes the Act confiscatory in total abrogation of the fundamental right guaranteed under Article 31(2) cannot be accepted. [938 F A] 3.2 The Constitution (Twenty fifth Amendment) Act, 1971, has placed the matter of adequacy of compensation beyond the pale of controversy by substituting the word " amount" for the word "compensation" in Article 31(2) and made the adequacy of the amount payable for acquisition or requisition of the property nonjusticiable. When the Court has no power to question the adequacy of the amount under Article 31(2), it cannot be said, that the amount determined according to the principles laid down in sub section (1) subject to the maximum fixed under sub section (6) thereof is illusory merely because of inadequacy. The legislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable and considers that Rupees Two Lakhs is a fair and just recombines. That is a legislative judgment and the Court has no power to question it. [938 G, 939 FG, 942 E F,G] H.H. Kesavananda Bharati vs State of Kerala [1973] Supp. SCR P.I; R.C. Cooper vs Union of India ; State of Kerala vs Gwalior Rayan 874 Silk Manufacturing Co. ; ; State of Karnataka vs Ranganatha Reddy ; followed. 4.1 Sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3) in sub section (4) of section 23 are ultra vires of the Parliament [935 B C] 4.2 Apart from the five pillars or the Constitution, namely, Sovereign Democratic Republic, Equality of status and opportunity, Secularism, Citizen s right to worship and the Rule of law , the concept of social and economic justice to build a welfare State , is equally a part of the basic structure or the foundation upon which the Constitution rests. The provisions of sections 23(1), (2) and (3) and the opening words in sections 23(4) are the very antithesis of the idea of a welfare State based on social and economic justice. Since these provisions permit acquisition of property under the Act for private purposes, they offend against the Directive Principles of State Policy of Article 39 (b) and (c) and are also violative of Article 31(2) and therefore, not protected under Article 31 B, [934 G H 935 A B] Indira Nehru Gandhi vs Raj Narain, [1976]2SCR 347 relied on H.H. Kesavananda Bharyti vs State of Kerala [1973] Supp. SCR p.1 explained. 4.3 It is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomeration throughout the country for a bold, indefinite and unspecified objective like ' industry", simpliciter would be a valid exercise of the power of eminent domain. [928H 929A] 4.4 Although the impugned Act is enacted with a laudable object to subserve the common good, in furtherance of the Directive Principles of State Policy under Article 39(b) and (c), in terms of sub sections (1), (2) and (3) of section 23 it would be permissible to acquire vacant land in urban agglomerations and divert it for private purposes, the whole emphasis being on industrialisation. The opening words in section 23 (4) "subject to the provisions of sub section (1), (2) and (3)" make the provisions of section 23(4) subservient to section 23(1), which make it lawful for the allottee that is the industrialist to hold such land in exceess of the ceiling limit. [928 D F] 4.5 The provisions of sub section(1), (2) and (5) of section 23 cannot be read in the light of the Preamble of the Act or the Directive Principles under Article 39(b) and (c). [929 B C] When the language of the section is clear and explicit, its meaning cannot be controlled by the Preamble. It is not for the Court to restructure the section. The restructuring of a statute is obviously a legislative function. The matter is essentially of political expediency and as such it is the concern of the statements and, the therefore, the domain of the legislature and not the judiciary. [929 C E] 875 The use of the words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) takes away the compulsion on the State Government to adhere to the Directive Principles under Article 39 (b) and (c) in making allotment of the vacant lands in an urban aggolomereration acquired under the Act. The words " subject to the provisions of sub sections (1), (2) and (3)" in section 23(4), appearing in the context means " in addition to if anything is left over after the allotment under section 23(1)"[929 F G] A legislation built on the foundation of Article 39(b) and (c) permitting acquisition of private property must be for a Public purpose. that is to subserve the common good Sub sections (1), (2) and (3) of section 23 of the Act negate that principle. Furthermore, Article 31(2) consists of three prerequisites, namely, (i) the property shall be acquired by or under a valid law; (ii) it shall be acquired only for a public purpose, and (iii) the person whose property has been acquired shall be given an amount in lieu thereof. The definition of 'industry ' in Explanation (b) to section 23(1) is wide enough to include any business, trade or vocation carried on for private grain. There cannot be "mixed purpose of public and private to substain under legislation Article 39(b) and (c) The vice lies in section 23(1) and the Explanation (b) thereto, which on a combined reading, frustrate the he very object of the legislation. [930 A C] 4.6 The concept of "public purpose" necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally subserves public interest. If In reality the object of the acquisition under the Act is to set up industries in the private sector as is permissible from the provisions of section 23(1) of the Act, nothing prevents the State from taking recourse to section 40 of the Land Acquisition Act, 1894, for which there must be quid pro quo that is, payment of compensation according to the market value. [930 F G] 4.7 The guidelines issued by the Government of India, Ministry of Works and Housing clarifying the intent and purpose of the provisions of the Act cannot supersede or alter any of the provisions of the Act or the rules made thereunder. The Guidelines cannot alter the "priorities" laid in the sections. The guidelines are nothing but in the nature of Executive Instructions and cannot obviously control the plain meaning of the section. [930 G H, 932E] Where the language of the Act is clear and explicit, the Courts must give effect to it, whatever may be the consequences for in that case the words of the statute speak the intention of the legislature. Therefore, the courts cannot be called upon the interpret the provisions of section 23 of the Act in the light of the Guidelines issued by the Government of India, Ministry of Works and Housing. 932 E F] 4.8 The provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3) in section 23(4) which makes the setting up of industries the dominent object for 876 the acquisition of vacant land in urban agglomerations under the Act are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31 C. [932 G H] 4.9 A legislation which directly runs counter to the Directive Principles of State Policy enshrined in Article 39(b) and (c) cannot by the mere inclusion in the Ninth Schedule receive immunity under Article 31 B. The Directive Principles are not mere homilies. Though these Directives are not cognizable by the Courts and if the Government of the day fails to carry out these objects no court can make the Government ensure them , yet these principles have been declared to be fundamental to the governance of the country. In short, the Directives emphasise, in amplification of the Preamble, that the goal of the Indian policy is not laissez faire, but a welfare State, where the State has a positive duty to ensure to its citizens social and economic justice and dignity of the individual. It would serve as an "Instrument of Instructions" upon all future governments, irrespective of their party creeds. 933A B, E F] 5.1 The provisions of sub section ( 1) of section 27 of the Act is invalid in so far as it seek to affect a citizen 's right to dispose of his urban property in an urban agglomeration within the ceiling limits. [946 B C] 5.2 The right to acquire, hold and dispose of property guaranteed to a citizen under Article 19(1)(f) carries with it the right not to hold any property. As such a, citizen cannot be compelled to own property against his will [945 G H] There is no justification at all for the freezing of transactions by way of sale, mortgage, gift or lease of vacant land or building for a period exceeding ten years or otherwise for a period of ten years from the date of the commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits. [945 E F] If vacant land owned by a person falls within the ceiling limits for an urban agglomeration he is outside the purview of section 3 of the Act. That being so, such a person is not governed by any of the provisions of the Act. [946A] Excel Wear vs Union of India and Ors. ; relied on.

longest

No. 10 of 1950. Appeal from a Judgment of the High Court of Judicature at Bombay (Chagla C.J. and Tendolkar J.) dated 29th March, 1950, in Suit No. 24 of 1950. December 20. The Court delivered Judgment as follows: FAZL ALI J. I have read the judgment prepared by my brother, Mahajan J., and generally agree with his conclu sions and reasonings, but, having regard to 54 the importance of the points raised, I wish to add a short judgment of my own. There are really three questions to be decided in this appeal, and they are as follows : (1) Whether the Bombay City Civil Court Act, 1948 (Act XL of 1948), is ultra vires the Legislature of the State of Bombay; (2) Whether in any event section 4 of the above Act is ultra vires the State Legislature; and (3) Whether the Bombay High Court has jurisdicion to try the suit. The first and the third questions have been answered by the High Court in favour of the appellant and the second question has been answered in favour of the respondents. In this Court, the appellant attacked the judgment of the High Court in so far as it concerns the second question, whereas the first respondent attacked it in so far as it concerns the first and the third questions. The Bombay City Civil Court Act purports to create in additional civil court for Greater Bombay having jurisdic tion to try, receive and dispose of all suits and other proceedings of a civil nature not exceeding a certain value, subject to certain exceptions which need not be referred to here. It was contended on behalf of the respondents that the Act is ultra vires the Legislature of the State of Bombay, because it confers jurisdiction on the new court not only in respect of maters which the Provincial Legislature is compe tent to legislate upon under List II of the 7th Schedule to the Government of India Act, 1935, but also in regard to matters in respect of which only the Central or Federal Legislature can legislate under List I (such as, for in stance, promissory notes, which is one of the subjects mentioned in entry 28 of List I). To understand this argu ment, it is necessary to refer to entry 53 of List , entries 1 and 2 of List II and also entry 15 of List II. These entries run as follows : Entry 53, List I : 55 "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List . ." Entries 1 and 2, List II : "1 . the administration of justice;constitution and organisation of all courts except the Federal Court . " "2. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this List . " Entry 15, List III : "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List. " The respondents ' contention may appear at the first sight to be a plausible one, but, in my opinion, it is not well founded in law. For the purpose of correctly deciding the question raised, we must first try to understand the meaning of the following items in entry 1 of List II, "administration of justice, constitution and organization of all courts except the Federal Court. " A reference to the three Legislative Lists shows that "administration of jus tice" is entirely a provincial subject on which only the Provincial Legislature can legislate. The same remark ap plies to "constitution and organization of all courts except the Federal Court. " The expression "administration of jus tice" has a wide meaning, and includes administration of civil as well as criminal justice, and in my opinion entry 1 in List II, which I have quoted, is a complete and self contained entry. In this entry, no reference is made to the jurisdiction and powers of courts, because the expressions "administration of justice" and "constitution and organi zation of courts", which have been used therein without any qualification or limitation, are wide enough to include the 'power and jurisdiction of courts, for how can justice be administered if courts have no power and jurisdiction to administer it, and how can courts function without any power or jurisdiction. Once this fact is clearly 56 grasped, it follows that, by virtue of the words used in entry 1 of List II, the Provincial Legislature can invest the courts constituted by it with power and jurisdiction to try every cause or matter that can be dealt with by a court of civil or criminal jurisdiction,and that the expression "administration of justice" must necessarily include the power to try suits and proceedings of a civil as well as criminal nature, irrespective of who the parties to the suit or proceeding or what its subject matter may be. This power must necessarily include the power of defining, enlarging, altering, amending and diminishing the jurisdiction of the courts and defining their jurisdiction territorially and pecuniarily. The question then arises as to the exact meaning of entry 2 of List II and entry 53 of List I, which are said to militate against the above construction. These entries, in my opinion, confer special powers on Provincial and Central Legislatures, as opposed to the general power conferred on the Provincial Legislature by entry 1 of List II, the spe cial powers being the logical consequence or concomitant of the power of the two Legislatures to legislate with regard to the matters included in their respective Legislative Lists. The effect of these entries is that while legislating with regard to the matters in their respective Legislative Lists, the two Legislatures are competent also to make provisions in the several Acts enacted by them, concerning the jurisdiction and powers of courts in regard to the subject matter of the Acts, because otherwise the legisla tion may not be quite complete or effective. The words used in entry 2 of List II and entry 53 of List I are wide enough to empower the two Legislatures to legislate negatively as well as affirmatively with regard to the jurisdiction of the courts in respect of the matters within their respective legislative ambits. In other words, they can exclude or bar the jurisdiction of the courts in regard to those matters, and they can also confer special jurisdiction on certain courts. They can also, apart from the general power which the courts usually exercise, confer power on the courts to 57 pass certain special orders, instances of which I shall give later. In this connection, reference may be made to section 9 of the Code of Civil Procedure, which provides that "the Courts shall have jurisdiction to try all suits of a civil nature ' excepting suits of which their cognizance is either expressly or impliedly barred. " This section obviously postulates among other things the barring of the jurisdiction of the civil courts by Legislatures with respect to particular classes of suits of a civil nature, and the statute book abounds in instances in which the jurisdiction of the civil courts is barred under Acts passed by the Central and Provincial Legislatures. There are also many Acts providing that any suit or proceed ing concerning the subjects matters of those Acts shall be triable by the court or courts specified therein. Such provisions are to be found in a number of Acts enacted both prior to and after the enactment of the Government of India Act, 1935, and there can be no doubt that the British Par liament while enacting that Act was fully aware of the existing legislative practice obtaining in this country as well as of the fact that the provisions in question were sometimes necessary and therefore it empowered the Central and Provincial Legislatures to make them under entry 53 of List I and entry 2 of List II, respectively. This, in my opinion, is the true meaning of these entries, and it also explains why a separate entry was necessary enabling the two Legislatures to legislate with regard to the power and jurisdiction of the courts in respect of the subject matters mentioned in the three Legislative Lists. But for an express provision like that made in the entries referred to above, the two Legislatures might not have been able to confer special jurisdiction on the courts in regard to the matters set out in the Legislative Lists, nor could they have been able to bar the jurisdiction of the ordinary courts in regard to them, however necessary or desirable such a course might have appeared to them. 8 58 It should be noted that the words used in these entries are: "jurisdiction and power". "Power" is a comprehensive word, which includes all the procedural and substantive powers which may be exercised by a court, but the full significance of the use of the word in the context can be grasped only by reading a large number of local and special Acts in which power has been given to Courts to pass certain special and unusual orders. For example, section 13 of the Indian , provides that " where any person is convicted of an offence punishable under any rule made under clauses . the Court by which he is convicted may direct that the aircraft or arti cle or substance, as the case may be, in respect of which the offence has been committed, shall be forfeited to His Majesty. " Reference may also be made to section 24 of the Indian Arms Act, 1878, which provides that "when any person is convicted of an offence punishable under this Act, committed by him in respect of any arms, ammunition or military stores, it shall be in the discretion of the convicting Court or Magistrate further to direct that the whole or any portion of such arms, ammunition or mili tary stores, and any vessel . . . shall be confiscated." (See also section 10 of the [Act I of 1944], and section 13 of the Food Adul teration Act, 1919 [Bengal Act VI of 1919], which are in similar terms, and the various Acts relating to money lend ers and money lending which confer special power on the courts of reopening several kinds of transactions for the relief of debtors.) It seems to me that the word "power" was added to the word "jurisdiction", in entry 53 of List I, entry 2 of List II, and entry 15 of List III, in order to enable the two Legislatures to grant special powers like those I have mentioned to the courts which are to deal with the subject matter of any special legislation. A reference to the Acts passed after the enactment of the Government of India Act, 1935, will show that 59 special provisions with regard to the jurisdiction of courts have been made even after the passing of that Act, in a large number of Central and local Acts. Confining ourselves to the Acts passed by the Bombay Legislature, since we are concerned here with one of such Acts, we find that in The Bombay Probation of Offenders Act, 1938 (Bombay Act No. XIX of 1938), section a empowers the following courts "to exer cise powers under the Act, (a) the High Court, (b) a Court of Session, (c) a District Magistrate, (d) a Sub Divisional Magistrate, (e) a salaried Magistrate . " Similarly, in the Bombay Agricultural Produce Markets Act, 1939, sec tion 23 provides that "no offence under this Act . shall be tried by a Court other than that of a Presidency Magistrate, or a Magistrate of the First Class or a Magis trate of the Second Class specially empowered in this be half. " Section 11 of the Bombay Cotton Control Act, 1942, provides that "no criminal court inferior to that of a Presidency Magistrate or a Magistrate of the Second Class shall try any offence under this Act". Section 19 of the Bombay Sales of Motor Spirit Taxation Act, 1946, and section 5 of the Bombay Harijan Temple Entry Act, 1947, are provi sions which exclude the jurisdiction of courts under certain circumstances. Similar instances may be multiplied from the Acts of the Central Legislature and other Provincial Legis latures, but, in my opinion, the instances I have quoted are sufficient to show (1) that the practice which prevailed before the Government of India Act has continued even after its enactment, and (2) that the words "jurisdiction and powers" have been consistently construed to bear the meaning which I have attributed to them. The interpretation which is sought to be put on the entries by the respondent is in my opinion open to the following objections : (1).It involves the curtailment of the meaning of the expression "administration of justice" in such a way as to rob it of its primary content the jurisdiction and powers of the court, without which justice cannot be administered. 60 (2) It makes it necessary to read entry 2 of List II as part of entry 1 of the same List, though it has been sepa rately numbered as an independent entry. This is opposed to the scheme followed in the three Legislative Lists, which seems to be that each particular entry should relate to a separate subject or group of cognate subjects, each subject or group of subjects being independent of the others (subject only to incidental overlapping). The construction suggested by the respondents makes it necessary to assume that though according to their line of reasoning the words "jurisdiction and powers of courts, etc. " occurring in entry 2 of List II should have been put in entry 1 of the same List, being intimately connected with the subject of "admin istration of justice and the constitution and organization of courts", it was without any apparent reason numbered separately and made an independent entry. (3) The suggested construction would exclude from the jurisdiction of the Provincial Courts a large number of matters which normally come before courts exercising civil or criminal jurisdiction and, if it is accepted, the courts will not be able to function in the fullest sense unless both the Provincial and Central Legislatures have by piece meal legislation or otherwise exhausted their power of legislating on all the subjects comprised in Lists II and I respectively. Even after they have exhausted such power, the courts will not be able to deal with important matters, such as contracts, transfer of property, arbitration, wills and succession, criminal law, etc., which are subjects mentioned in List III, until one of the two Legislatures has legislated in regard to those subjects, which raises two important questions: (1) Which of the two Legislatures has to do it first; and (2) How is the conflict to be avoided ? That the construction put by the respondents will lead to anomalous results which could not have been within the contemplation of the British Parliament while enacting the Government of India Act, 1935, may be illustrated by one or two examples. Reference 61 might here be made to entry 26 of List I, which deals with "carriage of passengers and goods by sea or by b air. " It should be supposed that if any of the goods carried by air are lost and a suit is instituted in regard to them, the suit will be triable by the court having jurisdiction over the matter under the Civil Procedure Code, subject to any special legislation on the subject by the Central Legisla ture, in spite of the fact that the carriage of goods and passengers by sea or by air is a subject mentioned in List I. But, on the view propounded before us by the respondent, the Provincial civil courts will not be competent to try such a suit, unless they are empowered to do so by the Central Legislature. In order to show to what absurd result this doctrine may be pushed, and in order to avoid the criticism of taking for granted what is in controversy, we may take a very extreme example, because the soundness of the respondents ' contention can be tested only by trying to find out what would happen if we were to stretch it to the utmost limit to which it can be stretched. Entry 13 in List I is: "the Banaras Hindu University and the Aligarh Muslim University." Under entry 53 of List I, the Central Legisla ture has power to legislate in regard to the jurisdiction and powers of courts in respect of the subject matter of entry 13. It may therefore be supposed, having regard to the wide language used in entry 13, that it is open to the Central Legislature to enact that suits in which these Universities are concerned as plaintiff or as defendant, will be triable only by the particular court mentioned in the enactment concerned and that no other court shall have jurisdiction in regard to such suits, It is difficult to think that until such a legislation is made, a court which would otherwise be the proper court, has no jurisdiction to try any suit in which one of these Universities is a party, no matter what the subject matter of the suit may be. I am certain that the framers of the Government of India Act did not contemplate such a result. We all know that at the date when the Government of India Act, 1935, was passed, there were in existence 62 in the different Provinces a large number of courts of law and the administration of justice throughout the Provinces was in the hands of these provincial courts. The civil courts in the Province used to try all suits and proceedings of a civil nature which are triable under section 9 of the Civil Procedure Code, and the criminal courts used to try all criminal cases which are triable under the Code of Criminal Procedure. The jurisdiction and power of the courts were not confined to cases in regard to the subjects stated in List II, nor were they debarred from dealing with cases relating to matters which have been assigned to List I. The jurisdiction of the courts depended in civil cases on a "cause of action" giving rise to a civil liability, and in criminal cases on the commission of an offence, and on the provisions made in the two Codes of Procedure as to the venue of the trial and other relevant matters. It seems to me that the Government of India Act, 1935, did not contem plate any drastic change in the existing system of adminis tration of justice, but what it contemplated was that that system should continue subject to future legislation by the proper Legislature; Central or Provincial, barring the jurisdiction of courts or conferring jurisdiction or power on special courts with regard to the matters included in the appropriate Legislative Lists, should there be any occasion for such special legislation. Under the Govern ment of India Act, 1935, every Province became more or less an autonomous unit with a complete machinery for administer ing justice to the fullest extent. In my opinion, there is nothing in the Act of 1935 to show that there was any inten tion on the part of its framers to affect the machinery so drastically as to confine it to the administration of a mere partial or truncated kind of justice relating only to mat ters specified in List II. Mr. Setalvad, the ]earned Attorney Genera], who ap peared on behalf of the appellant, in supporting the im pugned Act, argued before us that for the purpose of decid ing this appeal, we might also refer to entry 4 List III. His contention was that the impugned 63 Act having had the assent of the Governor General, it would be permissible to see what powers the Provincial Legislature could exercise under Lists II and III taken together. If the course which he suggests is adopted, then the subjects on which the Provincial Legislature can legislate would be: (1) administration of justice; (2)constitution and organiza tion of courts; and (3) civil procedure, including all matters included in the Code of Civil Procedure at the date of the passing of the Government of India Act, 1935. One of the matters included in the Civil Procedure Code is the jurisdiction of courts, Section 9 of the Code provides, as I have already stated, that the courts shall have jurisdic tion to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There are are also provisions in the Code dealing with the territorial and pecuniary jurisdiction of the courts. The three entries will thus cover exactly the field which is covered by item 14 of section 92 of the Canadian Constitution which comprises the following matters: "administration of justice in the Provinces, including constitution, maintenance and organization of provincial courts both of civil and criminal jurisdiction including procedure in civil matters in those courts. " It has been held in Canada that the words referred to above include the power and jurisdiction of courts, and, under that item, the provincial Legislature can confer the widest power on the courts. It seems to me that the approach suggested by the learned Attorney General is useful for testing whether entry 2 of List II was intended to be treated as the sole and only basis of the power of the Provincial Legislature to confer jurisdiction on the provincial courts and whether it was really the intention of the British Parliament to empower the Provincial Legislature to confer jurisdiction of only such a limited character as can be conferred on the provin cial courts under entry 2 of List II, if that entry is treated as a self sufficient entry. In my opinion, the correct view is to hold that it is not necessary to call into aid either entry 4 of List III or any of the 64 provisions of the Canadian Constitution in this case, and that the words "administration of justice; constitution and organization of courts" are by themselves sufficient to empower the Provincial Legislature to invest a new court with all the power which has been conferred upon it by the impugned Act. It is of course open to the Central Legisla ture to bar the jurisdiction of the new court by a special enactment with regard to any of the matters in List I, but so long as such jurisdiction is not barred, the court will have jurisdiction try all suits and proceedings of a civil nature as enacted in the Act in question. I think that if the Provincial Legislature had merely enhanced the pecuniary jurisdiction of any of the existing civil courts there could have been no objection to that course. Why then should there, be any objection when, instead of investing one of the existing courts with power to try suits and proceedings of a civil nature not exceeding a certain amount, the Legis lature has created a new court and invested it with the same power. Perhaps, it will be simpler to deal at this stage with the third question, namely, whether the Bombay City Civil Court has jurisdiction to try a suit based on a promissory note. So far as this point is concerned, the respondent bases his contention on entries 28 and 33 of List I. Entry 28 relates to "cheques, bills of exchange, promissory notes and other like instruments". Entry 53, as already stated, relates to "jurisdiction and powers of courts with respect to any of the matters in List I." It is contended on behalf of the respondent that the effect of these two entries, when they are read together, is that no court can try a suit relating to a promissory note, unless it is invested with the jurisdiction to try such a suit by the Central Legisla ture by virtue of the power given by entry 53 of List I. The question so raised is covered by the answer to the first question, and I shall only add that the answer already given to that question finds some support in the case of Prafulla Kumar Mukherjee and Others vs Bank of Commerce Limited Khulnal (1), in which the arguments of the (1) [1947] F.C.R.28. 65 respondents before the Privy Council proceeded on the same lines as the arguments of the respondents before us. The question raised in that case was as to the validity of the Bengal Money lenders ' Act, 1940, which limited the amount recoverable by a money lender on his loans and interests on them, and prohibited the payments of sums larger than those permitted by the Act. The validity of the Act was questioned by the respondent Bank in certain suits brought by them to recover loans and interests alleged to be due on promisso ry notes executed by the appellants borrowers as well as in suits brought by the debtors claiming relief under the Act. The argument put forward on behalf of the Bank was that the Bengal Legislature by the impugned Act had attempted to legislate on subjects expressly forbidden to it and expressly and exclusively reserved for the Federal Legislature, that is to say, in relation to promissory notes and banking, which are reserved for the Federal Legislature exclusively, under entries 28 and 38 respectively of List I. On the other hand, the arguments put forward on behalf of the appellants was that the impugned Act was in pith and substance legislation dealing with money lending and that in so far as it dealt with promissory notes or banking that was only incidental or ancillary to the effective use of the admitted legislative powers of the Provincial Legislature to deal with money lending. 'This argument of the appellants was substantially accepted by the Privy Council. The second point raised on behalf of the respondent relates to the validity of section 4 of the Act, which runs as follows : "Subject to the exceptions specified in section 3, the Provincial Government, may by notification in the Official Gazette, invest the City Civil Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature, arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification. " 9 66 It is contended that this section is invalid, because the Provincial Legislature has thereby delegated its legis lative powers to the Provincial Government which it cannot do. This contention does not appear to me to be sound. The section itself shows that the provincial Legislature having exercised its judgment and determined that the new Court should be invested with jurisdiction to try suits and pro ceedings of a civil nature of a value not exceeding Rs. 25,000, left it to the Provincial Government to determine when the Court should be invested with this larger jurisdic tion, for which the limit had been fixed. It is clear that if and when the new court has to be invested with the larger jurisdiction, that jurisdiction would be due to no other authority than the Provincial Legislature itself and the court would exercise that jurisdiction by virtue of the Act itself. As several of my learned colleagues have pointed out, the case of Queen vs Burah (1), the authority of which was not questioned before us, fully covers the contention raised, and the impugned provision is an instance of what the Privy Council has designated as conditional legislation, and does not really delegate any legislative power but merely prescribes as to how effect is to be given to what the Legislature has already decided. As the Privy Council has pointed out, legislation conditional on the use of particular powers or on the exercise of a limited discretion entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing, and in many instances it may be highly convenient and desirable. Examples of such legislation abound in England, America and other countries. As some of the American Judges have remarked, "there are many things upon which wise and useful legislation must depend which cannot be known to the law making power and must therefore be the subject of enquiry and determination outside the halls of legislation (Field vs Clark (2). Mr. Setalvad, the learned Attorney General who appeared on behalf of the appellant, contended that in this country even delegated legislation is (1) 3 A.C. 889. (2) ; , 67 permissible, but I do not consider it necessary to go into that question, because the principle enunciated in Queen vs BUrah(1) is sufficient to dispose of the contention raised here. I think that the present case stands well outside what was laid down by the Federal Court in Jitendranath Gupta vs The Province of Bihar,(2) as two of my colleagues who were parties to the majority decision in that case have pointed out. In the result, this appeal is allowed. PATANJALI SASTRI J. This appeal raises the important ques tion of the constitutional validity of the Bombay City Civil Court Act, 1948 (hereinafter referred to as the Act) and though I concur in the conclusion reached by the majority of my learned brothers I wish to state precisely the reasons which lead me to that conclusion. The first respondent brought the suit in the High Court at Bombay on its orginal side for recovery of Rs. 11,704 from the second respondent on promissory notes. Notwithstanding that the jurisdiction of the High Court to try suits cog nisable by the City Civil Court was barred under section 12 of the Act and the pecuniary limit of the jurisdiction of the latter court had been enhanced from Rs. 10,000 to Rs. 25,000 by a notification issued by the Provincial Government under section 4 of the Act, it was stated in the plaint that the High Court had jurisdiction to try the suit because the Act as well as the said notification was ultra vires and void. In view of the constitutional issues thus raised, the State of Bombay, the appellant herein was on its own motion, made a party defendant. The High Court (Chagla C.J. and Tendolkar J.) held (1) the Act was intra vires, but (2) that section 4 which autho rised the Provincial Government to enhance the jurisdiction of the City Court up to the limit of Rs. 25,000 amounted to a delegation of legislative power, and as such, was void and inoperative, with the result that the suit, which ex ceeded Rs. 10,000 in (1)5 I.A. 178. (2) 68 value and was not cognisable by the City Court apart from the impeached notification, was held to have been property laid in the High Court. Both these findings have been challenged before us as erroneous, the first by the first respondent and the second by the appellant. On the first point, learned counsel for the first re spondent urged that section 100 of the Government of india Act, 1935, read with entries 53 of List I, 2 of List II and 15 of List III, the relevant parts of which are in identical terms, namely, "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List", conferred power on Legislatures in British India to make laws with respect to jurisdiction of courts only in relation to matters falling within their respec tive legislative fields, and that, therefore, the expres sions "administration of justice" and "constitution and organisation of courts" in entry 1 of List II, although they might be wide enough, if that entry stood alone, to include the topic of "jurisdiction and powers of courts", should not be construed in that comprehensive sense as such construc tion would give no effect to the limiting words in entry 2 which would then become meaningless indeed if those expres sions in entry 1 included the power to legislate with re spect to jurisdiction also, there would be no need for entry 2, while, on the other hand, without including such power, they would still have ample content, as various other mat ters relating to administration of justice and constitu tion of courts would have to be provided for, The scheme disclosed by the three separate entries in identical terms in the three lists was said to be this: The, Provincial Legislatures were to have the power of constituting courts and providing for administration of justice, but the power to invest the courts with jurisdiction was to rest with the Federal Legislature in respect of the matters mentioned in List I and with the Provincial Legislature in respect of the matters mentioned in List Ii, while both the Federal and the Provincial Legislatures were to have such power with respect to 69 the matters mentioned in List III subject to the provisions of section 107. It was, therefore, submitted that the Act, in so far as it purported to provide by section 3 that the City Civil Court established thereunder "shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within Greater Bombay" (with certain exceptions not material here) was ultra vires the Provincial Legislature, constituting as it did a direct invasion of the Federal field marked out by entry 53 of List I. As all the three entries dealt with the same topic of jurisdiction and powers of courts, there was no room, it was said, for the application of the doctrine of incidental enroachment. The argument is not without force. The Bombay High Court in Mulchand vs Raman (1), which was followed by the learned Judges in the present case, and the Attorney General who adopted the same line before us, invoked the doctrine of pith and substance in answer to the argument on behalf of the respondent. But that doctrine, while it often furnishes the key to the solution of problems arising out of the distribution of overlapping legislative powers in a Federal system, is not of much assistance in meeting the difficulty in finding any usefulness in entry 2 if under entry 1 the Provincial Legislature were intended to have the power to legislate generally with respect to the jurisdiction and powers of courts. The greater power must include the less. A similar difficulty in construing entry 4 of List III and entry 2 of List II arose in Stewart vs Brojendra Kishore (2) and led a Division Bench of the Calcutta High Court to construe the expression "civil procedure" occurring in the former entry in a "limited sense" as excluding jurisdiction and powers of courts. After referring to the decision of the Judicial Committee in In re Marriage Reference(3) where "marriage ,and divorce" in the Dominion List was construed as excluding matters relating to the "solemnisation of marriage (1) 51 B.L.R. 86. (3) 628 (2) A.I.R. 1939 Cal. 628 70 in the province" because the latter topic was specifically included in the Provincial List, the learned Judges ob served: "The position is similar here. 'Civil procedure ' in the Concurrent Legislative List must be held to exclude matters relating to jurisdiction and powers of courts since special provision is made for those matters elsewhere in the lists." "To hold otherwise", they pointed out, "would be completely to wipe out the second entry in the Provincial Legislative List." Learned counsel for the first respondent strongly relied on that decision and suggested that, if it had been brought to the notice of the learned Judges in Mulchand vs Raman (1), their decision might well have been the other way. On the other hand, the Attorney General submitted that there could be no question of conflict between two entries in the same list and that the natural meaning of one should not be restricted simply because of the presence of the other. He placed reliance on the following observations of Gwyer C.J. in Aliqa Begum 's case (4) "It would be practi cally impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every item in that list and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by words of broad and general import. I think, however, that none of the items in the lists is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. " These observations were, however, made to support the conclusion that the power to legislate with respect to" collection of rents" under entry 21 of List II includes the power to legislate with respect to any limitation on the power of a landlord to collect rents, that is to say, with respect to the remission of rents as well, and that, therefore, the United Provinces Regularisation of Remissions Act, 1933, was intra vires. General observations made in such context (4) ,134 71 do not answer the objection that the wider construction of entry 1 would deprive entry 2 of all its content and reduce it to useless lumber. I am therefore, of opinion that the words" ' administration of justice" and "constitution and organisation of courts" occurring in entry 1 must be under stood in a restricted sense excluding from their scope "jurisdiction and powers of courts" dealt with specifically in entry 2. This does not, however, compel the conclusion that it is beyond the competence of the Provincial Legislature to confer general jurisdiction on courts constituted by it, for, if entry 1 does not by itself enable the legislature to do so, entry 2 certainly does when read with entry 1. It should be remembered and this is what the argument for restricting the legislative power of provinces in regard to jurisdiction overlooks that "administration of justice" is one of the matters mentioned in List II itself. The Provin cial Legislature, therefore, is competent under entry 2 to legislate conferring jurisdiction on courts with respect to administration of justice, that is to say, general juris diction to administer justice by adjudicating on all matters brought before them, except, of course, matters excluded expressly or by implication either by an existing law con tinued in force or by a statute passed by the appropriate legislature under the entries in the three Lists relating to jurisdiction and powers of courts. In other words, though "administration of justice" in entry 1 does not authorise legislation with respect to jurisdiction and powers of courts, the legislative power under entry 2 in regard to the tatter topic, which can be legitimately exercised" with respect to any of the matters in this List," can be exer cised with respect to administration of justice, one of the matters comprised in that List, with the result that the subject of general jurisdiction is brought within the autho rised area of provincial legislation. This view thus leaves a field in which entry 2 could apply. When once the Provincial Legislature is found competent to make a law with respect to the general jurisdiction of courts, the apparent conflict with the 72 central legislative power under entry 53 of List I can be resolved in a given case by invoking the doctrine of pith and substance and incidental encroachment. For, that rule, though not of much assistance in construing entries 1 and 2 which occur in the same List II, has its legitimate applica tion in ascertaining the true character of an enactment and attributing it to the appropriate list where the Federal and the Provincial Lists happen to overlap. Accordingly, if the Legislature of Bombay was, in conferring jurisdiction on the City Civil Court to hear and determine all suits of a civil nature, really legislating on a subject which was within the ambit of its legislative power, and if in doing so, it encroached on the forbidden field marked off by entry 53 of List 1, the encroachment should be taken to be only inciden tal. It may be that such encroachment extends to the whole of that field, but that is immaterial, as pointed out by the Judicial Committee in the Khulna Bank case(1). One of the questions their Lordships put to themselves in that case was "Once it is determined that the pith and substance is money lending, is the extent to which the federal field is invaded a material matter?" Answering the question in the negative their Lordships observed: "No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between de grees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provi sions may advance so far into the federal territory as to show that its true nature is not concerned with provincial matters, but the question is not, has its trespassed, more or less, but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not money lending but promissory notes or banking ? Once that question is determined, the Act falls on one or the other side of the line and can be seen as valid or invalid accord ing to its true content". In answering the objection that that view does not give sufficient effect to the words of precedence used in section 100 of the Government of (1) [1947] F.C.R.28. 73 India Act as between the three Lists, their Lordships went on to say "No doubt where they come in conflict List I has priority over Lists III and II, and List III has priority over List II; but the question still remains priority in what respect? Does the priority ' of the Federal Legislature prevent the Provincial Legislature from dealing with any matter which may incidentally affect any item in its list or in each case has one to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character ? In their Lordships ' opinion the latter is the true view. " The test for determining whether in pith and substance a particular enactment falls within one list or another is further elucidated in a passage quoted with approval from Lefroy 's Treatise on Canadian Constitutional Law in the judgment of the Federal Court in the Bank of Commerce case(1). "It seems quite possible" says the learned writer, summarising the effect of the Privy Council decisions on the point "that a particular Act regarded from one aspect might be intra vires of a Provincial Legislature and yet regarded from another aspect might also be intra vires of the Domin ion Parliament. In other words, what is properly to be called the subject matter of an Act may depend upon what is the true aspect of the Act. The cases which illustrated this principle show. by 'aspect ' here must be understood the aspect or point of view of the legislator in legislating the object, purpose and scope of the legisla tion. The word is used subjectively of the legislator rather than objectively of the matter legislated upon. " Applying that test there can be little doubt that the im pugned Act must, in its pith and substance, be attributed to List II. as the legislators of Bombay were certainly not conferring on the new court, which they were constituting under the Act, jurisdiction with ' respect to any of the matters in List I. They were, as section 3 clearly indi cates constituting a new court, the Bombay City Civil Court, and investing it with the (1) [1944] F.C.R.126,139. 10 74 general jurisdiction to try all suits of a civil nature within certain. pecuniary and territorial limits, and if they were acting, as I have endeavoured to show, within the scope of the legislative power conferred on them under entry 2 read with entry 1 of List II, it seems immaterial that the enactment, so far as one aspect of jurisdiction, namely, its conferment, is concerned, encroaches practically on the whole of the federal field marked out by entry 53 of List I. The encroachment, however, would still leave ample room for the exercise by the Centre of its legislative power under entry 53 in regard to other aspects of jurisdiction and powers of courts. This view is strongly reinforced by a consideration of the legislative practice prevailing in this country prior to the passing of the Government of India Act, 1935. That it is legitimate to have regard to legislative practice in deter mining the scope of legislative powers has been recognised in decisions of high authority (e.g., Croft vs Dunphy) (1), It had long been the practice in this country to constitute and organise courts with general jurisdiction over all persons and matters subject only to certain pecuniary and territorial limitations, and to confer special jurisdiction limited to certain specified cases or matters either on the ordinary courts in addition to their general jurisdiction or on tribunals set up to deal with such matters exclusively. The various Provincial Civil Court Acts as well as the provisions of the Civil and Criminal Procedure Codes invest the courts, both civil and criminal, with general jurisdic tion, that is to say, power to adjudicate in respect of all persons and all matters except those that are specifically excluded or brought within the cognisance of tribunals with special or limited jurisdiction extending only to those matters. The grading of the courts too in their heirarchy has reference to the pecuniary and territorial limits rather than to the nature and kind of the subject matter which they are empowered to deal with. It is reasonable to presume that this system of organisation of courts in (1) ,165 75 British India was known to the framers of the Government of India Act, 1935, and it cannot be readily supposed that they wanted to introduce a radical change by which the power of constituting courts and providing for administration of justice is to be vested in the Provincial Legislatures, while jurisdiction has to be conferred by piecemeal legisla tion by the Federal and Provincial Legislatures with respect to specific matters falling within their respective legisla tive fields which are by no means capable of c]ear demarca tion. The constitutional puzzles which such a system is likely to pose to the legislatures no less than to the courts and the litigant public in the country whenever a new court is constituted in finding out by searching through the legislative lists, whether jurisdiction to deal with a particular matter or power to make a particular order is validly conferred by the appropriate legislature must make one pause and examine the relevant provisions of the Govern ment of India Act to see if there is anything in them to compel the acceptance of so novel a system. After giving the matter my careful consideration, I am convinced that both the language of the provisions and the antecedent legislative practice support the conclusion that the Provin cial Legislatures which have the exclusive power of consti tuting and organising courts and of providing for the admin istration of justice in their respective provinces, have also the power of investing the courts with general juris diction. On the question whether section 4 of the Act operates as a delegation of legislative power, I entirely agree with the reasoning and conclusion of my learned brother Das who has said all I wish to say in his judgment which I have had the advantage of reading, and, like him, I reserve the larger question raised by the Attorney General as to how far it is open to the legislatures in this country, while acting within their authorised areas, to delegate their legislative powers to other agencies. I find it no more necessary in the present case to decide that point than in Jatindranath 76 Gupta 's case(I) where I preferred to rest my decision on a narrower ground. It follows that the High Court has no jurisdiction :0 hear and determine the first respondent 's suit and I agree that the appeal should be allowed. MAHAJAN J. This is an appeal from the judgment of the High Court of Judicature at Bombay dated the 29th March, 1950, in Suit No. 240 of 1950, holding that section 4 of the Bombay City Civil Court Act (Bombay Act XL of 1948) is ultra vires the Provincial Legislature. The facts are that on the 6th February, 1950, the first respondent presented a plaint to the Prothonotary and Senior Master of the High Court for filing a summary suit against the second respondent to recover a sum of Rs. 11,704 24 alleged to be due under promissory notes. This suit was instituted in the High Court, in contravention of a notifi cation dated the 20th January, 1950, issued under section 4 of the City Civil Court Act, under which suits up to the pecuniary limit of Rs. 25,000 could be heard only by the City Civil Court, and not by the High Court. As the question of jurisdiction was of importance, the matter was referred to the sitting Judge in Chambers. On 23rd February, 1950, the learned Judge admitted the plaint holding that section 4 of the Act was ultra vires the Provincial Legislature and the notification issued under it was consequently inopera tive and that the High Court had jurisdiction to hear the suit. The first respondent thereupon took out summons for judgment against the second respondent. On the application of the AdvocateGeneral, the State of Bombay was impleaded as defendant at this stage and the proceedings were trans ferred to a Division Bench of the High Court. The Division Bench upheld the view of the Judge in Chambers and returned the cause to him for disposal on the merits. The State of Bombay, dissatisfied with this decision, has preferred the present appeal. (1) 77 Two questions have been canvassed in this appeal: (1) whether the City Civil Court Act is ultra vires the legisla ture of the Province of Bombay in so far as it deals with the jurisdiction and powers of the High Court and City Civil Court with respect to matters in List I of the Seventh Schedule of the Government of India Act, 1935; and (2) whether section 4 of the Act is void as it purports to delegate to the Provincial Government legislative authority in the matter of investing the City Civil Court with ex tended jurisdiction. Bombay Act of 1948 came into force on 10th May, 1948. It was considered expedient to establish an additional civil court for Greater Bombay presumably with the object of relieving congestion of work on the original side of the Bombay High Court. Sections 3, 4 and 12 of the Act are in these terms : "3. The State Government may, by notification in the Official Gazette, establish for the Greater Bombay a court, to be called the Bombay City Civil Court. Notwithstanding anything contained in any law, such court shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognisable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the State Government may, from time to time, after consultation with the High Court, by a like notifica tion extend the jurisdiction of the City Court to any suits or proceedings which are cognisable by the High Court as a court having testamentary or 78 ntestate jurisdiction or for the relief of insolvent debt ors. Subject to the exceptions specified in section a the State Government may by notification in the Official Ga zette, invest the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification. Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognisable by the City Court: Provided that the High Court may, for any special rea son, and at any stage remove for trial by itself any suit or proceeding from the City Court. " On the second question the High Court held that section 4 of the Act was inoperative as it purported to delegate the law making powers of the legislature to an outside authority and hence the notification issued in pursuance of it had no effect whatsoever and did not take away the jurisdiction of the High Court to try the present suit. On the first ques tion the High Court placed reliance on its own earlier decision in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), and held that the Act was intra vires the Bombay Legislature. The appellant assails the correctness of the decision of the High Court on the second point and supports the decision on the first point. The first respondent, on the other hand, while supporting the decision of the High Court on the second question, challenges its correctness in regard to the first question. The learned Attorney General contends that the High Court placed an erroneous construc tion on sections 3 and 4 of the Act; that reading the two sections together the effect is that the legislature has set up the City Civil Court with an initial jurisdiction of Rs. 10,000 and has placed an outside limit of Rs. 25,000 on its pecuniary jurisdiction and that it (1) 79 has left to the discretion of the Provincial Government the determination of the circumstances under which this exten sion of the pecuniary jurisdiction between Rs. 10,000 to Rs. 25,000 is to take place. It was said that section 4 is in the nature of a conditional legislation and that under it no legislative function has been delegated to the Provincial Government. The learned Chief Justice in the court below disposed of this contention with the following,observations: "I am also conscious of the fact that an Act must be construed in a manner which would reconcile its differ ent sections but with the best of intention in the world I do not see how it is possible to read sections 3 and 4 together so as to come to the conclusion for which the AdvocateGeneral contends. To my mind it is patent that the Legislature never applied its mind to the question as to whether the new court which it was setting up should have a jurisdiction higher than that of Rs. 10,000. It never passed any judgment on that question. It never laid down any policy with regard to that question and section 4 is not a section which merely directs the Provincial Government to carry out the policy laid down by the legislature . but it is a section which confers upon the Provincial Gov ernment the power to confer jurisdiction upon the Court, or in other words, it is a section which entitled the Provin cial Government to lay down its policy as to whether the new Court should have the increased jurisdiction up to twenty five thousand rupees. " I find it difficult to accept this view. Without apply ing its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than Rs. 10,000, how could the legislature possibly enact in section 4 that the pecuniary jurisdiction of the new court would not exceed Rs. 25,000. The fixation of the maximum limit of the court 's pecuniary jurisdiction is the result of exercise of legislative will, as without arriving at this judgment it would not have been able to determine the out side limit of the pecuniary jurisdiction of the new 80 court. The policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by sections 3 and 4 of the Act and it was to the effect that initially its pecuniary jurisdiction will be limited to Rs. 10,000 and that in future if circumstances make it desirable and this was left to the determination of the Provincial Government it could be given jurisdiction to hear cases up to the value of Rs. 25,000. It was also determined that the extension of the pecuniary jurisdiction of the new court will be subject to the provisions contained in the exceptions to section 3. I am therefore of the opinion that the learned Chief Justice was not right in saying that the legislative mind was never applied as to the conditions subject to which and as to the amount up to which the new court could have pecuniary jurisdiction. All that was left to the discretion of the Provincial Government was the determination of the circumstances under which the new court would be clothed with enhanced pecuniary jurisdiction. The vital matters of policy having been determined, the actual execution of that policy was left to the Provincial Government and to such conditional legislation no exception could be taken. The section does not empower the Provincial Government to enact a law as regards the pecuniary jurisdic tion of the new court and it can in no sense be held to be legislation conferring legislative power on the Provincial Government. In Queen vs Burah(1), section 9 of Act XXII of 1869, which was a piece of legislation analogous to section 4 of the City Civil Court Act, was held intra vires by their Lordships of the Privy Council. By the 9th section power was conferred on the Lieutenant Governor of Bengal to deter mine whether the Act or any part of it should be applied to certain districts. In other words, authority to extend the territorial limits of the operation of the statute was conferred on the Lieutenant Governor and such extension had the result of depriving the High Court of its jurisdiction in those areas and of conferring jurisdiction in respect to them (1) 5 I.A. 178. 81 on the commissioner. Objection was taken as to the validity of section 9 on the ground that it was legislation delegat ing legislative power and was therefore void, Their Lord ships negatived this contention and held that section 9 was intra vires the Governor General 's power to make laws and was a piece of conditional legislation. That was a case of an extension of territorial limits within which an Act of the Legislature was to be in force, whereas the present is a case of extension of pecuniary limits of a court 's jurisdic tion. In principle, there seems no difference between the two cases and the present case is therefore within the rule of the decision in Queen vs Burah(1). Their Lordships in holding section9 intra vires made the following observations : "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) as if, when they were exer cised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Gover nor, General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself. The proper Legislature has exercised its judgment as to place, person, laws, powers, and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legislation is now absolute. Where plenary powers of legis lation exist as to particular subjects, whether in an Impe rial or in a Provincial Legislature, they may (in their Lordships ' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discre tion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many cir cumstances. it may be highly convenient. The British Stat ute Book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when consti tuting the (1) 5 I A. 178, 11 82 Indian Legislature, contemplate this kind of conditional legislation as within the scrape of the legislative powers which it from time to time conferred. certainly used no words to exclude it. " These observations appositely apply to the legislative provision contained in section 4 of the impugned Act. The true distinction is between the delegation of power to make the law which necessarily involves a discretion as to what it shall be and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. Objection may be taken to the former but not to the latter. Reference in this connection may also be made to the decision of the Supreme Court of America in Field vs Clark(1) wherein referring to Locke 's case(2) the following observations were made : "To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public wel fare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know. " The proper distinction the court said was this: "The Legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law making power, and, must there fore, be a subject of inquiry and determination outside of the halls of legislation. " The High Court in support of its view placed considera ble reliance on the decision of the Federal Court in Jatin dra Nath Gupta vs The Province of Bihar(3) and it was con sidered that the present case fell1 within the ambit of the rule therein laid down. It seems to me that the decision in the Bihar case has no application to the case in hand. The Federal Court there was (1) 143 U.S.649. (3) [1949] F.C.R.595. (2) 72 Pa.491. 83 dealing with an Act which contained the following provisions in section 1, sub section (3) : "The Act shall remain in force for a period of one year from the date of its commencement: Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification. " In connection with this proviso I said in my judgment in that case that the power conferred therein was much larger than was conferred on the Lieutenant Governor in Queen vs Burah(1) inasmuch as it authorised the Provincial Government to modify the Act and also to re enact it. It was pointed out that "distinction between delegation of power to make the law which necessarily involves a discretion as to what it shall be, and conferring discretion or authority as to its execution to be exercised Under and in pursuance of the law is a true one and has to be made in all cases where such a question is raised. " The following observations made by me there pointedly bring out the distinction between the two cases : "The proviso which has been assailed in this case. judged on the above test, comes within the ambit of delegat ed legislation, and is thus an improper piece of legislation and is void. To my mind, it not only amounts to abdication of legislative authority by the Provincial Legislature, it goes further and amounts to setting up a parallel Legisla ture for enacting a modified Bihar Maintenance of Public Order Act and for enacting a provision in it that that Act has to be enacted for a further period of one year. A careful analysis of the proviso bears out the above conclu sion. It may be asked what does the proviso purport to do in terms and in substance ? The answer is that it empowers the Provincial Government to issue a notification saying (1) 5 I.A. 178. 84 that the Provincial Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification . Modification of statute amounts to re enacting it partially. It involves the power to say that certain parts of it are no longer parts of the statute and that a statute with X sections is now enact ed with Y sections. In the act of modification is involved a legislative power as a discretion has to be exercised wheth er certain parts of the statute are to remain law in future or not or have to be deleted from it. The power to modify may even involve a power to repeal parts of it. A modified statute is not the same original statute. It is a new Act and logically speaking, it amounts to enacting a new law. " I have not been able to follow how these observations concerning the Bihar statute could be relied upon by the High Court in support of its decision in respect 10 the invalidity of section 4 of the Bombay City Civil Court Act. The two provisions are not analogous in any manner whatsoev er and that being so, no support can be derived by the respondent from this decision. In the concluding portion of his judgment under appeal the learned Chief Justice observed as follows: " Now applying once more these tests to the City Civil Court Act, we find that the Legislature in the exercise of its legislative power has set up a Civil Court with a limit ed jurisdiction under section 5 of the Act. It has not set up a court with jurisdiction higher than ten thousand rupees. Having set up a court of limited jurisdiction it has given to the Provincial Government under section 4 the power to center upon that court a higher jurisdiction up to twen ty five thousand rupees. Now this power which is conferred upon the Provincial Government is a power which could only have been exercised by the Legislature itself. " It seems to me that the above observations are based on a construction of sections 3 and 4 of the Act which these sections cannot legitimately bear. As already observed. the Legislature set up a Civil Court for Greater 85 Bombay and decided that, to start with, it will have pecuni ary jurisdiction up to Rs. 10,000. It also decided at the same time that it would also have jurisdiction up to Rs. 25,000 as soon as circumstances, necessitate it the Provin cial Government was constituted the judge of those circum stances. What the limit of that jurisdiction was to be was in unmistakeable terms enacted in section 4 of the Act. It was not left to the will of the Provincial Government to confer on that court any pecuniary jurisdiction that it liked to confer upon it. It would be by force of the legis lative power of section 4 that the City Civil Court will be vested with enhanced jurisdiction but that vesting cannot take place till a notification is issued by the Provincial Government. It is conditional on that event only. For the reasons given above, in my judgment, the High Court was in error in holding that section 4 of the City Civil Court Act was void and ultra vires the Provincial legislature. In this view the notification issued under section 4 must be held to be effective. That being so, it is unnecessary to go into the question raised by the learned Attorney General that assuming that section 4 of the Act was delegation of legislative power, it was still valid. The next question to decide is whether the Act is ultra vires the Bombay Legislature. In order to appreciate Mr. Seervai 's contention on this point it is necessary to set out some of the provisions of the Government of India Act, 1935. relevant to the enquiry. These are contained in sec tion 100. and in the Seventh Schedule in entries 28 and 53 of List I, entries 1 and 2 of List II, and entries 4 and 15 of List III. They are in these terms: Sec. (1) Notwithstanding anything in the two next succeeding sub sections, the Federal Legislature, has, and a Provincial Legislature has not power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the "Feder al Legislative List.") 86 (2) Notwithstanding anything in the next succeeding sub section, the Federal Legislature, and, subject to the pre ceding subsection, a Provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the "Concurrent Legislative List.") (3) Subject to the two preceding sub sections, the Provin cial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect 10 any of the matters enumerated in List II in the said Schedule (hereinafter called the" Provincial Legis lative List.") (4) The Federal Legislature has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof. List I. 23. Cheques, bills of exchange, promissory notes and other like instruments. Jurisdiction and powers of all courts, except the Federal Court, with respect to any of the matters in this list and, to such extent as is expressly authorized by Part IX of this Act, the enlargement of the appellate jurisdic tion of the Federal Court, and the conferring thereon of supplemental powers. List II. Public order (but not including the use of His Majesty 's naval, military or air forces in aid of the civil power); the administration of justice; constitu tion and organization of all courts, except the Federal Court, and fees taken therein; preventive detention for reasons connected with the maintenance of public order; persons subject to such detention. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts. List III.4. Civil Procedure, including the Law of Limitation and all matters included in the Code of Civil Procedure at the date of the passing of this Act; the recovery in a Governor 's Province or a Chief 87 Commissioner 's Province of claims in respect of taxes and other public demands, including arrears of land revenue and sums recoverable as such, arising outside that Province. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list. Mr. Seervat contends that section 3 of the impugned Act is void because it directly trenches on the exclusive legis lative powers of the Centre conferred on it by List I of the Seventh Schedule inasmuch as 'it confers jurisdiction on the new court in respect to all cases of a civil nature. The expression "all cases of a civil nature" presumably brings within the ambit of the Act suits in respect to subjects contained in List I. He urged that the three simi lar entries in the three is, name]y, entry 53 in List I, entry 2 in List II and entry 15 in List III indicated that in respect to the subjects covered by the three fields of legislation demarcated for the two Legislatures the Parlia ment empowered each of them respectively to make laws in respect to jurisdiction and power of courts and that in view of the provisions of section 100 of the Constitution Act the Provincial Legislature had no power to make any law confer ring jurisdiction on courts in respect to subjects covered by List I. In other words, the Federal Legislature alone could legislate on the jurisdiction and powers of a court in regard to the subjects in List I. Similarly in respect of subjects contained in the Provincial List, jurisdiction and power of courts could only be determined by a law enacted by the Provincial Legislature and that in respect of items contained in List III, both Legislatures could make laws on the subject of jurisdiction and powers of courts. It was said that the exceptions and the proviso to section 3 of the City Civil Court Act in dear terms disclosed that jurisdic tion in respect to the subjects on which the Provincial Legislature had no competence to legislate was also con ferred on the new court. Section '12 of the Act by which the High Court was deprived of all jurisdiction on matters that fell 88 within the jurisdiction of the City Civil Court was assailed on similar grounds. In regard to the legislative power conferred under entry I of List 11 on the Provincial Legis lature it was contended that this wide power stood limited by the three entries above mentioned and that under it legislation could only be made to the extent of establishing and organizing courts but no legislation under it was per missible in respect to the powers of those courts. The learned Attorney General, on the other hand, con tends that the Act is intra vires the Bombay Legislature under entry 1 of List II and under entries 4 ' and 15 of List III, it having received the assent of the Governor General. It was urged that the Provincial Legislature had exclusive legislative power on the subject of administration of jus tice and constitution and organization of all courts and that this power necessarily included the power to make a law in respect to the jurisdiction of courts established and constituted by it and that the impugned legislation in pith and substance being on the subject of administration of justice, it could not be held ultra vires even if it trenched on the field of legislation of the Federal Legisla ture. In regard to entry 53 of List I, entry 2 of List II and entry 15 of List II of the Schedule, it was said that these conferred legislative power on the respective Legisla tures to confer special jurisdiction on established courts in respect of particular subjects only if it was considered necessary to do so. In other words the argument was that the Provincial Government could create a court of general jurisdiction legislating under entry 1 of List II and that it was then open to both the Central and the Provincial Legislatures to confer special jurisdiction on courts in respect to particular matters that were covered by the respective lists. In my opinion, the contention of the learned Attorney General that the Act is intra vires the Bombay Legislature under entry 1 of List If is sound and I am in respectful agreement with the view expressed by the Chief Justice of Bombay on this point in Mulchand Kundanmal Jagtiani vs Raman Hiralal 89 Shah (1). The learned Chief Justice when dealing with this point said as follows: "If, therefore, the Act deals with administration of justice and constitutes a court for that purpose and confers ordi nary civil jurisdiction upon it, in my opinion, the legis lation clearly falls within the legislative competence of the Provincial Legislature and is covered by item 1 of List 11 of Schedule 7. That item expressly confers upon the Provincial Legislature the power to legislate with regard to the administration of justice and the constitution and organization of all courts except the Federal Court. It is difficult to imagine how a court can be constituted without any jurisdiction, and if Parliament has made the adminis tration of justice exclusively upon the Provincial Legisla ture the power to constitute and organize all courts, it must follow, that the power is given to the Provincial Legislature to confer the ordinary civil jurisdiction upon the courts to carry on with their work. Item 2 of List II deals with jurisdiction and power of all courts except the Federal Court with respect to any of the matters in this list, and Mr. Mistree 's argument is that item 1 is limited and conditioned by item 2 and what he contends is that the only power that the Provincial Legislature has is undoubted ly to create courts, but to confer upon them only such jurisdiction as relates to items comprised in List II. I am unable to accept that contention or that interpretation of List 11 in Schedule 7. Each item in List 11 is an independ ent item, supplementary of each other, and not limited by each other in any way. Item 1 having given the general power to the Provincial Legislature with regard to all matters of administration of justice and with regard to the constitution and organization of all courts, further gives the power to the Legislature to confer special juris diction, if needs be, and special power, if needs be, to these courts with regard to any of the items mentioned in List 11. It is impossible to read item 2 as curtailing (1) 12 90 and restricting the very wide power with regard to adminis tration of justice given to the Provincial "Legislature under item 1. Similarly in List I the Federal Legislature has been given the power under item 53 to confer jurisdic tion and power upon any court with regard to matters falling under any of the items in that list, and, therefore, it would be competent to the Federal Legislature to confer any special jurisdiction or power which it thought proper upon any court with regard to suits on promissory notes or mat ters arising under the Negotiable Instruments Act. ". It seems to me that the legislative power conferred on the Provincial legislature by item 1 of List II has been con ferred by use Of language which is of the widest amplitude (administration of justice and constitution and organization of all courts). It was not denied that the phrase employed would include within its ambit legislative power in respect to jurisdiction and power of courts established for the purpose of administration of justice. Moreover, the words appear to be sufficient to confer upon the Provincial Legis lature the right to regulate and provide for the whole machinery connected with the administration of justice in the PrOvince. Legislation on the subject administra tion of justice and constitution of courts of justice would be ineffective and incomplete unless and until the courts established under it were clothed with the jurisdiction and power to hear and decide causes. It is difficult to visua lise a statute dealing with administration of justice and the subject of constitution and organization of courts without a definition of the jurisdiction and powers of those courts, as without such definition such a statute would be like a body without a soul. To enact it would be an idle formality. By its own force it would not have power to clothe a court with any power or jurisdiction whatsoever. It would have to look to an outside authority and to another statute to become effective. Such an enactment is, so far as I know, unknown to legislative practice and history. The Parliament by making administration of justice a provin cial subject 91 could not be considered to have conferred power of legisla tion on the Provincial Legislature of an ineffective and useless nature. Following the line of argument taken by Mr. Mistree before the High Court of Bombay, Mr. Seervai stren uously contended that the only legislative power conferred on the Provincial Legislature by entry 1 of List II was in respect to the establishment of a court and its constitution and that no legislative power was given to it to make a law in respect to jurisdiction and power of the court estab lished by it. The argument, logically analysed, comes to this: that a statute will contain the name of the court, the number of its judges, the method of their appointment, the salaries to be drawn by them and it will then stop short at that stage and will not include any provision defining the powers of the tribunal or its other jurisdiction and that the court so constituted could acquire jurisdiction only when a law was made relating to its jurisdiction and powers by the Federal Legislature under entry 53 of List I, by the Provincial Legislature under entry 2 of List II and by either Legisla ture under entry 15 of List III. The learned counsel con tended that this peculiar result was the natural consequence of a federal constitution with divided powers, and that entries 53, 2 and 15 of the three respective lists limit and curtail the wide power conferred on the Provincial Legisla ture by item 1 of List II. It is difficult to accede to this contention because it would amount to holding that though the Provincial Legislature under item 2 of List II has been given the widest power of legislation in the matter of administration of justice and constitution and Organiza tion of courts and though that field has been demarcated for it as its exclusive field of legislation, yet all that it can do, acting within that field, is merely to establish a court without any competency to function and that in can only become an effective instrument for administering jus tice by laws enacted elsewere or under powers conferred under other items of the different lists. I am unable to read items 53, 2 and 15 of the three respective 92 lists as imposing limitations on legislative power con ferred on the Province by item 1 of List II. Such a con struction of the Act would not only do violence to the plain language of item 1 of List II but would be contrary to its scheme under which administration of justice was made a provincial subject. It is significant that no other Legis lature has been given the power to bring into existence a court. A court without powers and jurisdiction would be an anomaly as it would not be able to discharge the func tion of administration of justice and the statute estab lishing such a court could not be said to be a law on the subject of administration of justice. It is a fundamental principle of the construction of a constitution that every thing necessary for the exercise of powers is included in the grant of power. Everything necessary for the effective execution of power of legislation must therefore be taken to be conferred by the constitution with that power. It may be observed that in exercise of legislative power under item 1 of List 11 a provincial Legislature can alter the constitu tion of the existing courts, can abolish them, reorganize them and can establish new courts. If the construction contended for by Mr. Seervai is accepted, then the existing courts re established or re organised by the provincial Legislature would not be able to function till legislation under item 53 of List I, under item 2 of List II or item 15 of List III also simultaneously was made. I do not think that such a result was in the contemplation of parliament. Mr. Seervai with some force argued that it full effect is given to the comprehensive phraseology employed in item 1 of List II, then it would result in making the provisions of item 2 of List II, of item 53 of List I and item 15 of List III nugatory. in other words, if the provincial Legislature could bring into existence a court of general jurisdiction which could hear all causes on subjects concerning which legislative power was divided in the three lists, then the conferment of legislative power on the Federal Legislature under item 53 of List 1, on the provincial Legislature under item 2 in List II and on both the Legislatures under 93 item 15 of List III was purposeless. In my opinion, this argument is not a valid one and the premises on which it is based are not sound. The three lists of subjects contained in Schedule 7 have not been drawn up with any scientific precision and the various items in them overlap. The point kept in view in drawing up the lists was to see that all possible power of legislation was included ,within their ambit. By making administration of justice a provincial subject and by conferring on the Provincial Legislature power to legislate on this subject and also on the subject of constitution and organization of courts, Parliament conferred on that Legislature an effective power which included within its ambit the law making power on the sub ject of jurisdiction of courts. The Provincial Legislature could therefore bring into existence a court with general jurisdiction to administer justice on all matters coming before it within certain territorial and pecuniary limits, subject of course to the condition that such general juris diction may be expressly or impliedly taken away by the provisions of other laws. The Parliament having divided the field of legislation between the two Legislatures, naturally thought that as a corollary or a necessary consequence of this division of legislative power it was necessary to provide by way of a complementary provision a legislative power specifically on the two Legislatures in respect to the jurisdiction and powers of courts on subjects which were within their exclusive legislative field. If a Legislature could exclusively legislate in respect to particular sub jects, as a necessary consequence it should also have the power to legislate in respect to jurisdiction and power of the court dealing with that subject. It is this power that has been conferred by entries 53, 2 and 15 above mentioned on the two Legislatures. Entries 42 and 99 of List I, entries 37 and 42 of List II and entries 25 and 36 of List III are of a similar consequential character. The respective Legislatures are therefore competent to confer special powers on courts and can create special jurisdic tions acting under those powers in respect to 94 their divided fields of legislation. Instances of confer ment of powers and jurisdiction on courts to hear cases on particular subjects were well known to Parliament. Such powers had been conferred on different courts in respect of testamentary and intestate jurisdiction, admiralty jurisdic tion, under the Indian Companies Act, under the Succession Act, Guardians and Wards Act and under the various. Rent Acts and Acts dealing with relief of indebtedness. In view of the division of powers in respect to different subjects, power was given under item 53 of List I, item 2 of last II and item 15 of List III to the different Legislatures when dealing with those subjects also to legislate on the ques tion of jurisdiction and powers of the courts. This confer ment of legislative power to create special jurisdiction in respect to particular subjects does not in any way curtail the legislative power conferred on the Provincial Legisla ture under item 1 of List II. As soon as special legisla tive power under item 53 of List I, under item 2 of List II and item 15 of List III is exercised, the causes that arise in respect to those subjects would then only be heard in jurisdictions created by those statutes and not in the courts of general jurisdiction entrusted with the normal administration of justice. In the language of section 9 of the Code of Civil Procedure, jurisdiction of the general courts will then become barred by those statutes. I am therefore of the opinion that under item 1 of List II the Provincial Legislature has complete competence not only to establish courts for the administration of justice but to confer on them jurisdiction to hear all causes of a civil nature, and that this power is not curtailed or limit ed by power of legislation conferred on the two Legislatures under items 53, 2 and 15 of the three lists. On the other hand, these three items confer on the respective Legisla tures power to legislate when dealing with particular sub jects within their exclusive legislative field to make laws in respect of jurisdiction and powers of courts that will be competent to hear causes relating to those subjects; in other words, this is a power of creating special 95 jurisdictions only. This interpretation of the entries in the lists is not only in accordance with the scheme of the statute but it harmonizes the different entries in the lists and does not make any of them nugatory and in effective. The interpretation contended for by Mr. Seervai would reduce the power of the Provincial Legislature under item 1 to almost nothingness. The crux of the case is whether item 1 of List 11 should be given a limited construction which makes it nugatory or whether a limited construction is to be placed on items 53, 2 and 15 of the three lists. I have no hesitation in holding that both in the light of principles of construction of statutes and principles of legislation, the course to adopt is the one that I have indicated above. Finally, it was contended that section 12 of the Act in any case was a void piece of legislation as it deprived the High Court of its jurisdiction even in respect to subjects contained in List I of the Seventh Schedule. In view of the construction that I have placed on item 1 of List II this argument has no force. If the Legislature has power to bring into existence a court and confer jurisdiction and power on it, a fortiori it has power to take away the jurisdic tion and power that already exist in other courts. More over, the Bombay City Civil Court Act in section a has excepted from the jurisdiction of the new court all cases which the High Court can hear under any special law. Spe cial law has been defined as a law applicable to a particu lar subject. If under List 1 of the Seventh Schedule the Federal Legislature by any law determines that a case has to be heard by the High Court, section 5 will not affect the jurisdiction of that court in any manner whatsoever. The result, therefore, is that the Bombay City Civil Court Act is a statute which is wholly within the legisla tive field of the Province under item 1 of List II and its validity cannot be affected even if it incidentally trenches on other fields of legislation. It is not a statute dealing with any of the subjects mentioned in List I and therefore it cannot be said that the 96 Provincial Legislature has in any way usurped the power demarcated for the Centre. In view of this conclusion I think it unnecessary to pronounce any opinion on the other points raised by the learned Attorney General. For the reasons given above I allow the appeal preferred by the Government of Bombay and set aside the decision of the High Court holding that section 4 of the City Civil Court Act (XL of 1948) is void. In the circumstances of the case I leave the parties t9 bear their own costs of the appeal. MUKHERJEA J. In my opinion this appeal should be allowed and I concur substantially in the line of reasoning adopted by my learned brother Mahajan J. in his judgment. Having regard to the constitutional importance of the questions raised in this case, I would desire to add some observations of mine own. There are really two questions which require considera tion in this appeal. The first is whether section 4 of the Bombay City Civil Court Act, 1948, is void and inoperative by reason of its amounting to a delegation of legisltive powers by the Provincial Legislature to the Provincial Government of Bombay. The Bombay High Court has answered this question in the affirmative and it is entirely upon this ground that the judgment appealed against is based. The propriety of this decision has been challenged by the learned Attorney General who appeared on behalf of the State of Bombay in support of this appeal. On the other hand, Mr. Seervai, appearing on behalf of the respondents, has not only attempted to repel the contention ad vanced by the learned Attorney General, but has sought to support the judgment appealed against on another and a more comprehensive ground which, if accepted, would make the entire Bombay City Civil Court Act a void piece of legisla tion, as being an encroachment by the Provincial Legislature upon the field of legislation reserved for the Centre under List I of Schedule 7 to the Government of India Act, 1935. 97 As regards the first point, I agree that the contention of the appellant is sound and must prevail. I have no hesi tation in holding that the Legislature in empowering the Provincial Government to invest the City Court, by notifica tion, with jurisdiction of such value not exceeding Rs. 25,000 as may be specified in the Notification, has not delegated its legislative authority to the Provincial Gov ernment. The provision relates only to the enforcement of the policy which the Legislature itself has laid down. The law was full and complete when it left the legislative chamber permitting the Provincial Government to increase the pecuniary jurisdiction of the City Court up to a certain amount which was specified in the Statute itself. What the Provincial Government is to do is not to make any law; it has to execute the will of the Legislature by determining the time at which and the extent to which, within the limits fixed by the Legislature, the jurisdiction of the court should be extended. This is a species of conditional legis lation which comes directly within the principle enunciated by the Judicial Committee in The Queen vs Burah(1), where the taking effect of a particular provision of law is made to depend upon determination of certain facts and conditions by an outside authority. The learned Judges of the Bombay High Court in coming to their decision on the point seem to have been influenced to some extent by the pronouncement of the Federal Court in Jatindranath Gupta vs Province of Bihar(2), and the learned. Counsel for the respondents naturally placed reliance upon it. I was myself a party to the majority decision in that case and expressed my views in a separate judgment. I do not think that there is anything in my judgment which lends support to the contention which the respondents have put forward. I stated expressly in course of, my Judgment on the authority of the well known American decision in Locke 's appeal(3) that a legislature may not (1) 5 I.A. 178. (3) 13 American Reports 716. 13 98 delegate its powers to make law but "it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend "; and that the inhibition against delegation does not extend to legislation which is complete in itself, though its operation is made to depend upon contingencies the ascertainment of which is left to an external body. The subject matter of dispute in the Bihar case was the validity of a proviso engrafted upon section 1, subsection (3) of the Bihar Maintenance of Public Order Act. The sub section laid down that the Act would remain in force for a period of one year from the date of its commencement. The proviso then added "that the Provincial Government may, by notification on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification." Mr. Seervai would have been probably right in invoking the decision in that case as an authority in his favour if the proviso simply empowered the Provincial Government, upon compliance with the condi tions prescribed therein, to extend the duration of the Act for a further period of one year, the maximum period being fixed by the Legislature itself. The proviso, however, went further and authorised the Provincial Government to decide at the end of the year not merely whether the Act should be continued for another year but whether the Act itself was to be modified in any way or not. It was conceded by the learned Counsel appearing for the Province of Bihar that to authorise another body to modify a statute amounts to in vesting that body with legislative powers. What the learned Counsel contended for, was that the power of modification was severable from the power of extending the duration of the statute and the invalidity of one part of the proviso should not affect its other part. To this contention my answer was that the two provisions were inter related in such a manner in the statute that one could not be severed from the other. 99 Obvious]y, the facts of this case are quite different, and all that I need say with regard to my pronouncement in Jatindranath Gupta 's case is that the principle upon which that case was decided is not applicable and cannot be at tracted, to the present case. I may state here that a question in the broad form as to whether a Provincial Legislature exercising its legislative powers within the limits prescribed by the Imperial Parlia ment in the Government of India Act, 1935, could delegate its legislative functions in any manner to an outside au thority as it thought proper, was neither raised nor decided in Jatindranath Gupta 's case. The learned Attorney General has not very properly invited any final decision on that point in the present case and I would refrain from express ing any opinion upon it. ' The second point appears to be of some complexity and it was decided by the Bombay High Court adversely to the re spondents on the basis of an earlier pronouncement of the same Court in Mulchand vs Raman(1). The arguments of Mr. Seervai are really directed at assailing the correctness of this earlier decision which the learned Judges held to be binding on them in the present case. The contention of Mr. Seervai, in substance, is, that the Bombay City Civil Court Act, which is a piece of provincial legislation, is ultra vires the legislature inasmuch as it purports to endow the City Court, which it brings into existence, with jurisdic tion to receive, try and dispose of "all suits and other proceedings of a civil nature" with certain exceptions that are specified in the different sub sections of section 8. What is said is that the expression "all suits of a civil nature" is wide enough to include suits in respect to mat ters specified in List I of the Seventh Schedule of the Constitution Act with regard to which the Central Legisla ture alone is competent to confer jurisdiction on courts under entry 53 of the said List. It is argued that so far as the Provincial Legislature is concerned, it may empower all courts (except the Federal Court) with jurisdiction in respect to any of the matters in the Provincial List. (1) 100 and it may also be capable of exercising like powers in regard to subjects enumerated in the Concurrent List as provided for in article 15 of List III, subject to the conditions laid down in section 107 of the Act. But as the scope of section 3 of the Bombay City Civil Court Act is not limited to matters in Lists II and III only and its language can embrace subjects coming under List I as well, and fur thermore as the different subjects both within and outside the provincial and concurrent fields dealt with by section 3 are inextricably, intertwined and not capable of severance or demarcation, the whole Act must be held to be ultra vires. In answer to this, it has been urged by the learned Attorney General that amongst the subjects included in Item 1 of the Provincial List are "the administration of justice and constitution and organization of all courts except the Federal Court", and these expressions obviously include within their ambit the conferring of general jurisdiction to hear and decide cases upon courts which are set up by the Provincial Legislature, and without which they cannot func tion as courts at all. 'It is said that Item 2 of the Provincial List which mentions "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List" does not in any way limit or curtail the ordinary connotation of the ,expressions "admin istration of justice and constitution of courts" as used in Item I of the said List referred to above. It cannot be disputed that the words "administration of justice" occuring in Item 1 of the Provincial List, unless they are limited in any way, are of sufficient amplitude to confer upon the Provincial Legislature the right to regulate and provide for the whole machinery connected with the administration of justice. Section 92, of the North America Act deals with the exclusive powers of the Provincial Legis latures and clause (14) of the section speaks of "the admin istration of justice in the Provinces" as including "the constitution, maintenance and organization of Provincial Courts. " In interpreting this provision of the constitution it has been held in North America that the words 101 "constitution, maintenance and organization of courts" plainly include the power to define the jurisdiction of such courts territorially as well as in other respects(2). Mr. Seervai argues that this might be the normal meaning of the words if they stood alone. But if Items 1 and 2 of the Provincial List are read together, the conclusion cannot be avoided that the expressions "administration of justice and constitution of courts" do not include "jurisdiction and powers of courts" which are separately dealt with under Item 2. To find out, therefore, the extent of powers of the Provincial Legislature in respect conferring jurisdic tion upon courts, the relevant item to be looked to is not Item 1 but Item 2 of the Provincial List. The contention in this form seems to me to be plainly unacceptable. I agree with Mr. Setalvad that the different topics in the same Legislative List should not be read as exclusive of one another. As was observed by Sir Maurice Gwyer in The United Provinces vs Atiqa Begum(1), "the sub jects dealt with in the three Legislative Lists are not always set out with scientific definition. It would be practically impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every other item in that List, and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by a word of broad and general import . I think that none of the items in the List is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. " As there can be no question of conflict between two items in the same List, there is no warrant for restricting the natural meaning of one for the simple reason that the same subject might in some aspect come within the purview of the other. The difficulty, however, arises when we come to entry 53 of List I. Under this entry, it is the Central (1) Re County Courts of British, Columbia 21 S.C.R. 446. (2) at p. 134. 102 Legislature that has been given the power of legislating in regard to jurisdiction and powers of all courts except the Federal Court in respect to any of the matters in List L The difficulty that one is confronted with, is that if Item 1 of the Provincial List is taken to empower the Provincial Legislature to invest a court with jurisdiction with respect to all subjects no matter in whichever List it might occur, a clear conflict is bound to arise between Item 1 of the Provincial List and Item 53 of the Central List; and a Provincial legislation trespassing upon the exclusive field of the Centre would be void and inoperative under section 100 of the Constitution Act. This being the posi tion, a way would have to be found out to avoid the conflict. As the Privy Council observed in the case of the Citizens Insurance Company of Canada vs Parsons(2) "it could not have been the intention that a conflict should exist and in order to prevent such a result the two sections must be read together and the language of the one interpreted and where necessary modified by the other." Mr. Seervai suggests that the proper way of reconciling this apparent conflict would be to read the words "adminis tration of justice and constitution of courts" occurring in entry 1 of the Provincial List as exclusive of any matter relating to jurisdiction of courts. The Provincial Legisla ture can only set up or constitute courts but their juris diction or power of deciding cases must be derived from the Central or the Provincial Legislature or, from either of them in accordance with the subjects to which such juris diction relates. The Provincial Legislature can endow the court with jurisdiction in respect to any matter in List II and the Central Legislature can do the same with regard to subjects specified in List I. So far as matters in the Concurrent List are concerned, either of the Legislatures can make provisions in respect of them subject to the condi tions laid down in section 107 the Constitution Act. (2).A.C. ,96 at p. 109. 103 This argument, though apparently plausible, cannot, in my opinion, be accepted as sound. It is to be noted that the right to set up courts and to provide for the whole machinery of administration of justice has been given exclu sively to the Provincial Legislature. Under section 101 of the North America Act, the Parliament of Canada has a re serve of power to create additional courts for better admin istration of the laws of Canada but the Indian Constitution Act of 1935 does not give any such power to the Central Legislature. Courts are to be established by the Provincial Legislature alone. The word 'court ' certainly means a place where justice is judicially administered, The appointment of Judges and officers or the mere setting apart of a place where the Judges are to meet, are not sufficient to consti tute a court. A court cannot administer justice unless it is vested with jurisdiction to decide cases and "the consti tution of a court necessarily includes its jurisdiction. "(1) If Mr. Seervai 's contention is accepted, the result will be that when a Provincial Legislature estab lishes a civil court, it can only be invested with jurisdic tion to decide cases in respect to matters coming within the Provincial List. Such court can have no power to decide cases relating to any matter which is enumerated in List I so long as the appropriate Legislature does not confer upon it the requisite authority. Thus an ordinary Provincial Court established to decide civil suits would be entitled to entertain all money claims but not a claim on a promissory note; nor could it entertain a suit for recovery of corpora tion tax, for Negotiable Instruments and corporation tax are subjects of the Central List. This certainly was not the scheme of the Constitution Act. In my opinion, the proper way to avoid a conflict would be to read entry 1 of the Provincial List, which contains the only provision relating to constitution of courts and administration of justice, along with the group of three entries, viz., entry 53 of List I, entry 2 of List II and entry 15 of List III with which it is supposed to be in conflict, (1) Vide Clement 's Canadian Consitution, 3rd Edn., p. 527, 104 and to interpret the language of one by that of the other. Entry 1 of List II uses the expressions "administration of justice and constitution of all courts" in a perfectly general manner. No particular subject is specified to which the administration of justice might relate or for which a court might be constituted. It can, therefore, be legitimately interpreted to refer to a general jurisdiction to decide cases not limited to any particular subject. The other three items on the other hand relate to particular matters appearing in the three Lists and what they contem plate is the vesting of jurisdiction in courts with regard to such specific items only. In one case the jurisdiction is 'general ' as is implied in the expression "administration of justice", while in the other three the jurisdiction is 'particular ' as limited to particular matters and hence exclusive. I agree with my learned brother Patanjali Sastri J. that one approved way of determining the scope of a legislative topic is to have regard to what has been ordi narily treated as embraced within that topic in the legisla tive practice of the country(2); and if that test is ap plied, the interpretation suggested above would appear to be perfectly legitimate. The distinction between general and particular jurisdiction has always been recognised in the legislative practice of this country prior to the passing of the Constitution Act of 1935 and also after that. There have been always in this country civil courts of certain classes and categories graded in a certain manner according to their pecuniary jurisdiction and empowered to entertain and decide all suits of a civil nature within particular localities. Particular jurisdiction again have been conferred on some one or the other of these courts to try cases relating to certain specified matters. Thus there have been special jurisdictions created for insolvency, probate or guardianship proceedings, for deciding disputes relating to compulsory acquisition of land and for dealing with cases arising under the Rent Acts or the different legislations passed in recent years (2) vide Croft vs Dunphy. 105 for scaling down exorbitant rates of interest or giving relief to rural debtors. Similar instances may be cited with regard to conferring of special jurisdiction in criminal cases. There will be no difficulty in interpreting in a proper manner the different entries in the Legislative Lists re ferred to above if this distinction between general and special jurisdiction is kept in view. The entire scheme of the Constitution Act of 1935 is to vest the power of estab lishing courts upon the Provincial Legislature. The Provin cial Legislature can endow the courts which it sets up with general jurisdiction to decide all cases which, according to the law of the land, are triable in a court of law, and all these powers can be exercised under entry I of List II. If the Central Legislature or the Provincial Legislature chooses to confer special jurisdiction on certain courts in respect to matters enumerated in their appropriate legisla tive lists, they can exercise such powers under the three entries specified above. But the exercise of any such powers by the Central Government would not m any way conflict with the powers exercisable by the Provincial Legislature under entry 1 of List II. The expression 'general ' must always be understood as being opposed to what is 'special ' or exclu sive. If the Central Legislature vests any particular juris diction upon a court in respect to a Central matter, that matter would cease to be a general matter and consequently the court having general jurisdiction would no longer deal with that, but the general jurisdiction of such courts would not be affected thereby. The contents of general jurisdic tion are always indeterminate and are not susceptible of any specific enumeration. In this view, I do not think that it would be at all necessary to invoke 'the pith and substance ' doctrine in avoiding the possibility of incidental encroach ment by the Provincial Legislature upon Central subjects in regard to conferring jurisdiction upon courts. If the expression 'jurisdiction ' in entry 53 of List I means and refers to special jurisdiction only, there cannot be even an incidental encroachment upon such special jurisdiction 14 106 by reason of the conferring of general jurisdiction upon courts by the Provincial Legislature under entry 1 of List II. As I have said already what is 'special ' or made so, will automatically cease to be in the category of what is 'general ' and no question of a conflict would at all arise. It may be pointed out in this connection that in the Canadian Constitution also, the general scheme is to carry on administration of justice throughout Canada through the medium of provincial courts. Subject to the residuary power reserved to the Dominion Parliament under section 101 of the North America Act, the Constitution has assigned to the provinces the exclusive power in relation to administration of justice including the maintenance, constitution and organization of courts. There is no limitation in any provincial court along the line of division that exists between matters within the legislative competence of the Dominion Parliament and of the Provincial Legislative Assemblies (1). There is indeed no such thing as Entry 53 in List I of the Indian Act in the Canadian Constitution, but there are judicial pronouncements to the effect that the Dominion Parliament can impose jurisdiction on provincial courts over Dominion subjects (2). It may be that the British Parliament in framing the legislative topics in the Government of India Act of 1935 in regard to administration of justice and jurisdiction of courts wanted to adopt the Canadian model with such modifications as they considered necessary. It is, however, immaterial to speculate on these matters. For the reasons given above, I am of the opinion that the decision of the Bombay High Court in Mulchand vs Raman(3) is correct, and the contention of Mr. Seervai should fail. In the result, the appeal is allowed and the judgment of the High Court is set aside. DAS J: I agree that this appeal should be allowed. In view of the importance of the questions raised in (1) Vide Clement 's Canadian Constitution p. 526. (2) Vide Lefroy 's Canada 's Federal system p. 541, (3) 107 this appeal, I consider it right to state 'my reasons for coming to that conclusion. The salient facts, as to which there is no dispute, are as follows: On May 10, 1948, the Provincial Legislature of Bombay passed Act No. XL of 1948, called the Bombay City Civil Court Act, 1948. It was passed with a view "to estab lish an additional Civil Court for Greater Bombay. " The provisions of that Act which will be relevant for the pur poses of the present appeal may now be set out: "1. (2) It shall come into force on such date as the Provincial Government may, by notification in the Official Gazette, appoint in this behalf. The Provincial Government may, by notification in the Official Gazette, establish for the Greater Bombay a Court, to be called the Bombay City Civil Court. Notwith standing anything contained in any law, such Court shall have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognizable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the Provincial Government may, from time to time, after consultation with the High Court, by a like notification extend the jurisdiction of the City Court to any suits or proceedings of the nature specified in Clauses (a) and (b). Subject to the exceptions specified in section 3, the Provincial Government may, by notification in the Offi cial Gazette, invest the City Court with jurisdiction to receive, try and dispose of all suits and 108 other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification. Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognizable by the City Court: Provided that the High Court may, for any special rea son, and at any stage, remove for trial by itself any suit or proceeding from the City Court. " The Act received the assent of the Governor General about the same time. It came into force on August 16, 1948, by a notification issued by the Provincial Government and published in the Official Gazette. Simultaneously with the passing of the above Act the Bombay Legislature also enacted Act (XLI of 1948) called the Bombay High Court Letters Patent Amendment Act, 1948. By section3 of that Act Clause 12 of the Letters Patent was amended by adding the following words: "Except that the said High Court shall not have such Original jurisdiction in cases falling within the jurisdic tion of the Small Cause Court at Bombay or the Bombay City Civil Court. " Shortly after the passing of the above Acts, the validi ty of the Bombay City Civil Court Act (XL of 1948) was challenged in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), a suit on promissory notes filed in the Original side of the High Court. A Division Bench of the Bombay High Court (Chagla C.J. and Bhagwati J.), on September 2, 1948, held that the Act was well within the legislative competence of the Provincial Legislature and was not ultra vires. Leave was given to the plaintiff in that suit under section 205 of the Government of India Act, 1935, to appeal to the Federal Court but no such appeal appears to have been filed. On January 20, 1950, the Provincial Government of Bombay issued the following notification No. 2346/5 in the Official Gazette: (1) A,I.R. 1949 Bom. 197; 109 "In exercise of the powers conferred by section 4 of the Bombay City Civil Court Act, 1948 (Bombay, Act XL of 1948), the Government of Bombay is pleased to invest, with effect from and on the date of this notification, the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding twen ty five thousand rupees in value, and arising within the Greater Bombay subject, however, to the exceptions specified in section a of the said Act. " On February 6, 1950, the first respondent Narothamdas Jethabhai presented a plaint before the Prothonotary of the Bombay High Court for recovery of Rs. 11,704 5 4 with further interest due by the second respondent Aloysious Pinto Phillips upon three several promissory notes. In paragraph 4 of this plaint it was expressly pleaded that the High Court had jurisdiction to receive, try and dispose of that suit because (1)the Bombay City Civil Court Act, 1048, was ultra vires and (2) at least section 4 of that Act and the notification issued thereunder were ultra vires. Having some doubts as to whether in view of the notification issued 1 by the Provincial Government under section 4 of the Act the plaint could be admitted in the High Court, the Prothon otary placed the matter under the rules of the Court before Bhagwati J. who was then the Judge in Chambers. By his judgment delivered on February 23, 1950, Bhagwati J. held that section 4 of the Act and the notification issued there under were ultra vires and void and that the High Court, therefore, had jurisdiction to entertain the suit. The plaint was accordingly received and admitted. The first respondent thereupon took out a summons under the rules of the Court for leave to sign judgment against the second respondent. The State of Bombay was, on its own application, added as a party to the suit. The matter was put up before a Division Bench (Chagla C.J. and Tendolkar J.) for trial of the following issues: 110 "(1) Whether Act XL of 1948 is ultra vires of the Legis lature of the State of Bombay. (2) Whether,Section 4 of Act XL of 1948 is in any event ultra rites of the Legislature of the State of Bombay. (3) Whether the Government of Bombay Notification 'No. 2346/5 dated 20th January, i1950, is ultra vires, void and inoperative in law. (4) Whether this Court has jurisdiction to try the suit. The larger point involved in issue No. 1 having been concluded by the earlier decision of the Division Bench in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1) that issue was answered in the negative without any argument but leave was reserved to the first respondent to contest the correctness of that earlier decision in this Court. The Division Bench in agreement with Bhagwati J. held that by section 4 of the Act the Provincial Legislature did not itself legislate but delegated the power of legislation to the Provincial Government which it had no power to do and, therefore, section 4 and along with it the notification No. 2346/5 issued thereunder were ultra vires, void and inoperative. Accordingly they answered issues Nos. (2), (3) and (4)in the affirmative and sent the summons for judgment back to the learned Judge taking miscellaneous matters to dispose it of on merits. The State of Bombay has now come up before us in appeal from this decision of the High Court. The Advocate General of Madras has intervened in support of this appeal and for maintaining the validity of the Madras City Civil Court Act (VII of 1892) section 3A of which inserted in 1935 by way of amendment is in identical terms with section 4 of the Bombay Act except that the amount of the value was fixed at Rs. 10,000 in section 3A of the Madras Act instead of Rs. 25,000 fixed in section 4 of the Bombay Act. The distinction between conditional legislation and delegation of legislative power has been well known (1) 51 Bom L R.86 111 ever since the decision of the Privy Council in R.v. Burah(1) and the other Privy Council cases cited in the judgments of the High Court. It is firmly established that conditional legislation is not only permissible but is indeed in many cases convenient and necessary. The difficul ty which confronts the Courts is in ascertaining whether a particular provision of a Statute constitutes a conditional legislation as explained in the decisions of the Privy Council. In the present case the High Court, on a construc tion of section 4 of the Bombay City Civil Court Act, came to the conclusion that it was not an instance of conditional legislation at all. The use of the word "invest" in section 4 was considered by the High Court to be very significant and the difference between the language in section 3 and that in section 4 appeared to them to be very marked and striking. According to the High Court while by section a the Legislature itself set up a Court with a particular pecuniary jurisdiction, under section 4 the Legislature itself did not invest the Court with any higher jurisdiction but left it to the Provincial Government to exercise the function which the Government of India Act laid down should be exercised by the Provincial Legislature. The learned Chief Justice expressed the view that the Legislature never applied its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than that of Rs. 10,000, and that section 4 was not a sec tion which merely directed the Provincial Government to carry out the policy laid down by the Legislature, but that it was a section which conferred upon the Provincial Govern ment the power to confer jurisdiction upon the Court. Then, after referring to R.V. Baruha(1) and several other cases and purporting to apply the tests laid down in the decisions to the Act the learned Chief Justice concluded that the Legislature in the exercise of its legislative power had set up a Civil Court with a limited jurisdiction under section a of the Act, that it had not set up a Court with a jurisdiction higher than ten thousand rupees and (1) L.R 5 I. A. 178. 112 that, having set up a Court of, limited jurisdiction, it had given to the Provincial Government under section 4 the power to confer upon that Court a higher jurisdiction up to twenty five thousand rupees. This power, which was con ferred upon the Provincial Government was according to the Chief Justice, a power which could only have been exercised by the Legislature itself. I am unable to accept the afore mentioned construction of sections 3 and 4 of the Act. As I have already said, the High Court rounded their conclusions principally on the observations of their Lord ships of the Privy Council in R.v. Burah(1) and certain other Privy Council cases. It will be useful, therefore, to analyse the Privy Council decision in R.v. Burah(1). In 1869 the Indian Legislature passed an Act (No. XXII of 1869) purporting, first, to remove a district called Garo Hills from the jurisdiction of the Courts of civil and criminal jurisdiction and from the law prescribed for such Courts by Regulations and Acts and, secondly, to vest the administra tion of civil and criminal justice, within the same territo ry, in such officers as the Lieutenant Governor of Bengal might, for the purpose of tribunals of first instance, or of reference and appeal, from time to time appoint. The Act was to come into operation on such day as the Lieutenant Governor of Bengal should, by notification in the Calcutta Gazette, direct. The 8th section authorised the Lieuten ant Governor of Bengal by notification in the Calcutta Gazette to extend to the said territory, any law or any portion of any law then in force in other territories sub ject to his government or which may thereafter be enacted by the Council of the Governor General or of himself. The 9th section of that Act provided: "The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend mutatis mutan dis all or any of the provisions contained in the other sections of this Act to the Jaintia Hills, the Naga Hills, and to such portion of the Khasi Hills, as for the time being forms part of British India, (1) L.R. 5 I.A. 178. 113 Every such notification shall specify the boundaries of the territories to which it applies. " On October 14, 1871, the Lieutenant Governor of Bengal issued a notification in exercise of the powers conferred on him by section 9 extending the provisions of that Act to the territory known as the Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the Courts of civil and crimi nal justice. The respondent Burah and another person having been convicted by the Deputy Commissioner of the Khasi and Jaintia Hills of murder and sentenced to death, which was later on commuted to transportation for life, they from jail sent a petition of appeal against their conviction. The provisions of Act XXII of 1869 having been extended, by notification under section 9, to the Khasi and Jaintia Hills, the High Court would have no jurisdiction to enter tain the appeal, unless section 9 and the notification were ultra rites and void. The majority of the Judges of the Full Bench constituted for considering the question took the view that section 9 was really not legislation but was an in stance of delegation of legislative power. The Crown ob tained special leave to appeal to the Privy Council. In summarising the effect of the provisions of sections 1 to 8 of that Act on Garo Hills Lord Selborne who delivered the judgment of the Privy Council observed at page 194 that the Governor General in council had determined, in the due and ordinary course of legislation, to remove a particular district from the jurisdiction of the ordinary Courts and offices, and to place it under new Courts and offices, to be appointed by and responsible to the Lieutenant Governor of Bengal leaving it to the Lieutenant Governor to say at what time that change should take place, that the Legisla ture had determined that, so far, a certain change should,take place, but that it was expedient to leave the time, and the manner, of carrying it into effect to the discretion of the Lieutenant Governor and also, that the laws which were or might be in force in the other territo ries subject to the same Government were such as it might be fit and proper to apply to this 15 114 district also, but that, as it was not certain that all those laws, and every part of them, could with equal conven ience be so applied, it was expedient, on that point also, to entrust a discretion to the LieutenantGovernor. His Lordship then proceeded to state the true meaning and effect of the provisions of section 9: "This having been done as to the Garo Hills, what was done as to the Khasi and Jaintia Hills? The Legislature decided that it was fit and proper that the adjoining dis trict of the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts, and brought under the same provisions with the Garo Hills, not neces sarily and at all events, but if and when the Lieutenant Governor should think it desirable to do so; and that it was also possible that it might be expedient that not all, but some only, of those provisions should be applied to that adjoining district. And accordingly the Legislature en trusted for these purposes also, a discretionary power to the Lieutenant Governor. " Finally, his Lordship concluded at p. 195: "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the LieutenantGovernor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act XXII of 1869 itself. The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legisla tion is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an imperial or in a provinciall Legislature, they may, in their Lordships ' judgment be well exercised, either absolutely or condition ally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrust ed by the Legislature to persons in whom it places confi dence, 115 is no uncommon thing; and, in many circumstances, it may be highly convenient. " If the reasonings underlying the observations of the ' Bombay High Court were correct then on those very reasonings it could be held in Burah 's case(1) that while in enacting sections 1 to 8 the Legislature had applied its mind and laid down its policy as to the exclusion of the Garo Hills from the jurisdiction of the Courts the Legislature did not apply its mind and did not lay down any policy as to the exclusion of the Khasi and Jaintia Hills rom the jurisdic tion of the Courts but had left it to the Lieutenant Gover nor to do what it alone could do. This construction quite clearly did not find favour with the Privy Council. The Privy Council by construction spelt out of the very language section 9 that the Legislature itself had decided that it was fit and proper that the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts and brought under the same provisions as applied to the Garo Hills, not necessarily and at all events but if and when the LieutenantGovernor should think it desirable to do so and accordingly entrusted a discretionary power to the Lieutenant Governor. Adopting the same method of construc tion and adopting the language of Lord Selborne it may well be said that in enacting section 3 the Legislature itself has determined, in the due and ordinary course of legisla tion, to establish an additional Court of civil jurisdiction with jurisdiction to entertain suits and other proceedings arising within the Greater Bombay of the value up to Rs. 10,000 leaving it, by section 1 (2), to the Provincial Government to say at what time that change should take place. Likewise, it may be said that in enacting section 4 the Legislature itself has decided that it is fit, and proper to extend the pecuniary jurisdiction of the new Court, not necessarily and at all events or all at once but if and when the Provincial Government should think it de sirable to do so and accordingly entrusted a discretionary power to the Provincial Government. It is entirely wrong to say that the (1) L.R. 5 I.A. 178. 116 Legislature has not applied its mind or laid down any poli cy. Indeed, the very fact that the extension of pecuniary jurisdiction should not exceed twenty five thousand rupees, that the extension should be subject to the exceptions specified in section 3 clearly indicate that the Legislature itself has decided that the extension of the pecuniary jurisdiction of the new Court should be made, not necessarily or at all events or all at any one time but when the Provincial Government may consider. it desirable to do so and while entrusting a discretionary power with the Provincial Government to determine the time for investing such extended jurisdiction on the new Court, the Legislature itself has also prescribed the limits of such extension. The efficacy of the Act of extension of jurisdiction is, there fore, not due to any other legislative authority than that of the Legislature itself. The expression "invest" does not appear to me to have any special significance. It only implies or indicates the result of the fulfilment of the condition which the Legislature itself laid down. To use the language of Lord Selborne the extension of jurisdiction is directly and immediately under and by virtue of this very Act itself. Here there is no effacement of the Legislature, no abdication of the legislative power. On the contrary, the proper Legislature has exercised its judgment as to the possible necessity for the extension of the pecuniary juris diction of the new Court and the result of that judgment has been to legislate conditionally as to such extension and that the condition having been fulfilled by the issue of the notification by the Provincial Government the legislation has now become absolute. In my judgment the construction put upon sections 3 and 4 by the High Court was erroneous and cannot be supported either on principle or on authority. When properly construed in the light of the observations and decision of the Privy CounCil in R.v. Burah(1) as indi cated above section 4 does not amount to a delegation of legislative power at all but constitutes what is known as conditional legislation. (1) L.R. 5 I.A 178. 117 Reliance was placed by the High Court on the decision of the Federal Court of India in Jatindra Nath Gupta vs Prov ince of Bihar (1) in support of their conclusions. That case was concerned with the question of the validity of the proviso to section 1 (3)of the Bihar Maintenance of Public Order Act (V of 1947). Section 1 (a) provided that the Act should remain in force for a period of one year from the date of its commencement. The relevant part of the proviso was in the following terms: "Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification. " Three of the learned Judges held that the proviso and the notification thereunder were ultra vires and void They laid particular emphasis on the power given to the Provin cial Government to make any modification in the Act when extending its life as indicating that it was a delegation of legislative power. Another learned Judge did not decide this point but agreed to set aside the order of detention on another ground not material for our present purpose and the remaining learned Judge took a different view of the effect of the proviso and held that it was a conditional legisla tion within the meaning of the decision in R., vs Burah(2). I do not find it necessary, for the purposes of the present appeal, to express any view as to the correctness of the decision of the Federal Court in that case. Assuming, but without deciding, that the entrustment with the Provincial Government of the power to extend the life of an Act with such modifications as the Provincial Government in its unfettered discretion thought fit to make was nothing but a delegation of legislative powers, there is no such power of modification given to the Provincial Government by section 4 of the Bombay City Civil Court (1) A.I.R. 1949 F.C. 175, (.2) L.R. 5 I.A. 178. and, therefore, that decision of the Federal Court can have no application to the case before us. The learned Attorney General wants to go further and contend that under the Government of India Act, 1935, it was permissible for the Legislatures, Central or Provincial, while acting within their respective legislative fields, to delegate their legislative powers. In the view I have ex pressed above, namely, that section 4 of the Bombay City Civil Court Act, 1948, does not involve any delegation of legislative power, I do not consider it necessary, on this occasion, to go into that question and I reserve my right to consider and decide that question including the question of the correctness of the decision of the Federal Court in Jatindra Nath Gupta 's case(1) on that point as and when occasion may arise in future. Learned counsel for the first respondent then raises before us the larger question as to whether the Bombay City Civil Court Act, 1948, as a whole was or was not within the legislative competence of the Provincial Legislature of Bombay. Legislative powers were by section 100 of the Gov ernment of India Act, 1935, distributed amongst the Federal and the Provincial Legislatures. Under that section the Federal Legislature had, and the Provincial Legislature had not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to that Act. Likewise, the Provincial Legislature had, and the Federal Legislature had not, power to make laws the Province with respect to my of the matters enumerated in List II in that Schedule. It will be noticed that 'the section, while af firmatively giving legislative power with respect to certain matters to one Legislature, expressly excluded the legisla tive power of the other Legislature with respect to those matters. Lastly, section 100 gave concurrent power of legis lation to the Federal as well as to the Provincial Legisla ture with respect to matters enumerated in List III in that Schedule. Section 107 of that Act made provision for resolv ing the inconsistency, if any, between a Provincial law and a Federal law or the existing Indian (1) A.I.R. 1949 F.C. 175 119 law with respect to any of the matters in the Concurrent List (i.e., List III). Turning now to the three lists we find several entries relating to Courts, the relevant por tions of which are as follows : List I. Entry 53: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list . List II. Entry 1: . . the administration of justice, constitution and organisation of all Courts, except the Federal Court, and fees taken therein; . Entry 2: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts. List III. PART 1. Entry 2: Criminal Procedure, including all matters included in the Code of the Criminal Procedure at the date of the passing of this Act. Entry 4: Civil Procedure, including the law of Limita tion and all matters included in the Code of Civil Procedure at the date of the passing of this Entry 15: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list. Learned Attorney General urges that entry 1 in List II clearly indicates that administration of justice had been expressly made a provincial subject and that it was only the Provincial Legislature which could make laws with respect to administration of justice. The next steps in the argument are that there could be no administration of justice unless Courts were constituted and organised, that the constitution and organisation of Courts would be meaningless enterprises for the Provincial Legislatures to indulge in, unless the Courts so constituted and organised were 120 vitalised by being invested with jurisdiction and powers to receive, try and determine suits and other proceedings. The argument, therefore, is that entry 1 in List II by itself gave power to the Provincial Legislature not only to consti tute and organise Courts but also to confer jurisdiction and powers on them. The learned Attorney General relies on Jagtiani 's case(1) and points out that under entry 1 admin istration of justice was entirely a provincial responsibili ty and the Provincial Legislature was authorised to make laws with respect to administration of justice. Administra tion of justice, so the argument ' proceeds, is inseparable from Courts and Courts without jurisdiction is an incompre hensible notion. The conclusion sought to be established. therefore, is that under entry 1 alone of List II the Provincial Legislature had power to make a law not merely constituting a new Court but, investing such new Court with general jurisdiction and powers to receive, try and deter mine all suits and other proceedings. If entry 1 in List II stood alone and entry 53 in List I, entry 2 in List II and entry 15 in List HI were not in the Seventh Schedule, the argument would have been unanswerable. In Section 92 of the British North America Act, 1867, there was no separate provision authorising the making of laws with respect to jurisdiction and powers of Courts and, therefore, the au thority to make laws with respect to the jurisdiction and powers of Courts had of necessity to be found in and spelt out of the words ' 'administration of justice" occurring in section 92 (14) of that Act. There is, however, no such pressing or compelling necessity for giving such wide and all embracing meaning to the words "administration of jus tice" in entry 1 of List 11. The expression "administration of justice" may be an expression of wide import and may ordinarily, and in the absence of anything indicating any contrary intention, cover and include within its ambit several things as component parts of it, namely, the consti tution and organisation of Courts, jurisdiction and powers of the Courts and the laws to be administered by the Courts. But the legislative (1) 51 Bom. L.B. 86. 121 practice in England as well as in India has been to deal With these topics separately in legislative enactments: see for example Indian High Courts Act 1861. (24 and 25 Vic., c. 104) sections 2 and 19; Government of India Act, 1935, sections 220 and 223, the Letters i Patent of the Bombay High Court, 1865, and also the different Civil Courts Acts. Of these, one topic, namely, "constitution and organisa tion of Courts" had been expressly included in entry 1 of List II in addition to "administration of justice", a fact of some significance which must be noted although I do not say that the inclusion of the words "constitution and organ isation of all Courts" in entry 1 of List II by itself and in the absence of anything else cut down the generality of the meaning of the expression "administration of justice" which preceded those words, for such a construction may militate against the principle laid down by the Privy Coun cil in Meghraj vs Allah Rakhia(1). Further, entry 2 in List II would have been wholly unnecessary if the expression "administration of justice" in entry 1 in List II were to be given the wide meaning contended for by the learned Attor neyGeneral, for if under entry 1 ' in List II the Provincial Legislature had plenary powers to make laws conferring on, or taking away from, Courts, existing or newly constituted, 0jurisdiction and powers of the widest description, such power would also include the lesser power of conferring jurisdiction and powers with respect to any of the matters enumerated in List II, such as is contemplated by entry 2 in List II. The greater power would certainly have included the lesser. I do not say that the presence of entry 2 in List II by itself cut down the ambit of the expression "administration of justice" in entry 1, for if there were only entries 1 and 2 in List II and there were no entries like entry 53 in List I and entry 15 in List III, it might have been argued with some plausibility that in framing the two entries in the same list not much care was bestowed by the draftsman to prevent overlapping and that as (1) L.R. 74 I.A. 12, at p.20 16 16 122 both the entries in one and the same list gave legislative power to the same Legislature the overlapping caused no confusion or inconvenience and that it was not necessary, therefore, to construe entry 1 of List II as cut down by entry 2 in the same List. The important thing to notice is that the topic of "jUrisdiction and powers of Courts" had not been included in entry 1 in List II along with the topic of "constitUtion and organization of Courts", but the legislative powers with respect to the topic of "jurisdic tion and powers of the Courts" had been distributed between the Federal and the Provincial Legislatures in the manner set forth in entry 53 in List I, entry 2 in List II and entry 15 in List III. The inclusion of "constitution and organisation of Courts" as a separate item in entry 1 in List II, the omission of the topic of "jurisdiction and powers of Courts" from entry 1 and the deliberate distribu tion of powers to make laws with respect to jurisdiction and powers of Courts with respect to the several matters speci fied in the three lists clearly indicate to my mind that the intention of Parliament was not, by entry 1 in List II by itself, to authorise the Provincial Legislature to make any law with respect to the jurisdiction and powers of Courts. In my judgment, entry 1 in List II cannot be read as at all giving any power to the Provincial Legislature to confer any jurisdiction or power on any Court it might constitute or organise under that entry and that the expressions "admin istration of justice" and "constitution and organisation of Courts" occurring in entry 1 in List II should be read as exclusive of "the jurisdiction and powers of Courts" the powers of legislation with respect to which were distributed under entry 53 in List I, entry 2 in List II and entry 15 in List III. Such a construction will be consonant with the principle of construction laid down by, the Privy Council in the case of In re Marriage Legislation in Canada(1). It is next said that entry 1 in List II gave general powers to the Provincial Legislature to make laws (1) 123 conferring general jurisdiction and powers on Courts consti tuted by it under that entry while entry 53 in List I, entry 2 in List II and entry 15 in List III conferred special powers on the Federal and Provincial Legislatures to make laws conferring special jurisdiction and powers with respect to matters specified in their respective Lists. As I have already pointed out, if entry 1 in List II conferred plenary powers on the Provincial Legislature to make laws with respect to jurisdiction and powers of Courts in widest terms, entry 2 in List II would be wholly redundant, for the wider power itself would include the lesser power. Further,the very concession that entry 53 in List 1, entry 2 in List II and entry 15 in List III gave special powers to the Legislature to confer special jurisdiction and powers necessarily amounts to an admission that the powers conferred on the Provincial Legislature by entry 1 in List II were exclusive of the powers conferred under entry 53 in List I, entry 2 in List II and entry 15 in List III, for if entry 1 in List II gave power to the Provincial Legislature to make laws conferring general jurisdiction of the widest kind which included jurisdiction and powers with respect to all matters specified in all the Lists, then the utility of entry 53 in List I, entry 2 in List II and entry 15 in List III as giving special powers to make laws conferring special jurisdiction would vanish altogether. Special power to confer special jurisdiction would be meaningless if it were included in the general power also. This circumstance by itself should be sufficient to induce the Court to assign a limited scope and ambit to the power conferred on the Pro vincial Legislature under entry 1 in List II. We, there fore, come back to the same conclusion that entry 1 in List II should be construed and read as conferring on the Provin cial Legislature all powers with respect to administration of justice and constitution and organisation of Courts minus the power to make laws with respect to the jurisdiction and powers of Courts. It is pointed out that under entry 1 in List II it was only the Provincial Legislature which alone could 124 constitute and organise a new Court and if that entry did not empower the Provincial Legislature to vest in such new Court the general jurisdiction and power to re ceive, try and dispose of all kinds of suits and other proceedings, then no new Court of general jurisdiction could be established at all. As will be seen hereafter, the Provincial Legislature has, under entry 2 in List II, power to make laws conferring wide general jurisdiction and powers on a newly constituted Court and consequently a forced construction need not be placed on entry 1 in List II. It is said that if the Provincial Legislature could not, under entry 1 in List II, confer jurisdiction on a new Court set up by under that entry, the result would have been that the Provincial Legislature would have had to set up a new Court by one law made under entry 1 of List II without conferring on it any jurisdiction whatever and would have had to make another law with respect to ' the jurisdic tion and powers of such Court. I see no force in this, for the Provincial Legislature could by one and the same law have set up a Court under entry 1 in List II and vested in the Court jurisdiction and powers with respect to any of the matters specified in List II and, subject to section 107 of the Act, with respect to any of the matters enumerated in List III. It is wrong to assume that the Provincial Legisla ture could not make one law under both entry 1 and entry 2 in List II and entry 15 in List III at one and the same time. A good deal of argument was advanced before us as to the applicability of the doctrine of pith and substance and, indeed, the decision of the Bombay High Court in Jagtiani 's case was practically rounded on that doctrine. Shortly put, the argument, as advanced, is that under entry 1 in List II the Provincial Legislature had power to make laws with respect to administration of justice; that, therefore, the Provincial Legislature had power, under entry 1 itself, to make laws conferring general jurisdiction and powers on Courts constituted and organised by it under that entry; that if in making such law 125 the Provincial Legislature incidentally enroached upon the legislative field assigned to the Federal Legislature under entry 58 in List I with respect to the jurisdiction and powers of Court with respect to any of the matters specified in List I, such incidental encrochment did not invalidate the law, as in pith and substance it was a law within the legislative powers. In my judgment, this argu ment really begs the question. The doctrine of pith and substance postulates, for its application, that the impugned law is substantially within the legislative competence of the particular Legislature that made it, but only inciden tally encroached upon the legislative field of another Legislature. The doctrine saves this incidental en croachment if only the law is in pith and substance within the legislative field of the particular Legislature which made it. Therefore, if the Provincial Legislature under entry 1 had power to vest general jurisdiction on a newly constituted Court, then if the law made by it incidentally gave jurisdiction to the Court with respect to matters specified in List I the question of the applicability of the doctrine of pith and substance might have arisen. I have already pointed out that, on a proper construction, entry 1 of List II did not empower the Provincial Legislature to confer any jurisdiction or power on the Court and the ex pression "administration of justice" had to be read as covering matters relating to administration of justice other than jurisdiction and powers of Court and, if that were so, the discussion of the doctrine of pith and substance does not arise at all. I find it difficult to support the rea sonings adopted by the Bombay High Court in Jagtiani 's case. The argument as to the applicability of the doctrine of pith and substance to the impugned Act can, however, be well maintained in the following modified form: Under entry 2 in List II the Provincial Legislature had power to make laws with respect to the jurisdiction and powers of Courts with respect to any of the matters enumerated in List II; that "administration of justice" in entry 1 is one of the matters in 126 List II; that, therefore, the Provincial Legislature had power to confer the widest general jurisdiction on any new Court or take away the entire jurisdiction from any existing Court and there being this power, the doctrine of pith and substance applies. It is suggested that this argument cannot be formulated in view of the language used in entry 2 in List II. It is pointed out that entry 2 treats "any of the matters in this List" as subject matter "with respect to" which, i.e., "over" which the Court may be authorised to exercise jurisdiction and power. This construction of entry 2 is obviously fallacious, because jurisdiction and powers of the Court "over" administration of justice as a subject matter is meaningless and entry 2 can never be read with entry 1. This circumstance alone shows that the words ' 'with respect to" occurring in entry 2 in List 11 when applied to entry 1 did not mean "over" but really meant "relating to" or "touching" or "concerning" or "for" admin istration of justice, and so read and understood, entry 2, read with entry 1 in List 11, clearly authorised the Provin cial Legislature to make a law conferring on or taking away from a Court general jurisdiction and powers relating to or touching or concerning or for administration of justice. This line of reasoning has been so very fully and lucidly dealt with by my brother Sastri J. that I have nothing to add thereto and I respectfully adopt his reasonings and conclusion on the point. This argument, in my opinion, resolves all difficulties by vesting power in the Provincial Legislature to confer general jurisdiction on Courts consti tuted and organised by it for effective administration of justice which was made its special responsibility. Any argument as to deliberate encroachment that might have been rounded on the Proviso to section 3 of the Act which ena bled the Provincial Government to give to the City Court even Admiralty jurisdiction which was a matter in List I has been set at rest by the amendment of the Proviso by Bombay Act XXVI of 1950. The impugned Bombay Act may, in my judg ment, be well supported as a law made by the Provincial Legislature under 127 entry 2 read with entry 1 in List II and I hold accordingly. I, therefore, concur in the order that this appeal be al lowed. In the view I have taken, it is not necessary to discuss the contention of the learned Attorney General that the Bombay City Civil Court Act may be supported as a piece of legislation made by the Provincial Legislature of Bombay under entry 4 read with entry 15 in Part I of List III and I express no opinion on that point. Appeal allowed.

The Bombay City Civil Court Act of 1948, an Act passed by the Provincial Legislature of Bombay, provided by section 3 that the Provincial Government may, by notification in the official Gazette, establish for the Greater Bombay a court to be called the Bombay City Civil Court, and that this court shall, notwithstanding anything contained in any law, have jurisdiction to receive, try ' and dispose of all suits and other proceedings of a civil nature nob exceeding Rs. 10,000 in value arising within Greater Bombay except certain kinds of suits which were specified in the section. Section 4 of the Act provided that subject to the exceptions speci fied in 8. 3 the Provincial Government may, by notification in the official Gazette, invest the City Civil Court with jurisdiction to 52 receive, try and dispose of all suits and other proceedings of civil nature arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification. Section 12 barred the jurisdiction of the Bombay High Court to try suits and proceedings cognizable by the City Civil Court. In exercise of the powers conferred by section 4 the Provincial Government invested the City Civil Court with jurisdiction to receive, try and dispose of all suits and proceedings of a civil nature not exceeding Rs. 25,000 in value. The first respondent instituted a suit in the High Court of Bombay for recovery of Rs. 11,704 on the basis of a promissory note, contending that the Provincial Legislature had no power to make laws with respect to juris diction of courts in regard to suits on promissory notes which was a matter covered by item 53 of List I, and the Bombay City Civil Court Act of 1948 was therefore ultra vires. It was further contended on his behalf that in any event section 4 of the Act was invalid as it involved a delega tion of legislative powers to the Provincial Government and that the suit was therefore cognisable by the High Court. Held by the Full Court. (i) that the impugned Act was a law with respect to a matter enumerated in List II and was not ultra vires; (ii)that, as the legislature had exercised its judgment and determined that the City Civil Court should be invested with pecuniary jurisdiction up to Rs. 9,5,000 and all that was left to the discretion of the Provincial Government was the determination of the conditions under which the court should be invested with the enhanced juris diction, section 4 did not involve any delegation of legislative powers but was only an instance of conditional legislation and was not ultra vires or invalid on this ground; (iii) inasmuch as the impugned Act was in pith and substance a law with respect to a matter covered by List II, the fact that it incidentally affected suits relating to promissory notes (a subject falling within items 28 and 53 of List I) would not affect its validity and the suit was accordingly not cognisable by the High. Court. Per FAZL ALI, MEHR CHAND MAHAJAN and MUKHERJEA JJ. The power of the Provincial Legislature to make laws with re spect to "administration of justice" and "constitution and organisation of all courts" under item 1 of List II is wide enough to include the power to make laws with regard to the jurisdiction of courts established by the Provincial Legis lature; the object of item 53 of List I, item 9, of List II and item 15 of List III is to confer special powers on the Central and the Provincial Legislatures to make laws relat ing to the jurisdiction of courts with respect the particu lar matters that are referred to in Lists I and II respec tively and the Concurrent List, and these provisions do not in any way curtail the power of Provincial Legislature under Item I of List II to make laws with regard to juris diction of courts and to confer jurisdiction on courts established by it to try all causes of a civil nature sub ject to the power of the Central and 53 Provincial Legislatures to make special provisions relating to particular subjects referred to in the Lists. Per PATANJALI SASTRI and DAS JJ. The words" adminis tration of justice" and "constitution and organisation of all courts" in item 1 of List II must be understood in a restricted sense excluding from their scope "jurisdiction and powers of courts" as the latter subject is specifically dealt with in item 2 List II. Item 1 of List II does not therefore by itself authorise legislation with respect to jurisdiction and powers of courts, and the legisltive power under item 9. in regard to "jurisdiction 'and powers of courts ", which can legitimately be exercised with respect to any of the matters in List II, can be exercised with respect to administration of justice as this is one of the matters enumerated in that List, with the result that the subject of general jurisdiction of courts is brought within the authorised area of provincial legislation; and as the Provincial Legislature is thus competant to make a law with respect to the general jurisdiction of the court, the apparent conflict with the central legislative power under item 53 of List I can be resolved by invoking the doctrine of pith and substance and incidental encroachment. [The legislative practice which prevailed in India before 1935 was relied on in this case in support of the view that the Provincial Legislatures had power under the constitution of 1935 to invest courts constituted by them with general pecuniary jurisdiction]. Quaere: Whether it was not open to the Legislatures of India under the Government of India Act of 1935 to delegate their legislative powers to other agencies. Queen vs Burah (59. A 178).applied. Jatindra Nath Gupta vs Province of Bihar distinguished. Mulchand Kundanmmal Jagtiani vs Raman (51 Born. L.R. 86 :, United Provinces vs Atiqa Begum Prafulla Kumar Mukherjea and Others vs Bank of Commerce, Khulna referred

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n No. 105 of 1961. Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights. A. V. Viswanatha Sastri, M. K. B. Namburdripat and M. R. K. Pillai" for the petitioner. M. C. Setalvad Attorney General of India, K. K. Mathew, Advocate General for the State of Kerala, Sardar Bahadur, George Pudissary and V. A. Seyid Muhammad, for the respondent. December 5. The Judgment of P.B. Gajendragadkar, A. K. Sarkar, K. N. Wanchoo and K. C. Das Gupta, JJ., was delivered by Gajendragadkar, J. N. Rajagopala Ayyangar, J., delivered a separate judgment. GAJENDRAGADKAR, J. This petition has been filed under article 32 of the Constitution and it seeks to challenge the validity of the Kerala Agrarian Relations Act, 1960 (Act 4 of 1961) (hereafter called the Act). The petitioner owns about 1, 250 acres of land in the Kerala State. These lands were originally situated within the erstwhile State of Cochin which now forms part of the Kerala State. 757 Out of the lands owned by the petitioner nearly 900 acres are classified in the land records maintained by the State as Pandaravaka holdings while the remaining lands are classified as Puravaka holdings. By his petition the petitioner claims a declaration that the Act is ultra vires and unconstitutional and prays for a writ of certiorari or other appropriate writ, order or direction against the respondent, the State of Kerala, restraining it from implementing the provisions of the Act. It appears that a notification has been issued by the respondent on February 15, 1961, directing the implementation of sections 1 to 40, 57,58,60,74 to 79 as well as sections 81 to 95 of the Act from the date of the notification. The petitioner contends that the notification issued under the Act is also ultra vires, unconstitutional and illegal and as such he wants an appropriate writ or order to be issued quashing the said notification. That in brief is the nature of the reliefs claimed by the petitioner. The Kerala Agrarian Relations Bill which has ultimately become the Act was published in the Government Gazette of Kerala on December 18, 1957, and was introduced in the Kerala Legislative Assembly on December 21, 1957, by the Communist Government which was then in power. The bill was discussed in the Assembly and was ultimately passed by it on June 10, 1959. It was then reserved by the Governor of the State for the assent of the President under article 200 of the Constitution. Meanwhile, on July 31, 1959 the President issued a proclamation under article 356 and the Assembly was dissolved. In February 1960 mid term general elections took place in Kerala and as a result a coalition Government came into power. On July 27,1960, the President for whose assent the bill was pending sent it back with his message requesting the Legislative Assembly to reconsider the bill in the light of the specific amendments suggested by him. On August 2, 1960, the Governor returned the bill 758 remitted by the President with his message and the amendments suggested by him to the new Assembly for consideration. On September 26, 1960, the amendments suggested by the President were taken up for consideration by the Assembly and ultimately on October 15, 1960, the bill as amended in the light of the President 's recommendations was passed by the Assembly. It then received the assent of the President on January 21, 1961, and after it thus became law the impugned notification was issued by the respondent on February 15, 1961. On March 9, 1961, the present writ petition was filed. Broadly stated three points fall to be considered in this petition. The petitioner challenges the validity of the Act on the preliminary ground that the bill which was pending before the President for his assent at the time when the Legislative Assembly was dissolved lapsed in consequence of the said dissolution and so it was not competent to the President to give his assent to a lapsed bill with the result that the said assent and all proceedings taken subsequent to it are constitutionally invalid. If this preliminary point is upheld no further question would arise and the petition will have to be allowed on that ground alone. If however, this preliminary challenge to the validity of the bill does not succeed the respondent raises its preliminary objection that the Act is protected under article 31 A (1) (a) and as such its validity cannot be challenged on the ground that it is inconsistent with, or takes away, or abridges, any of the rights conferred by articles 14, 19 and 31. This point raises the question as to whether the properties owned and possessed by the petitioner are an "estate" within the meaning of article 31 A (2) (a). If this question is answered in the affirmative then the Act would be protected under article 31 A (1) (a) and the challenge to its validity on the ground that it is inconsistent with articles 14,19 and 31 will not 759 survive. If, however, it is held that the whole or any part of the properties with which the petitioner is concerned is outside the purview of "estate" as described by article 31 A (2) (a) the challenge to the validity of the Act on the merits would have to be considered. The petitioner contends that the material provisions of the Act contravenes the fundamental rights guaranteed by Arts, 14, 19 (1) (f) and 31 of the Constitution. That is how three principal points would call for our decision in the present writ petition. Let us first examine the argument that the bill which was pending the assent of the President at the time when the legislative Assembly was dissolved has lapsed and so no further proceedings could have been validly taken in. respect of it. In support of this argument it is urged that wherever the English parliamentary form of Government prevails the words "prorogation" and "dissolution" have acquired the status of terms of art and their significance and consequence are well settled. The argument is that if there is no provision to the contrary in our Constitution the English convention with regard to the consequence of dissolution should be held to follow even in India. There is no doubt that, in England, in addition to bringing a session of Parliament to a close prorogation puts and end to all business which is pending consideration before either House at the time of such prorogation; as a result any proceedings either in the House or in any Committee of the house lapse with the session Dissolution of Parliament is invariably preceded by prorogation, and what is true about the result of prorogation is, it is said, a fortiori true about the result of dissolution (1). Dissolution of Parliament is sometimes described as "a civil death of Parliament". Ilbert, in his work on 760 'Parliament ', has observed that "prorogation means the end of a session (not of a Parliament)"; and adds that "like dissolution, it kills all bills which have not yet passed". He also describes dissolution as an "end of a Parliament (not merely of a session) by royal proclamation", and observes that "it wipes the slate clean of all uncompleted bills or other proceedings". Thus, the petitioner contends that the inevitable conventional consequence of dissolution of Parliament is that there is a civil death of Parliament and all uncompleted business pending before Parliament lapses. In this connection it would be relevant to see how Parliament is prorogued. This is how prorogation is described in May 's "Parliamentary Practice": "If Her Majesty attends in person to prorogue Parliament at the end of the session. the same ceremonies are observed as at the opening of Parliament: the attendance of the Commons in the House of Peers is commanded; and, on their arrival at the bar, the Speaker addresses Her Majesty, on presenting the supply bills, and adverts to the most important measures that have received the sanction of Parliament during the session. The royal assent is then given to the bills which are awaiting that sanction, and Her Majesty 's Speech is read to both Houses of Parliament by herself or by her Chancellor; after which the Lord Chancellor, having received directions from Her Majesty for that purpose, addresses both Houses in this manner: "My Lords and Members of the House of Commons, it is Her Majesty 's royal will and pleasure that this Parliament be prorogued (to a certain day) to be then here holden; and this Parliament is accordingly prorogued" (2). According to May, the effect of prorogation is at once to suspend all business until Parliament shall be summoned again. Not only are the proceedings of Parliament at an end but all proceedings pending at the time are quashed except 761 impeachment by the Commons and appeals before the House of Lords. Every bill must therefore be renewed after prorogation as if it had never been introduced. To the same effect are the statements in Halsbury 's "Laws of England" (Vide: Vol. 28, pp. 371, 372, paragraphs 648 to 651). According to Anson, "prorogation ends the session of both Houses simultaneously and terminates all pending business. A bill which has passed through some stages but which is not ripe for royal assent at the date of prorogation must begin at the earliest stage when Parliament is summoned again and opened by a speech from the throne" (1). It would thus be seen that under English parliamentary practice bills which have passed by both Houses and are awaiting assent of the Crown receive the royal assent before the Houses of Parliament are prorogued. In other words, the procedure which appears to be invariably followed in proroguing and dissolving the Houses shows that no bill pending royal assent is left outstanding at the time of prorogation or dissolution. That is why the question as to whether a bill which is pending assent lapses as a result of prorogation or dissolution does not normally arise in England. Thus, there can be no doubt that in England the dissolution of the Houses of Parliament kills all business pending before either House at the time of dissolution. According to the petitioner, under our Constitution the result of dissolution should be held to be the same; and since the bill in question did not receive the assent of the President before the Assembly was dissolved it should be held that the said bill lapsed. This argument has taken another form. The duration of the Legislative Assembly is prescribed by article 172(1), and normally at the end of five years the life of the Assembly would come to an end. Its life could come to an end even before the expiration of the said period 762 of five years if during the said five years the President acts under article 356. In any case there is no continuity in the personality of the Assembly where the life of one Assembly comes to an end and another Assembly is in due course elected. If that be so, a bill passed by one Assembly cannot, on well recognised principles of democratic government. be brought back to the successor Assembly as though a change in the personality of the Assembly had not taken place. The scheme of the Constitution in regard to the duration of the life of State Legislative Assembly, it is urged, supports the argument that with the dissolution of the Assembly all business pending before the Assembly at the date of dissolution must lapse. This position would be consonant with the well recognised principles of democratic rule. The Assembly derives its sovereign power to legislate essentially because it represents the will of the citizens of the State, and when one Assembly has been dissolved and another has been elected in its place, the successor Assembly cannot be required to carry on with the business pending before its predecessor, because that would assume continuity of personality which in the eyes of the Constitution does not exist. Therefore, sending the bill back to the successor Assembly with the message of the President would be inconsistent with this basic principle of democracy. It is also urged that in dealing with the effect of the relevant provisions of the legislative procedure prescribed by article 196 it would be necessary to bear in mind that the powers of the legislature which are recognised in England will also be available to the State Legislature under article 194 (3). The argument is that whether or not a successor Legislative Assembly can carry on with the business pending before its predecessor at the time of its dissolution is really 763 a matter of the power of the Legislature and as such the powers of the Legislative Assembly shall be "such as may from time to time be defined, by the Legislature by law, and, until so defined, shall be those of the House of Commons of Parliament of the United Kingdom, and of its Members and Committees, at the commencement of this Constitution". In other words, this argument assumes that the conventional position with regard to the effect of dissolution of Parliament which prevails in England is expressly saved in India by virtue of article 194(3) until a definite law is passed by the State Legislature in that behalf to the contrary. It would be noticed that this argument purports to supply a constitutional basis for the contention which we have already set out that the word "dissolution" is a term of art and its effect should be the same in India as it is in England. It may incidentally be pointed out that the corresponding provisions for our Parliament are contained in article 104(3). As we have already mentioned there is no doubt that dissolution of the House of Parliament in England brings to a close and in that sense kills all business pending before either House at the time of dissolution; but, before accepting the broad argument that this must inevitably be the consequence in every country which has adopted the English Parliamentary form of Government it would be necessary to enquire whether there are any provisions made by our Constitution which deal with the matter; and if the relevant provisions of our Constitution provide for the solution of the problem it is that solution which obviously must be adopted. This position is not disputed. Therefore, in determining the validity of the contentions raised by the petitioner it would be necessary to interpret the provisions of article 196 and determine their effect. The corresponding provisions in regard to the 764 legislative procedure of Parliament are contained in article 107. The argument based on the provisions of article 194(3) is, in our opinion, entirely misconceived. The powers, privileges and immunities of State Legislatures and their members with which the said Article deals have no reference or relevance to the legislative procedure which is the subject matter of the provisions of article 196. In the context, the word 'powers ' used in article 194(3) must be considered along with the words "privileges and immunities" to which the said clause refers, and there can be no doubt that the said word can have no reference to the effect of dissolution with which we are concerned. The powers of the House of the Legislature of a State to which reference is made in article 194(3) may, for instance, refer to the powers of the House to punish contempt of the House. The two topics are entirely different and distinct and the provisions in respect of one cannot be invoked in regard to the other. Therefore, there is no constitutional basis for the argument that unless the Legislature by law has made a contrary provision the English convention with regard to the effect of dissolution shall prevail in this country. What then is the result of the provisions of article 196 which deals with the legislative procedure and makes provisions in regard to the introduction and passing of bills? Before dealing with this question it may be useful to refer to some relevant provisions in regard to the State Legislature under the constitution. Article 168 provides that for every State there shall be a Legislature which shall consist of the Governor and (a) in the States of Bihar, Bombay, Madhya Pradesh, Madras, Mysore, Punjab, Uttar Pradesh and West Bengal, two Houses, and (b) in other States, one House. In the present petition we are concerned with the State of Kerala which has only one House 765 Article 168 (2) provides that where there are two House of the Legislature of a State. one shall be known as the Legislative Council and the other as the Legislative Assembly, and where there is only one House, it shall be known as the Legislative Assembly. Article 170 deals with the composition of the Legislative Assembly. and article 171 with that of the Legislative Council. Article, 172 provides for the duration of the State Legislatures. Under article 172(1) the normal period for the life of the Assembly is five years unless it is sooner dissolved. Article 172(2) provides that the Legislative Council of a State shall not be subjected to dissolution, but as nearly as possible one third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law. It would thus be seen that under the Constitution where the State Legislature is bicameral the Legislative Council is not subject to dissolution and this is a feature which distinguishes the State Legislatures from the England Houses of Parliament. When the Parliament is dissolved both the Houses stand dissolved, whereas the position is different in India. In the States with bicameral Legislature only the Legislative Assembly can be dissolved but not the Legislative Council. The same is the position under article 83 in regard to the House of the People and the Council of States. This material distinction has to be borne in mind in construing the provisions of article 196 and appreciating their effect. Article 196 reads thus: "196. (1) Subject to the provisions of Articles 198 and 207 with respect to Money Bills and other financial Bills, a Bill may originate in either House of the Legislature of a State which has a Legislative Council. 766 (2) Subject to the provision of articles 197 and 198, a Bill shall not be deemed to have been passed by the Houses of the Legislature of a State having a Legislative Council unless it has been agreed to by both Houses either without amendment or with such amendments only as are agreed to by both Houses. (3) A Bill pending in the Legislature of a State shall not lapse by reason of the prorogation of the House or Houses thereof. (4) A Bill pending in the Legislative Council of a State which has not been passed by the Legislative Assembly shall not lapse on a dissolution of the Assembly. (5) A Bill which is pending the Legislative Assembly of a State, or which having been passed by the Legislative Assembly is pending in the Legislative Council, shall lapse on a dissolution of the Assembly". With the first two clauses of this Article we are not directly concerned in the present petition. It is the last three clauses that call for our examination Under cl. (3) a Bill pending in the Legislature of a State will not lapse by reason of the prorogation of the House or Houses thereof. Thus, this clause marks a complete departure from the English convention inasmuch as the prorogation of the House or Houses does not affect the business pending before the Legislature at the time of prorogation. In considering the effect of dissolution on pending business it is therefore necessary to bear in mind this significant departure made by the Constitution in regard to the effect of prorogation. Under this clause the pending business may be pending either in the Legislative Assembly or in the Legislative Council or may be pending the assent of the Governor. At whichever stage the 767 pending business may stand, so long as it is pending before the Legislature of a state it shall not lapse by the prorogation of the Assembly. Thus, there can be no doubt that unlike in England prorogation does not wipe out the pending business. Clause (4) deals with a case where a Bill is pending in the Legislative Council of a State and the same has not been passed by the Legislative Assembly; and it provides that such a bill pending before the Legislative Council of a State shall not lapse on the dissolution of the Legislative Assembly. It would be noticed that this clause deals with the case of a Bill which has originated in the Legislature Council and has yet to reach the Legislative Assembly; and so the Constitution provides that in regard to such a Bill which has yet to reach, and be dealt with by, the Legislative Assembly the dissolution of the Legislative Assembly will not affect its further progress and it will not lapse despite such dissolution. That takes us to cl. This clause deals with two categories of cases. The first part deals with Bills which are pending before the Legislative Assembly of a State, and the second with Bills which having been passed by the Legislative Assembly are pending before the Legislative Council. The Bills falling under both the clause lapse on the dissolution of the Assembly. The latter part of cl. (5) deals with cases of Bills which are supplemental to the cases covered by cl. Whereas cl.(4) dealt with Bills which had originated in the Legislative Council the latter part of cl.(5) deals with Bills which, having originated in the Legislative Assembly, have been passed by it and are pending before the Legislative Council. Since cl. (4) had provided that Bills falling under it shall not lapse on dissolution of the Assembly it was thought necessary to provide as a matter of precaution that Bills falling under the latter part of cl. (5) shall lapse on the dissolution of the Assembly. 768 That leaves part 1 of cl. (5) to be considered. This part may cover three classes of cases. It may include a Bill which is pending before the Legislative Assembly of a State which is unicameral and that is the case with which we are concerned in the present proceedings. It may also include a case of a Bill which is pending before the Legislative Assembly of a state which is bicameral; or it may include a case of a Bill which has been passed by the Legislative Council in a bicameral State and is pending before the Legislative Assembly. In all these cases the dissolution of the Assembly leads to the consequence that the Bills lapse. It is significant that whereas cl. (3) deals with the case of a Bill pending in the Legislature of a State, cl. (5) deals with a Bill pending in the Legislative Assembly of a State or pending in the Legislative Council; and that clearly means that a Bill pending assent of the Governor or the President is outside cl. If the Constitution makers had intended that a Bill pending assent should also lapse on the dissolution of the Assembly a specific provision to that effect would undoubtedly have been made. Similarly, if the Constitution makers had intended that the dissolution of the Assembly should lead to the lapse of all pending business it would have been unnecessary to make the provisions of cl. (5) at all. The cases of Bills contemplated by cl. (5) would have been governed by the English convention in that matter and would have lapsed without a specific provision in that behalf. Therefore, it seems to us that the effect of cl. (5) is to provide for all cases where the principle of lapse on dissolution should apply. If that be so, a Bill pending assent of the Governor or President is outside cl. (5) and cannot be said to lapse on the dissolution of the Assembly. It is however, contended by the petitioner that if cl. (5) was intended to deal with all cases 769 where pending business would lapse on the dissolution of the Assembly it was hardly necessary to make any provision by cl. There is no doubt in force in the contention; but, on the other hand it may have been thought necessary to make a provision for Bill pending in the Legislative Council of a State because the Legislative Council of a continuing body not subject to dissolution and the Constitution wanted to make a specific provision based on that distinctive character of the Legislative Council. Having made a provision for a Bill originating and pending in the Legislative Council by cl. (4) it was thought necessary to deal with a different category of cases where Bills have been passed by the Legislative Assembly and are pending in the Legislative Council; and so the latter part of cl. (5) was included in cl. On the other hand, if the petitioner 's contention is right cls. (3) and (4) of article 196 having provided for cases were business did not lapse it was hardly necessary to have made any provisions by cl. (5) at all. In the absence of cl. (5) it would have followed that all pending business, on the analogy of the English convention, would laps on the dissolution of the Legislative Assembly. It is true that the question raised before us by the present petition under article 196 is not free from difficulty but, on the whole, we are inclined to take the view that the effect of cl. (5) is that all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Legislative Assembly. In that sense we read cl. (5) as dealing exhaustively with Bills which would lapse on the dissolution of the Assembly. If that be the true position then the argument that the Bill which was pending assent of the President lapsed on the dissolution of the Legislative Assembly cannot be upheld. In this connection it is necessary to consider articles 200 and 201 which deal with Bills reserved for the assent of the Governor or the President. 770 Article 200 provides, inter alia, that when a Bill has been passed by the Legislative Assembly of a State it shall be presented to the Governor, and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President. The proviso to this Article requires that the Governor may, as soon as possible after the presentation to him of the Bill for assent, return the Bill if it is not a Money Bill together with a message requesting that the House or Houses will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when a Bill is so returned the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent the Governor shall not withhold assent therefrom. The Second proviso deals with cases where the Governor shall not assent to but shall reserve for the consideration of the President any Bill which in the opinion of the Governor would, if it became law, so derogate from the powers of the High Court as to endanger the position which that Court is by this Constitution designed to fill. Article 201 then deals with the procedure which has to be adopted when a Bill is be assented to by the President. Under the said Article the President shall declare either that he assents to the Bill or that he withholds assent therefrom. The proviso lays down, inter alia, that the President may direct the Governor to return the Bill to the House together, with such message as is mentioned in the first proviso to article 200, and when a Bill is so returned the House shall reconsider it accordingly within a period of six months from the date of receipt of such message, and if it is again passed by the House with or without amendment it shall be presented again to the President for his consideration. The provisions of 771 these two Articles incidentally have a bearing on the decision of the question as to the effect of article 196. The corresponding provision for Parliamentary Bill is contained in article 111. It is clear that if a Bill pending the assent of the Governor or the President is hold to lapse on the dissolution of the Assembly unlikely that a fair number of Bills which may have been passed by the Assembly, say during the last six months of its existence, may be exposed to the risk of lapse consequent on the dissolution of the Assembly, unless assent is either withheld or granted before the date of the dissolution. If we look at the relevant provisions of articles 200 and 201 from this point of view it would be significant that neither Article provides for a time limit within which the Governor or the President should come to a decision on the Bill referred to him for his assent. Where it appeared necessary and expedient to prescribe a time limit the Constitution has made appropriate provisions in that behalf (vide : article 197 (1)(b) and (2)(b)). In fact the proviso to article 201 requires that the House to which the Bill is remitted with a message from the President shall reconsider it accordingly within a period of six months from the date of the receipt of such message. Therefore, the failure to make any provision as to the time within which the Governor or the President should reach a decision may suggest that the Constitution makers knew that a Bill which was pending the assent of the Governor or the President did not stand the risk of laps on the dissolution of the Assembly. That is why no time limit was prescribed by articles 200 and 201. Therefore, in our opinion, the scheme of articles 200 and 201 supports the conclusion that a Bill pending the assent of the Governor or the President does not lapse as a result of the dissolution of the Assembly and that incidentally shows that the provisions of article 196(5) are exhaustive. 772 At this stage it is necessary to examine another argument which has been urged against the validity of the Act on the strength of the provisions of articles 200 and 201. It is urged that even if it be held that the Bill does not lapse, the Act is invalid because it has been passed in contravention of articles 200 and 201. The argument is that the scheme of the said two Articles postulates that the Bill which is sent back with the message of the President ought to be sent back to the same house that originally passed it. It is pointed out that when the message is sent by the President the House the requested to reconsider the Bill and it is provided that if the Bill is again passed by the House the Governor shall not withhold assent therefrom. This argument proceeds on the basis that the concept of reconsideration must involve the identity of the House, because unless the House had considered it in the first instance it would be illogical to suggest that it should reconsider it. Reconsideration means consideration of the Bill again and that could be appropriately done only if it is the same House that should consider it at the second stage. The same comment is made on the use of the expression "if the Bill is passed against. It is also urged that it would be basically unsound to ask the successor House to take the Bill as it stands and not give it an opportunity to consider the merits of all the provisions of the Bill. We are not impressed by these pleas. When the successor House is considering the Bill it would be correct to say that the Bill is being reconsidered because in fact it had been considered once. Similarly, when it is said that if the Bill is passed again the Governor shall not withhold assent therefrom it does not postulate the existence of the same House because even if it is the successor House which passes it is true to say that the Bill has been passed again because in fact it had been passed on an early occasion. Besides, if the effect of article 196 is that the Bills 773 pending assent do not lapse on the dissolution of the House then relevant provisions of article 200 must be read in the light of that conclusion. In our opinion, there is nothing in the proviso to article 201 which is inconsistent with the basic concept of democratic Government in asking a successor House to reconsider the Bill with the amendments suggested by the President because the proviso makes it, perfectly clear that it is open to the successor House to throw out the Bill altogether. It is only if the Bill passed by the successor House that the stage is reached to present it to the Governor or President for his assent, not otherwise. Therefore, there is no substance in the argument that even if the effect of article 196 is held to be against the theory of lapse propounded by the petitioner the Bill is invalid because it has been passed in contravention of the provisions of articles 200 and 201. This argument proceeds on the assumption that the House to which the Bill is sent must be the same House and that assumption, we think is not well founded. We would accordingly hold that the preliminary contention raised against the validity of the Bill cannot be sustained. That takes us to the point raised by the respondent that the Act attracts the protection of article 31A (1)(a) and so is immune from any challenge under articles 14, 19 and 31. There is no doubt that if the Act falls under article 31A(1)(a) its validity cannot be impugned on the ground that it contravenes articles 14, 19 and 31; but the question still remains: Does the Act fall under article 31A (1) (a) ?; and the answer to this question depends on whether or not the properties of the petitioner fall within article 31A(2)(a). Before dealing with this point it is necessary to set out the relevant provisions of article 31A (2) Article 31A(2) reads thus: "31A (2). In this article (a) the expression 'estate ' shall, in relation to any local area, have the same meaning 774 as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant, and in the States of Madras and Kerala any janmam right; (b) the expression 'rights ', in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor tenure holder, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue. " Article 31A was added by the Constitution (First Amendment) Act, 1951, with retrospective effect. Similarly, the portion in italics was added by the Constitution (Forth Amendment) Act, 1955, with retrospective effect. It is well known that the Constitution First Amendment of 1951 was made in order to validate the acquisition of zamindari estates and the abolition of permanent settlement. In other words the effect of the First Amendment was to provide that any law which affected the right of any proprietor or intermediate holder in any estate shall not be void on the ground that its provisions were inconsistent with any of the fundamental rights guaranteed by part III of the Constitution. The acquisition of zamindnri rights and the abolition of permanent settlement, however, was only the first step in the matter of agrarian reform which the Constitution makers had in mind. When the first zamindari abolition laws were passed in pursuance of the programme of social welfare legislation their validity was impugned on the ground that they contravened the provisions of articles 14, 19 and 31. In order to save the impugned legislation from any such challenge articles 31A and 31B and the Ninth Schedule were enacted by the Constitution First Amendment Act; and it is in that context that article 31A (2) (a) 775 and (b) were also enacted. After the zamindari abolition legislation was thus saved the Constitution makers thought of enabling the State Legislatures to take the next step in the matter of agrarian reform. As subsequent legislation passed by several States shows the next step which was intended to be taken in the matter of agrarian reform was to put a ceiling on the extent of individual holding of agricultural land. The inevitable consequence of putting a ceiling on individual occupation or ownership of such agricultural land was to provide for the acquisition of the land held in excess of the prescribed maximum for distribution amongst the tillers of the soil. It is in the light of this background that we have to determine the question as to whether the property with which the petitioner is concerned constitutes an estate or rights in relation to an estate under cl. (2)(a) or (b). The petitioner contends that in interpreting the expression "estate" we must have regard to the fact that originally it was intended to cover case of zamindars and other intermediaries who stood between the State and the cultivator and who were generally alienees of land revenue; and so it is urged that it is only what may be broadly described as landlord tenures which fall within the scope of the expression "estate ". It is conceded that the expression "rights in relation to an estate " as it now stands is very broad and it includes the interest of a raiyat and also an under raiyat; but it is pointed out that the said rights, however comprehensive and broad they may be, must be rights in relation to an estate, and unless the property satisfies the test which would have been reasonably applied in determining the scope of "estate" in 1950 the amendment made in cl. (2)(b) will not make the denotation of the word "estate" any broader. In other words, the argument is that the denotation which the expression "estate " had in 1950 continues to be the same even after the 776 amendments of 1965 because no suitable amendment has been made in cl. (2) (a). But the infirmity in this argument is that the limitation which the petitioner seeks to place on the denotation of the expression "estate" is not justified by any words used in cl. (2)(a) at all; it is introduced by reading cls. (2)(a) and (b) together, and that would not be reasonable or legitimate. In deciding what an "estate" means in cl. (a) we must in the first instance construe cl. (a) by itself. In dealing with the effect of cl. (2) (a) two features of the clause are significant. First, that the definition has been deliberately made inclusive, and second, that its scope has been left to be determined not only in the light of the content of the expression "estate " but also in the light of the local equivalent of the expression "estate" as may be found in the existing law relating to land tenure in force in that area. The Constitution makers were fully conscious of the fact that the content of the expression "estate" may not be identical in all the areas in this country and that the said concept may not be described by the same word by the relevant existing law; and so the decision of the question as to what an estate is has been deliberately left rather elastic. In each case the question to decide would be whether the property in question is described as an estate in the terminology adopted by the relevant law. If the said law uses the word "estate" and defines it the there is no difficulty in holding the property described by the local law as an estate is an estate for the purpose of this clause. The difficulty arises only where the relevant local law does not describe any agricultural property expressly as an estate. It is conceded that though no agricultural property may be expressly described as an estate by the local law, even so there may be some properties in the area which may constitute an 777 estate under cl. (2) (a); and so in deciding which property constitutes an estate it would be necessary to examine its attributes and essential features and enquire whether it satisfies the test implied by the expression "estate " as used in cl. (2) (a) In this connection it is pertinent to remember that the Constitution makers were aware that in several local areas in the country where the zamindari tenure did not prevail the expression "estate" as defined by the relevant law included estates which did not satisfy the requirement of the presence of intermediaries, and yet cl. (2)(s) expressly includes estates in such areas within its purview and that incidentally shows that the concept of " estate " as contemplated by cl. (2)(a) is not necessarily conditioned by the rigid and inflexible requirement that it must be landlord tenure of the character of zamindari estate. That is why, treating the expression "estate" as of wide denotation in every case we will have to enquire whether there is a local definition of "estate" prevailing in the relevant existing law; if there is one that would determine the nature of the property. If there is no definition in the relevant existing law defining the word "estate" as such we will have to enquire whether there is a local equivalent, and in that connection it would be necessary to consider the character of the given agricultural property and its attributes and then decide whether it can constitute an estate under cl. (2)(a). If the expression "estate" is construed in the narrow sense in which the petitioner wants it to be construed then it may not be easy to reconcile the said narrow denotation with the wide extent of the word "estate" as is defined in some local definitions of the word "estate ". Therefore, in deciding the question as to whether the properties of the petitioner are an "estate" within the meaning of article 31A(2)(a) we are not prepared to adopt 778 the narrow construction that the estate must always and in every case represent the estate held by zamindars or other similar intermediaries who are the alienees of land revenue. This question can also be considered from another point of view. As we will presently point out, decisions of this Court in relation to agricultural estates existing in areas where the zamindari tenure does not prevail clearly show that the definitions in the relevant existing laws in those areas include properties within the expression "estate" despite the fact that the condition of the existence of the intermediary is not satisfied by them, and so there can be no doubt that even in such ares if the definition of the word "estate" includes specified agricultural properties they would be treated as estates under cl. (2)(a). Now just consider what would be the position in areas where the zamindari tenure does not prevail and where the relevant existing law dose not contain a definition of an "estate" as such. According to the petitioner 's argument where in such a case it is necessary to find out a local equivalent of an estate the search for such a local equivalent would be futile, because in the area in question the condition or test of the presence of intermediaries may not be satisfied and that would mean that the main object with which the Constitution First and Fourth Amendment Acts of 1951 and 1955 were passed would be of no assistance to the State Legislatures in such local areas. If the State Legislatures in such local areas want to enact a law for agrarian reform they would not be able to claim the benefit of article 31 A (1)(a). Indeed, the petitioner concedes that on his construction of cl. (2) (a) the intended object of the amendments may not be carried out in certain areas where the existing relevant law does not define an estate as such; but his argument is that the Constitution makers failed to give effect to their intention 779 because they omitted to introduce a suitable amendment in cl. (2)(a). On a fair construction of cl. (2) (a) we do not think that we are driven to such a conclusion. Therefore, we are not inclined to accept the petitioner 's narrow interpretation of the word "estate" in cl. (2) (a). It is necessary therefore to have some basic idea of the meaning of the word "estate" as used in article 31A(2) (a). As we have said already, where the word "estate" as such is used in the existing law relating to land tenures in force in a particular area, there is no difficulty and the word "estate" as defined in the exiting law would have that meaning for that area and there would be no necessity for looking for a local equivalent. But where the word "estate" as such is not defined in an existing law it will be necessary to see if some other term is defined or used in the existing law in a particular area which in that area is the local equivalent of the word "estate". In that case the word "estate" would have the meaning assigned to that term in the existing law in that area. To determine therefore whether a particular term defined or used in a particular area is the local equivalent of the word "estate" as used in article 31 A (2) (a) it is necessary to have some basic concept of the meaning of the word "estate" as used in the relevant Article of the Constitution. It seems to us that the basic concept of the word "estate" is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the State paying land revenue to it except where it is remitted in whole or in part. If therefore a term is used or defined in any existing law in a local area which corresponds to this basic concept of "estate" that would be the local equivalent of word "estate" in that area. It is not necessary. that there must be an intermediary in an estate before it can be called an estate within the meaning of article 31 A (2)(a); it is true that in 780 many cases of estate such intermediaries exist, but there are many holders of small estates who cultivate their lands without any intermediary whatever. It is not the presence of the intermediary that determines whether a particular landed property is an estate or not; what determines the character of such property to be an estate is whether it comes within the definition of the word "estate" in the existing law in a particular area or is for the purpose of that area the local equivalent of the word "estate" irrespective of whether there are intermediaries in existence or not. This in our opinion, is also borne out by consideration of the relevant decisions of this Court to which we will now turn. The decisions of this Court where this question has been considered lend support to the construction of the word "estate" for which the respondent contends. In Sri Ram Ram Narain Medhi vs The State of Bombay (1) the constitutional validity of the Bombay Tenancy and Agricultural Lands (Amendment) Act 1956 (Bombay Act XIII of 1956) amending the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay Act LXVII of 1948), was considered by this Court. Section 2(5) of the Bombay Land Revenue Code, 1879, had defined the word "estate" as meaning any interest lands and the aggregate of such interested vested in a person or aggregate of persons capable of holding the same. This Court held that the Bombay Land Revenue Code was the existing law relating to land tenures in force in the State of Bombay and that the definition of the word "estate" as prescribed by s.2(5) had the meaning of any interest in land and it was not confined merely to the holdings of landholders of alienated lands. The expression applied not only to such estate holders but also to land holders and occupants of unalienated lands". It would be noticed that section 2(5) referred to "any 781 interest in lands" and the expression "lands" was undoubtedly capable of comprising within its ambit alienated and unalienated lands. The argument urged by the petitioner in that case in attacking the validity of the impugned Act in substance was that having regard to the narrow denotation of the "estate" used in article 31A(2)(a) the broader construction of section 2(5) of the Bombay Land Revenue Code should not be adopted, and in construing what is the local equivalent of the expression "estate" in Bombay the narrow construction of section 2(5) should be adopted and its operation should be confined to alienated lands alone. This contention was rejected and it was held that the estate as defined was not confined merely to the holdings of landholders of alienated lands. It is true that the decision proceeded substantially on the interpretation of section 2(5) of the local Act ; but it may be observed that if the denotation of the word "estate" occurring in article 31A(2)(a) was as narrow as is suggested to by the petitioner before us this Court would have treated that as a relevant and material fact in considering the contention of the petitioner before it that the narrow construction of section 2(5) should be adopted. There is no doubt that the property which was held to be an estate in Medhi 's case (1) would not be an estate within the narrow meaning of the word as suggested by the petitioner. In Atma Ram vs The State of Punjab (2), this Court had occasion to consider the meaning of the expression "estate" in the light of the Punjab Land Revenue Act, 1887. Section 3(1) of the said Act had provided that an "estate" means any area (a) for which a separate record of rights has been made, or (b) which has separately assessed to land revenue, or would have been so assessed if the land revenue had not been released, compounded for or redeemed, or(c) which the State Government may by general rule or special order, declare to be an estate. Section 3(3) which is also relevant provided 782 that "holding" means a share or portion of an estate held by one landowner or jointly by two or more landowners. One of the arguments urged by the petitioner before the Court was that a part of the holding was not an estate within the meaning of section 3(1) of the local Act. This argument was rejected. In dealing with the question as to whether the property held by the petitioner was an estate under the article 31A(2)(a) it became necessary for the Court to consider the amplitude of the expression "any estate or of any rights therein" in article 31A (1) (a). Sinha J., as he then was, who spoke for the Court, has elaborately examined the different kinds of land tenures prevailing in different parts of India, and has described the process of sub infeudation which was noticeable in most of the areas in course of time. An "estate", it was observed, "is an area of land which is unit of revenue assessment and which is separately entered in the Land Revenue Collector 's register or revenue paying or revenue free estates". "Speaking generally", observed Sinha, J., "It may be said that at the apex of the pyramid stands the State. Under the State, a large number of persons variously called proprietors, zamindars, malguzars, inamdars and jagirdars, etc., hold parcels of land, subject to the payment of land revenue designated as peshkash, quitrent or malguzari, etc., representing the Government demands by way of land tax out of the usufruct of the land constituting an state, except where the Government demands had been excused in whole or in part by way of reward for service rendered to the State in the past, or to be rendered in the future" (p. 759). "Tenure holders", it was observed, "were persons who took lands of an estate not necessarily for the purpose of self cultivation, but also for settling tenants on the land and realising rents from them. Thus, in each grade of holders of land, in the process of sub infeudation the holder is a tenant under his superior holder 783 the landlord, and also the landlord of the holder directly holding under him" (pp. 760, 761). Having thus considered the background of the land tenures in Punjab and elsewhere this Court proceeded to consider the amplitude of the crucial words "any estate or of any rights therein" in article 31A(1)(a). "According to this decision as the connotation of the term "estate" was different in different parts of the country, the expression "estate" described in cl. (2) of article 31A, has been so broadly defined as to cover all estates in the country, and to cover all possible kinds of rights in estates, as shown by sub cl. (b) of cl. (2) of article 31 A" (p. 762). "The expression `rights ' in relation to an estate has been given an all inclusive meaning comprising both what we have called, for the sake of brevity, the horizontal and vertical divisions of an estate. The Provisions aforesaid of article 31 A, bearing on the construction of the expression `estate ' or `rights ' in an estate, have been deliberately made as wide as they could be in order to take in all kinds of rights quantitative and qualitative in an area coextensive with an estate or only a portion thereof" (p. 763). Further observations made in the judgment in regard to the effect of the addition of words "raiyats" and "under raiyats" in cl. (b) may also be usefully quoted : "The expression `rights ' in relation to an estate again has been used in a very comprehensive sense of including not only the interests of proprietors or Sub proprietors but also of lower grade tenants, like raiyats or under raiyats, and then they added, by way of further emphasising their intention, the expression `other intermediary ', thus clearly showing that the enumeration of intermediaries was only illustrative and not exhaustive" (p. 765). Thus, this decision shows that the amendments made by the constitution First and Fourth Amendment Acts of 1951 and 1955 were intended to enable the State Legislatures to undertake the task of agrarian reform with the object of abolishing intermediaries 784 and establishing direct relationship between the State and tillers of the soil; and it is in that context that the would "estate" occurring in cl. (2) of article 31 A was construed by this Court. What we have said about the decision in Medhi 's case (1) is equally true about the decision in the case of Atma Ram (2). The property which was held to be an estate was not an estate in the narrow sense for which the petitioner contends. In Shri Mahadeo Paikaji Kolhe Yavatmal vs The State of Bombay and Shri Namadeorao Baliramji vs The State of Bombay (3) this Court had to consider the case of the petitioners in Vidarbha who held lands under the State and paid land revenue for the said lands thus held by them. The relevant provisions of the Madhya Pradesh Land Revenue Code. 1954 (II of 1955) were examined and it was held that though the word "estate" as. such had not been employed by the said Code the equivalent of the estate had to he determined under article 31 A (2) (a), and as a result of provisions of sections 145 and 146 of the said Code it was held that the estates held by the petitioners satisfied the test of the local equivalent of "estate" as contemplated by article 31A (2) (a). In The State of Bihar vs Rameshwar Pratap Narain Singh(4), this Court had occasion to consider the scope and effect of the expression "rights in relation to an estate" used in cl. (2) (b), and it held that "in the circumstances and in the particular setting in which the words `raiyat ' and `under raiyat ' were introduced into the definition it must be held that the words "or other intermediary" occurring at the end do not qualify or colour the meaning to be attached to the tenures newly added". It is in the light of these decisions that we must now proceed to examine the character of the properties with which the petitioner is concerned. As we have already seen the petitioner owns about 900 acres of land which are classified 785 as Pandaravaka holdings and about 350 acres which are described as Puravaka holdings. In meeting the respondent 's contention that these lands are an estate under cl. (2) (a) of article 31A the petitioner has alleged that the Pandaravaka tenure represents lands of which the State was in the position of the landlord and whatever rights other persons possessed were directly derived from the State. Of the several classes of Pandaravaka tenure the most common is the verumpattom and most of the petitioner 's lands falling under the Pandaravaka tenure belong to this class. The petitioner 's case is that his liability is to pay rent to the State calculated as a proportion of the gross yield of the properties ; and so the lands held by the petitioner as tenant under the State cannot be said to be an estate under cl. (2) (a). He is not an intermediary between the State and the tiller of soil and so is outside the purview of cl. (2) (a). It has also been alleged by the petitioner that his properties cannot be said to be an estate even in the sense of a local equivalent of the term "estate" because there is no unified record of rights over the area in question; "each survey number is often divided into several sub numbers and representing holdings that do not often take in more than a few cents has his own record of rights and separate assessment register". It is for these reasons that the petitioner resists the application of cl. (2) (a) to his Pandaravaka Verumpattom lands. No clear and specific plea has been expressly made by the petitioner in regard to Puravaka lands. In that connection the petitioner has, however, alleged that the Janmam is another peculiar feature of the land system in Kerala which it is not easy to define since a good deal of ambiguity attaches to the term. However he contends that the Janmam right has to be understood in its limited and technical sense as taking within its scope a particular form of land holding known as the known tenancy. 786 According to the petitioner the Janmam right included in cl. (2) (a) can take in only the rights and liabilities controlled and created by the two Tenancy Acts to which he has referred. That is how the petitioner contends that the Puravaka lands are also outside the purview of cl. (2) (a). It is common ground that the proclamation issued by his Highness Sir Rama Varma Raja of Cochin on March 10, 1905, is the relevant existing law for the purpose of deciding whether the agricultural properties of the petitioner constitute an estate under cl. (2)(a). It is therefore, necessary to examine the scheme of this proclamation and decide whether in view of the characteristics and attributes of the properties held by the petitioner they can be said to constitute a local equivalent of an estate under cl.(2)(a). This proclamation consists of twenty eight clauses which deal broadly with all the aspects of land tenure prevailing in the State of Cochin. The preamble to the proclamation recites that the Raja had already ordered that a complete survey embracing demarcation and mapping and the preparation of an accurate record of titles in respect of all descriptions of properties within his entire State shall be carried out, and it adds that directions had been issued that a revenue settlement or revision of the State demand shall be conducted in accordance with the principles laid down by the proclamation. Clause 6 enumerates the tenures of lands prevailing in the State. Under this clause there are two major tenures (1) Pandaravaka and (2) Puravaka. The former are held on one or the other of six varieties of tenures; of these we are concerned with the verumpattom sub tenure. This clause provides that the Pandaravaka verumpattom tenure shall be deemed as the normal tenure for settling the full State demand and that the other tenures shall be treated as favourable tenures and settled on the lines indicated in cls. 14 to 17. Clause 7 says that the present rate of assessment 787 on Pandaravaka verumpattom nilas varies from one eighth para to twelve paras of paddy for every para of land; and it adds that such a vast disparity of rates is indicative of unequal incidence under the existing revenue system. That is why the clause proceeds to lay down that the State demand should bear a fixed proportion to the produce a land is capable of yielding and so it prescribes that under the Pandaravaka verumpattom tenure the holder should pay half of the net produce to the State. The clause then proceeds to provide for the method in which this half of the net produce should be determined. Clauses 11 and 12 deal with the assessment on tree. Clause 13 is important. It says "at present holders of Pandaravaka verumpattom lands do not possess any property in the soil. As we are convinced that proprietorship in the soil will induce the cultivator to improve his land and thereby add to the prosperity of the land, we hereby declare that the verumpattom holders of lands shall, after the new settlement has been introduced, acquire full rights to the soil of the lands they hold and that their rights shall remain undisturbed so long as they regularly pay the State revenue provided that the rights to metals, minerals possessed by the State in all lands under whatever tenure they are held are reserved to the State". Under cl.18 it is provided, inter alia, that in the case of Pandaravaka lands held on the erumpattom tenure the settlement shall be made with the present holder of the land and in regard to Puravaka land with the Janmam. Clause 22 prescribes the procedure and the time for the introduction of settlement. It requires that before the introduction of the new rates of assessment a rough patta shall be issued to each of the landholders showing the relevant detail of his holdings and the assessment to be paid by him hereafter. The object of preparing such a patta is to 788 give an opportunity to the landholders to bring to the notice of the authorities their objections if any. The objections are then required to be heard before the final entries are made. Clause 26 declares that the new settlement shall be current for a term of thirty years. This has been done with a view to secure the utmost freedom of action to the landholders in improving their properties and turning them to the best advantage according to their means and inclination. Clause 27 deals with escheats; and cl. 28 makes general provisions as to the formation of a new land record including reassessment of land and the registration of titles "a work calculated to promote the well being of a State". It would thus be seen that under cl. 13 the person holding lands on the Pandaravaka verumpattom tenure is not a tenant. He is given the proprietary right in the soil itself, subject of course to the rights as to metals and minerals reserved in favour of the State. Indeed, the whole scheme of the new proclamation appears to be to change the character of the possession of the Pandaravaka verumpattom tenure holder from that of a tenant into that of a proprietor holder. It is true that he is made liable to pay half of the net produce and that may appear to be a little too high, but the measure of the levy will not convert what is intended to be a recovery of assessment into a recovery of rent. The proprietor of the land held on Pandaravaka verumpattom tenure is nevertheless a proprietor of the land and he holds the land subject to his liability to pay the assessment to the State. It is not difficult to imagine that in a fairly large number of lands held by Pandaravaka verumpattom tenure holders the holders in turn would let out the lands to the cultivators and thus would come into existence a local equivalent of the class of intermediaries. Land revenue record is required to be prepared by the proclamation and relevant entries showing the extent of the properties belonging to 789 the respective holders and the details about their liability to pay the assessment are intended to be shown in the said record. In our opinion, it would not be reasonable to hold that the lands held by the petitioner under the Pandaravaka verumpattom tenure do not confer on him the proprietary right at all but make him a tenant of the State. In the proclamation there does not appear to be a provision for forfeiture or surrender and the scheme adopted by the proclamation suggests that the amount due from the tenure holder by was of assessment would presumably be recovered as arrears of land revenue and not as rent. Therefore, we are inclined to hold that the Pandaravaka Verumpattom can be regarded as a local equivalent of an estate under cl. (2) (a) of article 31A. The position with regard to Puravaka lands is still more clear. Clause 14 of the proclamation enumerates four kinds of more favourable tenures. The first of these is the class of Puravaka lands. Clause 15 provides that in the case of Puravaka lands a third party called Janmi is recognised as owning proprietorship in the land and therefore entitled to share the produce with the cultivator and the sirkar. Then the clause describes the mode in which share of the State or its demand on these Puravaka lands is calculated, under the previously existing land system; and it provides new rates of assessment payable in respect of the Puravaka tenure. The Puravaka tenure in the State, the clause adds, corresponds to the normal conditions of land tenure in the District of Malabar where, in the recently introduced settlements, the net produce was distributed among the cultivator, the Janmi and the State in the following proportion : 790 __________________________________________________ __________ In Wet Lands In Garden Lands or Vrikshapattom Parambas __________________________________________________ __________ Cultivator 5 out of 15 5 out of 15 Jenmi 4 out of 15 5 out of 15 State 6 out of 15 5 out of 15 __________________________________________________ __________ Since it was thought that the said method of apportionment was fair and equitable the clause adopted the same in the State of Cochin. It would thus be clear that the lands held by the petitioner under the Puravaka tenure satisfy the test of even the narrow construction placed by the petitioner on the term "estate" in cl. (2)(a). Therefore, there can be no doubt that about 350 acres of land held by the petitioner on the Puravaka tenure constitute an estate under cl. (2)(a). The result is that the lands held by the petitioner are an estate under cl. (2)(a), and so the Act in so far as it operates against the holdings of the petitioner is protected under article 31A(1)(a) and so it is not open to the petitioner to challenge its validity on the ground that its material provisions offend against articles 14, 19 and 31 of the Constitution. The writ petition accordingly fails and is dismissed. There will be no order as to costs. AYYANGAR, J. I regret I am unable to agree that article 31A of the Constitution saves the Kerala Agrarian Relations Act, 1960, from challenge under articles 14, 19 and 31 of the Constitution in so far as the said Act relates to the Pandaravaka lands of the petitioner. Before however dealing with this point I consider it proper to add that I entirely agree that the Act was properly enacted by the State Legislature and that the consideration of the remitted bill by the new Legislative Assembly did not violate the provisions of article 20 of the Constitution. In my judgment the terms of article 196 of the Constitution proceed on the basis that the Constitution maker 791 in line with the framers of the Government of India Act, 1935, radically departed from the theory of the British Constitutional Law and the practice obtaining in the Parliament of the United Kingdom as regards the effect of dissolution of the Houses of the Legislature on bills passed by the House or Houses and pending the assent of the head of the State. Article 196 by its third clause having negatived the English rule that bills pending in the legislature lapse by reason of prorogation, goes on to enact cls. (4) and (5) making special provision for Lapse in the event of not prorogation but dissolution. Clause (5) enacts: "A bill which is pending in the Legislative Assembly of a State or which having been passed by the Legislative Assembly is pending in the legislative Council shall lapse on a dissolution of the Assembly." This clause on its terms applies both to States which have and which do not have a bicameral legislature. In its application to a State without a Legislative Council the relevant words of the clause would read: "A bill which is pending in a Legislative Assembly of a State. . .shall lapse on dissolution of the Assembly". The question that arises on the terms of this clause may be stated thus: Can a bill be said to be pending before the Legislative Assembly when it has gone through all the stages of the procedure prescribed for its passage through the house and has been passed by the Assembly ? Expressed in other words, does the pendency of a bill before the Assembly cease when it has passed through all the stages through which bills pass before the House or is it to be deemed as pending before the House until the bill receives the assent of the Governor or the President, as the case may be the latter event arising when bills are reserved by the Governor for the President 's assent ? Unless it could be contended that a bill 792 is pending in the Legislative Assembly until assent, there could be no scope for the argument based on article 196(5) in support of the position that an unassented bill is still pending in the Assembly. In this context the difference in the terminology employed in article 196(3) and 196(5) requires to be noticed. Whereas article 196(3) speaks of the pendency of a bill in the Legislature of a State which would, having regard to the description of 'Legislature ' in article 168, include the Governor, article 196(5) uses the words 'Legislative Assembly ' as if to indicate that it is only in the event of the bill being pending before that body that it lapses on dissolution. In the face of the provision in article 196(5) there is no justification for invoking the Biritish practice under which bills not assented to before the dissolution of the Houses are treated as having lapsed on that event occurring. If the Governor can assent or refuse to assent to a bill, which has passed through all the stages of consideration by a Legislative Assembly even though that Assembly is dissolved under the terms of article 200, because the bill is a live bill within the terms of that Article, it would follow that he can exercise the other alternative open to him under that Article, viz., to reserve the bill for the President 's assent. If by reason of the language employed in article 196(5) the bill is alive so far, and the President could assent to the bill it would follow that subject to an argument based on the terms of article 201 he can also remit the bill for reconsideration by the Assembly notwithstanding the dissolution. The next question for consideration is whether there is anything in the terms of article 201 which precludes effect being given to the above principle. The Article runs: 793 "201. When a Bill is reserved by a Governor for the consideration of the President, the President shall declare either that he assents to the Bill or that he withholds assent therefrom: Provided that, where the Bill is not a Money Bill, the President may direct the Governor to return the Bill to the House or, as the case may be, the Houses of the Legislature of the State together with such a message as is mentioned in the first proviso to article 200 and, when a Bill is so returned, the House or Houses shall reconsider it accordingly within a period of six months from the date of receipt of such message and if it is again passed by the House or Houses with or without amendment, it shall be presented again to the President for his consideration. " Considerable stress was laid by the Learned Counsel on the use of the two expressions 'return the bill to the House ' and 'the House shall reconsider it accordingly ' as indicating that the words underlined* unmistakably implied that the consideration of the bill must be by the Assembly which originally passed it. It was in this connection that reliance was placed on the terms of article 172(1) reading (omitting the proviso which is immaterial for the present purpose): "172. (1) Every Legislative Assembly of every State, unless sooner dissolved, shall continue for five years from the date appointed for its first meeting and no longer and the expiration of the said period of five years shall operate as a dissolution of the Assembly: " The argument was that the Constitution did not envisage the Assemblies having a continuous life but 794 that on the other hand it clearly contemplated different Legislative Assemblies each one having a definite life which ended either automatically at the end of five years or at an earlier period by dissolution and that in the context of this provision, to the words 'return ' and 'reconsider ' employed in article 201 their literal meaning must be attached. It is not possible to accept this construction as to the effect of article 172 on the rest of the provisions in this Part. No doubt, for particular purposes each Assembly is conceived of as having a life of limited duration but it does not follow that the Constitution does not envisage the Legislature as an institution. In this connection I consider it useful to refer to the decision of the Privy Council in Attorney General for New South Wales vs Rennie (1). The question before the Board was as ragards the true construction of a New South Wales statute "The Parliamentary Representatives ' Allowance Act" which by its section 2 made an annual grant to "every member of the Legislative Assembly now serving or hereafter to serve therein". Section 2 of the Imperial Act which enacted the Constitution Act of the Colony provided that "every Legislative Assembly was to continue for five years from the day of the return of writs for choosing the same and no longer, subject to be sooner prorogued or dissolved by the Governor of the Colony", which term was by a later enactment reduced to three years. The Attorney General for New South Wales raised an information seeking a declaration that there were no moneys legally available or applicable to the payment of members of future Assemblies with a prayer that the Auditor General might be restrained from countersigning the authorisation of such payments. The Supreme Court of the Colony dismissed the information whereupon the Attorney General brought the matter in appeal to the Privy 795 Council. The question turned on the meaning of the words 'the Legislative Assembly ' in section 2 of the Act and reliance was placed on behalf of the appellant on the provision for dissolution contained in the Imperial Act. It was contended that the Assembly was a body of limited duration called into existence from time to time and not a permanent and continuous body and that consequently the Act granting the allowance should be construed as applying to the members of the particular Assembly in existence on the date of the Act. Rejecting this argument, Sir, Richard Couch stated: "They think that according to the ordinary use of the term 'legislative assembly it means the assembly created by the Constitution Act which, though liable to be dissolved or to expire by effluxion of time, is an essential part of the constitution of the colony and must be regarded as a permanent body. " I consider these words apt to describe the reference to the "House of the Legislature" in the proviso to article 201. I therefore respectfully concur in the view that the bill was validly passed and that the objection based on an infringement or contravention of article 201 must be repelled. I shall now take up for consideration the merits of the petition. The petitioner is the owner of about 1,250 acres of land in Trichur in the erstwhile princely State of Cochin. Out of this extent, 900 acres are classified in the land records of the State as Pandaravaka Verumpattom lands and the remaining are entered as Puravaka lands. While so the Kerala Legislature enacted the Kerala Agrarian Relations Act, 1960 (Kerala Act IV of 1961), providing for the acquisition of certain types of agricultural lands in the State beyond the specified maximum extents laid down in the statute and 796 on payment of compensation as determined by it. The details of this legislation are set out and their impact on the owners of landed property in the State are dealt with in full in the judgment in Writ Petitions 114 and 115 which is being pronounced today. In the circumstances it is not necessary to say more about the enactment than point out that it seriously interferes with the rights of landowners in a manner which, as held in the judgment in the other petitions, is violative of the rights guaranteed to citizens by Part III of the constitution. For the respondent however the main defence on this petition is based on article 31A, the submission being that the lands of the petitioner by reason of the tenure by which he holds them, constitute an "estate" within the definition of that term in article 31A(2)(a). As the tenures which are involved in the case cover considerable areas of the former State of Cochin, and as the implications arising from any decision as regards these tenures might affect other areas, particularly in South India the effect of the acceptance of the submission by the respondent would be far reaching. I have therefore considered it proper to deal with matter from a wider angle than would be necessary if the effect of our decision would be confined to tenures of infrequent occurrence. The two tenures into which the lands held by the petitioner fall are, as stated earlier, Pandaravaka Verumpattom and the Puravaka, but before considering their characteristics it will be useful to attempt a picture of the general system of landholding in Malabar. As is well known, Malabar comprising the territories of the former princely State of Travancore & Cochin and the contiguous district of Malabar in the former Presidency of Madras, was among the few areas in India in which freehold rights in land were recognised. This exclusive right and hereditary possession and usufruct of the soil was denoted by the term "Jenm" 797 and the holder was designated the Jenmi or the Jenmikaran. The Jenmis had full and obsolute property in the soil. All land which was not the property of Jenmis or ceased to be theirs such as by forfeiture, were held by the State. These lands were let for rent to cultivators on terms of paying rent. The assertion by the State to the proprietorship of the soil which carried with it a denial of the right of alienation by the tenant of the leased lands and so of the right to hereditary enjoyment was besides being contrary to the accepted theory of the Hindu law givers, was also productive of grave economic ills. According to the Hindu Law givers starting from Manu, property in the soil arose out of occupation and cultivation. The texts which expound this position are set out and discussed by Westropp, C. J., in Vykunta Bapuji vs Government of Bombay(1) (See also Sundaraja Iyengar Land Tenures in the Madras Presidency, pp. 5 to21). According to this theory the King was not the owner of cultivated land but the proprietary interest in it vested in the cultivator, the right of the King being merely to the Raja bhagam which represented various proportions of the produce, sometimes thought of as being a sixth and at other times at higher proportions ranging up to a half. As observed by Subramania Iyer, J., in Venkata Narasimha vs Kotayya (2). "For, in the first place, sovereigns, ancient or modern, did here set up more than a right to a share of the produce raised by raiyats in lands cultivated by them, however much that share varied at different times. And,in the language of the Board of Revenue which long after the Permanent Settlement Regulations were passed, investigated and reported upon the nature of the rights of ryots in the various parts of the Presidency, 'whether rendered in service, in money or in kind and whether paid to rajas, jagirdars, zemindars, poligars, mutadars 798 shro triemdars, inamdars or to Government officers, such as tahsildars, amildars, amins or thannadars, the payments which have always been made are universally deemed the due of Government. ' (See the Proceedings of the Board of Revenue, dated 5th January, 1818, quoted in the note at page 223 of Dewan Bahadur Srinivasa Raghava Ayyangar 's 'Progress in the Madras Presidency '). " This proprietary interest of the cultivator was in its true sense a property right being capable of alienation and of hereditary enjoyment. At the time of Permanent Settlement Regulation in Bengal (1793), and subsequently when its Madras counterpart was enacted (Regulation XXV of 1802), there was a great deal of controversy as to whether the East India Company as the Ruler was or was not entitled to the proprietary rights to the soil in the country. In the words of Westropp, C. J., in Vykunta Bapuji vs Government of Bombay (1) involved in this "was the question as to the character in which native governments claimed, from the occupants of the land, payments either in money or in produce in respect of the land. Were these payments rent or revenue ? Some maintained that those payments were rent, not revenue; because, it was said, the land could only be occupied and cultivated by the permission of the sovereign, and that such produce, as there may be in excess of what sufficed for the bare subsistence of the cultivators and for the expenses of cultivation, is the property of the sovereign. Others maintained that the sovereign was only entitled to a fixed portion of the produce, and that the surplus beyond that portion, plus the subsistence of the rayuts (cultivators) 799 and the cost of cultivation, belonged to a class of great landlords between the sovereign and the rayuts, which intermediate class consisted of zamindars, talukdars or similar personages; while others again strongly contended that, subject to a land tax payable to the sovereign, the property in the soil was vested in the cultivator, sometimes in the form of village communities holding corporately, at other times individuals holding in severalty, or jointly as members of an undivided family. In 1793, (either upon the ground that the soil was vested in the sovereign power, and that it was expedient that, by that power, a landed aristocracy should be created, or upon the ground, that the land, subject to the revenue assessment i.e., the king 's (or State 's share of the produce, ought to be publicly recognized as vested in the class of zamindars, & c., as landlords) the permanent settlement in Bengal, Bihar and Orissa was made by the Government of Lord Cornwallis, by recognizing the zamindars, & c., as the proprietors of the soil, and entitled to transfer it, and by fixing, once for all, the land tax payable by them to the State at an immutable annual rate. " In 1796 the Government of Madras declared that "it is the first feature in all the Governments of India, that the Sovereign, whether he be a Mussulman or Hindoo is lord of the soil; and hence it is that no alienation of lands from the property of the circar, or rather no possession of land whatever is valid without a written instrument from the superior lord; and this distinction has invariably followed the conquests of all nations who have established themselves in India". This statement was directly contrary to accepted practice and the consciousness of the cultivator in Madras. It is not therefore a matter for surprise 800 that in answer to this declaration of the Government, the Board of Revenue at once pointed out that "there were hereditary cultivators on lands with the right of making any disposition of them by sale, mortgage or otherwise as long as they paid the Government revenue, and that they only could not make any alienation of them to the exclusion of the royal share of the revenue. " Acting on the view that the Crown was the proprietor of the soil, the Birtish Government purported to confer proprietary rights in the soil on the zamindars under the Permanent Settlement the preamble to which referred to the reservation by the ruling power of the "implied right and actual exercise of the proprietary right to possession of all lands whatever" and by section 2 purported to vest in the zamindars the proprietary right to the soil. It was however found that this interfered with the established rights of cultivators and Madras Regulation IV of 1822 was passed to declare that the provisions of Regulation XXV of 1802 were not intended to affect the actual ryots in cultivation of lands. It might be added that the Privy Council ruled in Collector of Trichinapally vs Lekkamoni (1) that the theory underlying these words in the Regulation were not sustainable and that there were proprietary rights in land not traceable to or derived from the sovereign. The introduction of the Permanent Settlement with the creation of a class of zamindars as in Bengal was not considered to be a beneficial system by the Government of Madras and so after the grant of some sanads under Madras Regulation XXV of 1802 mostly in recognition of ancient titles the creation of new permanently settled estates was stopped and in its place, the system of revenue administration associated with the name of Sir Thomas Munro known as the ryotwari system was adopted. According to Munro there was 801 no need for the interposition of an intermediary between the State and the actual cultivator, particularly as it was clear that the system meant that the zamindars enjoyed what the cultivator parted with to the State; in other words, the difference between the rent paid by the actual cultivator, viz., the melwaram and the peishcush or the Jama fixed by the zamindar or proprietor was so much profit for the middleman and therefore pro tanto a diminution of the amount which would have accrued to the State. Besides, Munro considered that on economic grounds and with a view to increase agricultural production it was necessary for the State being in touch with the actual cultivator. For these reasons he formulated the "ryotwari system" and introduced it in several areas of the Madras Presidency and Coimbatore district adjoining the State of Cochin being almost the first among the districts where the system was introduced. The basic and essential feature of the system was that the fixation of the revenue assessment payable by the cultivator had to be proceeded by a survey of the a land which included the ascertainment of the productivity of the soil and that the assessment should be based on what was known as 'tharam ' (or quality) classification. The assessment thus began to be based on scientific data and principles and was so designed as to leave a sufficient margin to the cultivator to induce him to remain on the land and be assured of a good share in increased production resulting from the employment of his labour and capital. The terms on which the ryot held the land was contained in the patta issued to him on behalf of the Government and this specified the extent of land held by him as well as the amount of the assessment and the time when the instalments had to be paid. This was not however considered to be any document of title, because the ryot had the property in him and his interest was a proprietary interest in the soil and so capable 802 of being alienated and of being transmitted to his heirs. This however was not anything new and it was not as if the interest of the cultivator was not alienable before the ryotwari system was introduced. Before that date however, the assessment of the land was both heavy in most parts and unequal not being based on the productive capacity of the soil, as to leave little or no margin to the cultivator. Besides the predations of revenue and the severity of the tax was dependent on the exigencies and necessities, if not the whims of the ruler and in such a situation, even though technically cultivated land was capable of alienation there being no ban on alienation, still having regard to the meagre margin left to the owner and the fear of increased taxation based on no principle, no purchaser could be found; though owing to the impossibility of finding a more profitable use for manual labour apart from the sentimental attachment to land, the actual cultivator clung to his holding. But when with the advent of a system of assessment based on fixed and scientific principles which left a sufficient margin for the cultivator, and there was no fear of sudden increases of assessment, land became a marketable commodity investment in which was rendered worthwhile. Notwithstanding that in Malabar absolute ownership of the soil by the Jenmi where the land was the property of individuals and of the State where it was the owner, was a characteristic of the landholding, still from a fairly early date after the British conquest of the neighbouring areas the concept of the cultivator with whom the State entered into direct relations being conceded the proprietorship of the soil slowly permeated. In this connection I might usefully refer to a proclamation of the ruler of Travancore of 1865 (1040 M. E.) regarding Sarkar pattom lands, with the observation that subject to variations 803 dependent on local usages, the system of land tenure and the concepts as regards the rights of property in land were substantially similar in Travancore and Cochin. Sarkar pattom lands were what might be termed 'Crown lands ' of which the ruler was deemed to be the Jenmi or the landlord. Previous to the proclamation the lands were legally capable of being resumed by the ruler, though this was seldom done and the cultivators were not legally entitled to transfer their rights and where this was done the Government had the right to ignore the transaction. The fact that the cultivator was conceived of as having no proprietary interest on the land also bore adversely on the State since the State was deprived of the means of realising any arrears of revenue by bringing the holding to sale. It was to remedy this situation that the proclamation was issued and the preamble and its terms carry the impress of the impact of the ryotwari system of Madras. The proclamation reads: "Whereas we earnestly desire that the possession of landed as well as other property in Our Territory should be as secure as possible; and whereas We are of opinion that, with this view Sirkar Pattom lands can be placed on a much better footing than at present so as to enhance their value; we are pleased to notify to our Ryots 1st. That the Sirkar hereby and for ever surrenders, for the benefit of the people, all optional power over the following classes of lands, whether wet, garden or dry, and whether included in the Ayacut accounts or registered since: Ven Pattom, Vettolivoo Pattom, Maraya Pattom, Olavoo Pattom, Mara Pattom, 804 and all such Durkast Pattom, the tax of which is understood to be fixed till the next Survey and assessment. 2ndly. That the Ryots holding these lands may regard them fully as private, heritable, saleable, and otherwise transferable, property. 3rdly. Accordingly, the sales, mortgages, & c., of these lands will henceforward be valid, may be effected on stamped cadjans, and will be duly registered. The lands may be sold for arrears of tax, in execution of decrees of Courts and such other legitimate purposes, and may also be accepted as security by the Sirkar as well as by private individuals. 4thly. That the holders of the lands in question may rest assured that they may enjoy them undisturbed so long as the appointed assessment is paid. 5thly. That the said holders are henceforth at full liberty to lay out labour and capital on their lands of the aforesaid description to any extent they please, being sure of continued and secure possession. . . . " The language employed in the proclamation is of significance. It speaks of the relinquishment or withdrawal of the right of the State and not of the conferment of a right on the ryot so as to render the ryot a grantee from the State, just in line with the Hindu Law theory of the proprietorship of the soil vesting in the occupant cultivator. With this background, I shall proceed to consider the nature of the tenures Pandaravaka and Puravaka with which this petition is concerned. The two tenures are quite different in their origin and essential characteristics and so have to be separately dealt with. Pandaravaka lands are those in which the State held proprietary rights the 805 name being derived from Bandara or the treasury, while in regard to the Puravaka, they were lands in which the proprietorship vested in the Jenmi, but which were under the cultivation of tenants on whom the State imposed land revenue. Putting aside for the moment the Puravaka lands, the Pandaravaka lands might be approximated to the Crown lands dealt with by the Travancore Proclamation of 1865 already referred to. The terms on which the tenants held the right of the Crown were almost the same as in the other case. The evils which the system gave rise to, the economic insecurity of the tenant and the consequent lack of incentive on his part to put his best exertion on the land and the resultant loss to the state in the shape of revenue as well as the rise of a contented peasantry were exactly parallel to the situation which faced the ruler of Travancore leading to the proclamation of 1865. It was in these circumstances that the ruler of Cochin issued a proclamation on March 10, 1905, which defined with precision the rights of the State and of the cultivator in regard to these lands and it is the submission of the learned Attorney General that the effect of this proclamation is to render the Pandaravaka and Puravaka lands held by the petitioner "estates" within the meaning of article 31A(2) of the constitution as it now stands. It is therefore necessary to set out in some detail the terms of this proclamation. The preamble to the proclamation recites the fact that the State demand had not been fixed either with reference to the actual measurements of the land or on any fixed or uniform principles and that a revision of the State demand based upon a correct measurement of lands and definite principles, fair alike to the State and "our" agricultural population, is desirable in the interest of a sound revenue administration. It then proceeds to state 806 that a survey which included the demarcation, mapping and the preparation of an accurate record of titles in respect of all descriptions of properties was to be carried out and that a Settlement or revision of the State demand would be conducted in accordance with the principles laid down by the proclamation. In passing it may be mentioned that this is reminiscent of the despatches of Thomas Munro in which he expatiates upon the need of a proper survey and a correct definition of the principles upon which land revenue shall be assessed and that the quantum of revenue should be such as while providing for a fair share to the State, should leave enough for the cultivator to live upon and offer an inducement to him to increase the output of his fields in which event the surplus available to him would be more. In particular I might refer to a passage in a despatch which is extracted by Westropp, C.J., in Vykunta Bapuji vs Government of Bombay (1) reading: "When the land revenue is fixed and light, the farmer sees that he will reap the reward of his own industry: the cheerful prospect of improving his situation animates his labours, and enables him to replace in a short time the losses he may sustain from adverse seasons, the devastations of war, and other accidents. " Paragraph 5 of the proclamation directs that lands, whether wet or dry, were to be classified with reference to the nature of their soils in accordance with the table of classification prescribed in the Madras Settlement Manual which is sufficiently indicative of the close correspondence between the ryotwari system and mode of fixation of land revenue and the principles underlying it as prevailed in the neighbouring Presidency of Madras. Paragraph 6 reads: "Under the present land revenue system of the State, lands are held under two main 807 tenures, viz., Pandaravaka and Puravaka. . " At this stage it is necessary only to add that the proclamation does not deal with the rights as between the State and Jenmis, i.e., that class of land owners who were entitled to a freehold interest in the land as explained earlier. I shall deal later with special legislation with reference to Jenmis in the other princely State which is a constituent of present State of Kerala in its proper place. Paragraph 6 proceeds to enumerate the six subsidiary classifications of the Pandaravaka tenure and enumerates the Verumpattom type as the first among them and this type is taken as the standard for fixing the land revenue of the other categories which, it might be mentioned, are favourable tenants, the State demand being reduced. To these others which partake of the nature of grants of land revenue very different considerations would apply. The lands of the petitioner held on Pandaravaka tenure, it should be added fall within the sub category of Verumpattom lands. The proclamation then proceeds to state: "The revenue paid to the State varies according to the nature of the tenure, i.e., the six sub classes. It is however only the Pandaravaka Verumpattom lands which pay the full pattom or share due to the State. We have accordingly decided that the Pandaravaka Verumpattom shall be deemed as the normal tenure for settling the full State demand and that the other tenures shall be treated as favourable tenures and settled on the lines hereinafter indicated. . ." Paragraph 7, after reciting that the rates of assessment on Pandaravaka Verumpattom wet lands vary from place to place, points out that such disparity is indicative of unequal incidence and stating that it was essential that the State demand should 808 bear a fixed proportion to the produce a land is capable of yielding announces the decision that the same shall be half the net produce. The deductions to be made for ascertaining the net produce are indicated. The next clause which is of relevance and importance in the present context is cl. 13 which runs: "13. At present holders of Pandaravaka Verumpattom lands do not possess any property in the soil. As we are convinced that proprietorship in soil will induce a cultivator to improve his land and thereby add to the agricultural prosperity of the country, we hereby declare that our Verumpattom holders of lands shall, after the new Settlement has been introduced, acquire full rights to the soil of the lands they hold and that their rights shall remain undisturbed so long as they regularly pay the State revenue, provided that the rights to metals and minerals, possessed by the State in all lands under whatever tenures they are held, are reserved to the State. " Paragraph 14 onwards deal with favourable tenures and of these we are concerned only with Puravaka lands and it is pointed out in Paragraph 15 that in the case of Puravaka lands the Jenmi is recognised as owning the proprietorship in the land and is consequently entitled to share the produce with the cultivator and the Sirkar, and proceeds to define the State demand in such lands. There are other clauses dealing with other incidents in regard to these tenures and in regard to other interests in the land such as house sites etc. but we are not concerned with them. The proclamation also makes provision for the grant of rough or draft pattas to cultivators and of fair pattas detailing the assessment payable on such lands provisions exactly parallel to the practice and procedure prevailing in the adjoining area of the Madras Presidency. Besides, it also makes 809 provision against any revision of the assessment once fixed before the expiry of 30 years, also in line with the then practice in Madras. I have made this analysis of the provisions of the proclamation for the purpose of emphasizing that what the proclamation intended to achieve was the introduction of ryotwari system of settlement in the place of exactions by the State based on no principles and unrelated to the productivity of the soil and having an unequal incidence for different areas and different lands. The holder of Pandaravaka Verumpattom patta was therefore nothing more or nothing less than the holder of a ryotwari patta in the adjoining Madras State. The only point of difference that could be suggested is this. Under the ryotwari system, the proprietorship of the ryot to the soil is not in theory derived from the State, whereas under the proclamation of 1905, it appears to rest on a grant. In my opinion this makes no difference, because the essential features of the system are the same as those of ryotwari (1) a direct relationship between the State and the cultivator, and with the absence of any intermediary to intercept the raja bhagam or land revenue, (2) there is no grant or alienation of the States ' right to revenue in favour of the grantee. The Puravaka tenure was wholly different. They were lands held by Jenmis. As I shall show later, Jenmam lands were not exempt from the payment of land revenue but the Puravaka tenant had the benefit of a favourable assessment. In other words, in respect of those lands the produce of the land was the subject of sharing as between the actual cultivator, the Jenmi and the State, though the Jenmi had a freehold interest in the land itself The question for consideration now is whether the lands held under a patta by a Pandaravaka Verumpattom and of Jenmam lands by a Puravaka 810 tenant are "estates" within the meaning of article 31 A (2). Before examining the terms of article 31 A (2) as they now stand, it is necessary to refer to the antecedent history which led to the First and the Fourth Constitutional Amendments. Preliminary to this it might not be out of place to briefly explain the circumstances which necessitated the First amendment as pointing to the mischief which that amendment was designed to remedy. Very soon after independence several States initiated land reforms whose object was the elimination of the intermediaries. The Madras Legislature enacted the Madras Abolition of Estates and Conversion into Ryotwari Act, 1948, by which intermediaries in the shape of zemindars, Palayagars, Jagirdars, Inamdars and other such proprietors were eliminated and persons in actual cultivation of the lands under the zemindars were brought into direct relationship with the government by being granted ryotwari pattas in respect of their former holdings. There was similar legislation in Bihar Bihar Act 1 of 1950, as also in some of the other States of the Indian Union. The validity of the several pieces of legislation was challenged in the respective High Courts principally on the ground that the deprivation of the rights of the zamindars etc. effected by these enactments and the principles upon which the compensation payable for the deprivation was determined violated articles 14, 19 and 31 of the Constitution. The first case in which a decision was rendered by a High Court in respect of the contentions urged was by the Patna High Court in Kameshwar Singh vs State of Bihar (1) in which the petition succeeded and Bihar Abolition of Estates Act 1 of 1950 was declared unconstitutional. An appeal was preferred by the State against the judgment to this Court and it was during 811 the pendency of this appeal and with a view to validate the legislation which had been enacted in the several States and which was the subject of attack in several Courts, including this Court, that First Constitutional Amendment by which article 31A was introduced into the Constitution, was enacted. The Constitution (First Amendment) Act, 1951, received the assent of the President on June 18, 1951, but article 31A which was introduced by section 4 of this Act was expressly made retrospective from the commencement of the Constitution. As then enacted article 31A ran: "31A. Saving of laws providing for acquisition of estates: etc. (1) Notwithstanding anything in the foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. (2) In this article, (a) the expression 'estate ' shall in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant; (b) the expression 'rights ' in relation to an estate shall include any rights vesting in a proprietor, sub proprietor, under proprietor tenure holder or other intermediary and any rights or privilege in respect of revenue. " 812 In addition the First Constitution Amendment Act also enacted by its section 5 a further provision article 31B expressly validating the several enactments of the various States which were then under challenge and which were all set out in Sch. 9 of the Constitution. From this collocation it would be seen that whereas article 31B immunised from attack all the pieces of legislation which had been enacted by June 1951, article 31A was intended to render the same types of legislation enacted in future immune from attack, provided that the enactments were reserved for the President 's assent and were assented to by him. It is with this background that one has to approach the construction of article 31A. Clause (1) of article 31A does not present any difficulty in construction with reference to the point now under discussion, because its terms are clear and apply to laws providing for "the acquisition by the State of any estate or rights therein" or "the extinguishment or modification of any such rights". The crucial words here are that the rights which are acquired, extinguished or modified are rights in or in respect of an "estate". If there had been no definition of the expression 'estate ', one might have had to look to the grammatical of literal meaning of the word, and the word might conceivably be understood as including person 's interest in landed property whatever may be the nature or extent of the interest, though the width of this meaning might be controlled by the history of the provision, the antecedent state of circumstances and the mischief which it was designed to overcome. But the enactment has not left this matter for investigation in that manner. Sub clause (2)(a) contains the definition of expression 'estate ' and sub cl. (b) of "rights in relation to an estate". It is obvious that the word 'estate ' in sub cls. (a) and (b) mean the same and is employed to designate identical types of land holding. If the expression "rights in relation to an estate" in sub cl. (b) 813 indicates that it is the "estate" or the right of the intermediary that is comprehended by the use of the words 'proprietor, sub proprietor, under proprietor, tenure holder or other intermediary", clearly the expression 'estate ' in sub cl.(a) must be understood as referring to such types of landholder. It is also worth noting that the words "shall also include any jagir, inam or muafi or other similar grant" in sub cl.(a) have their parallel in sub cl. (b) by the words "any rights or privileges in respect of land revenue. " The net result therefore was that the term 'estate ' signified the land held by an intermediary who stood between the State and the actual tiller of the soil, and also the interests of those in whose favour there had been alienation of the right to revenue, i.e., lands held on revenue free or on favourable tenures. The two sub clauses may now be further examined to determine their content and significance. Taking first sub cl. (a) it is necessary to advert to two matters: (1) the reference to the "local equivalent" of the term 'estate ' in the law existing in any local area, and (2) the denotation of the words 'the existing law in relation to land tenures in force in that area '. In regard to the 'local equivalent ' of the term 'estate ' there is one observation I desire to make. These words were not in the Bill as originally presented to Parliament and were brought in as a result of the suggestion of the Joint Select Committee to which the BIII was referred. In their report the Select Committee stated: "We have amended the definition of an 'estate ' to cover cases where the existing law relating to land tenure is in a regional language for example in Hindi or Urdu and uses the local equivalent of 'estate '. " I am far from saying that if the meaning of the expression were clear the purpose for which the words were used would determine their construction 814 but I am drawing attention to this passage from the report of the Joint Select Committee for pointing out that by the use of the expression 'local equivalent ' the central concept of an 'estate ', as would be clear from the terms of sub cl. (b), which in effect is a further definition of the term 'estate ' was not intended to be departed from. Next as to the meaning of "in the existing law in relation to land tenures". These words raise for consideration the question as to what constitutes "a land tenure". If one had to go merely by the grammatical meaning merely of 'tenure ' derived from the Latin 'tenere ' to hold, any kind of right or title by which property is held would be included, the only requirement would be that the property should be held of another. In that wide sense it would include the case of land held under an ordinary tenancy under a landlord under the Transfer of Property Act. Obviously that is not the sense in which the word is employed in the clause. It has therefore to be understood as comprehending that type of "holding" where the holder is an intermediary between the State and the tiller, or is otherwise the grantee of land revenue holding the land under a favourable tenure. If this is the essential feature of the concept of an 'estate ' under cl. (2), the expression 'land tenure ' must in the context mean the 'tenure ' under which an 'estate ' as defined is held. To read it otherwise and understand 'land tenure ' as designating any system of landholding, whether or not such system conforms to the central and essential concept of estate, would not be correct. Such an interpretation would result in anomaly that in an existing law in force in a local area which uses the word 'estate ' and includes within that definition particular tenures, only they and none also are included, but if such law does not refer to a tenure as an 'estate ' then it comprehends any 815 holding of land under Government whatever be the nature of the tenure. That would constitute a radical departure from the purpose of the First Amendment and a construction which is not compelled by the words, but on the other hand contradicted by the context and setting in which they occur. This leads me to the case where an "existing law in relation to land tenures" uses the term 'estate ' and defines it in a particular manner and that definition includes not merely the proprietary rights of intermediaries or others holding land on favourable tenures as described in sub cl. (b) but also others who hold properties in their own right and describes the land holding of these others also as 'estates '. The question would then arise whether literal effect has or has not to be given to the words 'defined as an estate under the law relating to land tenures ' occurring in sub cl. One possible view to take would be that having regard to the central concept of an 'estate ' as signifying the rights in land of an intermediary etc. , those whose rights in land did not involve any assignment of the Raja bhagam but were in direct relationship with the State and subject to the payment of the full assessment of the revenue lawfully imposed upon it, could not be termed to have an interest in an 'estate ', nor the land held by them to fall within the concept of an 'estate ' as comprehended in sub cl. The other view would be that if the operative terms of article 31A and in particular the definition of "an estate" contained in cl. (2)(a) unambiguously covered cases of non intermediaries also, effect would have to be given to the terms used for it is a cardinal rule of interpretation that the operative words of an enactment, and in this must be included the terms of the Constitution, cannot be controlled by reference to the object for which the provision was introduced where the words are unambiguous. If a law in force in any local area 816 at the commencement of the Constitution which was "a law in relation to land tenures" contained the definition of an 'estate ' then every species of land holding which fell within the definition and was comprehended by such law relating to land tenure would, for the purpose of the Constitution be comprehended within the ambit of an 'estate ' and it might be no answer in regard to any particular species of land tenure that its holder was not an intermediary. I shall have occasion to refer to the decisions which turn on this aspect of the matter a little later. Apart from the exceptional cases just now mentioned where one is faced with a definition of 'an estate ' in an existing law, I consider that the First Amendment to the Constitution did not bring within the definition of 'an estate ' the holdings of persons other than intermediaries or those who held land under grants on favourable tenures from Government Jagirdar, Inamdar, Muafidar, etc. As pointed out by Venkatarama Ayyar, J., speaking for this Court in Thakur Amar Singhji vs State of Rajasthan (1): The object of article 31A was to save legislation which was directed to the abolition of intermediaries so as to establish direct relationship between the State and the tillers of the soil. . " I shall now turn to sub cl. (b) and to the terminology employed in it to define 'rights in relation to an estate ' and examine how far this definition affects the content of cl. (a) as above explained. In the first place as already noticed, the use of the word 'estate ' in the clause serves to bring into it the concept of an 'estate ' as defined in cl. (a) pointing to the inter dependence of the two clauses necessitating their having to be read together. The second point requiring advertance is as regards the definition purporting to be inclusive and not exhaustive. The question arising therefrom may be 817 posed thus: Does the definition include any other type of interest besides those enumerated, particularly of a different nature or characteristic which could not be comprehended within the extension brought in by the words 'or other intermediary '. I am clearly of the opinion that it does not and that the word includes ' is here used in the sense of 'means and includes '. In this connection I would usefully refer to the observations of Lord Watson delivering the judgment of the Privy Council in Dilworth vs Commissioner for Land and Income Tax (1): "The word 'include ' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word 'include ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to shew that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to 'mean and include ', and in that case it may afford an exhaustive explanation of the meaning which for the purposes of the Act, must invariably be attached to these words or expressions. " If therefore the constitutional validity of a legislation extinguishing or modifying the rights either of the Pandaravaka Verumpattomdars who were in the position of a ryotwari pattadar or of the Puravaka holders who held under a Jenmi of Jenmam land had to be tested with reference to 818 article 31A as it stood when it was introduced by the First Amendment, these interests under the proclamation of 1905 would not be held to be an 'estate ' and therefore outside the scope of the protection against the guaranteed fundamental rights. Before examining the effect of the change introduced by the Fourth Amendment to article 31A it might be useful to detail the circumstances which put these tenures outside article 31A under the First Constitution Amendment. Taking the Puravaka tenure first, it ought to be mentioned that as would be seen from the terms of the proclamation of 1905 extracted earlier, Puravaka lands were those in the ownership of the Jenmi but in respect of which he was not directly in cultivation. The Jenmi was considered an absolute proprietor not merely of lands which were cultivated but unlike the ryotwari pattadar also those which were not under his cultivation such as waste lands, forests, etc., and he did not hold land under the State. In other words, his proprietorship to or rights over the land of which he claimed ownership was not traceable to any title derived from the State. But notwithstanding this freehold right that he claimed and enjoyed the State was entitled from the earliest times to assess his lands to land revenue. Exemption from taxation was not any essential condition of Jenmam tenure and the Jenmi was under an obligation to pay what was termed 'Raja bhagam ' which was the equivalent of the expression 'land revenue '. This incidence of Jenmam land did not therefore detract from its character of its being the private and absolute property of the Jenmi. There was legislation in Travancore as regards the liability of the Jenmi to pay the land tax or the Raja bhagam except, of course, in those cases where anr particular land was rendered tax free as a mattey of grace or concession by the ruler. The legislation started with a royal proclamation 1869 (1042 M.E.) dealing with the lands of Jenmis and their relation 819 with their tenants. This proclamation was replaced by Regulation 5 of 1071 (July 3, 1896) which continued in force with various amendments right up to the date of the Act whose validity is now impugned and is referred to in it. By these pieces of legislation the rights of the Jenmi quoad his tenants were regulated, the grounds upon which eviction would take place were laid down and the customary rights enjoyed by either party were, so, to speak, codified. I am pointing this out because the existence of a law regulating the rights of property owners and defining their rights or obligations either quoad the Government in respect of land revenue or as regards persons holding land under them did not by itself render such law one "relating to land tenure" within the meaning of article 31A(2)(a). In order to be such a law it should regulate the rights of persons holding under grants from the government of the Raja bhagom. A law defining or regulating the levy of assessment or revenue on lands held not under such grants from the State would not be such a law. It was for this reason that the interest of Jenmis and the lands owned in Jenmam right did not fall within article 31A as it stood under the First Amendment to the Constitution and which necessitated the Fourth Amendment to which I shall refer later. The position of persons holding lands on Puravaka tenure would not be different from that of the Jenmis. As the Puravaka lands were held not under the State or under a grant from it but under the Jenmis, though liable to pay Raja bhagam, they would not be 'estates '. The case of the Pandaravaka Verumpattomdars would be similar and the lands held by them would also not fall within the category of 'estate. ' This would be so because they like ryotwari pattadars held the lands for cultivation directly from the State, and were niether intermediaries nor persons 820 who held their lands on a favourable tenure as regards the payment of land revenue in other words, they were not alienees of the Raja bhagam to any extent, and were therefore not intended to be affected by the First Amendment. For this purpose it would make no difference whether the origin of the ryot 's proprietary interest in the land be traceable to the Hindu law concept of title based on occupation and cultivation or to the relinquishment by the State under the Travancore Proclamation of 1865 or even to the conferment of proprietary rights by the Cochin Proclamation of 1905. It is only necessary to add that, their being outside the ambit of article 31A(2), and this would equally apply to the interest of the Jenmi, was not due to their tenure not being regulated by enacted law, as distinct from regulation either by the common law of by departmental instructions in the shape of the Standing Orders of the Board of Revenue or other similar bodies. The point next to be considered is regarding the effect of the change brought about by the Fourth Amendment in 1955 which on its terms was also to have retrospective effect from the commencement of the Constitution. Clause 3 of the Act which was substituted for the original cl. 1 of article 31A, provides for various types of legislation interfering with property rights, but in respect of the matter now in question the words in the original cl. 1 referring to "a law providing for the acquisition by the State of an estate of an any rights therein or the extinguishment or modification of any such rights" were left untouched. In regard to the definition of an "estate" contained in cl. 2 the only change effected in sub cl. (a) was the addition of the words "in the States of Madras and Travancore & cochin any Janmam right" after the word "grant" in the clause as it stood and in sub cl. (b) the addition of the words "ryot and under ryot" 821 after the word "tenure holder" in the original clause. After the amendment, the relevant words in article 31A read as follow: "(I) Notwithstanding anything contained in article 13, no law providing for (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights . . shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. (2) In this article, (a) the expression 'estate ' shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any Jagir, inam or muafi or other similar grant and in the Sates of Madras and Kerala, any Janman right; (b) the expression 'rights ' in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure holder, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue. " It is not open to dispute that if the words of the statute are clear their import or content cannot be modified or varied either by way of extension or of 822 diminution by reference to the presumed intention gatherable from the statement of objects and reasons to which I shall refer presently, for it is the enacted words that constitute the record of the intention of the legislature and where this is clear any extrinsic aid is forbidden. Now let us look at the definition of an "estate" in sub cl.(a) where in express terms the lands held by a Jenmi are deemed to be a part of an estate. The words that precede the newly introduced words still retain their original form, with the result that they continue to connot the same idea and their content remains unaltered. The result of this would be that to the class of the lands of proprietors who were intermediaries and of others holding on favourable tenures which was designated as an "estate" under the First Constitutional Amendment, Jenmi lands were by specific ad hoc addition included. If therefore the holding of a ryotwari proprietor was not comprehended within the definition of an estate, the same cannot be included by reason of Jenmi lands being brought in. The argument that a raiyatwari holding has merely by the inclusion of the Jenmi become an "estate" would require the entire clause to be rewritten so as to make it read as embracing all lands which are subject to payment of land revenue to government. I consider this contention so unreasonable and unrelated to the language used in the clause as not to deserve serious consideration. Proceeding next to sub cl. (b), I must point out that it was on the introduction into it of the words 'raiyat and under raiyat ' that almost the entire argument on behalf of the respondent was rested. It is therefore necessary to scrutinize carefully the effect of these words. There is no doubt that if the words 'raiyat and under raiyat ' had been introduced in sub cl.(b) as an independent category of persons whose interests were intended to be covered by the definition, just as the lands held by Jenmis were brought into sub cl. (a) then the words 823 of the definition would have to be given full effect and the expression 'raiyat and under raiyat ' receive the construction urged before us by the respondent. But they are, however, not introduced as an independent category as has been done in the case of the Jenmam right, but are wedged in the midst of the enumeration of the several types of tenures in estates such as those of proprietor, sub proprietor under proprietor and tenure holder persons deriving their title to the interest held by them either under grants by a sovereign or under a title derived from grantees from government, the clause continuing to be wound up by a reference to "other intermediaries". As regards this a few observations may pertinently be made. The first is that even after the Fourth Amendment, "the rights vesting in a proprietor" etc. still continue to be a definition of "rights in relation to an estate" and if the word 'estate ' in cl. (b) has to be read in the light of the definition of that word in cl.(a) no interest other than one in the estate of an intermediary or of a grantee on a favourable tenure and other than one in the estate of a Jenmi would be covered by sub cl.(b). (2) I have already had occasion to point out that raiyats in proprietary estates like those of zamindars etc. did not claim title to hold their lands from the proprietor but according to law, as understood their rights even preceded that of the proprietor, i.e., the rights vested in them even before their proprietor. The interest of such raiyats cannot therefore be comprehended within the expression 'rights in relation to an estate ' which as ordinarily understood would mean 'rights created in an estate or held under the proprietor '. Undoubtedly, the words 'raiyat and under raiyat ' introduced by the Fourth Amendment would comprehend this class of raiyats because they were raiyats in an estate as defined in sub cl.(a). I am pointing this out for the purpose of showing that it is not as if the words 'raiyat and under raiyat ' would be without any 824 meaning if they were not taken to extend to the interest of every raiyatwari proprietor having, direct relationship with the State. In this connection the decision in this Court in The State of Bihar vs Rameshwar Pratap Narain Singh (1) is very relevant. The point in controversy before the Court was this. Under the Bihar Land Reforms Act (1 of 1950), the ex intermediaries were conferred a ryoti interest in certain types of land previously held by them as proprietors. As owners of these lands they had been holding melas in some places on these lands and were deriving considerable income therefrom. By the Bihar Land Reforms Amendment Act of 1959, their right to hold melas was taken away and it was the validity of this enactment that was challenged in the case. It was urged on their behalf that when the land holders were converted into raiyats, they were entitled to hold melas as an incident of their rights as raiyats and that this could not be adversely affected by State legislation without the same standing the test of scrutiny under articles 19, 31 etc. of the Constitution. The State of Bihar which was the respondent in the Writ Petition sought the protection of article 31A of the Constitution as amended by the Fourth Amendment. Dealing with the meaning of the words the 'raiyat and under raiyat ' in article 31A(2)(b) this Court said: "It is reasonable to think that the word 'raiyat ' was used in its ordinary well accepted sense, of the person who holds the land under the proprietor or a tenure holder for the purpose of cultivation, and the word 'under raiyat ' used in the equally well accepted and oridinary sense of a person who holds land under a raiyat for the purpose of cultivation". and speaking of the purpose of the Fourth Amendment it was observed: 825 "At that time laws had already been passed in most of the States for the acquisition of the rights of intermediaries in the estates; rights of raiyats or under raiyats who might answer the description 'intermediary ' were also within the definition because of the use of the word 'or other intermediary '. The only reason for specifically including the rights of 'raiyats ' and 'under raiyats ' in the definition could therefore be to extend the protection of article 31A to laws providing for acquisition by the State Governments of rights of these 'raiyats ' or 'under raiyats '. In the circumstances and in the particular setting in which the words 'raiyat ' or 'under raiyat ' were introduced into the definition, in must be held that the words 'or other intermediary 'occurring at the end, do not qualify or colour the meaning to be attached to the tenures newly added". In other words, the decision was that the object achieved by the Fourth Amendment by the introduction of these two words in sub cl. (b) was to rope in the interests of 'raiyats ' and 'under raiyats ' in 'estates ', notwithstanding that the ryot might not derive his interest, in his holding from the proprietor. The lands held by a ryotwari proprietor other than those in 'estates 'would not be an 'estate ' within sub cl. (a) nor the interest of such ryot in his holding an 'interest in an estate ' within sub cl. (b) having regard to the collocation of the words which I have attempted to explain earlier. In support of the construction that the holdings of ryots were comprehended within the definition of 'estates ' in article 31A(2), to submissions were made. The first was based on the object sought to be achieved by the Fourth Constitutional Amendment Act as set out in the statement of objects and reasons of the Bill. The passage relied on reads: 826 "While the abolition of zamindaris and the numerous intermediaries between the State and the tiller of the soil has been achieved for the most part our next objectives in land reform are the fixing of limits to the extent of agricultural lands that could be held or kept by any person, the disposal of any land held in excess of the prescribed maximum and the further modification of the rights of landowners ' tenants and agricultural holders". I am unable to accept the argument that this passage can be of any assistance in the construction of cl. (a) or (b) of article 31A (2). As already pointed out, any extrinsic aid to construction can sought only when the words of the statute reasonably and properly interpreted are of ambiguous import, and the construction of the clauses now under consideration leads to no ambiguity. In the circumstances, to accept the construction contended for by respondent would be not to interpret the enacted words but to rewrite the clauses altogether. Besides, article 31A makes provision for special cases where on account of overwhelming social needs, the protection normally afforded to the citizen by the guarantee of fundamental rights is withdrawn. It would, I consider, be a proper rule of construction to interpret the terms of such a provision with strictness which would serve to preserve the area of the guaranteed freedoms from encroachment except as specially provided. In other words, if the construction of article 31A were ambiguous, the ambiguity should be resolved in favour of the citizen, so as to preserve to him the guarantee of the fundamental rights guaranteed by articles 14, 19 and 31 except where the same has been denied to him by the clear words of the Constitution. Secondly reliance was placed on three 827 decisions of this Court: Shri Ram Ram Narayan Medhi vs The State of Bombay (1), Atma Ram vs The State of Punjab (2) and Yavtamal vs State of Bombay (3). In the two reported decisions, no doubt this Court held that interests of persons similar to those of raiyatwari proprietors were comprehended within the definition of an 'estate ' within sub cl. (a) but the reasoning upon which this was rested in wholly inapplicable for resolving the controversy now before us. In the first case Sri Ram Narain Medhi vs The State of Bombay (1), the Bombay Land Revenue Code 1879 contained a definition of an 'estate ' which included not merely the estates of intermediaries such as zamindars, taluqdars and other proprietors but also an occupant, i.e., a person who held directly under the government and whose property was assessed to land revenue in full. The question however was whether the provision in article 31 A (2) (a) that the expression 'estates ' "shall have the same meaning as that expression has in the existing law relating to land tenures enforce in the area" could be read as permitting the exclusion from the definition of interests which were defined in such a law as 'estates ' on the ground that such interests were not those of an intermediary. This Court held that full effect had to be given to these words and that the definition of an 'estate ' in a pre Constitution law relating to land tenures must determine the content of that expression. It would be seen that the result would have been the same whether the case arose before or after the Fourth Amendment. The decision in Atma Ram vs The State of Punjab (2) proceeds on an identical basis and turned on the definition of an 'estate ' in the Punjab Revenue Act 17 of 1887. In this, as in the earlier case in relation to the Bombay Land Revenue Code, there could be no dispute that the enactment was a law in relation to land tenure. The only question therefore was 828 whether full effect could or ought to be given to the words of the definition, and this was answered in the affirmative. In my opinion, the learned Attorney General cannot derive any assistance from either of these decisions. In the unreported decision in Yavatmal vs The State of Bombay (1) the challenge was to the validity of a Bombay enactment of 1958 which extended the Bombay Tenancy & Agricultural Lands Act 1956 to the Vidarbha region, an enactment whose constitutional validity had been upheld by this Court in Medhi 's case. The argument before the Court was that the lands of the petitioners were not an 'estate ' and this, for the most part, was sought to be supported by the absence of any definition of the word 'estate ' in the Madhya Pradesh Land Revenue Code of 1954 which was taken to be "the existing law relating to landtenures" in the Vidarbha region. This Court accepted the submission of Counsel for the respondent that article 31A applied to and saved the legislation from being impugned under articles 14, 19 and 31 for the reason that the interest of the petitioners in that case (who were bhoomiswamis) was the local equivalent of an 'estate '. The decision, therefore, is no authority for the point now under consideration as to the proper meaning to be attached to the word 'raiyat ' and 'under raiyat ' in sub cl. (2)(b) of article 31A or as regards the effect of the Fourth Amendment to the Constitution in regard to the point now under controversy. From the foregoing it would be seen that the interests of the petitioner in the lands held by him on Puravaka tenure are within article 31A because they are lands belonging to a Jenmi and so covered by the definition of an 'estate ' as amended by virtue of the Fourth Amendment to the Constitution. With regard, however, to the Pandaravaka Verumpattom lands I am clearly of the opinion that they are not an 'estate ' and that the interests of the 829 petitioner in them do not amount to "an interest in an estate" within sub cl. (b) of article 31A(2). It would follow that the validity of the impugned Act in relation to Pandaravaka lands would have to be considered with reference to articles 14, 19 and 31. For the reasons stated in the judgment of this Court in Writ Petitions 114 and 115 which need not be repeated, I hold that the impugned Act is constitutionally in valid and cannot be applied to the Pandaravaka Verumpattom lands of the petitioner but that the petitioner would not be entitled to any relief as regards his other properties. BY COURT: In accordance with the opinion of the majority, the petition is dismissed. There will be no order as to costs. Petition dismissed.

The Kerala Agrarian Relations Bill was introduced in the Kerala Legislative Assembly on December 21, 1957, and was ultimately passed by it on June 10, 1959. It was then reserved by the Governor of the State for the assent of the President under article 200 of the Constitution of India. Meanwhile, on July 31, 1959, the President issued a proclamation under article 356 and the Assembly was dissolved. In February 1960 fresh elections took place in Kerala and on July 27,1960, the President for whose assent the Bill was pending sent it back with his message requesting the Legislative Assembly to reconsider the Bill in the light of the amendments suggested by him. On October 15, 1960, the Bill as amended in the light of the President 's recommendations was passed by the Assembly. It then received the assent of the President on January 21, 1961, and became law as the Kerala Agrarain Relations Act, 1960. The petitioner challenged the validity of the Act on the ground that the Bill which was pending before the President for his assent at the time when the Legislative Assembly was dissolved lapsed in consequence of the said dissolution and so it was not competent to the President to give his assent to a lapsed Bill with the result that the said assent and all proceedings taken subsequent to it were constitutionally invalid. ^ HELD, that the Constitution of India radically departs from the practice obtaining in the Parliament of the United Kingdom under which Bills not assented to before the dissolution of the Houses are treated as having lapsed on that event occurring. Under Act. 196 of the Constitution a Bill which is pending assent of the Governor or the President does not lapse on the dissolution of the Legislative Assembly of the State. 754 Held, further, that the consideration of the remitted Bill by the new Legislative Assembly did not violate the provisions of article 201 of the Constitution. Per Gajendragadkar, Sarkar, Wanchoo and Das Gupta, JJ. (1) Clause (5) of article 196 of the Constitution of India deals exhaustively with the circumstances under which Bills would lapse on the dissolution of the Legislative Assembly of a State, and all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Assembly. (2) Under articles 200 and 201 there is no time limit within which the Governor or the President should reach a decision on the Bill referred to him for his assent and those Articles do not require that the Bill which is sent back with the message of the Governor or the President should be to the same House which had considered it in the first instance. Per Ayyangar, J. (1) A Bill before the legislative Assembly of a State ceases to be pending under article 196(5) when it has passed through all the procedure prescribed for its passage through the House and has been passed by it, and is not deemed as pending before the House till the receipt of the assent of the Governor or the President as the case may be. (2) Though under article 172 each Legislative Assembly of a State is conceived of as having a life of limited duration, in article 201 the expression "The House of the Legislature" i used in the sense of a House regarded as a permanent body. Attorney General for New South Wales vs Pennie, , relied on. The Kerala Agrarian Relations Act. 1960, was enacted with the object of providing for the acquisition of certain types of agricultural lands in the State beyond the specific maximum extents laid down in the statute. The petitioner who was the owner of certain lands in Trichur of which 900 acres were classified in the land records of the State as Pandaravaka Verumpattom lands and the remaining were entered as Puravaka lands, claimed that the lands did not constitute estates under article 31A(2)(a) and, therefore, the Act was not applicable to them. His case was (1) that as regards Pandaravaka Verumpattom lands he was paying rent to the State calculated as a proportion of the gross yield of the properties, that he held the lands under the State as a tenant and that as he was not an intermediary between the State and the tiller of the soil, the lands were not an estate under cl. 2 (a) of article 31A, and (2) that the Puravaka lands were held under a Jenmi and that as they had within its scope a particular form of land holding known as kanom 755 tenancy they were outside the purview of cl. 2 (a). It was not disputed that the proclamation issued by the Ruler of Cochin on March 10, 1905, was the relevant existing law for the purpose of deciding whether the properties of the petitioner, were an estate under article 31A (2)(a). Under cl. 13 of the proclamation the holders of the Pandaravaka Verumpattom tenure acquired full rights to the soil of the lands and held them subject to the liability to pay the assessment to the State. Clause 15 provided that in the case of Puravaka Lands the Jenmi was recognised as owning proprietorship in the land and entitled to share the produce with the cultivator and the State. Held, that the lands held by the petitioner on Puravaka tenure satisfied the test as to what constituted an estate under article 31A(2)(a) of the Constitution and, therefore, the provision of the Kerala Agrarian Relations Act, 1960, were applicable to them. Held, further (Ayyangar, J., dissenting), that the basic concept of the word "estate" as used in article 31A(2)(a) of the Constitution is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the State paying land revenue to it except where it is remitted in whole or in part. If a term is used or defined in any existing law in a local area which corresponds to this basic concept of estate that would be the local equivalent of the word "estate" in the area. It is not necessary that there must be an intermediary in an estate before it can be called an estate within the meaning of article 31A(2)(a). Shri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp. 1 S.C.R. 489, Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, Shri Mahadeo Paikaji Kolhe Yavatmal vs State of Bombay, ; and The State of Bihar, vs Rameshwar Pratap Narain Singh, relied on. The holder of lands held on Pandaravaka Verumpattom tenure was a proprietor of the lands and held the lands subject to the liability to pay the assessment to the State and therefore, Pandaravaka Verumpattom could be regarded as a local equivalent of an estate under cl. 2(a) of article 31A. 382. Per Ayyangar, J. (1) The word "estate" in sub cls.(a) and (b) in article 31A(2) has the same meaning and signifies lands held by an intermediary who stood between the State and the actual tiller of the soil and also the interests of those in whose favour there had been alienation of the right to revenue. 756 (2) The First Amendment to the Constitution did not bring within the definition of an estate in article 31A(2)(a) the holding of persons other than intermediaries or those who held land under grants on favourable tenures from Government. (3) Lands held by a ryotwari proprietor other than those in 'estates ' would not be an estate within sub cl. (a) of article 31A(2), nor the interest of such ryot in his holding an 'interest in an estate ' within sub cl. (4) The word 'includes ' in Art 31A(2)(b) is used in the sense of 'means and includes '. (5) The holder of Pandaravaka Verumpattom tenure was in the position of a ryotwari pattadar, and, therefore, his lands were not an estate within the meaning of article 31A(2). (6) The lands held by the petitioner on Puravaka tenure were within article 31A(2) because they were lands belonging to a Jenmi and so covered by the definition of an estate as amended by virtue of the Fourth Amendment to the Constitution.

longest

Civil Appeals Nos. 140 to 142 of 1952. Appeals from the judgment and order dated March 24, 1953, of the former Nagpur High Court in Misc. Petitions Nos. 1795 1796 of 1951 and 1 of 1952. WITH Petitions Nos. 24, 25 and 93 of 1952. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. G.S. Pathak, S.N. Andley, J.B. Dadachanji and Rameshwar Nath, for the Appellants/petitioners. H.N. Sanyal, Additional Solicitor General of India, N.S. Bindra, R.H. Dhebar and T.M. Sen, for the respondents. C.R. Pattabhi Raman and R. Ganapathy Iyer, for the interveners (in C.A. No. 141 of 1954). 1961, December 11. The judgment of S.J. Imam, K.C. Das Gupta, Raghubar Dayal and N. Rajagopala Ayyangar, JJ., was delivered by Rajagopala Ayyangar, J., J.L. Kapur, J., delivered a separate judgment. AYYANGAR, J. The appellants in Civil Appeal 140 of 1954 are tobacco merchants and manufacturers of biris. They own private warehouses licensed under r. 140 of the Excise Rules, 1944 at Gondia and other places in Madhya Pradesh. On the 28th of February, 1951 a Bill was introduced in the House of the People, being Bill 13 of 1951 containing the financial proposals of the Government of India for the fiscal year beginning the 1st of April, 1951. Clause 7 of the Bill made provision for the amendment of the 4 Central Excise Act (Act 1 of 1944) by way of alteration of duties on "tobacco manufactured and unmanufactured." In particular, it provided that "unmanufactured tobacco other than flue cured and ordinarily used otherwise than for the manufacture of cigarettes" (which included tobacco intended for manufacture into biris) should be charged to an excise duty of 8 annas per lb. and it also imposed a new duty of excise on biris varying from 6 to 9 annas per lb. depending upon the weight of tobacco contained in the biris. Section 3 of the (Act XVI of 1931) enacted "Where a bill introduced into the Indian Parliament provided for the imposition or increase of a duty of excise the Central Government might cause to be inserted in the bill a declaration that it was expedient in the public interest that any provision of the bill relating to such imposition or increase shall have immediate effect under this Act". A declaration under this section was made in respect of the provision for imposing the duties on tobacco under cl. 7 of the bill already adverted to. The effect of such a declaration was stated in section 4 of Act XVI of 1931 in the following terms: "4. (1) A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced. (2) A declared provision shall cease to have the force of law under the provisions of this Act (a) When it comes into operation as an enactment with or without amendment, or (b) when the Central Government in pursuance of a motion passed by parlia 5 ment, directs, by notification in the Official Gazette, that it shall cease to have the force of law, or (c) if it has not already ceased to have the force of law under clause (a) or clause (b), then on the expiry of the sixtieth day after the day on which the Bill containing it was introduced. " In compliance with this law the appellants paid the excise duty at the rates imposed under cl. 7 of the bill and obtained clearance certificates in regard to the tobacco moved out from their warehouses from and after March 1, 1951. Bill 13 of 1951 was passed into law as the Indian Finance Act 1951 (Act XXIII of 1951 on April 28, 1951 but as passed, changes were effected in the duty proposed in the bill, as a result of certain alterations suggested by the Select Committee. Under section 7 (1) of the Finance Act 1951 while the excise duty on biris was abandoned, the duty on unmanufactured tobacco (other than flue cured and used in the manufacture of cigarettes) was increased to 14 annas per lb. from the rate of 8 annas per lb. in the bill. Consequential provisions were enacted in section 7 (2) of the Finance Act which read: "The amendments made in the Central Excise and Salt Act 1944, sub cl. 1 shall be deemed to have effect on and from the 1st March, 1951 and accordingly: (a) refund shall be made of all duties collected which would not have been collected, if the amendment had come into force on that day, and (b) recoveries shall be made of all duties which have not been collected but which would have been collected if the amendment had so come into force." 6 In pursuance of section 7 (2) a demand was made upon the appellants on June 22, 1951 for the payment of the duty payable by them, after giving credit for the refund of the duty paid on biris which had been deleted by the Act. The appellants contested the legality of this demand by a petition under article 226 which they filed in the High Court at Nagpur urging that the retrospective operation given to section 7(1) by sub s.(2) thereof was illegal, ultra vires and unconstitutional, and besides that the provision in r. 10 of the Excise Rules which contained the machinery for enforcing the demand was not adequate to meet the situation arising out of the change in the law from the provisions of the bill to those of the Act. The learned Judges of the High Court repelled all the contentions disputing the legislative competence and the constitutionality of the legislation contained in section 7(2) of the Finance Act of 1951, but they upheld the objection to the adequacy of the procedure for recovery based on the limited scope of r. 10 of the Excise Rules. Thereafter the Central Government, by a notification dated December 8 1951, amended the Central Excise Rules, 1944 by the addition of a new r. 104 providing machinery specially designed f r the enforcement of a demand like the one arising in the circumstances of the present case. On December 12, 1951 a further and a fresh demand was made for the payment of the duty in terms of section 7(2)(b) of the Finance Act quoted earlier, and the appellants thereupon once again moved the High Court of Nagpur under article 226 challenging the validity of the demand on the very same grounds as before. This petition was heard by a Full Bench of the Court and every contention raised by the appellants including that based on the adequacy of the new r. 10A to cover the present case was rejected. The learned Judges granted a certificate under article 132 of the Constitution which was enabled the appellants to file this appeal. Before proceeding further it is only necessary to state that there is no material difference between the facts of the 7 cases covered by Civil Appeals 141, 142 as well as the points raised in the Writ Petitions and that this judgment will cover and dispose of the other appeals and the petitions. We might also, at this stage mention that other parties who were similarly situated as the appellants in Civil Appeals 140 to 142 of 1954 and who had filed petitions under article 226 of the Constitution in the High Court of Madras which arc pending there, raising the same points as the appellant 's before us, have intervened in these appeals and they have also been heard. Learned Counsel appearing for the interveners adopted the arguments urged in support of the appeal. Mr. Pathak, learned Counsel who appeared for the appellants urged three point in support of the appeals(1) Section 7 (2) of the Finance Act, 1951 in so far as it imposed an excise duty retrospectively before the date of its enactment (April 28, 1951) was beyond the legislative competence of Parliament. The contention on this head was briefly this: The impugned tax was imposed by Parliament in purported exercise of the power to levy "a duty of excise on tobacco" within Legislative Entry 84 of Union list which reads: "Duties of excise on tobacco and other goods manufactured or produced in India except An "excise" was basically an indirect tax, i.e., a tax or duty not intended by the taxing authority to be borne by the person on whom it is imposed and from whom it is collected but is intended to be passed on to those who purchased the goods on which the duty was collected; but when such a tax was imposed with retrospective effect it could not be passed on, so such a levy deprived the tax of its essential characteristic of being indirect. It therefore ceased to be a "duty of excise" and 8 became a personal tax of a category quite distinct from "excise" and so was beyond the legislative power of Parliament under that Entry. (2) That the impugned levy was unconstitutional in that it contravened the fundamental right guaranteed to the citizens of India to hold property under article 19(1)(f), the point urged being that a retrospective levy of an "excise duty" deprived the tax payer of the right of passing it on and recovering it from his buyer, that this constituted a restraint on "the right to hold property" (the amount of the tax levy) conferred by article 19(1)(f) and was not saved by cl. 5 of that Article as being a reasonable restraint and should, therefore, be struck down under article 13(2). (3) That the terms of r. 10A of the Excise Rules 1944 were insufficient to cover the cases of the appellants and that in consequence the demand made on them and the attempt to recover the sums by resort to the coercive process provided for by section 11 of the central Excise Act was illegal and without statutory authority. We shall now proceed to consider these points in that order. (1) Want of legislative competence: To appreciate the submission of learned Counsel it is necessary to set out the steps in the reasoning by which he sought, to establish that a "duty of excise" when imposed with retrospective effect ceased to be a "duty of excise" as used in Entry 84 of the Union List. The submission of learned Counsel was this: The term "duty of excise" on goods was universally recognized as a tax on home produced goods and as a typical instance of an indirect tax. It was a tax on the activity of production or manufacture of goods within the country and that it was levied on or collected from tho producer or manufacturer or from those who held such goods. It was, further, not a personal tax but its essential and characteristic nature, which distinguished it from other types of taxes was that it was levied on goods. It had, therefore, in order that it might 9 truly be "duty of excise", to satisfy two tests: (a) It had to be an indirect tax, i.e. levied in such a manner that the person from whom the tax was collected was in a, position to pass it on to those who acquired the goods from him or at least the taxing authority expected him to pass it on, and laid no impediment on his ability to do it. (b) Being a tax on goods, it was levied on the producer or manufacturer or person in possession of the goods at the time when the person taxed was the owner or had possession and control over the goods. Where neither of these essential elements or attributes was present, and in the present, case, according to learned Counsel neither condition was satisfied, the tax levy would not fall under the category of "duty of excise. " The same argument was Presented in a slightly different from by saying that though Parliament, generally speaking, had the power to legislate in respect of everyone of the subjects included in the relevant legislative entries whether prospectively, or retrospectively including legislation with regard to taxation, still if the retrospective levy of a taxes, altered its essential nature and identity, then the power to legislate retrospectively would be open to Parliament only if the tax in its altered from i.e., a tax direct and personal would be open to Parliament to impose. In the case of a "duty of excise" as the tax in the present case was, if imposed retrospectively, deprived it of its essential characteristic of being in indirect tax and a tax on goods, and so the power of Parliament to enact such retrospective legislation would depend upon whether Parliament could impose a tax on a person merely because he happened to produce goods at an antecedent date, or, happened to have had in his control goods of indigenous production at a prior date and if this could not be done, it would follow that Parliament could not impose a "duty of excise" with retrospective effect. 10 In support of his submission regarding the nature of an excise duty and that meaning that ought to be attributed to the expression as it occurs in Entry 84 of the union List, Mr. Pathak placed before us judgments of the Privy Council in appeals from Canada and some decisions of the American Supreme Court and of the Australian High Court. First as to the decisions relating to the Canadian constitution though learned Counsel referred us to several decisions on the interpretation of the word "excise" in connection with the distinction between direct and indirect taxes in most of the British North America Act, 1867, we do not think it necessary to refer to all of them. The general line of approach of the Privy Council decisions referred by learned Counsel could be gathered from the observations of Lord Cave in City of Halifax vs Fairbanks ' Estate. The impugned tax legislation was a business tax imposed by the Province of Nova Scotia to be paid by every occupier of real property for the purposes of any trade, profession, or other calling carried on for the purpose of gain, the assessment being according to the capital value of the premises. This was challenged inter alia on the ground that it was an indirect tax and therefore not within the legislative competence of the Provincial Legislature. Lord Cave said: "Thus, taxes on property or income were everywhere treated as direct taxes; and John Stuart Mill himself, following Adam Smith, Ricardo and James Mill, said that a tax on rents falls wholly on the landlord and cannot be transferred to any one else. . On the other hand, duties of customs and excise were regarded by every one as typical instances of indirect taxation. When therefore the Act of Union allocated the power of direct taxation for Provincial purposes to 11 the Province, it must surely have intended that the taxation, for those purposes, of property and income should belong exclusively to the Provincial legislatures, and that without regard to any theory as to the ultimate incidence of such taxation. To hold otherwise would be to suppose that the framers of the Act intended to impose on a Provincial legislature the task of speculating as to the probable ultimate incidence of each particular tax which it might desire to impose, at the risk of having such tax held invalid if the conclusion reached should afterwards be held to be wrong. . . The imposition of taxes on property and income, of death duties and of municipal and local rates is, according to the common understanding of the term, direct taxation, just as the exaction of a customs or excise duty on commodities. . would ordinarily be regarded as indirect taxation; and although new forms of taxation may from time to time be added to one category or the other in accordance with Mill 's formula as a ground for transferring a tax universally recognised as belonging to one class to a different class of taxation." Similar passages in relation to a "duty of excise" being an indirect tax occur in other judgments of the Judicial Committee to which learned Counsel drew our attention. Of these, it is sufficient to refer to one more Attorney General for British Columbia vs Kingcome Navigation Company, Limited which raised the question as to whether a tax which was imposed upon every consumer of fuel oil according to the quantity which he had consumed imposed by the Fuel Oil Tax Act of 1930 of British Columbia was a direct tax under section 92, head 2, of the British North America Act, 1867. After extracting the following passage from Bank of Toronto vs Lambe: 12 "A direct tax is one which is demanded from the very persons who it is intended or desired should pay it. Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another; such are the excise or customs. Lord Moulton who delivered the judgment of the Board referred to the passage from the judgment of Lord Cave in City of Halifax vs Fairbanks ' Estate just now quoted and went on to add: "The ultimate incidence of the tax in the sense of the political economist, is to be disregarded, but where the tax is imposed in respect of a transaction, the taxing authority is indifferent as to which of the parties to the transaction ultimately bears the burden . . . Similarly, where the tax is imposed in respect of some dealing with commodities, such as their import or sale, or production for sale, the tax is not a peculiar contribution upon the one of the parties to the trading in the particular commodity who is selected as the tax payer. This is brought out in the second paragraph of Mill 's definition, and is true of the typical custom and excise duties referred to by Lord Cave. " The tax was therefore held to be valid. We consider that not much assistance could be derived from these decisions for the interpretation of the scope or content of the term "duties of excise" in Entry 84 of the Union List. The line of division in Canada between those taxes which a Province could impose and those which it could not was, whether it was direct or indirect. In Canada, taxing powers are divided between the Dominion and the Provinces on the basis of the incidence of the tax, the Dominion power extending to "any mode or system of taxation" (vide section 91 (3) British North America Act, 1867) while that of the 13 Provinces is restricted to "direct taxation within the Province in order to the raising of revenue for provincial purposes" (Section 92(2) ibid). When therefore the validity of any Provincial tax legislation is challenged in Canada the enquiry is as regards the normal incidence of the tax whether it is "direct" or "indirect." As these expressions had a settled meaning in economic theory, the Courts had necessarily to find out whether the particular tax imposed by the Province fell within the class of "indirect" taxes or not. In such a situation naturally the classification by economists of taxes as those which are "direct" as distinct from those which are "indirect" assumed a vital role in deciding whether the tax impugned is or is not within Provincial power. As pointed out by Gwyer, C.J. in the Province of Madras vs Boddu Paidanna: "The Canadian cases which were cited do not seem to afford any assistance, since analogous problems in Canada are always concerned with questions of direct and indirect taxation; and if a Provincial tax is held to be an indirect tax, it is unnecessary for the Court to consider whether it may not also be a duty of excise: see, for example Att. for British Columbia vs The Canadian Pacific Railway Co. , where a tax on every person purchasing within the Province fuel oil for the first time after its manufacture in, or importation into, the Province was held to be invalid as an indirect tax, and the question whether it might not also be bad as an excise duty was left unanswered. In contrast to the case just cited we may refer to Att. Gen. for British Columbia vs Kingcome Navigation Co. in which a fuel oil tax imposed by a Province upon every consumer of fuel oil according to 14 the quantity which he had consumed was held to be valid as a direct tax, because it was demanded from the very persons who it was intended or desired should pay it. " Similarly, Lord Simonds observed in Governor General in Council vs Province of Madras: "little assistance is to be derived from the consideration of other federal constitutions and of their judicial interpretation. Here there is no question of direct and indirect taxation, nor of the definition of specific and residuary powers. " Under the Indian Constitution the scheme of division of the taxing powers between the Union and the States is not based on any criterion dependent on the incidence of the tax. Sir Maurice Gwyer in In re the Central Provinces and Berar Act XIV of 1938 speaking of the word "excise" as occurring in the legislative lists in the Government of India Act (and for this purpose there is no variation in the lists in Schedule VII of the Constitution) said: "Its primary and fundamental meaning in English is that of a tax on articles produced or manufactured in the taxing country and intended for home consumption. I am satisfied that this is also its primary and fundamental meaning in India; and no one has suggested that it has any other meaning in Entry No. 45 (corresponding to Entry 84 in the Union List). It was then contended on behalf of the Government of India that an excise duty is a duty which may be imposed upon home produced goods at any state from production to consumption; and that therefore the federal legislative power extended to imposing excise 15 duties at any stage. This is to confuse two things, the nature of excise duties and the extent of the federal legislative power to impose them . . There can be no reason in theory why an excise duty should not be imposed even on the retail sale of an article, if the taxing Act so provides. Subject always to the legislative competence of the taxing authority, a duty on home produced goods will obviously be imposed at the stage which the authority find to be the most convenient and the most lucrative, wherever it may be; but that is a matter of the machinery of collection, and does not affect the essential nature of the tax. The ultimate incidence of an excise duty, a typical indirect tax, must always be on the consumer, who pays as he consumes or expends; and it continues to be an excise duty, that is, a duty on home produced or home manufactured goods, no matter at what stage it is collected. " As Lord Simonds said in the decision, to which reference has already been made after referring to the decision of the Federal Court in the C.P. Petrol case: "Consistently with this decision their Lordships are of opinion that a duty of excise primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods," and then speaking about taxes on sale of goods the learned Lord continued: "The two taxes, the one levied on a manufacturer in respect of his goods, the other on a vender in respect of his sales, may, as is there pointed out, in one sense overlap. But in law there is no overlapping. The taxes 16 are separate and distinct imposts. If in fact they overlap, that may be because the taxing authority, imposing a duty of excise, finds it convenient to impose that duty at the moment when the exciseable article leaves the factory or workshop for the first time on the occasion of its sale. But that method of collecting the tax is an accident of administration; it is not of the essence of the duty of excise, which is attracted by the manufacture itself. " In view of this clear exposition of the content of the term "duty of excise" in the Indian setting we think, no assistance can be derived for the meaning ascribed and the characteristics attributed to it in the decision construing the relative taxing powers of the Dominion and the Provinces under the British North America Act 1867. Before dealing with the Australian decision to which Mr. Pathak drew our attention, we could conveniently dispose of the American cases which were referred to by the learned counsel bearing on the meaning of the word "excise". We might point out that the American decisions do not assist the appellant in the least since under the Constitution of the United States practically every tax other than a capitation, a poll tax or a tax on land is termed an "excise duty" and even income tax was held to be an 'excise ' until the decision of the Supreme Court of the United States in Pollock vs Farmers Loan & Trust Co. It has to be borne in mind that the American Constitution provides that direct taxes have to be apportioned among the States according to their respective populations (article 1, section 2, and article 1, section 9, cl. 4). Hence the attempt in the United States has been to bring taxes which according to the classification of economists would be direct taxes within the category of excise or indirect taxes which need not follow the rule as to apportionment among the States. It follows, 17 therefore, that neither the American decisions, nor the understanding by the Courts of that country as to what a duty of excise connotes can be of any utility for deciding the content of that entry in the Indian Constitution. The relevance of the American decisions is, therefore, even remoter than the decisions from Canada which were relied on by the learned Counsel. Mr. Pathak referred us to some of the decisions in Australia and in particular to Parton vs Milk Board (Victoria) in support of his submission that the characteristic of being an indirect tax and therefore the capability of being passed on was an essential ingredient and pre requisite of an excise duty. In this connection it is necessary to point out that the decisions in Canada which were relied on by Mr. Pathak as aids for understanding the import of the expression "duty of excise" in Entry 84, have been treated by the Australian Courts as not helpful to determine the meaning of "excise" in section 90 of the commonwealth of Australia Act. As explained by Wynes: "In Canada, the distribution of taxation is based upon the direct and indirect character thereof, the Provincial power being limited to direct taxation within the Province. Hence Canadian cases such as the Bank of Toronto vs Lambe are of very little use in settling the question whether or not a tax is a duty of customs or excise within the meaning of the Australian Constitution. It may be pointed out that under the Australian Constitution taxes levied on commercial dealings in goods produced, such as taxes on sales, have been held to fall within the category of excises. Several of the decisions of the Australian High Court rendered before Parton vs Milk Board (Victoria dealing with what constituted an excise 18 under section 90 of the Commonwealth of Australian Act were cited to the Federal Court in the Province of Madras vs Boddu Paidanna and the learned Chief Justice, after referring to them in detail, observed: "We find it impossible to say that the expression 'duties of excise ' even in Australia is limited to duties imposed in connection with the production of a commodity alone. We should be disposed to say on the contrary that in Australia all taxes on the sale of commodities are, or may be regarded, as, duties of excise. . Under the Australian Constitution power to impose duties of excise is, as we have said, the exclusive right of the Commonwealth Parliament; the residuary taxing power remains in the States. In the Indian Constitution Act the whole of the taxing power in this particular sphere is expressly apportioned between the Centre and the Provinces, to the one being assigned the power to impose duties of excise, to the other taxes on the sale of goods. " The decision in the Milk Board case follows in general the same lines as did the earlier decisions which have been detailed and discussed by Sir Maurice Gwyer C. J. in Paidanna 's case. In these circumstances we do not consider it useful or necessary to discuss these decisions. Undoubtedly, there are passages in these judgments in the Australian Courts which refer to the fact that an excise duty is an instance of an indirect tax. As regards the general proposition, however, there is little controversy, but these decisions did not lay down that if by reason of the tax being levied retrospectively the duty cannot be passed on it ceased to be a duty of excise. On the other hand, there is express and high authority for the position that a duty of excise could be validly levied with retrospective effect under the Australian Constitution. The question for 19 consideration before the privy Council in Colonial Sugar Refining Company Ltd. vs Irving related to the constitutional validity of the Excise Tariff Act, 1902, passed by the Commonwealth Parliament. One of the objections raised to the levy was that on the terms of the enactment which was passed on the 26th of July, 1902, the imposition of the duty could be as and from October 8, 1901, the day on which the Minister had moved a resolution to that effect in the committee of Ways & Means of the House of Representatives. The respondent before the Board who were manufacturers of refined sugar in Brisbane in the State of Queensland questioned the legality of the tax which had been demanded and paid by them in respect of the sugar produced by them between October 8, 1901, and July 26, 1902. Lord Davey delivering the judgment of the Board observed: "It is a little difficult to understand the first point taken by the appellants. The Parliament had undoubted power to impose taxation under the express words of section 51 of the Constitution, and it is not now disputed that the Parliament could, if it thought fit, make the Act retrospective and impose the duties from the date of the resolution. That practice is (it is believed) universally followed in the imperial Parliament, and (their Lordships were told) is common in the Colonial Legislatures in Acts of this description, and for obvious reasons it is convenient and almost necessary. There was nothing, therefore, in either the subject matter of the Act, or in the mode of dealing with it, which was beyond the power of the Parliament. " In our opinion, the above aptly describes and covers the point raised by the appellants in the appeals now before us. 20 There is no doubt that excise duties have been referred to by the economists and in the judgments of the Privy Council as well as in the Australian decisions as an instance of an "indirect tax", but in construing the expression "duty of excise" as it occurs in Entry 84 we are not concerned so much with whether the tax is "direct" or "indirect" as upon the transaction or activity on which it is imposed. In this context one has to bear in mind the fact that the challenge to the legislative competence of the tax levy is not directed to the imposition as a whole but to a very limited and restricted part of it. This challenge is confined (a) to the operation of the tax between the period March 1, 1951, and April 28, 1951, and (b) even in regard to this limited period, it is restricted to the imposition of the additional duty of six annas per lb. which was levied, beyond the eight annas per lb. collected from the appellants by virtue of the Finance Bill under the provisions of the . It would seem to be rather a strange result to achieve that the tax imposed satisfies every requirement of a "duty of excise" in so far as the tax operates from and after April 28, 1951, but is not a "duty of excise" for the duration of two months before that date. Learned Counsel conceded, as he had to, that even on the decision relied upon by him, the fact that owing to the operation of economic forces it was not possible for the taxpayer to pass on the burden of the tax, did not alter the nature of the imposition and detract from its being a "duty of excise". For instance, the state of the market might be such that the duty imposed upon and collected from the producer or manufacturer might not be capable of being passed on to buyers from him. Learned Counsel urged that this would not matter, as one had to have regard to "the general tendency of the tax" and "the expectation 21 of the taxing authority" and to the possibility of its being passed on and not to the facts of any particular case which impeded the operation of natural economic forces. The impediment to the duty being passed on might be due not merely to private bargains between the parties or abnormal economic situations such as the market for a commodity being a buyers ' market. Such impediments may be brought about by the operation of other laws which Parliament might enact, such for instance, as control over prices. If in such a situation were the price which the producer might charge his buyer is fixed by the statute, say under the Essential Supplies Act, and a "duty of excise" is later imposed on the manufacturer, it could not be said that the duty imposed would not answer the description of an "excise duty". Learned Counsel had really no answer to the situation created by such a control of economy except to say that it would be an abnormal economic situation. It could hardly be open to argument that a tax levied on a manufacturer could be stated not to be a "duty of excise", merely because by reason of the operation of other laws the tax payer was not permitted to pass on the tax levy. The retrospective levy of a tax would be one further instance of such inability to pass on, which doses not alter the real nature or true character of the duty. It might further be pointed out that the submission of the learned Counsel that a tax which according to economic theory is an indirect tax or a tax on goods becomes a direct and a personal tax and a tax of a different nature or category if imposed retrospectively because it was then incapable of being passed on, does not correctly represent the law as laid down by this Court. In common with duties of customs and excise, a tax on the sale of goods is another instance of a typical indirect tax 22 Indeed Lord Thankerton pointed out in Attorney General for British Columbia vs Kingcome Navigation Company Ltd.: "The ultimate incidence of the tax in the sense of political economist is to be disregarded and referred to a tax imposed in respect of some dealings in commodities such as their import or sale or production for sale as instances of indirect taxes, the tax not being a peculiar contribution upon one of the parties to the trading in the particular commodity selected as the tax payer. " The question of the validity of the imposition of a sales tax with retrospective effect came up for consideration before this Court in the Tata Iron & Steel Co. Ltd. vs The State of Bihar. An argument similar to the one now presented before us was submitted to this Court in challenge of that levy which was summarized by Das, C.J., in these terms: "The retrospective levy by reason of the amendment of section 4(1) (of the Bihar Sales tax Act which was impugned) destroys its character as a sales tax and makes it a direct tax on the dealer instead of an indirect tax to be passed on to the consumer. " Dealing with this point the learned Chief Justice said : "The argument is that sales tax is an indirect tax on the consumer. The idea is that the seller will pass it on to his purchaser and collect it from them. If that is the nature of the sales tax then, urges the learned Attorney General, it cannot be imposed retrospectively after the sale transaction has been concluded by the passing of title from the seller to the buyer, for it cannot, at that 23 stage, be passed on to the purchaser. . . Once that time goes past, the seller loses the chance of realising it from the purchaser and if it cannot be realised from the purchaser, it cannot be called sales tax. In our judgment this argument is not sound. From the point of view of the economist and as an economic theory, sales tax may be an indirect tax on the consumers, but legally in need not be so. . This also makes it clear that the sales tax need not be passed on to the purchasers and this fact does not alter the real nature of the tax which, by the express provisions of the law, is cast upon the seller . . If that be the true view of sales tax then the Bihar Legislature acting within its own legislative field had the powers of a sovereign legislature and could make the law prospectively as well as retrospectively. We do not think that there is any substance in this contention. " In our judgment this passage covers the argument regarding a duty of excise getting its essential nature altered and ceasing to be a duty of excise if imposed retrospectively. The submission, therefore, lacks any force and is rejected. It is also necessary to refer to one further matter : Even assuming that the learned Counsel is right in his submission, that to be a duty of excise within Entry 84 of the Union List the taxing authority should have expected the tax to be passed on, we consider that learned Counsel is not right in submitting that condition is not satisfied in the case of the levy now impugned. The provisions of the impugned enactment have to be read in the light of section 64A of the Sale of Goods Act which enacts: "In the event of any duty of customs or excise on any goods being imposed, increased decreased or remitted after the making of any 24 contract for the sale of such goods without stipulation as to the payment of duty where duty was not chargeable at the time of the making of the contract, or for the sale of such goods duty paid where duty was chargeable at that time: (a) if such imposition or increase so takes effect that the duty or increased duty, as the case may be or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such duty or increase of duty, and he shall be entitled to be paid and to sue for and recover such addition, and (b) if such decrease or remission so takes effect that the decreased duty only or no duty, as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or remitted duty and he shall not be liable to pay, or be sued for or in respect of, such deduction. " This provision originally formed section 10 of the Tariff Act VIII of 1894 and was subsequently enacted as section 10 in the Indian Tariff Act of 1934 (cl Act XXXII of 1934). The object of the statutory provision is that where contracts for the sale of goods are entered into and the price payable therefor determined on the basis of existing rates of duty either of excise or of customs neither party shall be prejudiced or advantaged by reason of the increase or decrease of the duty. The question as to the scope of section 10 of the Tariff Act of 1894 came up for consideration before a Bench of the Madras High Court whose decision is reported in Narayanan v, Kadir Sahib (1). The suit out of which the second appeal before the High 25 Court arose was by a buyer of salt for the refund of salt excise duty which had been reduced after the date of the contract. The transaction of sale between the plaintiff and the defendant took place on March 5, 1922, and the price payable by the plaintiff was based on the rate of duty prevailing on that date. Subsequent thereto the Government of India reduced the duty on salt from Rs. 5/ to Rs. 2/8/ per bag and this was to have effect from a date prior to March 5, 1922. The defendant firm (the sellers) had obtained from the Government refund of the duty on the salt sold by them to the plaintiff. It was to recover this amount of duty that the suit was filed by the buyer. The learned Judges held that on the terms of s, 10 of the Tariff Act of 1894 (indentical with section 64A of the Sale of Goods Act) the fact that the contract was no longer executory but that delivery had been made and the price paid, was no bar to the plaintiff succeeding in his suit. It will be seen that section 64A is in two parts: the first cl. (a) dealing with the case of an increase in duty and conferring on the seller the right to recover the amount of the increased duty from the buyer, and the second limb (cl. b) making provision regarding the correlated case of a reduction in the duty with corresponding rights to the buyer to obtain the benefit of a reduction. Whatever argument might be raised baned upon the language of the second limb of the section, it is not open to doubt that in the case of an increase in duty, the seller would be entitled to recover the duty from the buyer provided: (a) there was no contract to the contrary by which he had precluded himself from claiming such enhanced duty, i. e., the contract having negatived or limited the seller 's right to prefer such a claim, or was at least silent as regards what was to happen in the event of the duty being increased, (b) the change in the rate of duty was effected after the date of the contract. In 26 these circumstances, it appears to us that there might not be even a factual basis for the complaint of learned Counsel for the appellants that in the case of a retrospective increase in duty, the duty ceases to be a duty of excise by becoming a "direct" tax because it was incapable of being passed on. The answer of learned Counsel to this point regarding the operation of section 64A of the Sale of Goods Act was merely that the Court could not take account of the provisions of another statute for dealing with the validity of a provision of the Finance Act 1911. The submission has no force at all because section 64A of the Sale of Goods Act refers in express terms to "duties of excise" and has therefore, to be read as part and parcel of every legislation imposing a duty of excise. In view of our conclusion, however, that the duty in the present case, notwithstanding its imposition with retrospective effect, and even if it be that it was incapable of being passed on to a buyer from the tax payer, was a duty of excise within Entry 84 as properly understood it is not necessary to rest it upon this narrower ground. In our view, a duty of excise is a tax levy on home produced goods of a specified class or description, the duty being calculated according to quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in them. The duty in the present case satisfies this test and therefore it is unnecessary to seek other grounds for sustaining the validity of the tax. One further aspect of the matter on which some emphasis was laid by Mr. Pathak was that a duty of excise was in its essence a tax on goods and not a personal tax a levied on the tax payer such as an income tax. He urged that being a tax levied on goods notwithstanding that it was 27 collected from the producer or manufacturer, it followed that the essential attribute or characteristic of that duty was that the producer or manufacturer must own or have possession and control over the goods at the moment of the levy. If this element of ownership, possession or control over the goods by the tax payer was lacking, learned Counsel urged the duty would not be a duty on the goods but a personal tax levied on the tax payer. This is really another aspect of the same argument that a duty of excise is in its nature an indirect tax but learned Counsel submitted that viewed from this angle it would be seen that the duty imposed by the impugned enactment was shown to be not a duty of excise. The grounds upon which the submission of learned Counsel that a duty of excise levied retrospectively was converted into a direct tax and therefore not a duty of excise have been repelled by us which ought to suffice to repel the contention in this form also. Besides, it may also be pointed out that even in strict theory there is no basis for the submission now under consideration. The duty imposed by the impugned Act being retrospective, it operates as from a previous date and admittedly on the date when by force of the enactment the duty was levied the tax payer was the owner or was in possession and control of the goods. To deny this, would in effect deny the legal effect of the tax being imposed retrospectively and fictionally deemed to be in force on an earlier date. In dealing with the arguments of learned Counsel on the scope and content of Entry 84 of the Constitution and of the meaning of the expression "duty of excise" in that entry we have also covered the special argument questioning the right of Parliament to impose retrospectively a duty of excise. It was conceded, that Parliament has power to enact laws with retrospective effect and as it was not suggested that laws 28 dealing with taxation are any exception to that rule the only ground upon which the learned Counsel could rest this submission was that being an indirect tax, capability of being passed on was an essential characteristic or requirement of a duty of excise, and so its imposition with retrospective effect deprived it of that essential character and therefore rendered it a duty of a different nature and for that reasons a retrospective imposition of an excise duty was not permissible. It would be seen that this is really the same argument which we have dealt with earlier presented in another form. For the reasons already stated, we find no substance in this form of argument either and we have no hesitation in rejecting it. It need only be mentioned that the passage in judgment of Lord Davey in the Colonial Sugar Refining Company Ltd. vs Irving, already extracted, is sufficient precedent, if authority were needed, to reject this argument. The second point raised by learned Counsel was that the impugned section 7(2) of the Act was unconstitutional in that it contravened the fundamental rights guaranteed under articles 19(1)(f) and 31(1) and (2) of the Constitution. It was urged that even if the impugned provision was within the legislative competence of Parliament as being covered by Entry 84 of the Union List, the retrospective levy of an excise duty violated the freedom guaranteed by article 19 (1)(f) the right to hold property and was not saved by article 19(5) since the same was not "a reasonable restraint" on the rights of the appellant. If Counsel was right so far, his next submission was that the threat to deprive the appellant of the amount of the tax levy was a deprivation without authority of law article 31(1) and was further a compulsory acquisition of that property without compensation (article 31(2)) which was not saved by article 31(5)(b)(i) because the 29 law contemplated by that sub article was a valid law for the imposition of a tax which satisfied the requirements both of legislative competence and of the rights guaranteed by Part III of the Constitution. The submission of Mr. Pathak on this part of the case was briefly as follows. A law which imposes a tax and provides for its levy and collection is as much a law, as a law under other non taxation entries of the legislative list. All laws including laws imposing taxes are within Part III of the Constitution being laws under article 13(2) thereof and unless any particular Article was inapplicable to such laws by reason of obvious irrelevance every Article in the Part would apply to them and without such a law satisfying the test of reasonableness or constitutionality laid down in the various Articles guaranteeing the several. Fundamental rights the statute in question could not be pronounced valid and enforceable. We shall be referring to the manner in which Mr. Pathak sought to urge that the impugned provision offended article 19(1) (f), but before doing so, it is necessary to notice the submission which Mr. Sanyal invited us to accept. He raised a broad contention that no law imposing a tax could be impugned on the ground of violation of Part III of the Constitution in general and in particular of article 19(1) (f) or article 31. His submission was that the validity of tax laws were governed solely by article 265 and that such laws were not governed by Part III of the Constitution and specially because the money sought to be taken by the State as tax by virtue of a fiscal enactment was not "property" within article 19(1) (f) and that the expression "laws for the purpose of imposing a tax" used in article 31(5) (b) (i) saved all laws from the operation of article 31 whether such laws be within legislative competence or not, as 30 also whether or not such laws were repugnant to Part III of the Constitution. Before adverting to the decisions on which reliance was placed for this position two things might he pointed out: (1) that article 265 merely enacts that all taxation the imposition, levy and collection shall be by law; and (2) that the Article beyond excluding purely executive action does not by itself lay down any criterion for determining the validity of such a law to justify any contention that the criteria laid down exclude others to be found elsewhere in the Constitution for laws in general. If by reason of article 265 every tax has to be imposed by "law" it would appear to follow that it could only be imposed by a law which is valid by conformity to the criteria laid down in the relevant Articles of the Constitution. These are that the law should be (1) within the legislative competence of the legislature being covered by the legislative entries in Schedule VII of the Constitution; (2) the law should not be prohibited by any particular provision of the Constitution such as for example, articles 276(2), 286 etc., and (3) the law or the relevant portion thereof should not be invalid under article 13 for repugnancy to those freedoms which are guaranteed by Part III of the Constitution which are relevant to the subject matter of the law. The reference therefore to article 265 does not lead necessarily to the result envisaged by Mr. Sanyal. The entire argument of Mr. Sanyal on this part of the case was rested on the observations contained in two decisions of this Court, Ramjilal vs Income tax Officer, Mohindargarh and Laxmanappa Hanumantappa Jamkhandi, vs The Union of India. We do not understand these decisions as laying down any such broad proposition. We are further 31 satisfied that the learned Judges could not have meant that if a law imposing a tax was outside the legislative competence of the legislature enacting it, as the argument before us appeared to suggest it could be a law under which a person could be deprived of his property under article 31(I) or regarding which a person could not move this Court for relief under article 32. Such a proposition would be contrary to a long catena of cases of this Court of which it is sufficient to refer to Mohammad Yasin vs The Town Area Committee, Jalalabad, State of Bombay vs The United Motors (India) Ltd., The Bengal Immunity Company Limited vs The State of Bihar and Ch. Tika Ramji vs The State of Uttar Pradesh. In all these cases the legislation imposing the tax or the fee which had been held not to have been within the legislative competence of the authority imposing the tax or the fee was struck down on the ground that those laws violated the freedom guaranteed by Part III of the Constitution. Learned Counsel laid some stress on the fact that in these cases the tax or fee was held to be unconstitutional as imposing an unreasonable restraint on the right to carry on a trade or business guaranteed by article 19(1)(g) and not as an infringement of the right to hold "property" under article 19(I)(f). In our opinion nothing turns on this, for it is the deprivation of the freedom "to hold property" that is the direct result of the tax and the restraint on the business by reason of the collection of the illegal tax or the procedures prescribed for such collection is only an indirect and incidental effect thereof. Nor do we find it possible to accept even the more limited proposition that whatever be the position in regard to tax laws which lack legislative competence, once a tax law is covered by an entry in the Legislative List and does not contravene direct prohibitions like those in articles 276 (2) or 286 32 etc. , such a law is immune from the limitations imposed by Part III of the Constitution. Mr. Sanyal is right in his submission that the levying of taxes though it might involve taking private property for a public use is entirely distinct from the power of eminent domain which is covered by article 31(1)(2) and that the saving in article 31(5)(b) (i) of such laws is really by way of abundant caution. It has been stated that where "property is taken under a taxing power, the persons so taxed may be said to be compensated for their contribution by the general benefits which they receive from the existence and operation of Government. But this is not to say that the burden of a tax that may be constitutionally laid upon an individual needs to be justified by a showing that he, individually will receive benefit from the expenditure of the proceeds of the tax, and much less that the degree of that burden may be measured by the amount of benefit that the tax payer is excepted to receive (1)". It would, therefore, be obvious that a tax law need not satisfy the tests of article 31(2). But it does not follow that every other Article of Part III is inapplicable to tax law. Leaving aside article 31(2) that the provisions of a tax law within legislative competence could be impugned as offending article 14 is exemplified by such decisions of this Court as Suraj Mal Motha vs Sri A. V. Visvanatha Sastri and Shree Meenakshi Mills Ltd., Madurai, vs Sri A. V. Visvanatha Sastri. In Moopil Nair vs State of Kerala the Kerela Land Tax Act was struck down as unconstitutional as violating the freedom guaranteed by article 14. It also goes without saying that if the imposition of the tax was discriminatory as contrary to article 15, the levy would be invalid. It might very well be that a distinction might have to be drawn between the legality of the 33 quantum of a tax levied which might not be open to challenge under article 19(1)(f) and the incidence of the tax or the procedure prescribed therein either for the assessment or the collection which might be open for being tested with reference to all the freedoms including that contained in article 19(1)(f). In fact in Moopil nair vs State of Kerala (1) already referred to, certain provisions of the Act therein challenged which prescribed the procedure for the levy of the tax were struck down on the ground of being obnoxious to article 19(1)(f). Having regard to the very limited controversy before us we do not consider it necessary to embark on any further or more detailed examination of this question, except to say that we cannot accept the argument of the learned Additional Solicitor General that by reason of article 265 tax laws are outside Part III of the Constitution. In support of the submission that a tax levied with retrospective effect was unconstitutional as being an unreasonable restriction on this right to hold property (article 19(1)(f)). Mr. Pathak relied on the decisions in Nichols vs Coolidge (2). The tax in question was an estate duty on property passing on death and in the items to be included for computing the value of the estates was included not merely all property of which the deceased died possessed, on the date of his death but also that which he had transferred by gifts within a period of two years fore his death. This inclusion of property transferred to third persons not in contemplation of death but by the grantor in the ordinary and natural course of the transaction of his affairs so that the donees might enjoy the properties absolutely, was held to be unconstitutional as offending the rule as to "due process" contained in fifth amendment to the constitution. Justice McReynolds delivering the opinion of the Court said: 34 "Under the theory advanced for the United States, the arbitrary, whimsical and burdensome character of the challenged tax is plain enough . .Real estate transferred years ago, when of small value, may be worth an enormous sum at the death. If the deceased leaves no estate there can be no tax; if, on the other hand, he leaves ten dollars both that and the real estate become liable. Different estates must bear disproportionate burdens determined by what the deceased did one or twenty years before he died. This Court has recognised that a statute purporting to tax may be so arbitrary and capricious as to amount to confiscation and offend the fifth Amendment. We must conclude that section 402(c) of the statute here under consideration, in so far as it requires that there shall be included in the gross estate the value of property transferred by a deceased prior to its passage merely because the conveyance was intended to take effect in possession or enjoyment at or after his death, is arbitrary, capricious and amounts to confiscation." Learned Counsel also referred us to a few later decisions of the American Supreme Court in which retrospective taxation has been held arbitrary and capricious and to amount to a violation of the due process clause contained in the 5th Amendment. In regard to these decisions, two points have to be noted: (1) that the decisions of Supreme Court of the United States are not uniform and there are undoubtedly decisions of the Court of a later date which speak the other way. In Third National Bank vs White (1) the Supreme Court upheld an estate tax which operated retrospectively. It is in view of these decisions that Mr. Ballard states in an article in the Harvard Law Review (*), referring to White 's case (1) 35 "It seems accurate to say that the decision marks for practical purposes the passing of 'arbitrary retroactivity ' in the field of the estate tax. . .And the present status of Nichols vs Coolidge is not entirely clear. . Since the Nichols case can be distinguished on its facts, it may well give way. . In any event. .it would seem that after the White case no application of the estate tax can be successfully resisted on the score of retroactivity. " For instance in Welch vs Henry (1) which related to an enactment imposing income tax which had retrospective operation, Justice Stone delivering the Judgment of the Court referring to Nichols vs Coolidge (2) and other cases in which observations broadly stating that any retrospective tax legislation was obnoxious to the requirement of due process, stated: "Even a retroactive gift tax has been held valid where the donor was forewarned by the statute books of the possibility of such a levy. In each case it is necessary to consider the nature of the tax and the circumstances in which it is laid before it can be said that its retroactive application is so harsh and oppressive as to transgress the constitutional limitation." "Any classification for taxation is permissible which has reasonable relation to a legitimate end of governmental action. Taxation is but the means by which government distributes the burdens of its cost among those who enjoy its benefits. And the distribution of a tax burden by placing it in part on a special class which by reason of the taxing policy of the State has escaped all tax during the taxable period is not a denial of equal protection. 36 Nor is the tax any more a denial of equal protection because retroactive. . A tax is not necessarily unconstitutional because retroactive. Milliken vs United States and cases there cited. Taxtation is neither a penalty imposed on the taxpayer not a liability he assumes by contract. It is but a way of apportioning the cast of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens. Since no citizen enjoys immunity from that burden, its retroactive imposition does not necessarily infringe due process, and to challenge the present tax is not enough to point out that the taxable event, the receipt of income, antedated the statute. " In Untermyer vs Anderson (1) which was concerned with the validity of a tax on gifts which was made to operate from a date before it was enacted, Justice Holmes stated: ". . I find it hard to state to myself articulately the ground for denying the power of Congress to lay the tax. We all know that we shall get a tax bill every year. I suppose that the taxing act may be passed in the middle as lawfully as at the beginning of the year. A tax may be levied for past privileges and protection as well as for those to come," and Justice Brandeis made the added observations which have been repeatedly quoted in later decisions as well as in text books: "For more than half a century, it has been settled that a law of Congress imposing a tax may be retroactive in its operation. Each of the fifteen income tax acts adopted from time to time during the last sixty seven years has been retroactive, in that it applied 37 to income earned, prior to the passage of the act, during the calendar year. . The need of the government for revenue has hitherto been deemed a sufficient justification for making a tax measure retroactive whenever the imposition seemed consonant with justice and the conditions were not such as would ordinarily involve hardship. On this broad ground rest the cases in which a special assessment has been upheld. Liability for taxes under retroactive legislation has been 'one of the notorious incidents of social life '. . Recently this Court recognized broadly that 'a tax may be imposed in respect of past benefit '. " It would thus be seen that even under the constitution of the United States of America the unconstitutionality of a retrospective tax is rested on what has been termed "the vague contours of the 5th Amendment." Whereas under the Indian Constitution that grounds on which infraction of the rights a property is to be tested not by the flexible rule of "due process" but on the more precise criteria set out in article 19(5), mere retrospectivity in the imposition of the tax cannot per se render the Law unconstitutional on the ground of its infringing the right to hold property under article 19(1)(f) or depriving the person of property under article 31(1). If on the one hand, the tax enactment in question were beyond legislative competence of the Union or a State necessarily different considerations arise. Such unauthorised imposition would undoubtedly not be a reasonable restriction on the right to hold property beside being an unreasonable restraint on the carrying on of business, if the tax in question is one which is laid on a person in respect of his business activity. Mr. Pathak also presented his argument on this head in a slightly different form. He submitted that the Constitution makers had contemplated that a duty of excise would be imposed only when the 38 manufacturer or the producer was in possession and control of the goods at the moment of the imposition, and therefore would be in a position to pass it on and obtain payment from the purchaser of the duty paid by him to State. The imposition of the levy retrospectively however deprive him of this benefit of passing on the burden which he would normally have. This restriction or impairment of his right to pass on the duty, he urged rendered the restriction imposed on him in the shape of the obligation to pay the duty unreasonable. Learned Counsel admitted that as the imposition would yield to the Exchequer more money, the restriction on appellants ' right to hold property could not be denied to be in the 'interest of the general public" within article 19(5) but his submission was that it lacked the character of "reasonableness" because it deprived him of the right to pass on the tax to others. It was further admitted that it was only if learned Counsel was right in his submission regarding the infraction of article 19 (1) (f) that any question of the violation of article 31 (1) could arise. It would be seen that it is the same argument as was presented to challenge the legislative competence of Parliament to enact the legislation. Only the nomenclature employed is different and adapted to suit the need of bringing it into the fold of an impairment of fundamental rights under Part III of the Constitution. As Evatt, J. observed in Broken Hill South Limited (Public Officer) vs The Commissioner of Taxation (New South Wales) (1) "It is not proper to deny to the legislature the right of solving taxation problems unfettered by legal categories. " If notwithstanding that according to economic theory or doctrines propounded by economists a duty of excise does not cease to be such, merely because it is imposed at a time or in circumstances (as pointed out earlier in conjunction with a system of price control) in 39 which it cannot be passed on one fails to see any substance in the argument that the imposition of such a tax is an unreasonable restriction on the exercise of the fundamental rights to hold property guaranteed by article 19 (1) (f). The last of the points urged was that r. 10A was not apt to cover the recovery of the duty which was a subject of demand dated December 12, 1951. The learned Judges of the High Court rejected this submission and, in our opinion, correctly. Rule 10 under which the first demand of June 22, 1951, was made ran: "10. Recovery of duties or charges short levied or erroneously refunded. When duties or charges have been short levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded the person chargeable with the duty or charge, so short levied, or to whom such refund has been erroneously made shall pay the deficiency or repay the amount paid to him in excess, as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account current, if any, or from the date of making the refund. " The contention which was then urged was that the short levy which led to the demand was not caused through inadvertence, error etc., which are set out in this rule and that consequently there was a defect in the operative machinery for collection of the refund. This objection of the present appellants was upheld by the Full Bench of the 40 Nagpur High Court and it was as a result of this decision that rule 10 A was framed. This rule reads: 10A. Residuary powers for recovery of sums due to Government. Where these rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify. " The words "deficiency in duty if the duty has for any reason been short levied" are in our opinion, wide enough to include cases of deficiency arising like those in the circumstances of the present case, viz., where 8 annas out of the 14 annas of the duty has been collected in the first instance but 6 annas remains to be collected. We consider, therefore, that there is no substance in the objection that r. 10A is not wide enough to cover the recovery of the duty from the appellants. The result is that these appeals fail and are dismissed with costs. There will, however, be only one hearing fee for all the cases. The writ petitions also fail and are dismissed, without any order as to cost. KAPUR J. The appellants are manufacturers, warehousemen and merchants of tobacco and they have private licensed warehouses which are governed by r. 140 of the Rules made under the Central Excise & Salt Act (Act 1 of 1944), hereinafter termed the "Act. " According to their allegations in the petition under article 226 of the Constitution, the appellants had a considerable quantity of tobacco in their licensed 41 warehouses on February 28, 1951. On the same day the Central Bill (Bill No. 13 of 1951) was introduced in the House of the People, one of the clauses of which related to the duty of excise for the financial year beginning April 1, 1951. According to the Bill, on unmanufactured tobacco a duty of 8 As. per Ib. and 6 to 9 As. (per 1000) Biris was to be imposed. This Bill was amended and by this amendment the duty on tobacco other than Biri tobacco was fixed at 6 As. per Ib. On Biri tobacco 14 As. per Ib. and no duty was imposed on manufactured Biris. As a result of the operation of sections 3 & 4 of the provisional Collection of Taxes act (Act XVI of 1931) the duty became leviable as from the date of the introduction of the Bill. The petitioner have stated that in accordance with the provisions of the Bill that was introduced, they paid excise duty on tobacco in their possession at the rates mentioned in the Bill and obtained clearance certificates in accordance with the Rules under the Act. On April 28, 1951, the Finance Bill was passed and became Finance Act, 1951 (Act XXIII of 1951). By section 7 of that Act the first schedule to the Central Excise and Salt Act was amended in accordance with what has been stated above. By section 7. (2) of the Finance Act. 1951, it was provided that the amendment made in the first schedule to the Act shall be deemed to have effect on and from the first day of March 1951. A demand was subsequently made from the appellants in respect of excess duty payable on tobacco cleared out of the store houses from March 1, 1951, to April 28, 1951. Thereupon the appellants filed a petition under article 226 of the Constitution in the High Court at Nagpur. The grounds of the attack as to the constitutionality of the tax were decided against the appellants but the petition succeeded on the ground that there was no machinery 42 provided under the Act for recovery of the tax. This judgment is reported as Chhotabhai Jethabhai Patel & Co. vs The Union of India (1). On December 8, 1951, the Central Government by a notification amended the Central Excise Rules by adding r. 10A which provided machinery for the collection of tax. The rule was : "10 A. Residuary powers for recovery of sums due to Government. Where these rules do not make any specific provision for the collection of any duty or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall on a written demand made by the proper officer be paid to such person and at such time and place as the proper officer may specify." After the introduction of this rule a fresh demand was made on December 12, 1951, for excess duty on the tobacco cleared. The appellants again filed a petition in the High Court of Nagpur which was decided against them and against that judgment the appellants have come to this court on a certificate under article 132 of the Constitution. The question submitted to this Court is as to the validity of the said tax on the ground of its repugnancy to the Constitution of India. Counsel for the appellants has raised two questions against the legality of the taxes; (1) The Parliament had no power to make a retrospective legislation while making a law under item 84 of List I so as to affect goods that had been cleared from the warehouses after payment of proper duties at the rates prevailing on the date that the goods were cleared because (a) Parliament 's power to make retrospective laws is subject to constitutional limitations, namely, the language 43 of item 84 of List I; (b) duty of excise as defined in the Constitution and its nature and character is such that it is not capable of being exercised after the goods on which it is imposed are no longer in possession of the warehousemen and after they have passed into the common stock of the country; (2) legislation of this character imposes an unreasonable restriction under article 19 (1) (f); and (3) r. 10 A does not apply to the facts of the case and does not authorise the collection of the duty imposed. The first point relates to the legislative competency of Parliament. Item 84 of List I provides: Item 84 "Duties of excise on tobacco and other goods manufactured or produced in India. " In the corresponding item under the Government of India Act, 1935, the same language was used so that the nature of the duties remains the same both under the Constitution and under the Government of India Act, 1935 Section 3 of the Act empowers the levying of duties specified in the First Scheduled. The relevant portion of that section is as follows: Section 3(1) "There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates set forth in the First Schedule." By section 7 (2) of the Act retrospective effect was given to the duties imposed by the Finance Act taking effect as and from the First day of March, 1951. section 7(2) "The amendment made in the , by sub section (1) shall be deemed to have had effect on and from the first day of March 1951. ." 44 The effect of this deeming provision is that the new rates of duties must be taken to have been imposed and become operative as if they were in the bill as and when the bill was introduced in Parliament: Venkatachalam vs Bombay Dyeing & Manufacturing Co. Ltd.(1). The contention raised is as to the nature of the duty of Excise. It was argued that Excise Duty is a tax on goods which must exist at the time when the tax is levied and it must have been intended and expected by the legislature that it will be passed on to the consumer and as retrospective operation of such duties has not got these qualities when the goods are no longer in possession of the person sought to be taxed they do not fall within the term "duty of excise" and therefore they are beyond the legislative competence of Parliament. To support his contention, counsel for the appellants relied on Bank of Toronto vs Lambe (2) where the question for decision was as to whether certain taxes imposed on commercial corporations carrying on business were direct taxes or indirect taxes of the Provinces or the Dominion. Lord Hobhouse at p. 582 relying upon the definitions given by John Stuart Mill said: "Taxes are either direct or indirect. A direct tax is one which is demanded from the very persons who it is intended or desired should pay it. Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another; such are the excise or customs. " The same distinction was brought out in some other Canadian cases decided by the Privy Council; City of Halifax vs Estate of J. P. Fairbanks (3) which related to the nature of "Business Tax" which was held to be a direct tax; Attorney General 45 for British Columbia vs Mc Donald Murphy Lumber Company Ltd. (1); & Attorney General for British Columbia vs Kingcome Navigation Comapny Limited (2) Attorney General for Manitoba vs Attorney General for Canada (3) and Brewers & Malster 's Association of Onatario vs The Attorney General for Ontario (4) Reference was next made to an Australian case Parton vs Milk Board (Victoria) (5) where two necessary qualities of the duty of Excise were stated to be that it must be levied on goods which are in existence and the taxpayer should be able to pass it on to the consumer. But as was pointed out by Gwyer, C.J., in the Province of Madras vs Boddu Paidanna (6): "The Canadian cases which were cited do not seem to afford any assistance since analogous problems in Canada are always concerned with direct and indirect taxation. " Dealing with the same distinction the Privy Council said in Governor General in Council vs Province of Madras (7): "Little assistance is to be derived from the consideration of other federal constitutions and of their judicial interpretations. Hence there is no question of direct and indirect taxation. " The Indian Constitution is unlike any that have been called to their Lordships ' notice in that it contains what purports to be an exhaustive enunciation and division of legislative powers between the Federal and Provincial Legislatures. " The Excise duty in England came to be imposed as a scheme of revenue and taxing device by Pym and approved by the Long Parliament. It consisted of charges on wine and tobacco and some 46 other articles were added later. The basic principle of duties of Excise was that they were taxes on the production and manufacture of articles which could not be taxed through the customs house. The revenue derived from that source is called excise revenue proper. In England it was later on extended to comprise other taxes but the fundamental conception of the term is that it is a tax on articles produced or manufactured in the country. It was in this sense that the word "duty of excise" was understood in Australia (Peterswalad vs Bartley (1). The importance of legislative practice of a country was pointed out by the Privy Council in a Canadian case Croft vs Dunphy (2) where it was held that when a power is conferred to legislate on a particular topic it is important in determining the scope of the power to have regard to what is ordinarily treated as embraced within that topic in the legislative practice in England, U.S.A. and the Dominions and of India, the Federal Court considered the nature of duty of Excise in Re The Central Provinces & Berar Sales of Motor Sprit & Lubricants Taxation Act (In re A Special Reference under section 213 of Government of India Act, 1935) (3), generally known as the "Central Provinces" case. In that case the Act of the Provincial legislature levying a tax on retail sale of motor spirit was held to fall within item 48 in List II of the 7th Schedule of the Constitution Act and not a duty of Excise within the meaning of entry 45 of List I of that Schedule. The nature of the duty was considered by the Court. Gwyer, C. J., after referring to the distionary meaning of the word "excise" said at p. 41: "But its primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption. I am satisfied that is also its primary and fundamental meaning in India; and no 47 one has suggested that it has any other meaning in entry No. 45. " At p. 47 the learned Chief Justice said: "The expression "duties of excise", taken by itself conveys no suggestion with regard to them time or place of their collection. Only the context in which the expression is used can tell us whether any reference to the time or manner of collection is to be implied. It is not denied that laws are to be found which impose duties of excise at stages subsequent to manufacture or production; but so far as I am aware, in none of the cases in which any question with regard to such a law has arisen was it necessary to consider the existence of a competing legislative power such as appears in entry No. 48." But Mr. Pathak relied on the observations of the learned Chief Justice at p. 50 where he said: "Thus the Central Legislature will have the power to impose duties on excisable articles before they become part of the general stock of the Province, that is to say at the stage of manufacture or production, and the Provincial Legislature an exclusive power to impose a tax on sales thereafter. " But these observations only mean this that when there is a competition between the duty, imposed at the stage of manufacture of production and a tax imposed on sales thereafter, the sphere of the Central and the Provincial Legislatures comes into operation but, as the previous passages, show, it does not in any manner vary the meaning of the word "excise" nor does it accept a further qualification which is sought to be included in that phrase as a necessary quality of that tax that unless it is capable of being passed on to the consumer or the person taxed can indemnify, himself, it is not a duty of excise. At p. 47, the learned Chief Justice 48 observed that in the expression "duties of excise" no suggestion as to time or place of collection was implied. Sulaiman, J., pointed out at p. 73 that in the Indian Constitution it was not necessary to go into the fine niceties of distinction between direct and indirect taxation because in the Indian Act no such division existed and that ultimate incidence of tax was not a crucial test under the Indian Constitution. Again at p. 77, Sulaiman, J., said: "The essence of a tax on goods manufactured or produced is that the right to levy it accrues by virtue of their manufacture or production. It is immaterial whether the goods are actually sold or consumed by the owner or even destroyed before they can be used. If a duty is imposed on the goods manufactured or produced when they issue from the manufactory then the duty becomes leviable independently of the purpose for which they leave it and irrespective of what happens to them later. " In a subsequent case The Province of Madras vs Messrs. Boddu Paidnna & Sons(1) Gwyer, C. J., again went into the question of the nature of the duty of excise under the expression "duties of excise" and said at p. 101: "There is in theory nothing to prevent the Central Legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed or given away. A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Indian Excise Acts) when the commodity leaves the factory for the first time, and also 49 because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example been destroyed in the factory itself. It is the fact of manufacture which attracts the duty, even though it may be collected later; and we may draw attention to the Sugar Excise Act in which it is specially provided that the duty is payable not only in respect of sugar which is issued from the factory but also in respect of sugar which is consumed within the factory." The Privy Council described the nature of the duty of Excise in Governor General in Council vs Province of Madras (1) as a duty which is primarily levied on a manufacturer or producer in respect of the commodity manufactured or produced. At p. 103 Lord Simonds referred to In re Central Provinces & Berear case (2) and to Baddu Paidanna case (3) and said: "The two taxes, the one levied on a manufacturer in respect of his goods, the other on a vendor in respect of his sales, may as is there pointed out in one sense overlap. But in law there is no overlapping. The taxes are separate and distinct imposts. If in fact they overlap, that may be because the taxing authority, imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time on the occasion of its sale. But that method of collecting the tax is an accident of administration; it is not of the essence of the duty of excise, which is attracted by the manufacture itself. That this is so is clearly exemplified in those excepted cases in which the Provincial, not the Federal legislature has power to impose a duty of excise. " 50 Thus according to the Indian cases decided on the nature of duties of excise ultimate incidence is not of any importance or relevance. In dealing with excise duty (1) there is no mention of a direct or indirect taxes; the Indian Legislature has avoided this incidence to be characteristic of the tax; (2) taxable event is the manufacture or production of goods; it is immaterial what happens to them afterwards whether they are sold, consumed, destroyed or given away; (3) it is not a necessary incidence that the manufacturer must be able to pass it on to the consumer or indemnify himself; (4) the general tendency of its being passed on may be there but it may be prohibited by the circumstances, economic or otherwise. The fact that the manufacturer has no chance to get the tax from the buyer does not affect the legality of the tax; it was so held in the case of sales tax in The Tata Iron & Steel Co. Ltd. vs The State of Bihar (1) where the nature of the excise duty was discussed. At page 1369 the observations of Gwyer C. J. in Boddu Paidanna case (2) and of the Privy Council in Governor General in Council vs Province of Madras (3) were quoted with approval. It may be noted that in the Tata Iron & Steel Co. case (1) the tax was a retrospective tax and was imposed at a time when in the Sales Tax Act no provision was made for passing on the Sales Tax to the purchaser. In the Union of India vs Madan Gopal Kabra (4) it was pointed out that Parliament was not precluded from exercising the power of imposing a retrospective tax and therefore it was competent to make a law imposing a tax on the income of any year prior to the commencement of the Constitution. As was pointed out in that case under articles 245 and 346 of the Constitution read with the relevant entry in List I of Schedule VII Parliament is empowered to make laws with regard to taxes and no limitation or restriction is imposed in regard to 51 retrospective legislation. See Sargood Bros. vs The Commonwealth (1) where retrospective laws about the levying of Customs were held valid. See also Welch vs Henry (2) On the ground of retrospectivity alone therefore the tax is not unconstitutional. In view of what has been said above the cases decided in Canada or Australia cannot have any application. It was next contended that a retrospective tax purporting to be a duty on goods when the goods had been disposed of would be a tax not under item 84, List I of the Seventh Schedule but one under item 60 of List II, i.e., tax on profession, trade, calling and employment the submission being that the word "trade" would include manufacture. This contention was sought to be supported by the observations of Lords Davey in Commissioner of Taxation vs Kirk (3): "The word `trade ' no doubt primarily means traffic by way of sale or exchange or commercial dealing, but may have a larger meaning so as to include manufactures." In National Association of Local Government Officers vs Bolton Corporation (4) Lord Wrights in interpreting the word "trade" in section 11 of the Industrial Courts Act, 1919, said: "Sect. 11 of the Act of 1919 shows that `trade ' used as including `industry ' because it refers to a trade dispute in the industry of agriculture. " But this letter case has no application because there the word "trade" was interpreted in relation to a section of a particular Act and trade in that context has quite a different meaning. In Skinner vs Jack Breach Limited (5), Lord Hewart, C. J. in interpreting the word "trade" in Trade Boards Act held that the word "trade" indicates a process of buying 52 and selling but it was by no means an exhaustive definition. It might also mean a calling or industry or class of skilled labour. The duty of Excise in item 84 should be given the widest construction unless for some reason it is cut down either by the terms of that item itself or by other Parts of the Constitution. The legislative history of the duty of Excise shows the nature of the tax. The word "trade" in item 60 of List II has reference to the carrying on of an activity in the nature of buying and selling and may in a different context mean a calling or an industry. Therefore reading the two items together it is obvious that item 84 deals with taxes on goods manufactured or produced and item 60 deals with the carrying on of trade i.e., an activity in the nature of buying and selling and the Act in its pith and substance relates to duty on goods manufactured or produced and has no relationship with item 60 of List II. Even assuming that the nature and tendency of the duty of Excise is, as contended by Mr. Pathak that it can be passed on to the consumer, even than the complaint of the appellants that they have been deprived of that opportunity is not well founded, because of section 64 A of the Indian Sale of Goods Act (3 of 1930), which was section 10 in the Indian Tariff Act, 1934. It was originally taken from the British Tariff Act, 1901, 1 Edw. VII Ch. Section 64A of the Indian Sale of Goods Act is as follows : section 64 A. "In the event of any duty of customs or excise on any goods being imposed, increased, decreased or remitted after the making of any contract for the sale of such goods without stipulation as to the payment of duty where duty was not chargeable at the time of the making of the contract, or for the sale of such goods duty paid where duty was chargeable at that time, 53 (a) if such imposition or increase so takes effect that the duty or increased duty, as the case may be, or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such duty or increase of duty, and he shall be entitled to be paid and to sue for and recover such addition; and (b) if such decrease or remission so takes effect that the decreased duty only or no duty, as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or remitted duty, and he shall not be liable to pay, or be sued for or in respect of, such deduction. " This section provides for the recovery by the seller of the amount of increase in duty from the purchaser where the increase takes effect subsequent to the contract and for the right of the purchaser to recover from the seller the duty in cases where there is a similar decrease and this right exists both before the delivery is given, taken and price received or paid as the case may be : Narayanan Chettiar vs Kidar Sahib(1). Counsel for the appellants attempted to counter this submission by relying upon a judgment of the Privy Council in Prbhudas vs Ganidada (2). In that case the Government duty had not been reduced but the Buyer claimed that it had constructively been decreased because the tariff valuation had been reduced and so constructively it must be reckoned that there was a decrease in the duty on the goods sold. This contention was negatived by the Privy Council and it was held that a change of duty means a change in the rate of duty, and not a change of tariff value. Thus assuming that the contention of the appellants is correct as to the nature of the excise duty it cannot be said that in the present case the appellants were 54 deprived of the opportunity of recovering the additional duty from the purchaser and therefore the duty lost its character of being excise duty and was transformed into a different tax. This argument of the appellants is therefore without substance and must be overruled. The constitutionality of the tax and retrospective imposition of enhanced duty on tobacco was further challenged on the ground of violation of the fundamental rights of the appellants under article 19(1)(f) of the Constitution which it was submitted is not saved by cl. (5) of that article because it is not a reasonable restriction in the interest of the general public. The grounds of attack may be stated in this way : (1) that the nature of an excise duty is such that normally it is passed on to the purchaser by the manufacturer or the producer and it has that tendency and quality; (2) as the impugned duty was enhanced at a time when the appellants had cleared their goods after paying the then prevailing duty, it was not possible for them to realize the excise duty from any purchaser and (3) at the time of the clearance of the goods the appellants had paid all the taxes under the then existing law and the new liability rendered them liable to pay an illegal exaction or in the alternative to suffer the consequences of non payment which are of a drastic nature. On this basis it was submitted that the imposition was an unreasonable restriction on the fundamental rights of the appellants guaranteed under article 19(1) (f). At this stage an examination of the extent of the State 's power of taxation will be helpful. This power is one of the three governmental powers of the State; the other two being police power and power of eminent domain. The power of taxation is the legal capacity of government to impose charges upon persons or their property to raise revenue for governmental 55 purposes. A tax is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract. It is but a way of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens. Welch vs Henry (1), but the constitutionality of a tax does not depend upon a showing of benefits ; protection and taxation are not correlative terms. Willis Constitutional, Law, p. 224 : Tax is levied against the person and not against property. Property only serves as a basis for computing the measure of each person 's liability. Weaver on Constitutional Law, p. 513 : "The power of taxation is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. It reaches to every trade or occupation to every object of industry, use, or enjoyment; to every species of possession; and it imposes a burden which, in the case of failure to discharge it, may be followed by seizure and sale or confiscation of property. No attribute of sovereignty is more pervading and at no point does the power of the government affect more constantly and intimately all the relations of life than through the exactions made under it." (Cooley 's Constitutional Limitations, Vol. 2, 8th Ed.p. 987.) Chief Justice Marshall said in M 'Culloch vs Maryland (2) : "The power of taxing the people and their property is essential to the very 56 existence of government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the government may choose to carry it. The only security against the abuse of this power is found in the structure of the government itself." (See Willough by on the Constitution of the United States, Vol. 2 at p. 666). As the exigencies of the government cannot be limited, no limits can be prescribed to the exercise of the right of taxation. Every individual must bear a portion of public burden and that portion is determined by the legislature. According to the American Supreme Court the power of taxation is very wide and uncontrolled. In M 'Culloch vs Maryland(1) Chief Justice Marshall said : ". . . . it is unfit for the judicial department to inquire what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power." See also Graves vs Schmidlapp(2) (per Chief Justice Stone). In Pacific Insurance Co. vs Soule(3) the Court said: "Congress may prescribe the basis fix the rate, and require payment as it may deem proper within the limits of the constitution it is supreme in its action. No power of supervision or control is lodged in either of the other departments of the government. " Again in Veazie Bank vs Fenno (4), it was said : "It is insisted. . that the tax in this case is excessive and so excessive as to indicate a purpose on the part of the congress to destroy the franchise of the bank, and is, therefore beyond the constitutional power of 57 congress. . . The first answer to this is that the judicial cannot prescribe to the legislative department of the Government limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the Courts but to the people by whom its members are elected. " In Patton vs Brady(1), the Court observed: "It is no part of the function of a Court to enquire into the reasonableness of the exercise of the power of taxation either as respects the amount or the property on which it is imposed. " In Welch vs Henry(2), at p. 94 it was observed : "The equitable distribution of the costs of government through the medium of an income tax is a delicate and difficult task. In its performance experience has shown the importance of reasonable opportunity for the legislative body, in the revision of tax laws, to distribute increased costs of government among its tax payers in the light of present need for revenue and with knowledge of the sources and amounts of the various classes of taxable income during the taxable period preceding revision. Without that opportunity accommodation of the legislative purposes to the need may be seriously obstructed if not defeated." Thus according to American view (1) the power to tax is an attribute of sovereignty; (2) tax is an rateable contribution of each individual in a State towards the amount of revenue which is essential for the existence and operation of a public governing body; (3) it being essential for the very existence of an organised State, it may be exercised on objects to the utmost extent to which the legislature may choose to carry it and (4) the needs of 58 the revenue are only known to the legislature and the court cannot enquire into the necessity of imposing a tax or the objects on which the imposition should be made or the extent of the imposition. In the very nature of things the courts are unable to go into the propriety, extent or economics of a particular tax or the policy underlying it, which must depend upon a multitude of circumstances, which can only be known to the government or the legislature. As the appellants have relied on certain American decisions where certain taxing laws operating retrospectively were tested on the touchstone of "due process of law" clause it becomes necessary to examine the extent of that doctrine. "The taxing power of Federal Government," says Prof. Willis (Constitutional Law, p. 378), "is limited by the procedural requirements of the due process clause. Notice and hearing, though not a judicial tribunal, are required where the tax is based on the value of the property. Jurisdiction, also, is a requirement for all forms of taxation, though the rules as to jurisdiction vary with the kind of tax levied." According to Willoughby, Constitution of the United States, Vol. III, p. 1875, the due process of law obliges the exercise of the taxing power to conform to the following rules : 1. That the tax shall be for a public purpose. That it shall operate uniformly upon those subject to it. That either the person or the property taxed shall be within the jurisdiction of the government levying the tax. That in the assessment and collection of the tax certain guarantees against injustice to individuals, especially in the case of specific as distinguished from ad valorem taxes, by way of notice and 59 opportunity for a hearing shall be provided. These principles of taxation are not peculiar to America but are accepted in all countries which have parliamentary democracies and govern the Indian taxation system also. In some American decisions retroactive tax laws were held to be inconsistent with due process : Nichols vs Coolidge(1); Helvering vs Helwholz(2) Blodgett vs Holden (3). But the decision in those cases rested on the ground that the tax could not reasonably be anticipated by the taxpayer at the time of the voluntary act which the statute later made the taxable event e.g., the gift by the descendent of the whole or a part of his interest in property. As was explained in Welch vs Henry(4) at p. 93 : "Since, in each of these cases, the donor might freely have chosen to give or not to give the taxation, after the choice was made of a gift which he might will have refrained from making had he anticipated the tax, was thought to be so arbitrary and oppressive as to be a denial of due process. But there are other forms of taxation whose retroactive, imposition cannot be said to be similarly offensive, because their incidence is not on the voluntary act of the taxpayer. And even a retroactive gift tax has been held valid where the donor was forewarned by the statute books of the possibility of such a levy, Milliken vs United States, 75 L. Ed. 809. . . " In that case the retroactive operation of a tax on dividends was upheld and the objection on the ground of inconvenience in being called upon, after the customary time for levy and payment of the 60 tax had passed, to bear a governmental burden of which he had no warning and which he did not anticipate was held to be unsustainable. The contention that the retroactive application of the Revenue Acts is a denial of the due process guaranteed by the Constitution has not been accepted in America as an invariable rule. Welsh vs Henry(1) and the other cases there cited. The doctrine of due process of law has received various interpretations in America which have not always been consistent. Sometimes it has favoured personal liberty and sometimes social control sometimes personal liberty as a matter of substance. Sometimes it has protected personal liberty by extending due process to matters of substance and sometimes it has protected social control by broadening the scope of police power or the power of taxation or the power of eminent domain. Willis ' Constitutional Law, p. 659. Brandeis J., in Untermyer vs Anderson(2) dealing with the presumption of validity of a taxing statute observed : "The presumption should be particularly strong where as here the objection to an act arises not from a specific limitation or prohibition on congressional power but only out of the `vague contours of the 5th Amendment prohibiting the depriving any person of liberty or property without due process of law '. Holmes J., in Adkins vs Children 's Hospital, , 800. " It was because of the varying meanings and concepts which have from time to time been attached to "due process of law" that the framers of the Indian Constitution did not adopt it in the Constitution; on the other hand they tried to give more defined boundaries to the area of fundamental rights in articles 19 and 31 which deal with rights of property 61 and in articles 19, 20, 21 and 22 which relate to protection of personal liberty and this Court rejected it in A. K. Gopalan 's case (1) and in the State of West Bengal vs Subodh Gopal Bose (2). The constitutionality of the duty of excise was challenged in the present case on the ground of violation of article 19 (1) (f) of the Constitution. he argument is that a taxing law under article 265 is as much a law as any other and therefore falls within the definition of law under article 13(3)(a), and if it contravenes any of the fundamental rights under Part III, then to the extent of the contravention it is void. Counsel relied on the second Kochuni case (3). Article 19 guarantees personal freedoms subject to certain restrictions. Its relevant portion is as follows: article 19(1)(f). "All citizens shall have the right to acquire, hold and dispose of property; article 19(5). "Nothing in sub clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes or prevent the State from making any law imposing reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe. " As has already been said the power to tax is the legal capacity of the State to raise from all those subject to its authority a certain amount of revenue essential so the existence and operation of government. A tax is not a penalty but a contribution of monies for governmental purposes by 62 persons who may be residents or non residents citizens or non citizens, living persons or legal personae who are privileged to enjoy its benefits, but those are not co relative. It implies an equality of burden and regular distribution of expenses of government among the persons taxed. It is levied by authority of law equitably, uniformly or in echelons on all persons subject to it. The appellants alleged that they had sold their goods during the period when the Finance Bill was before Parliament. Variations in the rates of duties are not unexpected, it being within the power of Parliament to do so both prospectively and retrospectively. It is not suggested that such variations are unknown in legislative practice or that the legislators were not entitled to amend a money bill as introduced. If the appellants ' contention is sustained then it will mean the deprivation of Parliament of its right to choose the objects of taxation and therefore Parliament will only vary the rates of duties proposed by the Executive or the time of their effectiveness at the peril of their being declared invalid although they may be within its legislative competence and may in its opinion be necessary for the carrying out of its policies or subserve the proper governance of the country. In the Indian Constitution there is an exhaustive enunciation and distribution of legislative powers, including powers as to taxation, between the State Legislatures and Parliament. Subjects of taxation are distributed in the three Legislative Lists and areas of the respective fields of Parliament and State Legislatures as to taxes are defined. In Parts XII and XIII limitations on legislative competence of the various legislatures as to taxation are indicated and emphasis is placed on the preservation of the economic unity of 63 India. Article 265 is in Chapter XII and provides : "No tax shall be levied or collected except by authority of law," which means that all taxation has to be under a law enacted by a legislature of competent jurisdiction and subject to constitutional limitations. This Court in 1950 rejected the applicability of the doctrine of "due process of law" to Indian constitutional problems: A. K. Gopalan 's case (1); The state of West Bengal vs Subodh Gopal Bose (2). In the latter case it was also held that the Indian Constitution recognises no fundamental right to immunity from taxation and that is why presumably no constitutional protection is provided against the exercise of that power. Per Patanjali Sastri, C.J., p. 614. Das, J. (as he then was), held the power of taxation to be distinct from police power (i.e. regulatory power of the State) and the power of Eminent Domain (i.e. the power of the State of compulsory acquisition of property). Dealing with protection against taxation he said in Subodh Gopal 's case (2) at p. 652 : "Our Constitution makers evidently considered the protection against deprivation of property in exercise of police power or of the power of eminent domain by the executive to be of greater importance than the protection against deprivation of property brought about by the exercise of the power of taxation by the executive, for they found a place for the first mentioned protection in article 31 (1) and (2) set out in Part III dealing with fundamental rights while they placed the last mentioned protection in article 265 to be found in Part XII dealing with finance etc. So with regard to all the three sovereign powers we have complete protection against the executive organ of the State. " 64 Again at p. 653 he observed : "Apart from this, what I ask is, our protection against the legislature in the matter of deprivation of property by the exercise of the power of taxation ? None whatever. By exercising its power of taxation by law the State may deprive us, citizen or non citizen of almost sixteen annas in the rupee of our income." (See also p. 654). In Ramjilal vs Income Tax Officer (1) Das, J. (as he then was), observed at pp. 136 137 : "Reference has next to be made to article 265 which is in Part, XII, Chapter 1, dealing with 'Finance '. That article provides that no tax shall be levied or collected except by authority of law. There was no similar provision in the corresponding chapter of the Government of India Act, 1935. If collection of taxes amounts to deprivation of property within the meaning of article 31(1), then there was no point in making a separate provision again as has been made in article 265. It, therefore, follows that clause (1) of article 31 must be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, for otherwise article 265 becomes wholly redundant. In the United States of America the power of taxation is regarded as distinct from the exercise of police power or eminent domain. Our Constitution evidently has also treated taxation as distinct from compulsory acquisition of property and has made independent provision giving protection against taxation save by authority of law. When Dr. Tek Chand was asked if that was not the correct position, he did not advance any cogent or convincing answer to refute the conclusion put to him. In our opinion, the protection against imposition 65 and collection of taxes save by authority of law directly comes from article 265, and is not secured by clause (1) of article 31. Article 265 not being in Chapter III of the Constitution, its protection is not a fundamental right which can be enforced by an application to this court under article 32. It is not our purpose to say that the right secured by article 265 may not be enforced. It may certainly be enforced by adopting proper proceedings. All that we wish to state is that this application in so far as it purports to be founded on article 32 read with article 31(1) to this court is misconceived and must fail. " A similar decision was given and similar language used by Mahajan, C.J., in Laxmanappa Hanumantappa vs Union of India (1) : "It was held by this Court in Ramjilal vs Income Tax Officer, Mohindergarh (2), that as there is a special provision in article 265 of the constitution that no tax shall be levied or collected except by authority of law, clause (1) of article 31 must therefore be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, and inasmuch as right conferred by Article 265 is not a right conferred by Part III of the constitution, it could not be enforced under article 32. " Ramjilal 's case (2) was quoted with approval in Bengal Immunity Co. Ltd. vs State of Bihar (3). Thus early after the establishment of this Court opinion was expressed excluding the applicability of fundamental rights in Part III to taxing Statutes. But it is important to notice that the Article which was sought to be applied in those cases was article 31 (1) which deals with deprivation of property 66 and not article 19 which is regulatory of the rights of a citizen of personal liberty, property and avocation. It was contended that the impugned tax illegally deprives the appellants of their property and was therefore unconstitutional. In support reference was made to Suraj Mal Mohta & Co. vs A. V. Viswanatha Sastri (1) (under article 14); Shree Meenakshi Mills Ltd. vs Sri A. V. Viswanatha Sastri (2) (under article 14); Purshottam Govindji Halai vs Shree B. M. Desai, Additional Collector of Bombay (3) (under articles 14 and 21); M. Ct. Muthiah vs The Commissioner of Income tax, Madras (4) (under article 14); A. Thangal Kunju Mudaliar vs M. Venkatchalam Potti (5) (under article 14); Bidi Supply Co. vs The Union of India (6) (under article 14); Panna Lal Binjraj vs Union of India (7) (under articles 14 and 19(1)(g);) and Collector of Malabar vs Erimal Ebrahim Hajee (8). These are the cases in which the validity of taxation laws was attacked under the Articles above mentioned. In Panna Lal Binjraj vs The Union of India (7), the assault was not against the imposition or the vires of the tax but against the vires of section 5(7A) of the Indian Income tax Act which empowers the Commissioner of Income tax to transfer any case from one Income tax Officer subordinate to him to another and empowers the Central Board of Revenue to transfer any case from one Income tax officer to another. This attack was based on the contravention of articles 14 and 19(1)(g). It was held that the discretion vested in the authorities empowered to make the transfer is not discriminatory and there was no interference with the right of the citizen to carry on his trade or calling. In collector of Malabar vs Erimal Ebrahim Hajee (8) the attack against the recovery of income tax under section 46 (2) of the Income tax Act was based on articles 14, 19 and 22. There again the question for decision was not the imposition of the tax but 67 the mode of recovery and at Page 976 this ground of attack was rejected and reference was there made to the State of Punjab vs Ajaib Singh (1); Purshottam Govindji Halai vs Shree B. M. Desai, Additional Collector of Bombay (2). Another case relied upon by the appellant 's counsel was Western India Theatres vs The Cantonment Board, Poona, (3) in which the tax was imposed on cinema houses with larger seating capacity and the attack was on the ground of article 14 but that was repelled. The appellant 's counsel also referred to the Bengal Immunity Co. Ltd. vs State of Bihar (4) where the vires of the sales tax imposed on inter State transactions was attacked. The High Court in the case had held that the petition under article 226 was misconceived overlooking the fact that the contention raised was that in so far as the tax purported to act on non residents in respect of inter State sales it was ultra vires of the Constitution. p. 619, Das, C. J., observed : "It is also true that article 31 which protects citizens and non citizens alike cannot be availed of as it deals with deprivation of property otherwise than by way of levying or collecting taxes as held by this Court in Ramjilal vs Income tax Officer, Mohindergarh ; , and that, therefore the Act does not constitute an infringement of the fundamental right to property under that article. It is, however, clear from article 265 that no tax can be levied or collected except by authority of law which must mean a good and valid law. The contention of the appellant company is that the Act which authorises the assessment, levying and collection of sales tax on inter State trade contravenes and constitutes an infringement of article 286 and is, therefore, ultra vires, void and unenforceable. If, therefore, this contention be well founded, 68 the remedy by was of a writ must, on principle and authority, be available to the party aggrieved. The next case relied upon by counsel for the appellants was Kailash Nath vs State of U. P. (1) which was a case under the U. P. Sales Tax Act, the plea of the petitioners was that the goods sought to be taxed had been exported overseas and therefore not liable to sales tax. It was held that if a tax is levied without due legal authority on any trade or business then it is open to the citizen to approach this Court under article 32, since his right to carry on trade is violated or infringed by the imposition of the tax and article 19 (1)(g) "comes into play". There again the taxation law itself was not challenged on the ground of violation of any fundamental right which has reference to property, but the imposition of the tax was assailed on the ground that it was not imposeable on the transactions which had been entered into. In support of the proposition that the taxation laws are assailable under the provisions of article 19(1) State of Travancore Cochin vs Shanmuga Vilas Cashew Nut Factory (2) was relied upon. That was not a petition under article 32 or a matter under article 19(1)(f) but one under article 286(1) and the question in dispute was whether the transaction was in the course of inter State trade. Himatlal Harilal Mehta vs The State of Madhya Pradesh (3) was also a similar case. Article 19(1)(g) was applied because of the unconstitutionality of the tax under article 286(1)(a). M/s. Ram Narain Sons Ltd. vs Asst. Commissioner of Sales Tax (4) was also a case under article 286 of the Constitution and was not a matter falling under article 19(1) of the Constitution. In all these cases relied upon by counsel for the appellants the basis of attack was (1) that the 69 tax was not within the legislative competence of the legislature imposing the tax and therefore the tax was being illegally recovered from the assessee or (2) an objection was taken to the differential mode of imposition and collection and use of a more stringent procedure i.e., illegal discrimination between persons similarly situated e.g., under Taxation on Income (Investigation Commission) Act. The imposion of an illegal tax not within the legislative competence of the legislature, a colourable piece of legislature imposing a tax which is not a tax but is an imposition of a confiscatory nature, a breach of principles of natural justice or imposing an unimposeable tax have all been held to be violative of the right to carry on trade under article 19(1)(g). But they do not support the proposition that the tax if otherwise valid can be declared unconstitutional and can be subject to judicial review on the ground of being excessive or being retrospective in operation or being imposed on one article rather than another. These cases do not support the proposition which has been contended for by the appellants that the very imposition of the tax is a contravention of the right of the assessee to acquire, hold (or own) or dispose of property or on the ground of contravention of article 31. In the State of Bombay vs Bhanji Munji (1), it was also held that article 19(1)(f) read with cl. (5) postulates the existence of the property which can be enjoyed and over which rights can be exercised because otherwise the reasonable restriction contemplated by cl.(5) cannot be brought into play. That was the uniform view held in this Court till the majority judgment in Moopil Nair 's case(2) which relied on the second Kochuni case i.e., Kavalappara Kottarathil Kochunni etc. vs The State of Madras (3). But the latter was not a taxation case. It was held in that case (Kochuni case) that all laws within 70 article 13 are subject to Part III and that for a law to be valid it must satisfy two tests (1) of being enacted by a legislature having legislative competence and (2) it should not contravene any of the fundamental rights. The above opinion is not in accord with the opinion of this court in A. K. Gopalan 's case (1); Ram Singh vs State of Delhi (2); State of Bombay vs Bhanji Munji (3); The Daily Express case (4) and The Hamdard Dawakhana case (5). The question of the applicability of article 19(1)(f) of the Constitution to taxing matters was considered in K. T. Moopil Nair vs The State of Kerala (6). That was a case in which a tax at a flat rate was levied on forest lands in the State of Kerala and this Court by majority held that the tax so imposed was unconstitutional on the ground of infringement of articles 14 and 19(1)(f). The reasons given by the learned Chief Justice were: (a) In the procedure to be adopted for the levying of the tax, there was no provision for a notice to be given to the assessee; (b) There was no procedure for rectification of mistakes committed by the assessing authorities; (c) There is no procedure for obtaining the opinion of a superior Civil Court on a question of law as is generally found in all taxing stautes (d) No duty was cast upon the assessing authority to act judicially; and (e) There was no right of appeal provided to the assessee. The provisions of the Act were held in the majority judgment to be confiscatory. It was observed by the learned Chief Justice at p. 559: "That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face. Taking the extreme 71 case, the facts of which we have stated in the early part of this judgment, it can be illustrated that the provisions of the Act, without proposing to acquire the privately owned forests in the State of Kerala after satisfying the conditions laid down in article 31 of the Constitution, have the effect of eliminating the private owners through the machinery of the Act." Thus the impugned statute in that case was held to be violative of article 19(1)(f) because its procedural part made no provision for giving a hearing to the assessees or for appeal nor was the Assessing Authority required to act judicially and the imposition though called a tax was in effect confiscatory and therefore a colourable piece of legislation. Sarkar, J., in his minority judgment remarked that reasonableness of the rate was not assailed but what was assailed was the imposition of a flat rate per acre without any reference to productivity. Undoubtedly Moopil Nair 's case (1) did hold that a law under article 265 was also a law within article 13 and if it contravened article 14, it was liable to be struck down and that such law must also pass the test of the limitations prescribed in Part III of the Constitution but it did not lay down that all Articles in Part III would be applicable to taxation laws nor did it decide contrary to Ramjilal 's case (2) that article 31 (1) would apply to taxation law which is otherwise invalid. But it is difficult to hold that a regulatory Article like article 19(1) was intended to limit the powers of the Legislature to impose taxes and thus to discharge its duty in regard to country 's financial needs and policies. The contention of infringement of the appellants ' right under article 19(1) (f) is unsound and must be rejected and the reasons are these: Firstly: Clause (5) of article 19 allows the enacting of laws which impose "reasonable restrictions" 72 in the interests of the general public. The use of the term "reasonable restrictions" is indicative of regulation of the right to the personal rights mentioned in sub cl. (f) of the first clause. It must have relation to the existence of the thing to be regulated. There can be no regulation of things not in existence. Therefore where an Act is deprivatory as the imposition of a tax is it cannot fall within article (19)(1) but under the specific article 31, which relates to deprivation of property. Imam, J., in The Collector of Malabar vs E. Ebrahim Hajee (1) said at p. 976: "If the property itself is taken lawfully under article 31, the right to hold or dispose of it perishes with it and article 19(1)(f) cannot be invoked. " That was a case where the Income tax Officer issued a certificate under section 46 (2) of the Income tax Act and the Collector proceeded to recover under section 48 of Madras Revenue Recovery Act. Secondly: All taxation, as shown by its very nature and object, is in the interest of the general public because it is a contribution for governmental expenditure from all persons who in some measure are entitled to its benefit. Thirdly: There is no means or measure for determining the reasonableness of the restrictions which is an objective determination. The needs of the revenue cannot be known to the courts and cannot be determined by them, and the sources of revenue are entirely within the knowledge of the legislature and it is for that department of the State to determine how the burden will be distributed and why, because that department is the policy making body and is familiar with the economics and the resources of the country and its needs. It is for that department in its discretion to select 73 anything for taxation or to exclude it. Cooley 's Constitutional Limitations, Vol. II, p. 986 (note). Fourthly: The power to tax is an attribute of sovereignty and it is an accepted principle that the exercise of that power is not subject to judicial control because no Constitutional Government can exist without the power to raise money for its needs and the only security against abuse is in the structure of the Government. That power carries with it the power to determine when and how the tax shall be levied. section Ananthakrishnan vs The State of Madras (1), M 'Culloch vs The State of Maryland (2). There is no indication that the Indian Constitution has rejected or modified the American concept of the sovereignty of the State in regard to the power of taxation. Fifthly: Article 19 (1) declares the right of a citizen and cl. (5) prescribes its limits. If a taxation statute is within article 19(1)(f) it must be capable of being upheld as a reasonable restriction on the holding of property etc. On the submission of the appellants all taxes will be restrictions. If they are restrictions then their reasonableness will be justiciable depending upon the appreciation of established facts. How are the courts to judge ? All the necessary data for determining reasonableness can never be before a court which in the very nature of things is available only to the legislature. Can the court say that a particular tax is excessive or unreasonable or can the court say which particular source should be taxed and which particular income group should bear the burden of taxation or what the policy of the State as to taxation should be. It would seem therefore that the reasonableness of tax laws is not justiciable and therefore they cannot fall within clause (5) of article 19. Article 74 19(1)(f) and cl. 5 are part of one scheme and the former is incapable of operating where the latter is inoperative. If considerations of article 19(5) are foreign to taxing laws article 19(1)(f) can have no application to them. Sixthly: Applicability of article 19(1)(f) to taxation laws will mean that laws which are otherwise valid will be inapplicable to citizens but will be applicable to non citizens. At any rate such law will operate differentially between one set of taxpayers and another i.e., between citizens and non citizens. This will violate the very principles of due process relied upon by the appellants. Seventhly: In American due process which has a variable concept has not been applied to retrospective operation of tax laws except to tax on voluntary gifts of property and that also was doubted in Welch vs Henry (1). Eighthly: Retroactive duty of excise will be a valid imposition in the case of persons who have not sold their tobacco between the period of the introduction of the bill and the enactment of the Finance Act but will be invalid in the case of persons placed as the appellants. Ninthly: The acceptance of the appellants ' argument would mean that they can recover any excess duty paid, excess because of subsequent decrease, but would not be liable to pay any similar increase in duty in spite of section 64 A of the Indian Sale of Goods Act under which variations in the rates of duties become operative on contracts of sale and purchase. Tenthly: It has been held that article 31 is inapplicable to deprivation by taxation. Ramjilal 's case (2); Lakshmanppa Hanumantappa vs The Union of India (3); and taxation laws are expressly excluded from the operation of article 31(2) by 75 cl. 5(b)(i) of that Article. If the appellants ' contention is correct then deprivation although not protected under article 31 will be subject to regulatory control under article 19(1)(f). Eleventhly: To put it in the words of the American Supreme Court in Odgen vs Saunders(1) "It is but a decent respect due to the wisdom the integrity and the patriotism of the legislative body, by which law is passed to presume in favour of its validity, until its violation of the Constitution is proved beyond all reasonable doubt". Twelfthly: The challenge to the legality of the tax in dispute is not based and is unsustainable on the ground of specific limitation or prohibition on Parliamentary power but has been raised on the ground of the infringement of an article containing the principles of the State 's power of control. The cases dealing with legislative incapacity are inapplicable to the latter ground of assault. Cases such as Mohammad Yasin vs The Town Area Committee, Jalalabad(2) (a case of a licence fee which is not a tax), The State of Bombay vs United Motors India Ltd.(3)(a case of inter State trade) and Bengal Immunity Co. case (4) (which was also a case of inter State trade and some of the provision of the impugned Act there were held to be unreasonable restriction on the right to carry on trade) and Ch. Tika Ramji 's case (5) (a case dealing with the imposition of the restriction on the right to purchase except through a particular society) were not cases in which the imposition of a tax was challenged on the ground of infringement of article 19(1)(f). I, therefore, agree that appeals be dismissed with costs. One hearing fee. Appeal dismissed.

The appellants who were carrying on business in tobacco had in their licenced warehouse considerable quantity of tobacco on February 28, 1951. On the same day a Bill was introduced in the House of the People containing the financial proposals of the Government of India for the fiscal year beginning April 1, 1951. Clause 7 of the Bill made provision for the amendment of the , by way of alteration of duties, inter alia, on unmanufactured tobacco by imposing an excise duty of 8 annas per 1b. Under the provisions of the , the duty could become leviable as from the date of the introduction of the Bill and it was so made. In accordance therewith the appellants paid excise duty on tobacco in their possession at the rates mentioned in the Bill and obtained clearance certificates. On April 28, 1951, the Bill was passed and became Finance Act, 1951, but as passed changes were effected as regards the duty proposed in the Bill. Under section 7(1) of the Finance Act, the duty on unmanufactured tobacco was increased to 14 annas per lb. Section 7 (2) thereof provided that "the amendments made in the , shall be deemed to have effect on and after March 1, 1951 and accordingly. . recoveries shall be made of all duties which have not been collected but which would have been collected if the amendment had so come into force. " In pursuance of section 7(2) a demand was made upon the appellants on June 22, 1951, for payment of the excess of the 2 excise duty payable on tobacco cleared out of the warehouse from March 1, 1951, to April 28, 1951. The appellants challenged the legality of the demand on the grounds, inter alia, that (1) excise duty was a tax on goods which must exist at the time when the tax was levied and it must have been intended and expected by the legislature that it would be passed on to the consumer, and as the retrospective operation of the duties deprived the tax of these qualities they did not fall within the term "duties of excise" in Entry 84, List I of the Seventh Schedule to the Constitution of India, and, therefore, section 7(2) of the Finance Act, 1951, in so far as it imposed an excise duty retrospective before the date of its enactment was beyond the legislative competence of Parliament and (2) the impugned levy contravened article 19(1)(f), because a retrospective levy of an excise duty deprived the tax payer of the right of passing it on and recovering it from his buyer, and that this constituted a restraint on the right to hold property, which was not saved by cl.(5) of article 19. ^ HELD: (1) Parliament acting within its own legislative field had the powers of a sovereign legislature and could make a law prospectively as well retrospectively and the duties leviable under the , as provided by section 7(2) of the Finance Act, 1951, notwithstanding their imposition with retrospective effect and even if it be that they were incapable of being passed on to a buyer from the taxpayer, were "duties of excise" within the meaning of Entry 84, List I of the Seventh Schedule to the Constitution of India. (2) The levy of the tax retrospectively under section 7(2) of the Finance Act, 1951, was valid and did not contravene article 19(1)(f) of the Constitution. Per Kapur, J. (1) Entry 84 in List I deals with taxes on goods manufactured or produced, while Entry 60 in List II deals with the carrying on of trade i.e., an activity in the nature of buying and selling, and the , in its pith and substance relates to duty on goods manufactured or produced and has no relationship with Entry 60. (2) Reasonableness of tax laws is not justiciable and therefore they cannot fall within cl.(5) of article 19. article 19(1)(f) and the cl.(5) are part of one scheme and the former is incapable of operating where the latter is inoperative. If considerations of article 19(5) are foreign to taxing laws article 19(1)(f) can have no application to them. Case law reviewed.

longest

Appeals Nos. 26, 27 and 30 to 36 of 1952. These were appeals under article 132 (1) of the Constitution from the Judgment and Order dated 10th January, 1952, of the Travancore, Cochin High Court in Original Petitions Nos. 5, 19, 34, 35, 71, 83, 88, 89 and 90 of 1951, quashing the assessments severally made on the respondents in each appeal under the Travancore Cochin General Sales Tax Act, 1124 M. E. The respondents who were assessed under the Travancore General Sales Tax Act which came into force in March, 1949, claimed exemption from sales tax in respect of the purchases made by them after the Constitution of 1950 came into force till the end of the accounting year 1950 on the ground that under article 286 (1) (b) the State had no power to levy tax on such purchases. The sales tax authorities having rejected the claim the respondents applied to the High Court under article 226 and the High Court quashed the assessments so far as they related to the said period. The State preferred the present appeals. These appeals were heard in part with certain other appeals in September and October, 1952, but as it was found that the material facts had not been clearly ascertained by the High Court the cases were remitted to the High Court for further enquiry and findings. The connected appeals were disposed of on the 16th of October, 1952, and the judgment is reported as the State of Travancore Cochin vs The Bombay Co. Ltd. ([1952] S.C.R. 1112). The hearing of these appeals was continued after the High Court had returned the record With its findings. 57 T. N. Subrahmanya Iyer, Advocate General of Travancore Cochin State (T. R. Balakrishna Iyer, with him) for the appellants. M. K. Nambiyar (N. Palpu, with him) for the respondents in Civil Appeals Nos. 26, 27 and 30 to 36. M. C. Setalvad, Attorney General for India and C. K. Daphtary, Solicitor General for India (Porus A. Mehta, with them) for the Union of India. V. K. T. Chari, Advocate General of Madras (V. V. Raghavan, with him) for the State of Madras. V. Rajaram Iyer, Advocate General of Hyderabad (B. N. Sastri, with him) for the State of Hyderabad. section M. Sikri, Advocate General of Punjab (M. L.Sethi,with him) for the State of Punjab. A. R. Somanatha Iyer, Advocate General of Mysore (R. Ganapathy Iyer, with him) for the State of Mysore. K. B. Asthana for the State of Uttar Pradesh. (States of Bombay and Orissa were not represented.) 1953. May 8. The judgment of the Chief Justice and Mukherjea, Vivian Bose and Ghulam Hasan JJ. was delivered by the Chief Justice. section R. Das J. delivered a separate judgment. PATANJALI SASTRI C. J. These are appeals from an order of the High Court of Travancore Cochin quashing the assessments severally made on the respondents in each appeal under the Travancore Cochin General Sales Tax Act, 1124 M. E. (Act No. XVIII of 1124 M. E.) (hereinafter referred to as the Act). The Act provided by section 3 for the levy of a tax on the total turnover of every dealer for each year. " Turnover " is the aggregate amount for which goods are either bought or sold by a " dealer" [section 2(d)], who is a person carrying on the business of buying and selling goods [section 2 (d) ]. " Sale", with all its grammatical variations and cognate expressions, is defined as meaning, among other things, every transfer 8 58 of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration [section 2(h)]. The sale or purchase is to be deemed to have taken place in the State, wherever the contract might have been made, if the goods were actually in the State when the contract was made or, if the goods are actually produced in the State, at any time after the contract in respect thereof was made. By section 3 (4) the turnover is to be determined in accordance with such rules as may be prescribed, and rule 4 of the rules framed under the Act prescribes that, in the case of certain goods including " cashew and its kernel", the gross turnover of a dealer is the amount for which the goods were bought by him, and in all other cases the amount for which the goods were sold by him. The respondents are dealers in cashew nuts in the State, and their business consists in importing raw cashew nuts from abroad and the neighbouring districts in the State of Madras in addition to purchases made in the local market, and, after converting them by means of certain processes into edible kernels, exporting the kernels to other countries, mainly America. The oil pressed from the shells removed from the cashewnuts was also exported. The Constitution having come into force on January 26, 1950, the respondent in each appeal claimed exemption under article 286 (1) (b) in respect of the purchases made from that date till May 29, 1950, the end of the account year. The sales tax authorities having rejected the claim, the respondents applied to the High Court under article 226, and that court upheld the claim and quashed the assessments in so far as they related to the said period. The State has preferred the appeals. The appeals were heard in part along with certain other appeals from the same order, and as it was found that the material facts relating to the course of business of the respondents in the present appeals had not been clearly ascertained, these appeals were remitted to the High Court for further enquiry and 59 findings in regard to those matters. The connected appeals, however, in which the materials on record were found sufficient for their disposal were finally decided, and the decision is reported in The State of Travancore Cochin vs The Bombay Co. Ltd. (1) (hereinafter referred to as the previous decision). Before considering how far the cashew nut purchases made by the respondents are, on the findings returned by the High Court, entitled to the protection of article 286(1)(b), it is necessary first to ascertain the scope of such protection. That clause, so far as it is material here, reads thus: 286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) * * * * * * (b)in the course of the import of the goods into, or export of the goods out of, the territory of India. In the previous decision this Court referred to four different views then adumbrated in the course of the argument as to the meaning and scope of the said sub clause as follows: (1) The exemption is limited to sales by export and purchases by import, that is to say, those sales and purchases which occasion the export or import, as the case may be, and extends to no other transactions however directly or immediately connected, in intention or purpose, with such sales or purchases, and wheresoever the property in the goods may pass to the buyer. (2) In addition to the sales and purchases of the kind described above, the exemption covers the last purchase by the exporter and the first sale by the importer if any, so directly and proximately connected with the export sale or import purchase as to form part of the same transaction. (3) The exemption covers only those sales and purchases under which the property in the goods concerned is transferred from the seller to the buyer during (1) ; 60 the transit, that is, after the goods begin to move and before they reach their foreign destination. (4) The view which found favour with the learned Judges of the High Court, namely, "the clause is not restricted to the point of time at which goods are imported into or exported from India; the series of transactions which necessarily precede export or import of goods will come within the purview of this clause. " This Court, however, found it unnecessary for the purpose of the cases then before it to go any further than to hold that " whatever else may or may not fall within article 286 (1) (b), sales and purchases which themselves occasion the export or import of the goods, as the case may be, out of or into the territory of India come within the exemption" and that the third view set out above, which was put forward on behalf of the State of Bombay and which seeks to limit the operation of the clause exclusively to sales and purchases effected during the transit of the goods, was too narrow and could not be accepted. It may be mentioned at once, to clear the ground, that if the Bombay view was considered to be too narrow, the view expressed by the Court below cannot but be regarded as too wide. This, indeed, was recognised by learned counsel who appeared in the cases, none of whom made any serious attempt to support it. Nor was any question raised or argument advanced as to the scope and effect of clause (2) of article 286, for, although the respondents in two of these appeals(1) purchased cashew nuts in the adjoining districts of the State of Madras during the period in question, it was not disputed that such purchases unless they were exempt under article 286(1)(a), would fall within the explanation to clause (1) (a) as interpreted in the majority decision ', of this court in the recent case of The State of Bombay vs United Motors (India) Ltd. (2), or under the Sales Tax Continuance Order, 1950 (C. O. No. 7 of 1950), issued by the President on January 26, 1950, in exercise of the powers conferred by the proviso to clause (2) of article 286, and would, in either case, be taxable. (1) Civil Appeals Nos. 33 and 36 of 1952, (2) [1953] S.C.R. 1069. 61 With reference to the aforesaid decision, it may be mentioned in passing that in order to remedy what was felt to be the unsatisfactory position in regard to the levy of tax by the States in America on sales in interstate commerce, the North Carolina Department of Revenue proposed that Congress should pass legislation authorising the States to tax certain sales in interstate commerce. The proposed bill ran thus: " That all taxes levied by any State upon sales of property or measured by sales of property may be levied upon or measured by sales of property in inter state commerce by the state into which the property is moved for use or consumption therein, in the same manner and to the same extent that said taxes are levied upon or measured by sales of property not in inter state commerce. Provided: that no State shall discriminate against sales of property in inter state commerce; nor shall any state discriminate against the sale of the products of any other state. Provided, further: that no state shall tax the sale in inter state commerce of property transported for the purpose of resale by the consignee as a merchant or as a manufacturer. Provided, further: that no county, city, or town, or other subdivision of any State shall levy a tax upon or measure any tax by sales of property in interstate commerce"(1). It is interesting to note that the bill sought to bring about substantially the same result as the combined operation of article 286 clause (1) (a) explanation, clause (2) and article 304 as they were interpreted by the majority in that decision would produce. It is possible that these provisions of our Constitution were inspired by the proposed bill. The only question debated before us was whether in addition to the export sale and import purchase, which were held in the previous decision to be covered by the exemption under clause (1) (b), the following two categories of sale or purchase would also fall within the, scope of that exemption: (2) See Selected Essays on Constitutional Law, Vol. I, Book V, P. 367 published by the Association of American Law Schools, 1938. 62 (1) The last purchase of goods made by the exporter for the purpose of exporting them to implement orders already received from a foreign buyer or expected to be received subsequently in the course of business, and the first sale by the importer to fulfil orders pursuant to which the goods were imported or orders expected to be received after the import. (2) Sales or purchases of goods effected within the State by transfer of shipping documents while the goods are in the course of transit. As regards the first mentioned category, we are of opinion that the transactions are not within the protection of clause (1) (b) What is exempted under the clause is the sale or purchase of goods taking place in the course of the import of the goods into or export of the goods out of the territory of India. It is obvious that the words "import into" and "export out of" in this context do not refer to the article or commodity imported or exported. The reference to "the goods" and to "the territory of India" make it clear that the words "export out of" and "import into" mean the exportation out of the country and importation into the country respectively. The word "course" etymologically denotes movement from one point to another, and the expression "in the course of" not only implies a period of time during which the movement is in progress but postulates also a connected relation. For instance, it has been held that the words "debts due to the bankrupt in the course of his trade" in section 15(5) of the English Bankruptcy Act, 1869, do not extend to all debts due to the bankrupt during the period of his trading but include only debts connected with the trade [see In re, Pryce, ex parte Rensburg(1).] A sale in the course of export out of the country should similarly be understood in the context of clause (1)(b) as meaning a sale taking place not only during the activities directed to the end of exportation of the goods out of the country but also as part of or connected with such activities. The time (1) and Williams on Bankruptcy, 16th Edn., p. 307. 63 factor alone is not determinative. The previous decision proceeded on this view and emphasised the integral relation between the two where the contract of sale itself occasioned the export as the ground for holding that such a sale was one taking place in the course of export. It is, however, contended that on this principle of connected or integrated activities a purchase for the purpose of export must be regarded as covered by the exemption under clause (1) (b). We are unable to agree. The phrase "integrated activities" was used in the previous decision to denote that "such a sale" (i.e., a sale which occasions the export) "cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction. " It is in that sense that the two activities the sale and the export were said to be integrated. A purchase for the purpose of export like production or manufacture for export, is only an act preparatory to export and cannot, in our opinion, be regarded as an act done "in the course of the export of the goods out of the territory of India", anymore than the other two activities can be so regarded. As point ed out by a recent writer "From the legal point of view it is essential to distinguish the contract of sale which has as its object the exportation of goods from this country from other contracts of sale relating to the same goods, but not being the direct and immediate cause for the shipment of the goods. When a merchant shipper in the United Kingdom buys for the purpose of export goods from a manufacturer in the same country the contract of sale is a home transaction; but when he resells these goods to a buyer abroad that contract of sale has to be classified as an export transaction"(1). This passage shows that, in view of the distinct character and quality of the two transactions, it is not correct to speak of a purchase for export as an activity so integrated with the exportation that the former could be regarded as done "in the course of " the latter. The same reasoning applies to the first (1) Schmittoff Export Trade, 2nd Edn., P. 3. 64 sale after import which is a distinct local transaction effected after the importation of the goods into the country has been completed, and having no integral relation with it. Any attempt therefore to invoke the authority of the previous decision in support of the suggested extension of the protection of clause (1)(b) 'to the last purchase for the purpose of export and the first sale after import on the ground of integrated activities must fail. Nor is it correct to say that it is necessary to extend the exemption to these transactions to avoid double taxation. It is true that in the previous decision it was indicated that the object underlying the exemption was the avoidance of double taxation on the foreign trade of this country which is of great importance to the nation 's economy. But the double taxation sought to be avoided consisted in the imposition of export duty by the Central Government and the imposition of sales tax by the State Government on the same transaction in its different aspects as an export and a sale. Such double taxation is already avoided by our holding that the export sale and the import purchase are exempt under clause (b) from the levy of sales tax by the State. The foreign trade of this country thus already enjoys immunity from double tax burden and suffers only one tax, namely, the export or import duty as the case may be. The claim now made for extension of the exemption under clause (1)(b) in the name of avoiding double taxation cannot be supported. Not the least among the reasons for rejecting the view that the last purchase for the purpose of export and the first sale after import are also within clause (1) (b) is the practical difficulty in giving effect to the exemption in regard to these transactions, having regard to the general pattern of sale tax legislation in this country of which our constitution makers must have been well aware. The tax is usually levied on the annual turnover of the seller who is allowed under certain conditions to pass it on to the buyer by adding it to the price charged for the goods at each individual sale. Supposing A is the seller from whom 65 B the export merchant purchases the goods for export. If the sale is to be exempt, how is A to be satisfied that the goods would actually be exported subsequently? And even if they were, it must be difficult for A to prove to the Sales Tax Officer that they were so exported by B if proof was required. On the other hand, B might be keeping the goods, waiting for orders to come, or might change his mind and not export the goods at all but sell them locally. In that case, what would be the position of A vis a vis the Sales Tax Officer demanding the tax ? Could A escape liability, if he failed to collect the tax from B at the time of the sale ? Or is A to collect the tax, ignoring B 's declaration of his intention to export and leaving him to apply for refund by producing evidence of actual export, whenever that takes place? Even if a sales tax enactment provides for adjustment on those lines, would not such legislation, in so far as it compels B to suffer the tax until he actually exports the goods, contravene clause (1)(b) which ex hypothesi exempts the transaction from sales tax? And what would be the position if the goods were burnt or otherwise lost in the meanwhile, and the export never took place? Athough, as pointed out in the previous decision, American cases are not of much assistance in interpreting article 286 because of the different wording of the import export clause of the Federal Constitution, it is interesting to see that such uncertainties led the American courts to lay down the rule that "It is the entrance of the articles into the export stream that marks the start of the process of exportation. Then there is certainty that the goods are headed for their foreign destination and will not be diverted to domestic use. Nothing less will suffice.": Empresa Siderurgica, section A. vs Merced(1). Similar difficulties and uncertainties are encountered in bringing within the exemption the first sale after import. How is the exemption to be applied to the (1) ; 9 66 goods imported from abroad after they are mingled with other goods and lose their distinctive character as imports? Here again, the American courts, with their practical approach to such problems, have evolved the doctrine of "original or unopened package" that is to say, the rule that the first sale of imported goods will 'be exempt from State taxation provided only such sale is made in the original packages in which the goods have arrived. Any sale of such goods made after the package is opened does not enjoy such exemption. Are we to import the same doctrine here to make the exemption workable ? Even in America, as pointed out in Balsara 's case(1), difficulties arose from time to time in applying the doctrine as "sometimes very intricate questions arose before the courts such as whether the doctrine applied to the larger cases only or to the smaller packages contained therein or whether it applied to smaller paper packages of cigarettes taken from loose files of packages at the factory and transported in baskets. " Hence this court has unanimously decided that "the doctrine has no place in this country" following the lead of Gwyer C. J. in the earlier case of Boddu Paidanna(2). It was said that clause (1) (b) should be construed in the light of the constitutional purpose and the commercial background and reference was made to the manner in which a large proportion of the export trade of the country was carried on by merchant houses who purchased goods from the producers and manufacturers to resell them to buyers abroad by means of contracts concluded with them. Similarly with regard to import trade, large import houses imported machinery and consumer goods wholesale and sold them to retail dealers or, in some cases, to the customers direct. This practice, it was argued, must have been well known to the makers of our Constitution, and it was reasonable to assume that they realised the importance of the foreign trade to the well being of the country and would not have desired to cripple the same by allowing the States to (1) ; , 699. (2) 67 tax such purchases and sales by the export and import merchants in this country. Such general considerations based largely on speculation are not of much assistance in construing the scope and effect of a specific constitutional provision seeking to restrict the power of State taxation. It is true, as pointed out in the previous decision, that the export import trade is important to our national economy, but it is no less true that the State power of taxation is essential for carrying on its administration, and it must be as much the constitutional purpose to protect the one as not unduly to curtail the other. The question really is, how far did the constitution makers want to go in protecting the foreign trade by restricting the power of taxing sales or purchases of goods which they conferred on the States under entry 54 of List II. The problem before them was one of balancing and reconciling the rival claims of foreign trade in the interests of our national economy and of the State 's power of taxation in the interests of the expanding social welfare needs of the people committed to its charge, and we have their solution as expressed in the terms of clause (1) (b). It is for the court to interpret the true meaning and scope of those terms without assuming that the one constitutional purpose was regarded as more important than the other. This court has already held in the previous decision that clause (1) (b) protects the export import trade of this country from double taxation by prohibiting the imposition of sales tax by the State on export sales and import purchases, and we find no warrant in the language employed to extend the protection to cover the last purchase before export or the first sale after import. As regards sales or purchases effected in the State by transfer of shipping (c.i.f.) documents while the goods are still in transit, we have already observed that the words "in the course of" imply a movement or progress and, therefore, a beginning and an end of such movement or progress. As clause (1) (b) is concerned only with exempting certain sales or purchases from taxation by the States in this country, it is 68 sufficient to determine where the course of export begins and where the course of import ends. In this connection, it is useful to remember that the power to make laws with respect to duties of customs including export duties (entry 83 of List I) and also with respect to import and export across customs frontiers and the 'definition of customs frontiers (entry 41 of List 1) is vested exclusively in the Central Legislature, and detailed provisions have been made in the Indian , for the levy of customs duties by the officers of the Central Government who are stationed along customs frontiers as defined by the Central Government where, after appraising the goods exported or imported, the duties chargeable, if any, are computed and levied, and it is not until this process is completed that the goods can be shipped for transportation or cleared by the consignee or his representatives as the, case may be. It would seem, therefore, logical to hold that the course of the export out of, or of the import into, the territory of India does not commence or terminate until the goods cross the customs barrier. It is, however, to be noted that the question of imposing sales tax on transfer of goods in the course of export would not often arise in practice for, where the goods are transported pursuant to a contract of sale already concluded with a foreign buyer and the shipping documents have been forwarded to him, any further sale of such goods by the Indian seller is impossible, and where the export trade is conducted through representatives or branch offices, the sale by the latter of the exported goods usually takes place abroad and would not then be subjected to tax by the State in India. It is in relation to import of goods from abroad that the question of exemption assumes practical importance. It is well known that sales or purchases by transfer of shipping documents while the goods are in transit are a characteristic feature of foreign trade and as they take place in the course of import as defined above, and are regarded commercially as incident to the import transaction, they fall within the terms of clause (1) (b) and would be entitled, in our view, to the protection of that 69 clause, if the State is constitutionally competent to tax such sales, as to which we express no opinion. Our conclusions may be summed up as follows (1) Sales by export and purchases by import fall within the exemption under article 286 (1) (b). This was held in the previous decision. (2) Purchases in the State by the exporter for the purpose of export as well as sales in the State by the importer after the goods have crossed the customs barrier are not within the exemption. (3)Sales in the State by the exporter or importer by transfer of shipping documents while the goods are beyond the customs barrier are within the exemption, assuming that the State power of taxation extends to such transactions. It remains to consider in the light of the foregoing discussion how far the cashew nut purchases made by the respondents are within the exemption under article 286. It will be recalled that these purchases fell into three groups: I. Purchases made in the local market, II. Purchases from the neighbouring districts of the State of Madras, and III. Imports from Africa. As regards Group 1, the High Court finds that the purchases of raw nuts whether African or Indian are all made with the object of exporting their kernels" though there were some negligible sales in the local market of what are called " factory rejects". The High Court further finds that the bulk of the kernels were in fact exported by the respondents themselves, a small quantity being sold by the respondents to other exporters who also subsequently exported the same. Thus, on the whole, respondents could be said to have purchased the raw nuts for the purpose of exporting the kernels and to have actually exported them. But, it will be seen, the purchases are not covered by the exemption on the construction we have placed on clause (1) (b), even if the difference between the, raw materials purchased and the manufactured 70 goods (kernels) exported is to be ignored. It may, however, be mentioned here that the High Court has found that the raw cashew nuts and the kernels manufactured out of them by various processes, partly mechanical and partly manual, are not commercially the same commodity. This finding, which is not seriously disputed before us, would be an additional ground for rejecting the claim to exemption in respect of these purchases, as the language of clause (1) (b) clearly requires as a condition of the exemption that the export must be of the goods whose sale or purchase took place in the course of export. As regards Group 11, the High Court has found that such purchases were made only by the respondents in Civil Appeals Nos. 33 and 36 of 1952. The High Court 's finding as to how these purchases and the deliveries under them were effected is by no means clear. The respondent 's contention was that the purchases were effected and the deliveries taken by their own paid servants outside the State of Travancore Cochin, and it was thus a case of a person buying goods and taking delivery thereof outside the State and bringing them across the border after the transaction was completed in all respects outside the State. On the other hand, the contention on behalf of the State was that though the purchases were made outside the State in the neighbouring districts of Madras, deliveries were effected through the ordinary commercial channels by employing commission agents who made the purchases and arranged for the deliveries at the respondents ' depots at Trichur or Quilon. All that can be said here is that, if the transactions took place in the manner alleged by the respondents in these two appeals, they would be exempt under clause (1) (a). This indeed was not disputed by the Advocate General of the, appellant State. On the other hand, if, as claimed by the Advocate General, the purchases were effected by the employment of firms doing business as commission agents outside the State, and the deliveries were made through normal commercial channels, the transactions would partake of an inter State character and fall under clause (2). In that case, it would be un 71 necessary to inquire further whether they would be covered by the explanation to clause (1)(a), as they would be clearly taxable under the President 's Order (C. O . No. 7 of 1950) to which reference has been made already, as it was admitted that sales tax was validly levied on such purchases before the commencement of the Constitution. As the taxability of such purchase,, on either view of the facts was not disputed, no arguments were addressed to us on the scope of clause (2) and the explanation to clause (1)(a), as has, been stated. Group III may be sub divided into two categories according to the findings of the high Court: (a) purchases made through intermediaries called in these proceedings as"the Bombay party" doing business as commission agents at Bombay, who acted as agents for the respondents charging commission. The dealings are thus described by the High Court: "The goods are purchased when they are in the high seas and shipped from the African port to Cochin or Quilon. Goods are never landed at Bombay. The Bombay party only arranges for purchases on behalf of the assessees, gets delivery of the shipping documents on payment at Bombay through a bank which advances money against the shipping documents and collects the same from the assessees at destination", and (b) the Bombay party indented the goods on their own account and sold the goods as principals to the respondents and other customers; but the goods were shipped direct to Cochin or Quilon on c. i. f. terms. The shipping documents were made out in the name of the Bombay party as consignees and were delivered to them against payment through bankers at Bombay. The Bombay party cleared the goods through their own representatives at the port of destination and issued separate delivery orders to the respondents and other customers for the respective quantities ordered. It will be seen that in respect of the purchases falling under (a), the Bombay party acted merely as the agents of the respondents, privity being established between the latter and the African sellers. The purchases are 72 thus purchases which occasioned the import, and therefore come within the exemption. As regards (b), the Bombay party are the purchasers, and they sell the goods as principals to the respondents at the port of destination by issuing separate delivery orders against payment. No privity being established between the respondents and the African sellers, the respondents ' purchases can only be described as purchases from the Bombay party of the goods within the State; in other words, they were local purchases and stand on the same footing as purchases falling under Group I above, and for the same reasons they do not come within the exemption. It would appear that the cashew nuts sold and exported to the American buyers were packed in tins placed in wooden boxes. The sales tax authorities have included the value of these packing materials in addition to the value of the kernels in computing the turnover of the respondents for purposes of assessment. It was urged that such inclusion was inadmissible inasmuch as these articles could not be regarded as separate articles of, sale apart from the kernels which are packed therein, and that even if they were to be so regarded, their sale to the American buyers was a sale which occasioned the export just as much as the sale of the kernels. The latter contention must prevail in view of the previous decision, and no sales tax can be levied in respect of these articles. In the result, the decison of the High Court quashing the assessments in question is affirmed but the cases will go back to the Sales Tax Officer concerned in the respective appeals for making fresh assessments according to law and in the light of this judgment. Each party will bear its own costs throughout. DAS J. This and eight other appeals have been filed by the State of Travancore Cochin against the judgment and order of the High Court of that State dated the 10th January, 1952, quashing the orders of assessment of sales tax made against the respondents respectively by the Sales Tax Officer and upheld on appeal by the Assistant Commissioner. These appeal* 73 were heard together immediately after the hearing of C.A. No. 204 of 1952 [The State of Bombay vs The United Motors (India) Ltd. & Others(1)] bad been concluded and judgment had been reserved by another Constitution Bench. The question of construction of article 286 of the Constitution which is involved in the present appeals was also raised in the Bombay appeal. That Constitution Bench has since delivered judgments in that appeal. The majority of that Bench have put upon clause (1)(a), the Explanation thereto and clause (2) of that article a meaning which, in spite of my pro found respect for their opinions, I am unable to accept as correct. It is again my misfortune that I am unable to agree to the interpretation my learned brethren are now seeking to place upon clause (1)(b) of that article. As the questions involved in these appeals are of very great importance and as the draft of this judgment was prepared before the judgments in the Bombay appeal had been delivered I consider it right to keep my views on record for whatever they may be worth. It is, however, needless for me to say that the majority decision in that Bombay appeal, so long as it stands, is binding on me. The respondents in each of these appeals carry on business in what is now the United State of Travancore Cochin. They buy raw cashew nuts locally and in neighbouring States and also import them from Africa and after putting them through a certain process they obtain cashew nut oil and edible cashew nut kernels. They export the edible kernels to foreign countries in large quantities. In compliance with the requirements of the relevant Sales Tax Act then in force the repondents filed returns in the prescribed forms of their respective turnovers for the period between the 17th August, 1949, and the 29th May, 1950. Each of the respondents claimed exemption from sales tax on their respective purchases made between the 26th January, 1950, when the Constitution came into force, and the 29th May, (1) ; 10 74 1950. The claim, however, was rejected by the Sales Tax Officer. On appeal the Assistant Commissioner upheld the assessment orders. The respondents appeal to the High Court. By its judgment dated the 10th January, 1952, the High Court accepted the appeals, quashed the assessment orders in so far as they included tax on the purchases made after the date of the Constitution and directed a refund of the tax overpaid. The State has now come up on appeal before us. As the questions involved in these appeals are of general importance and the other States as well as the Union of India are interested in the decision, notices were directed to be issued by this court to the Advocates General of all interested States and to the Attorney General for India. Many of these States as also the Union of India intervened and participated in the general discussion on the legal points involved in these appeals. After several days ' hearing before us in September and October, 1952, it was found that the parties were seriously at variance on several material facts and it was felt that the appeals could not be satisfactorily disposed of without proper findings on those facts. Accordingly on the 8th October, 1952, the appeals were remitted to the High Court with directions to investigate into the disputed facts under certain heads set forth in the annexure to the order of remand. The High Court has now returned the records with their findings and the appeals are before us again for final disposal. The assessments in question were made under the Travancore General Sales Tax Act, 1124 (Act XVIII of 1124). That Act came into force on the 7th March, 1949, and was, after the commencement of the Constitution, continued in force subject to the other provisions of the Constitution and it was in operation during the period of assessment. After the integration of Travancore and Cochin that Act was replaced by the United State of Travancore and Cochin General Sales Tax Act, 1125 (Act XI of 1125) but we are not concerned with the latter Act, for it came into force 75 on the 30th May, 1950, that is to say, immediately after the expiry of the period relevant for the purposes of these appeals. The relevant provisions of Act XVIII of 1124 have been summarised in the judgment just read by my Lord the Chief Justice and need not be set forth again. Suffice it to say that the rules framed under I the Act ' prescribed that in the case of cashew and its kernels the gross turnover of a dealer would be the amount for which those goods were purchased by him and, therefore, sales tax was payable on the purchase and not on the sale of cashew and its kernels. The respondents do not contend that it was not within the power of H.H. the Maharaja of Travancore to enact that law at the time he did so but they maintain that, as after the commencement of the Constitution Travancore Cochin became a Part B State and as such amenable to and bound by the Constitution, that law, in view of article 286, could no longer impose or authorise the imposition of any tax on their purchases of raw cashewnuts. This contention, therefore, raises important questions as to the extent of the power of the States under the Constitution to impose a tax on the sale or purchase of goods. In order, however, to correctly appreciate the meaning and import of the relevant provisions of the Constitution it will be helpful to bear in mind what the position was prior to the commencement of the Constitution. Under the Government of India Act, 1935, the Federal Legislature alone could make laws, under entry 19 in List I, with respect to import and export across customs frontiers as defined by the Federal Government and, under entry 44 of the same List, with respect to duties of custom including export duties. On the other hand the Provincial Legislatures alone could make laws, under entry 26 in List II, with respect to trade and commerce within the Province, under entry 29, with respect to production, supply and distribution of goods, under entry 48, with respect to taxes on the sale of goods and under entry 49, with respect to ' cesses on the entry of goods into a 76 local area for consumption, use or sale therein. Section 297 of that Act, however, prohibited the Provincial Legislature or Governments from imposing certain restrictions on internal trade and ended by saying that any law passed in contravention of that section would, to the extent of the contravention, be invalid. It should be noted that clause (a) of sub section (1) of that section was directly and expressly related to and constituted a restriction on the legislative power of the Province under entries 27 and 29 and not entry 48 in List II. That section obviously was inserted in that Act for the purpose of achieving, as far as possible, free trade within India by preventing the Provinces from checking or hampering the distribution of goods or from setting up barriers against internal trade in India regarded as one economic unit. Pursuant to the legislative power thus conferred on them the Provincial Legislatures enacted Sales Tax Acts for their respective Provinces. In enacting the Sales Tax Acts, the Provincial Legislatures, however, did not confine the operation of their legislation to sales or purchases which took place exclusively within their respective territories. Although in most of those Acts "sale" was first defined as meaning a transfer of the property in the goods, so as to make the passing of the property within the Province the principal basis for the imposition of the tax, yet by means of Explanations to that definition, they gave extended meanings to that word and thereby enlarged the scope of their operation. Thus some of those Acts purported to tax a sale or purchase irrespective of the place where it took place, if only the goods were within the Province at the time the contract for sale or purchase was made or the goods were produced or manufactured within the Province after the contract had been made. In short, if any one or more of the ingredients of sale, e.g. the contract, delivery, payment of price, or the passing of property etc., took place within a particular Province or the goods were produced or manufactured or otherwise found there that Province felt free to impose a tax on that transaction of sale or purchase 77 although all the other ingredients thereof took place outside that Province. The Indian States were not governed by the distribution of legislative powers contained in the Government of India Act, 1935, and were, therefore, generally free to make whatever laws they thought fit to make. They, however, enacted Sales Tax Acts on the model of the Sales Tax Acts of neighbouring Provinces in British India. Thus the Travancore Act XVIII of 1124 was substantially a reproduction of the Madras Sales Tax Act. The result of the imposition of tax on the sale or purchase of goods on the basis of a very slight connection or nexus between the sale or purchase and the taxing Provinces or States was that in some cases one single transaction of sale or purchase became liable to be taxed in different Provinces or States. This imposition of multiple taxes was certainly calculated to hamper and discourage free trade within India, which section 297 of the Government of India Act, 1935, was designed to achieve. This was the position immediately before the Constitution of India came into operation. Our Constitution makers were well aware of this evil. Articles 245 and 246 distribute legislative power between Parliament and the State Legislatures as per three Lists set forth in the Seventh Schedule to the Constitution. Thus Parliament alone is empowered to make laws, under entry 41 in the Union List, with respect to trade and commerce with foreign countries, under entry 42, with respect to inter State trade and commerce and under entry 83, with respect to duties of customs, including export duty. The State Legislatures, on the other hand, are alone authorised to make laws, under entry 26 in the State List with respect to trade and commerce within the State, under entry 27 with respect to production, supply and distribution of goods, under entry 52 with respect to taxes on the entry of goods into a local area for consumption, use or sale therein and under entry 54 with respect to taxes on sale or purchase of goods other than newspapers. 78 It may be mentioned in passing that in List I in the Seventh Schedule to the Government of India Act, 1935, there was no separate or specific entry corresponding to entry 42 in the Union List in the Seventh Schedule to the Constitution. This shows that our Constitution has deliberately assigned interState trade and commerce, like foreign trade, to the exclusive care of Parliament and, therefore, out of the .reach of the law making powers of the State Legis latures. Having thus distributed legislative powers between Parliament and the State Legislatures, article 265, which is in Part XII of the Constitution and headed "Finance, Property, Contracts and Suits" provides that no tax shall be levied or collected except by authority of law. Article 286, which is also in Part XII, imposes some restrictions on the legislative competency of the State Legislatures. That article runs as follows: " 286. Restrictions as to imposition of tax on the sale or purchase of goods. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into or export of the goods out of, the territory of India. Explanation. For the purposes of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce: 79 Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions, of this clause, continue to be levied until the thirty first day of March, 1951. (3)No law made by the Legislature of a State imposing, or authorising the imposition of a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. " In these appeals we are not concerned with sales or purchases of essential commodities and, therefore, nothing further need be said about clause (3). Leaving out that clause, the rest of the article, broadly speaking, enjoins that no State law shall impose or authorise the imposition of tax on sale or purchase of goods made (a) outside the State, (b) in the course of the import of the goods in to or the export of the goods out of India, (c) in the course of inter State trade and commerce. I may here mention that in the exercise of the powers conferred on him by the proviso to clause (2) of article 286 the President did, by the Sales Tax Continuance Order, 1950, direct that any tax on the sale or purchase of any goods which was being lawfully levied by the Government of any State immediately before the commencement of the Constitution should, until the 31st March, 1951, continue to be levied notwithstanding that such imposition was contrary to the provisions of clause (2) of article 286. Quite apart from the marginal note to article 286, a cursory perusal of that article will show that its avowed purpose is to put a restriction on the power of the 80 State Legislatures to make a law imposing tax on the sale or purchase of goods under entry 54 in the State List. It may be recalled that the Provincial Legislatures purporting to act under entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, enacted Sales Tax Acts imposing tax on sales or purchases of goods on the basis of one or more of the ingredients of sale having some connection with the Province and that this practice resulted in the imposition of multiple taxes on a single transaction of sale or purchase thereby raising the price of the commodity concerned to the serious detriment to the consumer. That evil had to be curbed and that is what has been done by clause (1)(a) of article 286. It imposes a ban that no law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the State. This provision clearly indicates that in making it our Constitution proceeds on the footing that a sale or purchase has a location or situs. The explanation to clause (1)(a) then goes on to say that for the purpose of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has, by reason of such sale or purchase, passed in another State. The non obstante clause in the Expla nation also clearly implies that the framers of the Constitution adopted the view that a sale or purchase has a situs and further that it ordinarily takes place at the place where the property in the goods passes. The Explanation, however, provides that, in spite of such general law, a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State. In effect, therefore, the Constitution, by this Explanation to clause (1)(a), acknowledges that under the general law the sale or purchase of the kind therein 81 mentioned may not really take place in the delivery State, but nevertheless requires it to be treated as if it did. That is to say, the Explanation creates a legal fiction. Reference may be made to Income tax Commissioner, Bombay vs Bombay Trust Corporation(1) where Viscount Dunedin explains the meaning of a legal fiction. When a legal fiction is thus created, for what purpose, one is led to ask at once, is it so created? In In re Coal Economising Gas Company(2) the question arose as to whether under section 38 of the Companies Act, 1867, a shareholder could get his name removed from the register on the ground that the prospectus was fraudulent in that it did not disclose certain, facts, or whether his remedy was against the promoter only. James L.J. said at pages 188 9: " The Act says that an omission shall be deemed fraudulent. It provides that something which under the general law would not be fraudulent shall be deemed fraudulent and we are dealing with a case of that kind. Where the Legislature provides that something is to be deemed other than it is, we must be careful to see within what bounds and for what purpose it is to be so deemed. Now the Act does not say that the prospectus shall be deemed fraudulent simpliciter but that it shall be deemed fraudulent on the part of the person wilfully making the omission as against a shareholder having no notice of the matter omitted ; and I am of opinion that the true intent and meaning of that provision is to give a personal remedy against the wrongdoer in favour of the shareholder." So it was held that the fiction did not operate as against the company and there could, therefore, be no rectification of the register. Again, in Ex parte Walton(3), referring to section 23 of the English Bankruptcy Act, 1869, James L.J. said: "When a statute enacts that something shall be deemed to have been done, which in fact and in truth (1) [1929] L.R.57 I.A. 49 at P. 55. (3) [1881]. L.R. 17 Ch 756. (2) 82 was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to. " The above observations were quoted with approval by Lord Cairns and Lord Blackburn in Arthur Hill vs The East and West India Dock Company(1). Lord Blackburn went on to add at page 458: "I think the words here 'shall be deemed to have surrendered. . . mean, shall be surrendered so far as is necessary to effectuate the purposes of the Act and no further;. . . ." In the case now before us, we have fortunately not to speculate as to the purpose for which the Explanation has introduced the fiction. It will be noticed that the Explanation does not say simpliciter that the sale or purchase is to be deemed to take place in the delivery State. By its opening words it expressly says that the sale or purchase is to be deemed to take place in the delivery State for the purposes of clause (1)(a). Therefore, the only effect of this assignment of a fictional location to a particular kind of sale or purchase in a particular State is to attract the ban of clause (1)(a) and to take away the taxing power of all other States in relation to such a sale or purchase even though the other ingredients which go towards the making up of a sale or purchase are to be found within these States or even if under the general law the property in the goods passes in any of those States. The purpose of the Explanation ends there and cannot be stretched or extended beyond that purpose. It is said by some of the Advocates General that a sale or purchase which falls within the Explanation is subject to the taxing power of the State in which the property in the goods passes under the general law as well as to the taxing power of the State in which, by virtue of the Explanation, the property in the goods is to be deemed to pass. On the other hand some of the other Advocates General contend that by virtue of the Explanation the latter State alone becomes entitled to tax such a sale or purchase. Both these contentions (1) [1884] L.R. 9 App. Cas 448, 83 appear to me to be founded on a misapprehension as to the real purpose of clause (1) (a) and the Explanation thereto. As I have already said, the only object of clause (1)(a) is to prevent the imposition of multiple taxes on a single sale or purchase and, therefore, it provides that no law of a State shall impose a tax on sale or purchase which takes place outside the State. Thus by one stroke the taxing power of all States outside whose territories the sale or purchase is, by the fiction, deemed, to take place is eliminated. To say that the effect of clause (1) (a) read in the light of the Explanation is to permit both States, namely, the State where the property passes under the general law as well as the State in which, by force of the Explanation, the sale or purchase is deemed to take place, to tax such sale or purchase is to stultify the very purpose of that clause, for, then it will fail to prevent the imposition of multiple taxes which it is obviously designed to prevent. It is quite clear also that clause(1)(a) in terms only takes away the taxing power of all States with respect to a sale or purchase which, by reason of the fiction introduced by the Explanation, is to be deemed to take place outside their respective territories. The purpose of the Explanation is only to explain the scope of clause (1)(a). By fictionally locating a sale or purchase in a particular State it, in effect, says that it takes place outside all other States so as to give it the benefit of the exemption of clause (1)(a). The Explanation is neither an exception nor a proviso. It is not its purpose nor does it purport, substantively and proprio vigore, to confer any power on any State, not even on the delivery State, to impose any tax. The fiction of the Explanation cannot be extended to any purpose other than the purpose of clause (1)(a), that is, to any purpose other than the purpose of taking away the taxing power of all States outside whose territories the sale or purchase is, by the fiction, deemed to take place. There its purpose ends and it cannot be used for the purpose of giving any taxing power on the delivery State, for that is quite outside its avowed purpose. Whether the 84 delivery State can tax the sale or purchase of the kind mentioned in the Explanation will depend on other provisions of the Constitution. Neither clause (1) (a) nor the Explanation has any bearing on that questionl. It is urged that even if by virtue of clause (1)(a) all States in relation to which a sale or purchase is, by the Explanation, to be deemed to take place outside their limits are precluded from taxing such sale or purchase and assuming that the Explanation does not, by implication or otherwise, permit even the delivery State to tax such sale or purchase, nevertheless the delivery State has the power under entry 54 in the State List read with article 100(3) of the Constitution to make a law imposing a tax on such sale or purchase. This certainly would be the position if there was nothing else in the Constitution. It should be borne in mind that the State Legislatures may make laws with respect to taxes on sale or purchase of goods (entry 54). If in purported exercise of powers under those entries a State Legislature makes a law imposing taxes on sale or purchase which partakes of the character of a sale or purchase made in the course of interState trade or commerce it may quite easily encroach upon the Union Legislative field under entry 42 in the Union List and such encroachment may conceivably give rise to questions as to the validity of the State legislation. It is in order to protect the free flow of inter State trade, which is placed in the care of Parliament alone, against any interference by State taxation and to prevent a recourse to the argument of pith and substance in justification of such encroachment by a State on the Union field that the Constitution, by article 286 (2), has expressly placed a restriction on the legislative power of the State in relation to tax on inter State sale or purchase. Clause (2) of article 286 provides that, except in so far as Parliament may by law otherwise provide, no law of a State shall impose a tax on the sale or purchase of goods when such a sale or purchase takes place in the course of inter State trade or commerce. Clause (2), 85 therefore, places yet another ban on the taxing power of the State under entry 54 read with article 100 (3), in addition to the ban imposed by clause (1) (a). A sale or purchase contemplated by the Explanation to clause (1) (a) undoubtedly partakes of the nature of a sale or purchase made in the course of inter State trade and, therefore, no State, whether it is the State in which the property in the goods passes under the general law or the State where the goods are delivered as mentioned in the Explanation, can impose a tax on such sale or purchase, unless and until Parliament lifts this ban. This appears to me to be the purpose and design of clause (2). It is said that if the sale or purchase referred to in the Explanation is to be bit by clause (2) then clause (1) (a) was wholly redundant, for there was no point in exempting it from the ban imposed by clause (1)(a)and hittin it by clause (2). As already stated the purposeof clause (1)(a) is to place a sale or purchase taking place outside a State beyond the taxing power of that State. The Explanation only explains, by an illustration as it were, the scope of that ban. Clause (1) (a) only contemplates one aspect of a sale or purchase, namely, its territorial location, and by imposing a ban on the taxing power of a State with respect to a sale or purchase, which takes place outside its limits, it purports to remedy the particular evil of multiple taxation founded on the nexus theory to which reference has been made. That is the limited purpose of clause (1) (a) and that purpose is fulfilled by placing a ban on those States in relation to which a sale or purchase is, by reason of the Explanation, deemed to take place outside their territories. Whether the delivery State where the sale or purchase is deemed to take place can tax such a sale or purchase is not, as I have said, the concern of clause (1) (a) or the Explanation. It is only when the question of the competency of a State Legislature under entry 54 of the State List to make a law imposing a tax on a sale or purchase which by the fiction is deemed to. take place within its territory is raised that clause (2) comes 86 into play. That clause looks at a sale or purchase in its inter State character and imposes another ban in the interest of the freedom of internal trade. The immediate purpose of the two bans are, therefore, essentially different and I see Do reason to hold that although clause (1)(a) read with the Explanation does not expressly authorise the State, in which the sale or purchase is, by the Explanation, to be deemed to take place, to tax such sale or purchase, it must nevertheless, by implication, be regarded not only as having authorised that State to do so but as having also exempted it from the ban imposed by clause (2). To adopt this course is to resort to the fiction created by the Explanation for quite a different and collateral purpose which is entirely beyond its avowed purpose. This, as I have explained, is, on principle and on authority, not permissible for the court to do. The same argument is advanced in a different and more attractive language. It is urged that once it is determined, with the aid of the fiction introduced by the Explanation that a particular sale or purchase has taken place within the delivery State, it must follow as a corollary that the transaction loses its inter State character and falls outside the purview of clause (2), not because the definition in the Explanation is used for the purpose of clause (2) but because such sale or purchase becomes, in the eye of the law, a purely local transaction. I am unable to accept this argument which appears to me to overlook the declared purposes of clause (1)(a) and of the Explanation. In all interState sale or purchase the property passes and the sale or purchase takes place in one or the other State according to the rules laid down in the Sale of Goods Act and the inter State character of the sale or purchase is not affected or altered by the fact of the property passing in one State rather than in another. What is an inter State sale or purchase continues to be such, irrespective of the State where the property passes. While, therefore, to locate a sale or purchase, by a legal fiction, in a particular State, is to make it appear to be an outside sale or purchase in relation to 87 all other States, so as to attract the ban of clause (1)(a) on those States, such location cannot possibly alter the intrinsic inter State nature or character of the sale or purchase. A sale or purchase which falls within the Explanation does not become, in the eye of the law, a purely local sale for all purposes or for all times. It is to be deemed to take place in the delivery State only for the purpose of clause (1)(a), i.e., for taking ing away the taxing power of all other States. I can see no warrant, for the argument that the fiction embodied in the Explanation for this definitely expressed purpose, can be legitimately used for the entirely foreign purpose of destroying the inter State character of the transaction and converting it into an intra State sale or purchase for all purposes. Such metamorphosis appears to me to be completely beyond the purpose and purview of clause (1) (a) and the Explanation thereto. To accede to this argument will mean that the Sales Tax Officer of the delivery State will have jurisdiction to call upon dealers outside that State to submit returns of their turnover in respect of goods delivered by them to dealers in that State under transactions of sale made by them with dealers within that State. Thus a dealer in, say, Pepsu who delivers goods to a dealer in, say, Travancore Cochin will become subject to the jurisdiction of the last mentioned State and will have to file returns of their turnover and support the same by producing their books of account there. I cannot imagine that our Constitution makers intended to produce this anomalous result. On the contrary, it appears to me that they enacted clauses (1) (a) and (2) for the very purpose of preventing this anomaly. I repeat that it is not permissible, on principle or on authority, to extend the fiction of the Explanation beyond its immediate and avowed purpose which I have explained above. In my judgment, until Parliament otherwise provides, all sales or purchases which take place in the course of inter State trade or commerce are, by clause (2) of article 286, made immune from taxation by the law of any State, irrespective of the place where the sales or purchases may take place, either under the general law or by virtue 88 of the fiction introduced by the Explanation to clause (1) (a). If a particular inter State sale or purchase takes place outside a State, either under the general law or by virtue of the fiction created by the Explanation, it is exempted from taxation by the law of that State both under clause (1) (a) and clause (2). If such inter State sale or purchase takes place within a particular State, either under the general law or by reason of the Explanation, it is still exempt from taxation even by the law of that State under clause (2), just as a sale or purchase which takes place within a State, either under the general law or by reason of the Explanation, cannot be taxed by the law of that State, if such sale or purchase takes place in the course of import or export within the meaning of clause (1) (b). I It is next contended that the ban imposed by article 286(2) is itself subject to the provisions of article 304. That article is one of the seven articles (articles 301 to 307) grouped under the heading "Trade, commerce and intercourse within the territory of India " in Chapter XIII. Article 301 proclaims that, subject to the provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. Article 302 empowers Parliament to impose by law such restrictions on the freedom of trade, commerce and intercourse between one State and another as may be required in public interest. Indeed, entry 42 in the Union List gives exclusive power to Parliament to make laws with respect to inter State trade and commerce and clause (2) of article 286 also recognises this power of Parliament. Article 303 prohibits both Parliament and State Legislatures from showing preference to one State over another, or discriminating between the States. Then comes article 304 which runs as follows: "304. Notwithstanding anything in article 301 or article 303, the legislature of a State may by law (a) impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject, so, however as not 89 to discriminate between goods so imported and goods so manufactured or produced, and (b)impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State Without the previous sanction of the President. " The argument is that the ban imposed by clause (2) of article 286 should, like article 301, be subordinated to article 304. 1 am unable to accept the correctness of this argument. Article 301 is expressly made subject to the other provisions of Chapter XIII which includes article 304 but no part of article 286 is so subjected. Article 304 (a) gives power to the State Legislatures to put a tax on goods imported from other States whereas article 286 restricts their taxing power on sale or purchase, i.e., the transaction itself as distinct from the goods. Article 304 appears to me to be closely related to entry 52 in the State List and restricts the State 's powers under that entry but article 286 controls the State 's powers under entry 54 in the State List. In the circumstances article 304 cannot properly be read into article 286. Article 304, of course, can have no bearing whatever upon clause (1) (b) of article 286. An argument is advanced suggesting that if all sales or purchases that take place in the course of interState trade and commerce are put beyond the taxing power of the States then that fact will very seriously and prejudicially affect the economy of the States and may prevent them from discharging the responsibilities, which all welfare States are expected to do. Apart from the benefit that a free flow of trade is likely to bring to the public generally the apprehended danger appears to me, to be more assumed than real. The proviso to clause (2) empowers the President to direct the continuation, up to the 31st March, 1951, of the sales tax which was being levied before the commencement of the Constitution and in fact the President, on 90 the same day as the Constitution came into force, actually made an order in exercise of this power as herein before stated. There was, therefore, no immediate danger to State revenue and the status quo was maintained. Further, clause (2) itself empowers Parliament to lift the ban imposed by it, should Parliament, in the interest of State economy, think fit to do so. The Constitution has thus itself provided ample safeguards and this court need not assume unto itself the functions of Parliament and indirectly under the guise of interpretation seek to secure the safety of State finance which Parliament itself has adequate direct power to do. Finally, it is said that the effect of holding that the ban imposed by clause (2) extends to all sales or purchases which take place in the course of inter State trade or commerce will be to place at a disadvantage the consumers of similar goods manufactured or produced locally, for the actual consumer will have to pay no tax if he buys similar goods manufactured in another State direct from the manu facturers or sellers in that other State. I do not think this objection has much force. Very few actual consumers take the trouble of importing goods for their own consumption direct from the manufacturers or sellers outside their State. Further, the cost of carriage, handling charges and the risk of loss and damage in transit will effectively deter actual consumers from procuring goods direct from outside, for in all probability the cost of such enterprise will exceed the sales tax which the consumer will save by not buying the local goods. Besides, if India is to be regarded as one economic unit there can be no objection to a consumer in one State getting goods cheaply from a neighbouring State. I now pass on to another important object of article 286 which is to encourage our foreign trade. Power is given exclusively to Parliament to make laws under entry 41 with respect to trade and commerce with foreign countries and under entry 83 with respect to duties of custom including export duties. If in addition to the import or export duty, which Parliament 91 alone can impose, the State Legislatures were left free to make a law under entry 54 in the State List levying another tax on a sale or purchase which takes place in the course of the import of the goods into or the export of the goods out of the territory of India such double taxation will necessarily increase the price of the goods. Such imposition may easily result in our not getting imported goods which may be of everyday requirement at a reasonable price or our not being able to compete in the world market with our exported goods. This will discourage and hamper our foreign trade and eventually affect the Union revenue. It is to avoid that calamity that article 286(1) (b) was introduced in the Constitution. Article 286 (1) (b) has to be construed in the light of its aforesaid constitutional purpose and against its commercial background. Import and export trade is principally carried on by big mercantile houses. They purchase goods locally either against orders secured from overseas buyers or in anticipation of such orders and send the goods out of India by land or sea to be delivered eventually to the overseas buyers. They purchase goods in foreign countries against orders secured from local Indian buyers who may be wholesale or retail dealers or in anticipation of such orders and bring them into India by land or sea to be delivered to their constituents. In some cases the manufacturers or producers in India may themselves export their goods direct to overseas buyers and the retail dealers or even actual consumers in India may occasionally import goods direct from overseas sellers. Export and import transactions of this clause are, however, comparatively speaking, smaller in volume than the great bulk of foreign trade put through by the big export and import houses. The constitutional purpose is to foster this foreign trade and to preserve the Union revenue. For achieving that purpose, the Constitution has by clause (1) (b) of article 286 imposed a ban on the State Legislatures preventing them from impinging upon the Union field of foreign trade and imposing tax on sales or purchases made in the course of import or export under the guise or pretence of making laws 92 with respect to taxes on sale or purchase of goods under entry 54 in the State List. The question arises: what is the scope of the ban thus imposed on the States ? The answer will depend on the meaning that may be ascribed to the phrase "in the course of" occurring in clause (1) (b). It should be noted that the same phrase is also used in clause (2) of that article. In The State of Travancore Cochin vs The Bombay Company Ltd.(1), this court has held that " Whatever else may or may not fall within article 286(1)(b) sales and purchases which themselves occasion the exports or imports of the goods, as the case may be, out of or into the territory of India come within the exemption. . In other words, this court has held that sales or purchases which themselves occasion the imports or exports are sales or purchases which take place " in the course of" import or export. This was sufficient to dispose of that case and it was not then necessary to decide what else might fall within that phrase. This court is now called upon to decide that point. Article 286(1)(b) exempts from taxation by a State law all sales or purchases which take place "in the course of the import of the goods into or the export of the goods out of the territory of India. " The word "course" conveys to my mind the idea of a gradual and continuous flow, an advance, a journey, a passage or progress from one place to another. Etymologically it means and implies motion, a forward movement. The phrase II in the course of " clearly has reference to a period of time during which the movement is in progress. Therefore ' the words "in the course of the import of the goods into and the export of the goods out of the territory of India" obviously cover the period of time during which the goods are on their import or export journey. This view, which has been said to be founded on mechanical test, is accepted by the Advocate General of the appellant State and, indeed, by all Advocates General other than those of Uttar Pradesh and Mysore. The Advocates General of the two last mentioned States seek to limit the (1) ; 93 exemption only to such sales or purchases as themselves occasion the export or import. That narrow view, however, fails to take note of the etymological meaning of the word "course" and the very large number of sales or purchases that take place while the goods are on the high seas by the endorsement and/or delivery against payment from hand to hand of the relative shipping documents covering goods worth crores of rupees. In the case of exports from India, such sales or purchases in India will not be many for the shipping documents will ordinarily be sent to the foreign country and the sales or purchases, if any, during transit, by delivery of the shipping documents will take place there. In some cases, however, where the goods are shipped to the exporter himself or his agent without any previous sale, such sale by delivery of shipping documents may take place in India. But take the case of an Indian importer who places an order or indent with an overseas merchant for the supply of a large quantity of goods. The goods are shipped and the shipping documents are sent by air mail and presented to the Indian importer by the overseas merchant through his bank. The Indian importer receives the shipping documents against payment. The goods are, however, on the high seas on their import journey and it will take some time before the steamer will arrive. The market may fluctuate in the meantime. Is the importer to wait patiently with folded hands trusting to luck that the market may be in his favour when the goods actually arrive? Is he not to be allowed to make a gain in case there is a rise in the market rate or cut his loss if there is a downward tendency in the market price ? Is he to keep his money locked up all this time ? The exigencies of foreign trade require that he must be permitted to sell the goods by delivering the shipping documents and realise his money and to again invest it in fresh imports. This is how foreign trade is done. It is stated in Halsbury 's Law of England (Hailsham Edn.), Vol. 29, p. 210: "280. The commercial reason for the evolution of the 'c.i.f. ' contract lies in the length of the time taken 94 in the carriage of goods by sea. It is to the advantage of neither seller nor buyer that the goods, the subject matter of the contract should remain en dehors commerce while they are in course of shipment. It is to the seller 's interest to receive the money equivalent to the goods as soon as possible after the date of the contract of sale, and until he has received actual payment of the price he normally desires to be able, if he wishes, to obtain credit upon the security of the transaction. The buyer, on the other hand, normally desires to be able to deal with the goods, for resale or finance, as soon as possible. To meet these business necessities on the part of both buyer and seller the 'c.i.f. ' contract was evolved. " Such sales or purchases, by delivery of shipping documents while the goods are on the high seas on their import journey were and are well recognised species of transactions done every day on a large scale in big commercial towns like Bombay and Calcutta and are indeed the necessary and concomitant incidents of foreign trade. To hold that these sales or purchases do not take place "in the course of" import or export but are to be regarded as purely ordinary local or home transactions distinct from foreign trade, is to ignore the realities of the situation. Such a construction will permit the imposition of tax by a State over and above the customs duty or export duty levied by Parliament. Such double taxation on the same lot of goods will increase the price of the goods and, in the case of export, may prevent the exporters from competing in the world market and, in the case of import, will put a greater burden on the consumers. This will eventually hamper and prejudicially affect our foreign trade and will bring about precisely that calamity which it is the intention and purpose of our Constitution to prevent. It is, therefore, clear, to my mind, that the ban imposed by article 286(1)(b) protects all sales or purchases of goods that take place during the period the goods are on the high seas. This construction appears to me to be imperative not only etymologically but also commercially and constitutionally. Indeed, this view is implicit in our judgments in the case of The State Of 95 Travancore Cochin vs The Bombay Company Ltd.(1) referred to above, in which we said at page 1120: "We are not much impressed with the contention that no sale or purchase can be said to take place in the course of ' export or import unless the property in the goods is transferred to the buyer during the actual movements, as for instance where the shipping documents are endorsed and delivered within the State by the seller to a local agent of the foreign buyer after the goods have been actually shipped or where such documents are cleared on payment or an acceptance by the Indian buyer before the arrival of the goods within the State. This view which lays undue stress on the etymology of the word 'course ' and formulates a mechanical test for the application of clause (b) places, in our opinion, too narrow a construction upon that clause in so far as it seeks to limit its operation only to sales and purchases effected during the transit of the goods, and would, if accepted, rob the exemption of much of its usefulness. " The question immediately arises as to how the period of time covering the "course" of import or export is to be measured. When does it begin and when does it end? The learned Advocate General of Travancore Cochin contends and in this he is supported by all the Advocates General other than those of Uttar Pradesh and Mysore that this period is confined within two terminii, namely, when the journey of the goods begins and when it ends. They maintain that the process of import or export ordinarily begins and ends at water 's edge, although the period of journey of the goods from the port to the place of the importer or his representative in case of import or to the port from the place of the exporter or his representative in case of export may be added to the period of the actual voyage on the high seas. This contention cannot be accepted in view of our decision in the case of The State of TravancoreCochin vs The Bombay Co. Ltd.(1) referred to above. According to that decision the phrase "in the course of " is not limited within these two terminii, i.e., from the point of time the goods are handed over to the carrier (1) ; , 96 upto the time they are delivered by the carrier. By adopting the principle of integrated activities we have included the agreement for sale to, or purchase from, the foreign merchant as taking place within the period connoted by that phrase. The agreement for sale or purchase, which occasions the export or import as the case may be, is obviously, in point of time, anterior to the actual and physical handing over of the goods to the carrier for taking the goods out of the country or for bringing them into the country as the case may be, but, nevertheless, such a sale or purchase has been held to have taken place "in the course of" export or import and as such exempt from taxation by the States. The question is how far backward we can trace the commencement of the "course" of export and how far forward we can fix the termination of the "course" of import. In my judgment the purchase made by the exporter to implement his agreement for sale with the foreign buyer is to be regarded as having taken place "in the course of" export. I take this view, not because I read the words "in the course of" as synonymous with the words "for the purpose of" but because I regard the purchase by the exporter as an activity so closely integrated with the act of export as to constitute a part of the export process itself and, therefore, as having taken place " in the course of the export. The learned Attorney General accepts this position but the Advocates General of the States demur. They maintain that in this view of the matter one cannot stop at the last purchase by the exporter but has to include the purchase by the person who sells to the exporter and all previous sales or purchases until one reaches the producer. I find no substance or cogency in this line of reasoning. In the last purchase by the exporter we have at least one party who is directly concerned with or interested in the actual export. The exporter is the connecting link, the commercial vinculum, as it were,. between the last purchase and the export. But in the earlier sales or purchases neither the sellers nor the purchasers are personally concerned with or interested in the actual 97 export of the goods at all. Therefore the earlier sales or purchases may be too remote and may not be regarded as integral parts of the process of export in the same sense as the last purchase by the exporter can be so regarded. The line of demarcation is easily perceptible. Let me explain my meaning step by step. As I have already stated, in some cases the exporters receive orders from the foreign buyers and then export the goods. It has been held by us that these orders themselves occasion the export and, therefore, they take place " in the course of " export. But these orders can occasion the export only if the exporters have the goods to export. The exporters are not necessarily the producers or manufacturers and in great many cases they have to procure the goods to implement the foreign orders. The overseas orders in such cases immediately necessitate the purchase of the goods and eventually occasion the export. The three activities are so intimately and closely connected, like cause and effect, with the actual export that they may well be regarded as integral parts of the process of export itself. As according to our previous decision the contract for sale with the foreign buyer starts the export stream and occasions the export, the purchases by the exporter to implement such contract necessarily take place, chronologically speaking, after the export stream has started and, therefore, must be an activity undertaken in the course of the export. Logically there can be no getting away from this conclusion. Therefore, these purchases to implement the sale which occasions the export must be immune from sales tax. Is there any compelling reason to confine this immunity to sales or purchases to implement a foreign order or sale ? It cannot be overlooked that in a great majority of cases the export merchants, who, as I have said, are not, generally speaking, the actual producers or manufacturers of goods, start purchasing goods in advance, after taking into account the estimated quantity of the year 's total production, the prevailing local prices, the likely demand from foreign countries 13 98 and the prices ruling or likely to rule in the foreign markets. Such anticipatory purchases form by far the largest part of the activities of the export merchants and are regarded by businessmen as necessary incidents of the export trade. Is there any logical reason why purchases by the exporters in anticipation of future foreign orders should not also be taken as starting the " course " of the flowing stream of the export trade ? The goods, it is true, are stored in godowns for a while awaiting actual exportation but that is like a stream falling into a lake and getting out by an outlet at the other end so that the undercurrent of the flow, even if imperceptible on the surface, is nevertheless continuous. One cannot overlook or ignore these well known preliminary but essential activities of the export merchants which necessarily precede and lead up to and, indeed, occasion or eventually make possible the ultimate physical movement of the goods. To hold that these purchases are independent local purchases totally distinct from the export trade will be to unduly narrow down the wide meaning of the flexible phrase in the course of". I find support for the views I have expressed above by the recent decision of the High Court of Australia in The Queen vs Wilkinson: Ex parte Brazell, Garlick and Coy (1) to which reference may now be made. Section 11(3) of a New South Wales statute called the Marketing of Primary Products Act, 1927 1940, provides, inter alia., that every producer who, except in the course of trade or commerce between the States, sells or disposes of or delivers any commodity, in respect of which a Board has been appointed, to persons other than the Board, and every person other than the Board who, except as aforesaid, buys, accepts or receives any such commodity from a producer shall be guilty of an offence. Brazeil, a producer of potatoes in New South Wales at Dorrigo in New South Wales agreed to sell 48 bags of potatoes of Garlick Coy & Co., who were buying agents for J. E. Long & Co., general produce merchants, whose head office was at Jennings on the New South Wales side of (1) ; 99 the border of that State and Queensland and who carried on business of purchasing and selling potatoes in both States. It was a term of the sale that the potatoes should be delivered from Brazell 's lorry on trucks at Dorrigo in New South Wales. The potatoes were loaded at Dorrigo railway station into a truck and consigned by Garlick Coy & Co. to J. E. Long & Co. at Wallangarra on the Queensland side of the border adjoining Jennings. The potatoes arrived at Wallangarra and were sold by J. E. Long & Co. to a purchaser in Queensland. Brazell was charged with the offence of disposing of and Garlick and Coy, the two partners of Garlick Coy & Co. were charged with the offence of receiving the potatoes in contravention of section 11(3) of the Act. The question was whether the sale by Brazell to Garlick Coy & Co. in New South Wales was in the course of trade and commerce between the States. It was found that it was no part of the contract of sale between Brazell and Garlick Coy & Co. that the potatoes would go to any ascertained buyer in New South Wales or in any other State other than Garlick Coy & Co. who were, as Brazell believed, acting as agents for J. E. Long & Co., that Brazell was only concerned with the sale of his potatoes and that when he received his money he had no further interest in the potatoes, that there was no evidence that at the time Garlick Coy & Co. received the potatoes from Brazell there was any contract in existence for sale of them to any person in Queensland or any other State or that J. E. Long & Co. had any definite orders for the supply of them to any ascertained inter State buyers or that the potatoes purchased by Garlick Coy & Co. were to fill any such orders. There was no binding agreement between Brazell and Garlick Coy & Co. or J. E. Long & Co. that the potatoes would be sold to buyers in Queensland, The Magistrate answered the question in the negative and convicted Brazell, Garlick and Coy, who thereupon moved for a writ of prohibition to restrain the informants and the Magistrate from further proceeding on those convictions. In a joint judgment Dixon, McTierman, Fullager and Kitto, JJ. said : 100 "In our opinion on the foregoing facts the disposal and the receiving made the subject of the informations were in the course of trade and commerce between the States, within the meaning of the exception in section 11(3). Under the agreement for the sale and purchase of the potatoes the agents buying were required to consign the potatoes to a railway station in Queensland, and they did so consign them. For the purpose of the exception the delivery of the potatoes from the lorry into the railway truck can bear only the aspect of an essential and integral, even if initial, step in the transportation of the potatoes to Queensland. " In a separate but concurring judgment Williams J. said : " It was submitted to the Magistrate that the transaction must be looked at as a whole and not split up into separate contracts of sale and purchase. The Magistrate rejected this submission. In doing so he fell into error. He should have regarded the transaction as a whole. On this basis the facts proved that the acts done by the appellants were done in the course of trade and commerce between the States. " After stating the facts shortly Webb J. said: "The potatoes went to Queensland and were sold by the principal in that State. It may be that there was no binding stipulation that the potatoes would be sold in another State, and that they could have been resold in New South Wales without breach of agreement. But a legal nexus with inter State trade, by a contract with the grower, is not required to secure the immunity given by section 92. " Reference was made in this case to the earlier case of Clements and Marshall Pty Ltd. vs Field Peas Marketing Board (1) where there were two sets of contracts, the first being contracts of sale by the producers to the dealers and the second contracts of resale by the dealers to buyers in other States. After pointing out that it was only the second set of contracts which in themselves were inter State transactions Dixon J. said at page 429: (1) (1947) 76 C.L.R 401, 101 "We should consider the commercial significance of transactions and whether they form an integral part of a continuous flow or course of trade, which, apart from the theoretical legal possibilities, must commercially involve transfer from one State to another." The reasonings adopted by the learned Judges in the above cases apply with full force not only to clause (2) but also to clause (1)(b) of article 286 and we should construe the words "in the course of" in the same way as it has been done in the case of Queen vs Wilkinson(1). So construed, the purchases made by the exporter even without any previous order for export form "an essential and integral, even if initial, step" in the exportation of the goods. They form "an integral part of a continuous flow" which is commercially involved in the export process. No "legal nexus" between these purchases and the actual physical export is required to secure immunity from State taxation. In my judgment the last purchases by the exporters whether in fulfilment of foreign orders already secured or in anticipation of future orders must, in a commercial sense, be "in the course of " the export. The only way to give business efficacy to article 286 (1)(b) is to construe it in this commercial sense. Tax such purchases and you tax the export itself and by that process eventually cripple our export trade and bring about an adverse trade balance against us in the long run. It must always be borne in mind that with our exports we pay for our imports. The same considerations apply to the first sale by the importers of the imported goods. I leave out of consideration the comparatively few cases of retail dealers themselves importing goods direct from overseas sellers and the still fewer cases of actual consumers importing goods for their own consumption. In by far the largest majority of cases it is the import merchants who bring goods into the country from abroad. Their business is to bring in the goods and thereby augment the general mass of goods in the country. In some cases the importers secure orders from local dealers and pursuant to such orders the importers import the goods (1) ; 102 from foreign lands. In most cases, however, the importers, in intelligent anticipation of local demands for such goods, place orders or indents with foreign sellers who, pursuant to such orders, send out the goods. Each of these orders or indents placed with the foreign sellers by the intending importers occasions the import and these purchases by the importers are certainly "in the course of" import of the goods into India within the meaning of our previous decision, and as such exempt from sales tax. We have also seen that the sale or purchase of goods during the period they are on the high seas is also "in the course of" import and as such immune from taxation by State law. The question then arises as to where the course of import ends. Does it end at the water 's edge ? If the sale by the importers while the goods are on the high seas be ,,in the course of" import and not liable to sales tax, there can be no logical reason why the first sale by the importers to dealers should not also be exempted. If such sale is to be regarded as purely a local sale and as such liable to taxation by the States, then, in effect, the tax will be a burden on the import itself. The importers have to pay the customs duty imposed by Parliament and if again the States impose additional taxes on the same goods such multiple taxation will raise the price of the goods to the detriment of the actual consumers and will eventually have an adverse effect on our import trade which it is the purpose of the Constitution to prevent. After all the business of the importers who bring the goods into our country is only to make the goods available to the internal trade, for they are not usually retail dealers who sell to the consumers direct. That business is completed only by the first sale by the importers to the dealers, wholesale or retail. It is only after that first sale of the goods by the importers to the dealers that the goods become parts of the general mass of property in the State concerned and thereafter subject to the taxing power of that State. The first sale by the importers to dealers, therefore, appears to me to be so inextricably wound up with the import itself that it may be commercially regarded as the culmination of the import activities and, 103 therefore, the end of the course of import. I arrive at this conclusion not by applying the American doctrine of unopened original package, which has now been abandoned even by the Supreme Court of America and has recently been rejected by us in the Prohibition Case(1) but on a construction of the phrase "in the course of" ' in the light of its etymology, the purpose of the Constitution and against the background of the known notions and practices of businessmen engaged in foreign trade. , If, however, a particular importer himself happens to be a retail dealer of the goods and sells the goods to the actual consumers and such cases are comparatively few then such retail sales may, like local retail sales of similar goods, be liable to sales tax by the State. Whether an importer is or is not a retail dealer is a question of fact which is capable of proof and, therefore, need not be regarded as creating any insuperable difficulty in the matter of the assessment of the sales tax. For reasons stated above, I find no difficulty in holding that just like the last purchases by the exporters themselves for the purpose of sending the goods out of the country the first sales by the importers to dealers of goods brought by them into the country also come within the somewhat elastic expression " in the course of " export or import. As stated above, it is possible to draw the line there. Reference is made to Clive M. Schmitthoff 's Export Trade (2nd Edition, page 3) where the learned lecturer says: "When a merchant shipper in the United Kingdom buys, for the purpose of export, goods from a manufacturer in the same country the contract of sale is a home transaction, but when he resells these goods to a buyer abroad that contract of sale has to be classified as an export transaction. " The argument formulated on this authority is that this passage clearly establishes that the last purchase by the exporters and the first sales by the importers are home transactions and cannot be classified as export or import transactions at all, This distinction between (1) ; , 104 a home transaction and an export transaction made by the learned lecturer for the purposes of his book takes us nowhere. Nor do the American decisions which distinguish between intra State trade and inter State trade throw any light on the problem of construction of article 286 (1)(b) which is couched in language quite different from that used in the American Constitution. In America the question is clear cut, namely, is it an inter State transaction or an intra State transaction. Our problem, on the other hand, is to find out whether a given sale or purchase has taken place "in the course of" import or export. Simply to say that the particular sale or purchase is a home transaction does not solve our problem, for to say so is not to say that it cannot have taken place "in the course of" import or export. Indeed, article 286 (1)(b) postulates a home transaction, that is, a transaction which takes place within the State and then places it beyond the taxing power of that State on the ground that the transaction, has taken place "in the course of " import or export. If the transaction is not a home transaction, i.e., if it takes place outside the State, clause (1) (b) need not be invoked at all, for then clause (1)(a) will prevent that State from taxing that outside transaction. It is only when a particular transaction is a home transaction in the sense that it take,,; place within the State that the further question arises, namely, whether that home transaction has taken place "in the course of" import or export within the meaning of clause (1)(b). The circumstance that a sale or purchase is a home transaction does not, therefore, conclude the matter and we have yet to solve that further question by the proper construction of clause (1)(b) according to its natural meaning and in the light of the Constitutional purpose and against the commercial back ground as explained above. A second argument founded on that passage is that if those home transactions are removed from the sphere of State taxation then the States will be deprived of one of the principal and fruitful sources of revenue and the economy of the States will be crippled and may 105 even collapse. It is pointed out that there is no provision in clause (1)(b), such as there is in clause (2), under which Parliament may lift the ban and, therefore, to place these home transactions beyond the taxing power of the States will irretrievably deprive them of a very large part of revenue which they have been realising from these sales or purchases made by the big importers or exporters many of whom are foreigners. There is no reason, it is urged, why they should not be made to pay sales tax like ordinary sellers or buyers in the States. As already stated, the imposition of double taxation may eventually hamper our own foreign trade. The object of our Constitution, apparent from the distribution of legislative powers and from article 286, is to place our inter State trade and our foreign trade beyond the taxing power of the State. In the case of inter State trade power is expressly given to Parliament by clause (2) of that article to lift the ban but in the case of foreign trade no such power is given to Parliament by that article to relax or lift the ban imposed by clause (1) (b) on the legislative power of the State Legislatures. It is for Parliament alone to make laws with respect to foreign trade. If the import or export of particular commodities is not beneficial to our country then Parliament, which is in a much better position than this court to know and judge of such matters, will, I am sure, make laws restricting or even prohibiting such imports or exports. If our imports or exports may bear the additional burden of taxation without any detriment to the consumers and our foreign trade and without any risk to the Union revenue, Parliament, I have no doubt again, will increase the customs or export duty and augment the revenue of the Union. If on its correct interpretation clause (1)(b) of article 286 causes loss to the States ' revenue by depriving them of the taxes on such sales or purchases then such loss will clearly and solely be attributable to the intention of the Constitution as expressed in that clause. If that clause results in any danger to the economy of the States, I have no manner of doubt that Parliament 14 106 Will make good the loss to the States on the recommendation of the Finance Commission under some appropriate article out of articles 268 to 281 grouped under the heading " Distribution of Revenues between the Union and the States " in the very chapter in which occurs article 286 which is engaging our attention. In any event, the court must construe the Constitution as it finds it and if the construction of the plain language leads to any inconvenience to the States it will be for authority other than this court to rectify and remove the same. It is said that it will be very difficult for the Sales Tax Officer to ascertain how much of the goods purchased by the exporters had actually been exported or how much of the goods imported by the importers had actually been distributed amongst the dealers as opposed to actual consumers. It is pointed out that ordinarily sales tax is levied on sales and the sellers are permitted to pass on the tax to the purchasers at the time of such sales. How, it is asked, is the seller to know whether his purchaser will actually honour his representation that he wants the goods for the purpose of export? If the seller has no confidence in the integrity of his purchaser he will not sell to him without sales tax. The purchaser who is really exporter will not then perhaps buy from such a seller or if in the case of urgency he buys on payment of the sales tax may claim the refund, if there be any provision in that behalf, on proof that he actually exported the goods. It is said that exporters may change their minds and sell the goods locally after obtaining the exemption or the importers may sell the goods themselves in retail to the consumers after having got the exemption. There is no substance in this line of theoretical reasoning, for these are matters capable of being proved. If the exporters or their sellers cannot prove to the satisfaction of the officer that the exporters purchased so much goods for export and did actually export the same or the importers or their purchasers cannot prove that the importers imported so much goods and distributed so much amongst the dealers as 107 opposed to actual consumers, they will not get the ' benefit of the exemption and that is all. If the Sales Tax Officer finds no difficulty in ascertaining whether the goods are delivered in a State only for the purpose of consumption within that State or whether they were delivered for the purpose of resale out of that State so as to ascertain the applicability of the Explanation to clause (1) (a), why cannot the same officer find out what goods were purchased by the exporters for the purpose of export or what part of the imported goods were sold by the importers to the dealers ? If the Income tax Officer can without difficulty ascertain the income, profits and gains of a business and work out the provisions of, section 10 of the Indian Income tax Act and also can ascertain under section 42 of that Act the income deemed to accrue or arise within the taxable territory, there cannot be any insuperable difficulty in the way of the Sales Tax Officer determining the turnover of a particular dealer and working out the exemptions he is entitled to under article 286(1) (b). In any case the assumed difficulty of the Sales Tax Officer cannot alter or affect the correct construction of the constitutional provisions in question. To summarise : The State Legislatures, under entry 54 of the State List, have power to make laws with respect to tax on the sale or purchase of goods. On this general power article 286 places four restrictions, namely, that no law of a State shall impose or authorise the imposition of tax on the sale or purchase of goods when such sale or purchase takes place (1) outside the State, (2) in the course of import or export, (3) in the course of inter State trade and commerce and (4) in respect of essential commodities. The Explanation to clause (1) (a) only explains what is an outside sale or purchase, for by saying that a particular sale or purchase is to be deemed to take place in a particular State it only indicates that it is to be deemed to take place outside all other States so as to attract the ban of clause (1) (a) and thereby take away the taxing power of those other States with respect to such sale or purchase. The Explanation does not operate as an 108 exception or a proviso but only explains sub clause (a). The, fiction created by the Explanation is only for the purposes of sub clause (a), so that sales or purchases of the kind which fall within the Explanation get the benefit of the ban imposed by sub clause (a). Therefore, the purpose of the Explanation read with sub clause (a) is only to take away the power of taxation of those States in relation to those sales or purchases which are to be deemed to be outside sales or purchases. Its purpose is not and, indeed, it does not purport, to confer any taxing power on any State, and it cannot be resorted to for any such extraneous or collateral purpose. It does not convert an inter State sale or purchase into an intra State sale for any purpose other than the limited purpose of sub clause (a). If a sale or purchase takes place outside a State, either under the general law or by virtue of the fiction created by the Explanation, then that State cannot, under clause (1) (a), tax such sale or purchase. If a sale or purchase takes place within a State, either under the general law or by reason of the Explanation, then, if such a sale or purchase takes place " in the course of " inter State trade and commerce, no State, not even the State where the sale or purchase takes place as aforesaid can tax it by reason of clause (2), unless and until Parliament by law provides otherwise. A sale or purchase "in the course of" import or export within the meaning of clause (1) (b) includes (i) a sale or purchase which itself occasions the import or export as already held by this court, (ii) a sale or purchase which takes place while the goods are on the high seas on their import or export journey and (iii) the . last purchase by the exporter with a view to export and the first sale by the importer to a dealer after the arrival of the imported goods. If a sale or purchase takes place within a State, either under the general law or by reason of the Explanation, then, if it takes place in the course of import or export as explained above, no State, not even the State within which such sale or purchase takes place can tax it by reason of clause (1) (b). This, in short, is the true meaning and import of article 286 as I read and understand it, 109 I have already stated, however, that the majority decision of this court in C. A. No. 204 of 1952 [The State of Bombay vs The United Motors (India) Ltd.(1)] has taken a different view of the meaning of clause (1) (a), the Explanation and clause (2) of article 286. In disposing of the present appeals, in so far as such disposal depends on those provisions, I am bound to follow the majority decision rather than my own view of them. Bearing in mind the principles laid down by this court in The State of Travancore Cochin vs The Bombay Company Ltd.(2) and in C. A. No. 204 of 1952 [The State of Bombay vs The United Motors (India) Ltd. and others (1)] and those explained above, I now proceed to consider the rival claims on their respective merits. There is really no substantial controversy as to the nature of the business carried on by the respondents. All of them are exporters of cashew nut kernels on a fairly big scale. They procure raw cashew nuts from three sources, namely, (i) from within the State of Travancore Cochin, (ii) from neighbouring States and (iii) from Africa. Then they put the raw cashew nuts through a certain process and obtain oil and edible kernels. These edible kernels they export to foreign countries. It will be recalled that the Travancore Sales Tax Act imposes taxes only on the purchase of "cashew and its kernels" but not on the sale thereof. The respondents claim exemption from sales tax for the period between the 26th January, 1950, when the Constitution came into force and the 29th May, 1950, which is the close of the assessment year. In support of their claim for exemption they rely oil article 286 of the Constitution. It is necessary, therefore, to take each of the three categories of purchases and see if they or any part of them come within any of the exemptions provided by that article. As regards local purchases of raw cashew nuts there is no controversy that those purchases take place within the State and are, therefore, not entitled to the protection of article 286 (1) (a). These purchases do not take place " in the course of " inter State trade or (1) ; (2) ; 110 commerce and, therefore, are not within clause (2) of that article. The only question is whether these local purchases can be said to take place " in the course of " export within the meaning of article 286 (1) (b). There is no dispute that the respondents do not sell the raw cashew nuts or any portion of it within or without the State of Travancore. They do not sell the edible kernels, which they obtain as a result of the manufacturing process or any part of them within Travancore Cochin or any other State in India except what have been described as factory rejections of negligible quantity which are not fit for export. All edible kernels are exported to foreign countries. Therefore, the res pondents claim that all their purchases, whether made locally or in neighbouring States or from abroad, are, " in the course of " export within the meaning of clause (1) (b) in the sense explained above. The appellant State, however, maintains that commercially " the goods " exported are entirely different from " the goods " purchased by reason of the process of manufacture they are put through and are, therefore, not entitled to the benefit of the ban imposed by clause (1) (b). The High Court has, on remand, enquired into the process of manufacture through which the raw cashewnuts are passed before the edible kernels are obtained. The High Court, in its judgment on remand, goes minutely into the different processes of baking or roasting, shelling, pressing, pealing, and so forth. Although most of the process is done by hand, part of it is also done mechanically by drums. Oil is extracted out of the outer shells as a result of roasting. After roasting the outer shells are broken and the nuts are obtained. The poison is eliminated by pealing off the inner skin. By this process of manufacture the respondents really consume the raw cashew and produce new commodities. The resultant products, oil and edible kernels, are well recognised commercial commodities. They are separate articles of commerce quite distinct from the raw cashewnuts. Indeed, it is significant that the respondents place orders for "cashew nuts " but orders are placed 111 with them for " cashew nut kernels ". In the circumstances, " the goods " exported are not the same as the goods purchased. The goods purchased locally are not exported. What are exported are new commodities brought into being as a result of manufacture. There is a transformation of the goods. The raw cashews are consumed by the respondents in the sense that a jute ' mill consumes raw jute, or a textile mill consumes cotton and yarn. The raw cashews not being actually exported the purchase of raw cashews cannot be said to have been made " in the course of " export so as to be entitled to immunity under clause (1) (b). As regards the purchases of raw cashew nuts from the neighbouring States, the position, as found by the High Court on remand, is that the bulk of such purchases were made by the respondents or their agents from sellers in the neighbouring States and the goods so purchased were delivered by the sellers to the respondents or their agents in the States where the purchases took place. The contract of purchase was fully implemented when as a direct result of the purchase delivery was given outside Travancore. The respondents or their agents thereafter brought, the goods, which by then had become their own goods, into Travancore, by rail or otherwise. The delivery of the goods under the contract for purchase having already taken place outside Travancore, the subsequent despatch of those goods to Travancore cannot possibly be said to have been delivery within that State as a direct result of the purchase within the meaning of the Explanation. Indeed, the learned Advocate General of Travancore Cochin concedes that as purchases of this type did not fall within the Explanation they must be regarded as having taken place outside TravancoreCochin and must, accordingly, be exempt from taxa tion by Travancore Cochin under article 286 (1) (a). If it could be shown that although such sales or purchases took place entirely in those other States yet they were made between two parties residing or carrying on business in two States and for the purpose of consumption or of sale in the purchasers ' State then these sales or purchases might have been said to have 112 been made "in the course of " inter State trade and commerce and as such exempt from taxation by both the States under article 286 (2). The transactions of sale or purchase with which we are concerned having taken place within the period covered by the President 's order made under the proviso to that clause, no protection under clause (2) can be claimed for these transactions. Further, if the cashew nuts purchased in neighbouring States were for the purpose of exporting them out of the territories of India and were actually so exported, then these purchases would be " in the course of " export and as such exempt from tax under article 286 (1) (b). As a matter of fact, however, the cashew nuts purchased in the neighbouring States were not actually exported but were put through a process of manufacture and the goods that were exported were not the same as those that were purchased as explained above and, therefore, clause (1) (b) gives no protection to these purchases. On the facts of these cases, these purchases, however, took place outside Travancore Cochin and as such are, therefore, immune from taxation by Travancore Cochin only under clause (1) (a) which is not affected by the President 's order made under the proviso to clause (2). The learned Advocate General of Travancore Cochin says that there is another type of purchase from neighbouring States where the seller in the neighbouring State directly delivers the goods under the contract for sale or purchase to the respondents in Travancore. Learned counsel for the respondents maintains that there is actually no case of purchase of this type. It is not necessary at this stage to go into this controversy, for, the matter having been fully argued, it is just as well to lay down the correct principle applicable to such purchases, if any. If there is no such purchase where the seller from the neighbouring State delivers the goods as a direct result of such purchase to the respondents in Travancore, no question will arise. Assuming that there are cases of such purchases, then it is clear that the first condition of the Explanation is satisfied, namely, the goods are delivered within the State as a direct result of such purchase. The next question is 113 was such delivery for the purpose of consumption in the State ? The raw cashew nuts, after they reach the respondents, are put through a process and new articles of commerce, namely, cashew nut oil and edible cashew nut kernels, are obtained. It follows, therefore, that the raw cashew nut is consumed by the respondents in the sense I have mentioned. Consequently, such purchases will fall squarely within the Explanation and will be deemed to take place in Travancore so that under clause (1)(a) the neighbouring States will not be entitled to impose any tax on these sales or purchases. According to my view, and on the reasonings adopted in the Australian case, these purchases are "in the course of" inter State trade and as such will be protected by clause (2) but according to the majority view in the Bombay appeal, which must prevail, such purchases will become, as a result of the Explanation, an intra State purchase in Travancore and consequently out of the protection of clause (2) and liable to taxation by Travancore law. Even if according to my view these purchases fall within clause (2) they will nevertheless be liable to be taxed under the Travancore Act, in spite of that clause, by virtue of the order made by the President in exercise of the powers conferred on him by the proviso to that clause. These purchases will not get any protection under clause (1) (b) because the goods purchased were not the goods that were exported. These purchases, if any, will, therefore, be liable to be taxed under the Travancore Act. The third source from which the respondents purchase raw cashew nuts is Africa. The respondents place orders for the purchase of raw cashew nuts with commission agents in Bombay and the Bombay agents pass on the orders to the African sellers or their agents in Bombay. The African sellers theft send the goods by steamer and send the bills of lading, invoice etc. to their bank in Bombay. The bank presents the documents to the Bombay agents of the respondents and the Bombay agents pay the price 15 114 and take delivery of the shipping documents in Bombay. The Bombay agents then prepare their own invoice showing the amounts paid by them on account of the respondents and their own commission and send their invoice together with the shipping documents to their Travancore bank. The Travancore bank presents all these documents to the respondents who pay the Bombay agents ' invoice amount and take delivery of the shipping documents. All these generally happen while the goods are on the high seas. On arrival of the goods at Travancore port, the respondents clear the goods on presenting the bill of lading etc. This is the main type of purchase of African raw cashew nuts. The appellant State concedes that these are not liable to tax. In the first place the purchases were outside the State and, therefore, clause (1)(a) applies. In the next place these purchases took place I 'in the course of " import and as such are exempt from taxation under article 286(1)(b), because (i) they themselves occasioned the import as already held by this court and (ii) the property in the goods passed and the purchases took place when the goods were on the high seas. These purchases, however, cannot be said to have taken place "in the course of" export, for reasons already explained. There is another type of purchase of African raw cashew nuts. There the African sellers ship raw cashew nuts on their own initiative or at the instance of their Bombay agents and while the goods are on the high seas, they are sold by endorsement and delivery of the bills of lading etc. at Bombay to the Bombay agents of the respondents and then the same procedure is followed as in the first case. Here the purchase by the respondents did not occasion the import, but, nevertheless, the sale or purchase was outside the State and further the goods being on the high seas at the time when the property passed such sale or purchase must be regarded as having taken place "in the course of" import of the goods according to the mechanical test explained above. The learned Advocate General of the appellant State does not dispute that such purchases are also to go free from sales tax, 115 The next type of purchase of African raw cashewnuts is as follows: The different respondents place separate orders with the same Bombay commission agents and the Bombay commission agents place one consolidated order for the entire quantity of the goods with the African sellers. The African sellers thereupon ship the entire lot of goods under one bill of lading and they send the bill of lading and invoice etc. to their Bombay bank and the Bombay bank presents the same to the Bombay agents. The Bombay agents pay for the entire lot of goods and obtain delivery of the shipping documents and then they prepare separate invoices for each of their constituents, namely, the respondents, including their own commission and split up the consignment in the sense that the draw separate delivery orders covering the respective quantity of goods ordered by each respondent and send such invoice and delivery orders to the Travancore bank, who presents the same to the respondents who receive the delivery orders against payment. The goods are then cleared on the original bill of lading on arrival of the steamer at Travancore and thereafter the respondents take delivery of the goods from the warehouse of sellers or the Bombay agents against their respective delivery orders. A purchase of this type cannot properly be said to occasion the import of the goods. What really occasions the import of the goods is the order placed by the Bombay agents. The Bombay agents not having passed the orders placed by the respondents separately to the African sellers and the African sellers not having shipped the respective quantities of goods under separate bills of lading none of the orders can be said to have occasioned the import, for in such a case there is no privity between the African sellers and the individual respondents and the import is referable only to the order placed by the Bombay agents which in the eye of the law is not the order of any of the respondents but a consolidated order placed by the Bombay agents on their own responsibility and account with the object of eventually distributing the goods amongst the different respondents in fulfilment of their respective orders. In the next place the delivery of the bill of 116 lading covering the entire goods to the Bombay agents cannot be said to be a delivery to the respondents of the goods separately ordered by each of the respondents. The sale in such a case takes place in Travancore on the handing over of the delivery orders to the respective respondents and the delivery of the goods thereunder from the warehouse in Travancore. These goods, therefore, cannot claim exemption from tax under the provisions of article 286 (1) (a) or 286 (1) (b) or 286 (2). The last type of transaction in African raw cashewnuts is where the purchase takes place after the cashew nuts arrive in Travancore port and are thereafter sold and delivered ex godown to the respondents. This is clearly a case of intra State sale and clauses (1) (a) and (2) of the article can have no application to it. The respondents cannot claim exemption under clause (1)(b) for reasons stated above. As the respondents do not claim any exemption from taxation with respect to pre Constitution purchases, the same need not be discussed separately. For reasons stated above, the decision of the High Court must be upheld only to the extent that the assessments should be quashed. The matter must, however, go back to the Sales Tax Officer who must make a reassessment in the light of the principles laid down in the two previous cases referred to regarding clause (1) (a), the Explanation and clause (2) and in the light of the principles discussed above regarding clause (1)(b). Agent for the appellants in all the appeals: G. H. Rajadhyaksha. Agent for the respondents in Appeals Nos. 26 and 33: Rajinder Narain. Agent for the respondents in Appeals Nos. 27, 30 to 32 and 34 to 36: section Subramanian. Agent for the Union of India and the States of Madras, Hyderabad, Punjab and Mysore: G. H. Rajadhyaksha.

Held, by (PATANJALI SASTRI C.J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ.) (i) Sales and purchases which themselves occasion the export or import of the goods, as the case may be, out of, or into, the territory of India come within article 286 (1) (b) and are exempt from State taxation. (ii) Purchases in the State by the exporter for the purpose of export as well as sales in the State by the importer after the goods have crossed the customs barrier are not within the exemption. (iii) Sales in the State by the exporter or importer by transfer of shipping documents while the goods are beyond the customs barrier are within the exemption, assuming that the State power of taxation extends to such transactions. The word " course " etymologically denotes movement from one point to another and the expression " in the course of " in article 286 (1) (b) not only implies a period of time during which the movement is in progress but postulates also a connected relation. Consequently, a sale in the course of export out of the country 54 should be understood in the context of article 286 (1) (b) as meaning a sale taking place not only during the activities directed to the end of exportation of the goods out of the country, but also as part of or connected with such activities. But a purchase of goods for the purpose of export is only an act preparatory to their export and not an act done in the course of the export of the goods, The respondents purchased raw cashew nuts within the State of Travancore Cochin, from the neighbouring states and also imported such nuts from Africa, for the purpose of refining them and exporting them to America. Imports from Africa were made in the following ways: (a) purchases were made through intermediaries doing business as commission agents at Bombay who acted as agents for the respondents charging commission; (b) the commission agents at Bombay indented the goods on their own account and they sold the goods as principals to the respondents. In either case the goods were shipped direct from Africa to a port in the Travancore Cochin State. It was found as a fact that the process of the factory was such that the goods were not the same goods commercially after refinement: Held, (i) as regards purchases made in the local markets of the State they were not exempted under article 286 (1) (b); (ii) as regards purchases made in the neighbouring States, if the purchases were effected and delivery was taken by the respondents ' servants outside the Travancore Cochin State, they would be exempt under article 286, cl. (i) (a), and if the purchases were effected by employing firms doing commission business outside the State and deliveries were made through normal commercial channels the transactions would be of an inter State character and would fall under cl. (2) but they would be taxable under the Sales Tax Continuance Order (No. 7 of 1950) issued by the President under cl. (2) as such tax was being levied before the Constitution. (iii) As regards imports from Africa, where the Bombay merchants merely acted as agents, the transactions would be purchases which occasioned the import and would be exempt under article 286 (1) (b), but where the Bombay merchants did not act as agents for the respondents, purchases from them would be on the same footing as local purchases and would not be exempt. Per S.R. DAS J. The Explanation to article 286 (1) (a) is not an exception or a proviso but only explains cl. (1) (a). It does not confer taxing power on any State but only takes away the power of taxation of a State in respect of sales and purchases in which delivery does not take place within the State by enacting that such sales shall be deemed to have taken place outside that State within cl. (1) (a). Consequently, if a sale or purchase takes place outside a State, either under the general law or by virtue of the fiction created by the Explanation, then that State cannot, under (1) (a), tax such sale or purchase. If a sale or purchase takes place within a State, either under the general law or by reason of the Explanation, then, if such a sale or purchase takes place 55 " in the course of " inter State trade and commerce, no State, not even the State where the sale or purchase takes place as aforesaid can tax it by reason of (2), unless and until Parliament by law provides otherwise. A sale or purchase " in the course of " import or export within the meaning of (1) (b) includes (i) a, sale or purchase which itself occasions the import or export as already held by this court, (ii) a sale or purchase which takes place while the goods are on the high seas on their import or export journey. and (iii) the last purchase by the exporter with a view to export and the first sale by the importer to a dealer after the arrival of the imported goods. If a sale or purchase takes place within a State, either under the general low or by reason of the Explanation, then, if it takes place in the course of import or export as explained above, no State, not even the State within which such sale or purchase takes place can tax it by reason of (1) (b). As regards local purchases, as those purchases took place with. in the State they were not entitled to the protection of article 286 (1) (a), since on the findings of the High Court, the goods purchased were so altered that they cannot be deemed to be the same as the goods which were exported, and the purchases cannot be said to have been made "in the course" of export so as to be entitled to immunity from taxation under article 286 (1) (b). As regards purchases from the neighbouring States, if the goods were taken delivery of by the agents of the respondents outside the State, such purchases must, under the Explanation, be regarded as having taken place outside the State and accordingly would be exempt from taxation under article 286 (1) (a). If however, the goods were directly delivered to the respondents in the Travancore Cochin State the Explanation to article 286 (1) (a) will apply in view of the finding of the High Court which implies that the goods are also consumed in the State, and the neighbouring States will not be entitled to tax these sales or purchases, but the purchases are " in the course of " inter State trade and as such will be protected by (2); but as the majority of the Court have taken a different view and as such view must prevail, such purchases will become, as a result of the Explanation to (1) (a), an intra state purchase and will lose the protection of (2). Even if such purchases fall within (2), they would be liable to be taxed under the President 's Order of 1950. They are not protected by (1) (b) as the goods exported are different goods. As regards purchases from Africa (1) where the Bombay merchants act as agents of the respondents and pay the price and take delivery of the shipping documents in Bombay the purchases fall within (1) (a) and also (1) (b) and are not liable to tax as they take place outside the State within (1) (a) and also "in the course of import" within (1) (b); (ii) where the African sellers ship the goods on their own initiation or on that of their agents and while the goods are on the high seas they are 56 purchased by the, respondents ' Bombay agents, the sale or purchase would be exempt under (1) (a) and under (1) (b); (iii) where the respondents place separate orders with the same commission agent at Bombay and the latter places a consolidated order with the African seller on his own responsibility and the Bombay agent after paying for the entire lot, prepares a separate invoice for each of their constituents and the latter receive the delivery orders from a Travancore bank against payment and take delivery from a Travancore warehouse the sale takes place in the Travancore Cochin State and the goods cannot claim exemption under (1) (a), (1) (b) or (2) of article 286.

longest

tition Nos. 232 & 233 of 1983. (Under article 32 of the Constitution of India) M.S. Joshi, N.D. Garg and Rajiv Kumar Garg for the Petitioners. D.D. Sharma for the Respondent. The Judgment of the Court was delivered by CHANDRACHUD, CJ. An important question arises for consideration in these two writ petitions. That question is whether a delay exceeding two years in the execution of a sentence of death must be considered sufficient for setting aside that sentence. Learned counsel who appears on behalf of the petitioners relies upon a decision of this Court in T.V. Vatheeswaran vs The State of Tamil Nadu(1) and contends that since more than two years have passed since the petitioners were sentenced to death by the Trial Court, they are entitled to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment. The petitioners, Sher Singh and Surjit Singh, and one Kuldip Singh were convicted under section 302 read with section 34 of the 586 Penal Code and were sentenced to death by the learned Sessions Judge, Sangrur, on November 26, 1977. By a judgment dated July 18, 1978 the High Court of Punjab and Haryana reduced the sentence imposed upon Kuldip Singh to life imprisonment but upheld the sentence of death imposed upon the petitioners. The High Court also imposed a sentence of fine of Rs. 5000 on Kuldip Singh and a fine of Rs. 5000 on each of the petitioners. Special Leave Petition (Crl.) No. 1711 of 1978 which was filed by the petitioners against the judgment of the High Court was dismissed by this Court on March 5, 1979. The petitioners then filed a Writ Petition in this Court challenging the validity of section 302 of the Penal Code. That petition was dismissed on January 20, 1981. Review Petition No. 99 of 1981 filed by the petitioners against the dismissal of their S.L.P. was dismissed by this Court on March 27, 1981. The petitioners filed yet another petition under article 32 of the Constitution, this time challenging the validity of section 34 of the Penal Code. That petition was dismissed on August 24, 1981. After failing in these seemingly inexhaustible series of proceedings, the petitioners filed these two writ petitions on March 2, 1983, basing themselves on the decision rendered by Justice Chinnappa Reddy and Justice R.B. Misra on February 16, 1983 in Vatheeswaran. The question which arose for consideration in Vatheeswaran is formulated by Chinnappa Reddy, J., who spoke for the Court, in these terms: "But the question is whether in a case where after the sentence of death is given, the accused person is made to undergo inhuman and degrading punishment or where the execution of the sentence is endlessly delayed and the accused is made to suffer the most excruciating agony and anguish, is it not open to a court of appeal or a court exercising writ jurisdiction, in an appropriate proceeding to take note of the circumstance when it is brought to its notice and give relief where necessary ?" This question arose on the following facts as stated in the judgment of Brother Chinnappa Reddy: (1) The prisoner was rightly sentenced to death. (2) He was the 'arch villain of a villainous piece ' and the brain behind a cruel conspiracy to impersonate Customs officers, pretend to question unsuspecting visi 587 tors to the city of Madras, abduct them on the pretext of interrogating them, administer sleeping pills to the unsuspecting victims, steal their cash and jewels and finally murder them. The plan was ingeniously fiendish and the appellant was its architect. (3) Since January 19, 1975 when the Sessions Judge pronounced the sentence of death, the prisoner was kept in solitary confinement contrary to the decision of this Court in Sunil Batra vs Delhi Administration. (1) Before that, he was a 'prisoner under remand ' for two years. On these facts, the argument advanced in this Court on behalf of the prisoner was that taking away his life after keeping him in jail for ten years, eight of which were spent in illegal solitary confinement, is a gross violation of the fundamental rights guaranteed by Article 21 of the Constitution. In Vatheeswaran, our learned Brethren have drawn sustenance to their conclusion from one judgment of the Federal Court of India, five judgments of this Court, one of the Privy Council and one of the U.S. Supreme Court. As to the meaning and implications of Article 21 of the Constitution, they have relied upon the decisions of this Court in Sunil Batra,(1) Maneka Gandhi,(2) Bachan Singh, (3) Hussainara Khatoon (4) and Hoskot.(5) The judgment in Bhuvan Mohan Patnaik (6) and Prabhakar Pandurang Sangzgiri (7) have been relied upon to show that prisoners who are under a sentence of death and detenus are entitled to certain fundamental rights. In Piare Dusadh, (8) the Federal Court was considering appeals against the judgments of the High Courts of Allahabad, Madras, Nagpur and Patna, under the special Criminal Courts Ordinance II of 1942. In Case Nos. XLI and XLII, the High Court of Patna had 588 confirmed the sentence of death passed on the appellants by the Special Judge. It was urged before the Federal Court that the death sentence imposed in those cases should be reduced to transportation for life on account of the time that had elapsed since the sentences were first pronounced. The Court observed: "It is true that death sentences were imposed in these cases several months ago, that the appellants have been lying ever since under threat of execution, and that the long delay has been caused very largely by the time taken in proceedings over legal points in respect of the constitution of the courts before which they were tried and of the validity of the sentences themselves. We do not doubt that this court has power, where there has been inordinate delay in executing death sentence in cases which come before it, to allow the appeal in so far as the death sentence is concerned and substitute a sentence of transportation for life on account of the time factor alone, however right the death sentence was at the time when it was originally imposed. But this is a jurisdiction which very closely entrenches on the powers and duties of the executive in regard to sentences imposed by courts. It is a jurisdiction which any court should be slow to exercise. We do not propose ourselves to exercise it in these cases. Except in Case No. XLVII (in which we are commuting the sentence largely for other reasons as hereafter appears), the circumstances of the crimes were such that if the death sentence which was the only sentence that could have been properly imposed originally, is to be commuted, we feel that it is for the executive to do so. " It was urged before the Federal Court that in England, when cases in which death sentence has been imposed are allowed to be taken to the House of Lords on account of some important legal point, the consequential delay in finally disposing of the case was treated as a ground for the commutation of the death sentence and that a similar course might well be adopted in India in cases in which substantial questions of law as to the interpretation of the Constitution Act had to be considered by the Federal Court. This argument was rejected on the ground that these were matters primarily for the consideration of the executive. 589 In Case No. XLVII, which was one of the cases before the Federal Court, the appellant was convicted by a special Judge of the offence of murder and was sentenced to death on September 30, 1942. The Allahabad High Court confirmed the sentence of death but the Federal Court commuted that sentence to transportation of life. As is evident from the parenthetical portion of the passage extracted above, this was done "largely for other reasons", that is to say, for reasons other than that a long delay had intervened after the death sentence was imposed. The Federal Court commuted the death sentence on the ground that the sentence of transportation for life was more appropriate in the circumstances of the case. They added that the appellant was awaiting the execution of his death sentence for over a year. It is thus clear that Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, that sentence must necessarily be commuted to life imprisonment. In Ediga Anamma(1) this Court was hearing an appeal against the sentence of death imposed upon the appellant. Finding that the appellant was a young woman of 24 who was flogged out of her husband 's house by the father in law, this Court reduced her sentence to life imprisonment for a variety of factual reasons peculiar to the case, like her entanglement into a sex net, that she had a young boy to look after and so on. Speaking for the Court, Krishna Iyer, J. added: "What may perhaps be an extrinsic factor but recognised by the Court as of humane significance in the sentencing context is the brooding horror of 'hanging ' which has been haunting the prisoner in her condemned cell for over two years. The Sessions Judge pronounced the death penalty on December 31, 1971, and we are now in February 1974. This prolonged agony has ameliorative impact according to the rulings of this Court." Piare Dusadh was regarded by the Court as a leading case on this point. We have already adverted to the circumstances in which the death sentence was commuted to transportation for life in that case. 590 In the other cases referred to in Vatheeswaran, (supra) this Court was hearing appeals against the judgments of High Courts confirming the sentence of death. In those cases, the sentence of death was commuted into life imprisonment by this Court by reason of the long interval which had elapsed either since the imposition of the death sentence or since the date of the occurrence. But we must hasten to add that this Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence. The question which arises in such appeals is whether the extreme penalty provided by law is called for in the circumstances of the case. The question which arises in proceedings such as those before us is whether, even if the death sentence was the only appropriate sentence to impose in the case and was therefore imposed, it will be harsh and unjust to execute that sentence by reason of supervening events. In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence, consequent upon the dismissal of the prisoner 's Special Leave Petition or Appeal by this Court. Traditionally, subsequent events are taken into account in the area of civil law. There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable. Undoubtedly, principles analogous to Res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already. That final decision is not a decision on new facts. Courts are never powerless to do justice, that is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship. That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court. Some of us dealing with this case have been parties to decisions directing, in appropriate cases, that the death sentence shall not be executed by reason of supervening circumstances. 591 In Vatheeswaran, the prisoner was under the sentence of death for over eight years and was in the jail for two years before that. After the death sentence was pronounced upon him, he was kept in solitary confinement, contrary to this Court 's ruling in Sunil Batra. These supervening considerations, inter alia, were unquestionably germane to the decision whether the death sentence should be allowed to be executed. The Court took them into account and commuted the sentence to life imprisonment. Like our learned Brethren, we too consider that the view expressed in this behalf by Lord Scarman and Lord Brightman in the Privy Council decision of Neol Riley (1) is, with respect, correct. The majority in that case did not pronounce upon this matter. The minority expressed the opinion that the jurisprudence of the civilized world has recognized and acknowledged that prolonged delay in executing a sentence of death can make the punishment when it comes inhuman and degrading: Sentence of death is one thing; sentence of death followed by lengthy imprisonment prior to execution is another. The prolonged anguish of alternating hope and despair, the agony of uncertainty, the consequences of such suffering on the mental, emotional, and physical integrity and health of the individual can render the decision to execute the sentence of death an inhuman and degrading punishment in circumstances of a given case. Death sentence is constitutionally valid and permissible within the constraints of the rule in Bachan Singh. This has to be accepted as the law of the land. We do not, all of us, share the views of every one of us. And that is natural because, every one of us has his own philosophy of law and life, moulded and conditioned by his own assessment of the performance and potentials of law and the garnered experiences of life. But the decisions rendered by this Court after a full debate have to be accepted without mental reservations until they are set aside. The fact that it is permissible to impose the death sentence in appropriate cases does not, however, lead to the conclusion that the sentence must be executed in every case in which it is upheld, regardless of the events which have happened since the imposition or the upholding of that sentence. The inordinate delay in the execution of the sentence is one circumstance which has to be taken into account 592 while deciding whether the death sentence ought to be allowed to be executed in a given case. In his sociological study called 'Condemned to Die, Life Under Sentence of Death ', Robert Johnson says: "Death row is barren and uninviting. The death row inmate must contend with a segregated environment marked by immobility, reduced stimulation, and the prospect of harassment by staff. There is also the risk that visits from loved ones will become increasingly rare, for the man who is "civilly dead" is often abandoned by the living. The condemned prisoner 's ordeal is usually a lonely one and must be met largely through his own resources. The uncertainties of his case pending appeals, unanswered bids for commutation, possible changes in the law may aggravate adjustment problems. A continuing and pressing concern is whether one will join the substantial minority who obtain a reprieve or will be counted among the to be dead. Uncertainty may make the dilemma of the death row inmate more complicated than simply choosing between maintaining hope or surrendering to despair. The condemned can afford neither alternative, but must nurture both a desire to live and an acceptance of imminent death. As revealed in the suffering of terminally ill patients, this is an extremely difficult task, one in which resources afforded by family or those within the institutional context may prove critical to the person 's adjustment. The death row inmate must achieve equilibrium with few coping supports. In the process, he must somehow maintain his dignity and integrity" (page 4) "Death row is a prison within a prison, physically and socially isolated from the prison community and the outside world. Condemned prisoners live twenty three and one half hours alone in their cells. " (page 47) The author proceeds to say: "Some death row inmates, attuned to the bitter irony of their predicament, characterize their existence as a living death and themselves as the living dead. They are speaking symbolically, of course, but their imagery is an appropriate description of the human experience in a world where life is so obviously ruled by death. It takes 593 into account the condemned prisoners ' massive deprivation of personal autonomy and command over resources critical to psychological survival; tomblike setting, marked by indifference to basic human needs and desires; and their enforced isolation from the living, with the resulting emotional emptiness and death." (page 110) A prisoner who has experienced living death for years on end is therefore entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed. That is the true implication of Article 21 of the Constitution and to that extent, we express our broad and respectful agreement with our learned Brethren in their visualisation of the meaning of that article. The horizons of Article 21 are ever widening and the final word on its conspectus shall never have been said. So long as life lasts, so long shall it be the duty and endeavour of this Court to give to the provisions of our Constitution a meaning which will prevent human suffering and degradation. Therefore, Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution. The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable. It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment. (See Prabhakar Pandurang Sangzgiri, Bhuvan Mohan Patnaik and Sunil Batra). It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair, Article 21 stands like a sentinel over human misery, degradation and oppression. Its voice is the voice of justice and fairplay. That voice can never be silenced on the ground that the time to heed to its imperatives is long since past in the story of a trial. It reverberates through all stages the trial, the sentence, the incarceration and finally, the execution of the sentence. In cases too numerous to mention, this Court has released undertrial prisoners who were held in jail for periods longer than the period to which they could be sentenced, if found guilty: this jurisdiction relates to pre trial procedure. In Hussainara Khatoon (supra) and Champalal(1), speedy trial was held to be an integral part of the 594 right conferred by Article 21: this jurisdiction relates to procedure during the trial. In Prabhakar Pandurang Sangzgiri, the Court upheld the right of a detenu, while in detention, to publish a book of scientific interest called 'Inside the Atom '; in Bhuvan Mohan Patnaik, it was held that prisoners had to be afforded reasonable human conveniences and that the live wire mechanism fixed on prison walls in pursuance of administrative instructions could not be justified as reasonable if it violated the fundamental rights of the prisoners; in Sunil Batra, solitary confinement and bar fetters were disapproved as normal modes of securing prisoners. These three cases are illustrative of the Court 's jurisdiction to review prison regulations and to regulate the treatment of prisoners while in jail. And, last but not the least, as we have stated already, death sentences have been commuted to life imprisonment by this Court either while disposing of Special Leave Petitions and Appeals or while dealing with Writ Petitions filed after the unsuccessful termination of the normal processes of litigation: this jurisdiction relates to the execution of the sentence. This then is the vast sweep of Article 21. What we have said above delineates the broad area of agreement between ourselves and our learned Brethren who decided Vatheeswaran. We must now indicate with precision the narrow area wherein we feel constrained to differ from them and the reasons why. Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed. But, according to us, no hard and fast rule can be laid down as our learned Brethren have done that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke Article 21 and demand the quashing of the sentence of death". This period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve". With great respect, we find it impossible to agree with this part of the judgment. One has only to turn to the statistics of the disposal of cases in High Court and the Supreme Court to appreciate that a period far exceeding two years is generally taken by those Courts together for the disposal of matters involving even the death sentence. Very often, four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by the Supreme Court in that matter. This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed 595 under Article 72 or article 161 of the Constitution or the time which the Government takes to dispose of applications filed under sections 432 and 433 of the Code of Criminal Procedure. It has been the sad experience of this Court that no priority whatsoever is given by the Government of India to the disposal of petitions filed to the President under Article 72 of the Constitution. Frequent reminders are issued by this Court for an expeditious disposal of such petitions but even then the petitions remain undisposed of for a long time. Seeing that the petition for reprieve or commutation is not being attended to and no reason is forthcoming as to why the delay is caused, this Court is driven to commute the death sentence into life imprisonment out of a sheer sense of helplessness and frustration. Therefore, with respect, the fixation of the time limit of two years does not seem to us to accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive. Apart from the fact that the rule of two years runs in the teeth of common experience as regards the time generally occupied by proceedings in the High Court, the Supreme Court and before the executive authorities, we are of the opinion that no absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the sentence must be substituted by the sentence of life imprisonment. There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated. A convict is undoubtedly entitled to pursue all remedies lawfully open to him to get rid of the sentence of death imposed upon him and indeed, there is no one, be he blind, lame, starving or suffering from a terminal illness, who does not want to live. The Vinoba Bhaves, who undertake the "Prayopaveshana" do not belong to the world of ordinary mortals. Therefore, it is understandable that a convict sentenced to death will take recourse to every remedy which is available to him under the law, to ask for the commutation of his sentence, even after the death sentence is finally confirmed by this Court by dismissing his Special Leave Petition or Appeal. But, it is, at least relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice. It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification. Stay orders are obtained in those proceedings and then, at the end 596 of it all, comes the argument that there has been prolonged delay in implementing the judgment or order. We believe that the Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it. If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation And then, the rule of two years will become a handy tool for defeating justice. The death sentence should not, as far as possible, be imposed. But, in that rare and exceptional class of cases wherein that sentence is upheld by this Court, the judgment or order of this Court ought not to be allowed to be defeated by applying any rule of thumb. Finally, and that is no less important, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition, if the death sentence is vacated, are matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed. The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum". In the case before us, the sentence of death was imposed upon the petitioners by the learned Sessions Judge, Sangrur, on November 26, 1977. It was upheld by the High Court on July 18, 1978. This Court dismissed the Special Leave Petition filed by the petitioners on March 5, 1979. The matter is pending in this Court since then in one form or another, by reason of some proceeding or the other. The last of the writ Petitions filed by the petitioners was dismissed by this Court on August 24, 1981. We do not know why the sentence imposed upon the petitioners has not been executed for more than a year and half. The Government of Punjab must explain that delay. We are of the opinion that, in the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court, and this Court, cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence. On the date when these Writ Petitions came before us, we asked the learned counsel for the petitioners to argue upon the 597 reasons why, apart from the dealy caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time. Every case has to be decided upon its own facts and we propose to decide this case on its facts. After hearing the petitioners ' counsel, we will consider the question whether the interests of justice require that the death sentence imposed upon the petitioners should not be executed and whether, in the circumstances of the case, it would be unjust and unfair to execute that sentence now We must take this opportunity to impress upon the Government of India and the State Governments that petitions filed under Articles 72 and 161 of the Constitution or under sections 432 and 433 of the Criminal Procedure Code must be disposed of expeditiously. A self imposed rule should be followed by the executive authorities rigorously, that every such petition shall be disposed of within a period of three months from the date on which it is received. Long and interminable delays in the disposal of these petitions are a serious hurdle in the dispensation of justice and indeed, such delays tend to shake the confidence of the people in the very system of justice. Several instances can be cited, to which the record of this Court will bear testimony in which petitions are pending before the State Governments and the Government of India for an inexplicably long period. The latest instance is to be found in Cri. Writ Petition Nos.345 348 of 1983, from which it would appear that petitions filed under article 161 of the Constitution are pending before the Governor of Jammu & Kashmir for anything between 5 to 8 years. A pernicious impression seems to be growing that whatever the courts may decide, one can always turn to the executive for defeating the verdict of the Court by resorting to delaying tactics. Undoubtedly, the executive has the power, in appropriate cases, to act under the aforesaid provisions but, if we may remind, all exercise of power is preconditioned by the duty to be fair and quick. Delay defeats justice. On the question as to whether the death sentence should not be allowed to be executed in this case, we shall pronounce later after hearing the parties. In the meanwhile, notice will go to the Government of Punjab. Order accordingly.

The petitioners were convicted under section 302 read with section 34 I.P.C. and were sentenced to death on November 26, 1977. The High Court upheld the conviction and sentence on July 18, 1978. The petitioners ' Special Leave Petition against the judgment of the High Court was dismissed on March 5, 1979 and the Review Petition against the dismissal of the Special Leave Petition was also dismissed on March 27, 1981. The petitioners ' successive writ petitions challenging the validity of sections 302 and 34 I.P.C. were dismissed on January 20, 1981 and August 24, 1981 respectively. The present writ petitions were filed on March 2, 1983 on the basis of the decision in T.V. Vatheeswaran vs State of Tamil Nadu which was rendered on February 16, 1983. The contention on behalf of the petitioners was that more than two years had elapsed since they were sentenced to death by the trial court and therefore they were entitled in terms of the ruling in vatheeswaran to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment. ^ HELD : Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed. But no hard and fast rule that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke article 21 and demand the quashing of the sentence of death" can be laid down as has been done in Vatheeswaran. [594 E F] (i) No absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the 583 sentence must be substituted by the sentence of life imprisonment. There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated. A convict is entitled to pursue all remedies lawfully open to him and get rid of the sentence of death imposed upon him and his taking recourse to them to ask for the commutation of his sentence even after it is finally confirmed by this Court is understandable. But, it is, at least, relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice. It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification. Stay orders are obtained in those proceedings and then, at the end of it all, comes the argument that there has been prolonged delay in implementing the judgment or order. The Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it. If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation. Further, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition if the death sentence is vacated, re matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed. The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum." [595 D H; 596 AE] T.V. Vatheeswaran vs State of Tamil Nadu. overruled. (ii) The period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve. " It is not possible to agree with this part of the judgment in that case. The fixation of the time limit of two years does not accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive. A period far exceeding two years is generally taken by the High Court and this Court together for the disposal of matters involving even the death sentence. Very often four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by this Court in that matter. This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed under article 72 or article 161 of the Constitution or the time which the Government takes to dispose of application filed under sections 432 and 433 of the Code of Criminal Procedure. [594 F H; 595 AC] (iii) Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, 584 that sentence must necessarily be commuted to life imprisonment. In that case the Federal Court commuted the sentence of death to sentence of transportation for life for reasons other than that a long delay had intervened after the death sentence was imposed. In Ediga Anamma, Piare Dusadh was regarded as a leading case on the point. In the other judgments of this Court referred to in Vatheeswaran, this Court was hearing appeals against judgments of High Courts confirming the sentence of death. However, the Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence. In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence. [589 B D H; 590 A D] Piare Dusadh, [1944] F.C.R. Vol.6 61; Ediga Anamma; , ; Sunil Batra vs Delhi Administration, ; ; Maneka Gandhi [1978] 2 S.C.R. 621; Bachan Singh, , Hussainara Khatoon; , ; Hoskot; , ; Bhuvan Mohan Patnaik; , ; and Prabhakar Pandurang Sangzgiri; , referred to. (iv) Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution. The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable. It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment. It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair. A prisoner who has experienced living death for years on end is entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed. That is the true implication of article 21 of the Constitution. [593 B G] Bhuvan Mohan Patnaik; , ; Prabhakar Pandurang Sangzgiri; , ; and Sunil Batra vs Delhi Administration; , referred to. (v) Traditionally, subsequent events are taken into account in the area of civil law. There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable. Principles analogous to res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already. That final decision is not a decision on new facts. Courts are never powerless to do justice, that 585 is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship. That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court. [590 E H] In the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court and this Court cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence. Counsel for the petitioners have been asked to argue upon the reasons why, apart from the delay caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time. The question will be decided after hearing the parties. [596 G H; 597 A B] 2. Petitions filed under articles 72 and 161 of the Constitution and under sections 432 and 433, Cr. P.C. must be disposed of expeditiously. A self imposed rule should be followed by the executive authorities that every such petition shall be disposed of within a period of three months from the date on which it is received. [597 C]

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Appeal No. 2053 of 1971. Appeal by special leave from the Judgment & Order dated the 8th July, 1971 of the Bombay High Court in S.C.A. No. 1346/68. M. C. Bhandare, P. H. Parekh and section Bhandare, for the appellant. The Judgment of the Court was delivered by SARKARIA, J. Whether the difference of 10 per cent between an Industrial Company and other Companies in the levy of Income tax provided in the Finance Act, 1966 is to be construed a "rebate" or "relief" in the payment of any direct tax, for the development of an industry for the purposes of section 7(e) of the , (for short, the Bonus Act) is the short question that falls to be answered in this appeal by special leave. The appellant is a Private Ltd. Company. it manufactures automobile ancillaries and other goods in its Factory at Bombay. It employs about 170 workmen. The workmen demanded bonus for the year 1964 65. Their demand was not met by the Company. Conciliation proceedings before the Conciliation Officer having failed, the dispute was submitted to the Government which by its Order, dated May 2, 1967 referred the same for adjudication to the Industrial Tribunal. One of the points mooted before the Tribunal was, whether in calculating the available surplus, the direct tax payable by the Company was deductible at the rate of 55 per cent or 65 per cent. The case of the Mazdoor Saneh (Respondent No. 1) was that the rate should be 55 per cent as the Company was paying the tax at the rate As against this, the Company contended that it was entitled to deduct as per section 7(e) of the Bonus Act, direct tax at the normal rate of 65 per cent and not at 55 per cent which was only a confessional levy amounting to a "relief" for the purpose of development. The Tribunal accepted the contention of the Company. After referring to the speech of the Finance Minister on the Budget of 196667, the Tribunal held: assessed to income tax at the rate of 65 per cent, those engaged in industrial undertakings have been assessed at the concessional rate of 55 per cent, as a measure of rendering assistance to their growth. Such a concession would, unquestionably amount to relief for the purpose of development as contemplated by Section 7(e) of the Act. " Aggrieved, the Mazdoor Sangh impugned the Tribunal 's Award, dated 29 2 1968, by a Writ Petition under Article 227 of the Con 544 stitution before the High Court of Bombay. The High Court held that the Company being an Industrial Company, was liable to pay tax under the Finance Act, 1966 at the rate of 55% only on its total income after deducting depreciation. Therefore it could not claim deduction at a rate higher than 55% in calculating the available surplus. In the result, the High Court set aside the Award and remitted the case to the Tribunal for further disposal in accordance with law. Hence this appeal by the Company. Broadly, the scheme of the Bonus Act is this : At first, the gross profits derived by an employer from an establishment are calculated in the manner specified in the First Schedule, or the Second Schedule, whichever may be applicable (section 4). On the basis of such gross profits, the available surplus for the particular accounting year is computed. This is done by deducting therefrom the sums referred to in Section 6. According to Clause (c) of Section 6, one of the sums so deductible is: "Subject to the provisions of Section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year". Section 7, to which section 6(c) is subject, provides how for the purposes of the Act, the direct tax payable by the employer is to be calculated. Clause (e) of Section 7 is material. It runs thus : "no account shall be taken of any rebate (other than development rebate or development allowance) or credit or relief or deduction (not hereinbefore mentioned in section) in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any industry". The rates of income tax applicable to Private Ltd. Companies tinder Paragraph F, Part I of the First Schedule fixed by the Finance Act, 1966, are as follows : 1. In the case of a domestic Company(A) (1). (2) where the Company is not a company in which the public are substantially interested. (i) in the case of an industrial Company (1) on so much of the total income as does not exceed Rs. 10,00,000 55 per cent. (2) on the balance, if any of the total income 60 per cent. (ii) in any other case 65 per cent of the total income". It is not disputed that the Company being an industrial Company with total income for the relevant year, not exceeding Rs. 10,00,900,, 545 the rate of tax under the above Paragaph 1(A) (2) (i), applicable to it was 55 per cent and not 65 per cent of the total income. However, Mr. Bhandare 's contention is that this was only a concessional rate and not the normal rate which was prescribed under Clause (ii) of the above Paragraph 1(A) (2). The point pressed into argument is that this ten per cent concession in the tax rate was given to Industrial Companies with a view to promote development of Industry and, as such, must be deemed to be a "relief" or "rebate" in the payment of direct tax of the kind contemplated by Section 7(e) of the Act. Reliance for this contention has been placed on the speech of the Finance Minister on the Budget of 1966 67, wherein he proposed to provide "certain reliefs" which he considered "necessary for providing a suitable climate of growth", and, in that context, described the rate of 55% tax on Industrial Companies as a "concessional rate". We are afraid what the Finance Minister said in his speech cannot be imported into this case and used for the construction of Clause (e) of Section 7. The language of that provision is manifestly clear and unequivocal. It has to be construed as it stands, according to its plain grammatical sense without addition or deletion of any words. As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates, Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question. In the case before us, the language of Section 7(e) is crystal clear and self contained. It indicates in unmistakable terms that the 'rebate or relief ' in the payment of any direct tax in order to fall within the purview of this clause must satisfy two conditions, viz., (i) that it must be a rebate or relief "allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act", and further, (ii) that it must be a relief or rebate for the development of any Industry. In the present case, condition (i) is lack ing. The Finance Act, 1966, does not say that this difference of 10per cent in the rates of tax applicable to an Industrial Company and any other Company is to be deemed to be a rebate or relief for the development of Industry. Nor has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes. 546 The High Court was, therefore, right in holding that it was not ,permissible to use the speech of the Finance Minister to construe the clear language of the statute,. For the forgoing reasons the question posed above is answered in the negative and the appeal is dismissed. As regards the costs, the delay in payment of the bonus caused by the pendency of this appeal has been amply compensated vide this Court 's order dated February 17, 1972, which is to this effect "The order of ex parte stay is made absolute on the condition that the petitioner appellant shall pay six percent interest on any amount that is found payable by the appellant to the respondent workmen from the date the award become enforceable till the disposal of the appeal in this Court, in case the appeal fails in this Court. " The appeal has been heard ex parte, we therefore make no order as to costs. P.B.R. Appeal dismissed.

Section 7 of the Bonus Act provides as to how the direct tax payable by an employer is to be calculated for the purpose of computing the available surplus. Clause (e) of section 7 enacts that no account shall be taken of any 'rebate ' or 'relief ' or deduction in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act for the development of any industry. in the case of an industrial company, which is not a company in which public ,arc substantially interested, the Finance Act. 1966 fixed the rate of income tax at 55% on so much of the total income as did not exceed Rs. ten lakhs, on the balance, if any, of the total income 60% and 65% in the case of any other ,company. In a dispute between its employees and the appellant, which is an industrial company the latter contended that for the purpose of computing the available surplus it was entitled to deduct direct tax at 65% and not 55% which was only a confessional levy amounting to a 'relief ' for the purpose of development. The Tribunal accepted the contention of the appellant. The High Court allowed the respondent 's writ petition under article 227 of the Constitution holding that the company being an industrial company could not claim deduction at a rate higher than 55% in calculating the available surplus. On appeal it was contended that the 10% concession in the rate was given to industrial companies with a view to promote development of industry and as such must be deemed to be a 'relief ' or 'rebate ' in be payment of direct tax contemplated by section 7(e) of the Bonus Act. Reliance for this had been placed on the speech of the Finance Minister on the budget for the year 1966 67. Dismissing the appeal, HELD : (1) The company being an industrial company with total income not exceeding rupees ten lakhs the rate of tax under paragraph 1(A)(2)(i) of the Finance Act. 1966 applicable to it was 55% and not 65% of the total income. [544H 545A] (2) The 'rebate or relief ' in the payment of any direct tax, in order to fall within the purview of section 7(e) of Bonus Act. must be a rebate or relief "allowed under any law for the time being in force relating. to direct taxes or under the relevant Finance Act. for the development of any industry" which is one of the conditions to be satisfied. In the present case it did not satisfy this condition. The Finance Act, 1966 did not say that this difference of 10% in the rate of tax applicable to an industrial company and any other company is to be deemed to be a rebate or relief for the development of industry. No, has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes. [545F H] 3 (a) It was not permissible to use the speech of the Finance Minister to construe the clear language of the statute. [545C D] (b) As a general principle of interpretation, where the words of a statute are ,plain, precise and unambiguous the intention of the Legislature has to be gathered from the language of the statute itself and no external evidence such as Parliamentary debate , Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more 543 than one meaning or shades of meaning that external evidence as to the evils. if any. which the statute was intended to remedy. or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question. [545D F]

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ivil Appeal No. 1201 of 1966. Appeal by special leave from the judgment and order dated June 24, 1965 of the Bombay High Court in Appeal No. 79 of 1963. F. section Nariman, K. D. Mehta and 1. N. Shroff, for the appellants. M. C. Chagla and A. K. Verma, for the respondents. The Judgment of the Court was delivered by Shah, J. Dadiba Hormusji Boatwalla was one of the eight partners of Messrs Meghji Thobhan & Company a firm of Muccadams and cotton brokers. Boatwalla died on February 20, 1957. By virtue of cl. 8 of the deed of partnership the business of the firm was continued by the surviving partners. Khorshed and Nariman widow and son respectively of Boatwalla obtained letters of administration to the estate of Boatwalla and commenced an action in the High Court of Bombay for an account of the partnership between Boatwalla and the surviving partners and for an order paying to the plaintiffs the amount determined to be due to Boatwalla at the time of his death. The suit was resisted by the surviving partners who will hereinafter be called ` the defendants '. Tarkunde, J., passed a preliminary decree declaring that qua Boatwalla the partnership stood 'dissolved on February 20, 1957, but not in respect of the surviving partners, and directed that an account be taken of the partnership upto February 20, 1957. Against that decree the defendants appealed under cl. 15 of the Letters Patent. In appeal the High 'Court modified the decree. The learned Judges held that the plaintiffs were not entitled to an account in the profits and losses of the firm after the death of Boatwalla, nor to exercise an option under section 37 of the Partnership Act, but that the plaintiffs were entitled only to interest at six per cent. per annum on the amount found due as Boatwalla 's share in the assets of the partnership including .the goodwill. They further declared that the interest of Boatwalla in the firm ceased on February 20, 1957, and deleted the direction with regard to the dissolution of the firm as between Boatwalla and the defendants. With special leave, this appeal has been filed by the defendants. The defendants contend that the plaintiffs as legal representatives of Boatwalla were not entitled to a share in the value of the goodwill of the firm because the goodwill of a firm may be taken into account only when there is a dissolution of the firm and in any event because Boatwalla had agreed that his interest in the goodwill shall cease on his death and the business shall 691 be continued by the surviving partners. The defendants do not challenge the decree of the High Court awarding to the plaintiffs Boatwalla 's share in the assets of the firm other than goodwill icy contend that in the goodwill of the firm the plaintiffs had to share. By section 14 of the Partnership Act, 1932, it is enacted that "Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm or acquired, by purchase or otherwise, by or for the firm or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business. " Goodwill of the firm is expressly declared to be the property of he firm. Counsel for the defendants relied upon section 55 of the Partnership Act which makes a provision with regard to sale of goodwill after dissolution. It is provided by sub section (1) of section 55 that : "In settling the accounts of a firm after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm. But it is not enacted thereby that goodwill may be taken into account only when there is a general dissolution of the firm, and not when the representatives of a partner claim his share in the firm, which by express stipulation is to continue notwithstanding the death of a partner. Nor do sections 39, 42 and 46 which were relied upon by counsel for the 'defendants support that contention. Under section 39 the dissolution of partnership between all the partners of a firm is called the "dissolution of the firm"; and by section 42 a firm is said to be dissolved subject to the contract between the partners on the happening of certain contingencies. Section 46 provides that on the dissolution of a firm every partner or his representative is entitled as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights. These provisions deal with the concept and consequences of dissolution of the firm : they do not either abrogate the terms of the contract between the partners relating to the consequences to ensue in the event of the death of a partner when the firm is not to stand dissolved by 692 such death, nor to the right which the partner has in the, assets an( property of the firm. The Partnership Act does not operate to extinguish the right in the assets of the firm of a partner who dies when the partnership agreement provides that on death the partnership is to continue. In the absence of a term in the deed Of partnership to that effect, it cannot be inferred that a term that the partnership shall continue notwithstanding the, death of a partner will operate to extinguish his proprietary right in the assets of the firm. Clause 8 of the deed of partnership reads as follows "This partnership shall not be dissolved or determined by the death of any of _the parties hereto but the same shall be continued as between the surviving part:ners on the same terms and conditions but with such shares as shall then be determined. " Mr. Nariman says that goodwill is nothing but the right to the name, the place of business and the reputation of the firm, and when all these components of the right by express agreement between the partners devolve upon the surviving partners '. it follows that. the share of the deceased partner in the goodwill of the firm devolves upon the surviving partners and not upon his legal representatives. The goodwill of a business is however an intangible asset being the whole advantage of the reputation and connections formed with the customers together with the circumstances which make the connection durable. It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years because of its reputation, location and other features. An agreement between the partners that the name, the place of business and the reputation of the firm are to be utilised by the surviving partners will not necessarily warrant an inference that it was intended that the heirs of the deceased partner will not be entitled 'to a s hare in the goodwill. Our attention was invited to Hunter vs Dowling( '); Smith vs Nelson(2); and Bachubai and L. 'A. Watkins vs Shamji Jadowji(3).The first two cases proceed upon the interpretation Of certain clauses in partnership Agreements It was inferred in those cases from the terms of the agreement that the right in the goodwill of a partner in a firm dying or retiring shall not survive to ' his legal representatives. Bachubai and L. A. Watkin 's case(") arose out of a case in which in the partnership agreement it was provided that (1) (2) 96 Law Times Reports. (3) 1. L. R. 9 Bom . 536. 694 the firm shall be the agents of a company: carrying on business as a manufacturer of cotton textiles so long as the firm carries on business in Bombay, or until the firm should resign. The firm were appointed the agents of the Corn any and continued to act as agents. One of the, partners died, and a representative of the partner filed a suit,. claiming a certain share in the assets of the firm including the goodwill. It was observed by Sargent, c. J,in rejecting the claim of the plaintiff to a share in the goodwill of the business as an asset of the firm, that "Assuming_ (which may well be doubted) that the term "goodwill" is applicable to a business of this nature, it is plain that it is attached to the name of the firm which, by the partnership agreement itself is to be used by the surviving partners, or partner for their own benefit. Such an arrangement between the partners must take away all value from the goodwill; even if it be not, as Mr. Justice Lindley in his Treatise on Par tnership, p. 887, (3rd ed.), considers it to be inconsistent. with its being an asset at all" The, learned Chief Justice expressed a doubt presumably relying upon old. English decisions that the goodwill of a firm may not be an asset at all. These observations do not set out any rule, of interpretation of a deed 'of partnership. But the question is now settled by statutory enactment. Under the Partnership Act, 1932, it is expressly declared that the goodwill of a business is ' an asset. Whether the goodwill has any substantial value may be determined on the facts of each case. We are unable to agree with Mr. Nariman that in interpreting a deed of partnership, business whereof it is stipulated shall be continued by the surviving partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the absence of an express stipulation to the contrary. The goodwill of a firm is an asset. In interpreting the deed of partnership, the Court will insist upon some indication that the right to a share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished. In the absence of a provision expressly made or clearly implied, the normal rule. that the share of a partner in the assets devolves upon his legal representatives will apply to the goodwill as well as to other assets. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

D who was one of eight partners in a firm, died on February 20, 1957. By virtue of a provision in the partnership deed, the business of the firm was continued by the surviving partners. The respondents, being the widow and son of D commenced an action for an account of the partnership between D and the surviving partners, praying for an order for the payment of the amount determined to be due to D at the time of his death. A single judge of the High Court passed a preliminary decree directing that an account be taken of the partnership as on February 20, 1957. A Division Bench, in appeal, modified the decree holding that the respondents were entitled only to interest at 6 % p.a. on. the amount of D 's share in the assets of the partnership, including good will. In appeal to this Court it was contended on behalf of the appellants that the respondents as legal representatives of D were not entitled to a share in the value of the good will of the firm because good will may be taken into account only when there is a dissolution and not otherwise; and. furthermore, because D had agreed that his interest in the good will would cease after his death and the business shall be continued by the _surviving, partners. HELD : Dismissing the appeal, It could not be held that in interpreting a deed of partnership, business. whereof, it is stipulated shall be continued by the surviving I partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the absence of an express stipulation to the contrary. The good will of a firm is an. asset of the firm. In interpreting the deed of partnership, the Court will insist upon, some indication that the right to a share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished. In the absence of a provision expressly made or clearly implied, the normal rule that the share of a partner in the assets devolves upon his legal representatives will apply to the good will as well as to other assets. [693 F H] There is no indication in section 55 of the Partnership Act that goodwill may be taken into account only when there is a general dissolution of the firm,. and not when the reprensentatives of a partner claim his share in the firm, which by express stipulations is to continue not with standing the death of a partner. Nor do sections 39, 42 and 46 of the Act support such a contention.[691 F] Hunter vs Dowling, [18951 ; Smith vs Nelson 96 Law Times Reports 313; Bachubai and L. A. Watkins vs Shamji Jadowji, I.L.R. ; referred to. Cl/70 14. 690

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Civil Appeal No.655 of 1986. From the Judgment and Order dated 23.4.1984 of the Delhi High Court in Letters Patent Appeal No.25 of 1984. M.K.Ramamurthy, Ms section Pappuh, B.P.Singh, Rishi Kesh, Raj Birbal, Sanjeev Sabharwal, B.R.Sabharwal and M.M. Kashyap for the appearing parties. S.S.Harlakha appeared in person. S.S.Onkarmal appeared in person for the Intervener. The Judgment of the Court was Delivered by K. Ramaswamy, J. In this appeal by special leave, by way of additional grounds with leave, the appellant impugnes Rule 5 of the Orissa Insurance Co operative Society Ltd. Service Rules (for short "the Rules") as unconstitutional and void offending Article 14 of the Constitution of India. The material facts relevant to the point are that while the appellant was working as Divisional Manager at Delhi, the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance (Emergency Provisions) Ordinance, 1971 replaced by Act 57 of 1972 (for short "the Act") and vested in the custodian of the New India Assurance Co. Ltd., the management of Orissa Insurance Co operative Society Ltd. By operation of s.7 of the Act, the services of the appellant and others stood transferred and vested with the custodian. Under the Act, the Board of Directors was empowered to terminate the service of the officer/employee of the insurer. The appellant was kept under suspension from August 9,1973 pending investigation into the embezzlement, Explanation was called for on October 16, 1973. in response thereto the appellant submitted his reply on december 7, 1974. While dropping the 223 proceeding, the appellant was served with termination order dated April 17,1975 issued by the respondent. The appellant challenged it in a writ petition in Delhi High Court which was dismissed by a learned Single Judge on November 11, 1983 and was confirmed by the Division Bench in Letter Patent Appeal No.351/1984 dated April 23, 1984. Section 7 of the Act provides that every whole time officer or other employee of an existing insurer employed in connection with his General Insurance business, immediately before the appointed day, shall become an officer/employee of the Indian Insurance Co. in which the undertaking of the insurer to which the service of the officer relates has vested and would hold his office on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him, if there had been no such vesting and shall continue to do so unless and until his appointment is terminated. Section 16(1) in Chapter V provides that if the Central Govt. is of the opinion that for the more efficient carrying on of General Insurance business, it is necessary to do so, it may by notification, frame one or more schemes providing for all or any of the following matter; (e) the rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary. Pursuant thereto, the central Govt. framed the New India Assurance Co. Ltd Merger Scheme, 1973 with effect from December 31, 1973. Thereunder by Rule 3, the undertaking was transferred to the respondent; under Rule 5 the existing whole time officer etc. became the officer of the transferee company (New Indian Assurance Co. Ltd) and could hold his office on the same terms and conditions as would have been admissible to him if there had been no such transfer, as referred to in paragraph 3. He shall continue to remain an officer unless and until his employment, in the transferee company is terminated or the terms and conditions are duly altered by any other scheme framed under the Act. By notification dated April 29, 1976 the Central Govt. also framed the scheme called the General Insurance (Rationalisation of pay scales and other Conditions of Service of Development Step) Scheme, 1976 which came into force on May 1, 1976, the details of which are not material for the reason that service of the appellant was terminated , in terms of the existing rule 5 of the Rules. Suffice to state that pursuant to the nationalisation under the Act and Scheme, the appellant became the officer of the respondent. Rule 5 read thus: Termination of Service: 224 "An employee whether permanent or temporary shall not leave or discontinue his service in the Society without first giving 30 days notice in writing of his intention to do so, to the Principal Officer, Failure to do so will entail forfeiture of the pay of the month. In the event of the Society not having any further need of any employee 's service whether permanent or temporary, which shall be decided by the Board, the Principal Officer shall give 30 days ' notice in writing for termination of his service or in lieu thereof pay such employee a sum equivalent to his one month pay including allowance upto the termination of the period of notice by way of compensation provided that nothing in these rules shall affect the rights of the society to dismiss an employee under Rule 8 for misconduct etc. without any notice or salary in lieu of notice, in the manner prescribed in these rules. An employee shall ordinarily retire from the Society 's services on completion of his 55th year unless the Board reserves to continue him in office of such period as may be determined from time to time. " It is thus manifest that an employee, whether permanent or temporary, has an option to leave or discontinue by giving 30 days ' notice in writing of his intention to do so. His failure thereof shall entail forfeiture of the pay of the month. The employee ordinarily would be superannuated on completion of his 55th year unless the Board continues him for an extended period as may be determined from time to time. Equally in the event of the Society not having any further need of the employee 's service, whether permanent or temporary, which should be decided by the Board, the Principal Officer shall give 30 days ' notice in writing for termination of his service or in lieu thereof, pay one month 's salary including allowances upto the period of termination. The respondent also has the right to dismiss an employee, under Rule 8, for misconduct in the manner prescribed in the Rules. Admittedly, though action was initiated against the appellant for the charges of embezzlement etc. which are misconduct, the charges were dropped. Taking aid of Rule 5 and without conducting an enquiry or giving an opportunity, the appellant 's service was terminated by tendering one month 's salary in lieu of notice and also a direction to pay all the allowances upto that date including the period of his suspension. It is not necessary to go into the grounds taken in the High Court assailing the invalidity of the termination order as they are not pressed before us. Sri Ramamurthy, the learned Senior counsel for the appellant placing reliance on the ratio of the majority view in D.T.C. vs D.T.C Mazdoor Congress & Ors., 225 Judgment today contended that Rule 5 is ultra vires of Article 14 of the Constitution. Shyamala Pappu, the learned Senior counsel for the respondent contended that unlike Rule 9 in D.T.C 's case Rule 5 provides guidelines. The Board of Directors have to take a decision, whether the need to continue the employee 's service subsists which would be based on the relevant material. Thereby, there would be objective consideration before taking a decision, not only regarding the need to continue the post but also the services of the officer or the employee. Though the rule does not provide for prior notice, post decisional opportunity would be read into the rule. If so read, the rule is not ultra vires Article 14. In our view the ratio in D.T.C. 's case has no application. Rule 9 of the rules of Delhi Transport Corporation Service Regulation gives naked power to terminate the services of a permanent employee by giving one month 's notice or pay in lieu thereof. It was not the contention therein, that the rule was capable of two constructions. It is settled law that there is a presumption of constitutionality of the rule. The court ought not to interpret the statutory provisions, unless compelled by their language, in such a manner as would involve its unconstitutionality, Since the legislature of the rule making authority is presumed to enact a law which does not contravene or violate the constitutional provisions. Therefore, there is a presumption in favour of constitutionality of a legislation or statutory rule unless ex facie it violates the fundamental rights guaranteed under Part III of the constitution. If the provisions of law or the rule is construed in such a way as would make it consistent with the constitution and another interpretation would render the provision or the rule unconstitutional, the court would lean in favour of the former construction. In view of this settled legal position, the question emerges whether the language in Rule 5 would be capable to be construed consistent with the fundamental rights in Part III. As stated earlier, the phrase "in the event of the Society not having any further need of any employee 's service whether permanent or temporary which shall be decided by the Board" is susceptible of two interpretations. The one interpretation put up by Sri Ramamurty is that the Board may unilaterally and arbitrarily decide that there is no need for the services of a particular employee, in given facts and circumstances, though the post which the employee is occupying may continue and would be put to an end by giving one month 's notice or pay in lieu thereof. In that event the rule per se is arbitrary offending Article 14. The other view capable to be construed from the language employed would be that the Board of Management may form an objective opinion, on the basis of the material, that the post which the officer or the employee is occupying no longer is in need. Thereby, the post would be abolished. This would be a policy decision depending on the exigencies. In consequences the service of the employee also would become 226 redundant or surplus. In that event his service would no longer be needed. The officer or employee may be permanent or temporary but the absence of the need for the continuance of the post would necessitate to terminate the service of an employee or officer. It must not be a pretext or a rouse to get rid of the service of an inconvenient officer or of an employee. If that be so. it would become colourable exercise of power and would be liable to be quashed as offending Article 14. Once the Board reaches a decision to abolish the post, in consequence the service of the officer/ employee occupying couched in Rule 5 also is capable of that interpretation. In that light we are of the opinion that Rule 5 does not become arbitrary. unreasonable or void offending Article 14. Accordingly, we hold that the rule is valid. But from the facts, it is clear that the Board of Management did not abolish the post but put an end to the service of the appellant. Obviously due to loss of confidence as his honesty and integrity became suspicious and his continuance in service was felt inexpedient and not in the interest of the business of the respondents. But Rule 8 was available for taking action for misconduct but was not availed. Therefore, the impugned order terminating the services of the appellant is illegal. What would be the consequence? Normally the appellant is entitled to reinstatement but in our view the ends of justice would be met by directing the respondent to pay him Rs. 1,00,000 as compensation, instead of reinstatement and further continuance in service. The compensation awarded would be staggered between the year 1973 till date for the purpose of income tax and given the appropriate relief. In this view it is not necessary to deal with other contentions or decisions cited across the bar. Before parting with the case it is necessary to mention that march of service jurisprudence necessitates the respondent to recast the rules in tune with the constitution and the law. The appeal is allowed but without cost. The intervention application filed by Sri S.S. Onkarmal Harlalka is dismissed. S.B. Appeal allowed.

While the appellant was working as Divisional Manager at Delhi, the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance (Emergency Provisions) Ordinance, 1971 which was replaced by Act 57 of 1972 and vested in the Custodian of the New India Assurance Co. Ltd. the management of Orissa Insurance Co operative Society Ltd. By operation of Section 7 of the Act the services of the appellant and others stood transferred and vested with the custodian. The appellant was kept under suspension from August 9,1973 pending investigation into charges of embezzlement. Explanation was called for on October 16,1973 and the appellant submitted his reply on December 7, 1974, While dropping the proceeding, the appellant was served with a termination order dated april 17, 1975 issued by the respondent. The appellant challenged the aforesaid termination order in a writ petition in Delhi High Court which was dismissed by a Single Judge on November 11,1983 and this judgment was confirmed by the division Bench in a Letter Patent Appeal. In the appeal to this Court it was contended on behalf of the 221 appellant placing reliance on the majority view in D.T.C vs D.T.C Mazdoor Congress & Ors. judgment Today 1990(3) SC 725 that Rule 5 of the Orissa Insurance Co operative Ltd. services Rules is ultra vires of Article 14 of the Constitution. On behalf of the respondent it was contended that unlike Rule 9 involved in D.T.C 's case, Rule 5 in the instant case provided guidelines, and that the Board of Directors had to take a decision, whether the need to continue the employee 's service subsists which would be based on relevant material and thus there would be objective consideration before taking a decision, not only regarding the need to continue the post but also the services of the Officer or the employee, and if so construed the rule is not ultra vires of article 14. Allowing the appeal, this Court, HELD: Rule 5 of the Orissa Insurance Co operative Society Ltd. is capable of the interpretation that the Board of management may form an objective opinion, on the basis of material, that the post which the officer or the employee is occupying is no longer in need and that the post would be abolished. This would be a policy decision depending on the exigencies. Once the Board reaches such a decision to abolish the post, in consequence the service of the officer/employee occupying the post could be terminated. Viewed in that light the said rule does not become arbitrary, unreasonable or void offending Article 14 and therefore the rule is valid. [225G 226 B] There is a presumption in favour of constitutionality of a legislation or statutory rule unless ex facie it violates the fundamental rights guaranteed under Part III of the constitution. If the provisions of a law or the rule is construed in such a way as would make it consistent with the Constitution and another interpretation would render the provision or the rule unconstitutional, the Court would lean in favour of the former construction. [225 E] It is clear in the instant case, that the Board of Management did not abolish the post but put an end to the service of the appellant, obviously due to loss of confidence as his honesty and integrity became suspicious and his continuance in service was felt inexpedient and not in the interest of the business of the respondents. But rule 8 was available for taking action for misconduct but was not availed. Therefore, the order terminating the services of the appellant is illegal. [226 C] 222 Normally the appellant is entitled to reinstatement but the ends of justice would be met by directing the respondents to pay him Rs. 1,00,000 as compensation, instead of reinstatement and further continuance in service. The compensation awarded would be staggered between the year 1973 till date for the purpose of income tax and given the appropriate relief. [226D E] March of service jurisprudence necessitates that the respondent recast Rule 5 in tune with the Constitution and the law. [226 E]

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tition Nos. 5600, 5601, 5615, 5689 5697 and 6283 6307/1980. (Under Article 32 of the Constitution) Soli J. Sorabjee, O.N. Tikku, E.C. Aggarwala, M.L. Bhatt, R. Satish, and V.K. Pandita for the Petitioners in W.Ps. 5600 01,5615 & 5689 97/80. M. K. Ramamurthy, Miss R. Vaigai, Joginder Singh and J. Ramamurty for the Petitioners in WPs. 6283 6307/80. S.N. Kacker and Altaf Ahmed for the Respondents in all the Writ Petitions. The Judgment of the Court was delivered by PATHAK J. The petitioner challenges the admission of a number of candidates to the M.B.B.S. course in the Government Medical College Srinagar for the session 1980 81. The petitioner, who had also applied for admission, was denied it. She contends that the criteria adopted in granting admission, is discriminatory, unreasonable and void. The Principal, Government Medical College, Srinagar invited applications by 3rd April, 1980 for admission to the M.B.B.S. course for the session 1980 81, and the notice specified the qualifying examinations of the Board of Secondary Education, Kashmir, or any other equivalent Board or University which constituted the basis of eligibility. The manner and procedure governing the eligibility for admission had been set forth in a Government order 37 of 3rd April, 1978, which laid down that a Selection Committee constituted by the Government would determine the inter se merit of eligible candidates on the basis of an interview for judging their (a) physical fitness, (b) personality, (c) aptitude, (d) general knowledge and (e) general intelligence. This Government order was modified by a subsequent Government order dated 23rd June, 1980 and in the result eligible candidates were now required to appear not only in the viva voce examination but also in an objective test. These two tests along with merit in the qualifying examination of the Board or University constituted the three elements which together combined to form a basis for Selection. The qualifying examination carried 35 marks, the objective test was allotted 35 marks and the viva voce examination was assigned 30 marks. Besides the examination base constituted by the aforesaid three criteria, the selection was also determined by a distribution of the seats into three distinct divisions. Of the total number of seats 50% were earmarked for being filled on the basis of open merit, 25% were reserved for candidates from Scheduled Castes and other reserved categories, one of which was broadly described as "socially and educationally backward classes" and included candidates from (a) areas adjoining actual line of control, and (b) area known as bad pockets including Ladhak. After selection had been made as above the remaining 25% of the seats were to be filled "on the basis of inter se merit to ensure rectification of imbalance in the admission for the State, if any, so as to give equitable and uniform treatment to those parts". It was also recited that in case there was no "visible imbalance", the seats earmarked under that head were to be distributed among further "open merit" candidates. On 27th June, 1974, the percentage of seats reserved for the different categories was refixed, so that 60% of the seats were now earmarked for admission on the basis of "open merit", 20% for distribution among candidates from the Scheduled Castes and other reserved categories including socially and educationally backward classes, and the remaining 20% of the seats were earmarked for "ensuring rectification of imbalances". Still another order dated 21st April, 1976 reduced the reservation for removing regional imbalances from 20% to 18%. The selection of candidates for admission to the Government Medical College, Jammu for the academic year 1979 80 was challenged in this Court in Nishi Maghu vs State of Jammu and Kashmir(1) 38 and the Court held that "the classification made for rectification of regional imbalance without identifying the areas suffering from imbalance was vague and the selections made under that head were accordingly invalid". The Court directed that the seats reserved under that head should be added to the quota of seats earmarked for selection on the basis of merit and filled accordingly. Thereafter, in an attempt to remove the deficiency pointed out by this Court in Nishi Maghu (supra), the State Government published Notification No. 41 GR of 1980 dated 24th September, 1980 purporting to identify certain villages as socially and educationally backward for applying the principle of "rectification of imbalance in different parts of the State". A long schedule (covering over 60 pages of the record before us) was annexed and listed some hundreds of villages. About the same time, a Government order was issued fixing 17% of the seats in the M.B.B.S course of the medical colleges of the State as the admission quota for the purpose of "rectification of imbalances. " From 14th to 17th July, 1980, as many as 660 candidates were interviewed by a Committee at Srinagar by way of viva voce examination. On 21st July, 1980 the State Government issued a directive that a total list of 125 candidates be prepared against all the seats of the two Government Medical Colleges, at Srinagar and at Jammu. A Selection List was finalised taking into account the reservations made for various categories and classes by the different Government orders, and was published on 29th September, 1980, and the names of 75 candidates were announced for admission to the M.B.B.S. course to the Government Medical College, Srinagar. The principal contention of Mr. Soli Sorabjee appearing for the petitioner in Writ Petition No. 5600 of 1980, is that notwith standing this brave attempt to meet the constitutional requirement indicated in Nishi Maghu (supra) the State Government has failed in its purpose. It is urged that there was no material before the State Government affording a pertinent basis for classifying these villages. It is pointed out that almost whole tehsils of different districts have been identified as socially and educationally backward, `bad pockets ' and areas belonging to the line of actual control have been included and in the result with more than 95 per cent of the villages classified as socially and educationally backward, the inference must be that almost all 39 of Kashmir Division calls for a reservation quota. It is asserted that a portion of Srinagar city, which includes Sangin Darwaza and Bhagwanpure, has also been identified as socially and educationally backward. To that class have also been added towns where Notified Area Committees exist. The submission is that the classification is wholly arbitrary and without any foundation to sustain it. The mere circumstance, it is urged, that the classification is defined on the basis of villages without anything more demonstrates its unconstitutional character. The case of the State Government is that the classification fully satisfies the criterion "social and educational backwardness". In proof of the assertion it is pointed out that the present selection shows that candidates from areas not included in this classified category have taken 66 seats out of 75 on the basis of open merit. It is conceded that a large number of villages have been included in the classification, but it is pointed out that the greater bulk of the population resides in the two cities of Srinagar and Jammu alone and would be equivalent to the population of hundreds of villages taken together. The classification is supported by the consideration that in the nature of things the inhabitants of the rural areas are socially and educationally backward. It is urged that merely because some of the villages are administered by Notified Area Committees does not remove the stigma of backwardness. It is admitted that two reports, popularly described as the Anand Committee report and the Sikri Commission report, are under consideration by the Government but, it is said, as a comprehensive appreciation of the situation disclosed by the two reports of all the aspects of social and educational backwardness in the State has not been made yet, the Government has proceeded "in its own wisdom" to identify the areas suffering from regional imbalance. We are of opinion that the classification attempted by the State Government by its order dated 24th September, 1980 suffers from the vice of arbitrariness and must be declared invalid. There is no intelligible data before us for sustaining the classification. No doubt the State Government has acted in its own wisdom, but the material to which that wisdom was applied has not been disclosed at all. The fact by itself that some hundreds of villages have been brought within the classification is of no assistance whatever. Over six years ago, this Court in State of U.P. vs Pradip Tandon(1) ruled that in the matter of admission of students to medical colleges 40 a reservation in favour of candidates on the ground that they hailed from rural areas was unconstitutional. The Court repelled the argument that it was necessary to reserve seats for candidates from rural areas because they were handicapped in the matter of education. It also rejected the plea that as the number of marks obtained by candidates from rural areas in the qualifying test were much lower than the marks obtained by the general candidates that was an indication of the former 's educational backwardness. Ray, C.J., speaking for the Court, observed: "The reservation for rural areas cannot be sustained on the ground that the rural areas represent socially and educationally backward classes of citizens. This reservation appears to be made for the majority population of the State 80 per cent of the population of the State cannot be a homogeneous class. Poverty in rural areas cannot be the basis of classification to support reservation for rural areas. " The criterion adopted by the State Government cannot be accepted unless supported by other relevant considerations. That a comprehensive understanding of regional imbalances from the Anand Committee report and the Sikri Commission report has not been possible yet affords no justification for an arbitrary classification. We are not satisfied that the State Government has succeeded in bringing the case within Article 15 (4) of the Constitution. The material before us is woefully inadequate and fails to sufficiently support the validity of the classification. We are of opinion that the order of the State Government dated 24th September, 1980 must be declared invalid. The next contention on behalf of the petitioner is that the allocation to the viva voce test of 30 per cent of the total marks is patently unreasonable and arbitrary. Our attention has been drawn to the observations of this Court in Ajay Hasia vs Khalid Mujib(1) where an allocation of more than 15 per cent of the total marks for the oral interview was regarded as arbitrary and unreasonable and liable to be struck down as constitutionally invalid. It seems to us that the State Government would have done well to apply its mind seriously to the evaluation ratio between the three criteria adopted for admission. When the Government order of 23rd June, 1980 dividing the total marks between the three criteria was issued, there 41 was ample evidence of the principle and practice adopted by examining bodies of high repute and status in the country. The marks ratio adopted by the Union Public Service Commission provided wise example. Besides, almost 10 years before this Court in A. Peeriakaruppan, etc. vs State of Tamil Nadu & Ors. had expressed its disapproval of the ear marking of 75 marks for the interview test out of 275 marks. And before the selection process was taken in the present case this Court had already observed in Nishi Maghu (supra) that reserving 50 marks for the interview out of a total of 150 marks appeared excessive, especially when the time spent was not more than 4 minutes on each candidate. This precisely is what happened here, because on the case of the State Government itself the average time devoted to the oral interview of each candidate was 4 minutes. However, we are reluctant to interfere on this ground because a clear pronouncement that an allocation of more than 15% of the total marks to the viva voce examination would result in constitutional invalidity has been made only recently, in Ajay Hasia (supra), by this Court and that was after the selection process in the present case had already been taken. We would prefer to impress on the State Government that there is need to revise the marks ratio because of the very real risk future selections will face on this score. The next contention for the petitioner is that having regard to the number of candidates interviewed and the time applied to conducting the interview no more than two minutes or so could have been given on the average to the oral interview of each candidate, a period demonstrating, in the submission of learned counsel, that the selection process was conducted in a perfunctory manner and there was no real application of the mind to the selection of candidates. The State Government maintains that the time spent was four minutes per candidate. We have given the matter our anxious consideration, and we are unable to hold that there is adequate material for striking down the selection on this ground. But here again the State Government would do well to note the observations made by this Court in Ajay Hasia (supra) in this matter, and to ensure that Selection Committees take care to devote sufficient time to the oral interview of individual candidates having regard to the several relevant considerations which must enter into their judgment respecting each candidate. 42 We are also told by the petitioner that the composition of the Interview Committee varied from time to time during the interviews. Therefore, it is said, the selection stands vitiated. It is alleged that while one member, Shri N.S. Pathania, Principal, Medical College, Jammu joined the Committee some time after the interviews had begun, another member, Shri B.R. Kundal, Deputy Commissioner, Udhampur was present during a part of the proceedings only and left thereafter. In regard to Shri N.S. Pathania, it is not possible to say that his joining with a slight delay has materially affected the validity of the proceedings. And as regards Shri Kundal, it appears that he was present on the 14th July, 1980 and according to the petitioner, left on the morning of the next day. It will be noticed that all the members of the Committee except Shri Kundal were persons closely associated with medical education. Shri B.R. Kundal was Deputy Commissioner of Udhampur. We also do not know what was the mode of functioning employed by the Committee, whether it was such as to invalidate the proceedings if one of the members ex necessitas, was unable to participate throughout in them. The respondents maintain that at least three out of four members remained present throughout the proceedings. And according to the petitioner, a proportionately small number only of the candidates was interviewed when Shri Kundal was present. In all the circumstances, we find it difficult to say that Shri Kundal 's absence from the Committee vitiated its proceedings. Shri Soli Sorabjee then contends that a number of candidates were selected for admission because of favouritism on account of relationship or friendship with members of the Selection Committee or because they were related to important and influential persons in the State. The allegations have for the most part been made for the first time in the rejoinder affidavit and there has been no reasonable opportunity to the respondents to reply to them. Such allegations on this point as are contained in the writ petition are extremely vague and sketchy, and can form no basis for a finding in favour of the petitioner. There is one more contention, and that is that the respondents Nos. 7 to 12 did not apply for admission to the Principal, Government Medical College, Srinagar, and even if they are found to have done so their applications must have been submitted beyond the time prescribed as the qualifying examination in which they appeared was held late and the results were announced after the date prescribed for submitting the applications at Srinagar had expired. It 43 appears from the record before us that inasmuch as the relevant examination was held late and the announcement of the results was delayed the State Government permitted the candidature of these applicants to be considered for inclusion in a common list drawn up to cover candidates for admission to either of the Government Medical Colleges, at Srinagar and at Jammu. Besides, it is conceded by the petitioner that those respondents have an excellent record and if they had applied in time for admission to the Government Medical College, Srinagar, they would certainly have been admitted on the basis of their merit. In the circumstances, we do not propose to interfere with the grant of admission to those respondents. Accordingly, the only relief which, in our judgment, should be awarded to the petitioner is the quashing of admissions granted in the quota reserved for rectifying regional imbalances. In consequence, those seats must be filled up on the basis of open merit. Writ Petitions Nos. 5601 of 1980, 5615 and 5689 to 5697 of 1980, which proceed on the same lines as Writ Petition No. 5600 of 1980, must be disposed of in like manner. The remaining cases, Writ Petitions Nos. 6283 to 6307 of 1980, fall in a separate category. The petitioners here challenge the selection of candidates for admission to the M.B.B.S. course in the Government Medical College, Jammu for the year 1980 81; and complain of the denial of admission to them. The facts on which these writ petitions have been brought and the grounds on which they claim relief are substantially the same as in Writ Petition No. 5600 of 1980. Indeed, Shri M.K. Ramamurthi, learned counsel for the petitioners, states at the outset that he adopts the submissions urged in that case against the validity of the admissions granted for the purpose of rectification of regional imbalances, in regard to the invalidity alleged by the assigning of 30% marks to the viva voce examination and also in regard to the legal effect on the interview proceedings of the absence of some members of the Selection Committee during part of the proceedings. These points have been considered and disposed of by us in that writ petition, and those findings are of equal validity in these writ petitions also. Besides this, learned counsel for the petitioners raises other contentions. He urges that the selections made are not in accordance with the Regulations framed by the Indian Medical Council under section 33 read with section 19A, and therefore violate the fundamental right of the petitioner guaranteed 44 under Article 15 of the Constitution. It is contended that the Regulations are law and are enforceable in a court, and that if they are to prevail the only reservation permissible is that in favour of Scheduled Castes and Scheduled Tribes. According to the Regulations, it is asserted, a Selection Committee can either take into consideration the marks obtained in a qualifying examination or in the competitive test. Nor, it is said, can a viva voce examination be permitted as a vehicle for selection. The validity of holding a separate objective test is also assailed as also of assigning 35% of the total marks to it. The merit test is challenged on the ground that no curricula have been prescribed in relation thereto Objection to the objective test and the viva voce examination is based on the ground that they fall outside the scheme envisaged by the Regulations made by the Indian Medical Council for admission to the M.B.B.S. course. The respondents, however, question the validity of the Regulations. We are then referred by the petitioners to clauses (j) and (I) of section 33, in support of the contention that the power of the Council to make regulations extends to making regulations prescribing the examinations and tests for admission. It seems to us prima facie that those provisions do not authorise the Council to do so. But we refrain from expressing any final opinion in the matter as the Council is not a party before us. We are also not satisfied that the reservations permissible must be confined to Scheduled Castes and Scheduled Tribes. Nor do we find sufficient basis in the submission that there is arbitrariness in providing for 35 marks to a separate objective test in addition to the 35 marks earmarked for the qualifying examination. The grounds taken before us do not justify the conclusion that a competitive entrance examination is not permissible in law in addition to the qualifying examination. In regard to the sufficiency of the objective test, we are not satisfied that the absence of a prescribed formal curriculum vitiates the objective test. The next contention on behalf of the petitioners is that the presence of a Government official on the Selection Committee vitiates its constitution. It is stressed that the viva voce test to be acceptable should be conducted by persons who are men of high integrity, calibre and qualifications. There is no principle of law, so far as we know, disqualifying a Government official from participating on the Interview Committee merely because he is a Government official. Nor do we believe that a Government official cannot be a person of high integrity, calibre and qualifications. The constitution of a 45 Committee lies in the wisdom of the State Government and it is expected that men suitably qualified in every respect will be appointed to discharge the functions of the Committee. So long as the State Government acts bona fide and on the basis of relevant considerations it is not possible to say that the appointment of a Government official is obnoxious to the law. In the result, the writ petitions are allowed insofar that the selection of candidates for admission to the M.B.B.S. course of the Government Medical Colleges at Srinagar and at Jammu for the year 1980 81 made on the basis of rectifying regional imbalances is quashed and the respondents are directed to fill up those seats on the basis of open merit. The candidates who will be displaced in consequence have already completed a few months of study and in order to avoid serious prejudice and detriment to their careers it is hoped that the State Government will deal sympathetically with their cases so that while effect is given to the judgment of this Court the rules may be suitably relaxed, if possible by a temporary increase in the number of seats, in order to accommodate the displaced candidates. In the circumstances, there is no order as to costs. S.R. Petitions allowed.

Selection of candidates to be admitted to M.B.B.S. course in the Medical College of the State of Jammu & Kashmir was made by a Selection Committee on the basis of (a) merit in qualifying examination (35 marks) (b) an objective test (35 marks) and (c) a viva voce test (30 marks). The seats were distributed besides the examination base was determined by a distribution of the seats into three distinct divisions namely, (i) 60% on the basis of open merit; (ii) 20% on the basis of reservation for scheduled castes and other reserved categories, one of which was broadly described as "socially and educationally backward classes" which included candidates from (a) areas adjoining actual line of control and (b) areas known as "bad pockets", including Ladhak and (iii) 20% were reserved as seats to be filled "on the basis of inter se merit to ensure rectification of imbalance in the admission for various parts of the State, if any, so as to give equitable and uniform treatment to those parts". In Nishi Maghu vs State of Jammu and Kashmir, ; , the Supreme Court held that the selections made under the third category were invalid, inasmuch as the classification made for rectification of regional imbalance without identifying the areas suffering from imbalance was vague. The State Government, therefore, published Notification No. 41 G.R. of 1980 dated 24th September, 1980 purporting to identify certain villages as socially and educationally backward for applying the principle of "rectification of imbalance in different parts of the States". and reduced the distribution of seats in the Medical Colleges of the State under this category from 18 to 17% under this category. This order is challenged by the petitioner, an unsuccessful candidate in the selection made for admission to M.B.B.S. course for the year 1980 81. 35 Allowing the petitions, the Court ^ HELD: 1. The classification attempted by the State Government by its order dated 24th September, 1980 suffers from the vice of arbitrariness and is, therefore, invalid. There was no intelligible data before the Court for sustaining the classification. No doubt the State Government had acted in its own wisdom, but the material to which that wisdom was applied was not disclosed at all. The fact by itself that some hundreds of villages had been brought within the classification is of no assistance whatever. That a comprehensive understanding of regional imbalances from the Anand Committee report and the Sikri Commission report had not been possible yet affords no justification for an arbitrary classification. The State failed to bring the case within Article 15(4) of the Constitution. [39 G; 40 D] State of U.P. vs Pradip Tandon, ; applied. There is need to revise the marks ratio for the viva voce test because of the very real risk future selections would face on this score. The Government would also do well to ensure that Selection Committees take care to devote sufficient time to the oral interview of individual candidates having regard to the several relevant considerations which must enter into their judgment respecting each candidate.[41 D & G] A. Peeriakaruppan, etc. vs State of Tamil Nadu and Ors., [1971] 2 S.C.R. 430; Nishi Maghu vs State of Jammu and Kashmir, ; ; Ajay Hasia vs Khalid Mujib, ; , referred to. The selection cannot be said to be vitiated on the ground that one of the members, Shri Kundal, left after some time and therefore the composition of the Interview Committee varied from time to time, since three out of four members remained present throughout the proceedings and a proportionately small number only of the candidates was interviewed when Shri Kundal was present. [42 D E] 2: 3. The appointment of a Government official as a member of the Selection Committee is not obnoxious to the law. There is no principle of law disqualifying a Government official from participating on the Interview Committee merely because he is a Government official. It cannot be said that a Government official cannot be a person of high integrity, calibre and qualifications. The constitution of a Committee lies in the wisdom of the State Government and it is expected men suitably qualified in every respect will be appointed to discharge the functions of the Committee. So long as the State Government acts bona fide it cannot be said that the presence of a Government official on the Selection Committee vitiates its constitution. [44H, 45 A B] 2: 4. Selection of a number of candidates, in the present case, cannot be said to have been made because of favouritism on account of relationship or friendship with members of the Selection Committee or because they were related to important and influential persons in the State. Besides being sketchy and extremely vague, such allegations have been made for the first time in the rejoinder affidavit and there has been no reasonable opportunity to the respondents to reply to them.[42 F] 36 3. The grant of admission to respondents Nos. 7 to 12, in the instant case, is in order, inasmuch as the relevant qualifying examination was held late and the announcement of the results was delayed. The State Government correctly permitted the candidature of these applicants to be considered for inclusion in a common list drawn up to cover candidates for admission to either of the Government Medical Colleges, at Srinagar and at Jammu. Even according to petitioner those respondents have an excellent record and if they had applied in time for admission in the Government College at Srinagar they would certainly have been admitted on the basis of their merit. [42G H] 4. A competitive entrance examination is permissible in law in addition to the qualifying examination. In regard to the sufficiency of the objective test, the absence of a prescribed formal curriculum does not vitiate the objective test. [44 E] 5. A reading of the regulations framed by the Indian Medical Council under section 33 read with section 19 A of the makes it clear that the reservation permissible need not necessarily be confined to Scheduled castes and scheduled tribes. [44 E]

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Appeals Nos. 480 & 481 of 1962. Appeals by special leave from the order dated March 10, 1958 of ' the Allahabad High Court in Writ Nos. 1006 and 1007 of 1955, and from the decision dated July 15, 1955 of the Labour Appellate Tribunal of India, Lucknow, III Bench in Appeal Nos. III 274 and 300 of 1954. G. section Pathak and G. C. Mathur, for the appellants. K. section Hajela and C.P. Lai, for respondent No. 2 (In C.A. No, 480 of 1962). 727 J.P. Goyal, for respondents Nos. 3 to 12 (in C.A. No. 480 of 1962) and the respondents (in C.A. No. 481 of 1962). May 9. The judgment of the court was delivered by GAJENDRAGADKAR J. An Industrial dispute which arose between the appellant, J,K. Cotton Spinning & Weaving Mills Co., Ltd,, and the respondents, its employees, was referred by the Government of Uttar Pradesh for adjudication to the Adjudicator, Kanpur, on November, 30, 1953.This dispute covered two items of claim made by the respondents. The judgment of the court was delivered by GAJENDRAGADKAR J. An Industrial dispute which arose between the appellant, J. K. Cotton Spinning & Weaving Mills Co., Ltd,, and the respondents, its employees, was referred by the Government of Uttar Pradesh for adjudication to the Adjudicator, Kanpur, on November, 30, 1953.This dispute covered two items of claim made by the respondents. The first item was in regard to the dismissal of a gardener (Mali) Badri by name. The respondents urged that the said dismissal was unlawful and Badri was entitled to reinstatement with all the wages during the period of his enforced unemployment. The second item of dispute was in regard to the claim made by the 10 Malis employed by the appellant to receive dear food allowance, weekly holidays and leave with: wages. Before the Adjudicator, the appellant contended that the Malis were not workmen within the meaning of the U.P. (No. 28 of 1947), and so, the reference was invalid. It was also urged by the appellant that the claim made by the respondents for dear food allowance could not be sustained, because G.O. No. 3754 (LL)/XVIII 894 (L) 1948 issued by the U. P. Government on December 6, 1948, was inapplicable to the Malis inasmuch as the said Government order applied only to industrial employees and the Malis are not industrial employees within the meaning of the said order. The other claims made by the respondents for weekly holidays and leave with wages were also resisted on the ground that the Malis were not workmen under 728 the Act, and so, they were entitled to, no relief in the present proceedings. The Adjudicator held that the Malis were workmen under the Act, and so, he rejected the appellant 's contention that the reference was bad. On the merits, he found that the dismissal of Badri was without justification, and so, he was entitled to reinstatement. He also ordered that the appellant should pay Badri half his wages at Rs. 45/ p.m. as compensation from the date of his dismissal to the date of his reinstatement. That is how the first item of dispute was decided by the Adjudicator. On the second item of dispute. the Adjudicator found that the Malis were not industrial employees, and so, they were not entitled to claim dear food allowance under the relevant Government order. The other claims made by the Malis With regard to weekly holidays and leave with wages were likewise rejected by the Adjudicator. In other words, the second item of dispute was decided against the respondents. This award was pronounced on May, 31 1954. The decision of the Adjudicator gave rise to two appeals before the Labour Appellate Tribunal. The appellant by its appeal No. 300 of 1954 disputed, the correctness of the Adjudicator 's conclusion that Badri was a workman and that his dismissal was unjustified. The Labour Appellate Tribunal has rejected this contention and the appellant 's appeal was dismissed. The respondents by their appeal No. 274/1954 contended that the Adjudicator was in error in holding that the Malis were not industrial employees and as such, were not entitled to dear food allowance. The Labour Appellate Tribunal has upheld this plea and has given the Malis the benefit of the provision contained in the relevant Government order in respect of dear food allowance. The claim of the respondents for a weekly holiday was, however, rejected by the Labour Appellate 729 Tribunal, while their claim for leave with wages was allowed, and a direction was issued that the Malis in question should be given leave in the manner prescribed by section 79 of the Factories Act (No. 63 of 1948). The Labour Appellate Tribunal held that though the said Act was, in terms, not applicable to the Malis, the principle on which the statutory provision for leave prescribed by section 79 was based was a principle of social justice, and so, the Malis were entitled to have a similar benefit. The respondents had also claimed that Badri should be given the full wages for the period of his enforced unemployment instead of Rs. 45/ as allowed by the Adjudicator. This plea has also been upheld by the Labour Appellate Tribunal. In the result, the respondents appeal substantially succeeded. The decision, of the Labour Appellate Tribunal was pronounced on 15.7.1955. This decision was challenged by the appellant before the Allahabad High Court by preferring a writ petition No. 1006/1955. It was urged by the appellant that, the decision of the Labour Appellate Tribunal was patently erroneous and illegal, and so,, it should be quashed under article 226 of the Constitution. Whilst the writ petition was pending in the said High Court, the Bench of the Labour Appellate Tribunal that sat at Lucknow ceased to exist, and so, the High Court took the view that it had no jurisdiction to entertain a writ petition in respect of the decision of the Labour Appellate Tribunal which was not functioning within the limits of its territorial juridiction. That is why the said writ petition was dismissed as having become in fructuous. This decision was pronounced on March 10, 1958. The two present appeals Nos. 480 & 481/1962 have been brought to this Court by the appellant by special leave and they are directed, against the decision of the High Court dismissing the appellant 's 730 writ petition and against the decision of the Labour Appellate Tribunal respectively. Mr. Pathak who appeared before us for the appellant stated that he did not propose to argue Civil Appeal No. 480/1962, because this Court 's decision in Civil Appeal No. 481/1962 would determine the dispute between the parties. Civil Appeal No. 480/1962 has in that dense become unnecessary, because the merits of the main dispute are raised by the appellant in its appeal No. 481/1962 which is directed against the decision of the Labour Appellate Tribunal. We would, therefore, deal with Civil Appeal No. 481/1962 only. In this appeal, Mr. Pathak has not disputed the correctness or propriety of the decision of the Labour Appellate Tribunal in regard to the claim made by the respondents in respect of Badri 's dismissal. So, that part of the dispute need not detain us in the present appeal. The principal contention which has been seriously pressed before us by Mr. Pathak is that the Labour Appellate Tribunal was in error in holding that the Malis are workmen under section 2 of the Act. Section 2 of the Act, as it stood at the relevant time, provided, inter alia , that in this Act the expression "workman" shall have the meaning assigned to it in section 2 of the , and that takes us to section 2 (s) of the (No. 14 of 1947) which defines a workman. Section 2 (s), inter alia, provi des that a "Workman" means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward. , whether the terms of employment be expressed or implied; and so, the question is whether the 10 Malis whose claims have given rise to the present reference can be said to be workmen under section 2 (s). For deciding this point, it is necessary to refer to the relevant facts, as they have been found by the 731 Tribunals below. The 10 Mails have been appointed by the appellant for the maintenance of gardens attached to the bungalows of some of the officers of the Mills which are situated in the compoun, of the Mills, while others are employed for looking after the gardens attached to Kamla Niwas which is a residential building allotted to the Governing Director of the Mills and which is also situated within the compound of the Mills. Some of these Malis have also to work in the gardens attached to the residential building of the Director in charge of the Mills. The gardens which are looked after by these Malis are not the gardens attached to the Mills as such. It appears that in the large and expensive colony of the Mills, the factory of the Mills is inside a compound. Outside this compound of the factory, but within the colony of the Mills, are situated the bungalows occupied by the officers of the Mills and the Director. It is the gardens attached to these bungalows that arc looked after by the 10 Malis. It is also clear that the Malis are appointed by the appellant. The total monthly wages of these 10 Malis come to about Rs. 450/ . The appellant collects a small amount from. the officers as a contribution to the salaries of these Malis and the bulk of it approximating to 78% is paid by the appellant. The contributions made by the officers are credited to the revenue of the appellant and from the funds of the appellant, the Malis are paid their wages and they are debited in the accounts of the appellant. The names of the Malis are borne on a register maintained by the clerk of the appellant who supervises their work. This clerk notes their attendance from day to day. Their appointment is made by the appellant, their work is supervised and controlled by the appellant and they are liable to be dismissed by the appellant. The officers who are allotted the bungalows have no control over the Malis and can exercise no jurisdiction over them. It is in the light 732 of these facts that the question raised by Mr. Pathak in regard to the status of the Malis has to be determined. Mr. Pathak contends that the crucial words used in the definition prescribed by section 2 (s) are ",,employed in any industry". He argues that before any person can claim to be a workman under section 2 (s), it must be shown that he has been employed in the industry of the employer. The industry of the appellant is spinning and weaving operations and, says Mr. Pathak, the Malis have obviously nothing to do either with the spinning or weaving operations of the appellant; since they are not employed in the industry of the appellant, the fact that they have been employed by the appellant would not make them Workmen within the meaning of the Act. Thus presented, the argument is no doubt prima facie attractive; but as soon as we begin to examine it more carefully, it breaks down. If the construction for which 'Mr. Pathak contends is accepted without any modification, clerks employed in the factory would not be workmen, because on the test suggested by Mr. Pathak, they are not employed in the spinning or weaving operation carried on by the appellant and yet, there is no doubt that clerks employed by the appellant to do clerical work are workmen under section 2 (s), and so. the literal construction of the clause employed in any industry" cannot be accepted and that means that " employed in any industry" must take in employees who are employed in connection with operations incidental to the main industry, and once we are compelled to introduce this concept of incidental Connection with the main industry, the literal construction for which the appellant contends has to be rejected. It is, of course, not very easy to decide what is the field of employment included by the principle of incidental relationship, and what would be the limitations of the said principle? If sweepers arc 733 employed by the appellant to clean the premises of the Mills, that clearly would be work incidental to the main industry itself, because though the work of the sweepers has no direct relation either with the spinning or weaving, it is so manifestly necessary for the efficient functioning of the industry itself that it would be irrational to exclude sweepers from the purview of section 2 (s). If buses are owned by the industry for transporting the workmen, would the drivers of such buses be workmen or not? It would be noticed that the incidental connection in ' the present illustration is one degree removed from the main industry; the workmen who work in the industry are intended to be brought to the factory by the buses and it is these buses that the drivers run. Even so, it would not be easy to exclude drivers of buses engaged by the factory solely for the purpose of transporting its employees to the Mills from their respective homes and back, on the basis that they are not workmen under section 2 (s). Mr. Pathak was unable to resist the extension of the definition to such cases; but, nevertheless, he attempted to argue that though sweepers who sweep the premises of the factory may be called workmen, sweepers who sweep the area around the factory may not be included under section 2 (s). Sweeping the area outside the factory, it is argued, may be incidentally connected with the main industry, but the incidental connection is indirect and remote, and so, this class of employees must be excluded from the definition. We are not prepared to accept this argument. In our opinion, an employee who is engaged in any work or operation which is incidentally connected with the main industry of the employer would be a workman, provided the other requirements of section 2 (s) are satisfied. In this connection, it is hardly necessary to emphasise that in the modern world industrial operations have become complex and complicated and for the efficient and successful functioning of 734 any industry, several incidental operations are called in aid and it is the totality of all these operations that ultimately constitutes the industry as a whole. Wherever it is shown that the industry has employed an employee to assist one or the other operation incidental to the main industrial operation, it would be unreasonable to deny such an employee the status of a workman on the ground that his work is not directly concerned with the main work or operation of the industry. Reverting to the illustration of the buses owned by the factory for the purpose of trans porting its workmen, if the bus drivers can legitimately be held to assist an operation incidental to the main work of the industry, we do not see why a Mali, should not claim that he is also engaged in an operation which is incidental to the main industry. While we are dealing with this point, it is necessary to bear in mind that the bungalows are owned by the appellant and they are allotted to the officers as required by the terms and conditions of the officers ' employment. Since the bungalows are allotted to the officers, it is the duty of the appellant to look after the bungalows and take tare of the gardens attached to them. If the terms and conditions of service require that the officers should be given bungalows and gardens are attached to such bungalows, it is difficult to see why in the case of Malis who are employed by the appellant, are paid by it, and who work subject to its control and supervision and discharge the function of looking after the appellant 's property, it should be said that the work done by them has no relation with the industry carried on by the appellant. The employment is by the appellant, the 'conditions of service. are determined by the appellant, the payment is substantially by the appellant, the continuance of service depends upon the pleasure of the appellant, subject, of course, to the Standing 735 Orders prescribed in that behalf, and the work assigned to the Malis is the work of looking after the properties which have been allotted to the officers of the appellant. Like the transport amenity provided by a factory to its employees, bungalows and gardens are also a kind of amenity supplied by the employer to his officers and the drivers who look after the buses and the Malis who look after the gardens must, therefore, be held to be engaged in operations which are incidentally connected with the main industry carried on by the employer. It is true that in matters of this kind it is not easy to draw a line, and it may also be conceded that in dealing with the question of incidental relationship with the main industrial operation, a limit has to be prescribed so as to exclude operations or activities whose relation with the main industrial activity may be remote, indirect and far fetched. We arc not prepared to hold that the relation of the work carried on by the Malis in the present case can be characterised as remote, indirect or far fetched. That is why we think that the Labour Appellate Tribunal was right in coming to the conclusion that Malis are workmen under the Act. Before we part with this point, we would like to add that industrial adjudication appears consistently to have taken the view that Malis looking after the gardens attached to the bungalows occupied by officers of any industrial concern are workmen under section 2 (s). Our attention has been drawn to two decisions of the Labour Appellate Tribunal dealing with this question. In Shri Bhikari, Kanpur vs Messrs. Cooper Allen & Co., Kanpur, (1) the Labour Appellate Tribunal while dealing with the case of Bhikari who was engaged as a gardener by the Company and was on the pay roll of the Company observed that the Tribunal failed to see why he is not to be regarded as a workman within the meaning of section 2 (s) of the which (1) 736 definition has been adopted by the U.P. under which the case was started. The same view was taken by the Labour Appellate Tribunal in the case of The Upper India Chini Mazdoor Union vs The Upper India Sugar Mills (1). Dealing, with the case of Rati Rama Who was engaged as a Mali, the Tribunal rejected the employer 's contention that the said Mali was a domestic servant and observed that merely because the Company chooses to put Rati Ram on the work of a gardener with the Managing Director which the A Company is admittedly required to provide for and pay for, it does not follow that Rati Ram became a domestic servant. It is remarkable that both these decisions which are directly in point, were under section 2 of the Act with which we are concerned. In dealing with industrial dispute we are reluctant to interfere with the well established and consistent course of decisions pronounced by the Labour Appellate Court unless, of course, it is shown that the said decisions are plainly erroneous. The next question which calls for our decision is whether the Malis are industrial employees within the meaning of the relevant G. O. The said G. O. opens with two operative paragraphs which are followed by the table of minimum basic wages prescribed by it and other paragraphs. These first two paragraphs read thus : "(1) This order shall he deemed to have come into force with effect from December, 1, 1948 and shall, in respect of the matters covered by it, bind all the industries affected thereby and the workmen employed therein. (2) The minimum basic wage payable to employees (industrial or clerical) in the various industries and undertakings specified in column 1 of, Table I hereunder shall, so long as this (1) 737. order remains in force, be the amounts menti oned against them in column 2 or 3 thereof, as the case may be," Paragraph 3 prescribes the dear food allowance, and it is in respect of this claim made by the respondents that the appellant has raised the contention that this paragraph does not apply, because the Malis are not industrial employees. It will be noticed that the first Paragraph makes it perfectly clear that the order binds all the industries affected by it and the workmen employed therein ; so that as soon as it is held that the Malis are workmen under section 2 of the Act, it would follow that the order would apply to the Malis. In considering the present point. it is necessary to bear in mind that this order has been issued in exercise of the powers conferred by clauses (b) and (g) of section 3 of the Act, and that clearly means that persons who are workmen under section 2 of the Act are referred to by paragraph I and there would be no escape from the conclusion that the order would apply to such workmen and the Industries that employed them. It is, however, urged that in paragraph 2 the minimum basic wage is specified as being payable to employees, industrial, or clerical, in the various industries and the suggestion is that it is only employees who are either industrial or clerical to whom the order applies. Industrial employees are not defined; but it is assumed by the appellant in urging this argument that the class of industrial employees would be narrower than the class of workmen covered by section 2 of the Act. In our opinion, this argument is wholly fallacious. It is clear that the second paragraph refers to industrial or clerical employees, because the table prescribing the minimum basic wages divides the employees into two categories, industrial and clerical. It is only because his division is made by the table that for the 738 purpose of clarification, paragraph 2 mentions industrial or clerical in bracket after referring to the employees. Besides it would be unreasonable to assume that when the order prescribed minimum basic wages for workmen to whom paragraph I expressly refers, it could have been intended that the said minimum basic wages should not be extended to some workmen falling under paragraph I because they do not fall under the category of industrial employees or clerical employees. The scheme of the order is plain and unambiguous ; to all workmen failing under section 2 the benefits of the order are intended to be extended. That is the view taken by the Labour Appellate Tribunal and, in our opinion, that view is obviously right. If that be so, the validity of the order passed by the Labour Appellate Tribunal awarding the respondents ' claim for dear food allowance under paragraph 3 of the G.O. cannot be questioned. It is true that in The Suti Mill Mazdoor Sabha Kanpur vs Messrs. The British Indian Corporation Ltd. Kanpur (1), the Labour Appellate Tribunal appears to have taken the view that the expression " 'industrial employees" is limited to the class of employees who are employed directly or indirectly for the purpose of manufacturing process carried on by the factory. In coming to this conclusion, the Labour Appellate Tribunal noticed the fact that the expression " 'industrial employees" had not been defined, but it was disposed to drive assistance from the definition of the word "worker" in the Factories Act in determining the scope of the expression "industrial employees". No doubt, it was urged before the Tribunal that expression "industrial employees" should be understood in the same comprehensive sense as the word "industry" as defined in the industrial Disputes Act, but this contention was rejected by the Tribunal. It seems to us that the Tribunal was in error in limiting the, scope of (1) 739 the expression. " 'industrial employees" by reference to the definition of the word "worker" prescribed by the Factories Act. Indeed, it would be relevant and appropriate to refer to the definition of the word workman" under section 2 (s) of the , because the G.O. in question has been issued under the Act and the definition of a "work man" prescribed by section 2 of the Act as section 2 (s) of the would determine the true denotation of the expression "industrials employees". We must accordingly hold that the Labour Appellate Tribunal was in error in accepting the very narrow construction of the expression "industrial employees" used in the Government order. The next point which has been urged before us by Mr. Pathak is in regard to the decision of the Labour Appellate Tribunal awarding the benefit of leave to the respondents on the same lines as section 79 of the Factories Act. Mr. Pathak attempted to argue that the claim for leave had been made specifically on the basis of provisions of the Factories Act and the U.P. shops and Commercial Establishments Act, and he suggested that as soon as it was found that these two Acts were inapplicable to the Malis the said claim should have been rejected. The Labour Appellate Tribunal has, however, held that though the said two Acts do not apply, a claim for leave can be justified on the ground of social justice. Mr. Pathak objects to this decision on the technical ground. that the claim itself was based on the provisions of the said two Acts and no other. This contention is not well founded. It does appear that in paragraph 10 of the written statement filed on behalf of the respondents reference is made to the said two Acts but in the prayer clause the claim is made in general terms without reference to the Acts, and the reference itself is in general terms and makes no mention of the said two Acts. Therefore, the technical ground urged by Mr. Pathak that the, 640 relevant claim was made on the provisions of the two specified Acts and should be rejected solely on the ground that the said Acts do not apply, cannot be sustained. It was a general reference which the Adjudicator was called upon to decide and the fact that the said two Acts did not apply, cannot be said to rule out the said claim as to leave in limine. Then Mr. Pathak was driven to contend that the ground of social justice given by the Labour Appellate Tribunal in support of its award is really not sound in law, and he referred us to the observations made by this Court on some occasions that the considerations of social justice 'were "not only irrelevant but untenable" vide J.K. Iron & Steel Co., Ltd. Kanpur vs The Iron and Steel Mazdoor Union, Kanpur (1), and Muir Mills Co., Ltd. vs Suti Mills Mazdoor Union, Kanpur. (2), In our opinion, the argument that the considerations of social justice are irrelevant and untenable in dealing with industrial disputes, has to be rejected without any hesitation. The development of industrial law during the last decade and several decisions of this Court in dealing with industrial matters have emphasised the relevance, validity and significance of the doctrine of social justice, vide Messrs. Crown Aluminum Works vs Their Workmen, (s) and The State of Mysore vs The Workers of Gold Mines (4) Indeed the concept of social justice has now become such an integral part of industrial law that it would be idle for any party to suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes. The concept of social justice is not narrow, one sided, or pedantic, and is not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded on the basic ideal of socioeconomic equality and its aim is to assist the removal of socioeconomic disparities and inequalities ; nevertheless, in dealing with industrial matters, it does not adopt a doctrinaire (1)[1955] 2 S.C.R. 1315. (2)[1955] 1 S.C.R. 991. (3)[1958]S.C.R. 651. (4) ; 741 approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach. It, therefore, endeavours to resolve the competing claims of employers and employees by finding a solution which is just and fair to both parties with the object of establishing harmony between capital and Labour, and good relationship. The ultimate object of industrial adjudication is to help the growth and progress of national economy and it is with that ultimate object in view, that industrial disputes are settled by industrial adjudication on principles of fair play and justice. That is the reason why on several occasions, industrial adjudication has thought it fit to make reasonable provision for leave in respect of the workmen, who may not strictly fall within the purview of the Factories Act or the Shops and Commercial Establishments Act. We are, therefore, satisfied that there is no substance in the grievance made by Mr. Pathak that the Labour Appellate Tribunal should not have granted the demand of the respondents for leave on grounds of fair play and social justice. The result is, Civil Appeal No. 481/1962 fails and is dismissed with costs. Civil Appeal No. 480 of 1962 has not been pressed and is, therefore, dismissed. There would be no order as to costs. Appeals dismissed.

An industrial dispute was referred by the Government of Uttar Pradesh for adjudication to the Adjudicator, Kanpur. ,Me Adjudicator held that the Malis were workmen under the U.p. but they were not Industrial employees and hence were not entitled to claim dear food allowance under the Government order dated December 6, 1948. The claims of the Malis with regard to weekly holidays and leave with wages were also rejected by the Adjudicator. 725 Two crow appeals were filed against the order of the Adjudicator before the Labour Appellate Tribunal. The appeal of the appellant was dismissed. As regards the appeal of respondents, the Tribunal gave the Malis benefit of dear food allowance. Their claim for leave with wages was also allowed on the ground of social justice. However, their claim for weekly holiday was rejected. The appellant filed a writ petition in the Allahabad High Court but that was dismissed as in fructuous. The appellant came to this court by special leave. The contentions raised by the appellant in this court were that the Malis were not workers within the meaning of section 2 of the U.P. , that Malis were not industrial employees within the meaning of Government order dated December 6, 1948, and hence were not entitled to dear food allowance and that the Labour Appellate Tribunal should not have granted the demand of the respondents for leave on ground of fair play and social justice. Held that the Malis were workers within the meaning of section 2, of the U.P. They were employed by the appellant, were paid by it and were, subject, to its control and supervision and *discharged the function of looking after the properties of the appellant. Their conditions, of service were also determined by the appellant and the continuance of their service also depended upon the pleasure of the appellant. The bungalows and gardens on which they worked were a kind of amenity supplied by the appellant to its officers. Hence, the Malis were engaged in operations which were incidentally connected with the main industry carried on by the employers The case of the Malis was similar to that of the bus drivers. The relation of the work carried on by the Malis with the industry was not remote, indirect or far fetched. The employee who is engaged in any work or operation which is incidentally,connected with the main industry of the employer is a workman, provided the other requirements of section 2 (s) of the industrial Disputes Act are satisfied. Held also, that the Malis were industrial employees within the meaning of the Government order dated December 6, 1948, and hence were entitled to claim the benefit of dear food allowance. The Tribunal was in error in limiting the scope of the expression, " Industrial , employees" by reference to the definition of the word "worker" as given in the Factories Act, 726 Held also, that the Tribunal was justified in granting the demand of the respondents for leave on grounds of fair play and social justice. The concept of social justice has now become such an integral part of industrial law that it is idle for any party to suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes. The concept of social justice is not narrow, one sided or pedantic and is not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded on the basic ideal of socioeconomic equality and its aim is to assist the removal of socioeconomic disparities and inequalities. In dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach. It endeavors to resolve the competing claims of employers and employees by finding a solution which is just and fair to both parties with the object of establishing harmony between capita i labour and relationship. Shri Bhikari, Kanpur vs Messrs. Cooper Allen & Co., Kanpur, ; The Upper India Chini Mills Mazdoor Union vs The Upper India Sugar Mills ; The Suti Mill Mazdoor Sabha, Kanpur vs Messrs. The British India Corporation Ltd., Kanpur, ; J.K. Iron& Steel Co. Lid, Kanpur vs The Iron and Steel Masdoor Union, Kanpur, ; Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; ; Messrs. Crown Aluminium Works vs Their Workmen, ; and The State of Mysore vs The Workers of Gold Mines, [1959] S.C.R. 895, referred to.

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N: Criminal Appeal No. 193 of 1979. From the Judgment and Order dated 23 1 1979 of the Gujarat High Court in Special Criminal Application No. 8/79. P. H. Parekh and M. Mudgol for the Appellant. N. M. Phadke, section P. Nayyar and M. N. Shroff for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Kanchanlal Maneklal Chokshi who is in preventive detention under the provisions of the and whose petition for the issue of a writ of Habeas Corpus was rejected by the High Court of Gujarat is the appellant in this appeal. The High Court, while rejecting the petition, granted a certificate under Article 133(1) of the Constitution that the case involved a substantial question of law of general importance which needed to be decided by the Supreme Court. The substantial question of law so certified was 'whether it is necessary for the detaining authority to consider whether a person should be prosecuted before an order of detention is made against him '. The Division Bench of the Gujarat High Court in rejecting the particular contention of the appellant 5 475 SCI/79 56 purported to follow an earlier decision of another Division Bench of the same Court in Ashok Murlidhar vs State of Gujarat.(1) In that case Divan C. J., and Majumdar, J., though inclined to the view that the possibility of a criminal prosecution being launched should be present to the mind of the detaining authority, felt constrained to hold otherwise because of what, they thought had been decided by this Court in Hardhan Saha & Anr. vs State of West Bengal & Ors.(2). In our view, this Court did not say in Hardhan Saha vs State of West Bengal that the possibility of a prosecution being launched was an irrelevant consideration which need never be present to the mind of the detaining authority. On the other hand, we do not also think that it is axiomatic, as sought to be contended by the learned Counsel for the appellant, that the detaining authority must invariably consider the possibility of launching a prosecution before making an order of detention and that, if not, the order of detention must necessarily be held to be bad. In Hardhan Saha vs State of West Bengal, the vires of the provisions of the Maintenance of Internal Security Act was in question. One of the contentions was that Section 3 of the Act offended Article 14 of the Constitution as it permitted 'the same offence to be a ground for detention in different and discriminatory ways '. It was submitted that while A might be prosecuted but not detained preventively, might not be prosecuted but only detained preventively and C might be both prosecuted and detained preventively. Dealing with the contention, a Bench of five judges of this Court explained the basic distinction between preventive detention and detention following upon conviction and observed: "The power of preventive detention is qualitatively different from punitive detention. The power of preventive detention is precautionary power exercised in reasonable anticipation. It may or may not relate to an offence. It is not a parallel proceeding. It does not overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched. An order of preventive detention may be made before or during prosecution. An order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal. The pendency of prosecution is no bar to an order of preventive detention. An order of preventive detention is also not a bar to prosecution". 57 The Court then referred to various earlier decisions and deduced the following principles: "First merely because a detenu is liable to be tried in a criminal court for the commission of a criminal offence or to be proceeded against for preventing him from committing offences dealt with in Chapter VIII of the Code of Criminal Procedure would not by itself debar the Government from taking action for his detention under the Act. Second, the fact that the police arrests a person and later on enlarges him on bail and initiates steps to prosecute him under the Code of Criminal Procedure and even lodges a first information report may be no bar against the District Magistrate issuing an order under the preventive detention. Third, where the concerned person is actually in jail custody at the time when an order of detention is passed against him and is not likely to be released for a fair length of time, it may be possible to contend that there could be no satisfaction on the part of the detaining authority as to the likelihood of such a person indulging in activities which would jeopardise the security of the State or the public order. Fourth, the mere circumstance that a detention order is passed during the pendency of the prosecution will not violate the order. Fifth, the order of detention is a precautionary measure. It is based on a reasonable prognosis of the future behaviour of a person based on his past conduct in the light of the surrounding circumstances". Clearly, the Court did not lay down that the possibility of a prosecution being launched was an irrelevant consideration, not to be borne in mind by the detaining authority. All that was laid down was that the mere circumstance that a detenu was liable to be prosecuted was not by itself a bar to the making of an order of preventive detention. It does not follow therefrom that failure to consider the possibility of a prosecution being launched cannot ever lead to the conclusion that the detaining authority never applied its mind and the order of detention was, therefore, bad. In Bhutnath Mate vs State of West Bengal(1) Krishna Iyer and Sarkaria JJ., declared the detention illegal for denial of opportunity to make effective representation. On the question whether the failure of criminal prosecution was a bar to preventive detention the answer was a definite 'no '. The learned judges however expressed 58 apprehension against the danger to the democratic way of life inherent in 'the potential executive tendency to shy at Courts for prosecution of ordinary offences and to rely generously on the easier strategy of subjective satisfaction '. The question presently under consideration, namely, whether the failure of the detaining authority to keep in mind the possibility of a prosecution would necessarily vitiate the order of detention was not considered by the learned judges. In Srilal Shaw vs State of West Bengal & Ors.(1), the prosecution was dropped and thereafter an order of preventive detention was passed. The substance of the allegation against the detenu was that he was in unlawful possession of scrap metal belonging to the Railway. The Court came to the conclusion that on the material which was available to the detaining authority, it was impossible to arrive at the conclusion that the possession of the petitioner was unlawful. The Court found that the reason given by the District Magistrate for dropping the prosecution was unacceptable. It was observed that the prosecution was in all probability dropped as the petitioner might have been able to establish that his possession of the goods was not unlawful. The case struck the Court as a typical case in which for no apparent reason a person who could easily be prosecuted under the punitive law was being preventively detained. It is seen that the decision turned on the peculiar facts of the case and throws no light on the question presently raised before us. In Abdul Gaffer vs State of West Bengal(2) the order of detention was passed on the basis of a few instances of theft of Railway property for which the detenu could well and easily have been prosecuted. The contention before the Court was that the order of detention was passed by the detaining authority mechanically without applying its mind to the question whether the facts disclosed the tendency of the petitioner to act prejudicially in the manner mentioned in the detention order. The bald and sweeping allegation was made in the counter filed on behalf of the State that material witnesses were afraid of giving evidence in the Court against the detenu. The material witnesses were members of the Railway Protection Force. In that situation Sarkaria J., observed that the version given in the counter was incredible and could not be swallowed. The learned Judge then observed "the conclusion therefore is inescapable that the petitioner has been proventively detained without application of mind as to whether the prosecution against him was foredoomed to failure on the ground of witnesses being afraid to depose against the detenu 59 in Court. The impugned order has been made in a casual and cavalier manner". It is seen that there was an express allegation that recourse was had to preventive detention despite the fact that criminal prosecutions could well have been successfully launched, based as the case was on the evidence of members of the Railway Protection Force. The reason given by the State for taking recourse to preventive detention was found to be fantastic. The decision thus stands on the special facts of the case. In Dulal Roy vs The District Magistrate, Burdwan & Ors.,(1) the Court had to consider a situation where a month after a person was arrested in connection with a criminal case he was discharged but was taken into custody on the same day pursuant to an order of detention. Krishna Iyer and Sarkaria, JJ., while observing that as an abstract legal proposition an order of preventive detention could be validly passed against a person in jail custody on the same facts on which he was being prosecuted for a substantive offence in a Court, pointed out that such an order of detention was readily vulnerable to the charge that the detaining authority was taking recourse to preventive detention in order to circumvent the penal law and the process of the Court. The learned Judges were satisfied that the discharge of the detenu in a criminal case was not due to any shortcoming in the evidence or difficulty in its production in Court. The order of detention was, therefore, quashed on the ground of non application of mind by the detaining authority. In Salim vs State of West Bengal,(2) Chandrachud J., speaking for the Court observed that the fact that the detenu could have been prosecuted for the acts attributed to him did not affect the validity of the order of preventive detention. The further question whether it was incumbent on the detaining authority to consider the question of possibility of prosecution was not considered by the Court. In Ashok Murlidhar vs State of Gujarat, (supra) Divan C.J., and Majumdar, J., appeared to think that the Bench of five Judges of this Court which decided Hardhan Saha & Anr. vs State of West Bengal & Ors. , (supra) had taken a view different from that expressed in Bhuthnath Mate vs State of West Bengal, Abdul Gaffer vs State of West Bengal, Srilal Shaw vs State of West Bengal & Ors., Dulal Roy vs The District Magistrate, Burdwan & Ors. , (supra) We do not think that there is any such conflict as thought by the Division Bench of the Gujarat High Court. The principles emerging from a review of the 60 above cases may be summarised in the following way: The ordinary criminal process is not to be circumvented or short circuited by ready resort to preventive detention. But, the possibility of launching a criminal prosecution is not an absolute bar to an order of preventive detention. Nor is it correct to say that if such possibility is not present to the mind of the detaining authority the order of detention is necessarily bad. However, the failure of the detaining authority to consider the possibility of launching a criminal prosecution may, in the circumstances of a case, lead to the conclusion that the detaining authority had not applied its mind to the vital question whether it was necessary to make an order of preventive detention. Where an express allegation is made that the order of detention was issued in a mechanical fashion without keeping present to its mind the question whether it was necessary to make such an order when an ordinary criminal prosecution could well serve the purpose, the detaining authority must satisfy the Court that that question too was borne in mind before the order of detention was made. If the detaining authority fails to satisfy the Court that the detaining authority so bore the question in mind the Court would be justified in drawing the inference that there was no application of the mind by the detaining authority to the vital question whether it was necessary to preventively detain the detenu. The facts of the present case are that the grounds of detention served on the appellant contain a very elaborate statement of facts quite clearly pointing to an application of the mind by the detaining authority. The appellant did not complain in the Writ Petition that the detaining authority had not applied its mind and in particular had not considered the question of the possibility of a prosecution. Nor are there any facts appearing from the record which can lead us to infer that the detaining authority did not apply its mind to relevant considerations. We do not, therefore, think that the order of detention is in any manner infirm. The appeal is accordingly dismissed. P.B.R. Appeal dismissed.

In Ashok Murlidhar vs State of Gujarat a Division Bench of the High Court thought that this Court in Hardhan Saha & Anr. vs The State of West Bengal & Ors., ; laid down that where a person was sought to be detained preventively the possibility of a prosecution being launched was an irrelevant consideration which need never be present to the mind of the detaining authority. Purporting to follow this decision another Division Bench of the High Court rejected the habeas corpus petition of the appellant who was in preventive detention under the provisions of . The Division Bench certified that a substantial question whether it is necessary for the detaining authority to consider whether a person should be prosecuted before an order of detention is made against him needed to be decided by this Court. In appeal to this Court it was contended on behalf of the appellant that it was axiomatic that the detaining authority must invariably consider the possibility of launching a prosecution before making an order of detention, in the absence of which the order of detention must be held to be bad. Dismissing the appeal, ^ HELD: 1. In Hardhan Saha 's case this Court did not say that the possibility of a prosecution being launched was an irrelevant consideration which need never be present to the mind of the detaining authority. All that was laid down in that case was that the mere circumstance that a detenu was liable to be prosecuted was not by itself a bar to the making of an order of preventive detention. It does not follow therefrom that failure to consider the possibility of a prosecution being launched cannot ever lead to the conclusion that the detaining authority never applied its mind and the order of detention was, therefore, bad. [57 F G] 2. The principles emerging from a review of the cases decided by this Court are that the ordinary criminal process is not to be circumvented or short circuited by ready resort to preventive detention, but that the possibility of launching a criminal prosecution is not an absolute bar to an order of preventive detention. Nor is it correct to say that if such possibility is not present to the mind of the detaining authority the order of detention is necessarily bad. However, the failure of the detaining authority to consider the possibility of launching a criminal prosecution may, in the circumstances of a case, lead to the conclusion that the detaining authority had not applied 55 its mind to the vital question whether it was necessary to make an order of preventive detention. Where an express allegation is made that the order of detention was issued in a mechanical fashion without keeping present to its mind the question whether it was necessary to make such an order when an ordinary criminal prosecution could well serve the purpose, the detaining authority must satisfy the court that the question too was borne in mind before the order of detention was made. If the detaining authority fails to satisfy the court that the detaining authority so borne the question in mind the court would be justified in drawing the inference that there was no application of the mind of the detaining authority to the vital question whether it was necessary to preventively detain the detenu. [60 A D] In the instant case the grounds of detention served on the appellant contained a very elaborate statement of facts quite clearly pointing to an application of the mind by the detaining authority. The appellant did not complain in his petition that the detaining authority had not applied its mind and in particular had not considered the question of the possibility of a prosecution nor were there any facts appearing from the record which could lead to the conclusion that the detaining authority did not apply its mind to relevant considerations. The order of detention is not infirm in any manner. [60 E F] Bhuthnath Mate vs The State of West Bengal, ; ; Srilal Shaw vs State of West Bengal & Ors., ; ; Abdul Gaffer vs State of West Bengal, AIR 1975 SC 1496; Dulal Roy vs The District Magistrate, Burdwan & Ors., ; ; Salim vs State of West Bengal; ; ; explained.

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Civil Appeal No. 2199 of 1977. From the Judgment and Decree dated 29 11 1976 of the Allahabad High Court in Special Appeal No. 378 of 1974. G. B. Pai and O. P. Rana for the Appellant. R. K. Garg, V. J. Francis) , Madan Mohan, K.P. Aggarwal and Mrs. Manju Gupta, for Respondents Nos. 1 and 2. Manoj Swarup and Miss Lalita Kohli for the Intervener. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The case is primarily concerned with the age of retirement of two obscure workmen but it raises question of general importance concerning workmen employed by most statutory bodies and corporations. It is on such chances that the development of our law depends. The two workmen were originally employed by Messrs Seth Ram Gopal and Partners who were licensees for the distribution of electricity under the . There were certified Standing orders for the industrial establishment of M/s. Seth Ram Gopal and partners. The certified Standing orders did not prescribe any age of superannuation for the employees. I ht, according to the workmen meant that they could continue to work as long as they were fit and able to discharge their duties. The electricity undertaking of Ms. Seth Ram Gopal and Partners was purchased br The U.P. State Electricity Board, with effect from 15 12 1964, under The provisions of the . The employees of Seth Ram Gopal and Partners became the employees of the U.P. the Electricity Board. The U.P. State Electricity Board which it is no longer disputed is an industrial establishment to which the Industrial Employment (Standing orders) Act, 1946, applies, neither made nor got certified any Standing orders as it was bound so to do under that Act. But it is evident, though no admitted from two letters, one from the Superintending Engineer in reply to a letter dated 31 12 166 from the Executive Engineer and the other from the Certifying officer for Standing orders and Labour Commissioner to the General Secretary of the Employees ' Union that the Board and the workmen considered the certified Standing orders of the establishment of Seth Ran 359 Gopal and Partners as applicable to them even after the purchase of the undertaking by the Board. This, however, is not very material. The Board, as we said earlier, made and not certified no standing orders either in regard to age or superannuation or in regard to any other matter Mentioned in the schedule to the Standing orders Act. We may mention here that by reason of a notification dated 17 1 1959 "age of superannuation or retirement, rate of pension or ally other facility which the employers may like to extend or may be agreed upon between the parties ' is one of` the matters in respect of which an employer to whom the Standing orders Act applies is bound to make Standing orders and get them certified. However, on May 28, 1970. the Governor of Uttar Pradesh notified. under Section 13 B of the Industrial Employment (Standing orders) Act, 1946. a regulation made by the U.P. State: Electricity Board under Section 7(c) of the , ]948. The notification was as Follows. "No. 3822 2/70/XXIII PB 15EH 67 May 28, 1970. In pursuance of the provision of Section 13 B of the Industrial Employment (Standing Orders) Act, 1948 (Act No. 20 of 1946), the Governor is pleased to notify in the official Gazette that the U.P. State Electricity Board has made the following Regulations under sub section (c) of Section 79 of the ) (Act No. 54 of 1948) ``Notwithstanding any rule if one order or practice hitherto followed, the date of compulsory retirement of an employee of the Board will be the date on which he attains the age of 58 years; provided that (i) in the case of the inferior servants of the Board, whose counterparts under State Government are at present entitled to serve upto the age of 60 years, the age of compulsory retirement will be the date on Which they attain the age of 60 years. (ii) the Board or its subordinate appointing authority may require an employee to retire after he attains or has attained the age of 55 years on three months ' ' notice or three months ' salary in lieu thereof without assigning any reason". Acting in pursuance of this regulation as notified by the Governor, the Board sought to retire the two respondents on July 2, 1972 and July 7, 1972 respectively on their attaining the age of 58 years. The respondents thereupon filed a writ petition in the Allahabad High Court challenging the regulation mad by the Board and its notification by 360 the Governor. Their contention was that the Board was not competent to make a regulation in respect of a matter covered by the Industrial Employment (Standing orders) Act. The writ petition as dismissed by a learned Single Judge. The respondents preferred a special appeal and the Division Bench which heard the Special Appeal in the first instance referred the following three questions tc a Full Bench: " (1) Whether the Industrial Employment (Standing orders) Act, 1946 applies to the Industrial establishments of the State Electricity Board ? (2) Whether the standing orders framed for an Industrial establishment of an electrical undertaking cease to be operative on the purchase of the undertaking by the Board or on the framing of regulations under section 79(c) of the ? (3) Whether section 13 B of the Industrial Employment (Standing orders) Act, 1946, applies only to industrial establishments of the Government or also to other industrial establishments ? The Full Bench answered the questions as follows: "l. The Industrial Employment (Standing orders) Act 1946 applies to the industrial establishments of the Ste Electricity Board. The Standing Orders framed in an industrial establishment by an electrical undertaking do not cease to b operative on the purchase of the undertaking by the Board or on framing of the regulations under section 79(c) of the . 3. Section 13 B of the , applies only to the industrial establishments of the government and to no other establishments". Following the opinion of the Full Bench, the Division Bench allowed the Special Appeal and issued a Writ quashing the notification dated May 28, 1970 and directing the U.P. State Electricity Board not to enforce the regulation against the appellants before them. The U.P. State Electricity Board, having obtained a Certificate from the High Court under Article 133(1) of the Constitution, has preferred this appeal. 361 Shri G. B. Pai learned Counsel for the appellant did not canvass A the correctness of the answer of the Full Bench to the first question referred to it. He confined his attack to the answers to the second and third questions. Relying upon the decisions of this Court in Sukhdev Singh vs Bhagat Ram(1), and Rajasthan Electricity Board vs Mohan Lal(2), Shri Pai argued that the U.P. State Electricity Board was an authority within the meaning of Article 12 of the Constitution and that the regulations made b the Board under Section 79(c) of the Act had the 'full force and effect of the statute and the force of law" so as to displace, over ride or supersede Standing Orders made and certified under the Industrial Employment (Stanching orders) Act. which, he submitted wee mere contractual conditions of service subjected to a quasi judicial process and which, therefore, could not take precedence over legislative processed regulations. The learned Counsel further submitted that Section 79(c) of the Electricity Supply Act was a special law and that it prevailed over the provisions of the Industrial Employment Standing orders Act. Alternately, he submitted, the notifying of the regulation regarding age of superannuation under Section 13 B of the Industrial Employment Standing orders Act excluded the applicability of that Act in regard to the subject of age of superannuation. He urged that Section 13 B was no confined in its application to Government undertakings only or to cases where there were comprehensive sets of rules, as was thought by the High Court. Shri R. K. Garg, for the Workmen contended that the Industrial Employment (Standing orders) Act was an act specially designed to define and secure reasonable conditions of service for workmen in industrial establishments employing one hundred or more workmen and to that end to compel employers to make Standing orders and to et them certified by a quasi judicial authority. It was, therefore, a special Act with reference to its subject matter. The Electricity Supply Act, on the other hand, was intended "to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development. ' ' It was not specially designed to define the conditions of service of employees of Electricity Board or to displace the Standing orders Act. The power given to an Electricity Board under Section 79(c) to make regulations providing for "the duties of officers and servants of the Board and their salaries, allowances and other conditions of service" was no more than the usual, general power possessed by every (1) ; (2) ; 362 employer. Shri Garg argued that the Industrial Employment Standing orders Act was a special Act which dealt with the special subject of conditions of employment of workmen in industrial establishments and, therefore, in the matter of conditions of employment of workmen in industrial establishments, it prevailed over the provisions of the Electricity Supply Act. He urged that under Section 13 B of the Standing orders Act, Government undertakings which had a comprehensive set of rules alone could be excluded from the applicability of the Act. He submitted that to permit a single rule or regulation made for limited purpose to be notified under Sec. 13 B would have the disastrous effect of excluding the applicability of the whole of the Standing Orders Act. Before examining the rival contentions, we remind ourselves that the Constitution has expressed a deep concern for the welfare of workers and has provided in Art, 42 that the State shall make provision for securing just and humane conditions of work and in article 43 that the State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment or leisure etc. These are among the "Directive Principles of State Policy". The mandate of Article 37 of the Constitution is that while the Directive Principles of State Policy shall not be enforceable by any Court, the principles are `nevertheless fundamental in the governance of the country ' and `it shall be the duty of the State to apply these principles in making laws '. Addressed to Courts, what the injunction means is that while Courts are not free to direct the making of legislation, Courts are bound to evolve, affirm and adopt principles of interpretation which will further and not hinder the goal set out in the Directive Principle of St Policy. This command or the Constitution must be over present n the minds of judges when interpreting statutes which council them selves directly or indirectly with matters et out in the Directive principles of State Policy Let us now examine the various provisions their proper contact with a view to resolve the problem before us. l the , 194(. Before the passing of the Act conditions or service of industrial employees s were invariably ill defined and were hardly over know with even a slight Degree of precision to the employees. There was no uniformity of conditions of service f(hr employees discharging identical duties in fl the same establishment. Conditions of service were generally e and the result of oral arrangements which left the employees t Te mercy of the employer. With the growth of the trade union move 363 ment and the right of collective bargaining, employees started putting A forth their demands to end this sad and confusing state of affairs. Recognising the rough deal that was being given to workers 1 employers who would not define their conditions of service and he inevitability f industrial strife in such a situation, the legislature intervened and enacted the Industrial Employment Standing Orders Act. It was stated in the statement of objects and reasons; "Experience has shown that "Standing orders" defining the conditions of recruitment, discharge, disciplinary action, holidays, leave etc., go a long way towards minimising, friction between the management and workers ill industrial undertakings. Discussion on the subject at the tripartite Indian Labour Conferences revealed a consensus of opinion in favour of legislation. The Bill accordingly seeks to pr vide for the framing of "Standing orders" in all industrial establishments employing one hundred and more workers". It was, therefore, considered, as stated in the preamble "expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them". The scheme or the Act, as amended in 1956 and as it now stands, requires every employer of an industrial establishment as defined in the Act to submit to the Certifying officer draft Standing orders, that is, "Rules relating to matters set out in the schedule", proposed by him for adoption in his industrial establishment. This is mandatory. It has to be done within six months after the commencement of the Act. 'Failure to do so is punishable and is further made a continuing offence. The draft Standing orders are required to cover every matter set out in the schedule. The schedule enumerates the matters to be provided in the Standing orders and they include classification of workmen, Shift working, attendance and late coming. Leave and holidays, termination of employment, suspension or dismissal for misconduct, means of redress for wronged workmen etc. Item No. 11 of the Schedule IS "Any other matter which may be prescribed". By a notification dated 17 1959 the Government of Uttar Pradesh has prescribed "Age o superannuation or retirement, rate of pension or any other facility which the employer may like to extend or may be agreed upon between the parties" as a matter requiring to be provided in the Standing orders. On receipt o the draft Standing Orders from the employee, the Certifying officer is required to forward a copy of the same to the trade union concerned or the workmen inviting them to prefer objections, if any. Thereafter the Certifying officer is required to give a hearing to the employer and the trade union or workmen as the case may be 7 526SCI/78 364 and to decide "whether or not any modification of or addition to the draft submitted by the employer is necessary to render the draft Standing orders certifiable under the Act '. Standing orders are certifiable under the Act only if provision i made therein for every matter set out in the schedule, if they are in conformity with the provisions of the Act and if the Certifying officer adjudicates them as fair and reason 3 able. The Certifying officer is invested with the powers of a Civil Court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses etc. The order of the Certifying Officer is subject to an appeal to the prescribed appellate authority. The Standing orders as finally certified are required to be entered in a Register maintained by the Certifying officer. The employer is required to prominently post the Certified Standing orders on special boards in. maintained for that purpose. This is the broad scheme of the Act. The Act also provides for exemptions. About that, later. The Act, as originally enacted, precluded the Certifying officer from adjudicating upon the fairness or reasonableness of the draft Standing orders submitted by the employer but an amendment introduced in 1956 now casts a duty upon the Certifying officer to adjudicate upon the fairness or reasonableness of the Draft Standing orders. The Scheme of the Act has ben sufficiently explained by this Court in Associated Cement t Co. LTD. vs f. D. Vyas(l), Rohtak Hissar District Electricity Supply Co. Ltd '. vs State of U.P. & Ors.(2), and Western dia Match Co. Ltd. vs Workmen. The Industrial Employment (Standing orders) Act is thus seen he an Act specially designed to define the terms of employment of workman in industrial establishments, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness. It is ar Act giving recognition and form to hard won and precious rights of workman. We have no hesitation in saying that it is a Special Act expressly and exclusively dealing with the schedule enumerated conditions (hf service of workmen in industrial establishments. Turning net to the Electricity Supply Act, it is, as its preamble says. An Act to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development". The statement of objects and reasons and a lance at the various provisions of the Act show that the primary object (1) ; (2) ; (3) [1974] I SCR 434 365 Of the Act is to provide for the coordinated, efficient and economic development of electricity in India on a regional basis consistent with the needs of the entire region including semi urban and rural areas. Chapter II of the Act provides for the constitution of the Central Electricity Authority and Chapter III for the constitution of state Electricity Boards. Chapter IV prescribes the powers and duties of state Electricity Boards, and Chapter V the Boards ' works and trading procedure. n Chapter VI deals with the Board 's finance, Accounts and Audit. Chapter VII (from S, 70 to section 83) which is headed "Miscellaneous" contains various miscellaneous provisions amongst Which are section 78 which empowers the Government to make rules and section 79 which empowers the Board to make regulations in respect of matters specific in clauses (a) to (k) of that Section. Clause (c) of section 79 is "the duties of officers and servants of the Board, and their salaries, allowances and other conditions of` service". This, of course is no more than the ordinary general power, with which every employer is invested in the first instance, to regulate the conditions of service of his employees. It is an ancillary or incidental power of every employer, The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of state Electricity Boards. It is an act to regulate the coordinated development of electricity. It is a special Act in reread to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special Act in regard to the subject of Conditions of Service of workmen in industrial establishments. If Sec. 79(c) of the Electricity Supply Act generally provides for the making of regulations providing for the conditions of service of tile employees of the Board, it can only be regarded as a general provides which must yield to the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter Act. The maim "Generalia specialibus non derogant" is quite well known. The rule flowing from the maxim has been explained in Mary Seward vs The owner of the "Vera Cruz"(l) as follows: "Now if anything be certain it is this, that where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general worlds without any indication of a particular intention to do so". (1) at 68. 366 The question in Seward vs Vera Cruz was whether Sec. 7 of the Admiralty Court Act of 1861, which gave jurisdiction to that Court over "any claim for damage done by any ship" also gave jurisdiction over claims for loss of life which would otherwise come under the Fatal Accidents Act. It was held that the general words o Sec. 7 of the Admiralty Court Act did not exclude the applicability of the Fatal Accidents Act and therefore, the Admiralty Court had no jurisdiction to entertain a claim for damages for loss of life. The reason for the rule that a general provision should yield to a specific provision is this: In passing a Special Act, Parliament devotes its entire consideration to a particular subject. When a General Act is subsequently passed, it is logical to presume that Parliament has not repealed or modified the former Special Act unless it appears that the Special Act again received consideration from Parliament. Vide London and Blackwall Railway vs Lighthouse District board o Works(l) and Thorpe vs Adams(2). In J. K. Cotton Spinning & Weaving Mills Co. Ltd. vs state f Uttar Pradesh(3), this Court observed (at p. 1174): "The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and judges but springs from the common understanding of men and women that when the same person gives two directions one covering a large number of matters in general and an other to only some of them his intention is that these latter directions should prevail as regards these while as regards us the rest the earlier direction should have effect". We have already shown that the Industrial Employment (Standing orders) Act is a Special Act dealing with a Specific subject, namely the conditions of service, enumerated in the Schedule, of workmen in industrial establishments. It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Sec. 79(c) of the Electricity Supply Act. It is obvious that Parliament did not have before it the Standing orders Act when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand protanto re pealed by Sec. 79(c) of the Electricity Supply Act. We are clearly of the view that the provisions of the Standing orders Act must prevail over section 79(c) of the Electricity Supply Act, in regard to matters to which the Standing orders Act applies. (1) = ; (2) (1871) L. R. (3) A. r. R. 367 Shri G. B. Pai, relying on what was said in the Rajasthan state A Electricity Board case and Sukhdev Singh & Ors 's case argued that the regulations made under Sec. 79(c) of the Electricity Supply Act being statutory in nature stood on so high a pedestal as to override, by their very nature, the Standing orders made under the Standing orders Act. The observations on which he relied are, in the Rajasthan State Electricity Bard case: "The state, as defined in article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under article 298 to carry on any trade or business. The circumstance that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word "state" as used in article 12. On the other hand, there are provisions in the Electricity Supply Act which clearly Show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence. In these circumstances, we do not consider it at all necessary to examine the cases cited by Mr. Desai to urge before us that the Board cannot be held to be an agent or instrument of the Government. The Board was clearly an authority to which the provisions o Part III of the Constitution were applicable". and in Sukhdev Singh 's case (at p. 627): "Rules, regulations, schemes, Bye laws, orders made under statutory powers are all comprised in delegated legislation" at p. 628) "Subordinate legislation has, if validly made, the full force and effect of a. statute" and (at p. 684 685) "Rules and Regulations of the oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation have the force of law. The employees of these statutory bodies have a statutory status and they are entitled to a declaration o being in employment when their dismissal or removal is in contravention of statutory provisions. 368 These statutory bodies are authorities within the meaning of article 12 o the Constitution". The proposition that statutory Bodies are 'authorities ' within the meaning of article 12 of the Constitution, that the employees of these bodies have a statutory status and that regulations made under the statutes creating these bodies have the force of law are not in dispute before us. The question is not whether the employees and the Board have a statutory status; they undoubtedly have. The question is not whether the regulations made under Sec. 79 have the force of law; again, they undoubtedly have. The question is whether Sec. 79(c) of the Electricity Supply Act is a general law and therfore regulations cannot be made under it in respect of matters covered by the Industrial employment (Standing order) Act, a special law. That question we have answered and the answer to that question makes irrelevant the submissions based on the statutory status of the employees and the statutory force of the regulations. Next, we turn to the submission based on the notification made under Sec. 13 B of the Standing orders Act. Section 13 B reads as follows: "13B. Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence, Service (Classiffication, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the official Gazette, apply". The notification made by the Government has already been extracted by us. Some doubts were expressed whether the U.P. state electricity Board had in fact made the regulation and whether the Government merely notified the relation without applying its mind. The learned counsel appearing for the Board and the Government placed before us the relevant records and note files and we are satisfied that the Board did make the regulation and the Government did apply its mind. The High Court expressed the views that the expression any other rules or regulations" should be read ejusdem generis with the expressions "Fundamental and Supplementary Rules", "Civil Services, Control, Classification and Appeal Rules" etc. So read, it was said, the provisions of Section 13 B could only be applied to industrial establish 369 ments in which the workmen employed could properly be described as Government servants. We are unable to agree that the application of the ejusdem generis rule leads to any such result. The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be construed as limited to things which are of the same nature as those specified. But the rule is one which has to be "applied with caution and not pushed too far". It is a rule which must be confined to narrow bounds so as not to unduly or unnecessarily limit general and comprehensive words. If a broad based genus could consistently be discovered, there is no warrant to cut down general words to dwarf size. If giant it cannot be, dwarf it need not be. It is true that in Sec. 13 B the specie specie spacifically mentioned happen to be Government servants. But they also possess this common characteristic that they are all public servants enjoying a statutory status, and governed by statutory rules and regulations. If the legislature intended to confine the applicability of Sec. 13 B to industrial undertakings employing Government servants only nothing was easier than to say so instead of referring to various rules specifically and following it up with a general expression like the one before us. The words 'rules and regulations ' have come to acquire a special meaning when used in statutes. They are used to describe subordinate legislation made by authorities to whom the statute delegates that function. Te words can have no other meaning in Sec. 1 3 B. Therefore, the expression "workmen . t whom. any other rules or regulations that may be notified in this behalf means, in the context of Sec. 13 B, workmen enjoying a statutory status, in respect of whose conditions of, service the relevant statute authorities the making of rules or regulations. The expression cannot be construed so narrowly as to mean Government servants only; nor can it be construed so broadly as to mean workmen employed by whomsoever including private employers, so long a their conditions of service are notified by the Government under Sec. 13 B. Shri Garg relied on certain observations of the Madras High Court in Raman Nambissan vs State Electricity Board(l), and Thiruvenkataswami vs Coimbatore Municipality(). In Raman Nambissan 's case it was held that the mere fact that the Electricity Board had adopted the rules and regulations if the Government of Madras a its transitory rules and regulations did not bring the workmen employed in industrial establishments under the Board within the mischief of Sec. 1 3 P. Of the Industrial Establishment 's (Standing order) ct. In Thiru Venkataswami 's '. ca it was held that rules made by the Government fl (1) [1967] I L.L.J. 252. (2) [1968] I L.L.J. 361 370 under the District Municipalities Act could not be considered to he rules notified under Se. 13 B of the Standing orders Act merely because the rules were made by the Government and published in the Government Gazette. We agree with the conclusion in. both case. In Thiru Venkataswami case Kailasam J., also observed that the industrial employment (Standing order) Act was a special act relating exclusively to the service conditions of persons employed in industrial establishments, and, therefore, its provisions prevailed over The provisions of the District Municipalities Act. We entirely agree. But, the learned judge went on to say "section 13 B cannot be availed of for purposes of framing rules to govern the relationships in an industrial establishment under private management or in a statutory Corporation. This rule can apply only to industrial establishments in respect of which the Government is authorised to frame rules and regulations relating to the conditions of employment in industrial establishments". There we disagree. Our disagreement is only in regard to industrial establishment in statutory Corporations and not those under private management. Our reasons are mentioned in the previous paragraph. Shri Garg suggested that the rules, and regulations specific mention of which has been made in Sec. 13 B were all comprehensive sets of rules. , and, therefore, "any other rules or regulations" that might be notified by the Government should also satisfy the test of eomprehensiveness. He argued that a single rule or regulation could not be notified under Sec. 13 B as it would be too much to say, he said, that the notifying of a single rule or regulation would exclude the applicability of all the provisions of the Standing orders Act. We do not think that the notifying of one or many regulations has the effect that Shri Garg apprehends it has. The words 'Nothing in this Act shall apply ' are not to be interpreted too literally as to lead to absurd results and to what the legislature never intended. In our view the only reasonable construction that we can put upon the language of Sec. 13 B is that a rule or regulation, if notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation corse the field. To that extent and to that extend only 'nothing in the Act shall apply '. To understand Sec. 13B in by other manner will lead to unjust and uncontemplated results. For instance, most of the Service Rules and Regulations expressly mentioned in Sec. 13 B do no deal with a large number of the matters enumerated in the schedule such as 'Manner of intimating to workman periods and hour 11 of work, holidays, pay days and wage rates ', 'shift working ', 'Attendance and late coming ', 'conditions o, procedure in applying for, and e authority which may grant leave and holidays '. 'Closing and 371 reopening of Sections of the industrial establishments and temporary stoppages of work and the rights and liabilities of he employer and workman arising therefrom ' etc. To exclude the applicability of Standing orders relating to all these matters because the Fundamental Rules, the Civil Service Rules or the Civil Services Control, Classification an Appeal Rules provide for a few. matters like 'Classification of workmen ' or 'suspension or dismissal for misconduct ' would be to reverse the processes of history, apart from leading to unjust and untoward results. It will place workmen once again at the mercy of the employer be he ever so benign and it will certainly promote industrial strife. We have indicated what according to us is h proper construction of Sec. 13 B. That is the only construction which gives meaning and sense to Sec. 13 B and that is a construction which can legitimately be said to conform to the Directive Principles of state Policy proclaimed in Articles 42 and 43 of the Constitution. We, therefore, hold that the Industrial Employment (Standing orders) Act is a special law in regard to the matters enumerated in the schedule and the regulations made by the Electricity Board with respect to any of those matters are of no effect unless such regulations are either notified by the Government under Sec. 13 B or certified by The Certifying officer under Sec. 5 o the Industrial Employment (Standing orders) Act. In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect o which n regulations have been made by the Board, the Industrial Employment (Standing orders) Act shall continue to apply. In the present case the regulation made by the Board with regard to age o superannuation having been duly notified by the Government, the regulation shall have effect notwithstanding the fact hat it is a matter which could be the subject matter s) Standing orders under the Industrial Employment (Standing orders) Act. The respondents were therefore, properly retired when they attained the age of is years. the appeal is, therefore, allowed. The Writ Petition field in the Light Court is dismissed. The appellants will pay the costs of the respondents as directed by this Court on 28 9 1977. The costs are quantified at Rs. 3,500/ . S.R. Appeal allowed.

Respondents were two workmen originally employed by M/s Seth lam Gopal and Partners, who were licensees for the distribution of electricity under the Electricity Act, 1910. There were certified Standing orders for the industrial establishment of the said licensees; but they did not prescribe any age of superannuation for the employees with the result the workmen could continue to hours long as they were fit and able to discharge their duties Pursuant to The purchase by the appellant with effect from 1 12 1964 of the electricity undertaking of M/s Seth Ram Gopal, the employees in their industrial establishment including the respondents became the employee of the appellant. I he appellant board which ii admittedly an industrial establishment to which the Industrial Employment (Standing orders Act. 1946 applies neither made nor got certified any standing orders as it was bound so to do under hat Act. The Board however considered the certified Standing orders of the establishment Seth Ram Gopal as applicable to their employees even after the purchase of the undertaking by the Board. However. On lay 2. 1970 the Governor of Uttar Pradesh notified under Section 13 B o the Industrial Employment (Standing orders) Act, 1946. a regulation made by the U.P. State Electricity Board under Section 79(c) of the electricity Suppl. Act, 1948 fixing the age of superannuation as S and 60 on a par with the other State Govt. employees. Action in pursuance of the regulation as notified by the Governor the appellant sought to retire the respondents on July 2, 1972 and July 7. 1972 respectively. On their attaining the age of 58 years. The respondents filed a Writ Petition in the Allahabad High Court challenging the regulation male by the Board and its notification by the Governor which was dismissed. But the Division Bench which heard the special appeal preferred by then. Referred three questions to a Full Bench The Full Bench answered the questions as follows: ``(l) The Industrial Employment (Standing Orders 1946 applies to the industrial establishment of the State Electricity Board. (2) The Standing Orders framed, in an industrial establishment by an electrical undertaking, do not cease to be operative on the purchase of the undertaking by the Board or on framing of the Regulations under Section 79(c) of the electricity (Supply) Act 1918 and (3) Section 13 B of the Industrial Employment (Standing orders Act. applies only to the industrial establishments of the Government and to no other establishments. 356 Following the opinion of the Full Bench, the Division Bench allowed the special Appeal and issued a writ quashing the notification dated May 28, 197) and directing the appellant not to enforce the regulation against the respondents. he appellant obtained a certificate under article 133(1) of the Constitution and has preferred the appeal. Allowing the appeal, the Court ^ HELD : 1. The Industrial Employment (Standing orders) Act. 1946 (Act 20) is a special law in regard to the matters enumerate(l in the schedule and the regulations made by the Electricity Board with respect to my of those matters are of no effect, unless such regulations are either notified by the Government under Section 13 B or certified by the certifying officer under Section 5 of the Industrial Employment (Standing orders) Act, 1946. In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect of which no regulations have been made by the Board the Industrial Employment (Standing Orders Act shall continue to apply. In the present case, the regulation made 1. the Board with retired to the age of superannuation having been duly notified by the government , the regulation shall have effect. notwithstanding the fact that it is a matter which could be the subject matters of Standing orders under the Industrial Employment (Standing Orders) Act. The respondents were, therefore, properly retired when they attained the are of 58 years. [371A F] 2. The Industrial Employment (Standing Orders) Act is an Act specially designed to define the terms of employment of workmen in industrial establishment, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness. It is an Act giving recognition and hard won and precious right of workmen. It is a Special Act expressly and exclusively dealing with the schedule enumerated conditions of service or workmen in industrial establishment. [364E G] Associated Cement Co. Ltd. vs P. D. Vyas, [196(] 2 S.C.R. 974; Rohtak Hissar district Electricity Supply Co. Ltd. vs , State of U.P. an(l ors. ; , ; Western India Match Co. Ltd. vs Workmen, [1974] 1 S.C.R. 434; referred to. The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of State Electricity Board. It is an act to regulate the coordinated development of electricity. It is a special Act in regard to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special act in regard to the subject of conditions of service of workmen in industrial establishments. If section 79 of he Electricity Supply Act generally provides for the making o regulations providing for the conditions of service of the employees of the Board, it can only be regarded as a general provision which must yield o the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter. [365D F] 4. The reason for the rule "Generalis specialibus non derogant", that a general provision should yield to specific provision is this: In passing a special Act, Parliament devotes its entire consideration to a. particulars subject. When a 357 General Act is subsequently passed, it is logical to presume that Parliament has A not repealed or modified the former special Act unless it appears that the Special Act again levied consideration from Parliament [366 D] The provisions of the Standing orders Acts therefore, must prevail over Section 79(c) of the Electricity Supply Act in regard to matters to which the Standing (Orders Act applies. It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act, embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Section 79(c) of the Electricity Supply Act. lt is obvious that Parliament did not have before it the Standing orders Act, when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand pr alto repealed by Section 79(c of the Electricity Supply Act. [366F H] Sukhdev Singh vs Bhagat Ram, ; ; Rajasthan Electricity Board n. Mohan Lal, [1967] 3 S.C.R. 277; held inapplicable. The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be so construed as limited t things which are of the same nature as those specified. But the rule is one which has to be "applied with caution aud not pushed too far". It is a rule which must be confined to narrow bounds so as not to unduly or necessarily limit general and comprehensive words. If a broad based genus could consistently be discovered there is no warrant to cut down general words to dwarf size. If giant it cannot be, dwarf it need not be. [369 A B] It is true that in Section 1 3 B the specie specifically mentioned happen to be Government servants. But they also possess this common characteristic that they are all public servants enjoying a statutory status and governed by statutory rules and regulations. If the legislature intended to confine the applicability of Section I 3 B to industrial undertakings employing government servants only nothing was easier than to say so instead of referring to various rules specially and following it up with a general expression like the one in the instant case. [369B D] 6. The words 'rules and regulations ' have come to acquire a. special meaning when used in statutes. They are used to describe subordinate legislation made by authorities to whom the statute delegates that function. The words can have MV other meaning in Sec. 1 3 B. Therefore, the expression "workmen . whom . any other rules or regulations that may be notified in this behalf means, in the context of Sec. 13 B, workmen enjoying a statutory status, in respect of whose conditions of service the relevant statute authorises the making of rules or regulations. The expression cannot be construed so narrowly as to mean Government servants only; nor can not be construed so broadly as to mean workmen employed by whomsoever including private employers, so long as their conditions of service are notified by the Govt. under Sec. 13 B [369D F] The words 'nothing in this Act shall apply ' are not to be interpreted to literally as to lead to absurd results. The only reasonable construction that an be put upon the language of Section 13 B is that a rule of regulation, it 358 notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation covers the field. To that extent and to that extent only "nothing in the Act shall apply". [307 F G] Raman Nambissan vs State Electricity Board and Thiruvenkataswami vs Coimbatore Municipality, explained.

0-8k

Civil Appeal No. 1831 of 1973. Appeal by Special Leave from the Judgment and Order dated 4 5 1970 of the Allahabad High Court in Spl. Appeal No. 453/69. B. P. Maheshwari and Suresh Sethi for the Appellants. Ex Parte for the Respondents. The Judgment of the Court was delivered by SARKARIA, J. This appeal is directed against a judgment, dated May 4, 1970, of the High Court of Allahabad. It arises in these circumstances: One Matadin, father of Ram Lochan, respondent 6 herein, was a fixed rate tenant of the plots in dispute measuring 2.11 acres. One Ram Naresh Singh (deceased), brother of appellant 1 herein, 735 namely Mahadeo Prasad Singh, obtained a money decree against Matadin on February 18, 1953 from the Judge, Small Causes Court, Varanasi suit No. 847 of 1953. Ram Naresh Singh sought to execute the decree. As a consequence, the decree was transferred from the Court of the Judge of Small Causes to the Court of Munsif, Varanasi, for execution. The plots in dispute were put to auction by the executing court, and were purchased by the decree holder on July 20, 1956. The sale was confirmed on August 29, 1956 and the sale certificate was issued on September 8, 1956. The decreeholder purchaser, Ram Naresh Singh, took delivery of possession over these plots on March 14, 1957. Thereafter, he further sold the plots to appellant 2 and respondents 6 to 10. Matadin, however, died sometime in 1960. Thereafter his son Ram Lochan respondent 1, herein, instituted a suit on June 14, 1961 i.e. more than three years after the delivery of possession to the decree holder purchaser, Ram Naresh Singh, under section 229B read with Section 209 of the U. P. Zamindari Abolition and Land Reforms Act in the Revenue court against the present appellants, for a declaration that he is in possession of the suit land as Bhoomidar. In the alternative, he claimed the relief of possession on the same basis. He pleaded that his father, Ram Naresh Singh was the original Bhoomidar and remained in possession of the suit land till his death and thereafter, the plaintiff as the heir of the deceased continue in possession as Bhoomidar. He further alleged that the sale in favour of Ram Naresh Singh was without jurisdiction and a nullity; as it had been made without the knowledge of or notice to his father. The suit was resisted by the appellant, who is original defendant 1, and respondents 7 to 10, who are original defendants 2 to 5, inter alia on the ground that the suit was barred as res judicata and also under section 47 of the Code of Civil Procedure, and Article 181 of the Limitation Act. Defendants 2 to 5 further pleaded that they were bona fide purchasers for value and, therefore, their rights in the suit land were protected under Section 41 of the Transfer of Property Act. They also, alleged that they had made improvements on the suit land and were entitled to the benefit of Section 51 of the Transfer of Property Act. The trial court, by its judgment, dated August 30, 1965. dismissed the suit, holding, inter alia, that It was barred by the principle of constructive res judicata as also under Section 47 of the Code of Civil Procedure; that the Revenue Court had no jurisdiction to entertain and try the suit; that the appellants 6 to 736 10 were bona fide purchasers for value and, as such, were entitled to the benefit of Sections 41 and 51 of the Transfer of Property Act; that the suit was barred by Article 181 of the Limitation Act, 1908 as well as by Section 34(5) of the U.P. Land Reforms Act; and that Ram Naresh Singh had been in possession since March 14, 1967, i.e., the date on which he obtained delivery of possession in execution of his decree as auction purchaser. Aggrieved, the plaintiff (respondent 1) preferred an appeal to the Court of the Additional Commissioner, Varanasi, who by his judgment dated December 28, 1965, allowed the appeal and held that the executing court had no jurisdiction to sell the suit land under Section 42 of the Code of Civil Procedure, as amended by the U.P. Civil Laws (Amendment) Act. 1954 and that the suit was not barred as res judicata or under Section 47 of the Code of Civil Procedure. The Additional Commissioner further held that the possession of Ram Naresh Singh was unlawful as it was on the basis of the void sale, dated March 4, 1960, which could not confer any title on him; that the judgment debtor had no knowledge about the execution proceedings; that the suit property worth Rs. 6,000 was for a very meagre amount and the sale was vitiated by fraud in publishing and conducting the sale. Ram Lochan and Ram Naresh Singh carried a second appeal against the decision to the Board of Revenue. During the pendency of that second appeal, Ram Naresh Singh died and Mahadeo Prasad Singh, appellant 1, was substituted in his place. The Board dismissed the appeal on the ground that the auction sale with regard to the suit land in pursuance of the decree of the Judge, Small Causes Court, was void and, as such, did not invest the decree holder purchaser with any title and consequently, the possession of the appellant was without any title. The Board further held that the auction sale did not affect the suit under Section 209 of the U.P. Zamindari Abolition and the Land Reforms Act. To impugn the judgment of the Board, Mahadeo Prasad Singh, appellant herein, as well as respondents 6 to 10 filed a writ petition under Article 226 of the Constitution in the High Court of Allahabad. A learned Single Judge, who heard the writ petition, allowed it by his judgment, dated April 23, 1969, and quashed the judgments of the Board of Revenue as well as of the Additional Commissioner, who are respondents 2 and 3 herein. Following an earlier judgment of a Division Bench of the same Court in Suraj Bux Singh vs Badri Prasad & Anr. the learned Judge held 737 that the execution sale of the suit land was proper as per the provisions of Section 42 of the Code of Civil Procedure; that prior to its amendment in U.P. by the U.P. Civil Laws (Amendment) Act 1954, the executing court had the same powers in relation to execution as it would have had if the decree had been passed by itself; that the decree in the present suit was passed on February 18, 1953, i.e. prior to the coming into force of the Amendment Act of 1954 and, as such, the amended Section 42 did not apply to it; and that the decree having been passed prior to the date of the amendment, should be executed in accordance with the provisions of Section 42 as it stood prior to its amendment; and that as a result, the suit for declaration as well as for possession would have to fail. The learned Single Judge did not go into the question as to whether the suit was barred by Section 47 of the Code of Civil Procedure. Against the judgment of the learned Single Judge, respondent 1, herein, preferred a Special Appeal which was referred to a Full Bench of the High Court consisting of three learned Judges. The two Judges, in majority, held that the Small Cause Court had no power to execute the decree by attachment and sale of immovable property; that the transferee court, namely, the court of the Munsif had the same powers as that of the Small Cause Court and, therefore, that court also had no jurisdiction to execute the decree by attachment and sale of the immovable property; that the right to execute a decree by attachment and sale of immovable property is a matter of procedure, while the right to realise the decretal amount by attachment and sale is a substantive right of the decree holder, that the date on which the decree was put into execution, the amendment of Section 42 had already come into force and the power of the transferee court had become co terminus with that of the transferor court; and that the amendment did not save the right of the appellant to execute the decree of the Small Causes Court by attachment and sale of immovable property. Sinha, J. however, dissented. He took the view that the Amendment Act did not apply to the present suit and that a substantive right had accrued to Ram Naresh Singh on the passing of the decree to execute it by attachment and sale of the immovable property and that right was clearly saved to him by virtue of Section 3 of the Amendment Act. In accordance with the view of the majority, the appeal of respondent 1 was allowed and the Order of the learned Single Judge was set aside. Hence this appeal by special leave by the appellants. 738 Thus, the principal question that falls to be considered in this appeal is whether the High Court was right in holding that the execution sale of the land in dispute was totally without jurisdiction and null and void. Some relevant dates may be noted. Ram Naresh obtained the decree from the Court of Small Causes on February 18, 1953. On the decree holder 's application under Section 39 of the Code of Civil Procedure, the decree was transferred to the Court of the Munsif on January 24, 1955 and was put into execution after the U.P. (Amendment) Act XXIV of 1954 had come into force. This sale in favour of the decree holder himself took place on July 20, 1956. It was confirmed on August 29, 1956 and the sale certificate was issued to the purchaser on September 8, 1956. The auction purchaser took delivery of possession as per Dakhalnama on March 24, 1957. The decree holder purchaser further sold the plots in dispute to defendants 2 to 5. Next, at this stage, the relevant provisions of the Code of Civil Procedure and the U.P. Civil Laws (Reforms and Amendment) Act (Act No. XXIV of 1954) may be noticed. Section 38 of the Code of Civil Procedure provides that "a decree may be executed either by the Court which passed it or by the Court to which it is sent for execution". In the instant case, as already seen, the decree was passed by the Small Cause Court which was competent to execute it, but (in view of Order 21, Rule 82 of the Code) not by attachment and sale of the immovable property of the judgment debtor. That is to say, that Court could execute it by attachment and sale of the movable property of the judgment debtor, if it was, of course, not exempt under Section 60 of the Code of Civil Procedure or under any other law. Section 39 of the Code deals with transfer of decree. Its material part reads thus: "39(1).The Court which passed a decree may, on the application of the decree holder, send it for execution to another Court of competent jurisdiction (a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court, or (b)if such person has not property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property 739 within the local limits of the jurisdiction of such other Court, or (c)if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or (d)if the court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court. (2)The Court which passed a decree may of its own motion send it for execution to any subordinate Court of competent jurisdiction. (3) . . . . . " In the instant case, the decree was transferred under clause (d) of sub section (1) of Section 39. Unlike the other clauses (a) to (c) of the sub section, it seems that under clause (d), the Court has a rational discretion to transfer or not to transfer the decree passed by it. This is apparent from the word "may" used in the opening part of sub section (1), and the requirement of recording reasons for the transfer under clause (d). It follows therefore, that under Section 39 (1) a decree holder has no indefeasible right to get his application for transfer of decree to another Court ipso facto accepted by the Court which passed it, particularly in a case which is not covered by clauses (a), (b) and (c) of that sub section. Section 42 of the Code indicates the powers of the transferee court for executing a transferred decree. The material part of this section, prior to its amendment by the U.P. Act (No. XXIV) of 1954, reads as under: "The Court executing a decree sent to it shall have the same powers in executing such decree as if it had been passed by itself. All persons disobeying or obstructing the execution of the decree shall be punishable by such Court in the same manner as if it had passed the decree. And its order in executing such decree shall be subject to the same rules in respect of appeal as if the decree had been passed by itself.". (emphasis added) The provisions in sub sections (2), (3) and (4) of the Section are not relevant for our purpose. The U.P. Act (No. XXIV of 1954) amended with effect from November 30, 1954, Section 42 of the Code, and after that amendment sub section (1) of the Section read as under: 740 "The Court executing the decree sent to it shall have the same power in executing such decree as if it had been passed by itself. All persons disobeying or obstructing the execution of decree shall be punished by such Court in the same manner as if it had passed the decree and its order in executing such decree shall be subject to the same rules in respect of appeal as if the decree had been passed by itself." (emphasis added) Thus, for the words "as if it had been passed by itself" occurring in the first sentence of sub section (1) of Section 42, the Amending Act 24 of 1954 substituted the words "as the Court which passed it". The effect of such substitution was that the powers of the transferee Court in executing the transferred decree became coterminous with the powers of the Court which had passed it. The result was that if the power of the transferor Court to execute its own decree were in any respect restricted, the same restriction would attach to the powers of the transferee Court in executing the transferred decree, notwithstanding the position that the powers of the transferee Court in executing its own decree were not so restricted. Section 3 of the U.P. Civil Laws (Reforms and Amendment) Act, saves certain rights already acquired or accrued. It is in these terms: "3(1)Any amendment made by this Act shall not affect the validity, invalidity, effect or consequence of anything already done or suffered, or any right, title, obligation or liability already acquired, accrued or incurred or any release or discharge of or from any debt, decree, liability, or any jurisdiction already exercised, and any proceeding instituted or commenced in any Court prior to the commencement of this Act shall, notwithstanding any amendment herein made, continue to be heard and decided by such Court. (2)Where by reason of any amendment herein made in the Indian Limitation Act, 1908, or any other enactment mentioned in column 2 of the schedule, the period of limitation prescribed for any suit or appeal has been modified or a different period of limitation will hereafter govern any such suit or appeal, then, notwithstanding any amendment so made or the fact that the suit or appeal would now lie in a different Court, the period of limitation applicable to a suit or appeal, as aforesaid, in which time has begun to run before the commencement of this Act, shall continue to be the period 741 which but for the amendment so made would have been available. Before dealing with the contentions canvassed, we may remind ourselves of some well known principles of interpretation in regard to the retrospective operation of statutes. As a general rule, a statute which takes away or impairs substantive rights acquired under the existing law is construed to have a prospective operation unless the language of that statute expressly or by inevitable intendment compels a contrary construction. But this presumption as to prospective operation of a statute does not apply to an enactment affecting procedure or practice such as the Code of Civil Procedure. The reason is that no person has a vested right in any course of procedure. "The general principle indeed seems to be that alterations in the procedure are always retrospective, unless there be some good reason against it". (See Mulla 's Code of Civil Procedure, 13th Edn. I, page 6, and In the light of the above principles, the question posed for our decision, resolves itself into the two fold issue : whether the decree holder had acquired a substantive right (a) to get the decree passed by the Court of Small Causes, transferred to the Court of the Munsif and (b) thereafter to have is executed by the transferee Court in any of the modes provided in Section 51 of the Code of Civil Procedure, including the mode by attachment and sale of the immovable property of the judgment debtor. As before the High Court, here also, it is contended on behalf of the decree holder that he had acquired this two fold substantive right before the coming into force of the U.P. (Amendment Act XXIV) of 1954, and, as such, it was saved by Section 3(1) of this Amendment Act. It is maintained that the two fold right aforesaid is a substantive right and not merely a matter of procedure. Support for this argument has been sought from a decision of this Court in Garikapati vs Subbiah Choudhry. Reference has also been made to a Division Bench judgment of the Allahabad High Court in Suraj Bux Singh vs Badri Prasad. In the alternative, it is submitted that assuming the sale was without jurisdiction, then also, that question would relate to the execution, discharge or satisfaction of the decree and, as such, the remedy of the judgment debtor was to proceed by an application 742 under Section 47 of the Code of Civil Procedure and not by a suit as has been done by the plaintiff in the instant case. In short, the argument is that in any event, the present suit was barred by Section 47 of the Code. It appears to us that none of these contentions stands a close examination. It may be noted that the fasciculus of Sections 51 to 54 of the Code of Civil Procedure appear under the heading "PROCEDURE IN EXECUTION". Section 51 is captioned "Powers of Court to enforce execution". It reads thus : "Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree holder, order execution of the decree (a) by delivery of any property specifically decreed; (b) by attachment and sale or by sales without attachment of any property; (c) . . . . . . . . (d) by appointing a receiver; or (e) in such other manner as the nature of the relief granted may require : Provided that, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied. . . ." This Section "merely enumerates the different modes of execution in general terms while the conditions and limitations under which alone the respective modes can be availed of are prescribed further on by different provisions". I.R. Commentaries Vol. I, 9th Edn. p. 863). The opening words of the Section "Subject to such conditions and limitations as may be prescribed" put it beyond doubt that there is no wide or unrestricted jurisdiction to order execution or to claim execution in every case in all the modes indicated therein. 'Prescribed ' has been defined in Section 2(16) of the Code to mean "prescribed by rules", and "rules", under Section 2(18) means "rules and forms" contained in the First Schedule of the Code or framed by the respective superior Courts in different States under Section 122 or Section 125. 743 We are one with the High Court (majority) that this phrase cannot be construed to mean that the powers of the executing Court under this Section are not subject to the other conditions and limitations enacted in the other sections of the Code. For instance, the mode, (b), by attachment and sale of the property of the judgment debtor, may not be available in respect of property which falls within the exemption of section 60 of the Code. Although ordinarily the decree holder has an option to choose any particular mode for execution of his money decree, it will not be correct to say that the Court has absolutely no discretion to place any limitation as to the mode in which the decree is to be executed. The option of the judgment debtor, for instance, to apply under Order 21. Rule 30, C.P.C. for execution of a decree simultaneously against both the person and the property of the judgment debtor is subject to exercise by the Court of a judicial discretion vested in it under Order 21, Rule 21, C.P.C. We have already noticed, that under Section 39(1) (d), the decree holder has no indefeasible, substantive right to get a decree of a Court of Small Causes passed in his favour transferred to another Court. Cases are conceivable where the decree is of such a petty amount that the Court of Small Causes thinks that it can easily be executed by it by attachment and sale of the movable property of the judgment debtor. In the instant case, also the decree was for a small amount of Rs. 300 and odd and we understand that the application for transfer was made under clause (d) of Section 39(1). Thus, the decree holder 's right to make an application for transfer of his decree under section 39(1) (d) is a mere procedural right. The Court of Small Causes could in its discretion, for reasons to be recorded, refuse to transfer it to the Court of the Munsif. In other words, the decree holder had no vested or substantive right to get the decree transferred to the Court of the Munsif for execution. The first limb of the issue is therefore answered against the appellant. As regards the second limb of the issue, we find ourselves entirely in agreement with the High Court that the provisions of Section 51 are merely procedural in character. A decree holder gets a right to execute the decree only in accordance with the 744 procedure provided by law in force at the time when the execution is sought. If a mode of procedure different from the one which obtained at the date of the passing of the decree, has been provided by law, the decree holder is bound to proceed in execution according to the altered procedure. The Amendment Act XXIV of 1954 had taken away the power of the transferee court to execute the transferred decree by attachment and sale of the immovable property by making it coterminous with that of the transferor Court which, in the instant case, was the Small Cause Court and in view of the prohibition contained in Order 21, Rule 82, Code of Civil Procedure, had no power to execute its decree by sale of immovable property. That being the position, the Court of the Munsif to whom the decree had also been transferred for execution, had also no jurisdiction to order sale of the immovable property of the judgment debtor. Thus considered, the sale of the immovable property ordered by the Munsif in execution of the decree of the Court of Small Causes transferred to him, was wholly without jurisdiction and a nullity. Once we come to the conclusion that the sale in question was totally null and void, the alternative contention of the appellants with regard to the suit being barred by Section 47 of the Code of Civil Procedure, does not survive. This is not a case of an irregular or voidable sale which continues to subsist so long as it is not set aside, but of a sale which was entirely without jurisdiction. It was non est in the eye of law. Such a nullity does not from its very nature, need setting aside. As pointed out by this Court in Kiran Singh vs Chaman Paswan, ". it is a fundamental principle, well established that a decree passed by a Court without jurisdiction, is a nullity; and that its invalidity could be set up whenever it is sought to be enforced or relied upon, even at the stage of execution, and even in collateral proceedings". Most of the rulings which have been cited in support of their alternative contention by the appellants, were also cited before 745 the High Court and have been rightly distinguished. We need not go into the same. Before we part with the judgment, we may, however, note that the amendment made by the U.P. (Act XXIV) of 1954 was deleted by another U.P. (Amendment) Act XIV of 1970, and the unamended sub section (1) of Section 42, as it existed before the amendment of 1954, was revived. But, this Amendment Act (XIV of 1970) was not given retrospective operation. It did not affect the previous operation of the Amendment Act XXIV of 1954 or anything suffered or done thereunder. For the foregoing reasons, we uphold the impugned judgment and dismiss this appeal. In view of the law point involved, we leave the parties to pay and bear their own costs. P.B.R. Appeal dismissed.

A decree, according to section 38 of the Code of Civil Procedure, may be executed either by the Court which passed it or by the Court to which it is sent for execution. Section 39(1)(d) provides that the Court which passed a decree may, on the application of the decree holder, send it for execution to another Court of competent jurisdiction, if the Court, which passed the decree, considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court. Section 42 of the Code, which indicates the powers of the transferee Court for executing the transferred decree, before its amendment in 1954, provided that the Court executing the decree sent to it, shall have the same powers in executing such decree "as if it had been passed by itself." After the amendment the words "as the Court which has passed it" were substituted for the words "as if it has been passed by itself". Section 3 of the U.P. Civil Laws (Reform and Amendment) Act saved certain rights already acquired or accrued. In February, 1953 the brother of appellant No. 1 obtained a decree from the Court of Small Causes which on his application under section 39 of the Code, was transferred to the Court of Munsif in January, 1955 and put into execution after the U.P. (Amendment) Act XXIV of 1954 had come into force. In the sale the decree holder himself purchased the land in July, 1956 and took possession of the property. He later sold the property to defendant nos. 2 to 5. The suit of respondent No. 1 for a declaration that the sale in favour of appellant No. 1 was without jurisdiction and therefore a nullity was dismissed by the trial Court. On appeal the Additional Commissioner held that the executing court had no jurisdiction to sell the suit land under section 42 of the C.P.C. as amended by the U. P. Civil Laws (Amendment) Act, 1954 Dismissing the appeal, the Board of Revenue held that the auction sale in pursuance of the decree of the Judge, Small Causes Court was void and did not invest the decree holder purchaser with any title. 733 On the appellant 's writ petition a single Judge of the High Court quashed the judgment of the Revenue Board as well as of the Additional Commissioner holding that the execution sale of the land was proper under section 42 of the Code, that prior to its amendment by the U. P. Civil Laws (Amendment) Act, 1954, the executing court had the same powers in relation to execution as it would have had if the decree had been passed by itself and the decree having been passed prior to the amendment of section 42 this section did not apply and the decree should have been executed in accordance with the provisions of section 42 prior to its amendment. On appeal a Full Bench of the High Court (by majority) held that since the Small Causes Court had no power to execute the decree by attachment and sale of immovable property, the Munsif 's Court to which the decree was transferred for execution, possessing the same powers as the Small Causes Court, had no jurisdiction to execute the decree by attachment and sale of the immovable property. It was contended before this Court on behalf of the decree holder that he had acquired a substantive right to get the decree of the Court of Small Causes transferred to the Court of Munsif for execution and thereafter to have it executed by the transferee court in any of the modes provided in section 51 C.P.C. and this two fold substantive right having accrued to him before the coming into force of the 1954 Amendment, it was saved by section 3 of this Amendment Act. Dismissing the appeal, ^ HELD: 1 (a) Under section 39(1)(d) a decree holder has no indefeasible substantive right to get his application for transfer of a decree to another Court ipso facto accepted by the Court which passed it, particularly in a case which is not covered by clauses (a), (b) & (c) of that sub section. The effect of substitution of the words "as the court which passed it" for the words "as if it had been passed by itself" was that powers of the transferee Court in executing the transferred decree became co terminus with the powers of the Court, which passed it. Therefore, if the power of the transferor Court to execute its own decree were in any respect restricted, the same restriction would attach to the powers of the transferee Court in executing the transferred decree notwithstanding the position that the powers of the transferee Court in executing its own decree were not so restricted. [739E; 740C D] (b) The opening words of section 51 (subject to such conditions and limitations as may be prescribed) put it beyond doubt that there is no wide or unrestricted jurisdiction to order execution or to claim execution in every case in all the modes indicated therein. The High Court (per majority) was right in construing it to mean that the powers of the executing court under this section are not subject to the other conditions and limitations enacted in the other sections of the Code. Although ordinarily a decree holder has an option to choose any particular mode for execution of his money decree it may not be correct to say that the Court has absolutely no discretion to place any limitation as to the mode in which the decree is to be executed. [742G, 743A B] In the instant case, the decree holder 's right to make an application for transfer of his decree under section 39(1)(d) is a mere procedural right. The Court of Small Causes could, in its discretion for reasons to be recorded, 734 refuse to transfer it to the Court of Munsif. In other words the decree holder had no vested or substantive right to get the decree transferred to the Court of the Munsif for execution. [743F G] (c) The well settled principle in regard to the retrospective operation of statutes is that as a general rule, a statute which takes away or impairs substantive rights acquired under the existing law is construed to have a prospective operation unless the language of that statute expressly or by inevitable intendment compels a contrary construction. But this presumption as to prospective operation of a statute does not apply to an enactment affecting procedure or practice such as the Code of Civil Procedure because no person has a vested right in any course of procedure. [741 B C] 2.(a) The High Court was right in holding that the provisions of section 51 are merely procedural in character. A decree holder gets a right to execute the decree only in accordance with the procedure provided by the law in force at the time when execution is sought. If a mode of procedure different from the one which obtained at the date of passing of the decree has been provided by law, the decree holder is bound to proceed in execution according to the altered procedure. [744A B] (b) The Amendment Act XXIV of 1954 had taken away the power of transferee Court to execute the transferred decree by attachment and sale of the immovable property by making it co terminus with that of the transferor Court (the Small Cause Court) and in view of the prohibition contained in Order 21 Rule 82 C.P.C. it had no power to execute its decree by sale of immovable property. That being the position, the Court of the Munsif to which the decree had been transferred for execution had no jurisdiction to order sale of the immovable property of the judgment debtor. The sale ordered by the Munsif in execution of the decree of the Court of Small Causes transferred to him was, therefore, wholly without jurisdiction and a nullity. [744 B D] Kiran Singh vs Chaman Paswan, ; referred to.

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Civil Appeal No. 3966 of 1987. From the Judgment and Order dated 20.1.1987 of the High Court of Orissa of O.J.C. No. 3300 of 1986. A.K. Panda for the Appellant. J. R. Das for the Respondent The Judgment of the Court was delivered by SHARMA, J. Special leave granted. Arguments heard. The respondent A.C. Jena was a Sarpanch of Padanipal Grama Panchayat, Orissa. He was removed from the office under section 115 of the Orissa Grama Panchayat Act, 1964 by the order of the State Government (petitioner No. I before us) dated 24.10.86, as contained in Annexure D to the special leave petition, which has been quashed by the impugned judgment of the Orissa High Court dated 20.1.1987 in o. J.c No. 330()/86. The relevant provisions of section 115 of the Act read as follows: "115(1). If on the report of the Sub Divisional 179 Officer the Collector is of the opinion that circumstances exist to show that the Sarpanch or Naib Sarpanch of a Grama Panchayat wilfully omits or refuses to carry out or violates the provisions of this Act, or the rules or orders made thereunder or abuses the powers, rights and privileges vested in him or acts in a manner prejudicial to the interest of the inhabitants of the Grama and that the further continuance of such person in office would be detrimental to the interest of the Grama Panchayat or the inhabitants of the Grama, he may, by order, suspend the Sarpanch or Naib Sarpanch, as the case may be, from office and report the matter to the State Government. (2) The State Government, on the report of the Collector under sub section (1) shall, or if the State Government themselves are of the opinion that the circumstances specified in the said sub section exist in relation to a Sarpanch or Naib Sarpanch, then on their own motion, may, after giving the person concerned a reasonable opportunity of showing cause, remove him from the office of Sarpanch or Naib Sarpanch, as the case may be. (3). . . . . . . . . . . . . . (4) A Sarpanch or Naib Sarpanch on removal from office under sub section (2) shall also cease to be a member of the Grama Panchayat, and such person shall not be eligible for election as a member for a period not exceeding four years as the State Government may specify. (5). . . . . . . . . . . . . . The Collector, Cuttack, petitioner No. 2, before us, received a report (Appendix to Annexure A) from the Sub Divisional officer, Kendra Pada, stating the facts and circumstances which clearly satisfy the conditions mentioned in section 115 of the Act, for the suspension and removal of the respondent. The Collector, Cuttack, thereupon suspended the Sarpanch by his order dated 24.4.1985 (Annexure A) and while so doing he expressly mentioned that on going through the 180 report of the Sub divisional officer he was satisfied that the Sarpanch acted in a manner as detailed in the Appendix and "his further continuance in office would be detrimental to the interest of the said Grama Panchayat as also of the inhabitants of the Grama." Accordingly a notice as required by sub section (2) was served on the Sarpanch, who filed his detailed reply and was also personally heard. His explanation however was not considered satisfactory and an order dated 24.10.1986 bearing No. 19032/GP was passed removing him from the office of the Sarpanch. A second notification of the same date bearing No. 19039/GP was issued under sub section (4). The Sarpanch in these circumstances moved the High Court under Article 226 of the Constitution. The High Court at the stage of admission by a short order quashed the notification issued against the petitioner "on the sole and simple ground that the order does not specify one of the mandatory requirements, i.e., his further continuance in the office would be detrimental to the interest of the Gram Panchayat or the inhabitants of the Gram". Elaborating the point the High Court observed as follows: ". One of the circumstances mentioned in sub section ( I) is just indicated above. As the existence of the circumstances mentioned in sub section (1) is condition precedent for passing an order of removal by the State Government, its absence makes the order wholly illegal and without jurisdiction . , .". As has been stated earlier, the Collector, while passing the order of suspension under sub section (1) of section 115 expressly stated that the further continuance of the petitioner in office would be detrimental to the interest of the Grama Panchayat and the inhabitants of the Grama. He relied upon the report of the Subdivisional officer mentioning serious allegations against the Sarpanch which undoubtedly, if true, satisfied the conditions for exercise of the power. Since it has not been suggested before us otherwise, we do not consider it necessary to deal with them except mentioning that besides many serious allegations, the report also said that certain money belonging to the Grama Panchayat which had been received at an auction was not deposited. In the order of removal, the State Government after mentioning the allegations stated that the explanation of the Sarpanch was not acceptable and he was, therefore, being removed from the office. The allegations made against him, 181 thus were accepted as correct. In other words the State Government was of the opinion that the circumstances specified in sub section ( I) existed. It will be noticed that the language of sub section (2) does not require a repetition of the necessary satisfaction in the same language as referable to sub section (1). Besides, the section cannot be interpreted to mandatorily lay down a rule for the authority concerned to express his conclusion in relation to the fulfilment of the conditions mentioned therein in a particular form using a particular set of words. What is contemplated by the section is the formation of an opinion in this regard after giving a reasonable opportunity to the sarpanch in question to meet the allegations suggested and to announce the conclusion in unambiguous and express terms. All that has been done in this case. We do not. therefore, see any justification in the High Court quashing the orders impugned before it. Accordingly the appeal is allowed, High Court 's judgment is set aside and the writ application filed before the High Court is dismissed. N.P.V. Appeal allowed.

% The respondent was a Sarpanch of a Gram Panchayat. Consequent upon a report made by the Sub Divisional officer, against the respondent stating the facts and circumstances which satisfied the conditions mentioned in section 115 of the orissa Gram Panchayat Act, 1964 for his suspension and removal, the second appellant, by his order dated 22.4.85, suspended the respondent. A notice, as required by sub section (2) of section 151, was served on the Sarpanch who filed his detailed reply and was also personally heard. As the explanation was not considered satisfactory, an order dated 24.10.86 removing him from the office of the Sarpanch was passed, in which it was mentioned that the appellant 's further continuance in office would be detrimental to the interest of the Gram Panchayat as also of the inhabitants of the Grama. A second notification dated 24.10.86 under sub section (4) was also passed. The Sarpanch challenged the above notifications before the High Court. The High Court quashed the notifications on the sole and simple ground that the order did not satisfy one of the mandatory requirements, i.e. the appellant 's further continuance in the office would be detrimental to the interest of the Gram Panchayat or inhabitants of the Grama. Allowing the appeal, ^ HELD: The language of sub section (2) does not require a repetition of the necessary satisfaction in the same language as referable to sub section (1). Besides, the section cannot be interpreted to mandatorily lay down a rule for the authority concerned to express his conclusion in relation to the fulfilment of the conditions mentioned therein in a particular form using a particular set of words. [181B] 178 What is contemplated by the section is the formation of an opinion in this regard after giving a reasonable opportunity to the Sarpanch in question to meet the allegations suggested and to announce the conclusion in unambiguous and express terms. All that has been done in the instant case. 1 [181B C] The second appellant, while passing the order of suspension under sub section (l) of section 115, expressly stated that further continuance of the appellant in the office would be detrimental to the interest of the Gram Panchayat and the inhabitants of the Grama. The State Government was of the opinion that the circumstances specified in sub section (1) existed. In the order of removal, the State Government after mentioning the allegations, stated that the explanation of the Sarpanch was not acceptable and he was, therefore, being removed from the office. The allegations made against him thus were accepted as correct. The High Court was, therefore, not justified in quashing the impugned orders.[180 H; 181A,C]

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ivil Appeal No. 709 of 1957. Appeal by special leave from the judgment and order dated April 18, 1955, of the Madras High Court in Case Referred No. 25 of 1952. A. V. Viswanatha Sastri and M. section K. Sastri, for the appellant. "M. C. Setalvad, Attorney General for India, R, Ganapathy Iyer, R. H. Dhebar and D. Gupta, for the respondent. November.24. The Judgment of the Court was delivered by 649 GAJENDRAGADKAR, J. The appellant is a firm acting as managing agents of the Janardana Mills Ltd., Coimbatore. It purchased four contiguous plots of land admeasuring 5 acres 26 cents under four sale deeds executed on October 25, 1941, November 15, 1941, June 29, 1942, and November 19, 1942, respectively for a total consideration of Rs. 8,712 15 6. After about five years these properties were sold by the appellant in two lots to the Janardana Mills Ltd. The first lot was sold on September 1, 1947, and the second on November 10, 1947, the total consideration for the two sales being Rs. 52,600. These two sales realised for the appellant a sum of Rs.43,887 0 6 in excess of the purchase price. The Income tax Officer treated the said amount of Rs. 43,887 as the income of the appellant for the assessment year 1948 49, and assessed it to income tax under the head " business ". The officer held that there was no evidence to show that the appellant had purchased the said lands for agricultural purposes or that it had acquired them as an investment. He also found that, since the lands were adjacent to the Janar dana Mills, the appellant must have purchased them solely with a view to sell them to the said mills with a profit. That is why, though the transaction was in the nature of a solitary transaction, it was held that it had all the elements of a business transaction and was thus an adventure in the nature of trade. Against this order of assessment the appellant preferred an appeal to the Appellate Assistant Commissioner. The appellate authority upheld the appellant 's contention that the amount in question was not assessable as it cannot be hold to be income or profit resulting from a profit making scheme, and set aside the order under appeal. The respondent challenged the correctness of this order by taking an appeal against it to the Incometax Appellate Tribunal. The tribunal agreed with the view taken by the Income tax Officer and held that the amount in question was not a capital accretion but a gain made in an adventure in the nature of business 82 650 in carrying out a scheme of profit making. The tribunal rejected the explanations given by the appellant as to why it had purchased the properties and held that the purchase had been made by the appellant solely with a view to sell the said properties at profit to the Janardana Mills. At the instance of the appellant the tribunal then referred to the High Court of Madras the question suggested by it in these words: " whether there was material for the assessment of the sum of Rs. 43,887 being the difference between the purchase and sale price of the four plots of land as income from an adventure in the nature of trade ". This reference was heard by Rajagopalan and Rajagopala Ayyangar, JJ., and the question referred has been answered against the appellant. The High Court has held that the transaction in question was an adventure in the nature of trade and so the respondent was justified in taxing the amount in question under the head " business " for the relevant year. The application for leave made by the appellant was rejected by the High Court. Thereupon the appellant applied for, and obtained, special leave to appeal to this Court. That is how the appeal has been admitted in this Court ; and the only question which it raises for our decision is whether the High Court was right in holding that the transaction in question was an adventure in the nature of trade. We may at this stage brie y indicate the material facts and circumstances found by the tribunal and the inference drawn by it in regard to the character of the transaction in question. The appellant purchased the four plots under four different sale deeds. The first purchase was for Rs. 521 and it covered a piece of land admeasuring 281 cents; the second purchase related to 2 acres 791 cents and the price paid was Rs. 1,250; while the third and the fourth purchases were for Rs. 1,942 and Rs. 5,000 and they covered 28 1/4 cents and 1 acre and 90 cents respectively. The property purchased under the first sale deed was sold on November 10, 1947, for Rs. 2,825 whereas the three remaining properties were sold on September 1, 1947, 651 for Rs. 49,775, the purchaser in both cases being the Janardana Mills Ltd. The purchase of the first item of property by the appellant had been made in the name of Mr. V. G. Raja, assistant manager of the Janardana Mills Ltd., who is the son in law Of G. Venkataswami Naidu, one of the partners of the appellant firm. Naturally when this property was sold to the mills the document was executed by the ostensible owner V. G. Raja. It is not disputed that the purchase in the name of V. G. Raja was benami for the appellant. All the plots which were thus purchased by the appellant piecemeal are contiguous and they adjoin the mills. On the plot purchased on June 29, 1942, there stood a house of six rooms which fetched an annual rent of about Rs. 100; and after deduction of taxes, it left a net income of Rs. 80 per year to the appellant. The other plots are vacant sites and they brought no income to the appellant. During the time that the appellant was in possession of these plots it made no effort to put up any structures on them or to cultivate them; and so it was clear that the only object with which the appellant had purchased these plots was to sell them to the mills at a profit. It was, however, urged by the appellant that the properties had been bought as an investment. This plea was rejected by the tribunal. The tribunal likewise rejected the appellant 's case that it had purchased the plots for building tenements for the labourers working in the Janardana Mills. Alternatively it was urged by the appellant that the Janardana Mills decided to purchase the plots because ' an award passed by an industrial tribunal in June 1947 had recommended that the mills should provide tenements for its labourers. Thus the appellant 's case was that it had not purchased the properties with a view to sell them to the mills and the mills in fact would not have purchased them but for the recommendation made by the award which made it necessary for the mills to purchase the adjoining plots for the purpose of building tenements for its employees. The tribunal was not impressed even by this plea; and so it ultimately held that the plots had been purchased by the appellant wholly and solely, 652 with the idea of selling them at profit to the mills. The tribunal thought that since the appellant was the managing agent of the mills it was in a position to influence the decision of the mills to purchase the properties from it and that was the sole basis for its initial purchase of the plots. On these findings the tribunal reached the conclusion that the sum of Rs. 43,887 was not a capital accretion but was a gain made in the adventure in the nature of business in carrying out the scheme of profit making. The appellant contends that, on the facts and circumstances found in the cage, it is erroneous in law to hold that the transaction in question is an adventure in the nature of trade. There is no doubt that the jurisdiction conferred on the High Court by section 66(1) is limited to entertaining references involving questions of law. If the point raised on reference relates to the construction of a document of title or to the interpretation of the relevant provisions of the statute, it is a pure question of law; and in dealing with it, though the High Court may have due regard for the view taken by the tribunal, its decision would not be fettered by the said view. It is free to adopt such construction of the document or the statute as appears to it reasonable. In some cases, the point sought to be raised on reference may turn out to be a pure question of fact; and if that be so, the finding of fact recorded by the tribunal must be regarded as conclusive in proceedings under section 66(1). If, however, such a finding of fact is based on an inference drawn from primary evidentiary facts proved. in the case, its correctness or validity is open to challenge in reference proceedings within narrow limits. The assessee or the revenue can contend that the inference has been drawn on considering inadmissible evidence or after excluding admissible and relevant evidence; and, if the High Court is satisfied that the inference is the result of improper admission or exclusion of evidence, it would be justified in examining the correctness of the conclusion. It may also be open to the party to challenge a conclusion of fact drawn by the tribunal on the ground that it is not supported by any legal evidence; or that the impugned conclusion drawn 653 from the relevant facts is not rationally possible; and if such a plea is established, the court may consider whether the conclusion in question is not perverse and should not, therefore, be set aside. It is within these narrow limits that the conclusions of fact recorded by the tribunal can be challenged under section 66(1). Such conclusions can never be challenged on the ground,,, that they are based on misappreciation of evidence. There is yet a third class of cases in which the assessee or the revenue may seek to challenge the correctness of the conclusion reached by the tribunal on the ground that it is a conclusion on a question of mixed law and fact. Such a conclusion is no doubt based upon the primary evidentiary facts, but its ultimate form is determined by the application of relevant legal principles. The need to apply the relevant legal principles tends to confer upon the final conclusion its character of a legal conclusion and that is why it is regarded as a conclusion on a question of mixed law and fact. In dealing with findings on questions of mixed law and fact the High Court would no doubt have to accept the findings of the tribunal on the primary questions of fact; but it is open to the High Court to examine whether the tribunal had applied the relevant legal principles correctly or not; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure points of law. This question has been exhaustively considered by this Court in Meenakshi Mills, Madurai vs Commissioner of Income tax, Madras (1). In this case the appellate tribunal had come to the conclusion that certain sales entered in the books of the appellant company in the names of certain intermediaries, firms and companies, were fictitious and the profits ostensibly earned by them were in fact earned by the appellant which had itself sold the goods to the real purchasers and received the prices. On this finding the tribunal had ordered that the profits received from such sales should be added to the amount shown as profits in the appellant 's books and should be taxed. The appellant 654 applied for a reference to the tribunal under section 66(1) and the High Court of Madras under section 66(2), but his application was rejected. Then it came to this Court by special leave under article 136 and it was urged on its behalf that the tribunal had erred in law in holding that the firms and companies described as the intermediaries were its benamidars and that its application for reference should have been allowed. This plea was rejected by this Court because it was held that the question of benami is purely a question of fact and not a mixed question of law and fact as it does not involve the application of any legal principles for its determination. In dealing with the argument urged by the appellant, this Court has fully considered the true legal position in regard to the limitation of the High Court 's jurisdiction in entertaining references under section 66(1) in the light of several judicial decisions bearing on the point. The ultimate decision of the Court on this part of the case was that " on principles established by authorities only such questions as relate to one or the other of the following matters can be questions of law under section 66(1): (1) the construction of a statute or a document of title (2) the legal effect of the facts found where the point for determination is a mixed question of law and fact; and (3) a finding of fact unsupported by evidence or unreasonable and perverse in nature ". Having regard to this legal position this Court held that the question of benami was a pure question of fact and it could not be agitated under section 66(1). The point about the scope and effect of the provisions of section 66(1)has again been considered by this Court in The Oriental Investment Co. Ltd. vs Commissioner of Income tax, Bombay(1) This was a case on the other side of the line. It was held that whether the appellant 's business amounted to dealing in shares and properties or to investment is a mixed question of law and fact and that the legal effect of the facts found by the tribunal as a result of which the appellant could be treated as a dealer or investor is a question of law. As a result of this conclusion the appeal (1) ; 655 preferred by the appellant was allowed, the order passed by the High Court refusing the appellant 's request for reference was set aside and the case was remitted to it for directing the tribunal to state a case, on the two questions mentioned in the judgment. ' These two decisions bring out clearly the distinction between findings of fact and findings of mixed questions of law and fact. What then is the nature of the question raised before us in the present appeal ? The tribunal and the High Court have found that the transaction in question is an adventure in the nature of trade; and it is the correctness of this view that is challenged in the present appeal. The expression " adventure in the nature of trade" is used by the Act in section 2, sub section (4) which defines business as including any trade, commerce or manufacture, or any adventure or concern in the nature of trade, commerce or manufacture. Under section 10, tax shall be payable by an assessee under the head profits and gains of business, profession or vocation in respect of the profit or gains of any business, profession or vocation carried on by him. Thus the appellant would be liable to pay the tax on the relevant amount if it is held that the transaction which brought him this amount was business within the meaning of section 2, sub section (4) and it can be said to be business of the appellant if it is held that it is an adventure in the nature of trade. In other words, in reaching the conclusion that the transaction is an adventure in the nature of trade, the tribunal has to find primary evidentiary facts and then apply the legal principles involved in the expression " adventure in the nature of trade " used by section 2, sub section It is patent that the clause " in the nature of trade " postulates the existence of certain elements in the adventure which in law would invest it with the character of a trade or business; and that would make the question and its decision one of mixed law and fact. This view has been incidentally expressed by this Court in the case of Meenakshi Mills, Madurai (1) in repelling the appellant 's argument based on the decision of the (1) ; 656 House of Lords in Edwards vs Bairstow (1). For the respondent, the learned Attorney General has, however, relied on the fact that the relevant observations in the case of Meenakshi Mills, Madurai, are obiter and he has invited our attention to the decision in the case of Edwards (1) in support of his contention that the judgment of the House of Lords would show that the question about the character of the transaction was ultimately treated as a question of fact. Before we refer to the said decision it may be relevant to observe that there are two ways in which the question may be approached. Even if the conclusion of the tribunal about the character of the transaction is treated as a conclusion on a question of fact, it cannot be ignored that, in arriving at its final conclusion on facts proved, the tribunal has undoubtedly to address itself to the legal requirements associated with the concept of trade or business. Without taking into account such relevant legal principles it would not be possible to decide whether the transaction in question is or is not in the nature of trade. If that be so, the final conclusion of the tribunal can be challenged on the ground that the relevant legal principles have been misapplied by the tribunal in reaching its decision on the point; and such a challenge would be open under section 66(1) because it is a challenge on a ground of law. The same result is achieved from another point of view and that is to treat the final conclusion as one on a mixed question of law and fact. On this view the conclusion is not treated as one on a pure question of fact, and its validity is allowed to be impeached on the ground that it has been based on a misapplication of the true legal principles. It would thus be seen that whether we call the. conclusion in question as one of fact or as one on a question of mixed law and fact, the application of legal principles which is an essential part in the process of reaching the said conclusion is undoubtedly a matter of law and if there has been an error in the application of the said principles it can be challenged as an error of law. The difference then is merely one of form and not substance; and on the whole it is (1) ; ; 657 more convenient to describe the question involved as a mixed question of law and fact. That is the view expressed by this Court in the case of Meenakshi Mills, Madurai (1); and, in our opinion, it avoids any confusion of thought and simplifies the position by treating such questions as analogous to those falling under the category of questions of law. Let us then consider whether the decision of the ' House of Lords in the case of Edwards(2) is inconsistent with this view. In this case the respondents, who were respectively a director of a leather manufacturing company and an employee of a spinning firm, purchased a complete cotton spinning plant in 1946 with the object of selling it as quickly as possible at a profit. They hoped to sell the plant in one lot, but ultimately had to dispose of it in five separate lots over the period from November 1946 to February 1948. Assessments to income tax in respect of profits arising from this transaction were made under Case I of Schedule D for the years 1946 47 and 1947 48. On the matter being taken before the Chancery Division, it was held in accordance with the earlier decisions of the Court of Appeal in Cooper vs Stubbs (3) and Leeming vs Jones (4) that the finding of the General Commissioners was a finding of fact which could not be challenged in appeal. The attention of the court was drawn to the different view expressed in a Scottish case, Commissioners of Inland Revenue vs Fraser (5) where the Court of Session had held that it was at liberty to treat the matter as a mixed question of fact and law, and in fact it had overruled the finding of the General Commissioners in that behalf " It does not seem to me ", observed Upjohn, J., " that in this court I am at liberty to follow the practice of the Scottish Court, attractive though it would be to do so, if the matter was res integra ". However, since apparently the finding of the General Commissioners did not appear to the court to be satisfactory, the matter was remitted to them with an intimation that they should consider (2) [1956]A.C.14;; (4) (1) [1956)S.C.R. 691. (3) (1925) To Tax Cas. 29. (5) 83 658 the question whether the transaction, being an isolated transaction, there was nevertheless an adventure in the nature of trade which was assessable to tax under Case 1 of Schedule D. The Commissioners were directed to hear further arguments on this point before stating a supplementary case. After remand, the Commissioners adhered to their earlier view and stated that they were of opinion that the transaction was an isolated case and not taxable and so they discharged the assessments. With the statement of this supplementary case, the matter was argued before the Chancery Division again. Wynn Parry, J., who delivered the judgment on this occasion referred to the earlier decisions of the Court of Appeal and held that " on those authorities prima facie the matter is concluded by the decision of the Commissioners that the transaction, the subject matter of the case, was not an adventure in the nature of trade ". Then the learned judge examined the question as to whether the decision of the Commissioners can be said to be perverse; and held that it could not be so characterised. In the result the appeal was dismissed. The question then reached the Court of Appeal but the result was the same. The Court of Appeal observed that the earlier decisions were binding on it no less than the Court of First Instance ; and so it held that the conclusion of the Commissioners was a finding of fact which the court cannot disturb. However, it is apparent from the discussion that took place when the court granted leave to. the Crown to take the matter to the House of Lords that the court did not feel happy about the correctness of the finding made by the General Commissioners in the case. That is how the matter reached the House of Lords. The facts in this case were so clearly against the finding of the Commissioners that Viscount Simonds made it clear at the outset that in his opinion, " what. ever test is adopted, that is, whether the finding that the transaction was not an adventure in the nature of trade is to be regarded as a pure finding of fact or as the determination of the question of law or of mixed law and fact, the same result would be reached in this 659 case. The determination cannot stand. This appeal must be allowed and the assessments must be confirmed". It is in the light of this emphatic statement that the rest of the judgment of Viscount Simonds must be considered. He referred to the divergence of views expressed in English and Scottish decisions and his conclusion was that " if and so far as there is any,, divergence between the English and Scottish approach it is the former which is supported by the previous authority of this House to which reference has been made "; but he analysed the position involved in both the approaches and held that the difference between them was not of substance. " To say that a transaction is or is not an adventure in the nature of trade ", observed Viscount Simonds, " is to say that it has or has not the characteristics which distinguish such an adventure but it is a question of law not of fact what are those characteristics, or, in other words, what the statutory language means. It follows that the inference can only be regarded as an inference of fact if it is assumed that the Tribunal which makes it is rightly directed in law what the characteristics are and that, I think, is the assumption that is made ". Dealing with the merits of the case, Viscount Simonds observed that " sometimes, as in the case as it now comes before the Court where all the admitted or found facts point one way and the inference is the other way, it can only be a matter of conjecture why that inference has been made. In such a case it is easy either to say that the Commissioners have made a wrong inference of fact because they have misdirected themselves in law or to take a short cut and say that they have made a wrong inference of law, and I venture to doubt whether there is more than this in the divergence between the two jurisdictions which has so much agitated the Revenue authorities ". Lord Radcliffe substantially agreed with this view. He also referred to the divergence of views expressed in Scottish and English decisions and observed that " the true position of the Court in all these cases can be shortly stated. If a party to a hearing before the Commissioners expresses dissatisfaction with their determination 660 as being erroneous in point of law,it is for them to state a case and in the body of it to set out the facts that they have found as well as their determination. I do not think that inferences drawn from other facts are incapable of themselves being findings of fact, although there is value in the distinction between primary facts and inferences drawn from them. When the case comes before the Court, it is its duty to examine the determination having regard to its knowledge of the relevant law. If a case contains anything ex facie which is bad in point of law and which ' bears upon the determination, it is obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no persons acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances,too, the Court must intervene ". Lord Radcliffe remarked that the English courts had been led to be rather overready to treat these questions as pure questions of fact and added "if so I would say with very great respect that I think it a pity that such a tendency should persist ". Therefore, it seems to us that in effect this decision is not inconsistent with the view we have taken about the character of the question raised before us in the present appeal. As we have already indicated, to avoid confusion or unnecessary complications it would be safer and more convenient to describe the question about the character of the transaction in the context as a question of mixed law and fact. The learned Attorney General has invited our attentionto the fact that the form in which the question referred tothe High Court has been framed in the present case seems to assume that the impugned finding is a finding of fact. It is only in regard to a finding of fact that a question can be properly framed as to whether there was material to support the said finding. We would, therefore, like to add that it would be more appropriate to frame the question in this form: whether, on the facts and circumstances proved in the case, the inference that the transaction in 661 question is an adventure in the nature of trade is in law justified ? In substance, that is the basis on which the question has been framed by the respondent and considered by the High Court. This question has been the subject matter of several judicial decisions; and in dealing with it all the judges appear to be agreed that no principle can be evolved which would govern the decision of all cases in which the character of the impugned transaction falls to be considered. When section 2, sub section (4), refers to an adventure in the nature of trade it clearly suggests that the transaction cannot properly be regarded as trade or business. It is allied to transactions that constitute trade or business but may not be trade or business itself. It is characterised by some of the essential features that make up trade or business but not by all of them; and so, even an isolated transaction can satisfy the description of an adventure in the nature of trade. Sometimes it is said that a single plunge in the waters of trade may partake of the character of an adventure in the nature of trade. This statement may be true; but in its application due regard must be shown to the requirement that the single plunge must be in the waters of trade. In other words, at least some of the essential features of trade must be present in the isolated or single transaction. On the other hand, it is sometimes said that the appearance of one swallow does not make a summer. This may be true if, in the metaphor, summer represents trade; but it may not be true if summer represents an adventure in the nature of trade because, when the section refers to an adventure in the nature of trade, it is obviously referring to transactions which individually cannot themselves be described as trade or business but are essentially of such a similar character that they are treated as in the nature of trade. It was faintly argued for the appellant that it would be difficult to regard a single or an isolated transaction as one in the nature of trade because income resulting from it would inevitably lack the characteristics attributed to it by Sir George Loundes in Commissioner of I. T. vs Shaw Wallace and Company(1). 'Income their Lordships (1) (1932) L. R. 59 I.A. 206. 662 think ", observed Sir George Loundes, " in this Act connotes a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources Then the learned judge proceeded to observe that income has been likened pictorially to the fruit of a tree, or the crop of a field. It is essentially the produce of something which is often loosely spoken of as capital". In our opinion, it would be unreasonable to apply the test involved in the use of this pictorial language to the decision of the question as to whether a single or an isolated transaction can be regarded as an adventure in the nature of trade. In this connection we may, with respect, refer to the comment made by Lord Wright in Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Commissioner of I. P., Bihar and Orissa (1) that " it is clear that such picturesque similes cannot be used to limit the true character of income in general ". We are inclined to think that, in dealing with the very prosaic and sometimes complex questions arising under the Income tax Act, use of metaphors, however poetic and picturesque, may not help to clarify the position but may instead introduce an unnecessary element of confusion or doubt. As we have already observed it is impossible to evolve any formula which can be applied in determining the character of isolated transactions which come before the courts in tax proceedings. It would besides be inexpedient to make any attempt to evolve such a rule or formula. Generally speak ing, it would not be difficult to decide whether a given transaction is an adventure in the nature of trade or not. It is the cases on the border line that cause difficulty. If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade. Cases of realisation of investments consisting Of purchase and resale, though profitable, are clearly outside the doma in of adventures in the nature of trade. In deciding (1) (1943) L.R. 70 I.A, 180, 193. 663 the character of such transactions several factors are treated as relevant. Was the purchaser a trader and were the purchase of the commodity and its resale allied to his usual trade or business or incidential to it ? Affirmative answers to these questions may furnish relevant data for determining the character of the transaction. What is the nature of the commodity purchased and resold and in what quantity was it purchased and resold ? If the commodity purchased is generally the subject matter of trade, and if it is purchased in very large quantities, it would tend to eliminate the possibility of investment for personal use, possession or Goverment. Did the purchaser by any act subsequent to the purchase improve the quality of the commodity purchased and thereby made it more readily resaleable ? What were the incidents associated with the purchase and resale ? Were they similar to the operations usually associated with trade or business ? Are the transactions of purchase and sale repeated ? In regard to the purchase of the commodity and its subsequent possession by the purchaser, does the element of pride of possession come into the picture ? A person may purchase a piece of art, hold it for some time and if a profitable offer is received may sell it. During the time that the purchaser had its possession he may be able to claim pride of possession and aesthetic satisfaction ; and if such a claim is upheld that would be a factor against the contention that the transaction is in the nature of trade. These and other considerations are set out and discussed in judicial decisions which deal with the character of transactions alleged to be in the nature of trade. In considering these decisions it would be necessary to remember that they do not purport to lay down any general or universal test. The presence of all the relevant circumstances mentioned in any of them may help the court to draw a similar inference; but it is not a matter of merely counting the number of facts and circumstances pro and con; what is important to consider is their distinctive character. In each case, it is the total effect of all relevant factors and circumstances that determines the character of the transaction; and so, though we may attempt to derive some assistance from decisions bearing on this point, we cannot seek to deduce any rule from them and mechanically apply it to the facts before us. In this connection it would be relevant to refer to another test which is sometimes applied in determining the character of the transaction. Was the purchase made with the intention to resell it at a profit ? It is often said that a transaction of purchase followed by resale can either be an investment or an adventure in the nature of trade. There is no middle course and no half way house. This statement may be broadly true; and so some judicial decisions apply the test of the initial intention to resell in distinguishing adventures in the nature of trade from transactions of investment. Even in the application of this test distinction will have to be made between initial intention to resell at a profit which is present but not dominant or sole; in other words, cases do often arise 'Where the purchaser may be willing and may intend to sell the property purchased at profit, but he would also intend and be willing to hold and enjoy it if a really high price is not offered. The intention to resell may in such cases be coupled with the intention to hold the property. Cases may, however, arise where the purchase has been made solely and exclus ively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself 'or otherwise enjoying or using it. The presence of such an intention is no doubt a relevant factor and unless it is offset by the presence of other factors it would raise a strong presumption that the transaction is an adventure in the nature of trade. Even so, the presumption is not conclusive; and it is conceivable that, on considering all the facts and circumstances in the case, the court may, despite the said initial intention, be inclined to hold that the transaction was not an adventure in the nature of trade. We thus come back to the same position and that is that the decision about the character of a transaction in the context cannot be based solely on the application of any abstract rule, principle or test and 665 m st in every case depend upon all the relevant facts and circumstances. Let us now consider some of the decisions to which our attention was invited. Normally the purchase of land represents investment of money in land; but where a company is formed for the purpose inter alia of acquiring and reselling mining property, and after acquiring and working various property, it resells the whole to a second company receiving payment in fully paid shares of latter company, it was held in The Californian Copper Syndicate (Limited and Reduced) vs Harris (Surveyor of Taxes) (1) that the difference between the purchase price and the value of the shares for which the property was exchanged is a profit assessable to income tax. In this case Lord Justice Clerk has observed that "it is quite a well settled principle in dealing with the question of assessment of Income Tax, that where the owner of an ordinary in. vestment chooses to realise it, and obtains a greater price for it than he originally acquired it at, the enhanced price is not profit in the sense of Schedule D of the Income Tax Act "; and he added that " it is equally well established that the enhanced value obtained from realisation or conversion of security may be so assessable where what is done is not merely a realisation or a change of investment but an act done in what is truly the carrying on or carrying out of a business ". This was a clear case where the company was held to be carrying on the business of purchase and sale of mining property. Where land purchased, and subsequently developed, with the object of making it more readily saleable, was sold at a profit, the intention of the assessee was treated to be not to hold the land as an investment, but as a trading asset in Cayzer, Irvine and Co. Ltd. vs Commissioners of Inland Revenue(2). In his judgment, Lord President Normand referred to the large development expenditure incurred by the assessee to improve the property and observed that it appeared to be on the whole consistent with the idea that it was carrying on a trade in land rather than with the idea that (1) (2) 84 666 it was throughout holding it as an investment only to be realised if at all when it desired to meet some financial need. In repelling the plea that the transaction showed investment, the Lord President added that the Commissioners " with their knowledge and experience of these matters, have come to the conclusion that the intention was to hold this estate not as an investment but as a trading asset and in, order to develop it and to market it ". It would thus appear that the conduct of the assessee in incurring a large amount of expenditure on the development of land consisting mainly in the construction of roads and sewers was held to justify the inference that the transaction was an adventure in the nature of trade, though the property purchased and sold was land. In the Commissioner 's of Inland Revenue vs Livingston (1) the assessees respondents were a ship repairer, a blacksmith and a fish salesmen 's employee; they purchased as a joint venture a cargo vessel with a view to converting it into a steam drifter and selling it. They were not connected in business and they had never previously bought a ship. After the ship was purchased, extensive repairs and alterations were carried out by the orders of the respondents and the ship was then sold at a profit. It was held that the profit arising from the transaction was assessable to income tax under Case I of Schedule D. Lord President Clyde said that in deciding whether the profits in question were taxable, regard must be had to the character and circumstances of the particular venture. " If the venture was one consisting simply in an isolated purchase of some article against an expected rise in price and, a subsequent sale ", observed the Lord President, " it might be impossible to say that the venture was in the nature of trade ". According to him the test to be applied would be whether the operations involved in the transaction are of the same kind and carried on in the same way as those which are characteristic of ordinary trading in the line of business in which the venture was made. If they are, there was no reason why the venture should not be (1), 667 regarded as in the nature of trade merely because it was a single venture which took only three months to complete. Reference was then made to the steps taken ,by the assessees to buy a secondhand vessel and to ,convert into a marketable drifter; and it was stated that the profit made by the venture arose not from the mere appreciation of the capital value of an isolated purchase for resale but from the expenditure on the subject purchased of money laid out upon it for the purpose of making it marketable at a profit. " That ", said the Lord President, " was the very essence of trade ". It was in this connection that the Lord President observed that the appearance of a single swallow does not make a summer. It would thus be noticed that this decision was based substantially on the ground that after the ship was purchased the assessees bestowed labour and money on converting it into a marketable drifter and that imprinted upon the transaction the character of trade. It is true that some of the observations made by the Lord President would indicate that from the intention to resell at a profit it would be impossible to attribute to the transaction the character of an adventure in the nature of trade. However, as we will presently point out, these observations have been explained by the Lord President himself subsequently in Rutledge vs Commissioners of Inland Revenue (1); and it is to this case that we will now refer. In the case of Rutledge(2) the appellant was a moneylender who was also interested in a cinema company in 1920. Since that time he had been interested ill various businesses. He was in Berlin in 1920 on business connected with the cinema company where he was offered an opportunity of purchasing very cheaply a large quantity of paper. He effected the purchase and within a short time after his return to England he sold the whole consignment to one person at a considerable profit. This profit 'Was held liable to assessment to income tax, Schedule D, and to excess profits duty as being profit of an adventure in the nature of trade. This assessment was the subject matter (1) 668 of an appeal before the Court of Appeal, and on behalf of the appellant the observations made by the Lord President Clyde in the case of Livingston (1) were pressed into service; but the Lord President did not accept the plea based on his earlier observations because he said that the said observations were intended to show that a single transaction fell far short of constituting a dealer 's trade; whereas, in the present case, the question was whether the transaction was an adventure in the nature of trade. The Lord President agreed that mere intention is not enough to invest a transaction with the character of trade but he added that, if the purchase is made for no purpose except that of resale at a profit, there seems little difficulty in arriving at the conclusion that the deal was in the nature of trade though it may be wholly insufficient to constitute by itself a trade. Then he referred to the illustration which he had cited in his earlier decision about the purchase of a picture and observed that if a picture was purchased to embellish the purchaser 's own house for a time, he might sell it if the anticipated appreciation in the value ultimately realised itself. " In such a case ", says the Lord President, " I pointed out that it might be impossible to affirm that the purchase and sale constituted an adventure in the nature of trade although, again, the crisis of judgment might turn on the particular circumstances ". It would thus be clear that the strong observations made by the Lord President in the case of Livingston (1) must be considered in the light of the clarification made by him in this case. Lord Sands, who agreed with the Lord President has thus observed: "Your Lordship in the Chair has indicated that there may be cases of purchase and resale at a profit where the transaction cannot be said to be in the nature of trade. In particular, this may be the case where there is no definite intention of reselling when the purchase is made ". This decision, therefore, shows that where the assessee purchased a very large quantity of paper with the intention to sell it at profit the transaction was treated as an adventure in the nature of trade. It was held (1) 669 to be a most successful adventure on the part of the assessee and having regard to the circumstances attending the purchase and sale it was treated as an adventure in the nature of trade. In T. Beynon & Co. Ltd. vs Ogg (1) the court was dealing with the case of a company which was carrying on business as coal merchants, ship and insurance brokers and as sole selling agent for various colliery companies in which latter capacity it was a part of its duty to purchase wagons on its own account as a speculation and subsequently to dispose of them at a profit. The assessee contended that the transaction of purchase and sale being an isolated one the profit was in the nature of a capital profit on the sale of an investment and should be excluded in computing its liability to income tax. The court held that the profit realised was made in the operation of the company 's business and was properly included in the computation of company 's profits for assessment under Schedule D. It appears that, in 1914, acting as agent on behalf of two colliery , companies, the assessee had purchased two lots of wagons each of which consisted of 250 wagons. During the course of negotiations the assessee, foreseeing that the cost of material and wages was likely to increase, determined to buy a, third lot of 250 wagons for itself and did eventually purchase it. In July 1915 the assessee sold this lot and made a profit of pound 2,500. The question which arose for decision was whether this sum was chargeable to incometax. In dealing with the argument that as an isolated transaction the profit arising out of it was not chargeable to tax, Sankey, J., observed that he thought " in most cases an insolated transaction does not fall to be chargeable ". But he added " you have to consider the transaction and you cannot lay it down as a matter of law without regard to the circumstances that in this case the pound, 2,500 is not chargeable ". Then the learned judge considered that the number of wagons purchased was large and held that the other circumstances attending the purchase and sale of the said wagons showed that this transaction was a (1) 670 transaction, and this profit was a profit " with the result that it made the operation of the assessee in that behalf its business. The learned judge ' however, added a word of caution that he did not think it desirable to lay down any rule as to where the line ought to be drawn, and that it was not even possible to lay down such a rule. " But ", said the learned judge, " it is perfectly easy to say whether Case A or Case B falls on the one side or the other ". In the Balgownie Land Trust, Ltd. vs The Commissioners of Inland Revenue (1) the owner of a landed estate, at his death, had left his estate to trustees with a direction to realise. The trustees were not successful in their efforts to sell the estate in the market. So they formed a company with general powers to deal in real property ' and transferred the estate to this company in exchange for shares which were allotted to the beneficiaries under the trust and were, at the date of the appeal still mainly held by those beneficiaries or their representatives. Soon after its incorporation the purchaser company made a substantial purchase of some other property acquired by borrowing on the security of the original estate. The company received rents and paid a regular dividend on its capital. In 1921 and the following years parts of the original estate were sold and in 1925 the whole of the additional property was sold. When the profits realised by the sales were taxed under Schedule D for the year 1926 27, the assessee contended that the transactions in question were not in the nature of trade and the profits arising therefrom cannot be taxed. This contention was negatived by the General Commissioners whereupon the assessee appealed. Lord President Clyde described the problem raised by the assessee as one of. the most familiar problems under Case I of Schedule D and ob. served that " a single plunge may be enough provided it is shown to the satisfaction of the Court that the plunge is made in the waters of trade; but the sale of a piece of property if that is all that is involved in the plunge may easily fall short of anything in the nature of trade. Transactions of sale are characteristic (1) 671 of trade, but they are not necessarily distinctive of it; much depends on the circumstances". Then the conduct of the assessee after its incorporation was considered and it was held that the purchase of the property in substance amounted to a launching forth albeit, not in a very large scale. In the result the finding of the Commissioners was confirmed and the profit, Was held liable to tax. In Martin vs Lowry (1) the House of Lords was considering a case of a wholesale agricultural machinery merchant who had never had any connection with the linen trade purchasing from the government the whole of its surplus stock of aeroplane linen (some 44 million yards) at a fixed price per yard. The contract of purchase provided in detail as to delivery, and the payment of the price. The purchaser failed in his original attempt to sell the whole of the linen to Belfast linen manufacturers outright. Then he sought to bring pressure on them by placing the linen for sale to the public. It led to an extensive advertising 'campaign, renting of offices and engaging advertising manager, a linen expert as adviser and a staff of clerks. Sales then proceeded rapidly and soon the whole stocks were disposed of. In all 4,279 orders were received from 1,280 purchasers. Assessment to income tax and excess profits duty were made upon the assessee in respect of profits of the transaction. It was held that the dealings of the assessee in linen constituted the carrying on of a trade of which the profits were chargeable to income tax and excess profits duty. One of the points raised before the House of Lords was that the assessee did not carry on trade or business but only engaged in a single adventure not involving trading operation. In rejecting this contention, Viscount Cave, L. C., observed that " the Commissioners have found as a fact that he did carry on trade, and they set out in the Case ample material upon which they could come to that conclusion ". He added that, indeed, having regard to the methods adopted for the resale of the linen, to the number of operations into which the assessee entered and to the time occupied by (1) 672 the resale, he did not himself see how they could have come to any other conclusion. The other point raised in the appeal was that the profits in question did not come within the description of annual profits or ,gains but we are not concerned with that point. In F. A. Lindsay, A. E. Woodward and W. Hiscox vs Commissioners of Inland Revenue (1) the appellant L, a wine merchant, had on hand a large quantity of American rye whisky. He invited the appellants W & H who were also engaged in the wine trade to join with him in a venture of shipping the whisky to the United States. It was agreed that W & H should contribute certain sums towards expenses and that the profits should be shared in certain proportions. agreement was not reduced to writing. The shipping of the whisky was arranged by L with consultation with W & H and was carried out gradually over a period of two years. From time to time W & H met L who told them that the whisky had been successfully shipped to the United States and sold there profitably. Subsequently the appellants decided to discontinue the export of whisky and to employ the monies which they had accumulated in the purchase with a view to resale of a wine business in Portugal. In respect of the profits made by the appellants from the sale of wine an assessment was made on them jointly for 1922 23. The Special Commissioners found that a partnership or joint venture subsisted between the appellants and that the profits of the sales of whisky were assessable to income tax. The Lord President Clyde rejected the appellant 's contention and observed that " the nature of the transaction apart from the fraudulent breaches of law which were inherent in it was neither more nor less than the commercial disposal of a quantity of rye whisky ". In point of fact the disposal was not effected by a single transaction but extended over a year and more; and so it could not fall outside the sphere of trade. This was a clear case where a large number of distinctive features of trade were associated with the transaction. (1) 673 The transaction of the purchase and sale of whisky was again brought before the court for its decision in the Commissioners of Inland Revenue vs Fraser (1). In this case the assessee, a woodcutter, bought through an agent for resale whisky in bond for pound 407. Nearly three years thereafter the whisky was sold at a profit for pound, 1,131. This was the assessee 's sole dealing in whisky. He had no special knowledge of the trade and he did not take delivery of the whisky nor did he have it blended and advertised. Even so, it was held that the transaction was an adventure in the nature of trade. It may be mentioned that when the matter was first taken before the Commissioners they took the view that an adventure in the nature of trade had not been carried on by the assessee, that merely an investment had been made and subsequently realised and so the profit was not assessable to income tax. This view was, however, reversed by the First Division of the Court of Session and it was held that in coming to the conclusion the Commissioners had misdirected themselves as to the meaning of " being engaged in an adventure in the nature of trade ". The Lord President Normand conceded that it would be extremely difficult to hold that a single transaction amounted to a trade but he added that it may be much less difficult to hold that a single transaction was an adventure in the nature of trade. " There was much discussion ", observed the Lord President, " as to the criterion which the court should apply. I doubt if it would be possible to formulate a single criterion. " The following observations made by the Lord President in this connection may be usefully quoted: " It is in general more easy to hold that a single transaction entered into by an individual in the line of his own trade (although not part and parcel of his ordinary business) is an adventure in the nature of trade than to hold that a transaction entered into by an individual outside the line of his own trade or occupation is an adventure in the nature of trade. (1) 85 674 But what is a good deal more important is the nature of the transaction with reference to the commodity dealt in. The individual who enters into a purchase of an article or commodity may have in view the resale of it at a profit, and yet it may be that that is not the only purpose for which he purchased the article or the commodity, nor the only purpose to which he might turn it if favourable opportunity of sale does not occur. In some of the cases the purchase of a picture has been given as an illustration. An amateur may purchase a picture with a view to its resale at a profit, and yet he may recognise at the time or after wards that the possession of the picture will give him aesthetic enjoyment if he is unable ultimately, or at his chosen time, to realise it at a profit. A man may purchase stocks and shares with a view to selling them at an early date at a profit, but, if he does so, he is purchasing something which is itself an investment, a potential source of revenue to him while he holds it. A man may purchase land with a view to realising it at a profit, but it also may yield him an income while he continues to hold it ' If he continues to hold it, there may be also a certain pride of possession. But the purchaser of a large quantity of a commodity like whisky, greatly in excess of what could be used by himself, his family and friends, a commodity which yields no pride of possession, which cannot be turned to account except by a process of realisation, I can scarcely consider to be other than an adventurer in a transaction in the nature of a trade; and I can find no single fact among those stated by the Commissioners which in any way traverses that view. In my opinion the fact that the transaction was not in the way of business (whatever it was) of the Respondent in no way alters the character which almost necessarily belongs to a transaction like this. Most important of all, the actual dealings of the Respondent with the whisky were exactly of the kind that take place in ordinary trade. " These observations indicate some of the important considerations which are to be borne in mind in determining the character of a single transaction. 675 We may now refer to the decision of the House of Lords in Leeming vs Jones (1). In this case the appellant was a member of a syndicate of four persons formed to acquire an option over a rubber estate with a view to resell it at a profit. The option was secured but the estate was considered too small for a resale to a company for public floatation. An option over another adjoining estate was accordingly secured and it was decided to resell the two estates to a public company to be formed for the purpose. Another member of the syndicate undertook to arrange for the promotion of this company. The syndicate 's total receipts resulting from the transactions in respect of the estates amounted to pound 3,000 and the balance remaining, after deduction of certain expenses, was divided between the members. The appellant was assessed to income tax, Schedule D, in respect of his share. The General Commissioners held that the appellant acquired the property or interest in the property in question with the sole object of turning it over again at a profit and that he at no time had any intention of holding it as an investment. That is why they confirmed the assessment. After the case was heard before the King 's Bench Division it was remitted to the General Commissioners for a finding as to whether there was or was not a concern in the nature of trade. The Commissioners then found that the transaction in question was not a concern in the nature of trade and that there was no liability to assessment. It may be pointed out that in remitting the case for the re consideration of the General Commissioners, Rowlatt, J., had observed that it was quite clear that what the Commissioners had got to find was whether there was a concern in the nature of trade and all that they had found was that the property was acquired with the sole object of turning it over again at a profit and without any intention of holding it as an investment. " That describes ", said Rowlatt, J., " what a man does if he buys a picture that he sees going cheap at Christie 's, because he knows that in a month he will sell it again at Christie 's That ", according to (1) 676 the learned judge, " is not carrying on trade " and " so what the Commissioners must do is to say, one way or the other, was this, I will not say carrying on a trade, but was it a speculation or an adventure in the nature of trade ". The learned judge to doubt added that he did not indicate which way the finding ought to be, but he commended the Commissioners to consider what took place in the nature of organising the speculation, maturing the property and disposing of the property, and when they have considered all that, to say whether they think it was an adventure in the nature of trade or not. It is thus clear that Rowlatt, J., indicated clearly though in cautious words what he thought was the true nature of the transaction made. Even so, on reconsideration of the matter the Commissioners returned a finding in favour of the assessee. After the finding was returned Rowlatt, J., held that he must abide by his own decision in Pearm vs Miller (1) and so the appeal was allowed. The matter was then taken to the Court of Appeal where the revised finding of the Commissioners was treated as a finding on a question of fact not open to challenge and the point which was considered at length was whether even if the transaction was not an adventure in the nature of trade, could the profit resulting from it be taxed under Case VI? The Master of the Rolls Lord Hanworth traced the history of the dispute, mentioned how Mr. Justice Rowlatt had indicated to the Commissioners what they had to consider in determin ing the question remitted to them and observed that " Mr Justice Rowlatt, and I think this Court, might perhaps have taken the course of saying that having regard to what he had called attention to in this case, the particular facts, of organising the speculation, of maturing the property, and the diligence in discovering a second property to add to the first, and the disposing of the property, there ought to be and there must be a finding that it was an adventure in the nature of trade; but Mr. Justice Rowlatt withheld his hand from so doing and I think he was right, for however strongly one may feel as to the facts, the facts (1) 677 are for the decision of the Commissioners ". It would thus be clear that the decision of the Commissioners appeared both to Rowlatt, J., and the Court of Appeal to be erroneous. Even so, they refused to interfere with it on the ground that it was a decision on a question of fact. We may, with respect, recall that it was in regard to this approach that Lord Radcliffe observed in the case of Edwards (1) that " it was a pity that such a tendency should persist to treat the findings of the Commissioners on the question as to the character of the transaction as conclusive ". In dealing wit the question as to whether if Case I did not apply Case VI could apply, Lord Justice Lawrence observed that " in the case of an isolated transaction of purchase and resale of property there is really no middle course open. It is either an adventure in the nature of trade, or else it is simply a case of sale and resale of property ". The Court of Appeal held that if the transaction did not fall in Case. It was difficult to see how it could fall under Case VI. The discussion on this part of the case is, however, not relevant for our purpose. This decision of the Court of Appeal was taken before the House of Lords and the question debated before the House of Lords was about the application of Case VI to the transaction. The House of Lords affirmed the view taken by the Court of Appeal and held that " Case VI was inapplicable because Case VI neces sarily refers to the words of Schedule D, that is to say, it must be a case of annual profits and gains and those words again are ruled by the first section of the Act which says that when an Act indicates that income tax shall be charged for any year at any rate the tax at that rate shall be charged in respect of the profits and gains according to the Schedules ". Lord Buckmaster agreed with the observations of Lord Justice Lawrence that there can be no middle course open in such cases. Viscount Dunedin, in concurring with the opinion of Lord Buckmaster, dealt with the several arguments urged by the Crown but the observations made by him with regard to the last argument are relevant for our purpose. " The last argument of the (1) ; ; 678 counsel for the Crown ", observed Viscount Dunedin, was that there was a finding that the respondent never meant to hold the land bought as an investment. The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or concern in the nature of trade in respect of his investment but per se it leads to no conclusion whatever ". According to Viscount Dunedin, recourse to Case VI ignores the fact that it had been settled again and again that Case VI does not suggest that anything that is a profit or gain falls to be taxed. The observations made by Viscount Dunedin were considered in the Commissioners of Inland Revenue vs Reinhold (1). We ought to add that the appellant has placed strong reliance on this decision. In this case, the respondent was a director of a company carrying on a business of ware house men; he bought four houses in January 1945 and sold them at a profit in December 1947. He admitted that he had bought the property with a view to resale and had instructed his agents to sell whenever a suitable opportunity arose. The profits made by him on resale were assessed to tax. On appeal before the General Commissioners he contended that the profit on resale was not taxable. The Crown urged that the transaction was an adventure in the nature of trade and that profits arising therefrom were chargeable to Ax. The General Commissioners being equally divided allowed the appeal and discharged the assessment. It was on these facts that the matter was then taken before the First Division of the Court of Session and it was urged on behalf of the Crown that the initial intention of the assessee clearly was to sell the property at a profit and so the view taken by the General Commissioners about the character of the transaction was erroneous. This argument was, however, rejected and the order of discharge passed by the General Commissioners was confirmed. When the Crown referred to the observations of Lord Dunedin in the case of Leeming (2) which we have (1) (2) 679 already cited, Lord Carmont observed that he did not wish to read the said passage out of its context and without regard to the facts of the case then under consideration. Then Lord Carmont added that though the language used by Lord Dunedin " may cover the purchase of houses" it " would not cover a situation in which a purchaser bought a commodity which from G its nature can give no annual return ". "This comment of mine ", said Lord Carmont, " is just another way of saying that certain transactions show inherently that they are not investments but incursions into the realm of trade or adventures of that nature Then reference was made to the fact that the assessee was a warehouse company director and not a property agent or speculator and that the only purchases of property with which he was concerned were two separated by ten years and that the first heritage was acquired without the intention to sell, which only arose fortuitously. His Lordship then put his conclusion in this way: "I would therefore say that the Commissioners of Inland Revenue have failed to prove and the onus is on them the case they sought to make out". According to Lord Carmont, Lord Dunedin 's observations do not suggest that the initial declaration of intention per se leads to the conclusion that the transaction was in the nature of trade. He thought that much more was required to show that the assessee was engaged in an adventure in the nature of trade than was proved in the case before the court. Lord Russell, who concurred with this opinion, began with the observation that " prima facie the difference of opinion among the General Commissioners suggests that the case is a narrow one and that the onus on the appellants of showing that the transaction was an adventure in the nature of trade is not a light one". Lord Russell then mentioned the argument of the Lord Advocate that if a person buys anything with a view to sale that is a transaction in the nature of trade because the purpose of the acquisition in the mind of the purchaser is all important and conclusive; and that the nature of the thing purchased and the other surrounding circumstances do not 680 and cannot operate so as to render the transaction other than an adventure in the nature of trade, and observed that in his opinion the argument so formulated " is too absolute and is not supported by the judicial pronouncements on which it was sought to be raised ". He then referred to the variety of circumstances which are or may be relevant to the determination of such a question; and he concluded with the observation that the appellants had not discharged the burden of showing that the transaction was an adventure in the nature of trade. Lord Keith also took the same view and stated that " the facts were, in his opinion, insufficient to establish that this was an adventure in the nature of trade ". This case was no doubt a case on the border line; and if we may say so with respect it was perhaps nearer an adventure in the nature of trade than otherwise. It would not be unreasonable to suggest that, in this case, if the Commissioners had found that the transaction was an adventure in the nature of trade, the court would probably not have interfered with the said conclusion; but the Commissioners were equally divided and so the assessment had been discharged by them. It was under these circumstances that the point about the onus of proof became a matter of substance; and, as we have already pointed out, all tile learned judges have emphasized that the onus had not been discharged and that no case had been made out for reversing the order of discharge passed by the Commissioners. However that may be, it would, we think, be unsafe to treat this case as laying down any general proposition the application of which would assist the appellant before us. We would also like to add that there can be no doubt that Lord Russell 's criticism against the contention raised by the Lord Advocate was fully justified because the contention as raised clearly overstated the significance and effect of the initial intention. As we have already pointed out, if it is shown that, in purchasing the commodity in question, the assessee was actuated by the sole intention to sell it at a profit, that no doubt is a relevant circumstance which would raise a strong presumption that the 681 purchase and subsequent sale are an adventure in the nature of trade; but the said presumption is not conclusive and it may be rebutted or offset by other relevant circumstances. What then are the relevant facts in the present case ? The property purchased and resold is land and it must be conceded in favour of the appellant that land is generally the subject matter of investment. It is contended by Mr. Viswanatha Sastri that the four purchases made by the appellant represent nothing more than an investment and if by resale some profit was realised that cannot impress the transaction with the character of an adventure in the nature of trade. The appellant, however, is a firm and it was not a part of its ordinary business to make investment in lands. Besides, when the first purchase was made it is difficult to treat it as a matter of investment. The property was a small piece of 28 1/4 cents and it could yield no return whatever to the purchaser. It is clear that this purchase was the first step taken by the appellant in execution of a well considered plan to acquire open plots near the mills and the whole basis for the plan was to sell the said lands to the mills at a profit. , Just as the conduct of the purchaser subsequent to the purchase of a commodity in improving or converting it so as to make it more readily resaleable is a relevant factor in determining the character of the transaction, so would his conduct prior to the purchase be relevant if it shows a design and a purpose. As and when plots adjoining the mills were available for sale, the appellant carried out his plan and consolidated his holding of the said plots. The appellant is the managing agent of the Janardana Mills and probably it was first thought that purchasing the plots in its own name and selling them to the mills may invite criticism and so the first purchase was made by the appellant in the name of its benamidar V. G. Raja. Apparently the appellant changed its mind and took the subsequent sale deeds in its own name. The conduct of the appellant in regard to these plots subsequent to their 86 682 purchase clearly shows that it was not interested in obtaining any return from them. No doubt the appellant sought to explain its purpose on the ground that it wanted to build tenements for the employees of the mills; but it had taken no steps in that behalf for the whole of the period during which the plots remained in its possession. Besides, it would not be easy to assume in the case of a firm like the appellant that the acquisition of the open plots could involve any pride of possession to the purchaser. It is really not one transaction of purchase and resale. It is a series of four transactions undertaken by the appellant in pursuance of a scheme and it was after the appellant had consolidated its holdings that at a convenient time it sold the lands to the Janardana Mills in two lots. When the tribunal found that, as the managing agent of the mills, the appellant was in a position to influence the mills to purchase its properties its view cannot be challenged as unreasonable. If the property had been purchased by the appellant as a matter of investment it would have tried either to cultivate the land, or to build on it; but the appellant did neither and just allowed the property to remain unutilised except for the net rent of Rs. 80 per annum which it received from the house on one of the plots. The reason given by the appellant for the purchase of the properties by the mills has been rejected by the tribunal; and so when the mills purchased the properties it is not shown that the sale was occasioned by any special necessity at the time. In the circumstances of the case the tribunal was obviously right in inferring that the appellant knew that it would be able to sell the lands to the mills whenever it thought it profitable so to do. Thus the appellant purchased the four plots during two years with the sole intention to sell them to the mills at a profit and this intention raises a strong presumption in favour of the view taken by the tribunal. In regard to the other relevant facts and circumstances in the case, none of them offsets or rebuts the presumption arising from the initial intention; on the other hand, most of them corroborate 683 the said presumption. We must, therefore, hold that the High Court was right in taking the view that, on the facts and circumstances proved in this case, the transaction in question is an adventure in the nature of trade. The result is the appeal fails and must be dismissed with costs. Appeal dismissed.

The appellant, who was a firm acting as managing agents of a limited company (the Mills), purchased four plots of land adjoining the Mills on various dates between 1941 and 1942, and about five years later sold them to the Mills, as a result. of which the appellant realised a sum of Rs. 43,887 in excess of the purchase price, For the assessment year. 1948 49 the Income tax Officer treated the amount as the income. of the appellant 'and assessed it to income tax under head 'business ', on the ground that there was no evidence to show that the appellant had purchased the said lands for agricultural purposes or that they were acquired as an investment, and, that since the lands: were adjacent to the Mills the appellant must have purchased them solely with a view to sell them to the Mills; with. profit. 'He considered that the transaction ' had ;ill the elements of a business transaction ' and was thus an adventure in the, natural of 'trade within section 2(4)of the Indian Income tax Act 7 The Appellate, Tribunal rejected the explanation given by the appellate 'regarding" the object with which it had purchased the plots of land agreed 641 with the view taken by the Income tax Officer. At the instance of the appellant the Tribunal referred to the High Court the question: " whether there was material for the assessment of the sum of. Rs. 43 87 being the difference between the purchase and sale price of the four plots of land as income from all adventure in the nature of trade. The High Court held that ' the transaction in question was an adventure in the nature of trade and so the income tax authorities were justified in taxing the amount under the head 'business ' for the relevant year. On appeal by special leave to the Supreme Court, it was contend ed for the appellant that on the facts and circumstances of the case it was erroneous in law to hold that the transaction ill question was an adventure in the nature of trade. On the other hand, it was urged for the respondent that the question as raised before the High Court was one of fact not liable to be challenged under section 66(1) of the Act. Held, (1) that the expression " adventure in the nature of trade " in sub section (4) Of section 2 of the Indian Income tax Act, 1922, postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business and that a tribunal while considering a question as to whether a transaction is or is not an adventure in the nature of trade, before arriving at its final conclusion on facts, has to address itself to the legal requirements associated with the concept of trade or business. Such a question is one of mixed law and fact and the decision of the tribunal thereon is open to consideration under section 66(1) of the Act. Meenakshi Mills, Madurai vs Commissioner of Income tax, Madras, ; and Oriental Investment Co., Ltd. vs Commissioner of Income tax, Bombay; , , relied on. Edwards vs Bairstow ; , considered and held not inconsistent with the above said decisions. 2) that in the circumstances of this case it would be more appropriate to frame the question in this from: " whether, on the facts and circumstances proved in the case, the inference that the transaction in question is an adventure in the nature of trade is in law justified. " Held, further, that even an isolated transaction might be regarded as an adventure in the nature of trade within section 2(4) Of the Act, if it is characterised by some of the essential features that make up trade or business. Though judicial decisions which deal with the character of transactions alleged to be in the nature of trade do not purport to lay down any general or universal test, the presence of all the relevant circumstances, mentioned by. them my help the court to draw a similar inference, but it is not a matter of merely counting the number of facts and circumstances pro and con; it is the total effect of all the relevant factors and circumstances that determine the distinctive character of the transactions 648 If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit,then it is a case of capital accretion and not profit derived from an adventure in the nature of trade. But where a purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser had no intention of holding the property for himself or otherwise enjoying or using it, there would be a strong presumption that the transaction is an adventure in the nature of trade; but this may be rebutted by the other facts or circumstances of the case. The Californian Copper Syndicate (Limited and Reduced) vs Harris (Surveyor of Taxes), ; T. Beynon lnland Revenue vs Livingston, ; Martin vs Lowry, ; Rutledge vs Commissioners of Inland Revenue, ; Balgownie Land Trust, Ltd. vs The Commissioners of Inland Revenue, ; F. A. Lindsay, A. E. Woodward and W. Hiscox vs Commissioners of Inland Revenue, and Cayzer, Irvine and Co., Ltd. vs Commissioners of Inland Revenue, , considered. Commissioners of Inland Revenue vs Reinhold, , distinguished and considered as not laying down any general proposition of law. In the present case, the circumstances showed that the appellant whose ordinary business was not to make investment in lands had purchased the plots of land with the sole intention of selling them to the Mills at a profit and this intention raised a strong presumption that the purchase and the subsequent sale were an adventure in the nature of trade; and, it was held that in the absence of any rebutting evidence, the Income tax authorities were justified in taxing the amount in question as income from business.

8k-16k

il Appeal No. 1102 of 1966. Appeal from the judgment and order dated December 27, 1965 of the Jammu and Kashmir High Court in W. P. No. 67 of 1965. C.K. Daphtary, Attorney General, section V. Gupte, Solicitor General, Jaswant Singh, Advocate General for the State of J. & K. H. R. Khanna; section Javali, Ravinder Narain, for the appellants. B. Sen, I. N. Shroff, M. K. Banerjee, B. N. Kirpal, R. K. Kaul, R. N. Kaul, P. L. Handu, Lalit Bhasin and T. R. Bhasin, for respondent No. 1. The Judgment of the Court was delivered by Sarkar C.J. This is an appeal by the State of Jammu and Kashmir, G. M. Sadiq, Chief Minister of that State and D. P.Dhar its Home Minister. The appeal is contested by respondent 403 No. 1, Bakshi Ghulam Mohammad. The other respondent, N., Rajagopala Ayyangar, a retired Judge of this Court, has not appeared in this Court or in the court below. These are the parties to the proceedings before us. After the accession of the State of Jammu and Kashmir to India in 1947, a responsible Government was set up there under the Prime Ministership of Shiekh Mohammad Abdulla. Bakshi Ghulam Muhammad was the Deputy Prime Minister in that Government and G. M. Sadiq was also in the Cabinet. In 1953 Sheikh Mohammad Abdulla was dismissed from office and a new Government was formed with Bakshi Ghulam Mohammad as the Prime Minister and G. M. Sadiq and D. P. Dhar were included in the Cabinet. On January 26, 1957, a new Constitution was framed for Jammu & Kashmir. In the first elections held under the Constitution, a party called the National Conference got the majority of votes. Bakshi Ghulam Mohammad and Sadiq were members of this party. A Ministry was then formed with Bakshi Ghulam Mohammad as the Prime Minister. It appears that G. M. Sadiq left the party sometime after 1957 and rejoined it along with D. P. Dhar in December 1960 and they were taken into the Cabinet. The next General Elections were held in 1962. Again, the National Conference Party came into power. In the Government that was formed, Bakshi Ghulam Mohammad became the Prime Minister and G. M. Sadiq and D. P. Dhar were taken in the Ministry. In September 1963, Bakshi Ghulam Mohammad resigned from the Ministry under what is called the Kamraj Plan and Shamsudd in became the Prime Minister in his place. It will be noticed that Bakshi Ghulam Mohammad was the Deputy Prime Minister of the State from 1947 to 1953 and its Prime Minister from 1953 to 1963. So he held these offices, one after the other, for a total period of about sixteen years. In February 1964, Shamsuddin left office and a new Govern ment was formed with G. M. Sadiq as the Prime Minister. It is said that shortly thereafter, political rivalry between him and Bakshi Ghulam Mohammad started. In August 1964, a notice was issued fixing a session of the Legislature of the State in the following September. According to Bakshi Ghulam Mohammad, thereafter, some of the legislators wanted to bring in vote of no confidence against G. M.Sadiqs Ministry and by September 21, 1964 the no confidence motion had obtained the support of the majority of. members of the Assembly. On September 22, 1964, at 5 o 'clock in the morning, Bakshi Ghulam Mohammad and some of his supporters were arrested under the Defence of India Rules. At 8.30 a.m. on the same day the notice of the motion of no confi dence with the signatures of some members was handed over to the Secretary of the Legislative Assembly. G. M. Sadiq challenges the genuineness of the, signatures on the notice of the motion and also denies that it had the support of, a majority: of the Assembly , At 9 a.m. the Legislative Assembly which was to meet on that day,. 404 was prorogued by the Speaker under the directions of the Sadar i Riyasat, the constitutional head of the State. Sometime in November 1964, a petition for a writ of habeas corpus for the release of Bakshi Ghulam Mohammad was presented to the High Court of Jammu and Kashmir. On December 15, 1964, before the petition could be heard and decided, Bakshi Ghulam Mohammad was released from arrest by the State Government. On January 30, 1965, a Notification was issued by the State Government appointing a Commission of Inquiry constituted by N. Rajagopala Ayyangar to enquire into (1) the nature and extent of the assets and pecuniary resources of Bakshi Ghulam Mohammad and the members of his family and other relatives mentioned in the first Schedule to the Order, in October 1947 and in October 1963; and (ii) whether during this period, Bakshi Ghulam Mohammad and the others mentioned in the Schedule had obtained any assets and pecuniary resources or advantages by Bakshi Ghulam Mohammad abusing the official positions held by him or by the aforesaid people set out in the first Schedule by exploiting that position with his knowledge, consent and connivance. The Notification provided that in making the inquiry under head (ii) the Commission would examine only the allegations set out in the second Schedule to it. It is this Noti fication that has given rise to the present proceedings. The Commission held certain sittings between February 1965 and August 1965 in which Bakshi Ghulam Mohammad took part. On September 1, 1965, Bakshi Ghulam Mohammad moved the High Court of Jammu and Kashmir under sections 103 and 104 of the Constitution of Jammu and Kashmir, which correspond to articles 226 and 227 of the Indian Constitution, for a writ striking down the Notification and quashing the proceedings of the Commission taken till then and for certain other reliefs to which it is not necessary to refer. The petition was heard by a Bench of three learned Judges of the High Court. The High Court allowed the petition, set aside the Notification and quashed the proceedings of the Commission. This appeal is against the judgment of the High Court. In the High Court, eight grounds had been advanced in support of the petition, three of which were rejected but the rest were accepted, some unanimously and some by the majority of the learned Judges. They have however not all been pressed in this Court. The Notification had been issued under the Jammu & Kashmir Commission of Inquiry Act, 1962. The first point taken was that the Notification was not justified by the Act because under the Jammu & Kashmir Constitution, a Minister was responsible for his acts only to the Legislature and no action could be taken against him except for criminal and tortuous acts in the ordinary courts of law, unless the Legislature by a resolution demanded it. The substance of this contention is that an inquiry cannot be directed under the Act into the actions of a Minister except at the instance of the Legislature, it cannot be directed by an order of the Government. This contention is based on section 37 of the Jammu 405 & Kashmir Constitution. That section states that the Council of Ministers shall be collectively responsible to the Legislative Assembly. It is contended that this implies that in no other way is a Minister responsible for anything that he does when in office. It is also said that is the convention in Britain and it has been adopted in the State of Jammu & Kashmir. We confess to a certain amount of difficulty in appreciating this argument. The point about the British convention need not detain us. It has not been shown that any such convention, even if it exists in England, as to which we say nothing, has been adopted in the State of Jammu & Kashmir. The Jammu & Kashmir Constitution is a written document and we can only be guided by its provisions. It is said that section 37 indicates that the British convention was adopted by the State of Jammu & Kashmir. We are unable to agree with this view. Section 37 talks of collective responsibility of Ministers to the Legislative Assembly. That only means that the Council of Ministers will have to stand or fall to other, every member being responsible for the action of any Other. The emphasis is on collective responsibility as distinguished from individual responsibility. The only way that a legislature can effectively enforce this responsibility of the Council of Ministers to it is by voting it out of office. Furthermore, this responsibility is of the Council of Ministers. Bakshi Ghulam Mohammad did not, at the date of the Notification, belong to that Council. He did not on that date owe any responsibility to the Legislature under section 37. That section has no application to this case Again section 3 of the Inquiry Act states, "The Government may and shall if a resolution in this behalf is passed by the Jammu & Kashmir State Legislative Assembly or the Jammu & Kashmir Legislative Council by notification appoint a Commission of Inquiry". It ,would, therefore, appear that the Act gave power to the Government to set up a Commission and also to both the Houses of the Legislature to require a Commission to be set up. It is important to note that even the Legislative Council has a right to get a Com mission appointed though section 37 of the Constitution does not say anything about the responsibility of the Ministers to that Council. The Act was passed by the State Legislature consisting of both the Houses. It would show that the Legislature did not consider that there was any convention or anything in section 37 which prevented a Commission of Inquiry being set up under the Act at the instance of the Government or the Legislative Council. The High Court had rejected this contention and we think that it did so rightly. The next point urged in support of the petition was that the Act permitted a Commission to be set up for making an inquiry into a definite matter of public importance and the matters which the Commission had been set tip to inquire into were not such. This contention found favour with all the learned Judges of the High Court. We are, however, unable to accept it. It is true that 406 a Commission can be set up only to inquire into a definite matter of public importance. But we think that the matters into which the Commission was asked to inquire were such matters. The first inquiry was as to the assets possessed by Bakshi Ghulam Mohammad and the other persons mentioned in the Notification, in October 1947 and in October 1963 and the second was whether during this period being the sixteen years when he held office as Prime Minister and Deputy Prime Minister, he and the other persons named had obtained any assets or pecuniary advantage by abuse of his official position or by that position being exploited by the others with his consent, knowledge or connivance, this inquiry being confined only to the instances set out in the second Schedule to the Notification. That Schedule contains 38 instances, the first of which, in substance, repeats the second head of inquiry earlier mentioned. The other items refer to individual instances of people being made to part with property under pressure brought upon them by abuse of official position and of public money being misappropriated. At the end of this Schedule, there is a note ' stating that the gravamen of the charge was that Bakshi Ghulam Mohammad abused his official position and the other persons named, exploited that position with his consent, knowledge or connivance in committing the acts whereby they acquired vast wealth. The inquiry was, therefore, into the assets possessed by Bakshi Ghulam Mohammad and the persons named, respectively in October 1947 and in October 1963 and to find out whether they had during this period acquired wealth by the several acts mentioned in the second Schedule by abuse or exploitation of Bakshi Ghulam Mohammad 's official position. The first question is, whether these are matters of public importance. Two of the learned Judges held that they were not and the third took the contrary view. This was put on two grounds. First, it was said that these matters were not of public importance because they had to be so at the date of the Notification and they, were not so on that date as Bakshi Ghulam Mohammad did not then hold any office in the Government. It was next said that there was no evidence of public agitation in respect of the conduct complained of and this showed that they were not matters of public importance. We do not think that either of these grounds leads to the view that the matters were not of public importance. As regards the first, it is difficult to imagine how a Commission can be set up by a Council of Ministers to inquire into the acts of its head, the Prime Minister, while he is in office. It certainly would be a most unusual thing to happen. If the rest of the Council of Ministers resolves to have any inquiry, the Prime Minister can be expected to ask for their resignation. In any case, he would himself go out. If he takes the first course, then no Commission would be set up for the Ministers wanting the inquiry Would have gone. If he went out himself, then the Commission would be set up to inquire into the acts of a person who was no longer in office and 407 for that reason, if the learned Judges of the High Court were right, into matters which were not of public importance. The result would be that the acts of a Prime Minister could never be inquired into under the Act. We find it extremely difficult to accept that view. These learned Judges of the High Court expressed the view that the acts of Bakshi Ghulam Mohammad would have been acts of public importance if he was in office but they ceased to be so as he was out of office when the Notification was issued. In taking this view, they appear to have based themselves on the observation made by this Court in Ram Krishan Dalmia vs Shri Justice section R. Tendolkar(1) that "the conduct of an individual may assume such a dangerous proportion and may so prejudicially affect or threaten to affect the public well being as to make such conduct a definite matter of public importance, urgently calling for a full inquiry". The learned Judges felt that since Bakshi Ghulam Mohammad was out of office, he had become innocuous; apparently, it was felt that he could no longer threaten the public wellbeing by his acts and so was outside the observation in Dalmia 's case. We are clear in our mind that this is a misreading of this Court 's observation. This Court, as the learned Judges themselves noticed, was not laying down an exhaustive definition of matters of public importance. What is to be inquired into in any case are necessarily past acts and it is because they have already affected the public well being or their effect might do so, that they became matters of public importance. It is irrelevant whether the person who committed those acts is still in power to be able to repeat them. The inquiry need not necessarily be into his capacity to do again what he has already done and it may well be into what he has done. The fact that Bakshi Ghulam Mohammad is no longer in office does not affect he question whether his acts already done constitute matters of public importance. If once it is admitted, as it was done before us, that if he had been in office his acts would have been matters of public importance, that would be acknowledging that his acts were of this character. His resignation from office cannot change that character. A Minister, of course, holds a public office. His acts are necessarily public acts if they arise out of his office. If they are grave enough, they would be matters of public importance. When it is alleged that a Minister has acquired vast wealth for himself, his relations and friends, as is done here, by abuse of his official position, there can be no question that the matter is of public importance. It was said that the object of inquiry was to collect material for the prosecution of Bakshi Ghulam Mohammad and, therefore, the matters to be required into were not of public importance. This contention is, in our view, fallacious. It is of public importance that public men failing in their duty should be called upon (1) ; 5SCI 28 408 to face the consequences. It is certainly a matter of importance to the public that lapses on the part of the Ministers should be exposed. The cleanliness of public life in which the public should be vitally interested, must be a matter of public importance. The people are entitled to know whether they have entrusted their affairs to an unworthy man. It is said that the Notification did not mention anything about the steps to be taken to prevent recurrence of the lapses in future. But that it could not do. Before the facts were found steps could not be thought of, for the steps had to suit the facts. The inquiry proposed in this case will, in the course of finding out the lapses alleged, find out the process as to how they occurred and it is only after the process is known that steps can be devised to meet them. It was also contended that the inquiry was into allegations of misconduct against Bakshi Ghulam Mohammad and an inquiry into allegations was not contemplated by the Inquiry Act. We are wholly unable to agree. An inquiry usually is into a question. That question may arise on allegations made. Dabnia 's case(1) dealt with an inquiry ordered at least in part into allegations made against people in charge of a big mercantile enterprise. Allegations may very well raise questions of great public importance. Suppose it is alleged that people in a city are suffering from ill health and that is due to the contaminated water supplied by the city admi nistration. It cannot be said that these allegations about the existence of poor health and its causes are not matters of grave public importance. They would be so even if it was found that the people 's health was not poor and the water was not contaminated. It cannot also be said that allegations can never be definite. They can be as definite as any existing concrete matter. It must depend on what the allegation is. Then as to the question whether the allegations against Bakshi Ghulam Mohammad were not matters of public importance because there was no public agitation over them. The Notification itself and the affidavits filed in this case on behalf of the appellants in fact state that there had been allegations made by the public against Bakshi Ghulam Mohammad that he had amassed a large fortune by the misuse of his office. But it was said that there was no proof that the allegations had actually been made. Whether there was proof would depend on whether the statements in the Notification and the affidavits were accepted or not. We are, however, unable to agree that a matter cannot be of public importance unless there was public agitation over it. Public may not be aware of the gravity of the situation. They may not know the facts. Some members of the public may be aware of individual cases but the entire public may not know all of them. There may have been influences working to prevent public agitation. Again, whe (1)[1959] S.C.R. 279. 409 ther a matter is of public importance or not has to be decided essentially from its intrinsic nature. If a matter is intrinsically of public importance, it does not cease to be so because the public did not agitate over it. Take this case. Suppose the Government sets up a Commission to inquire into the mineral wealth in our country. The public are not likely to agitate over this matter for they would not know about the mineral wealth at all. Can it be said that the inquiry does not relate to a matter of public importance because they did not agitate over it? The answer must plainly be in the negative. This would be so whether there were in fact minerals or not. Considering the allegations contained in the Notification by themselves, we think for the reasons earlier mentioned, that they constitute matters of public importance even if there was no public agitation over them. It was said that G. M. Sadiq, D. P. Dhar and various other people had praised the administration of Bakshi Ghulam Mohammad. That they no doubt did. But these were speeches made in support of party politics. They might again have been made without knowledge of full facts. They cannot, in any event, turn a matter of public importance into one not of that character. It was then pointed out that the Notification only mentioned that the matters were of public importance but did not say that they were definite matters of public importance. The Act, as we have earlier pointed out, requires that the matters to be inquired into shall be definite matters of public importance. But this omission of the word "definite" in the Notification does not, in our opinion, make any difference. A Court can decide whether the matters to be inquired into are definite matters of public importance. 'Definite ' in this connection means something which is not vague. One of the learned Judges of the High Court held that the matters set out in the second Schedule were vague as some of the instances did not give any date or year. He also said that the note at the end of the second Schedule., to which we have earlier referred, added to the vagueness. We are unable to accede to this view. What the learned Judge had in mind was apparently the particulars of the acts. In most cases, the acts are identifiable from the particulars given in the second Schedule in respect of them. Further, it is obvious that they had to be identified at the hearing and could not be proved nor any notice taken of them unless that was done. It does not appear to have been contended before the Commission that there was any matter not so identifiable. Neither do we think that the note drawing attention to the gravamen of the charges at the end of the second schedule indicates any indefiniteness. In most of the allegations it had been expressly stated that the act was done by the misuse of Bakshi Ghulam Mohammad 's official position and by his permitting others to exploit that it is this which made the matters, matters of public importance and it was for greater safety that the note was appended so that no 5SCI 28(a) 410 doubt was left as to the gravamen of the charge in each of the allegations made. The next point against the validity of the Notification was based on section IO of the Act which is in these terms: "10. (1) If at any stage of the inquiry the Commission considers it necessary to inquire into the conduct of any person or is of opinion that the reputation of any person is likely to be prejudicially effected by the inquiry, the Commission shall give to that person a, reasonable opportunity of being heard in the inquiry and producing evidence in his defence; Provided that nothing in this sub section shall apply when the credit of a witness is being impeached. (2)The Government, every person referred to in sub section (1) and with the permission of the Commission, any other person whose evidence is recorded by the Commission: (a) may cross examine any person appearing before the Commission other than a person produced by it or him as a witness, (b) may address the Commission. (3) It was contended that it showed that an inquiry may be made under the Act into the conduct of a person only incidentally, that is to say, it can be made only when that becomes necessary in connection with an inquiry into something else. It was, therefore, contended that the present inquiry which was directly into the conduct of Bakshi Ghulam Mohammad was outside the scope of the Act. It was also said that section 10 gives a statutory form to the rules of natural justice and provides for the application of such rules only in the case when a person 's conduct comes up for inquiry by the Commission incidentally. It was then said that the Act could not have contemplated an inquiry directly into the conduct of an individual since it did not provide specifically that he should have the right to be heard, the right to cross examine and the right to lead evidence which were given by section 10 to the person whose conduct came to be inquired into incidentally. We are unable to accept this view of section 10. Section 3 which permits a Commission of Inquiry to be appointed is wide enough to cover an inquiry into the conduct of any individual. It could not be a natu ral reading of the Act to cut down the scope of section 3 by an implication drawn from section 10. We also think that this argument is illfounded for we are unable to agree that section 10 does not apply to a person whose conduct comes up directly for inquiry before a Commission set up under section 3. We find nothing in the words of section 10 to justify that view. If a Commission is set up to inquire directly into the conduct of a person, the Commission must find 411 it necessary to inquire into that conduct and such a person would therefore, be one covered by section 10. It would be strange indeed if the Act provided for rights of a person whose conduct incidentally came to be enquired into but did not do so in the case of persons whose conduct has directly to be inquired into under the order setting up the Commission. It would be equally strange if the Act contemplated the conduct of a person being inquired into incidentally and not directly. What can be done indirectly should obviously have been considered capable of being done directly. We find no justification for accepting the reading of the Act which learned counsel for Bakshi Ghulam Mohammad suggests. The next attack on the Notification was that it had been issued mala fide. One of the learned Judges of the High Court expressly rejected this contention and the others also seem to have been of the same view for they did not accept it. We find no reason to accept it either. In that view of the matter, we consider it unnecessary to discuss this aspect of the case in great detail. We have set out the broad events of the case and it is on them that the case of mala fide is based. It is not in dispute that for some time past there was political rivalry between Bakshi Ghulam Mohammad and G. M. Sadiq. It was also said that there was personal animosity because G. M. Sadiq wanted to advance the interest of his relatives and followers by ousting persons belonging to Bakshi Ghulam Mohammad 's group in various fields. This allegation of personal animosity cannot be said to have been established. It is really on the political rivalry and the events happening since September 21, 1964 that the allegation of male fide is founded. It was said that the steps taken since the arrest of Bakshi Ghulam Mohammad down to the setting up of the Commission of Inquiry were all taken with the intention of driving him out of the political life so that G. M. Sadiq would have no rival as a political leader. First, as to the arrest. The case of Bakshi Ghulam Mohammad was that the arrest was mala fide. On the other side, it was said that since about July 1964 various allegations of abuse of power by Bakshi Ghulam Mohammad some of which formed the subject matter of inquiry, had come to the notice of the Government and thereupon investigations were started by the Criminal Investigation Department at the instance of the Government. In order to stop the investigation Bakshi Ghulam Mohammad and his followers started dowdyism and other form of breaches of law and order endangering public safety and maintenance of public order. It was pointed out that the situation in Kashmir had not been easy for some time past due to the hostile intentions of Pakistan and China and breach of law and order added to the seriousness of the position. It was said that for these reasons Bakshi Ghulam Mohammad had to be arrested and detained under the Defence of India Rules. it was said on behalf of Bakshi Ghulam Mohammad that prior to the arrest, a no confidence motion had been sponsored and had actually gathered in volume and the arrest was made to stultify 412 it. What support the no confidence motion had we do not know. It would appear however that the Criminal Investigation Department had been making inquiries against Bakshi Ghulam Mohammad 's acts for some time past and the situation in Kashmir was inflammable. In those circumstances, it cannot be said that Bakshi Ghulam Mohammad 's arrest was mala fide. He was no doubt released from arrest after a petition had been moved for his release and before the petition was heard. It was said that he was released because the Government found that the petition was bound to succeed. We have no material before us on which we can say that the petition was bound to succeed. On behalf of G. M. Sadiq and D. P. Dhar it was said that he was released because of ill health. This does not appear to have been denied. It was also said on behalf of G. M. Sadiq that the investigation having been completed there was no cause for Bakshi Ghulam Mohammad to instigate breaches of law and order and therefore it was not necessary to keep him in detention any longer. On the evidence before us, we are unable to say that the case made by G. M. Sadiq cannot be accepted. As to the prorogation of the Assembly, it is said by the appellants that it was necessary because it was apprehended that if the Assembly met, there might have been trouble inside the House created by Bakshi Ghufam Mohammad 's followers who resented the arrest. On the materials before us, we are unable to say that this apprehension was pretended. It was also said by the appellants that the prorogation had been decided upon before the arrest of Bakshi Ghulam Mohammad but the order could not be passed because the Sadar i Riyasat was out of Srinagar from before September 15, 1964 when both the arrest and prorogation had been decided upon and did not return there till some time on September 21, 1964. The fact that the Sadar i Riyasat returned on that date is not denied. As we have said, the arrest and the prorogation took place on the next day, that is, September 22, 1964. Bakshi Ghulam Mohammad was released on December 15, 1964 and the Notification challenged was issued on January 30, 1965. On these facts, we are unable to hold that Bakshi Ghulam Mohammad has been able to establish that the inquiry had been set up mala fide owing to political rivalry. It has been said on behalf of the appellants that there could be no political rivalry because, as appears from Bakshi Ghulam Mohammad 's own affidavit, he had declared his intention to retire from politics. On behalf of Bakshi Ghulam Mohammad it was stated that G. M. Sadiq had made a statement that he would be released after a Commission of Inquiry was set up and this would show that the detention was mala fide and that would indicate that the Notification had also been issued mala fide. That statement is not before us. On behalf of G. M. Sadiq it was said that such a statement had not been made and what had been said was that he would be released after the completion of investigation by the Criminal Investigation Department as thereafter, there 413 will be no occasion for Bakshi Ghulam Mohammad to disturb the public peace and safety. It was also said that it had been mentioned that after the completion of the investigation, the Commission of Inquiry would be set up. This is not denied. It however does not make the arrest mala fide. It was further said by Bakshi Ghulam Mohammad that the statement showed that the Commission was set up to prevent him from disturbing public safety and law and order and that, therefore, it was outside the scope of the Inquiry Act. This was denied on behalf of G. M. Sadiq. In the absence of the statement, it is impossible for us to say which is the correct version. Another point taken was that the affidavits filed on behalf of the appellants showed that the Government were satisfied about the correctness of the allegations into which the inquiry was directed. It was contended that since the inquiry is for finding facts, if the Government were already satisfied about them, there was no need for further inquiry. This contention has no force at all. What the affidavit really said was that the Government were prima facie satisfied. They had to be so before they could honestly set up the Commission to make the inquiry. It was said on behalf of G. M. Sadiq that before setting up the Commission the Government had investigated into the facts through the Criminal Investigation Department and if the Government 's intention was mala fide, they could have started criminal proceedings and ruined the political life of Bakshi Ghulam Mohammad just as well thereby and kept him busy and out of politics for a long time. It was pointed out that this might have resulted in serious consequences for Bakshi Ghulam Mohammad which the Commission of Inquiry would not. It was also pointed out that the Commissioner appointed was a retired Judge of the Supreme Court of India. All this, it was said, would indicate that the action had not been prompted by malice. We cannot say that these contentions of the appellants have no force. The next ground of attack on the Notification was based on article 14. It was said that most of the matters into which the Commission had been directed to inquire formed the subject matters of Cabinet decisions. It was pointed out that since such matters are confidential and no one is allowed to divulge in what way the members of the Cabinet voted on them, it must be held that they were all equally responsible for the acts sanctioned. That being so, it was contended that by picking Bakshi Ghulam Mohammad out of the entire Cabinet for the purpose of the Inquiry the Government had discriminated against him in a hostile way. It was contended that the Notification must be set aside on that ground. We find this contention untenable. The inquiry is in respect of wealth acquired by Bakshi Ghulam Mohammad and his friends and relatives by misuse of his official position. It would be strange if all the members of the Cabinet voluntarily abused their office for putting money into the pockets of Bakshi Ghulam Mohammad and his friends. Let us, however, assume that all the 414 members of the Cabinet assisted Bakshi Ghulam Mohammad in doing this. It is however not said that other members had acquired wealth by these acts. He was, therefore, in a class by himself. This classification has further a rational connection with the setting up of the Commission, for the object is to find out whether the wealth had been acquired by Bakshi Ghulam Mohammad by the abuse of official position. It remains now to deal with the last point. This was directed against the proceedings of the Commission. It was said that the proceedings had been conducted in a manner contrary to the rules of natural justice and to statutory provisions. Two specific complaints were made. The first was that the Commission had not allowed Bakshi Ghulam Mohammad to inspect all the documents before he was called upon to answer the allegations made against him. The second was that the Commission had refused him permission to cross examine persons who had filed affidavits supporting the allegations made against him. We have now to set out the procedure followed by the Commission. It first called upon the Government to file affidavits in support of the allegations in the second schedule to the Notification and to produce the documents which supported them. It then asked Bakshi Ghulam Mohammad to file his affidavit in answer. Thereafter the Commission decided whether any prima facie case had been made for Bakshi Ghulam Mohammad to meet and in that process rejected some of the allegations. Bakshi Ghulam Mohammad was told that there was no case, which be had to meet in respect of them. Out of the remaining allegations, a group was selected for final consideration and it was decided that the rest would be taken up gradually thereafter. In connection with that group of cases, counsel for Bakshi Ghulam Mohammad wanted to cross examine all the persons who had filed affidavits supporting the Government 's allegations in the cases included in that group. The Commissioner ordered that he would not give permission to cross examine all the deponents of affidavits but would decide each case separately. It was after this that the petition for the writ was presented. The question of inspection is no longer a live question. It is true that when Bakshi Ghulam Mohammad was directed to file his affidavits he had not been given inspection of ' all the documents and files which the Government proposed to use to support their case. On behalf of Bakshi Ghulam Mohammad it was said that this was a denial of the rules of natural justice. It is not necessary to consider this question because it is admitted that since then inspection of the entire lot of files and documents has been given. At the final hearing of the allegations, therefore, Bakshi Ghulam Mohammad would no longer be at any disadvantage. The next point is as to the right of cross examination. This claim was first based on the rules of natural justice. It was said 415 that these rules require that Bakshi Ghulam Mohammad should have been given a right to cross examine all those persons who had sworn affidavits supporting the allegations against him. We are not aware of any such rule of natural justice. No authority has been cited in support of it. Our attention was drawn to Meenglas Tea Estates vs Their Workmen(1), but there all that was said was that when evidence is given viva voce against a person be must have the opportunity to hear it and to put the witnesses questions in cross examination. That is not our case. Furthermore, in Meenglas Tea Estate case(1) the Court was not dealing With a fact finding body as we are. Rules of natural justice require that a party against whom an allegation is being inquired into should be given a hearing. Bakshi Ghulam Mohammad was certainly given that It was said that the right to the hearing included a right to cross examine. We are unable to agree that is so. The right must depend upon the circumstances of each case and must also depend on the statute under which the allegations are being inquired into. This Court has held in Nagendra Nath Bora vs Commissioner of Hills Division and Appeals, Assam(1) that "the rules of natural justice vary with the varying constitution of statutory bodies and the rules prescribed by the Act under which they function; and the question whether or not any rules of natural justice had been contravened, should be decided not under any preconceived notions, but in the light of the statutory rules and provisions. " We have to remember that we are dealing with a statute which permits a Commission of Inquiry to be set up for fact finding purposes. The report of the Commission has no force proportion vigorous. This aspect of the matter is important in deciding the rules of natural justice reasonably applicable in the proceedings of the Commission of Inquiry under the Act. 'Then we find that section 10 to which we have earlier referred, gives a right to be heard but only a restricted right of cross exaniination. The latter right is confined only to the witnesses called to depose against the person demanding the right. So the Act did not contemplate a right of hearing to include a right to crossexamine. It will be natural to think that the statute did not intend that in other cases a party appearing before the Commission should have any further right of cross examination. We, therefore. think that no case has been made out by Bakshi Ghulam Mohammad that the rules of natural justice require that lie should have a right to cross examine all the persons who had sworn affidavits supporting the allegations made against him. We will now deal with the claim to the right to cross examine based on statutory provision. That claim is based on section 4(c) of the Act. The relevant part of the section is as follows: "The Commission shall have the power of a Civil Court. while trying a suit under the Code of Civil Proce (1) ; (2) ; 416 dure Svt. 1977, in respect of the following matters, namely: (a) summoning and ao enforce the attendance yof an person and examining him on oath; (b) (c) receiving evidence on affidavits" ' It is not in dispute that the Code of Civil Procedure of Jammu and Kashmir State referred to in this section is in the same terms as the Indian Code of Civil Procedure. Order 19 r. I. of the Indian Code reads as follows: "Any Court may at any time for sufficient reason order that any particular fact or facts may be proved by affidavit, or that the affidavit of any witness may be read at the hearing, on such conditions as the Court thinks reasonable: Provided that where it appears to the Court that either party bona fide desires the production of a witness for cross examination, and that such witness can be produced, an order shall not be made authorising the evi dence of such witness to be given by affidavit. " The contention is that the powers of the Commission therefore to order a fact to be proved by affidavit are subject to the proviso that power cannot be exercised when a party desires the production of the persons swearing the affidavits for cross examining them. The contention was accepted by the High Court. We take a different view of the matter. We first observe that the inquiry before the Commission is a fact finding inquiry. Then we note that section 10 which, in our opinion, applies to a person whose conduct comes up for inquiry by the Commission directly, has a right to cross examine only those persons who give viva voce evidence before the Commission against him. If section 4(c) conferred a right to cross examine every one who swore an affidavit as to the facts involved in the inquiry, then section 10(2) would become superfluous. An interpretation producing such a result cannot be right. It also seems to us that O. 19 r. I has to be read with O. 18 r. 4 which states that the evidence of the witnesses in attendance shall be taken orally in open court. It would appear, therefore, that O. 19 r. I. is intended as a sort of exception to the provisions contained in O. 18 r. 4. The Act contains no provision similar to O. 18 r. 4. Therefore, when section 4(c) of the Act gave the Commission the power of receiving evidence on affidavits, it gave that as an independent power and not by way of an exception to the general rule of taking evidence viva voce in open court. It would be natural in such circumstances to think that what the Act gave was only the power 417 to take evidence by affidavit and did not intend it to be subject to the proviso contained in O. 19 r. I. If it were not so, then the result really would be to require all evidence before the Commission to be given orally in open court. If that was intended, it would have been expressly provided for in the Act. We should here refer to Khandesh Spinning etc. Co. Ltd. vs Rashtriya Girni Kamgar Sangh(1) where this Court dealing with a somewhat similar section like section 4(c) observed that facts might be proved by an affidavit subject to O. 19 r. (1). The observations appear to have been obiter dicta. In any case that case was dealing with a statute different from the one before us. The observation there made cannot be of much assistance in interpreting the Jammu and Kashmir Inquiry Act. The number of witnesses swearing affidavits on the side of the Government may often be very large. In fact, in this case the number of witnesses swearing affidavits on the side of the Government is, it appears, in the region of four hundred. The statute could not have intended that all of them had to be examined in open court and subjected to cross examination, for then, the proceedings of the Commission would be interminable. We feel no doubt that the Act contemplated a quick disposal of the business before the Commission, for, otherwise. the object behind it might have been defeated. While on this topic, we would impress upon the Commission the desirability of speedy disposal of the inquiry. For these reasons, in our view, section 4(c) of the Act does not confer a right on a party appearing before the Commission to require a witness giving evidence by an affidavit to be produced for his cross examination. The Commission would, of course, permit cross examination in a case where it thinks that necessary. The view that we take should not put any party in any difficulty. He can always file affidavits of his own denying the allegations made in affidavits filed on behalf of the other party. If the evidence on both sides is tendered by affidavits, no one should be at any special disadvantage. We have also to remember that section 9 of the Act gives the Commission power to regulate its own procedure subject to any rules made under the Act. We find that the rules provide that evidence may be given by affidavits and the Commission may after reading it, if it finds it necessary to do so, record the evidence of the deponents of the affidavits and also of others; see ff. 6, 7 and 8. Rule 10 reproduces the restricted right of cross examination given by section 10. Rule 11 says that in all matters not provided by the rules, the Commission may decide its own procedure. One of the matters covered by the rules is cross examination of witnesses. So the rules contemplate cross examination as a matter of procedure and the Commission is free to decide what cross examination it will allow provided that in doing so it cannot go behind the rules relating to cross examination. Section 9 of the Act has to be read in the light of these rules. All this. we think, supports (1)[1060] 2 S.C.R. 841. 418 the interpretation we have put on section 4(c). We also feel that the procedure before a body like the Commission has necessarily to be flexible. We, therefore, reject the last contention. In our view, for these reasons, the judgment of the High Court cannot be supported. We accordingly set it aside. The appeal is allowed. Appeal allowed.

The first respondent became a member of the Council of Ministers of the State of Jammu and Kashmir in 1947 and was the Prime Minister of the State from 1953 'to January 1963, when he resigned. Thereafter a Notification was issued by the State Government under section 3 of the Jammu and Kashmir Commission of Inquiry Act 1962 setting up a Commission to inquire into the wealth, acquired by the first respondent and certain specified members of his family during his period of office; the Commission was also to inquire whether in acquiring this wealth there was any abuse of his official position by the first respondent or the said relatives. The Commissioner so appointed held certain sittings between February 1965 and August 1965 in which the first respondent took part. In September 1965 he filed a writ petition before the High Court of Jammu and Kashmir and the High Court, allowing the said petition, set aside the Notification instituting the inquiry and quashed the proceedings of the Commission. The State appealed to the Court. HELD: (i) Section 37 of the Constitution of Jammu and Kashmir talks of the collective responsibility of Ministers to the Legislative Assembly. That, only means that the Council of Ministers will have to stand or. fall together, every member being responsible for the action of any other. The section does not mean that a Minister is responsible for his acts only to the Legislature and no action can be taken against him except for criminal or tortuous acts, in the ordinary course of law, unless the Legislature by a resolution demanded it. No British convention to this effect, if any, can be said to have been adopted by section 37. Furthermore, the responsibility to the Legislature is of the Council of Ministers, and not of those who have, like the first respondent ceased to be Ministers. [405C E]. (ii)Section 3 of the Commission of Inquiry Act expressly gives power to Government as well as to both the Houses of Legislature to initiate action instituting an inquiry. When enacting it the Legislature obviously did not consider that there was any convention or anything in section 37 which prevented a Commission of Inquiry being set up under the Act at the instance of the Government or the Legislative Council. [405F G], (iii)The acts of a Minister while in office do not cease to be matters of public importance after he ceases to hold office; their character cannot change. When it is alleged that a Minister has acquired vast wealth for himself and his friends by abuse of his official ' position, there can be no question that the matter is of public 402 importance. It does not cease to be of public importance merely because what is proposed is to inquire into allegations and not into the steps to be taken to prevent lapses in the future. Nor can absence of public agitation show that the facts to be inquired into are not of, public importance. [407E G; 408 G] Ram Krishan Dalmia vs Shri Justice section R. Tendolkar, ; , referred to. (iv) It is incorrect to say that) allegations mentioned are not definiteor that an inquiry into them is not contemplated by the Inquiry Act. [409 E F] (v) It cannot be inferred from the provisions of section 10 of the Act that a Commission of Inquiry can inquire into the conduct of a person only incidentally, when the main inquiry is in respect of something else. What can be done indirectly should obviously have been considered capabe of being done directly. [411B] (vi)On the facts of the case the inquiry could not be said to be mala fide. [412F] (vii)The. doctrine of Cabinet responsibility does not mean that if an inquiry was made against one of the members of the Cabinet that would be discrimination under article 14. The respondent was in a class, by himself and the classification was justified. [414A B] (viii)The rule of natural justice only requires that a hearing should be given. When the Commission refused permission to the first respondent to cross examine all the witnesses who had filed affidavits against him no rule of natural justice was violated. [415G] Meenglas Tea Estate V. Their Workmen, [1964]2 S.C.R. 165 and Nagendra Nath Bora vs Commissioner of Hills Division & Appeals, ,Assam ; (ix)Section 10 of the Act gives a right to cross examine only these persons who give viva voce evidence before the Commissioner. [416F] (x)Section 4(c) of the Act does not confer a right on a party appearing before the Commission to require a witness giving evidence by affidavit to be produced for his cross examination. The Commission would, of course, permit cross examination in a case where it thinks that necessary. [417E]

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tion (Civil) No. 1060 of 1987 etc. (Under Article 32 of the Constitution of India) K. Parasaran, Attorney General, G. Ramaswamy, Additional Solicitor General, N.A. Palkhiwala, Kapil Sibal, A.K. Gan guli, A.K. Sen. Shanti Bhushan, Raja Ram Aggarwal, Dr. Shankar Ghosh, 324 Tapas Ray, Devi Pal, B. Sen. G.A. Shah, Ashwani Kumar, Yogeshwar Prasad, P.A. Choudhary, Dr. L.M. Singhvi, S.K. Dholakia, R.N. Sachthey, A.B. Misra, P.S. Poti, R.N. Nara simha Murty, N.N. Gooptu, Advocate Generals, R.P. Gupta, section Krishan, J.B. Dadachanji, D.N. Mishra, Mrs. A.K. Verma, Vijay Hansaria, Sunil K. Jain, A.T.M. Sampath, P.N. Ramalin gam, C. Natarajan, N. Inbrajan, M.S. Singh, K.K. Gupta, N.B. Sinha, Sanjeev B. Sinha, Yogendra B. Sinha, Ms. Madhu Kha tri, Ms. Bina Gupta, K.N. Rai, Ms. Panaki Misra, Harish Salve, Ajay K. Jain, Pramod Dayal, K.M. Vyayar, Badar Durraj Ahmed, Parijat Sinha, J.R. Das, P.R. Seetha. raman, Ranjit Kumar, A. Sharan, J.D. Jain, C.S. Vaidyanathan, B.R. Setia, N.N. Keswani, R.N. Keswani, Pramod Dayal, Dilip Tandon, R.B. Mehrotra, M.C. Dhingra, M. Qamaruddin, Ashok Kumar Gupta, M.M. Kashyap, S.B. Upadhya, R.N. Karanjawala, Mrs. Manik Karanjawala, G.S. Vasisht, S.K. Gambhir, Amlan Ghosh, A.K. Singla, K.K. Khurana, L.K. Pandey, Mahabir Singh, E.C. Agarwala, Ms. Pumima Bhatt, Vineet Kumar, K.J. John, Ms. Naina Kapur, Ms. Hemantika Wahi, Sarva Mittar, P.K. Jain, Ms. A. Subhashini, B.V. Decra, M.N. Shroff, R. Mohan, R.A. Perumal, R.N. Patil, S.K. Agnihotri, Ashok K. Srivastava, Manoj Swarup, Pramod Swarup, T.V.S.N. Chaff, S.K. Dhingra, A.M. Khanwilkar, A.S. Bhasme, Anip Sachthey, P.N. Misra, Ajay K. Jha, K.R. Nambiar, P.R. Ramasesh, H.K. Puff, P.R. Mondal, M.P. Jha, Sushil Kumar Jain, S.R. Grover, M.P. Sharma, S.K. Nandy, D. Goburdhan, A. Subba Rao, K. Swami, U.S. Prasad, M. Veerappa, R.K. Mehta, and Naresh K. Sharma for the appearing parties. The Judgment of the Court was delivered by VENKATARAMIAH, J. In this batch of Writ Petitions and Civil Appeals two questions arise for consideration. The first question relates to the constitutional validity of the Constitution (Forty sixth Amendment) Act, 1982 (hereinafter referred to as 'the 46th Amendment ') by which the Legisla tures of the States were empowered to levy sales tax on certain transactions described in sub clauses (a) to (f) of clause (29 A) of Article 366 of the Constitution and the second question is whether the power of the State Legisla ture to levy tax on the transfer of property in goods in volved in the execution of works contracts referred to in sub clause (b) of clause (29 A) of Article 366 of the Con stitution is subject to the restrictions and conditions contained in Article 286 of the Constitution. An account of the history of the relevant constitutional and 325 statutory provisions and of judicial decisions having a beating on the said provisions has to be set out at this stage to appreciate the contentions of the parties. Prior to the commencement of the Constitution of India the power to levy sales tax had been conferred on the Provincial Legisla tures by Entry 48 of the List II of the Seventh Schedule to the Government of India Act, 1935which read as "Taxes on the sale of goods and on advertisements". In exercise of the said power some of the Provincial Legislatures had passed laws levying sales tax on the sale or purchase of certain commodities. There was no specific restriction or condition on the exercise of the said power under the Government of India Act, 1935. The Provincial Legislatures exercised the power to levy sales tax acting on the principles of the territorial nexus, that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of the levy of sales tax under the legislation. Assam and Bengal made among other things the actual exist ence of the goods in the province at the time of the con tract of sale the test of taxability. In Bihar the produc tion or manufacture of the goods in the Province was made an additional ground. A net of the widest range perhaps was laid in Central Provinces and Berar where it was sufficient if the goods were actually found in the Province at any time after the contract of sale or purchase in respect thereof was made. Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a court of law. Such claims to taxing power led to multiple taxation of the same transaction by different Provinces and cumulation of the burden falling ultimately on the consuming public. By the time the Constituent Assembly took up for consideration the provisions relating to the power of the State Legislatures to levy sales tax the difficulties creat ed by the sales tax laws passed by the various Provinces and their effect on inter State trade and commerce had come to be felt throughout the country. In order to minimise the adverse effects of the sales tax laws passed by the Legisla tures of States the Constituent Assembly enacted Articles 236, 301 and 304 of the Constitution. Introducing an amend ment to Article 264 A to the draft Constitution, which ultimately became Article 286 of the Constitution of India, Dr. Ambedkar observed on the floor of the Constituent Assem bly thus: "Sir, as everyone knows, the sales tax has created a great deal of difficulty throughout India in the matter of freedom of trade and commerce. It has been found that the very many sales taxes which are levied by the various Provincial Governments either cut into goods which are the 326 subject matter of imports or exports, or cut into what is called inter State trade or commerce. It is agreed that this kind of chaos ought not to be allowed and that while the provinces may be free to levy the sales tax there ought to be some regulations whereby the sales tax levied by the provinces would be confined within the legitimate limits which are intended to be covered by the sales tax. It is, therefore, felt that there ought to be some specific provisions laying down certain limitations on the power of the provinces to levy sales tax. The first thing that I would like to point out to the House is that there are certain provisions in this article ' 264A which are merely reproductions of the different parts of the Constitution. For instance, in sub clause (1) of article 264A as proposed by me, sub clause (b) is merely a reproduction of the article contained in the Constitution, the entry in the Legislative List that taxation of imports and exports shall be the exclusive province of the Central Government. Conse quently so far as sub clause (1)(b) is con cerned there cannot be any dispute that this is in any sense an invasion of the right of provinces to levy sales tax. Similarly, sub clause (2) is merely a reproduction of Part XA which we recently passed dealing with provisions regarding inter State trade and commerce. Therefore so far as sub clause (2) is concerned there is really nothing new in it. It merely says that if any sales tax is imposed it shall not be in conflict with the provisions of Part XA. With regard to sub clause (3) it has also been agreed that there are certain com modities which are so essential for the life of the community throughout India that they should not be subject to sales tax by the province in which they are to be found. There fore it was felt that if there was any such article which was essential for the life of the community throughout India, then it is necessary that, before the province concerned levies any tax upon such a commodity, the law made by the province should have the assent of the President, so that it would be possible for the President and the Central Government to see that no hardship is created by the particular levy proposed by a particular province. 327 The proviso to sub clause (2) is also important and the attention of the House might be drawn to it. It is quite true that some of the sales taxes which have been levied by the provinces do not quite conform to the provi sions contained in article 264 A. They proba bly go beyond the provisions. It is therefore felt that when the rule of law as embodied in the Constitution comes into force all laws which are inconsistent with the provisions of the Constitution shall stand abrogated. On the date of the inauguration of the Constitution this might create a certain amount of finan cial difficulty or embarrassment to the dif ferent provinces which have got such taxes and on the proceeds of which their finances to a large extent are based. It is therefore pro posed as an explanation to the general provi sions of the Constitution that notw ithstanding the inconsistency of any sales tax imposed by any province with the provisions of article 264A, such a law will continue in operation until the 31st day of March 1951, that is to say, we practically propose to give the provinces a few months more to make such adjustments as they can .and must in order to bring their law into conformity with the provisions of this article. " Article 286 of the Constitution, as it was originally enacted, read as follows: "286. Restrictions as to imposition of tax on the sale or purchase of goods (1) No law of a State shall impose, or authorise the imposi tion of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the gener al law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. 328 (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposi tion of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or com merce. Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immedi ately before the commencement of this Consti tution shall, notwithstanding that the imposi tion of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the impo sition of, a tax on the sale or purchase of any such goods as have been declared by Par liament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. " Articles 301 and 304 of the Constitution which were incorporated in Part XIII of the Constitution read thus: "301. Freedom of trade, commerce and intercourse Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free" "304. Restrictions on trade, commerce and intercourse among States Notwithstanding anything in article 30 1 or article 303, the Legislature of a State may by law (a) impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manu factured or produced; and (b) impose such reasonable restric tions on the freedom of trade, commerce or intercourse with or without that State as may be required in the public interest: 329 Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the president. " The Power to levy sales tax was conferred on the Legislatures of States by the Constitu tion by Entry 54 of List II of the Seventh Schedule to the Constitution of India which, as originally enacted, read thus: "54. Taxes on the sale or purchase of goods other than newspaper. " The power to levy tax on purchase of goods was expressely stated in Entry 54 even though it was implicit in the ex pression "taxes on the sale" which was found in Entry 40 of List II of the Seventh Schedule to the Government of India Act, 1935. In exercise of the power conferred on it by Entry 54 of the State List the Legislature of Bombay passed an Act called the Bombay Sales Tax Act, 1952 which imposed a gener al tax on every dealer whose turnover in respect of sales within the State of Bombay during the prescribed period exceeded Rs.30,000 and a special tax on every dealer whose turnover in respect of sales of special goods made within the State of Bombay exceeded Rs.5,000 during the prescribed period. The term 'sale ' was defined as meaning any transfer of property in goods for cash or deferred payment or other veluable consideration, and an Explanation to this defini tion provided that the sale of any goods which have actually been delivered in the State of Bombay as a direct result of such sale for the purpose of consumption in the said State shall be deemed, for the purposes of the Act, to have taken place in the said State irrespective of the fact that the property in the goods has, by reason of such sale, passed in another State. Rules 5 and 6 of the Bombay Sales Tax Rules, 1952, which were brought into force on the same day on which sections 5 and 10 of the Bombay Sales Tax Act came into force provided for the deduction of the following sales in calculating the taxable turnover, viz., sales which took place (a) in the course of the import of the goods into, or the export of the goods out of, the territory of India, and (b) in the course of inter State trade or commerce (being the two kinds of sales referred to clauses (1)(b) and (2) respectively of Article 286 of the Constitution). Rule 5(2)(i), however, required, as a condition of the aforesaid deductions, that the goods should be consigned by a railway, shipping or aircraft company or country boat registered for carrying cargo or public motor transport service or by registered post. In an application made under Article 226 of the Constitution challenging the validity of the said Act 330 and praying inter alia for a writ against the State of Bombay and the Collector of Sales Tax, Bombay, restraining them from enforcing the provisions of that Act, the High Court of Bombay held that the definition of 'sale ' in that Act was so wide as to include the three categories of sale exempted by Article 286 of the constitution from the imposi tion of tax by the States and thus not valid. On appeal to this Court the decision of the High Court of Bombay was reversed by the majority in the State of Bombay and Another vs The United Motors (India) Ltd. and Others; , Soon doubts came to be entertained about the correctness of the above decision and this Court got the opportunity to reconsider the correctness of the decision in the United Motors case (Supra) in the Bengal Immunity Company Limited vs The State of Bihar and Others, [1955]2 S.C.R. 503. In the case of the Bengal Immunity Company Ltd. (supra) the majority held that the operative provisions of the several parts of Article 286 of the Constitution, namely, clause 1(a), clause 1(b) and clauses 2 and 3 were intended to deal with different topics and one could not have pro jected or read into another. The bans imposed by Article 286 of the Constitution on the taxing powers of the States were independent and separate and each one of them had to be got over before a State Legislature could impose tax on transac tions of sale or purchase of goods. The Explanation to Article 286(1)(a) determined by the legal fiction created therein the situs of the sale in the case of transactions coming within that category and once it was determined by the application of the Explanation that a transaction was outside the State, it followed as a matter of course that the State, with reference to which the transaction could thus be predicated to be outside it, could never tax the transaction. After the judgment in the Bengal Immunity Company Ltd. 's (supra) case on the recommendations of the Taxation Enquiry Commission as regards the amendment of the constitutional provisions relating to sales tax, Parliament passed the Constitution (Sixth Amendment) Act, 1955 which received the assent of the President on 11th September, 1956. By the said amendment the Constitution was amended in the following way. In List I of the Seventh Schedule to the Constitution Entry 92A was added. It reads as follows: "92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of Inter State trade or commerce." In List II existing Entry 54 was substi tuted by the following entry: 331 "54. Taxes on the sale or purchase of goods other than newspapers subject to the provi sions of entry 92A of List Article 269 of the Constitution which enumerated the taxes that were to be levied and collected by the Government of India but were to be assigned to the States was amended by adding sub clause (g) ' to clause (1) and clause (3.) to it. After such amendment Arti cle 269 read thus: "269. (1) The following duties and taxes shall be levied and collected by the Government of India but shall be assigned to the States in the manner provided in clause (2), namely: (a) duties in respect of succession to property other than agricultural land; (b) estate duty in respect of proper ty other than agricultural land; (c) terminal taxes on goods or pas sengers carried by railway, sea or air; (d) taxes on railway fares and freights; (e) taxes other than stamp duties on transactions in stock exchanges and futures markets; (f) taxes on the sale or purchase of newspapers and on advertisements published therein; (g) taxes on the sale or purchase of goods other than newspapers, where such sale or purchases takes place in the course of inter State trade or commerce. (2) The net proceeds in any finan cial year of any such duty or tax, except in so far as those proceeds represent proceeds attributable to States specified in Part C of the First Schedule, shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that duty or tax is leviable in that year, and shall be 332 distributed among those States in accordance with such principles of distribution as may be formulated by Parliament by law. (3) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in the course of Inter State trade or commerce " By the above amendment Parliament was empow ered to levy tax . on the sale or purchase of goods other than newspapers where such sale or purchase took place in the course of Inter State trade or commerce and was also empowered to formulate by law principles for determining when a sale or purchase of goods took place in the course of Inter State trade or commerce. By the very same Sixth Amendment Article 286 of the Constitution was amended. The Explanation to clause (1) was omitted by that Amendment. Clauses (2) and (3) of Article 286 were substituted by two new clauses. After such amendment Article 286 of the Constitution read thus: "286. Restrictions as to imposition of tax on the sale or purchase of goods (1) No law of a State shall impose, or authorise the imposi tion of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorises the imposi tion of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in Inter State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Par liament may by law specify. " 333 Pursuant to the power conferred on it Parliament enacted the which received the assent of the President on 21st December, 1956. The said Act was passed to formulate principles for determining when a sale or purchase of goods took place in the course of Inter State trade or commerce of outside a State or in the course 'of import into or 'export from India, to provide for the levy, collection and distribution of taxes on sales of goods in the course of Inter State trade or commerce and to declare certain goods to be of special importance in Inter State trade or commerce and specify the restrictions and condi tions to which State laws imposing taxes on the sale. or purchase of such goods of special importance shall be sub ject. Section 6 of the explained when a sale or purchase of goods in the course of Inter State trade or commerce took place. Section 4 of the said Act explained when a sale or purchase of goods took place out side a State and Section 6 explained when a sale or purchase of goods took place in the course of import or export for purposes of that Act. Section 14 of the enumerated the goods which were considered to be of special importance in Inter State trade or commerce and section 15 of that Act set out restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. Section 15 of the as it is in force today reads thus: "15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. Every sales tax law of State shall, in so far as it imposes or authorises the imposition of a tax on the sale or pur chase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of Inter State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of Inter State trade or commerce, the tax levied under such law shall be 334 reimbursed to the person making such sale in the course of Inter State trade or commerce, in such manner and subject to such conditions as may be provided in any law in force in that State; (c) where a tax has been levied under that law in respect of the sale or purchase inside the State of any paddy referred to in sub clause (i) of clause (i) of section 14, the tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on such paddy; (d) each of the pulses referred to in clause (vi a) of section 14, whether whole or separated, and whether with or without husk, shall be treated as a single commodity for the purposes of levy of tax under that law. " By the time the Constitution (Sixth Amendment) Act and the came into force controversy had arisen before some of the High Courts about the liabili ty of contractors who had undertaken to carry out works contracts to pay sales tax on the transfer of property in the goods involved in works contracts. In Gannon Dunkerley and Co. (Madras) Ltd. vs State of Madras, A.I.R. 1954 Mad. 1130 the assessees were carrying on business as engineers and contractors. Their business con sisted mainly of execution of contracts for constructions of buildings, bridges, dams, roads and structural contracts of all kinds. During the assessment year the return made by the assessees showed as many as 47 contracts, most of which were building contracts, which were executed by the assessees. From the total of the amount which the assessees received in respect of sanitary contracts and other contracts 20% and 30% respectively were deducted for labour and the balance was taken as the turnover of the assessees for the assess ment year in question. Sales tax was levied on the said balance treating it as taxable turnover under the Madras General Sales Tax Act, 1939. The assessees questioned the levy of sales tax on the said amount treated as taxable turnover on the ground that there was no sale of goods as understood in India and, therefore, no sales tax could be levied on any portion of the amount which was received by the assessees from the persons for whose benefit they had constructed buildings. It was urged on behalf of the asses sees that there was no element or ' sale of the materials in a building contract and 335 that such a contract was one entire and indivisible. Unless the contract was completed, the builder was not entitled to the price fixed under the contract or ascertainable under the terms of the contract. The property in the materials passed to the owner of the land not by virtue of the deliv ery of the materials as goods under and in pursuance of an. agreement of sale which stipulated a price for the materi als. The property in the materials passed to the owner of the land because they were fixed in pursuance of the con tract to build and along with the corpus, which ultimately resulted by the erection of the superstructure, the materi als also passed to the owner of the land. It was urged that a contract to build was not a contract to sell goods used in the construction of a building. The High Court of Madras on a consideration of the submissions made before it came to the conclusion that the transactions in question were not contracts for sale of goods as defined under the provisions of the which was in force on the date on which the Constitution came into force and therefore the assessees were not liable to pay sales tax on the amounts received by them from the persons for whom they had constructed buildings etc. during the year of assessment. But a petition filed by the very same assessees for similar relief in the Gannon Dunkerley & Co. Madras (Private) Ltd. vs Sales Tax Officer, Mattancheri, A.I.R. 1957 Kerala 146 was dismissed by the Kerala High Court affirming the imposi tion of sales tax on the turnover relating to construction works and upholding the rules providing for apportionment of the determination of the taxable turnover on a percentage basis. In Mohamed Khasim vs State of Mysore, [1955] VI Sales Tax Cases 211, the Mysore High Court held that the provisions of the Mysore Sales Tax Act imposing sales tax on construction of buildings under works contract were valid and further upheld the determina tion of the taxable turnover on percentage basis. The compe tence of the State Legislature to levy sales tax on the supply of building materials for execution of building contracts came up for consideration before the Nagput High Court in Pandit Banarsi Das vs State of. Madhya Pradesh and Ors., [1955] VI Sales Tax Cases 93. The assessees in the said case were Madhya Pradesh Contractors ' Association and the Jabalpur Contractors ' Association. They instituted a petition before the Nagpur High Court through their Presi dent and Secretary questioning the power of the State Legis lature to levy sales tax on the turnover consisting of the amounts received by the building contractors from the per sons for whom they had constructed buildings by supplying the required materials. They relied upon the decision of the High Court of Madras in Gannon Dunkerley 's case (supra). The Nagput High Court while I declining to follow the decision of the High Court of Madras was 336 of opinion that the State Legislature could pick out a sale from the composite transaction of a building contract which included transfer of property in materials and could make the portion attributable to the cost of such materials subject to payment of sales tax in exercise of its undoubted and plenary powers. Jubilee Engineering Co. Ltd. vs Sales Tax Officer, Hyderabad City and Ors., was a case decided by the High Court of Hyderabad. In that case that High Court held that in a works contract where a person undertook to build a .particular building or to make a particular thing, the materials involved in the building or making of the finished product, could not be the subject matter of sale because there was no agreement to sell the materials nor was price of the goods fixed. It was also found that in such cases there was no passing of the title in those goods as such except as part of the building or the thing in which they were embedded. It accordingly held that the amount received by a building contractor from the person for whom he had constructed the building could not be taxed under the sales tax law of the State of Hyderabad. A similar question arose before the High Court of Rajasthan in Bhurar nal and Ors. vs State of Rajasthan, A.I.R. The High Court of Rajasthan held that the definition of "dealer" in the Rajasthan Sales Tax Act,, 1954 included not only those who sold goods, but also those who supplied goods, whether on commission, or for remuneration or other wise and the said definition was very wide and included persons like the building contractors who in the course of their business as building contractors supplied goods to those who gave them contracts. Since the said supply was not gratis such building contractors should be held to be deal ers within the meaning of that expression in the Rajasthan Sales Tax Act. Ultimately the question whether the cost of the goods supplied by a building contractor in the course of the construction of building could be subjected to payment of sales tax was finally resolved by this Court in State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., which was an appeal filed against the decision of the High Court of Madras in Gannon Dunkerley & Co. (Madras) Ltd. vs The State of Madras, (supra). In this case this Court held that on a true interpretation the expression "sale of goods" meant an agreement between the parties for the sale of the very goods in which eventually property passed. In a building contract where the agreement between the parties was that the contractor should construct the building according to the specifications contained in the agreement and in consideration therefor received payment as provided therein, there was neither a contract to sell the materials used in the construction nor the 337 property passed therein as movables. This Court further held that the expression "sale of goods" was at the time when the Government of India Act, 1935 was enacted, a term of well recognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic and should be interpreted in Entry 48 in List II in Schedule VII of the Government of India Act, 1935 as having the same meaning as in the . This Court further held that in a building contract which was one, entire and indivisible, there was no sale of goods and it was not within the competence of the Provincial Legisla ture under Entry 48 in List II in Schedule VII of the Gov ernment of India Act, 1935, to impose a tax on the supply of the materials used in such a contract treating it as a sale. The above decision though it was rendered on the basis of the provisions in the Government of India Act, 1935 is equally applicable to the provisions found in Entry 54 of List II of Schedule VII of the Constitution. In the above decision, the decision of the Nagpur High Court, the Rajas than High Court, the Mysore High Court and the Kerala High Court referred to above were overruled and the decision of the Hyderabad High Court and the decision of the Madras High Court against which the above appeal had been filed were affirmed. By virtue of the above decision of this Court no sales tax could be levied on the amounts received under a works contract by a building contractor even though he had supplied goods for the construction of the buildings. In addition to the building contracts referred to above, certain other kinds of transactions were also held to be not sales liable to payment of sales tax by this Court even though they involved transfer of property in goods. In M/s. New India Sugar Mills Ltd. vs Commissioner of Sales Tax, Bihar, [1963] Supp. 2 S.C.R. 459 this Court took the view that in the transfer of controlled commodities in pursuance of a direction under a control order, the element of voli tion by the seller, or mutual assent, was absent and there fore there was no sale as defined in the . However, in Oil and Natural Gas Commission vs State of Bihar and Ors. , ; this Court had occasion to consider its earlier decisions with regard to the liabil ity of transfers of controlled commodities to be charged to sales tax. This Court held that where there were any statu tory compulsions, the statute should be treated as supplying the consensus and furnishing the modality of the consensus. In Vishnu Agencies (Pvt.) Ltd. etc. vs Commercial Tax Offi cer & Ors. ; , the decision in M/s. New India Sugar Mills 's (supra) case was held to be not good law. Even after the decision in Vishnu Agencies 's case (supra) there was a certain area of doubt about the liabili ty of transactions not 338 consensual in nature in which property in goods passed to exigibility to sales tax. Devices by way of leases of films had also been result ing in avoidance of sales tax. The main fight in regard to a film related to its exploitation and after exploitation for a certain period of time, in most cases, the film ceased to have any value. There were also reports received by the State Govern ments to whom revenues from sales tax had been assigned, as to the large scale avoidance of central sales tax leviable on Inter State sales of goods through the device of consign ment of goods from one State to another. In Northern India Caterers (India) Ltd. vs Lt. Governor of Delhi, ; this Court held that there was no sale when food and drink were supplied to guests residing in the hotel and that supply of meals was essentially in the nature of a service provided to the guests and could not be identified as a transaction of sale. This Court declined to accept the position that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs and accordingly the proprietor of a restaurant who provided many services in addition to the supply of food was not liable to pay sales tax on the value of the goods supplied by him. The various problems which arose on account of the above decisions were referred to the Law Commission of India and its advice was sought as to the manner in which the types of transactions involved in the above decisions could be made exigible to sales tax. The Law Commission considered these matters in its 61st Report and recommended inter alia cer tain amendments to the Constitution, if as a matter of administrative policy it was decided to levy sales tax on transactions of the nature mentioned above. There were also complaints from the States that there was a large scale leakage of sales tax revenue by the adoption of devices such as hire purchase system. In the year 1982 Parliament passed the 46th Amendment amending the Constitution in several respects in order to bring many of the transactions, in which property in goods passed but were not considered as sales for the purpose of levy of sales tax, within the scope of the power of the States to levy sales tax. By the 46th Amendment a new clause, namely clause (29A) was introduced in article 349 of the Constitution. Clause (30A) of Article 366 of the Constitution reads thus: 339 "366, Definitions. In this Constitution, unless the context otherwise requires, the following expressions have the meaning hereby respectively assigned to them, that is. to (29A) tax on the sale or purchase of goods includes (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire purchase or any system of payment by instal ments; (d) a tax on the transfer of the right to use any goods. for any purpose (whether or not for a specified period)for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unin corporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part. of any service or in any other manner whatso ever, of goods, being food or any other arti cle for human consumption or any drink (wheth er or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made ;" A new entry was inserted in List I of the Seventh Schedule to the Constitution as Entry 92 F to enable the levy of tax on the consign ment of goods where such consignment took place in the course of InterState trade of commerce; 340 "92 F. Taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of Inter State trade or commerce. " Clause (1) of article 269 of mended by adding sub clause (h) thereto. Clause (a) of that article was amended to enable Parliament to formulate by law principles for determining when a consignment of goods took place in the course of Inter State trade or commerce. After the amendment the relevant portion of article 269 of the Constitution reads thus: "269. Taxes levied and collected by the Union but assigned to the States. (1) The following duties and taxes shall be levied and collected by the Government of India but shall be as signed to the States in the manner provided in clause (2), namely . . . . . . (h) taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of InterState trade or commerce . . . . (3) Parliament may by law formulate principles for determining when a sale or purchase of, or consignment of, goods takes place in the course of Inter State trade or commerce. " By the 46th amendment article 286 of the Constitution also was amended by substituting clause (3) thereof by a new clause. After the amendment clause (3) of article 286 reads thus: "286. Restrictions as to imposition of tax on the sale or purchase .of goods . . . . (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce; or 341 (b) a tax on the sale or purchase of goods, being a tax of the nature referred in sub clause (b), sub clause (c) or subclause (d) of clause (29 A) of article 366, be subjected to such restrictions and condi tions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify. " The 46th amendment also validated laws levying tax and also collection by way of tax under such law subject to the conditions mentioned therein. On the passing of the 46th Amendment the State Govern ments after making necessary amendments in their laws com menced to levy sales tax on the turnover of the works con tracts entered into by the building contractors for con structing houses, factories, bridges etc. In some States taxable turnover was determined by deducting the money spent on labour engaged in connection with the execution of the works contracts from the amount received by the contractor for the execution of the works contracts. In some other States a certain fixed percentage of the total turnover was deducted from the total turnover as labour charges before arriving at the taxable turnover. Each State adopted its own method of determining taxable turnover either by flaming rules under its sales tax law or by issuing administrative directions. It is not necessary for purposes of this judg ment to refer in detail to the various patterns of law in force in the States and the rules or administrative instruc tions made or issued thereunder. It is sufficient to say that the methods adopted by the States for determining the taxable turnover relating to works contracts for purposes of levy of sales tax were such that sales tax had to be paid by the building contractors not merely on the value of materi als supplied by them in connection with the works contracts but also on the expenditure they had incurred in securing the services of architects and engineers who had supervised the execution of the works and also on the amount which they were entitled to receive for supervising the execution of the works. While levying sales tax on the price of the materials supplied for the construction of houses, facto ries, bridges etc. the sales tax authorities of the States did not take into account the conditions and restrictions imposed by Article 286 of the Constitution and the provi sions of the . The assessing authorities did not make any attempt to ascertain whether the sales of the goods involved in a execution of works contract had taken place in favour of the person who had assigned the contract outside the State in which the works contract was being ex 342 ecuted or whether any part of the goods so used in a works contract had been imported from abroad on account of the person who had assigned the contract or whether any part of the goods, such as, iron and steel etc. which were declared goods, had already suffered sales tax at an earlier point in the State and whether on such goods the tax which was being levied exceeded the limit prescribed by section 15 of the . They did not also take into consideration whether the sale of the goods in question had been exempted under the sales tax laws of the State from payment of sales tax or whether it had already suffered payment of tax earlier where the sales tax law of the State had prescribed that the sale of such goods could be subject ed to the levy of sales tax at a single point. Aggrieved by the levy sales tax on the turnover relating to works con tracts in the above manner, the petitioners and the appel lants have filed these petitions and appeals. The petitioners and the appellants have pressed before us in these cases only two points, namely, (i) that the 46th Amendment is unconstitutional because it has not been rati fied by the Legislatures of not less than one half of the States by resolutions passed to that effect by those Legis latures before the Bill which led to the amendment in ques tion was presented to the President for assent; and (ii) that it was not open to the States to ignore the provisions contained in Article 286 of the Constitution and the provi sions of the while making as sessments under the sales tax laws passed by the Legisla tures of the States. By an order made by this Court on 20th of September, 1988 notices 'were issued to the Attorney General for India and the Advocates General for the concerned States. The Attorney General and some of the Advocates General appeared before us in response to the notices issued to them and made their submissions. The first contention raised before us regarding the constitutionality of the 46th Amendment need not detain us long. This contention was based on the assumption that the Legislatures of not less than one half of the States which were in existence during the relevant period had not rati fied the Bill which ultimately became the 46th Amendment before the President gave his assent. It was argued that such ratification was necessary since the provisions con tained in the 46th Amendment had the effect of enlarging the scope of Entry 34 of List II of the Seventh Schedule to the Constitution by empowering the 343 Legislatures of States to levy Sales Tax on the turnover relating to the transactions referred to in sub clauses (a) to (f) of clause (29 A) of Article 366 of the Constitution which they could not have done before the 46th Amendment. It was contended that irrespective of the fact whether the Amendment of an entry in any of the Lists of the Seventh Schedule to the Constitution had the effect of either cur tailing or enlarging the powers of Parliament or the Legis latures of States, a Bill making revision for such Amendment had to be ratified by Legislatures. of not less than one half of the States by resolutions passed to that effect before such a Bill was presented to the President for assent in view of the express provisions contained in clause (c) of the proviso to Article 368(2) of the Constitution. At the hearing of the above case the learned Attorney General for India produced before us the Memorandum dated the 31st January, 1982 signed by the Secretary General of the Rajya Sabha which reads thus: "RAJYA SABHA SECRETARIAT PARLIAMENT HOUSE, NEW DELHI. No. RS. 1/21/81 B Dated the 31st January, 1982 MEMORANDUM In pursuance of article 368 of the Constitution of India, the assent copy of the Constitution (Forty sixth Amendment) Bill, is presented to the President. This Bill has been passed by the Houses of Parliament and has been also ratified by the Legislatures of not less than one half of the States in accordance with the provision of the proviso to clause (2) of article 368 of the Constitution. Legis latures of the following States have passed resolutions ratifying the amendments: 1. Haryana 2. Himachal Pradesh 3. Karnataka 4. Madhya Pradesh 5. Maharashtra 344 6. Manipur 7. Meghalaya 8. Orissa 9. Punjab 10. Rajasthan 11. Sikkim 12. Tamil Nadu A copy each of the letters received from these Legislatures is placed below. Sd/(SUDAR SHAN AGARWAL) Secretary General To The Secretary to the President, (Through the Secretary, Ministry of Law)" The Attorney General has also produced before us the file containing the resolutions passed by the Legislatures of the 12 States referred to in the Memorandum, set out above. We are satisfied that there has been due compliance of the provisions contained in the proviso to Article 368(2) of the Constitution. We, therefore, reject the first conten tion. Before proceeding further, we should observe that there would have been no occasion for an argument of this type being urged in Court if at the commencement of the Act it had been stated that the Bill in question had been pre sented to the President for his assent after it had been duly ratified by the required number of Legislatures of States. We hope that this suggestion will be followed by the Central Secretariat hereafter since we found that even the AttorneyGeneral was not quite sure till the case was taken up for heating that the Bill which had become the 46th Amendment had been duly ratified by the required number of States. We shall now proceed to consider the other contention of the petitioners and the appellants, namely, that the States were bound to comply with the provisions of Article 286 of the Constitution and the provisions of the , even while levying sales tax on the turnover relating to the transactions described in sub clause (b) of clause (29 A) of Article 366 of the Constitution. The grounds urged on behalf of the petitioners and the appel lants may be sum 345 marised thus. The object of the 46th Amendment is to convert what is not a sale into a sale. A transfer of property in goods involved in the execution of a works contract which was held by this Court in the State of Madras vs Gannon Dunkerley & Co., (Madras) Ltd. (supra) to be not a sale is deemed by a fiction of law to be a sale and is made taxable as such. In no other respect does the 46th Amendment enlarge the power of the States to levy sales tax. Articles 269, 286, 366 (29 A), Entry 92A in List I of the Seventh Schedule and Entry 54 in List II of the Seventh Schedule to the Con stitution should be read together. Reading the above provi sions together the position which emerges may be summed up as follows: The 46th Amendment has no beating on the loca tion of the sale. It does not deem an outside sale to be an inside sale. It does not confer on the States the power to tax sales outside the State. Therefore, if in the process of executing a works contract, a transfer of property in the goods takes place outside the State, the State would have no power to levy sales tax on such a transfer. The 46th Amend ment does not deem an Inter State sale to be an inter State sale. It does not confer on the State the power to tax inter State sales. Therefore, if in the process of executing a works contract a transfer of property in goods takes place in the course of inter State sale, the state would have no power to levy sales tax on such a transfer. The 46th Amend ment does not confer on the State the power to levy sales tax on a sale in the course of import. Therefore, if in the process of executing a works contract, a transfer of proper ty in goods takes place in the course of import, the State would have no power to levy sales tax on such transfer. The price of goods supplied by a person who has assigned the contract for the purpose of executing a works contract cannot be treated as a part of the taxable turnover. The restrictions and conditions contained in section 15 of the Central Sales tax Act, 1956, on the power of the States to levy tax on the sale of declared goods apply equally and fully to transfer of property in goods under works con tracts, even as they apply to ordinary sales. Therefore, if there is a transfer of property in declared goods for example steel products in the process of execution of works contract,the State can levy tax only at 4 per cent and only at one stage. It is clear that the entire works contract is not deemed by the 46th Amendment to be a sale. Therefore only the price reasonably allocable to goods transferred under works contracts can be taxed, and not the totality of the consideration paid for the works contract. If goods for example fuel and power are used in the process of executing a works contract but are consumed in the process, the property in such goods cannot conceivably be transferred, because the goods themselves cease to exist. Such goods cannot be the subject matter for the levy of sales tax 346 at all. These in brief are the contentions of the petition ers and the appellants. The above mentioned contentions of the petitioners and the appellants are met by the States thus. When a works contract is executed property does not pass as a movable property unless there is an express agreement stating that the properties in such movables will pass to the person who has assigned the contract as and when the goods are used in the constructions of the building. In the absence of any such agreement transfer of property in goods passes not as movables as such but by accretion and in an unidentifiable and indivisible manner. In all such cases it is not possible to disintegrate the contract into a contract for sale of goods and a contract for work and labour only. When a house or a factory or a bridge constructed by a building contrac tor is handed over to the person who had assigned the con tract, what is handed over is a conglomerate of all the goods used in the construction of the building which was different from the specific goods used in the construction. Sub clause (b) of clause (29 A) of Article 366 of the Con stitution has conferred on the Legislatures of States the power to levy tax on works contract which is independent of the power conferred on the Legislatures of States under Entry 54 of the State List. It is thus argued that it was not possible to break up the house, factory or bridge etc. which is constructed by a building contractor into individu al items of goods and to tax the transfer of property in each of them in accordance with the provisions contained in Article 286 of the Constitution and the General Sales Tax Act, 1956. It was further urged that in the case of a works contract there could not be a sale of goods which had taken place outside the State in which the work was executed, there could not be any sale of the goods in the course of import into India, there could not be any sale or purchase of goods which had taken place in the course of Inter State trade or commerce and there could not be a sale of any declared goods attracting section 15 of the Central Sales Act, 1956 since a house, a factory or a bridge was not one of those items specified as declared goods under section 14 of the said Act. It was next contended that since in no sales tax law in force in any part of India it was stated that the turnover relating to a works contract was subject to payment of sales tax at one point only. the question of considering whether the levy of sales tax relating to a works contract could be held to be bad on account of the fact that certain goods which had been used in the construc tion had suffered tax earlier did not arise. In other words it was urged that the goods involved in a works contract were different from the works contract. It was, however, argued that if any goods had been supplied 347 by the person for whose benefit a building, factory or bridge was being constructed for the purpose of such con struction the value of those goods would not be included in the taxable turnover. Before proceeding further it is necessary to understand what sub clause (b) of clause 29 A of Article 366 of the Constitution means. Article 366. is the definition clause of the Constitution. It says that in the Constitution unless the context otherwise requires, the expressions defined in that article have the meanings respectively assigned to them in that article. The expression 'goods ' is defined in clause (12) of Article 366 of the Constitution as including all materials, commodities and articles. It is true that in the State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., (supra) this Court held that a works contract was an indi visible contract and the turnover of the goods used in the execution of the works contract could not, therefore, become exigible to sales tax. It was in order to overcome the effect of the said decision Parliament amended Article 366 by introducing sub clause (b) of clause (29 A) '. Sub clause (b) of clause (29 A) states that 'tax on the sale or pur chase of goods ' includes among other things a tax on the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works con tract. It does not say that a tax on the sale or purchase of goods included a tax on the amount paid for the execution of a works contract. It refers to a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. The emphasis is on the transfer of property in goods (whether as goods or in some other form). The latter part of clause (29 A) of Article 366 of the Constitution makes the position very clear. While referring to the transfer, delivery or supply of any goods that takes place as per subclauses (a) to (f) of clause (29 A), the latter part of clause (29 A) Says that. 'such ' transfer, .delivery or supply Of any goods ' shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Hence, a transfer of property in goods ' under sub?clause. (b) of clause (29 A) is deemed to be a sale of the goods involved in the execution of a works contract by the person making the transfer and a purchase of those goods by the person to whom such transfer is made. The object of the new definition introduced in clause (29 A) of Article 366 :of the Constitution is, therefore, to enlarge the scope of 'tax on sale or purchase of goods ' wherever it occurs in the Constitution so that it may include within its scope the transfer, delivery or supply of goods that may take place under any of the transactions referred to in sub clause (a) to (f) thereof wherever 348 such transfer, delivery or supply becomes subject to levy of sales tax. So construed the expression 'tax on the sale or purchase of goods ' in Entry 54 of the State List, therefore, includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract also. The tax leviable by virtue of sub clause (b) of clause (29 A) of Article 366 of the Constitu tion thus becomes subject tO the same discipline to which any levy under Entry 54 of the State List is made subject to under the. COnstitution. The position is the same when we look at Article 286 of the Constitution. Clause (1) of Article 286 says that no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) out side the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Here again we have to read the expression 'a Tax on the sale or purchase of goods found in Article 286 as in cluding the transfer of goods ' referred to in sub clause (b) of clause (29 A) of Article 366 which is deemed to be a sale of goods and the tax leviable thereon would be subject to the terms of clause (1) of Article 286. Similarly the re strictions mentioned in clause (2) of Article 286 of the Constitution which says that Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1) of Article 286 would also be attracted to a transfer of goods contemplated under Article 366(29A)(b). Similarly clause (3) of Article 286 is also applicable to a tax on a transfer of property referred to in sub clause (b) of clause (29 A) of Article 366. Clause (3) of Article 286 consists of two parts. Sub clause (a) of clause (3) of Article 286 deals with a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State or commerce, which is generally applicable to all sales including the transfer, supply or delivery of goods which are deemed to be sales under clause (29 A) of Article 366 of the Constitution. If any declared goods which are referred to in section 14 of the are involved in such transfer, supply or delivery, which is referred to in clause (29 A) of Article 366, the sales tax law of a State which provides for levy of sales tax thereon will have to comply with the restrictions mentioned in section 15 of the . Clause (b) is an additional provision which empowers Parliament to impose any additional restrictions or conditions in regard to the levy of sales tax on transactions which will be deemed to be sales under sub clause (b) or sub clause (e) or sub clause (d) of clause (29 A) of Article 366 of the Constitution. We do not find much substance in the contention urged on behalf of the States that since sub clause (b) of clause (3) of Article 286.of the Constitution refers 349 only to the transactions referred to in sub clauses (b), (c) and (d) of clause (29 A) of Article 386, the transactions referred to under those three sub clauses would not be subjected to any other restrictions set out in clause (1) or clause (2) or sub clause (a) of clause (3) of Article 286 of the Constitution. It may be that by virtue of sub clause (b) of clause (3) of Article 286 it is open to Parliament to impose some other restrictions or conditions which are not generally applicable to all kinds of sales. That however cannot take the other parts to Article 286 inapplicable to the transactions which are deemed to be sales under Article 366(29A) of the Constitution. We are of the view that all transfers deliveries and supplies of goods referred to in clause (a) to (f) of clause (29 A) of Article 366 of the Constitution are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub clause (a) of clause (3) of Article 366 of the Constitution and the trans fers and deliveries that take place under sub clauses (b), (c) and (d) of clause (29 A) of Article 366 of the Constitu tion are subject to an additional restriction mentioned in sub clause (b) of Article 286(3) of the Constitution. It is useful to refer at this stage to the corresponding law in Australia. In Sydney Hydraulic and Central Engineer ing Co. vs Blackwood & Son, 8N SWR 10 the Supreme Court of South Sales held that the works contract entered into be tween the parties which came up for consideration: in that case was one to do certain work and to supply certain mate rials and not an agreement for the sale or delivery of the goods. Accordingly, no sales tax was payable thereon. In 1932 the Legislature intervened and amended the statute of 1930 by introducing a new provision, section 3(4) in the following. terms: "For the purpose of this Act, a person shall be deemed to have sold goods, if, in the performance of any contract (not being a contract for the sale of goods) under which he has received, or is entitled to receive, valuable consideration, he supplies goods the property in which (whether as goods or in some other form) passes, under the terms of the contract, to some other person. " After the above amendment there arose a case in Austra lia regarding the liability of a contractor to pay sales tax on the transfer of goods involved in a works contrat, name ly: M.R. Hornibrook (Pty.) Ltd. vs Federal Commissoner of Taxation., ; The relevant facts involved in that case were these. M.R. Mornibrook 350 (Pty.) Ltd. was a builder and a contractor and in addition to manufacturing ironwork and goods for use in contracts undertaken, manufactured items of plants for its own use. In the years 1934 and 1935, M.R. Hornibrook (Pty.) Ltd. con structed under contract for Hornibrook Highway Ltd. at a price set out in the contract, the Hornibrook Highway con necting Ganagate and Redcliffe, aueensland. Part of the highway consisted of a bridge of 13/4 miles in length over an arm of Moreton Day. The bridge was build on reinforced concrete piles, which were driven into the bed of the sea in series of three in line, each set of three being connected by a headstock of reinforced concrete. The piles varied in length depending upon the depth to which they had to be driven into the bed of the sea. They were made of a mixture of cement, crushed metal, sand and water, and reinforced with steel bars. The piles were constructed on the bank or ' Moreton Day adjacent to the site of the bridge. The head stock was built in the same manner as the piles. So far as was known, concrete piles of the class used in the construc tion of the bridge were not manufactured for sale anywhere in Australia, nor were they an article of commerce in Aus tralia or anywhere else in the world. Such piles had not been standardized because the construction of each pile depended upon the particular load which it was to carry and the nature of the ground into which it was to be driven, and therefore, each pile in a job might be different from every other pile in it in length. When the sales tax authorities made an assessment in respect of the value of the piles, M.R. Hornibrook (Pty.) Ltd. contended that the said piles had no sale value within the meaning of the Sales Tax As sessment Acts, that the said piles were not a 'manufacture ' or 'goods manufactured ' within the meaning of the sales Tax Assessment Acts, and that the said piles formed part Of a bridge and were built on the job and were not article of commerce and were nor procurable from any third person and were not of a class of goods manufactured for sale by any person and there fore the price of piles was not liable to payment of sales tax. Latham, C.J. with whom Justice Rich and Justice Starke agreed (Justice McTiernan dissenting) held as under: "Sec. 3(4) of the Act, referred to in part of above quoted, was at the relevant time in the following form: 'For the purposes of this Act, a person shall be deemed to have sold goods if, in the performance of any contract under which he has received, or is entitled to receive, valuable consideration, he supplies goods the property in which (whether as goods or in some other form) passes, under the terms of the contract, to some other person. ' 351 In my opinion the commissioner is right in his contention that this provision applies to the present case. The appellant company, in the performance of a contract for building a bridge under which contract it was entitled to receive and doubtless has received valuable consideration, has supplied goods, namely, reinforced concrete piles. Such piles are plainly manufactured articles. They are chattels. They were intended to be incorporat ed in a structure and were so incorporated. They lost their identity as goods in that structure. But this fact does not prevent the piles from being goods any more than it pre vents bricks or stones, or nuts and bolts from being goods. The fact that the goods were specially manufactured and designed for a particular purpose cannot be held to deprive them of the character of goods. " Sub clause (b) of clause (29 A) of Article 366 of the Constitution of India more or less has adopted the language used in section 3(4) of the Australian Act. Even after the decision of this Court in the State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (supra) it was quite possible that where a contract entered into in connection with the construction of a building consisted of two parts, namely, one part relating to the sale of materi als used in the construction of the building by the contrac tor to the person who had assigned the contract and another part dealing with the supply of labour and services, sales tax was leviable on the goods which were agreed to be sold under the first part. But sales tax could not be levied when the contract in question was a single and indivisible works contract. After the 46th Amendment the works contract which was an indivisible one is by a legal fiction altered into a contract which is divisible into one for sale of goods and the other for supply of labour and services. After the 46th Amendment, it has become possible for the States to levy sales tax on the value of goods involved in a works contract in the same way in which the sales tax was leviable on the price of the goods and materials supplied in a building contract which had been entered into in two distinct and separate parts as stated above. It could not have been the contention of the revenue prior to the 46th Amendment that when the goods and materials had been supplied under a distinct and separate contract by the contractor for the purpose of construction of a building the assessment of sales tax could be made ignoring the restrictions and condi tions incorporated in Article 286 of the Constitution. If that was the position can the States 352 contended after the 46th Amendment under which by a legal fiction the transfer of property in goods involved in a works contract was made liable to payment of sales tax that they are not governed by Article 286 while levying sales tax on sale of goods involved in a works contract? They cannot do so. When the law creates a legal fiction such fiction should be carried to its logical end. There should not be any hesitation in giving full effect to it. If the power to tax a sale in an ordinary sense is subject to certain condi tions and restrictions imposed by the Constitution, the power to tax a transaction which is deemed to be a sale under Article 366(29 A) of the Constitution should also be subject to the same restrictions and conditions. Ordinarily unless there is a contract to the contrary in the case of a works contract the property in the goods used in the con struction of a building passes to the owner of the land on which the building is constructed, when the goods or materi als used are incorporated in the building. The contractor becomes liable to pay the sales tax ordinarily when the goods or materials are so used in the construction of the building and it is not necessary to wait till the final bill is prepared for the entire work. In Hudson 's Building Con tracts (8th edition) at page 362 it is stated thus: "The well known rule is that the property in all materials and fittings, once incorporated in or affixed to a building, will pass to the freeholder quicquid plantatur solo, solo cedit. The employer under a building contract may not necessarily be the freeholder, but may be a lessee or licensee, or even have no interest in the land at all, as in the case of a sub contract. But once the builder has affixed materials, the property in them passes from him, and at least as against him they become the absolute property of his employer, whatever the latter 's tenure of or title to the land. The builder has no fight to detach them from the soil or building, even though the building owner may himself be entitled to sever them as against some other person e.g., as tenant 's fixtures. Nor can the builder reclaim them if they have been subsequently severed from the soil by the building owner or anyone else. The principle was shortly and clearly stated by Blackburn J. in Appleby vs Reyers [1867] L.R. 2 C.P. 651 at p. 659: Materials worked by one into the property of another become part of that property. This is equally true whether it be fixed or movable property. Bricks built into a wall become part of the house, thread stitched into a coat which is under repair, or planks and nails and pitch worked into a ship under repair, be 353 come part of the coat or the ship. " In Bmden and Watson Building Contracts and Practice (6th edition) (Pages 229 230) it is stated thus: "VESTING OF PROPERTY IN MATERIALS 1. BY AFFIXING MATERIALS, ETC. TO THE FREEHOLD. Vesting of Materials when built into the work. As soon as materials of any de scription are built into a building or other erection they cease to be the property of the contractor and become that of the freeholder (a). Illustration A burial company, having erected a memorial stone, removed and sold it because it was not paid for Held: The proper remedy of the company was to sue for payment and they had no right to remove the stone (b). And where the employer has only an interest less than a free hold, he has the Same interest in the built in materials as he has in the land. Even if the employer detach them from the soil, the property in them does not revert to the contractor, and he acquires no right to remove them on the analogy of the law of landlord and tenant as to fixtures (c). Illustration Where the yearly tenant of a house had, at his own expense during his term, hung bells, but quitted the premises without remov ing them Held: By remaining fixed to the freehold after the expiration of the term they became the property of the landlord (C). Until, however, the materials are actually built into the work in the absence of some stipulation intended to pass the property in them when delivered on the site, they remain the property of the contractor (d). " 354 In Benjamin 's Sale of Goods (3rd Edition) in para 43 at page 36 it is stated thus: "Chattel to be affixed to land or another chattel. Where work is to be done on the land of the employer or on a chattel belonging to him, which involves the use or affixing of materials belonging to the person employed, the contract will ordinarily be one for work and materials, the property in the latter passing to the employer by accession and not under any contract of sale. Sometimes, howev er, there may instead be a sale of an article with an additional and subsidiary agreement to affix it. The property then passes before the article is affixed, by virtue of the contract of sale itself or an appropriation made under it." In view of the foregoing statements with regard to the passing of the property in goods which are involved in works contract and the legal fiction created by clause (29 A) of Article 366 of the Constitution it is difficult to agree with the contention of the States that the properties that are transferred to the owner in the execution of a works contract are not the goods involved in the execution of the works contract, but a conglomerate, that is the entire building that is actually constructed. After the 46th Amend ment it is not possible to accede to the plea of the States that what is transferred in a works contract is the right in the immovable property. We are surprised at the attitude of the States which have put forward the plea that on the passing of the 46th Amendment the Constitution had conferred on the States a larger freedom than what they had before in regard to their power to levy sales tax under Entry 54 of the State List. The 46th Amendment does no more than making it possible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials. We do not accept the argument that sub clause (b) of Article 366(29A) should be read as being equivalent to a separate entry in List II of the Seventh Schedule to the Constitution enabling the States to levy tax on sales and purchases independent of Entry 54 thereof. As the Constitution exists today the power of the States to levy taxes on sales and purchases of goods including the "deemed" sales and purchases of goods under clause (29A) of Article 366 is to be found only in entry 54 and not outside it. We may recapitulate here the observations of the Consti tution Bench in the case of Bengal Immunity Company Ltd. (supra) in which this Court has held that the operative 355 provisions of the several parts of Article 286 which imposes restrictions on the levy of sales tax by the States are intended to deal with different topics and one could not be projected or read into another and each one of them has to be obeyed while any sale or purchase is taxed under Entry 54 of the State List. We, therefore, declare that sales tax laws passed by the Legislatures of States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub clause of Article 286 of the Constitution. We, however, make it clear that the cases argued before and considered by us relate to one specie of the genetic concept of 'workscon tracts '. The case book is full of the illustrations of the infinite variety of the manifestation of 'works contracts ' Whatever might be the situational differences of individual cases, the constitutional limitations on the taxing power of the state as are applicable to 'workscontracts ' represented by "Building Contracts" in the context of the expanded concept of "tax on the sale or purchase of goods" as consti tutionally defined under Article 366(29A), would equally apply to other species of 'works contracts ' with the requi site situational modifications. The Constitutional Amendment in Article 366(29A) read with the relevant taxation entries has enabled the state to exert its taxingpower in an important area of social and economic life of the community. In exerting this power particularly in relation to transfer of property in goods involved in the execution of 'works contracts ' in building activity, in so far as it affects the housing projects of the underprivileged and weaker sections of society, the state might perhaps, be pushing its taxation power to the peripheries of the social limits of that power and, perhaps, even of the constitutional limits of that power in dealing with unequals. In such class of cases 'Building Activity ' really relates to a basic subsistential necessity. It would be wise and appropriate for the state to consider whether the requisite and appropriate classifications should not be made of such building activity attendant with such social purposes for appropriate separate treatment. These of course are matters for legislative concern and wisdom. Having interpreted the relevant provisions of the Constitution, as stated above, we feel that it is unneces sary to take up each and every writ petition referred to above to express our opinion on the validity of 356 the statutory provisions and rules which are questioned before us. The petitioners concerned are at liberty to approach the authorities under the Sales Tax Act or the High Court concerned for necessary relief. It is open to them to question the validity of the statutory provisions and the rules made thereunder before the High Courts concerned. When such petitions are filed the High Court will proceed to dispose of the cases in the light of this judgment. With these observations all the Writ Petitions are disposed of. The Civil Appeals filed against the orders of the High Courts, however, shall be placed before the appropriate bench heating tax matters to decide the other questions raised in them including the validity of any statutory provision or rule in the light of this judgment. These cases are accordingly disposed of. There is no order as to costs. Y. Lal Petitions dis posed of.

The petitioners in the writ petition are building contractors engaged in the business of constructing build ings, factories, bridges etc. They have challenged the levy of sales tax, by the concerned State Governments under the sales tax laws passed by them, on the turnover . of the works contracts entered into by them. The petitions raised two questions for the considera tion of the Court; the first question relates to the consti tutional validity of the 46th Amendment Act by which the State legislatures have been empowered to levy sales tax on certain transactions described in sub clauses (a) to (f) of clause (29 A) of Article 366 of the Constitution, and the second question is whether the power of the State legisla ture to levy tax on the transfer of property in goods in volved in the execution of works contracts referred to in sub clause (b) of clause (29A) of article 366 of the Constitu tion is subject to the restrictions and conditions in article 286 of the Constitution. On the passing of the 46th Amendment, the State Govern ments after making necessary amendments in their laws com menced to levy sales tax on the turn over of the works entered into by the building contractors for constructing houses, factories, bridges etc. In some States taxable turnover was determined by deducting the money spent on labour engaged in connection with the execution of the works con 321 tracts. In some other States a certain fixed percentage of the total turnover was deducted from the total turnover as labour charges before arriving at the taxable turnover. Each State adopted its own method of determining taxable turnover either by framing rules under its sales tax law or by issu ing administrative directions. Affected and aggrieved by the levy of sales tax so imposed, the petitioners filed the writ petitions under article 32 of the Constitution challenging inter alia the Constitu tional validity of the 46th Amendment Act. Civil appeals were also filed by some other building contractors against the orders of the High Court for similar relief. The petitioners and the appellants have raised two contentions; viz (1) that the 46th Amendment Act is uncon stitutional because it had not been ratified by the legisla tures of not less than one half of the states by Resolutions passed to that effect by these legislatures before the Bill which led to the amendment in question was presented to the President for assent; and (2) that it was not open to the States to ignore the provisions contained in article 286 of the Constitution and the provisions of the Central Sales Tax Act, 1966 while making assessment under the Sales Tax laws passed by the legislatures of the States. Notices were issued to the Attorney General for India and the Advocates General for the concerned States, some of which contested the Issues. The main contention of the States on the second point was that sub clause (b) of Article 326(29 A) bestowed on them a power to levy tax on works contract independent of Entry 54 of List IL Disposing of the Writ Petitions and directing that the appeals be now placed before the Bench hearing Tax matters, this Court, HELD. There has been in the instant case due compliance of the provisions contained in the proviso to article 368(2) of the Constitution. [344E] Sales tax laws passed by the legislatures of States levying taxes on the transfer of property in goods whether as goods or in some other form involved in the execution of a works contract are subject to the restrictions and condi tions mentioned in each clause of sub clauses of article 286 of the Constitution. [355B] 322 All transfers, deliveries and supplies of goods referred to in clauses (a) to (f) of clause (29 A) of article 366 of the Constitution are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub clause (a) of clause (3) of article 286 of the Constitution and the transfers and deliveries that take place under sub clauses (h), (c) and (d) of clause (29 A) of article 366 of the Constitution are subject to an additional restriction mentioned in sub clause (b) of article 286 (3) of the Constitution. [349C] The power to levy sales tax was conferred on the legis latures of States by the Constitution by Entry 54 of List II of the Seventh Schedule to the Constitution of India. [329B] State of Bombay and Another vs The United Motors (India) Ltd. and Others, ; and Bengal Immunity Company Limited vs The State of Bihar & Others, , referred to. Ordinarily unless there is a contract to the contrary in the case of a works contract, the property in the goods used in the construction of a building passes to the owner as the materials used are incorporated in the buildings. The con tractor becomes liable to pay the sales tax ordinarily when the goods or materials are so used in the construction of the building and it is not necessary to wait till final bill is prepared for the entire work. [3S2C] Hudson 's Building Contracts (8th Edition) at page 362 and Benjamin 's Sale of Goods (3rd Edition) in para 43 at page 36. The constitutional Amendment in article 366 (29 A) read with the relevant taxation entries has enabled the States to exert its taxing power in an important area of social and economic life of the community. In exercising this power particularly in relation to transfer of property in goods involved in the execution of "works contracts" in building activity, in so far as it affects the housing projects of the under privileged and weaker sections of society, the State might perhaps, be pushing its taxation power to the peripheries of the social limits of that power and perhaps even of the constitutional limits of that power, in dealing with unequals. In such class of cases 'building Activity ' really relates to a basic subsistential necessity. It would he wise and appropriate for the State to consider whether the requisite and appropriate classifications should not he made of such building activity attendant with such social purposes for appropriate separate treatment. [355E G] 323 Whatever might be the situational differences of indi vidual cases, the constitutional limitations on the taxing power of the State as are applicable to "works contracts" represented by "building contracts" in the context of the expanded concept of "tax on the sale or purchase of goods" as constitutionally defined under article 366 (29 A) would equally apply to other species of "works contracts" with the requisite situational modifications. [355C D] At the commencement of the Act it should have been stated that the bill in question had been presented to the President for his assent after it had been fury ratified by the required number of legislatures of the States. This suggestion should be followed by the Central Secretariat hereafter since it was found that even the Attorney General was not quite aware till the case was taken up for hearing that the bill which had become the 46th Amendment had been duly ratified by the required number of States. [344F] Gannon Dunkerley and Co. (Madras) Ltd. vs State of Madras, A.I.R. 1954 Mad. 1130; Gannon Dunkereley & Co. Madras (Pvt.) Ltd. vs Sales Tax Officer, Matrancher, A.I.R. 1957 Kerala 146; Mohamed Khasim vs State of Mysore, [1955] VI Sales Tax Cases 211; Pandit Banarsi Das vs State of Madhya Pradesh and Ors., [1955] VI Sales Tax Cases 93; Jubilee Engineering Co. Ltd. vs Sales Tax Officer, Hyderabad City & Ors., ; Bhuramal and Ors. vs State of Rajasthan, A.I.R. ; State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., ; M/s. New India Sugar Mills Ltd. vs Commissioner Of Sales Tax, Bihar, [1963] Supp. 2 SCR 459; Oil and Natural Gas Commission vs State of Bihar & Ors., ; ; Vishnu Agencies (Pvt.) Ltd. etc. vs Commercial Tax Officer & Ors. ; , ; Northern India Caterers (India) Ltd. vs Lt. Governor of Delhi, ; ; Sydney Hydraulic and Central Engineering Co. vs Blackwood & Son, and M.R. Bornbrook (Pvt.) Ltd. vs Federal Commis sioner of Taxation; ,

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Civil Appeal Nos. 626 & 629 of 1971. From the Judgment and Order dated 5 8 1970 of the Rajasthan High Court in R.F.A. No. 31/60. 630 section T. Desai and Naunit Lal for the Appellant. P. R. Mridul, B. P. Sharma, Krishna Bhatt and R. K. Bhatt for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. These two cross appeals by certificate arise out of a suit for possession of a house situate in Bikaner and for damages for use and occupation thereof filed in Civil Original Case No. 17 of 1957 on the file of the District Judge, Bikaner. The plaintiffs in the suit are the appellants in Civil Appeal No. 626 of 1971 and the defendant is the appellant in Civil Appeal No. 629 of 1971. The genealogy showing the relationship between the parties is given below: Sur Singh | | | | | Gad Singh Bharat Singh Bhim Singh Kan Singh | (Died in (P.I.) (Deft.) | Sept. 1955) | | | | | | | | Duley Dhaney Deep | Singh Singh Singh | | | Himmat Dalip Singh Singh (P.2.) (Died in Sept. 56) Gad Singh, Bharat Singh, Bhim Singh (plaintiff No. 1) and Kan Singh (defendant) are the sons of Sur Singh. Bharat Singh died unmarried in September, 1955. Gad Singh died thereafter leaving behind him three sons, Duley Singh, Dhaney Singh and Deep Singh. Dalip Singh, the second son of plaintiff No.1 died in September, 1956. Bharat Singh and the defendant were residing in the house which was the subject matter of the suit. After the death of Bharat Singh, the plaintiffs Bhim Singh and Himmat Singh filed the suit out of which this appeal arises against Kan Singh, the defendant for recovery of possession of the suit house and other ancillary reliefs. In the plaint, they 631 pleaded that the suit house belonged to them by virtue of a patta dated July 12, 1940 issued in their names; that the defendant who was the brother of plaintiff No. 1 and uncle of plaintiff No. 2 was living in a part of the house with their consent; that plaintiff No. 2 and his younger brother Dalip Singh were also living in the house till the year 1956; that the defendant had refused to receive a notice issued by them in the month of September, 1957 calling upon him to hand over possession of the house to the plaintiffs; that the defendant had done so on account of personal ill will and that the plaintiffs were, therefore, entitled to recover possession of the suit house and damages from the defendant. These were briefly the allegations made in the plaint. On the above basis, the plaintiffs prayed for a decree for the reliefs referred to above. In the written statement, the defendant did not admit the existence of the patta on the basis of which the plaintiffs claimed title to the suit house. He denied the allegation that the plaintiffs were the owners in possession of the suit house. He claimed that he was the exclusive owner of the suit house, and in support of the said claim stated as follows: There was a partition amongst the sons of Sur Singh in the year 1929. At that partition, Gad Singh and plaintiff No. 1 became separated and they were given all the family properties which were situated in their village, Roda. As Bharat Singh and the defendant had been educated at the expense of the family, they were not given any share in the property. Bharat Singh and he settled in Bikaner and lived together as members of joint Hindu family. Bharat Singh died on September 2, 1955 leaving the defendant as a surviving coparcener. On his death, the defendant became the owner of the properties of Bharat Singh 'as a member of joint Hindu family '. He further pleaded that from the year 1928, Bharat Singh and he who were working as the Aid de Camp and Private Secretary respectively of the Maharaja of Bikaner were living in the suit house which then belonged to the Maharaja. The defendant filed an application for purchasing the house. The proceedings had not terminated when the defendant left the service of the Maharaja and went to Banaras for higher studies. On his return from Banaras, he joined the service of the Maharaja in the civil department of Bikaner. After a long time on account of the joint efforts of Bharat Singh and the defendant, the sale of the house was sanctioned. Bharat Singh who was living jointly with him paid the consideration for the sale on November 4, 1939 'out of the joint income. ' Thus according to the defendant, Bharat Singh and he became its owners from the date of payment of the consideration. He 632 further pleaded that 'if the patta of the property had been granted in the names of the plaintiffs due to some reasons, political and other surrounding circumstances and for the safety of the property, it cannot affect the right of the defendant '. It was also stated that Bharat Singh and the defendant had not executed any sale deed in favour of the plaintiffs and so they could not become owners of the suit house. In another part of the written statement, the defendant pleaded thus: "The plaintiffs have taken the entire ancestral property of the village. Still they are harassing the defendant due to avarice. The defendant and Thakur Bharat Singh had been doing Government service. So there was always danger or removal or confiscation of the property. Even if Thakur Bharat Singh might have written or given his consent for entering the names of the plaintiffs in the patta in this view, it is not binding. The plaintiffs are at the most 'benami ' even though the patta which is not admitted might be proved. " It is thus seen that the defendant put forward a two fold claim to the suit house one on the basis of the right of survivorship another on the basis of a joint purchase along with Bharat Singh. Even though in one part of the written statement, he declined to admit the existence of the patta, in paragraph 13 of the written statement which is extracted above, he put forward the plea that the plaintiffs were at the most holding the property as benamdars. He, however, did not claim that he was entitled to the property as an heir of Bharat Singh alongwith plaintiff No. 1. and Gad Singh who would have inherited the estate of Bharat Singh on his death being his nearest heirs. In the reply, the plaintiffs denied that the defendant was entitled to the suit house as a surviving coparcener on the death of Bharat Singh. They, however, pleaded that plaintiff No. 1 had purchased the suit house out of his income; that Bharat Singh used to love plaintiff No. 2 'as his son ' and was thinking of adopting him but he died all of a sudden and that the defendant had not disclosed in his written statement the special political circumstances under which the names of the plaintiffs were entered in the patta. They denied that the defendant had any interest in the suit house. On the basis of the oral and documentary evidence produced before him, the learned District Judge who tried the suit held that Bharat Singh had secured the house from the Government of Bikaner for the plaintiffs with their money; that the patta of the house had been granted by the Patta Court in favour of the plaintiffs; that the plaintiffs were in possession of the suit house till September, 1956 and that the 633 defendant being their close relative was living in the house not on his own account but with the plaintiffs ' permission. The learned District Judge also held that the defendant had failed to prove that the suit house had been acquired by him and Bharat Singh with their joint fund. Accordingly he decreed the suit for possession of the house in favour of the plaintiffs and further directed that the defendant should pay damages for use and occupation at the rate of Rs. 50 per month from September 20, 1956 till the possession of the house was restored to them. Aggrieved by the decree of the trial court, the defendant filed an appeal before the High Court of Rajasthan in Civil First Appeal No. 31 of 1960. The High Court rejected the case of the plaintiffs that the consideration for the house had been paid by Bharat Singh out of the funds belonging to them and also the case of the defendant that the house had been purchased by Bharat Singh with the aid of joint family funds belonging to himself and the defendant. The High Court held that the house had been purchased by Bharat Singh out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them. It further held that the suit house belonged to Bharat Singh and on his death, Gad Singh, plaintiff No. 1 and the defendant succeeded to his estate which included the suit house in equal shares. Accordingly in substitution of the decree passed by the trial court, the High Court made a decree for joint possession in favour of plaintiff No. 1. The rest of the claim of the plaintiffs was rejected. Dissatisfied with the decree of the High Court, the plaintiffs and the defendant have filed these two appeals as mentioned above. The principal issue which arises for consideration relates to the ownership of the suit house. It is admitted on all hands that though Bharat Singh and the defendant were living in the suit house from the year 1928, it continued to be the property of the Maharaja of Bikaner till the date on which the patta (Exh. 4) was issued by the Patta Court of Bikaner and that on the issue of the patta, the State Government ceased to be its owner. It is also not disputed that the patta constituted the title deed in respect of the suit house and it was issued in the names of the plaintiffs on receipt of a sum of Rs. 5,000. On January 11, 1930, the defendant had made an application, a certified copy of which is marked as Exhibit A 116 to the Revenue Minister of the State of Bikaner making enquiry about the price of the suit house on coming to know that the State Government intended to sell it. After the above application was made, the defendant left the service of the State of Bikaner and went to Banaras for studies. Bharat Singh who was also an employee of the State Gov 634 ernment was working as the Aid de Camp of the Maharaja in 1939. At the request of Bharat Singh, an order was made by the Maharaja on May 4, 1939 sanctioning the sale of the suit house for a sum of Rs. 5,000. Exhibit A 118 is the certified copy of the said order. Exhibit A 120 is a certified copy of the order of Tehsil Malmandi showing that a sum of Rs. 5,000 had been deposited on behalf of Bharat Singh towards the price of the suit house. It also shows that Bharat Singh was asked to intimate the name of the person in whose favour the patta should be prepared. Presumably, the patta was issued in the names of the plaintiffs as desired by Bharat Singh and Exhibit A 121 shows that it was handed over on September 30, 1940. The patta was produced before the trial court by the plaintiffs. By the time the patta was issued in the names of the plaintiffs, the mother of plaintiff No. 2 had died. He was about eight years of age in 1940 and he and his younger brother, Dalip Singh were under the protection of Bharat Singh who was a bachelor. They were staying with him in the suit house. The defendant also was residing in it. The plaintiffs who claimed title to the property under the patta in the course of the trial attempted to prove that the sum of Rs. 5,000 which was paid by way of consideration for the patta by Bharat Singh came out of the jewels of the mother of plaintiff No. 2 which had come into the possession of Bharat Singh on her death. The plaintiff No. 2 who gave evidence in the trial court stated that he had not given any money to Bharat Singh for the purchase of the house but he had come to know from his father, plaintiff No. 1 that it had been purchased with his money. Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) to whose evidence we will make a reference in some detail at a later stage also stated that they had heard from Bharat Singh that the jewels of the mother of plaintiff No. 2 were with him suggesting that they could have been the source of the price house. Plaintiff No. 1 who could have given evidence on the above question did not enter the witness box. It is stated that he was a person of weak mind and after the death of Bharat Singh was behaving almost like a mad man. The defendant stated in the course of his evidence that the mother of plaintiff No. 2 had gold jewels weighing about 3 4 tolas only. In this state of evidence, it is difficult to hold that the plaintiffs have established that the consideration for the suit house was paid by them. The finding of the trial court that the house had been purchased by Bharat Singh for the plaintiffs with their money cannot be upheld. The case of the defendant that the price of the suit house was paid out of the funds belonging to him and Bharat Singh has been rejected both by the trial court and the High Court. On going 635 through the evidence adduced by the defendant, we feel that there is no reason for us to disturb the concurrent findings arrived at by the trial court and the High Court on the above question. We shall, therefore, proceed to decide the question of title on the basis that the consideration for the purchase of the house was paid by Bharat Singh out of his own funds. It was contended by the learned counsel for the defendant that since the plaintiffs had failed to establish that they had contributed the price paid for the suit house, the suit should be dismissed without going into the question whether Bharat Singh had purchased the suit house with his money in the names of the plaintiffs for the benefit of plaintiff No. 2. The plaint does not disclose the name of the person or persons who paid the sale price of the suit house. The suit is based on the patta standing in the names of the plaintiffs. In the written statement of the defendant, there was an allegation to the effect that even though the patta was standing in the names of the plaintiffs, they were only benamidars and the real title was with Bharat Singh and the defendant. The particulars of the circumstances which compelled Bharat Singh or the defendant to take the patta in the names of the plaintiffs were not disclosed although it was stated that it had been done owing to some political and other surrounding circumstances and for the safety of the property. From the evidence led by the parties, we are satisfied that they knew during the trial of the suit that the question whether the transfer effected under the patta was a benami transaction or not arose for consideration in the case. Even in the appeal before the High Court, the main question on which arguments were addressed was whether the transaction was a benami transaction or not. Merely because the plaintiffs attempted to prove in the trial court that the money paid for purchasing the house came out of their funds, they cannot in the circumstances of this case be prevented from claiming title to the property on the basis that even though Bharat Singh had paid the consideration therefor, plaintiff No. 2 alone was entitled to the suit house. Reference may be made here to the decision of this Court in Bhagwati Prasad vs Shri Chandramaul(1) where the Court observed as follows: "There can be no doubt that if a party asks for a relief on a clear and specific grounds, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to 636 attempt to sustain the same claim on a ground which is entirely new. . But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though in directly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it ?" After holding that the parties to the said case were not taken by surprise, the Court granted the relief prayed for by the plaintiff on the basis that defendant was a licensee even though the plaintiff had pleaded in his plaint that the defendant was tenant. In the above case, the Court distinguished the decision in Trojan & Co. Ltd. vs RM. N. N. Haggappa Chettiar(1) on which much reliance was placed by the learned counsel for the defendant before us. In the case of Trojan & Co. Ltd. (supra), this Court came to the conclusion that the alternative claim on which relief was sought was not at all within the knowledge of the parties in the course of the trial. The case before us is not of the nature. In Ismail Mussajee Mookerdum vs Hafiz Boo(2) the plaintiff laid claim to a property which had been transferred in her name by her mother alleging that she had paid the purchase money to her mother. The court came to the conclusion that she had failed to prove that she had paid the consideration. Still a decree was made in her favour holding that she had become the owner of the property by virtue of the transfer in her favour even though consideration had not been 637 paid by her since it had been established in the case that her mother intended to transfer the beneficial interest in the property in her favour. This is borne out from the following passage at page 95: "In her evidence, which was very confused, she tried to say that she paid that purchase money to her mother. This was clearly untrue: as both Courts have found. The fact, therefore, remains that the properties purchased by the sale proceeds were purchased no doubt in Hafiz Boo 's name, but were purchased out of funds emanating from her mother 's estate. This circumstance no doubt, if taken alone, affords evidence that the transaction was benami, but there is, in their Lordships ' opinion, enough in the facts of the case to negative any such inference." Moreover no plea was raised on behalf of the defendant before the High Court in this case contending that the High Court should not go into the question whether the transfer under the patta was a benami transaction or not. We, therefore, reject the above contention and proceed to examine whether the High Court was right in arriving at the conclusion that the plaintiffs were only benamidars holding the property for the benefit of its real owner, Bharat Singh as the consideration therefor had emanated from him. Under the English law, when real or personal property is purchased in the name of a stranger, a resulting trust will be presumed in favour of the person who is proved to have paid the purchase money in the character of the purchaser. It is, however, open to the transferee to rebut that presumption by showing that the intention of the person who contributed the purchase money was that the transferee should himself acquire the beneficial interest in the property. There is, however, an exception to the above rule of presumption made by the English law when the person who gets the legal title under the conveyance is either a child or the wife of the person who contributes the purchase money or his grand child, whose father is dead. The rule applicable in such cases is known as the doctrine of advancement which requires the court to presume that the purchase is for the benefit of the person in whose favour the legal title is transferred even though the purchase money may have been contributed by the father or the husband or the grandfather, as the case may be, unless such presumption is rebutted by evidence showing that it was the intention of the person who paid the purchase money that the transferee should not become the real owner of the property in question. The doctrine of advancement is not in vogue in India. 638 The counterpart of the English law of resulting trust referred to above is the Indian law of benami transactions. Two kinds of benami transactions are generally recognized in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transfer to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature, however, in both these cases is that the real title is divorced from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognized in section 82 of the which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration. This view is in accord with the following observations made by this Court in Meenakshi Mills. Madurai vs The Commissioner of Income Tax, Madras(1): "In this connection, it is necessary to note that the word 'benami ' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentions X as the purchaser. Here the sale itself is genuine, but the real purchaser is B, X being his benamidar. This is 639 the class of transactions which is usually termed as benami. But the word 'benami ' is also occasionally used, perhaps not quite accurately, to refer to a sham transaction, as for example, when A purports to sell his property to B without intending that his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid." In Mohammad Sadiq Ali Khan vs Fakhr Jahan Begum & Ors.(1) the facts were these: A Mahemmodan bought an immovable property taking the conveyance in the name of his daughter who was five years of age. The income was credited to a separate account, but it was in part applied to purposes with which she had no concern. Upon her marriage, the deed was sent for the inspection of her father in law. After the death of the donor it was contended that the property was part of his estate, the purchase being benami. The Judicial Committee of the Privy Council held that there was a valid gift to the daughter because there was proof of a bona fide intention to give, and that intention was established. In the course of the above decision, it was observed thus: "The purchase of this property was a very natural provision by Baqar Ali for the daughter of his favourite wife, and though there may be no presumption of advancement in such cases in India, very little evidence of intention would be sufficient to turn the scale. The sending of the deed for the inspection of the lady 's father in law, which the Chief Court held to be established, was clearly a representation that the property was hers, and their Lordships agree with the learned Judges in the conclusion to which they came. " 640 In Manmohan Dass & Ors. vs Mr. Ramdei & Anr. (1) Lord Macmillian speaking for the Judicial Committee observed: In order to determine the question of the validity or invalidity of the deed of gift in question it is of assistance to consider. 'the surrounding circumstances, the position of the parties and their relation to one another, the motives which could govern their actions and their subsequent conduct. ' Dalip Singh vs Nawal Kanwar 35 I.A. 104 (P.C.) always remembering that the onus of proof rests upon the party impeaching the deed. The principle enunciated by Lord Macmillan in the case of Manmohan Dass & Ors. (supra) has been followed by this Court in Jayadayal Poddar (deceased) through his L. Rs. & Anr. vs Mst. Bibi Hazara & Ors.(2) where Sarkaria, J. observed thus: "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformly applicable in all situations, can be laid down; yet in weighing the probabilities and for gathering 641 the relevant indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possesion of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale. " The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc. Now we shall refer to the facts of the present case. When the suit house was purchased from the Maharaja of Bikaner, Bharat Singh was a bachelor and he did not marry till his death in the year 1955. The wife of Bhim Singh had died before 1939 leaving behind her two young children. Plaintiff No. 2 was about eight years old in the year 1939 and his younger brother Dalip Singh was about two years old. These two children were living with Bharat Singh. Bhim Singh, plaintiff No. 1 was almost in indigent condition. The defendant had by then acquired a degree in law and also had practised as a lawyer for some time. It is stated that the defendant had again been employed in the service of the State of Bikaner. The patta was issued in the names of plaintiffs 1 and 2 at the request of Bharat Singh. Even though the defendant stated in the written statement that the patta had been taken in the names of the plaintiffs owing to certain political circumstances, he had not disclosed in the course of his evidence those circumstances which compelled Bharat Singh to secure the patta in the names of the plaintiffs, though at one stage, he stated that it was under his advice that Bharat Singh got the patta in the names of the plaintiffs. Bharat 642 Singh had no motive to suppress from the knowledge of the public that he had acquired the property. It was suggested in the course of the arguments that he had taken the patta in the names of the plaintiffs because he was in the service of the State. We do not find any substance in this submission because the property was being purchased from the State Government itself and there was no need for him to shield his title from the knowledge of the State Government. It appears that Bharat Singh acquired the suit house for the benefit of plaintiff No. 2 for the following circumstances: The first circumstance is that the original patta had been handed over by Bharat Singh to plaintiff No. 2 on his passing B. Sc. Examination. This fact is proved by the evidence of plaintiff No. 2 and it is corroborated by the fact that the patta was produced by the plaintiffs before the Court. In the course of his evidence, the defendant no doubt stated that the patta had been stolen by plaintiff No. 2 from the suit house during the twelve days following the death of Bharat Singh when the keys of Bharat Singh 's residence had been handed over to plaintiff No. 2 by the defendant. It is difficult to believe the above statement of the defendant because of two circumstances (i) that the defendant did not state in the written statement that the patta had been stolen by plaintiff No. 2 and (ii) that within a month or two after the death of Bharat Singh, plaintiff No. 2 wrote a letter which is marked as Exhibit A 124 to the defendant stating that the rumour which the defendant was spreading that plaintiff No. 2 had stolen some articles from the suit house was not true since whenever plaintiff No. 2 opened room or any of the almirahs of Bharat Singh in the suit house, Devi Singh the son of the defendant was keeping watch over him. That letter has been produced by the defendant and there is no reference in it to a false rumour being spread about the theft of the patta by plaintiff No. 2. Plaintiff No. 2 however, while asserting his claim to the suit house in the course of that letter stated that he had seen that the patta had been executed in his favour; and that the patta contained his name. The defendant does not appear to have sent any reply to Exhibit A. 124 nor did he call upon the plaintiffs to return the patta to him. He did not also file a complaint stating that the patta had been stolen by plaintiff No. 2. We are of the view that there is no reason to disbelieve the evidence of plaintiff No. 2 that the patta had been handed over to him by Bharat Singh on his passing the B.Sc. examination. This conduct of Bharat Singh establishes that it was the intention of Bharat Singh when he secured the patta from the State Government in the names of the plaintiffs the plaintiff No. 2 whom he loved should become the owner. It is no doubt true that the name of plaintiff No. 1 is also included in the patta. It may have been so included by way 643 of abundant caution as plaintiff No. 2 was a minor when the patta was issued. The above circumstance is similar to the one which persuaded their Lordships of the Privy Council in the case of Mohammad Sadiq Ali Khan (supra) to hold that the property involved in that case belonged to the person in whose favour the conveyance had been executed. The second circumstance which supports the view that Bharat Singh intended that plaintiff No. 2 should become the owner of the suit house is proved by the declarations made by Bharat Singh regarding the title to the suit house. Jaswant Singh (P.W. 2) was a former Prime Minister of the State of Bikaner. His wife was a cousin of plaintiff No. 1, Bharat Singh and the defendant. Being a close relative of Bharat Singh who was also the Aid de Camp of the Maharaja of Bikaner, he was quite intimate with Bharat Singh who used to discuss with him about his personal affairs. P.W. 2 has stated in the course of his evidence that Bharat Singh thought it proper to purchase the house in the name of plaintiff No. 2 and that he intended to make plaintiff No. 2 his heir and successor. He has also stated that Bharat Singh had expressed his desire to give all his property to plaintiff No. 2 by a will and that he had told Kesri Singh (P.W. 3) just a day prior to his (Bharat Singh 's) death that a will was to be executed. This statement of Jaswant Singh (PW. 2) is corroborated by the evidence of Kesri Singh (P.W. 3) whose wife was also a cousin of Bharat Singh, plaintiff No. 1 and the defendant. The relevant portion of the deposition of Kesri Singh (P.W. 3) reads thus: "I came from Jaipur to Bikaner by train one day before the death of Bharat Singh and when I was returning after a walk I found Bharat Singh standing at the gate of his house. I asked Bharat Singh to accompany me to my house to have tea etc. Bharat Singh came with me to my house. Bharat Singh told me at my house that he was not quite all right and that he might die at any time. He wanted to execute a will. He further told me that his house really belonged to Himmat Singh. It has been purchased in his name. He wanted to give even other property to Himmat Singh. By other property which Bharat Singh wanted to give to Himmat Singh was meant Motor car, bank balance and the presents which he had. The house regarding which my talk took place with Bharat Singh at my house was the house in dispute. " There is no reason to disbelieve the evidence of these two witnesses. Their evidence is corroborated by the deposition of Dr. Himmat Singh (D.W. 6) who was the Secretary of a Club in Bikaner 644 of which Bharat Singh was a member. He was examined by the defendant himself as his witness. In the course of his cross examination, Dr. Himmat Singh (D.W. 6) referred to what Bharat Singh had told him a few months prior to his death. The substance of his deposition is found in the judgment of the trial court, the relevant portion of which reads thus: "D.W. 6 Dr. Himmat Singh is the Secretary of the Sardul Club, Bikaner. He is the Senior Eye Surgeon in the Government Hospital, Bikaner. He has stated that Bharat Singh was the member of Sardul Club. A sum of Rs. 425/6/ remained outstanding against him till the year 1955. This amount was received on 28 10 1955. He has said that he does not know who deposited this amount. On the merits of the case, he has stated that he intimately knew Bharat Singh and members of his family. Bhim Singh and his sons Himmat Singh and Dalip Singh used to live in this house. Bharat Singh took this house for Bhim Singh and Himmat Singh. Four months before his death, Bharat Singh told the witness that he had already taken the house for Bhim Singh and Himmat Singh and that whatever else would remain with him shall go to them. Dr. Himmat Singh refutes the defendant 's stand and supports the plaintiff 's case. " It was argued on behalf of the defendant that there is some variation between the deposition of Dr. Himmat Singh (D.W. 6) and the above passage found in the judgment of the trial court and that the evidence of D.W. 6 should not be believed as he had turned hostile. The deposition of Dr. Himmat Singh (D.W. 6) was read out to us. It was also brought to our notice that an application had been made by the defendant to treat D.W. 6 as hostile and that it had not been granted by the trial court. Even though there is a slight variation between what is stated by D.W. 6 and what is contained in the judgment of the trial court with regard to certain details, we do not feel that the said variation is of any substantial nature. The evidence of D.W. 6 suggests that Bharat Singh was of the view even during his life time that the suit house belonged to plaintiffs and not to himself. Even though an application had been made by the defendant to treat D.W. 6 as hostile, we feel that this part of the evidence of D.W. 6 cannot be rejected on that ground since it is consistent with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3). It is seen from the judgment of the High Court that the effect of the statement of Kesri Singh (P.W.3) in his deposition that Bharat Singh 645 had told him that the suit house was the property of plaintiff No. 2 has not been considered. The High Court while dealing with the evidence of Jaswant Singh (P.W. 2) and Kesri Singh (P.W. 3) laid more emphasis on those parts of their evidence where there was a reference to the alleged utilisation of the jewels or moneys belonging to the plaintiffs by Bharat Singh for the purpose of acquiring the suit house. The High Court has also observed in the course of its judgment that neither of them had stated that Bharat Singh had told them that he was purchasing or had purchased the suit house as a gift to Bhim Singh and Himmat Singh. The above observation does not appear to be consistent with the evidence of Kesri Singh (P.W. 3) discussed above. It was, however, contended on behalf of the defendant that the statement made by Bharat Singh in the year 1955 could not be accepted as evidence in proof of the nature of the transaction which had taken place in the year 1940. It was contended that the question whether a transaction was of a benami nature or not should be decided on the basis of evidence about facts which had taken place at or about the time of the transaction and not by statements made several years after the date of the transaction. In support of the above contention, the learned counsel for the defendant relied on the decision of the House of Lords in Shephard & Anr. vs Cartwright & Anr.(1). The facts of that case were these: In 1929, a father, with an associate, promoted several private companies and caused a large part of the shares, for which he subscribed, to be allotted in varying proportions to his three children, one of them being then an infant. There was no evidence as to the circumstances in which the allotments were made. The companies were successful and in 1934 the father and his associate promoted a public company which acquired the shares of all the companies. The children signed the requisite documents at the request of their father without understanding what they were doing. He received a cash consideration and at various times sold, and received the proceeds of sale of, their shares in the new company. He subsequently placed to the credit of the children respectively in separate deposit accounts the exact amount of the cash consideration for the old shares and round sums in each case equivalent to proceeds of sale of the new shares. Later he obtained the children 's signatures to documents, of the contents of which they were ignorant, authorising him to withdraw money from these accounts and without their knowledge he drew on the accounts, which were by the end of 1936 exhausted, part of the sums withdrawn being dealt with for the benefit of the children but a large part remaining unaccounted for. He died in 646 1949. In the action filed against his executors, it was contended by them that the subsequent conduct of the father showed that when the shares were got allotted by him in the names of the children in 1929, he did not intend to make them the real owners of the shares and that the presumption of advancement had been rebutted. This contention was met by the plea that the subsequent conduct of the father in dealing with the shares as if they were his own could not be relied upon either in his favour or in favour of his representatives, executors and administrators to prove that he had no intention to create any beneficial interest in his children in the shares in question when they were obtained. On these facts, the House of Lords held that the subsequent acts and declarations of the father could not be relied upon in his favour or in favour of his executors to rebut the presumption of advancement. Viscount Simonds in the course of his judgment observed thus: "My Lords, I do not distinguish between the purchase of shares and the acquisition of shares upon allotment, and I think that the law is clear that on the one hand where a man purchases shares and they are registered in the name of a stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement. Equally it is clear that the presumption may be rebutted but should not, as Lord Eldon said, give way to slight circumstances: Finch vs Finch ; It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the well settled law on this subject. It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time. I will take, as an example, a passage from Snell 's Equity, 24th ed., p. 153, which is as follows: "The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the 647 declaration. But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour. " The above passage, we are of the view, does not really assist the defendant in this case. What was held by the House of Lords in the case of Shephard & Anr. (supra) was that the presumption of advancement could be displaced only by a statement or conduct anterior to or contemporaneous to the purchase nor could any conduct of the children operate against them as admissions against their interest as they acted without the knowledge of the facts. In the instant case, we are concerned with the conduct and declarations of Bharat Singh subsequent to the transaction which were against his interest. The evidence regarding such conduct and declarations is not being used in his favour but against the legal representative of Bharat Singh i.e. the defendant who would have become entitled to claim a share in the suit house if it had formed part of his estate. Such conduct or declaration would be admissible even according to the above decision of the House of Lords in which the statement of law in Snell 's Equity to the effect `but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour ' is quoted with approval. The declarations made by Bharat Singh would be admissible as admissions under the provisions of the Indian Evidence Act being statements made by him against his proprietary interest under section 21 and section 32(3) of the Indian Evidence Act The defendant cannot also derive any assistance from the decision of this Court in Bibi Saddiqa Fatima vs Saiyed Mohammad Mahmood Hasan(1). The question before the Court in the case of Bibi Siddiqa Fatima (supra) was whether a property which had been purchased by a husband in his wife 's name out of the fund belonging to a waqf of which he was a Mutawalli could be claimed by the wife as her own property. This Court held that the wife who was the ostensible owner could not be treated as a real owner having regard to the fact that the purchase money had come out of a fund belonging to a waqf over which her husband who was the Mutawalli had no uncontrolled or absolute interest. In reaching the above conclusion, this Court observed thus : "We may again emphasize that in a case of this nature, all the aspects of the benami law including the 648 question of burden of proof cannot justifiably be applied fully. Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired. The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself. In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf. " It was next contended that the defendant had spent money on the repairs and reconstruction of the building subsequent to the date of the patta and that therefore, he must be held to have acquired some interest in it. We have gone through the evidence bearing on the above question. We are satisfied that the defendant has not established that he had spent any money at all for construction and repairs. Even if he has spent some money in that way with the knowledge of the actual state of affairs, it would not in law confer on the defendant any proprietary interest in the property. It is also significant that neither Gad Singh during his life time nor his children after his death have laid any claim to a share in the suit house which they were entitled to claim alongwith the defendant if it was in fact a part of the estate of Bharat Singh. Their conduct also probabilities the case of the plaintiffs that Bharat Singh did not intend to retain for himself any interest in the suit house. On the material placed before us, we are satisfied that the transaction under which the patta was obtained was not a benami transaction and that Bharat Singh had acquired the suit house with his money with the intention of constituting plaintiff No. 2 as the absolute owner thereof. Plaintiff No. 2 is, therefore, entitled to a decree for possession of the suit house. The trial court passed a decree directing the defendant to pay damages for use and occupation in respect of the suit house at the rate of Rs. 50/ per month from September 20, 1956 till the 649 possession of the house was delivered to the plaintiffs. The operation of the decree of the trial court was stayed by the High Court during the pendency of the appeal before it. In view of the decree passed by the High Court, the defendant has continued to be in possession of the suit house till now. Nearly twenty years have elapsed from the date of the institution of the suit. In the circumstances, we are of the view that the defendant should be directed to pay mesne profits at the rate of Rs. 50/ per month till today and that an enquiry should be made by the trial court under Order 20, Rule 12 of the Code of Civil Procedure to determine the mesne profits payable by the defendant hereafter till the date of delivery of possession. In the result, the decree passed by the High Court is set aside and a decree is passed directing the defendant to deliver possession of the suit house to plaintiff No. 2 and to pay mesne profits to him at the rate of Rs. 50/ per month from September 20, 1956 till today and also to pay future mesne profits as per decree to be passed by the trial court under Order 20, Rule 12 of the Code of Civil Procedure. For the foregoing reasons, Civil Appeal No. 626 of 1971 is accordingly allowed with costs throughout. Civil Appeal No. 629 of 1971 is dismissed but without costs. C.A. 626/71 allowed. P.B.R. C.A. 629/71 dismissed.

Plaintiff No. 1 and plaintiff No. 2 were father and son while defendant was the brother of plaintiff No. 1. The plaintiffs in their suit against the defendant claimed that the suit house in which the defendant was living, belonged to them by virtue of a patta issued in their names. They alleged that the deceased brother of plaintiff No. 1, who remained a bachelor till his death, loved plaintiff No. 2 as his son and had thought of adopting plaintiff No. 2 but since he died all of a sudden it could not be done. The defendant on the other hand claimed that he and his deceased brother lived as members of a joint family after the partition of their family that as a result of the joint efforts of himself and his deceased brother the Maharaja, of Bikaner sanctioned sale of the house to them, that the purchase money was paid out of their joint income but that the patta was granted in the names of the plaintiffs due to political reasons and therefore the plaintiffs were at the most benamidars. The trial court held that the house was acquired by the deceased brother from the Government of Bikaner for the plaintiffs and the patta was granted in favour of the plaintiffs and that they were in its possession till 1956. It rejected the defendant 's claim that it was acquired with the joint funds of himself and his deceased brother. On appeal the High Court held that the house had been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them and on his death plaintiff No. 1 and the defendant succeeded jointly to the estate as his heirs. ^ HELD: The transaction under which the patta was obtained was not a benami transaction. The house was acquired by the deceased brother with his money and with the intention of constituting plaintiff No. 2 as the absolute owner thereof. [648G] Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case the transferee holds the property for the benefit of the person who has contributed the purchase money and he is a real owner. The second case which is loosely termed a benami transaction is a case where a person, who is the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case the transferor continues to be the real owner. The difference between the two kinds of benami transactions is that whereas in the former there is an operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of the person who has 629 contributed the purchase money, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not depends upon the intention of the person who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is statutorily recognized in section 82 of the Indian Trust Act, 1882. [638B E] Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; at p. 722; Mohammad Sadiq Ali Khan vs Fakhr Jahan Begam & Ors. 59 I.A. 1; Manmohan Das & Ors. vs Mr. Ramdai & Anr. A.I.R. 1931 P. C. 175; Jaydayal Poddar (deceased) through his L.Rs. & Anr. vs Mst. Bibi Hazra & Ors. referred to. 2. The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct. [641C E] In the instant case the deceased brother was a bachelor. On the death of the wife of plaintiff No. 1, plaintiff No. 2 and his younger brother were staying with the deceased brother. Plaintiff No. 1 was almost in an indigent condition while defendant practised law for some time and later entered into service. The patta for the house was issued in the name of plaintiffs nos. 1 and 2 at the request of the deceased brother for the benefit of plaintiff No. 2 and was handed over to him after he completed his education. This conduct of the deceased brother established that it was his intention that, when he secured the patta from the State Government in the names of plaintiffs it was his intention that plaintiff No. 2 whom he loved, should become the owner. [641F H] 3. The declaration made by the deceased, who had contributed the purchase money subsequent to the date of purchase to the effect that the property belonged to plaintiff No. 2 was admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended that plaintiff No. 2 should become its owner. [647E] Shephard & Anr. vs Cartwright & Anr. ; , distinguished.

8k-16k

Civil Appeal Nos. 1745 1755 of 1975. From the Judgment and Order dated 5 9 1975 of the Andhra Pradesh High Court in Writ Petition No. 1269/75 L. N. Sinha, Attorney General for India, E. C. Agarwala and Girish Chandra for the Appellants (In CA 1755/75). P.P. Rao, M.S. Ganesh, A.K. Ganguli and T.V. section Narasimhachari for the Appellants in Ca 1754/75. P. Govindan Nair, A. K. Sen, Bishambar Lal, Miss Munisha Gupta and Mrs. Baby Krishnan for RR 1 2 in CA 1754/75 and CA 1755/75. The Judgment of the Court was delivered by KRISHNA IYER, J. These two sister appeals have gained access to this Court by certificate under Article 133 and project a 'service dispute ' between the Army and civilian wings (both engineers) of the Survey of India. The constitutional missiles used, with success, in the encounter in the High Court by the 'civilians ' to shoot down the 'military men 's ' preferential claims under the relevant service rules, are Articles 14 and 16. And here, in this Court, the Army Wing is fighting back to repulse the civilian wing by defusing the war head of these two fundamental rights. Military imagery vivifies the litigative havoc when sectors of our public services go to battle against each other, though there is so much else to wage war against in the service of the people. A narration of facts falling within a short compass will unfold the real issue, revolving round the salary, seniority and de facto promo 1039 tional disparity inter se, which has sparked off the forensic war. The Union of India, one of the appellants, supports the stand of the military sector of the Survey Service, if we may so designate it. A survey of the story of this conflict suggests the sombre thought that unending litigation, affecting the public services with inevitable impact on morale and efficiency, is becoming an epidemic in courts even among strategic cadres and sensitive sectors a matter almost for consternation which surely must kindle a search for constitutional alternatives for resolution of service questions without large numbers of civil servants being locked in long drawn out legal struggles. Does the experience of 30 years under the Constitution indicate that, save where fundamental constitutional issues arise, Whitley councils, Service Tribunals and other specialised adjudicatory agencies, with the imprimatur of finality, are a more pragmatic mechanism of Service Justice ? The factual setting, sufficient to unravel the constitutional contention, may now be delineated. Both the appeals against the judgment of the High Court of Andhra Pradesh cover the same subject matter, although one of them is by the Central Government and the other by the members of the Survey of India from among the Defence personnel, and both have been resisted on the same basis by the civilian recruits to the Service. A common judgment will dispose of both the cases but we must begin from the very beginning to get a hang of the controversy. The genesis of the Survey of India, its life before birth, its genetic composition and hereditary characteristics, mould the structural engineering of the Service and, therefore, have a bearing on the issues debated before us both sides. While the High Court has, to some extent, slurred over the chronicle, both sides have heavily stressed before us the saga of the Survey of India, each to lend strength to its point of view. So, a peep into the bicentennial biography of the Survey of India is a necessary exercise as a starting point. To blink at history is to lose the living link with the Past and to stumble in the Present. Yet strangely, none such, i.e. history of the Service to serve as a lucid background is given in their statement by either party, save incidentally. Unfortunately, the fine and fruitful art of presenting a luscent written brief is still in the long Indian Year of the Infant and we have to cull out and piece together materials which should have been set out as a scenario of meaningful development. If the High Court has gone wrong the blame must fall in part on the Central Government which could and should have projected the story of the Survey of India, its functional complexion and recruitment rationale 1040 instead of leaving judges to run around the corridors of padded paper books or launch on speculative surmises. The other parties fare no better, though. And instalments of additional information during the progress of the hearing has had to make do for a comprehensive unfoldment. Better late than never ! The story of the Survey of India has been narrated in its brief autobiography, 'Our Department ', produced on the eve of its bicentennial in 1967. This department was born during the days of Lord Clive under happy Army stars, had a military upbringing and, in its brilliant career, achieved lustorous exploits. Starting from an accident of history the request of a historian, Robert Orme, to an East India Company administrator, Lord Clive, for a map of Bengal the Survey of India sprang to life in embryonic form when Major Rennel was appointed to execute this survey and, thereafter, was cradled by the Army but spread out to become a dynamic department and development instrument in the decades ahead. In war and in peace, in building the nation and defending its security, in 'civilian ' ventures and military operations the Survey of India has become a National Service in the role of adviser on survey data and kindred adventures. Indeed, almost all ministries of the Central Government and many States have used the services of the Survey of India during the several Five Year Plans. Look before you leap ' becomes in development terms, survey before you start, and so it is that in 1967 this great department of strategic importance is able to write its story and conclude: "25. In short, in its ever increasing sphere of vast, diverse and widely scattered work, Survey of India has built up a unique reputation both within the country and outside as a sound, distinguished, and great Survey Organisation of the world, progressively marching forward. expanding, adapting and modernising itself and continuing its contributions to science, security and development. The personnel of Survey of India can legitimately take pride in the fact that they belong to this ancient and great organisation, to whom a noble, rich and priceless heritage has been bequeathed inspiring and beckoning them to greater heights of achievement, honour and glory. " When the history of Free India comes to be written the proud contribution of the Survey of India may be printed in bold and bright 1041 characters because almost every Department of governmental activity with welfare potential has the imprint of the Survey of India at some stage or the other, as disclosed in the various materials which have come into our hands, through counsel, in the course of their submissions. The flattering fact that the tallest peak in the World, Mount Everest, was named after the eminent Surveyor General Sir George Everest shows that even in the geological discovery of India, this Department has had a hand. The different dimensions and directions in which the Survey of India has served the nation and science as a whole are perhaps a fall out of its adventurous alliance with military activity. During British days, it was not an accident that the Survey of India was under the Army. It was an inalienable companion of conquest and consolidation of defence and development a versatile genius which was put to greater good in the era of Freedom and After. It is perhaps not so well known that the work of the Survey of India has special significance in matters of country 's defence. The Survey of India has to organise surveys and work well ahead to provide maps at the right time and of the right places where campaigns might be fought in war. The Chinese threat along the northern borders of the country since 1959 necessitated diverting immediately a very large potential of the Department to carry out the work of special topographical surveys for defence purposes in one of the most inhospitable and rugged terrains of the world an assignment which cost the Department many precious lives and many years of hard work. The bulk of military survey and mapping requirements are met by Survey of India. Though the military survey service exists, it is small and has insufficient personnel, who carry out limited technical work and such staff duties as army requires in peace time. There have, thus, been many occasions for the Survey of India to be commended for its work for defence and development in war and peace, and for providing the basic knowledge of the land for all its users. " 1042 The Surveyor General, for reasons of functional importance, is also the Director of Military Survey. Topographical Mapping states: "When corrections and additions to maps of military importance are suggested by the Director, Military Survey, they should, as a general rule, be accepted by the Survey of India. " It is necessary to notice the role of the Survey Department under the Director of Military Survey who is also the Surveyor General thus bringing out the interlacing of activity. Obviously, there is not merely sensitivity and confidentiality but also a high degree of skill which cannot be relaxed and an instant sense of discipline, which cannot be liberalised, in view of the fact that military operations of national significance depend, in part, on the Survey of India and its service. While it is fair to emphasise that considerable peace time developmental work is rendered by this Department, its adventurous spirit of climbing mountains, penetrating wilderness and entering into forbidden regions cannot be minimised. Col. Sandes writing on 'The Military Engineer in India ' states: "History has shown that there is something in the training which the Survey of India, imparts to its officers which makes them peculiarly valuable in war. Their work develops not only self reliance and initiative, but a sense of responsibility. Everything centres on the example set by the leader of an isolated party. As a rule, he is the only European in the small country. He must have powers of organisation and observation: courage, determination and endurance. In the ordinary course, he must be precise to the point of pedantry, never satisfied with unchecked work and abhorring the smallest error; yet at other times he must fling theory and practice to the winds to improvise means of rapid reconnaissance when danger threatens. " The Military history which has moulded the character of this Department has relevance and so we quote again Lt. Col. Sandes: "As the war spread, the survey officers from India were scattered over the face of the earth; some on military duty with engineer units other flash spotting, sound ranging and triangulating in France and Belgium: and others again reconnoitering and surveying in any or all of three continents. They worked in Salonika, North and South Russia, Italy Gallipoli, East Africa, Mesopotamia, Egypt, Syria, Persia, 1043 and on the shores of the Caspian. One commanded a brigade in North Russia, another led a Persian army. Ten officers of the Survey of India were killed in Action, or died on service, during the Great War, and thirteen were wounded. Many casualties occurred in the lower ranks. Such were the contributions of the Department towards victory in the greatest struggle of all time. They form a fitting climax to its record in the frontier wars of India. " If we may sketch a few lines to indicate the trait of the Corps of Indian Engineers with a view to illumine the points canvassed before us, we have to refer to the book by Major Verma and Major Anand. The authors state: "Before the war, Military Survey as such did not exist; though for generations past, Survey of India had provided detachments for practically every military campaign or expedition. But these parties were considered to be civilian, including their military officers in command, and they were only attached to the Army for supplies and transport. Even in the First World War (1914 18), Survey of India detachments went out and worked in Macedonia, Mesopotamia and Persia. But at no time before 1940 did India have any military units like the Field Survey Companies or Battalions. Between the wars, survey and mapping for the Army was done by the Survey of India, which except for the Artillery Survey Section, Royal Artillery, was the sole military survey agency. It had a semi military tradition, the Surveyor General held the rank of a Brigadier and his principal officers were Royal Engineers with specialist survey qualifications. There was no survey representation at GHQ." Again "For the Department, the military responsibilities in 1938 39 were: (a) Liaison with the Armed Forces on survey and mapping. (b) Provision of maps required by the Defence Services, covering India, Burma, Afghanistan and Iran. 1044 (c) In the event of a war, to provide and equip firstly two Fd Survey Companies and two Survey HQs for service in the NWFP, and secondly one Survey Report (admn.) (d) To carry out annually a small amount of training in military survey. " In many Circles, Directors of the Survey of India have been Office Advisers to the 'Commander in Chief" and the work done by this Department has had in many cases military meaning. This was reflected in the past in the officer situation and personnel complexion. Class I Officers were all military men while Class II men were civilian graduates. Wheeler, writing of the officer situation in British India, summed up thus: "Perhaps the greatest single factor affecting military organisation was that whereas there were nearly 60 military officers in 1925, there were only 30 in 1939; to train a civilian to be sound and efficient soldier takes a considerable time, to train a non survey soldier to become an efficient surveyor, much longer, very much longer." The military commitments of the Survey of India in the World War II made it a strategic instrument invisible to the lay but invaluable to the esoteric. We have pressed this part of the career of the Survey of India to knock out the impression that its military component is purely a concession to the historical staffing pattern and the lack of avenues for promotion to Army engineers. It is an in built necessity of the department in national interest. We agree with counsel for the respondents, Sri Govindan Nair, that the early history of the Survey of India as a child of the Army cannot become an obsession to distort or debunk the enormity of its purely developmental undertakings. It is a Civil Service which serves in national reconstruction all the time, but, at the call of the country, is ready to switch to Defence, risk anywhere and do surveys as commanded. We must set our sights right about the civil and military range of the versatile department and not swallow the brash version that it is all 'brass '. Its bearing on the conclusions in the case is that the court should not blindly accept all the preferences to the Army recruits as against their civilian brethren under the impression that everything in the Survey of India is Defence operation and civilian must therefore accept the crumbs as shudras of the Service. No! Most of its work is peace time activity of a fundamental, though invi 1045 sible character to promote development in its multitude and magnitude and, indeed, in its panoramic magnificence. But we cannot get away from the historic fact not merely the fact of history that the Survey of India is, first and foremost, an instrument of military strategy for the defence of the country although its talents are not allowed to grow into thistles but to serve wherever needed. If competing demands come, it opts for and is therefore geared to Defence goals. That is its first charge and, in that sense, it is Defence oriented, has an Army bias and cannot afford to ignore the indispensability of a military component. The history of a nation is never written by the military but its history ceases to be, if its reserves of military manpower cannot be mobilised for active duty at an instant 's notice. The Survey of India, with its signal service to the planned progress of the people, has a tryst with national security and an everyday commitment to the country 's defence requirements. This may look over drawn but embeds a core of truth cardinal to the issue in the case why weightage to the 'uniformed ' recruits as against their counterparts in 'mufti '? Let us thus place accent on what is essential but not miss what exists as a reality. From this angle, a legal raconteur may re tell the story slightly differently. The Army in British India had, as one of its strategic operations, to undertake the survey of the interior and frontier of the country and had, therefore, under it a department wholly manned by military personnel. After Independence and the enactment of the Constitution, this military limb separated from the Defence Forces, was constituted into a Civil Service with the Surveyor General at the apex and a hierarchy below of triple components together making up the Class I service. The Service, in its new dimensions, was manned by civilian and military personnel due to functional imperatives. The entry into the service was at the point of Deputy Superintending Surveyors, save for a category of promotees from Class II, with provision for spiralling up to higher positions. The posts were filled according to Rules framed under the proviso to article 309 on a 50: 50 basis, as between Army engineering personnel dovetailed into the Survey of India and civilians recruited or promoted or otherwise appointed. We miss the service perspective if we do not take a functional glimpse at the operational scale and range of the Survey of India. What was a wholly military department previously reincarnated as the Survey of India, with a civilian inter mix, retained its meta military personality, functionally and personnel wise. In budgetary classifica 1046 tion and administrative charge, the Survey of India was a member of the Agriculture Ministry, of the Education Ministry and currently, perhaps, correctly belongs to the Ministry of Science and Technology which is pervasive enough to embrace Defence and Development. It is not right to regard this Service as a 'uniformed ' service, for it is ambidextrous. But that is not really decisive of the issue before us. What we have to understand is not so much its genetic transmigration as such or pedigree table but the nature of the service the Survey of India is expected to render, its basic functional characteristics, operational capabilities, futuristic uses and, consequentially, its meaningful personnel policy and the conditions of service dictated by the compelling necessities of these demands on the Service. In brief, the emphasis is not on the administrative pigeonhole in which the Survey is placed for secretariat or budgetary purposes, nor on its lineage, nor, indeed on the label 'civil ' or 'Defence ' but on the nature of its duties and the relevant pattern of manpower and, most importantly, the concrete conditions of recruitment and principal career requirements while in service, having regard to the strategic essence of the goals the Service must sub serve. So viewed, the Survey of India is army oriented. Not merely because of heredity but markedly because of the nation 's potential demands and perennial expectations from this specialised Service, not merely in emergency but to be always on the qui vive. We gather from the affidavit of the Senior Director, on behalf of the Union of India, that the army component is an inalienable requirement of the Survey of India if it is to fulfil its role. He swears: "Some of the reasons for corps of Engineers being one of the sources of recruitment are as follows: (a) Survey of India may need mobilisation in the event of any emergency of war. (b) The Corps of Engineer Officers in Survey of India form the nucleus around which mobilisation can take place quickly. (c) The small element in the Army cannot cater for training and experience, and hence Corps of Engineer Officers are kept in Survey of India which provides the ideal ground for training and experience of these officers during peace so as to keep them fully competent technically in the event of a war or emergency. In order to maintain an adequate balance between military and civilian officers, and to attract the higher type of Corps of Engineer Officers to the Survey of India, 50% of 1047 the total number of posts in the Class I Cadre were earmarked for the Corps of Engineer Officers. " What, then, is the raison d ' etre of this department ? War means advance into or withdrawal from territory. Operations involve identification of topography, climatology, environmentology, location of defence positions, marking of marching and retreating positions and artillery targets and paratroop landing positions, keeping secret strategic centres and sealing them off as out of bounds and a host of other surveys invaluably informational and immediately available for national defence. It is obvious that if this be the functional relevance of the Survey of India, some divisions of it have to be fighting fit, always on the alert, ready to rush to the risk zones and technically capable of teaming with the ground forces in seasons of emergency and occasions of external aggression, before and after. The Survey of India must be geared to the goal of national security if it is to justify itself in a large country of extensive mountain frontiers, border disputes, history of hot war, interior defence lines and military routes. Of course, our imperial masters could afford, at the expense of people 's welfare, to keep such a department as a section of the Armed Forces, idle for long stretches of time but keeping their tools sharp for eventualities. Free India could not. Naturally, the country 's leaders, entrusted with gubernatorial responsibilities in this behalf, hit upon a golden mean of forming a separate Survey of India, no more a wing of Army. The object was understandable. A permanent yet considerable number of technical personnel virtually idle during peace time was a luxury. Nevertheless, an instrument was forged which preserved the military mood of active duty but expanded and expended its sophisticated expertise during years of peace on national needs of other Ministries or States ' requirements. It reflected the duo dexterous roles and mosaic of manpower in its recruitment policy. We see nothing strange in this unorthodox composition, although attempts to interpret the new scheme by familiar Service moulds may mislead, as has happened in the High Court. The Senior Director with reference to current conditions, deposes as affiant of the Central Government: "Reasons for seniority and pay protection for the Corps of Engineer Officers are as follows: (a) They suffer due to lack of higher opportunities of promotion to Brig. Major General, Lt. General 1048 and General by their volunteering for the Survey of India. (b) They can utmost expect to get military pension as a Colonel but not as Brig. and higher which are substantially higher. (c) They lose other perquisites like house rent, concessional electricity and furniture facilities, concessional Form 'D ' facilities, and many other concessions. Unless therefore, they are given protection of seniority and pay in order to partly compensate their losses, no Corps of Engineer Officer would ever volunteer for the Survey of India. These were the considerations for the seniority and pay protection for Corps of Engineer Officers. Even if, for argument 's sake, it is admitted that preferential treatment is given to Corps of Engineer Officers (which it is not), it is done under the rules which have been framed based on the differences between the various sources of recruitment, and the said differences have a reasonable relation to the nature of the office to which recruitment is made. Thus, the appointment, and terms and conditions of the Corps of Engineer Officers can legitimately be substantiated on the basis of valid classification. " At this point we must eye at close quarters the Survey of India (Recruitment from Corps of Engineer Offices) Rules, 1950. Primarily, it relates to the recruitment from the Corps of Engineer Officers. The relevant part of Rule 2 runs thus: "2. Recruitment: A Corps of Engineer Officer for appointment to the Survey of India should at the time of appointment normally have not less than three and not more than six years commissioned service, but this rule may be relaxed in exceptional cases. Corps of Engineer Officers shall apply for appointment to the Survey of India to the Military Secretary, through the Engineer in Chief, who will transmit the applications to the Surveyor General. When a military post falls vacant and the Military quota has not been filled the Surveyor General shall nominate an Officer or Officers from the above list. " 1049 This Rule postulates a military quota which takes us straight to Rule 11: "11. Method of recruitment to Survey of India Class I Service. All future recruitment to the Survey of India Class I Cadre will be as follows: 1. From Corps of Engineer Officers 50% 2. From promoted Class II Civilian Officers 25% 3. From direct recruits by competitive exami nation through the U.P.S.C. 25% The military recruits to Class I Service enter the Deputy Superintending Surveyor 's (hereinafter referred to as D.S.S.) position in the Service from where they rise on promotion as Superintending Surveyors (hereafter referred to as SS) Deputy Directors and Director, the top post being of Surveyor General. These promotion posts are available for all categories of entrants as has been clarified in the later set of Rules called 'The Survey of India (Class I Recruitment) Rules, 1960. ' Before we part with the 1950 Rules, it is necessary to place accent on some aspects of the military officers and their career in the Survey of India. Their sojourn in this new Department is not an exit from the Army but a long furlough, as it were. For all practical purposes, they retain their military position and remain under military control and are liable to be called back for regular army service. It is a kind of provisional adoption into a different family but with the ties in the natural family kept in tact. A Corps of Engineer Officer will be qualified for recruitment only if he is in commissioned service for between three and six years. Then he is to go through a two year period of probation during which he is to pass tests. If he is not good, he gets back to military duty and even if he makes good, he has an option to revert to military employment. Even after confirmation, the officer may revert during the first 20 years of commissioned service on his own request. Even thereafter, with the approval of the Government he may revert permanently to military duty, save in the case of those who fall under Rule 4(c). If an officer retires from the army that will involve retirement from the Survey of India too, save in the case of those who are Colonels or Lt.Ratio of the decision Colonels, covered by Rule 4(c), and 1050 retires from the army only for the reason that they have attained the requisite age limit. Such persons under Rule 4(d) may continue in the Survey of India until the age of superannuation from civil employment. It is important to note that an officer may be reverted permanently to military duty if he is no longer needed in the Survey of India on account of reduction in strength or unsatisfactory work. He may also be reverted temporarily to military duty for grounds given in Rule 4(f). Another remarkable rule is Rule 8 which speaks of wearing military uniform while in civil employment if the incumbent is willing to observe the courtesies due to military officers of superior ranks. Rule 9 is extremely significant and reads thus: 9. Military Promotion: A military officer in the Survey of India is expected to keep himself efficient as an army officer and will have to pass such promotion examinations, etc. as may be laid down for other military officers of his rank and corps; such military confidential reports will be submitted on him as may be required by the military authorities. Military Confidential Reports will be initiated and submitted in accordance with the procedure laid down in Special Army Order 24/S/51 as amended from time to time. Military officer in the Survey of India will be considered for military substantive promotion in turn with others in their corps and their fitness for such promotion will be judged by their confidential reports. After completing his normal period as a Lt. Colonel an officer will be eligible for promotion to full Colonel and above provided that: (i) he is a substantive Director or above in the Survey of India; (ii) there is a vacancy in the number of posts for full Colonel and above reserved for military officers in the Survey of India. Rule 10 is also meaningful because the army officers in the Survey of India when they rise to higher positions get equivalent rise in the Army. There is a partial assimilation but a substantial separation persists. Once an Army Engineer, always an Army Engineer, is the gist. Absent integration, article 14 is out of bounds such is the cumulative effect of the Service Rules, 1950 according to the learned Attorney General. We will presently examine his claim which has been rejected by the High Court. Also, the myth of Defence needs and consequent preferences for military recruits. The High Court rightly formulated the crucial question when it stated: Thus, the bone of contention of the respondents is that the very nature of the work undertaken and done by the Survey of India is related to Defence purposes and the officers recruited from the army engineering corps are specially trained for this purpose. This, according to the respondents, is the reasonable connection between the classification and the object that is sought to be served in recruitment to Class I service of the Survey of India. The conclusions reached by the High Court also deserve to be set down at this place to facilitate a clear understanding of our approach and the basic finding of fact reached by the High Court. The respondents have heavily relied upon this finding and have legitimately lashed the appellants ' plea as unpresentable in the face of this finding of fact. The learned Judges observed: This claim, however, is not made out before us. We have already referred to the various affidavits filed by the parties. In the original counter affidavits filed by respondents, the stand taken is that because the rules provide for special privileges, they are being given to the army personnel and so the equality concept is not violated. That is really begging the question. When the petitioners complain that the rules made in this behalf violate the equality concept as enunciated in Articles 14 and 16, it would be futile to reply to that argument by saying that the rules so provide. In the 1052 later affidavits some attempt is sought to be made to point out that the nature of the work carried on by the Survey of India department is essentially connected with Defence of India and that the officers recruited from the Army Corps of Engineers are specially trained for this purpose. On the basis of the material placed before us, we are not inclined to accept that the work done by the Survey of India department is essentially of the nature and character required for defence purposes. From the affidavits and the other material placed before us, it could be seen that the survey work done by the department is mostly concerned with the development projects and preparation of maps for various Ministries, State Governments, public sector projects and other civilian agencies. The annexure filed along with the additional reply affidavit filed by the petitioners show that the Survey of India is a national survey organisation. It appears to have surveyed quite a large number of development projects during the three plan periods. The department might have prepared some maps useful for the Defence purposes. But that is only part of the work and incidental to the nature of the survey it carries on. Its work does not appear to be Defence oriented. The survey done by the department is utilised by several departments of the Central and State Governments, public sector projects and other civilian agencies. It is, therefore, making a tall claim to say that the survey is essentially of Defence nature. Thus, the Survey of India appears to be a civilian department with a civilian budget. Further, whenever there is an emergency there is nothing which prevents or bars the Government of India from calling upon the civilian officers also to serve on the border. It is the stand of the petitioners that if 25 army personnel belonging to the Survey of India were called to the border area in 1962 war, as many as 70 civilian officers belonging to Class I and Class II categories were called to work in the same area. They also assert that just like the Defence department uses some maps prepared by the Survey of India, the Forest Department, G.S.I., P.W.D. etc., also use the maps. So we are not inclined to hold that the nature of the survey and work carried 1053 on by the Survey of India department is largely defence oriented. Some reports are sought to be relied on in this connection. It is true that some attempts have been made after attainment of Independence to attract officers from the army engineering corps into Survey of India department. The impugned rules will have to be examined in the light of the circumstances that are now prevailing ever since Independence and not on the so called historical background which has, in any case, become archaic. In regard to the special training given to the army personnel which is said to justify the classification, it appears to us that this claim is not tenable. If the army personnel are given training in field engineering for 9 months and for 3 years in the Military Engineering College, Kirki, the qualifications required for direct recruitment of civilians are no less valuable. Largely, only engineering graduates are recruited directly. They have equal engineering experiences. Further, it does not appear that the army officers had been given any survey training when they were in the army services. It is not, therefore, possible to say that the recruits from the army are better qualified than the civilian direct recruits. The promotees from Class II have, behind them a very long experience of not less than one decade in the work undertaken by the Survey of India department. With this long experience of survey work, particularly belonging to this department behind them, we do not see any justification for their being discriminated against in favour of army officers. We are not, therefore, prepared to accept that the army personnel in the Survey of India department have had any longer or better training required for Survey of India than either the direct recruits or promotees from Class II 1054 service to Class I service. The latter two categories appear to be as qualified and as experienced as the army officers to carry out the work of Survey of India. The only conclusion that is possible from the above discussion is that this classification made under the impugned rules between the army personnel and the civilian personnel has no reasonable connection with the object that is sought to be served. We demur. Why ? The 1950 Rules, in our view, have two prominent features which are basic. The first one which we have already emphasised is that the military nominees do not shed their army service and merge into a new Service but undergo a partial absorption and preserve a substantial separateness. The second feature, which is perhaps more hurtful to the civilian sector, turns on Rule 5 which provides for seniority. The rule runs thus: 5. Seniority. (1) On first appointment an officer will be in the grade of Deputy Superintending Surveyor (Formerly Assistant Superintendent) in Class I Service of the Survey of India. (2) The seniority of military officers inter se will remain the same as in the Army. (3) The seniority of military officers vis a vis directly recruited civilian officers will be determined by the year of allotment which will depend: (i) in the case of military officers, on the date of first commission including ante date, if any; and (ii) in the case of directly recruited civilian officers, on the date of appointment ante dated by two years. (4) Civilian officers directly recruited on the results of any one examination will be junior to those recruited on the results of earlier examinations and senior to those recruited on the results of later examinations, the seniority inter se of those recruited in any one year being determined according to the order of merit in which they are placed by the Union Public Service Commission in the qualifying examination. (5) Among those allotted to the same year, military officers will rank senior to directly recruited civilian officers. 1055 Rule 5A deals with promotion officiating and substantive. A qualifying two year probation and a further three years ' service are a sine qua non for substantive promotion. But officiating promotions are open to all the officers, preference being given to those who have done more years of actual survey work, regardless of seniority. Even officiating posting needs the qualifying service of two years and three years, earlier referred to. In this regard, the Class II officers who are directly promoted as S.S. have a definite advantage over the military men. But when it comes to confirmation in substantive promotion posts, the military personnel opting into the Survey of India get the advantage of Rule 5 which bestows on them the added benefit of the period of service from the date of first commission in the Army which may be anything between three to six years as against two years of ante dated service which the civilian officers are entitled to tack on. The 1960 Rules also require to be examined before we proceed to a discussion. Rule 3 speaks of the sources of recruitment or appointment Direct recruitment of qualified candidates, promotion or transfer from another service, appointment from the Corps of Engineer Officers of the Ministry of Defence and, rarely, admission of other qualified persons these are the methods of entry into the service. A direct recruit must be a graduate with Mathematics or the holder of an Engineering Degree (there are other alternatives which are of minor significance). Rule 20A, which was an amendment made in 1965, insists that every person in the Service, appointed after the 1965 amendment, "shall be liable to serve in any defence service or post connected with the defence of India, for a period of not less than four years", including the training period. This, incidentally, emphasises the military adaptability expected of the Service. Rule 22 is important: 22. Seniority (a) On the first appointment an officer will be in the grade of Deputy Superintending Surveyor (formerly Assistant Superintendent) in class I Service of the Survey of India. (b) The seniority of military officers inter se will remain the same as in the Army. (c) The seniority of military officers vis a vis directly recruited civilian officers will be determined by the year of allotment which will depend : (i) in the case of military officers, on the date of first commission including ante dated if any; and 1056 (ii) in the case of directly recruited civilian officers, on the date of appointment ante dated by two years. (d) The relative seniority of all direct recruits shall be determined by the order of merit in which they are selected for such appointment on the recommendations of the Union Public Service Commission, persons appointed as a result of an earlier selection being senior to those appointed as a result of a subsequent selection. Another rule which must be mentioned for a complete understanding is to the effect that Class II officers, when promoted to Class I, are directly appointed as S.S. and, therefore, can skip the lower position of D.S.S. In 1970, the promotional scheme was slightly modified, but the thrust of the argument that military engineers enjoyed an advantage remained. The attack made by the civilian wing, consisting of two groups, namely, direct recruits and Class II promotees, is against three key rules of the 1950 Scheme, viz., Rules 5, 5A and 11 and, of course, their corresponding 1970 provisions based on articles 14 and 16 and the High Court has substantially acceded on the basis that seniority prescriptions are based on irrelevant criteria and arbitrariness is writ large in some of the impugned provisions. The Court has struck down Rules 22B, 22E of the 1960 Rules and Rules 5(2), 5(3), 5(5), 7 and 11 of the 1950 rules. However, the Court has circumspectly declined to open the Pandora 's box and restricted the refixation of seniority and review of promotions "only from the date of the filing of the writ petition viz. 5 3 1974, because if we do it from a back date, it would be unsettling the promotions that had already been given before a challenge is made by the petitioners. " This comprehensive narration is sufficient to inaugurate a discussion on the merits of the contentions after a formulation of the critical issues. The points urged by the learned Attorney General are two fold. Neither article 14 nor article 16 is violated because the Army recruits and the civilian entrants do not march into a common pool within the service of the Survey of India. There are two sources or streams 1057 which flow into the Service but remain immiscible layers. Since the Constitutional mandate of equal treatment applies only to equals, it cannot apply to the given situation. Secondly, assuming there is a united cadre, even then article 16 cannot invalidate the weightage for seniority assigned to the military recruits, since sensible supportive discremen, having a rational relation to the object of the Service exists and that is sufficient panacea to cure the infirmity of differential treatment. He further pressed that it was perfectly permissible, having regard to the different sources, to prescribe a weightage at the time of the entry into the Service. And, in the present case, the weightage is only at the time of entry into the Service. Thereafter, they are treated as equal for all purposes of promotion and what manifest advantage is derived by the military men in their career is a consequence of the initial addition of the commissioned service for the purposes of seniority. These positions have been contested by Sri Govindan Nair, for the respondents, who has further argued that it is not proper for this Court to upset a finding of fact by the High Court unless there be something palpably erroneous on the face of the judgment. This is true and we should not slightly interfere save where there is grave error. Before we discuss these points, we must clear the ground regarding the necessity of the military presence in the survey Service. We have already quoted from the affidavit on behalf of the Union of India, which gives condensed reasons for induction of army engineers into the Survey of India. That terse statement crystallizes all that we have stated at some length earlier in this judgment. An S.O.S. and the Survey of India must go into action maybe in the war torn area, maybe for post truce measurements. More military survey literature was placed in our hands by the learned Attorney General, making up for earlier defaults, to drive home the point that multifarious though the Survey 's operations are, it does discharge duties secret, sensitive and strategic for Defence requirements which necessitate the maintenance of an Army Engineering component willy nilly. This backdrop serves to highlight the issues on which we may turn the focus. We may now enter the area of encounter. What was a thoroughbred Military Engineering Corps suffered a metamorphosis by 1950 when a new set of rules of recruitment, composition and conditions of service, consistent with the new vision, rainbow of responsibilities and switch over to civilian departmentalisation, was brought about. 1058 A critical dissection of the present set up yields the result: While army engineers are definitely needed and are not expendable, the civilian accent on developmental work and the like justifies opening up the Service to recruits and promotees, non military in source. Guided by this flexible realism and acting under the proviso to article 309 of the Constitution, the President of India has made Rules in 1950 to regulate the recruitment and conditions of service of the army personnel coming into the Survey of India. The anatomy of the 1950 Rules is important. It reserves 50% for the military Engineers by way of entitlement quota out of the total number to be recruited over a year as D.S.S. The other 50% was to have been divided equally between civilian recruits from the open market and the Class II officers. But, by an amendment of 1965, a modification was made to the effect that the promotees from Class II would enter the Class I Service directly as S.S. and not as D.S.S. Thus, the total number of vacancies each year at the D.S.S. level has to be filled by recruitment in the proportion of 50 and 25. To illustrate for clarity, if there are 75 DSS vacancies in a given year, 50 of them are reserved for military nominees and the remaining 25 are filled up by direct recruitment from the civilians. The expression 'recruitment ' definitely means enlisting anew into a Service and so it may be taken that the army engineering quota is 50 out of the 75 and the remaining 25 belong to the civilian recruits. By way of contrast, the members of the Class II Service have a quota of 25% but that proportion is to be worked out, in terms of the extant rule, not based on the number of vacancies at the S.S. level but by a calculation of the total number of posts at the S.S. and higher levels in the Service. The recruitment is only to the posts of Superintending Surveyors although the number to be so promoted is based upon totalling up the various posts at and above the S.S. level. The total number of vacancies at the DSS level for each year shall be divided in the ratio of 2: 1 (50% for the Army Corps and 25% for direct recruits). The 50% reserved for the army corps shall be available to be filled by those candidates. The 25% seats to be filled by direct recruits shall be filled only by such recruits. Even if enough direct recruits are not available they will not be filled by the army nominees but shall be kept vacant to be carried forward and filled in later years by such direct recruits. A reasonable period for the carry 1059 forward scheme will be 3 years, not more. Likewise, military vacancies at the DSS level each year shall be filled only by such nominees. If enough such hands are not available, a similar procedure of carry forward will govern. For the SS posts 25% belongs to promotees from Class II officers. The total number will be worked out by adding all the posts of SS, Deputy Directors and Directors and Surveyor General and allotting one fourth of it as the quota for Class II promotees for appointment as SS. Such is the reasonable interpretation of the rule. Now we come to the bitter bone of contention between the parties. Why should the 50% of military recruits be given a special weightage ? Should not all entrants into the DSS be treated alike without being afforded a handicap in the race? We see no difficulty in upholding this weightage, once we accept the reality that the military portion of the Survey is a compelling factor for national defence. We hold, on a study of the materials already adverted to, that sans they army engineers the Survey of India will become a functional failure in discharging its paramount duties in times of war and in spells of peace, defence spreads beyond hot war or cold war and sustains the sense of security by a state of ever readiness. There is enough literature to establish that the work done by the army wing of the Survey is far too important to be played with and such work is best done by that wing. The military recruits, as has been already observed, are commissioned officers with 3 to 6 years of service. They have a certain salary scale and period of service when they are baptised into the Survey of India. Giving due weight to these factors, Rule 5 lays down the criteria for seniority as between the military sector of recruits and the civilian counter parts. What needs to be appreciated is that for the very efficiency of the Survey of India, a substantial army element is structurally essential. Army engineers are invited into this Service not because this department historically belonged to the Defence Forces but because it cannot minister to one of the major objectives of its creation if it does not have engineers with military training, aptitude, courage, discipline and dare devilry in hours of crisis. The necessity of the Survey, not opportunity to the armymen, has determined the need to attract and, therefore, to allot a quota in the upper echelons, viz., Class I, for military engineers. This, in turn, has desiderated the offer of reasonable terms and conditions for army men to join the Survey of India. The military engineers belong to the Corps of Engineer Officers. They are commissioned officers with service of 3 to 6 years before coming into the Survey which needs, not raw engineers, but men 1060 with some experience. They have prospects and scales of pay in the Defence Department. Why should they look at the Survey if on entry they are to lose their commissioned service and begin the rat race with civilian freshers? Why should they suffer pay cut by walking into the Survey of India? It is, therefore, fairly intelligible and basically equitable to allow military engineers credit for commissioned service and protection of already earned higher salaries. The reasoning is simple. The functional compulsions of the Survey of India require army engineers to be inducted, say half its Class I strength. These engineering officers have to possess some years of experience. How, then, can they be attracted into the Survey except by assuring them what they were enjoying in their existing service, viz., credit for the years under commission in reckoning seniority and fitment of their salary at a point in the scale of Class I officers so that, by way of personal pay or otherwise, a cut may be obviated. To equate them with unequal civilian freshers is precisely the Procrustean exercise which is unconstitutional equality anathematised by Article 14. Let us eye the issue from the egalitarian angle of Articles 14 and 16. It is trite law that equals shall be treated as equals and, in its application to public service, this simply means that once several persons have become members of one service they stand as equals and cannot, thereafter, be invidiously differentiated for purposes of salary, seniority, promotion or otherwise, based on the source of recruitment or other adventitious factor. Birth marks of public servants are obliterated on entry into a common pool and our country does not believe in official casteism or blue blood as assuring preferential treatment in the future career. The basic assumption for the application of this principle is that the various members or groups of recruits have fused into or integrated as one common service. Merely because the sources of recruitment are different, there cannot be apartheidisation within the common service. They merely plead that unequals should not be forced into equality without regard to their rights. They are unequal because their 3 to 6 years of commissioned service cannot be wished away when brought into the service shoulder to shoulder with raw recruits. Secondly, their salaries 1061 are higher and that should not be forfeited as punishment for entering the Survey Service. Not that the salary difference must be perpetuated but that at the point of entry into service their commissioned service and personal pay should be protected. The Service Rules safeguard both these a just gesture without which many army engineers may not care to respond and the 'efficiency ' factor of the Survey Service will fail in their absence. The learned Attorney General also adopted the precedentially sanctified route of escape from the magnetic field of Articles 14 and 16, that if the two sources of entry never really flowed into a homogenised sangam but remained the Ganga and the Jamuna, no question of equality arose. A common pool where the plurality meets is a necessary postulate for the application of the equalist mandate. Here the army engineers, it is apparent from the rules, essentially continue to be army men but wear pro tempore Survey apparel, to be doffed any time specified in the rules themselves. Resultantly, the military and civilian members remain immiscible layers save for some purposes. The condition of integration of men from the divergent sources being absent, rulings have held article 16 is out of the way. Once it is agreed or found that at the entrance point the army engineers are justly given credit for the commissioned service which they carry with them, there is no further discrimination while in service on the score that they come from the Corps of Engineer Officers. All that happens thereafter is merely a manifestation of initial advantage of credit for commissioned service. For this reason, we negative the case of discrimination. The relevant rulings not to burden but to brighten the points urged, may be referred to. In B. section Gupta 's case(1) where article 16 was agitated in a battle between promotees and direct recruits, one facet of Service Jurisprudence was illumined. We excerpt: When considering this point it must be clearly understood that this Court is not concerned with Govt. 's policy in recruiting officers to any service. Government runs the service and it is presumed that it knows what is best in the public interest. Government knows the calibre of candidates available and it is for the Government to determine how a particular service is to be manned whether by direct recruits or by promotees or both and, if by both, what should be the ratio between the two sources having regard to the age factor, experience and other exigencies of service. Commissions and Committees appointed by the Government 1062 may indeed give useful advice but ultimately it is for the Government to decide for itself. In the next place we have to remember that it would be wrong to pronounce adversely upon the new seniority rule merely because of its impact on the fortunes of any particular individual officer. Nor will it be correct to point that an individual officer 'A ' would have fared better if the old quota rule and weightage rule had been restored.(1) We have to take an overall view to determine whether the rule now framed by the Government to determine seniority is just and fair.(2) A total conspectus does not persuade us that anything grossly unfair has been perpetrated. Absent fusion into one integrated service, article 16 is not attracted, in a proposition entrenched by precedents. In Shujat Ali 's case,(3) this Court pithily put it: The two categories of Supervisors were thus never fused into one class and no question of unconstitutional discrimination could arise by reason of differential treatment being given to them. We have read Shelat, J 's observations in Wadhwa 's case(4) to reinforce our view: The principles on which discrimination and breach of articles 14 and 16 can be said to result have been by now so well settled that we do not think it necessary to repeat them here once again. To sum up the position, the two services were from as early as 1937 and before separate. At no stage, even after provincialisation was decided upon and the principles of its implementation were drawn up there was any integration of the two. In fact, after considering the alternatives which the Government had before it, it opted, on consideration of difficulties of integration, for the alternative of keeping the two separate.(5) 1063 No principle under article 14 or article 16 is involved if such an integration was not brought about, for, considering the past history of the two services and the differences existing between them, Government could not be required to fuse them into one upon any principle emanating from the two Articles.(1) Going backwards still further, we find Ayyangar, J. in Joginder Singh(2) emphatically enunciating the same proposition: If, as we hold, there was no integration (and integration has no meaning unless it is complete, for there is no such thing as partial integration) either expressly or by necessary implication, it would follow that it was not the impugned rules that created the two distinct cadres but that they existed independently of the rules and the only charge that could be laid against the rules in this respect was that they failed to effect an integration. If the government order of September 27, 1957, did not integrate them into a single service, it would follow that the two remained as they started as two distinct services. If they were distinct services, there was no question of inter se seniority between members of the two services, nor of any comparison between the two in the matter of promotion for founding an argument based upon article 14 or article 16(1). They started dissimilarly and they continued dissimilarly and any dissimilarity in their treatment would not be a denial of equal opportunity, for it is common ground that within each group there is no denial of that freedom guaranteed by the two articles.(3) Likewise, in Jaisinghani,(4) the same note has been struck. To pursue precedents beyond a point is a tiring adventure which reaches a point of no return. It is too late to upset settled law save where the point of extravaganza is reached. Here such a situation is yet to come. Again, Sri Govindan Nair 's submission suffers damage from the following observations in Ganga Ram 's(5) case. 1064 The direct recruits and the promotees like the petitioners in our opinion, clearly constitute different classes and this classification is sustainable on intelligible differentia which has a reasonable connection with the object of efficiency sought to be achieved. The distinction between direct recruits and promotees as two sources of recruitment being a recognised difference, nor obnoxious to the equality clauses, the provisions which concern us cannot be struck down on the ratio of this decision.(1) Let us examine the facts briefly to see whether the fundamentals of constitutional equality are followed in the Service scheme. The army engineers remain in 'uniform ' as it were but wear a Survey of India overcoat. They do not merge or fuse into a single integrated service with the civilian recruits but remain as an immiscible layer of the Class I Service, the other layer being the civilians. The two wings remain close but separate, not one homogenised family, as the various rules eloquently proclaim. The Army engineers are formally part of the Survey of India but factually retain the vital pattern of life of the army and close nexus with their official prospects, conditions and control as if they had continued in the Army. The 1950 Rules bring out the following incidents of service boldly. Notwithstanding their having left the Corps Engineer Officers Service and entering the Survey Service, they continue to wear uniforms, they get notional promotions in the Army when they earn corresponding promotions in the Survey of India. More significantly, they secure Army promotions only if they pass the requisite army tests ab extra. They can be recalled by the Army and, for a certain period, they themselves may opt back to the army. They continue to be broadly under the control of the Commander in Chief and when inefficiency is noticed, they can be called back to the army for being dealt with appropriately. They have to undergo the regular periodical drills in the army and their disciplinary control is not divested from the Army Chiefs. There are many other such details, the cumulative impact of which is that they have two masters, as it were; they are in two Services, as it were; they are under two parents natural and adopted. This is a unique pattern where the Army members remain with one foot in the Army and the other in the Survey of India. A conspectus of the facts and circumstances governing the 1065 service convinces us that there is no total integration of the Army personnel into the Survey Service. They are in it and yet out of it. This is what we may call a sui generis Service and indubitably it can be asserted that they have not fully fused into a common pool. Absent such complete integration, Article 14 or 16 cannot be invoked. The present case plainly falls in the hands off zone and so the court must leave the injustice, if any, to be corrected, if needed, by other processes. Our exploration has revealed that the Survey of India is a civilian department rendering varied services to non Defence spheres of the Central Government and to State Governments. So its composition cannot be reasonably confined to military personnel only. But critical Defence oriented work is also done, not only in seasons of national emergency but also during peace spans. The border line between national security by the Defence forces and developmental projects by civil services is becoming obsolete. Defence is not only on the battle front but also in the strategic rear, in the farms and factories, in efficient supplies and essential services, in mapping second lines of defence and routes of troop movements, all of them having to be executed on a war footing. Wings which can be mobilised at instant 's notice, forces which will build with blitz speed, have to be in the sheath to be drawn out like a sword on an alarm signal. More than all, as earlier elaborated, the tasks of the Survey for the Defence are in times of Emergency top priority items. So a sizeable section of men with army background, and military aptitude, with quick reflexes and familiar with Defence team work, must be kept in reserve all the time. It follows that a good proportion of Army engineers are a 'must ' for the Survey. It is enough to have 25% or 50% from military engineers a matter of fine tuning of policy for which the judiciary has no genius and the Administration has a reach of materials and range of expertise so that Courts must keep out, save where irrational criteria, irrelevant factors, mala fide motives or gross folly enter the verdict. Have any such invalidatory infirmities been established by the challengers here ? If the induction of the army engineers has a nexus with the raison d 'etre of the Survey of India, the exact dosage needed to be drawn from that source for functional adequacy is not susceptible of judicial measurement. If gross exaggeration is indulged in to boost the military component or non existent or illusory requirements are invented for the same purpose, taking for granted judicial gullibility or jurisdictional exile, the Court will call the bluff. But here 50% of Class I services, from a historical need based or other approach, cannot be called irrational, impertinent or improvident. 1066 Likewise, the award of the length of commissioned services in the Army as service in the Survey of India cannot be dismissed as arbitrary or irrelevant. The necessity to attract such officers is a factor. The reality of their engineering experience on commission cannot be wished away. The value of such experience for the Survey of India with Defence commitments argues itself. Whether such services should be given credit wholly or at all in the new Service is more a matter of pragmatic wisdom beyond the bounds of irrationality, arbitrary fancy or departmental quasi nepotism. It is difficult to dislodge the rules, fixing the quota and grafting of service while on Army Commission on to the Survey of India service, as favoured treatment devoid of rational foundation. That is all there is to it. Sri Govindan Nair, with assertive argument, gave us anxious moments when he pleaded for minimum justice to the civilian elements. He said that the impugned rules were so designed, or did so result in the working, that all civilians, recruit or promotee, who came in with equal expectations like his military analogue, would be so outwitted at all higher levels that promotions, even in long official careers would be hopes that sour into dupes and promises that wither away as teasing illusions. In effect, even if not in intent, if a rule produces indefensible disparities, whatever the specious reasons for engrafting service weightage for the army recruits, we may have had to diagnose the malady of such frustrating inequality. After all, civilian entrants are not expendable commodities, especially when considerable civil developmental undertakings sustain the size of the service. And their contentment through promotional avenues is a relevant factor. The Survey of India is not a civil service 'sold ' to the military, stampeded by war psychosis. Nor does the philosophy of article 14 or article 16 contemplate de jure classification and de facto casteification in public services based on some meretricious or plausible differentiation. Constitutional legalistics can never drown the fundamental theses that, as the thrust of Thomas 's case(1) and the tail piece of Triloki Nath Khosa 's case(2) bring out, equality clauses in our constitutional ethic have an equalising message and egalitarian meaning which cannot be subverted by discovering classification between groups and perpetuating the inferior superior complex by a neo doctrine. Judges may interpret, even make viable, but not whittle down or undo the essence of the Article. Subba Rao J. hit the nail on the head when he cautioned in Lachhman Das vs State of Punjab:(1) The doctrine of classification is only a subsidiary rule evolved by courts to give a practical content to the said doctrine. Overemphasis on the doctrine of classification or an anxious and sustained attempt to discover some basic for classification may gradually and imperceptibly deprive the article of its glorious content. That process would inevitably end in substituting the doctrine of classification for the doctrine of equality; the fundamental right to equality before the law and the equal protection of the laws may be replaced by the doctrine of classification. The quintessence of the constitutional code of equality is brought out also by Bose, J. in Bidi Supply Co. case(2) The truth is that it is impossible to be precise, for we are dealing with intangibles and though the results are clear it is impossible to pin the thought down to any precise analysis. Article 14 sets out, to my mind, an attitude of mind, a way of life, rather than a precise rule of law. It embodies a general awareness in the consciousness of the people at large of something that exists and which is very real but which cannot be pinned down to any precise analysis of fact save to say in a given case that it falls this side of the line or that, and because of that decisions on the same point will vary as conditions vary, one conclusion in one part of the country and another somewhere else; one decision today and another tomorrow when the basis of society has altered and the structure of current social thinking is different. It is not the law that alters but the changing conditions of the times and article 14 narrows down to a question of fact which must be determined by the highest Judges in the land as each case arises. The constitutional goal is to break down inequalities steadily between man and man, whether based on status or talent. Masses of men have suffered so long from social suppressions and environmental inhibitions and to deliver them out of such stratification and petrification came the message of social justice, blowing like winds of change, with an accent on distributive justice ensured by the rule of real equal 1068 opportunity. This basic mandate of equality cannot be subverted by the pragmatic plea of classified equality without robbing articles 14 to 16 of their spiritual kernel in the process of decoding. Status to values must wither away in the march to the constitutional goals. Every Article of Part III is an article of faith of our nation and is the formal expression of a moral spiritual mandate, not a string of words whose meaning of meanings can be played with by intellectual exercises favouring the Establishment. The paramount law is value loaded. Our freedom is in peril if equality is by judicial reconstruction, a refined validation of inequality. Princes shall be treated equally but pariahs will continue where they are Why? because article 14 means only equality among equals, a self evident statement without solemn pronouncement. Mr. Justice Subba Rao in Lachhman Das 's case(1) warned against this pernicious potential. We pollute our cultural stream if we narrow the flow of constitutional equality to the little trickle of equals being made equals. The dynamic demand of levelling up unequals to the level of the higher brackets is non negotiable albeit gradual. This caveat is sounded in the last paragraph of the majority judgment in Triloki Nath(2) and is writ large in the whole of the concurring minority judgment. It binds. But we hope that this judgment will not be construed as a charter for making minute and microcosmic classifications. Excellence is, or ought to be, the goal of all good government and excellence and equality are not friendly bed fellows. A pragmatic approach has therefore to be adopted in order to harmonize the requirements of public services with the aspirations of public servants. But let us not evolve, through imperceptible extensions, a theory of classification which may subvert, perhaps submerge, the precious guarantee of equality. The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment. What after all is the operational residue of equality and equal opportunity? The point Sri Govindan Nair made from Triloki Nath(3) is, on principle, well taken but on facts, fallacious. The learned Attorney General, in the last instalment of information furnished in the course of his reply, did convince us that no such disaster as was painted did or would befall unless we take a myopic view. 1069 If we had been satisfied that the end product of the provision (Rule 5) was a manipulation of continued seniority, beyond allowance for some differences, a perpetual suppression of the civilian wing and a back door entry into and occupancy of all higher positions by the military men, it might have been a mockery of equality. But the story is that some advantage is secured by the military recruits which is intended and justified. Certainly, in the promotional scale this will be reflected. But no monopoly of all promotions vests in the commissioned recruits. As expressed earlier, rigid or relentless equalisation of divergent categories who have been brought into one Service is the Procrustean bed process, contrary to democratic social dynamics. In the first few years, the army wing had a better deal but in the next spell the civilian wing more than made up. In the next span some change occurs and a projection into the decade ahead shows that the civilians will outnumber the army men at the next two tiers. Maybe, the Surveyor General may continue to be a 'uniformed ' engineer. We do not see the pathetic picture held out by counsel and the differences we do notice are distances away from the creation of class legislation. We do not strike down the rule as constitutionally obnoxious. Sri Govindan Nair drew our attention to Pay Commission Reports which had strongly recommended fair treatment to the civilian wing by making the higher positions realistically accessible to them. Prima facie, there is some grievance if promotions at the top are totally sealed off, not in law but in fact. And simmering discontent of a whole wing is no small matter. Maybe, when the apex is occupied always by a 'brass ' boss the working of the rules and of the department may be tilted. We do consider that recommendations of the Pay Commission deserve Central Government 's early attention. Flexible provisions for promotion to higher positions which will not make the department lop sided, or vertical division of the civilian and military wings without injury to integrity and efficiency may meet the needs of equality. Policy is for the Executive, not the Judicative wing. We find no unconstitutionality but discontent should not be neglected in good government. A measure of agreement, with marginal differences in the interpretation of the rules, emerged in the course of the debate. We may as well set it down to avoid future doubt. The learned Attorney General stated, with a view to silence the grievance of the respondents, that for promotions beyond Superintending Surveyor, even officiating S.S. are 1070 considered. It is not right to contend, he said, that only on confirmation they are considered for promotion as Deputy Directors. Indeed, the learned Attorney General pointed out that many Deputy Directors have been only officiating SSs. We accept this as correct. Sri Govindan Nair, apprehending adverse winds in reversal of the High Court 's conclusion, raised fresh contentions which he was not permitted to put forward because they were new and urged only in the Supreme Court. Creative thinking is good, if it dawns in good time; for, according to our processual law, arguments unborne on the record in the High Court have no chance as a post script in the Supreme Court. For instance, he urged that commissioned officers governed by the Army Act could not be governed by any other Service Rules. So much so, the 1950 Rules, being a deviation from the Army Rules, were invalid. We illustrate but not exhaust and, in any case, do not investigate. The social philosophy of our fundamental law is a perennial flow, rising and falling, rushing to push out obstructing rocks and slowing to erode a doctrinal distortion, the power being geared to the good of the people in terms of Justice, social economic and political. From this futuristic standpoint, every decision of the Supreme Court is the focal point of the battle of the tenses, of social change versus social stability. We leave these seminal issues for future consideration when they more directly demand decision. Enough unto the day is the evil thereof. We allow the appeals but intricate constitutional questions when decided by this Court to declare the law under article 141 should be an exception to the conventional rule of costs following the event, unless other circumstances warrant. So no costs.

Rule 5 of the Survey of India (Recruitment from Corps of Engineer Officers) Rules 1950 provided that on first appointment an officer would be in the grade of Deputy Superintending Surveyor in Class I Service of the Survey of India and that seniority of military officers inter se will remain the same as in the Army. Sub rule 5 of this rule provided that among those allotted to the same year, military officers would rank senior to directly recruited civilian officers. Rule 11 of the Rules which dealt with the method of recruitment to Survey of India Class I Service provided that all recruitments to the Cadre would be 50% from the Corps of Engineer Officers, 25% from promoted Class II civilian officers and 25% from direct recruits by competitive examination through the Union Public Service Commission. These Rules were amended in 1960 and 1970 but the provision relating to military engineers remained the same as in the 1950 Rules. In a writ petition filed in the High Court, the civilian officers of the service consisting of direct recruits and Class II promotees impugned the validity of the 1950 Rules on the ground that seniority prescriptions were based on irrelevant criteria and that discrimination was writ large in the impugned provisions. The High Court, accepting the contentions of the civilian officers, struck down certain rules of the 1950 Rules as violative of Articles 14 and 16 of the Constitution. The High Court did not accept the contention of the Government that the nature and character of the work done by the Survey of India was essentially connected with defence purposes because the work done by the Department for the Army was done along with several other services carried on by it, namely, with the development projects, preparation of maps for various Ministries of the Central and State Governments, public sector undertakings and other agencies; assuming that the work was related to defence purposes, civilian officers were employed by the Department to do the same work and during emergencies, civilian officers were called upon to serve in border areas. The Department had civilian budget. For these reasons the High Court came to the conclusion that there was no ground to justify classification made under the impugned Rules between the Army officers and civilian officers because the recruits from the army could not be said to be better qualified than the civilian direct recruits and that there was no justification for adopting any discrimination in favour of the Army officers. The impugned rules were struck down on the ground that there was no reasonable nexus with the object sought to be achieved. 1037 In appeal to this Court it was contended on behalf of the State that the constitutional mandate of equal treatment applies only to equals and in the case of recruitment to the service the sources of recruitment of Army personnel and civilian entrants are different and remain different; weightage is given only at the time of entry and thereafter officers are treated as equals for all purposes of promotion and the advantage gained by the militarymen is a consequence of the initial advantage of the commissioned service for the purposes of seniority. Assuming that there is a unified cadre, since there exists a rational relation to the object sought to be achieved Article 16 cannot be said to have been violated. Allowing the appeals, ^ HELD: The 1950 Rules are valid in that they have a prominent feature which is basic namely the military nominees do not shed their army service and merge into a new service to undergo partial absorption but preserve a substantial separateness. [1054 B C] 1. Without the military engineers the Survey of India would become a functional failure in discharging its paramount duties in times of war and peace. The work done by the army wing of the Survey of India is far too important to be played with and such work is best done by that wing. The military recruits are commissioned officers with three to six years of service with certain salary scales and period of service. Giving due weight to these factors rule 5 lays down the criteria for seniority as between the military sector and the civilian sector. For the very efficiency of the Survey of India a substantial Army element is essential. Army engineers are invited into this service not because this department historically belonged to the defence forces but because in hours of crises it cannot minister to one of the major objectives of its creation if it does not have engineers with military training, courage and so on. It is fairly intelligible and basically equitable to allow military engineers credit for commissioned service and protection of already earned higher salaries. [1059 E H 1060 A B] 2. To attract engineers into the Survey of India by assuring them all that they were enjoying in their existing service, namely, credit for the years under commission in reckoning seniority and fitment of their salary and other benefits is not discrimination or favoured treatment but justice to those whom, of necessity, the service wants. [1060 C D] 3. Once it is agreed that at the entrance point the Army engineers are justly given credit for the commissioned service which they carry with them there is no further discrimination while in service on the score that they come from the Corps of Engineer Officers. All that happens thereafter is merely the manifestation of initial advantage of credit for commissioned service. [1061 D E] Mohammad Shujat Ali & Ors. vs Union of India & Ors. ; at 481; Ram Lal Wadwa & Anr. vs The State of Haryana & Ors. ; at 635; State of Punjab vs Joginder Singh [1963] Supp. 2 SCR 169 at 189; section G. Jaisinghani vs Union of India & Ors. ; ; Ganga Ram & Ors. vs Union of India & Ors. ; at 488 referred to. The 1950 Rules bring out certain incidents of service boldly. Notwithstanding the fact that they entered the Survey of India service. the Army 1038 officers continue to wear Army uniforms, they get notional promotions in the Army provided they pass the requisite Army tests when they earn corresponding promotions in the Survey of India. They can be recalled by the Army and they continue to be under the control of the Commander in Chief. When inefficiency is noticed they can be called back to the Army for being dealt with appropriately. A conspectus of the facts and circumstances governing the service makes it clear that there is no integration of the Army personnel into the Survey Service. Without such complete integration Articles 14 and 16 cannot be invoked. [1064 E G, 1065 A B] 5. Whether 25% or 50% induction from military engineers is enough is a matter of policy for which the judiciary has no genius and the administration has a reach of materials and range of expertise, so that Courts must keep out except where rational criteria, or irrelevant factors mala fide motives or gross folly enter the verdict. In the instant case reservation of 50% of Class I service for Army Officers cannot be called irrational, impertinent or improvident. [1065 F H]

8k-16k

Civil Appeal Nos. 152, 153, 155,156, 158, 160 and 162 of 1972. From the Judgment and Order dated 20.11. 1970 of the Andhra Pradesh High Court in W.A. No. 616 of 1969. 103 of 1970, 472 397 of 1970,474 of 1970,473 of 1970,99of 1970 and W.P. No. 4947 of 1968. G. Venkatesh Rao and A.V. Rangam for the Appellants. C. Sitaramiah, B. Parthasarthi, A.D.N. Rao and A. Subba Rao the Respondents. The Judgment of the Court was delivered by K.N. SAIKIA, J. These seven appeals by certificate under Article 133(1)(a) of the Constitution of India are from the common Judgment of the Andhra Pradesh High Court dated 20.11.1970 in several appeals and writ petitions. The appel lants are the tenants and respondents are the landholders or their legal representatives, as the case may be, in respect of the tenanted agricultural lands of the hitherto inam estates of Kukunuru and Veerabhadrapuram villages in the West Godavari District of Andhra Pradesh. After coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948 (A.P. Act 25 of 1948), hereinafter referred to as `the Estates Abolition Act ', the inam estates were abolished and the land stood vested in the Government free of all encumbrances. The pre existing right, title and interest of erstwhile landholders ceased except to claim ryotwari patta. The tenants were not liable to be evicted pending the proceedings for issuance of ryotwari patta. The respondents landholders, hereinafter referred to as `the landholders ', claimed that the lands in question were either under their personal cultivation or they intended to resume those for private cultivation and as such those were their private lands and they were entitled to ryotwari pattas. The appellants tenants on the contrary claimed that those were not private lands of the landholders as those were neither under their personal cultivation nor they intended to resume those for personal cultivation, but those were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates. The Settlement Officer of Anakappalla, after making inquiry under section 25 of the Estates Abolition Act held in all the cases in these appeals, except one (out of which W.P. No. 695/1968 arose) that the landholders failed to establish that they were personally cultivating the lands or they intended to resume the lands for personal cultivation and as such rejected their claims, except in the aforesaid case. The landholders ' appeals therefrom to the Estates Abolition Tribunal were 398 allowed relying on. and applying the tests formulated in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (FB) and holding that in all cases the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3(10)(b)(i) of the Andhra Pradesh. (Andhra Area) Estates Land Act, 1908 (A.P. Act I of 1908), hereinaf ter referred to as `the Estates Land Act ', and that the tenants were not entitled to ryotwari pattas in respect of the same. The appellants tenants moved writ petitions before the High Court of Andhra Pradesh impugning the deci sion of the Estates Abolition Tribunal. O. Chinnappa Reddy, J. as he then was, sitting singly, after discussing the case law on the question, by a common Judgment in nine writ petitions, observing that it was common ground before the Subordinate Tribunal as well as before him that the nature of the lands at the inception, whether ryoti or private, was not known and that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and that the lands were sometimes leased under short term leases, there were no other circumstances indicating that the landholders intended to resume cultivation of the lands, held that after the pronouncement of this Court in Chidambaraam Chettiar vs Santhanaramaswamy Odayar; , , the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, (supra) could no longer be considered good law and that the decision in Jagdeesarn Pillai vs Kupparnreal, ILR and in Perish Priest of Karayar vs Thiaga raja Swami Devasthanam, App. 176 178 and 493 of 1946 once more held the field. It was also observed that since in all the cases before him the only mode of proof attempted by the land holders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no `at tempt was made to prove personal cultivation or any inten tion to resume personal cultivation. As the Estates Aboli tion Tribunal applied the tests laid down by the Madras Full Bench in Periannan 's case (supra) and since Periannan 's case was no longer good law, the writ petitions had to be allowed and the impugned orders of the Tribunal quashed in eight writ petitions. In Writ Petition No. 695 of 1968 the orders of the Assistant Settlement Officer was quashed. The landholders preferred writ appeals therefrom. Two Writ Petitions, namely, Writ Petition No. 4947 of 1968 and Writ Petition No. 310 of 1968 were also taken up for hearing analogously. The Division Bench observing that the main question for consideration in the appeals was whether the decision of the Full Bench in Periannan 's 399 case was good law and it turned on the effect of some impor tant precedents and a review of the principles enunciated by them, and after discussing the case law took the view that in the first place the e observations of this Court in Chidambaram 's case were in accord with the rule in Perian nan 's case and secondly, even if some of the dicta in the Judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been im pliedly overruled by this Court. The writ appeals were accordingly allowed except Writ Appeal No. 616 of 1969 which was dismissed. Writ Petition No. 4947 of was allowed and Writ Petition No. 310 of 1968 was dismissed taking the same view. Hence these appeals by certificate. Mr. A.V. Rangam, the learned counsel for the appellants, submits that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as those were neither under their personal cultivation nor they were intended to be resumed for personal cultivation and applying the rule in Chidamba ram 's case the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; and that the learned Single Judge correctly held that Periannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, (supra), it was held that the definition of private land in section 3(10) of the Estates Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases, it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases, the Division Bench erred in holding that Periannan 's test were still applicable. Mr. C. Sitaramiah, the learned counsel for the respondents. submits that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case and the Division Bench correctly applied those tests to find that the lands were private lands of the landholders; and that in Chidambaram 's case the appellant had not adduced sufficient evidence to rebut the presumption under section 185 of the Estates Land Act that the lands con cerned in the inam village were not ryoti lands as defined in section 3(16) as the Tanjore Palace Estate was held to be an `estate ' within the meaning of section 3(2)(d) of the Estates Land Act and the widows of the Raja enjoyed both the varams, but were not personally cultivating 400 them. In the instant case, according to counsel, the rights of the landholders were not the same as those of the widows of the Raja of Tanjore after the relinquishment of the landed properties by the Government which amounted to a re grant. The Division Bench pointed out several misconceptions in some precedents for which they could not be said to have laid down the correct law. Counsel further submits that in Chidambaram 's case, the grant of Orathur Padugai village was of the whole village and a named one and, therefore, it was an Estate within the meaning of section 3(2)(d) of Estates Land Act and the courts having concurrently found that the lands in dispute were ryoti lands and not private lands, the landholders claiming that the lands were private lands had to show that they converted the ryoti lands into private lands which they could prove only by showing their personal cultivation and they failed to prove it, and that case was therefore distinguishable on facts and could not be held to have overruled Periannan 's tests. The question to be decided in these appeals, therefore, is whether in view of this Court 's decision in Chidamba rarn 's case the decision in Periannan 's case is still good law, and whether on application of the correct legal tests the lands in dispute are private lands of the landholders entitling them to ryotwari pattas in respect thereof or those are ryoti lands in possession of the appellants as tenants of the landholders and, as such, they are entitled to ryotwari pattas thereof. In other words, whether the appellants or the respondents are entitled to ryotwari pattas under the Abolition of Estates Act. To appreciate the rival submissions, reference to the relevant provisions of the Estates Land Act and the Estates Abolition Act is necessary, and to understand the relevant provisions of the two Acts a little knowledge of development of the land system and legislation in the area will be helpful. The Estates Land Act amended and declared the law relat ing to the holding on land in estated in the Andhra Area of the State of Andhra Pradesh which includes the West Godavari District to which the two inam villages concerned in this appeal belong. It appears the scheme of the Estates Land Act divides cultivable lands in the two categories, namely, (1) private lands and (2) ryoti lands. The Act relates to the holding of land in estates. As defined in section 3(2) `estate ' means: "(a) any permanently settled estate or temporarily settled zamindari; 401 (b) any portion of such permanently settled estate or tempo rarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) (i) any inam village, or (ii) any hamlet or khandriga in an inam village, of which the grant as an inam has been made, confirmed or recognized by the Government, notwithstanding that subse quent to the grant, such village, hamlet or khandriga has been partitioned among the grantees, or the successors intitle of the grantee or grantees. [Explanation: (1) Where a grant as an inam is expressed to be of a named village, [hamlet of khandriga in an inam village] the area which forms the subject matter of the grant shall be deemed to be an estate notwithstanding that: it did not include certain lands in the village [hamlet or khandriga] of that name which have already been granted on service or other tenure or been reserved for communal pur poses]. [Explanation: (1 A) An inam village, hamlet or kandriga in an inam village granted in inam, shall be deemed to be an estate, even though it was confirmed or recognized on dif ferent dates, or by different title deeds or in favour of different persons. Explanation: (1 B) [If any hamlet or khandriga granted as inam] was at any time designated as an inam village of as a part thereof in the revenue accounts, it shall for purposes of item (ii) or sub clause (d) be treated as being a hamlet or khandriga of an inam village, notwithstanding that subse quently it [has come to be designated] in the Revenue ac counts as a ryotwari or zamindari village or part thereof]. Explanation (2) Where an inam village is resumed by the State Government, it shall cease to be an estate; but, if any village so resumed is subsequently regranted by the Government as an inam, it shall from the date of such re grant, be regarded as an estate. 402 Explanation (3): Where a portion of an inam village is resumed by the Government such portion shall cease to be part of the estate, but the rest of the village shall be deemed to be an inam village for the purposes of this sub clause. If the portion so resumed or any part thereof is subsequently regranted by the Government as an inam, such portion or part shall from the date of such re grant. be regarded as forming part of the inam village for the purpose of this sub clause; (e) any portion consisting of one or more villages of any of the estates specified above in clauses (a), (b) and (c) which is held on a permanent under tenure . " It appears that the original definition had undergone several amendments. Clause (d) and Explanation (I A) were substituted by section 2(i) of Act XXXV of 1956. The Explanation (1) was inserted by section 2(1) of Act 1I of 1945. Explanation (1) and (1 B) were amended by section 2(ii) of Act XXXV of 1956 and Explanation (2) and (3) are the renumbered old Explana tions (1) and (2) inserted by section 2(1) of Act H of 1945. The respondents claim to have been `landholders '. As defined in section 3(5): `Landholder ' means a person owning an estate or part there of and includes every person entitled to collect the rents of the whole or any portion of the estate by virtue of any transfer from the owner or his predecessor in title or of any order of a competent Court or of any provision of law. Where there is a dispute between two or more persons as to which of them is the landholder for all or any of the purposes of this Act or between two or more joint landholders as to which of them is entitled to proceed and be dealt with as such landholder, the person who shall be deemed to be the landholder for such purposes shall be the person whom the Collector subject to any decree or order of a competent Civil Court may recognize or nominate as such landholder in accordance with rules to be flamed by the State Government in this behalf. " Both "Private land" and "ryoti land" have been defined in the Act. As 403 defined in section 3(10) private land means: "(a) in the case of an estate within the meaning of sub clauses (a), (b), (c) or (e) of clause (2) means the domain or home farm land of the landholder by whatever designation known such as, kambattam, khas, sir, or pannai, and includes all land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the commencement of this Act; and (b) in the case of an estate within the meaning of subclause (d) of clause (2), means (i) the domain or home farm land of the landholders, by whatever designation known, such as kambattam, khas, sir or pannai; or (ii) land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired stock, for a continuous period of twelve years immedi ately before the first day of July 1908, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land; or (iii) land which is proved to have been cultivated by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the first day of November, 1933, provided that the landholder has retained the kudiva ram ever since and has not converted the land into ryoti land; or (iv) land the entire kudivaram in which was acquired by the landholder before the first day of November, 1933 for valu able consideration from a person owning the kudivaram but not the melvaram, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land, and provided further that, where the kudivaram was acquired at a sale for arrears of rent, the land shall not be deemed to be private land unless it is proved to have been cultivated by the landholder him 404 self, by his own servants or by hired labour, with his own or hired stock. for a continuous period of twelve years since the acquisition of the land and before the commence ment of the Andhra Pradesh (Andhra Area) Estates land (Third Amendment) Act, 1936. " As defined in section 3(16): `Ryoti land ' means cultivable land in an estate other than private land but does not include (a) beds and bunds of tanks and of supply, drainage surplus of irrigation channels; (b) threshing floor, catfie stands, village sites, and other lands situated in any estate which are set apart for the common use of the villagers; (c) land granted on service tenure either free of rent or on favourable rent if granted before the passing of this Act or free of rent if granted after that date, so long as the service tenure subsists. Village is defined in section 3(19): `Village ' means any local area situated in or constituting an estate which is designated as a village in the revenue accounts and for which the revenue accounts are separately maintained by one or more karnams or which is now recognized by the State Government or may hereafter be by the State Government for the purposes of this Act to be a village, and includes any hamlet or hamlets which may be attached there to." The Estates Abolition Act provided for `the repeal of the permanent settlement, the acquisition of the landholders in permanent estate and in certain other estates in the State of Andhra Pradesh and the introduction of the ryotwari settlement in such estates. It extended to the whole of the State of Andhra Pradesh and applied to all estates as de fined in section 3 clause (2) of the Estates Land Act. This Act, in section 2(3) defined `estate ' to mean a zamindari or an under tenure or an inam estate. As defined in section 2(7) `inam estate ' means an estate within the meaning of section 3, clause (2)(d) of the Estates Land Act. 405 The statement of objects and reasons of the Estates Abolition Act speaks of acute discontent among estate ryots and good deal of agitation under zamindari administration which was considered to have outlived its usefulness and needed abolition. It also mentioned about the election manifesto issued by the Working Committee of the Congress Party in December 1945 urging reform of the land system and that such reform involved the removal of all intermediaries between the peasant and the State and that the rights of such intermediaries should be abolished on payment of equi table compensation. In February 1947 the Madras Legislative Council passed a resolution accepting the general principle of the abolition of the zamindari system and recommending to the Government that legislation for the purpose be undertak en and brought forward at an early date. The Government accordingly proposed to abolish the zamindari system by acquiring all estates governed by the Estates Land Act including whole inam villages and converting them into ryotwari paying equitable compensation to the several per sons having an interest in the estates. The Estates Abolition Act has also undergone a number of amendments. The Amendment Act 1 of 1950 inserted section 54(a)& section 54(b) dealing with compensation. The Amendment Act XVII of 1951 clarified certain positions in regard to Inam vil lages. Section 17(1) of the Estates Abolition Act provided for the grant of ryotwari patta to a person holding any land granted on service tenure failing under section 3(16)(c) of the Estates Land Act irrespective of whether such land consisted of only a portion of a village or of one or more villages. The reference to one or more villages in the section had given rise to the misapprehension that it applied also to an entire village granted on service tenure. But the intention was that the provisions of the section should not apply to such a village and clause 3 of the Act gave effect to it and clause 4 was consequential of clause 3. The provisions of the Estates Abolition Act were brought into force in certain inam villages on the assumption that they were under tenure estates. But it had been subsequently found that the assump tion was not correct. It was therefore necessary to withdraw the operation of the Act from those villages and the Amend ment Act provided for such withdrawal. The Amendment Act XXI of 1956 dealt with annual payments to any religious educa tional or charitable institutions. The Amendment Act XVII of 1957 made provisions for the abolition and conversion in the ryotwari tenure of certain categories of inams under the Estates Abolition Act. Under section 3(2)(d) of the Estates Land Act, as originally enacted,.whole inam villages in respect of which the original grant conferred only the melvaram right on a person not owning the kudivaram thereof alone 406 became `estates '. By virtue of Third Amendment of the Es tates Land Act whole inam villages m which both melvaram and kudivaram rights vested in the inamdars also became estates. The provisions of the Madras Estates Land (Reduction of Rent) Act, 1947 (Madras Act XXX of 1947) were applicable to both these categories of whole inam villages. But the provi sions of the Estates Abolition Act were not applicable to the whole inam villages which became estates under the Madras Estates, Land (Third Amendment) Act, 1936, i.e. those in which the inamdars possessed both the melvaram and kudi varam rights. Under section 2 of the Estates Land Amendment Act, 1946, section 3(2)(d) of the Estates Land Act was further amended so as to include within the definition of `estate ' hamlets and khandrigas of inam villages which were previously held to be not estates. Provision was also made so as to bring within its purview only such of the inam hamlets and inam khandrigas of inam villages wherein the melvaram rights alone vest in the inamdars. Thus, the only categories of inam estates which now remained outside the purview of the Estates Abolition Act were: (a) the whole inam village which became estate by virtue of the Madras Act XVIII of 1936 and (b) inam hamlets and khandrigas of inam villages which became estates by virtue of the Estates Land (Andhra Amend ment) Act, 1956 but in respect of which both melvaram and kudivaram rights vested in the inamdars. The Amendment Act XX of 1960 dealt with all post 1936 inam villages which were also brought within the purview of the Estates Abolition Act by the Amendment Act XVIII of 1957. The Andhra Pradesh (Andhra Area) Inams (Abolition and Conversion into Ryotwari) Act, 1956 (Act XXXVII of 1956) provided for conversion of all inam lands other than estates into ryotwari tenure. The Act extended to the whole of the Andhra State, but applied only to lands described in clause (c) of section 2. Section 2(c) defined "inam land" to mean any land in respect of which the grant in inam has been made, confirmed or recognised by the Government, (Act 3 of 1964 inserted thereafter the words) "land includes any land in the merged territory of Banagana palle in respect of which the grant in inam has been made, confirmed or recognised by any former Ruler of the territo ry", but does not include an inam constituting an estate under the Estates Land Act. Section 2(d) defines an "Inam Village" to mean a village designated as such in the revenue accounts of the Government, (and includes a village so designated immediately before it was notified and taken over by the Government under the Estates Abolition Act. Thus to find out whether a `village was designated as inam village or not, prima facie the revenue accounts of the Government which 407 were there at the time of the Inam Abolition Act came into force had to be looked into. If it was so shown no further proof was necessary. Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the evidence Act. Section 2 A of this Act said: "Notwithstanding anything contained in this Act all communal lands and poramookes, grazing lands, waste lands. forest lands, mines and quer ries, tanks, tank beds and irrigation works, streams and rivers, fisheries and ferries in the inam lands shall stand transferred to the Government and vest in them free of all encumbrances. " Section 3 of the Act prescribed the procedure for deter mination of inam lands and provided for giving opportunity to interested persons. As we have already noted the High Court found that the basis of the decision of the Tribunal in all the cases was that .sometimes the leases were for short terms with occa sional change of tenants and rents payable by them and that the nature of the lands, whether ryoti or private, was not known and that it was the burden of the landholder to prove that the lands were private lands and that there was no other circumstances to show that the landholders intended to resume cultivation of the same. It was conceded before the Single Bench by the learned Advocate for the petitioners that if the tests formulated by the Full Bench in Perian nan 's case applied to the facts of these cases the land must be held to be private land and the landholders must be considered to have established their claim to grant of ryotwari pattas. The Division Bench did not change this position in view of the provisions of Section 185 of the Estates Land Act as amended from time to time. The original section said: "185. When in any suit or proceeding it becomes necessary to determine whether any land is landholder 's private land, regard shall be had to local custom and to the question whether the land was before the first day of July 1898, specifically let as private land and to any other evidence that may be produced, but the land shall be presumed not to be private land untill the contrary is shown: Provided that all land which is proved to have been cultivated as private land by the landholder himself, by his own servants 408 or by hired labour with his own or hired stock for twelve years immediately before the commencement of this Act shall be deemed to be the landholder 's private land. " Section 185 was amended in 1934, 1936 and 1955 whereafter it as follows: "185. When in any suit or proceeding it becomes necessary to determine whether any land is the landholder 's private land, regard shall be had (1) to local custom, (2) in the case of an estate within the meaning of subclause (a) (b), (c) or (c) of clause (2) of section 3 to the ques tion whether the land was before the first day of July 1898, specifically let as private land and (3) to any other evidence that may be produced: Provided that the land shall be presumed not to be private land until the contrary is proved: Provided .further that in the case of an estate within the meaning of sub clause (d) of clause (2) of sec tion 3 (i) any expression in a lease, patta or the like, executed or issued on or after the first day of July 1918, to the effect or implying that a tenant has no right of occupancy or that his right of occupancy is limited or restricted in any manner, shall not be admissible in evidence for the purpose of proving that the land concerned was private land at the commencement of the tenancy; and (ii) any such expression in a lease, patta or the like, executed or issued before the first day of July 1918, shall not by itself be sufficient for the purpose of proving that the land concerned was private land at the commencement of the tenancy. " When the Estates Abolition Act was passed, the legisla ture envisaged the difficulties that could arise in respect of the estates in which the landholder would be entitled to ryotwari patta. Section 13 409 provided as to in respect of what lands in inam estates the landholder would be entitled to ryotwari patta and said: 13. Lands in inam estate in which landholder is entitled to ryotwari patta: In the case of an inam estate, the landholder shall, with effect on and from the notified date, be entitled to ryotwari patta in respect of (a) all lands (including lanka lands) which immediately before the notified date, (i) belonged to him as private land within the meaning of Section 3, clause (10)(b) of the Estates I.and Act, or (ii) stood recorded as private land in a record prepared under the provisions of Chapter XI or Chapter XII of the said Act, not having been subsequently converted into ryoti land; and (b)(i) all lands which were properly included, or which ought to have been properly included, in the holding of a ryot and which have been acquired by the landholder, by inheritance or succession under a will provided that the landholder has cultivated such lands himself, by his own servants or by hired labour with his own or hired stock, in the ordinary course of husbandry, from the date of such acquisition or the 1st day of July, 1945 whichever is later and has been in direct and continuous possession of such lands from such later date; (ii) all lands which were properly included, or which ought to have been properly included in the holding of the ryot and which have been acquired by the landholder by purchase, exchange or gift, including purchase at a sale or arrears of rent; Provided that the landholder has cultivated such lands himself, by his own servants or by hired labour, with his own or hired stock, in the ordinary course of husbandry from the 1st day of July, 1945 and has been in direct and continuous possession of such lands from that date; (iii) all lands [not being (i) lanka lands], (ii) lands of the description specified in Section 3, clause (16), sub clauses (a), (b) and (c) of the Estates Land Act, or (iii) forest lands which have been abandoned or relinquished by a ryot, or 410 which have never been in the occupation of a ryot, provided that the landholder has cultivated such lands himself, or by his own servants or hired labour, with his own or hired stock, in the ordinary course of husbandry, from the 1st day of July, 1945 and has been in direct and continuous posses sion of such lands from that date. Explanation: `Cultivate ' in this clause includes the plant ing and rearing of topes, gardens and orchards, but does not include the rearing of topes of spontaneous growth. " Section 15 dealt with the determination of lands in which the landholder would be entitled to ryotwari patta under the foregoing provisions of the Act and said: "(1) The Settlement Officer shall examine the nature and history of all lands in respect of which the landholder claims a ryotwari patta under Sections 12, 13 or 14, as the case may be, and decide in respect of which lands the claim should be allowed. XX XX XX XX XX XX XX XX XX XX An interpretation of the words "Private land" and "ryoti land" has to be made in consonance with the legislative purpose, provisions and scheme of the enactment. Interpre tare et concordare leges legibus, est optimus interpretandi modus. To interpret and in such a way as to harmonize laws with laws is the best mode of interpretation. We may now examine the question whether the tests formu lated in Periannan 's case (supra) can still be applied in face of the decision in Chidambaram 's case (supra). In other words whether Periannan 's decision is still a good law. In Periannan the Full Bench of Madras High Court dealt with a batch of second appeals and a batch of civil revision peti tions. The suits out which the second appeals arose. related to the village of Manamelpatti, a Dharmasanam village in the Ramnad District and those were instituted by the trustees of Airabhadeswarar Soundaranayagi Amman Temple for ejectment of the defendants from the lands in their respective possession and for recovery of rent for faslis 1349 and 1350 and for future profits. The village comprised 80 pangus out of which the plaint temple in this batch owned 231/2 pangus purchased from the original owners and one pangu taken on othi from the owner. The plaintiffs in the batch of suits out of which the civil 411 revision petitions arose were the managers of the Devastha nam of Nagara Vairavapatti Valaroleeswaraswami Nagara Vaira vaswami Devasthanam. That temple owned 54 and 5/8th pangus or shares in the village and the suits were instituted for recovery of the balance of amounts due as `irubhogam ' for faslis 1349 and 1350. In both the batches of suits the plaintiffs claimed that they were the owners of meIvaram and kudivaram interests in the lands which were being enjoyed as "pannai" lands or private lands; that they were leasing the lands from time to time changing tenants and collecting "swamibhogam" in recognition of their full proprietary rights in the lands. They claimed that the tenants had no occupancy rights in the lands; and in the second appeals batch a relief for ejectment of the tenants was also claimed. The defence of defendants tenants in both the batches was common. They claimed that the temples owned only the melvaram interest and that they, the tenants, were the owners of the kudivaram which they had been enjoying heredi tarily paying half varam in respect of the nanjas and a fixed money rent for the punja or dry lands according to the "tharam" (classification) of lands. They denied that they ever paid "swami bhogam" to the temple. In all the suits there was the common plea that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act, as amended by the Madras Estates Land (Amendment) Act, 1936 (Act XVIII of 1936); that they had therefore acquired occu pancy rights under the Act; and that the lands were ryoti and that, therefore, the civil court had no jurisdiction to try those suits. The plaintiffs also raised an alternative contention that on the footing that the village was an "estate" the suit lands were private lands or "pannai" lands of the temples and, therefore, the defendants acquired no occupancy rights in the lands under the statute and that the civil court alone had the jurisdiction to entertain and try the suits. The High Court found that the main questions that had to be considered by the courts below were whether the village was or was not an estate under the Madras Estates Land Act and, if so, whether the lands were private lands as claimed by the plaintiffs or ryoti lands as claimed by the tenants. The further question that even apart from the Estates Land Act whether the defendants had acquired occupancy rights by prescription was also raised and considered. The jurisdic tion of the civil court to entertain the suits depended upon the decision of the question whether the village was or was not an estate. On the main questions the concurrent findings of the Courts below were that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act as amended in 1936, that the plaint temple owned the melvaram and kudivaram interests in the lands; that the lands were 412 private lands as defined by the Madras Estates Land Act; that the defendants had acquired no occupancy rights in the lands either under the Act or by prescription and that the suits were properly laid in the civil court which had un doubted jurisdiction to try the suits. The Subordinate Judge, in appeals, agreed with the finding of the trial court but refused the plaintiff 's relief for ejectment on the ground that the tenancy was not lawfully terminated. The lands in both the sets of cases were situated in the same village of Manamelpatti. Before the High Court the findings of the courts below that the temple owned the melvaram and kudivaram interests in the lands and the defendants had not acquired permanent rights of occupancy in the lands apart from the Act had not been disputed by the defendants. The dispute, therefore, was confined to two questions, namely, first, whether the vil lage was an "estate" under the Madras Estates Land Act and, secondly, whether the concurrent finding of the courts below that the lands were private lands of the temple was correct or not. While deciding the second question and dismissing the second appeals and the civil revision petitions, the learned Judges discussed the relevant case law and therefrom Satyanarayana Rao, J with whom Vaswanath Sastri, J con curred, at paragraph 49 page 346 of the report held that the following propositions were established: "1. If the land is known to be ryoti at its inception the only mode by which it could be converted into private land is by proof of continuous cultivation for a period of 12 years prior to the commencement of the Act. Even if the nature of the land is not known, continuous cultivation for the required period of 12 years before the commencement of the Act would conclusively establish that the land is private land. If there is no proof of cultivation for a continuous period of 12 years before the commencement of the Act, the land may be proved to be private land by other methods; provided the land was not shown to be once ryoti. Cultivation of the lands or leasing of the lands under short term leases may be one mode of proof. An intention to cultivate or resume for cultivation is also a test to decide that the land is private land and such 413 intention may be established by any other means, not neces sarily by cultivation and by cultivation alone. The essence of private land is continuous course of conduct on the part of the land holder asserting and acting on the footing that he is the absolute owner thereof and recognition and acceptance by the tenants that the landhold er has absolute right in the land. Mere proof that the land holder is the owner of both the warams is not sufficient to prove that the land is private land. " Considered in light of the definition of "private land", sections 13 and 15 of the Estates Abolition Act and the basic concept of "domain or home farm land", we are of the view that the proposition 4, 5 and 6 above have to be doubt ed. Viswanatha Sastri, J. who concurred summarised his conclusions as under: "I may now summarise my conclusion on the legal aspects of the case. Where land proved or admitted to be once ryoti land is claimed to have been converted into private land, the claim is untenable unless the land holder proves direct cultivation for a period of 12 years before 1st July 1908. No other mode of conversion is permissible. Where you have to find out whether a land is private or ryoti its original character not being known, proof of direct cultivation of the land by the land holder for 12 years before 1st July 1908, would, without other evidence, conclusively establish its character as private land, but this is not the only mode of proof permitted to land holder. Other evidence may be adduced and looked into and might consist, among other matters, of direct cultivation of the land at some period anterior to 12 years preceding 1st July 1908 but this is not indispensable. Direct cultivation may be valuable and weighty evidence and may be inferred from accounts and other records usually kept by large land holders. If, owing to lapse of time or other reasons, evi dence of direct cultivation is not forthcoming its absence is not fatal to the claim that the land is private. section 185 of the Act 414 does not shut out, but on the other hand allows all evidence that would be relevant and admissible under the law of evidence, to prove that fact in issue, namely, whether the land is private or ryoti. Local usage or custom and the letting of the land as private land in leases before 1898 are specifically mentioned in Ss. 185(1) and (2) as being relevant evidence but other evidence is also expressly made admissible under section 185(3). The classification of lands as private lands at the time of the permanent settlement or in the early records of zamindaries, the terms of the grant of an undertenure, the assertion and enjoyment by the land holder of the right to both the warams, the intention to retain with himself the kudiwaram right and the consequent right to resume direct cultivation if he chooses, leases of the lands as private lands or with terms and conditions inconsistent with any right of occupancy in the leases, admissions by tenants that the land holder is the owner of both warams and that they have no occupancy rights, changes in the personnel of the tenants, variations in the rates of rent payable by the tenants these and kindred matters would be relevant and admissible in evidence to prove that the lands are private lands. The probative value of such evidence depends on the facts and circumstance of each case. The burden of proof that a particular land in an estate is private land rests on the land holder, the statu tory presumption being the other way. This burden is not discharged merely by proving that both the warams were granted to or enjoyed by the land holder once upon a time. There must be evidence of the treatment of the lands as private lands by the land holder, either by direct cultiva tion or otherwise in the manner above stated. " Considering the statutory definition, in our opinion, the third paragraph and last part of last paragraph above have to be doubted. Raghava Rao, J. who dissented summarised his conclusions separately. We are not oblivious the fact that on the basis of the above propositions cases have been decided for a long time. But their tenability having been questioned in the instant case we proceed to examine them. The above propositions no doubt refer to different 415 aspects including the evidentiary aspect of the question of determination of `private lands ' and `ryoti lands ' but it may be difficult to hold that each or all of them by them selves laid down any rule to be invariably followed irre spective of the history, location and nature of the estates, their cultivation and the customs governing them. There is also no sufficient exposition of the central concept of `domain ' and `home farm ' lands in the above propositions. These words were not defined ,in the Estates Land Act In Zamindar of Chellapalli vs Rajalapati Somayya, , Wallis C.J. adopted the dictionary meaning, namely, "the land about the mansion house of a Lord and in his immediate occupancy". Seshagiri Aiyar, J. in the same case quoted from the Encyclopaedia Brittanica, Vol. III (3): `Domain ' as synonymous to `Domesne ' and is explained as follows: "Domesne (Domeine, Demain, Domain etc.) that portion of the land of a manor not granted out in the freehold tenancy, but (a) retained by the lord of the manor for his own use and occupation, or (b) let out as tenemental land to his retain ers or `villani. ' The domesne land originally held at the will of the landlord, in course of time came to acquire fixity of tenure and developed into the modern copyhold. It is from domesne as used in sense (a) that the modern re stricted use of the word comes, i.e., `land immediately surrounding the mansion or dwelling house, the park or chase '." In Jagadeesam Pillai vs Kupoarnmal (supra) which related to lands in an inam village which was part of the Tanjore palace, Wadsworth, Offg. C.J. accepeted the interpretation put upon the word "Domain" by Wailis, C.J. and Sesnagiri Aiyar, J. In Chellapalli case (supra) as meaning "land immediately surrounding the mansion or dwelling house, the park or chase" and that connoted land appurtenant to the mansion of the lord of the manor kept by the landlord for his personal use and cultivated under his personal supervi sion as distinct from lands let to tenants to be farmed without any control from the lord of the manor other than such control as in incident to the lease. The learned Judge further observed: "It seems to us that the sub clause (b)(1) of the definition is intended to cover those lands which come obviously within what would ordinarily be recognised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use. " In Parish Priest of Karayar Parish vs Thiagarajaswami Devas 416 thanam, (supra) Subba Rao and Chandra Reddy, JJ accepted the test laid down in Jagadeesam (supra) and the legal position was summarised as follows: "The legal position having regard to the provisions of the Act and the decisions dealing with them in so far as it is relevant for the purposes of this case may briefly be stated thus. Private land as defined under the Madras Land Estates Act comprises two categories, private lands, technically so called and lands deemed to be private lands. In regard to private lands strictly so called, it must be a domain or home farm land as understood in law. The mere fact that particular lands are described in popular province as pan nai, kambattam, sir, khas, is not decisive of the question unless the lands so called partake of the characteristics of domain or home farm lands. The test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in `Mallikarjuna Prasad vs Somayya ', i.e. land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a season. Whenever a question therefore arises whether a land is private land technically so called, as defined in sub clause (1) of clause (b) to section 3(10) the presumption is that it is not a private land. The recitals in the leases, pattas etc. after 1918 must be excluded and the recitals in similar documents prior to 1918 in them selves are not sufficient evidence. There must be in addi tion direct evidence that these lands were either domain or home farm lands in the sense that they were in their origin lands directly cultivated by the landlord or reserved by him for his direct cultivation. We are not concerned in this case with the question whether ryoti lands could be convert ed into private lands. " The trend not to confine the concept of private lands only to domain or home farm lands but to include in it lands situate outside in which land holder had granted leases or made arrangements for cultivation with a view to resume them for personal cultivation did not find favour in the above three decisions. In Chidambaram Chettiar (supra) involved lands in Orathur 417 Padugai in Tanjore Palace Estate. The Raja of Tanjore having died without leaving any male issue the East India Company took possession of all his properties including his private property. Later, on representation of the senior widow of the late Raja, the Government of India in 1962 "sanctioned the relinquishment of the whole of the landed property of the Tanjore Raja in favour of the heirs of the late Raja. " The Tanjore Palace Estate thus came into existence. In 1948 the appellant purchased the suit lands situate in Orathur Padugai within Tanjore Palace Estate and instituted suits for possession from the various defendants. The Trial Court having dismissed the suits on the ground that the lands were situated in an estate as defined in section 3(2)(d) of the Madras Estates Land Act and they were ryoti lands as defined in section 3(16) in which the defendants have acquired occupancy rights. The Madras High Court having affirmed that decree in appeal, the appellant came to this Court contending that the lands did not form an `estate ' under section 3(2)(d) because the restoration did not amount to a fresh grant but only resto ration of status quo ante; that Orathur Padugai was not a whole village to be an estate and that the widows of the late Raja enjoyed both the varams and the lands purchased by the appellant were private lands under section 3(10)(b) so that the defendants did not have any occupancy rights therein. Holding that the relinquishment by the Government in 1962 amounted to a fresh grant and that since 1830 onwards Ora thur Padugai was a whole village and therefore an estate, their Lordships enunciated the tests as to private land thus: "Under section 3(10) of the Act, private land comprises of two categories, private lands technically so called, and lands deemed to be private lands. In regard to private lands technically so called, it must be the domain or home farm land of the landholder as understood in law. The mere fact that particular lands are described in popular parlance as pannai, kambattam, sir, khas, is not decisive of the ques tion unless the lands so called partake of the characteris tics of domain or home fair lands. In our opinion the cor rect test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR , that is whether it is land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a sea son. The Legislature did not use the words `domain or home farm land without attaching to them ,a meaning; and it is reasonable to suppose that the Legislature would 418 attach to these words the meaning which would be given to them in ordinary English. It seems to us that the sub clause (b)(i) of the definition is intended to cover those lands which come obviously within what would ordinarily be recog nised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use. The home farm is land which the landlord cultivates himself, as distinct from land which he lets out to tenants to be farmed. The first clause is, therefore meant to include and signify those lands which are in the ordinary sense of the word home farm lands. The other clauses of the definition appear to deal with those lands which would not necessarily be regarded as homefarm lands in the ordinary usage of the term; and with reference to those lands there is a proviso that lands purchased at a sale for arrears of revenue shall not be regarded as private lands unless cultivated directly by the landlord for the required period. It seems to us that the definition reads as a whole indicates clearly that the ordinary test for `private land ' is the test of retention by the landholder for his personal use and cultivation by him or under his personal supervi sion. No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive character; but it is not the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short term leases. There must, in our opinion be something in the evidence either by way of proof of direct cultivation or by some clear indication of an intent to regard these lands as retained for the personal use of the landholder and his establishment in order to place those lands in the special category of private lands in which a tenant under the Act cannot acquire occupancy rights. " The concept of home farm does not appear to be much different from that of domain. According to Black 's Law Dictionary, a farm means body of land under one ownership devoted to agriculture, either to raising crops or pasture or both. The word farm means a considerable tract of land or number of small tracts devoted wholly or partially to agri cultural purposesor pasturage of cattle but may also include woodland. The term does not necessarily include only the land 419 under cultivation and within a fence. It may include all the land which forms part of the tract and may also include several connected parcels under one control. According to Collins English Dictionary, farm means a tract of land usually with house and buildings cultivated as unit or used to rear livestock. According to Webster 's Comprehensive Dictionary, International Edition, farm means a tract of land forming a single property and devoted to agricultural stock raising dairing and some allied activity. We are therefore of the view that home farm necessarily implies a farm with the home of the landholder. Pollock & Maitland in The History of English Law, 2nd Edn. Vol. 1, at pp 362 363 describing the manorial arrange ment in England wrote: "Postponing until a late time any debate as to whether the term manor bore a technical meaning, we observe that this term is constantly used to describe a proprietary unit of common occurrence: the well to do landholder holds a manor or many manors. Now speaking very generally we may say that a man who holds a manor has in the first place a house or homestead which is occupied by himself, his bailiffs or servants. Along with this he holds cultivable land, which is in the fullest sense (so far as feudal theory permits) his own; it is his demesne land. Then also, as part of the same complex of rights, he holds land which is holden of him by tenants, some of whom, it may be, are freeholders, holding in socage or by military service, while the remainder of them, usually the large majority of them, hold in villein age, by a merely customary tenure. In the terms used to describe these various lands we notice a certain instructive ambiguity. The land that the lord himself occupies and of which he takes the fruits he indubitably holds `in demesne '; the land holden of him by his freehold tenants he indubita bly does not hold `in demesne; his freehold tenants hold it in demesne, unless indeed, as may well be the case, they have yet other freeholders; below them. But as to the lands holden of him by villein tenure, the use of words seems to fluctuate; at one moment he is said to hold and be seized of them in demesne, at the next they are sharply distinguished from his demesne lands, that term being reserved for those portions of the soil in which no tenant free or villein has any rights. In short, `language reflects the dual nature of tenure in villeinage; it is tenure 420 and yet it is not tenure. The king 's courts, giving no protection to the tenant, say that the lord is seized in demesne; but the manorial custom must distinguish between the lands holden in villeinage and those lands which are occupied by the lord and which in a narrower sense of the word are his demesne. Describing the field system they wrote: " We have usually therefore in the manor ,lands of three kinds, (1) the demesne strictly so called, (2) the land of the lord 's freehold tenants, (3) the villenagium, the land holden of the lord by villein or customary tenure. Now in the common case all these lands are bound together into a single whole by two economic bonds. In the first place, the demesne lands are cultivated wholly or in part by the labour of the tenants of the other lands, labour which they are bound to supply by reason of their tenure. A little labour in the way of ploughing and reaping is not out of the free hold tenants; much labour of the many various kinds is obtained from the tenants in villeinage, so much in many cases that the lord has but small, if any, need to hire labourers. Then in the second place, these various tenements lie intermingled; neither the lord 's demesne nor the ten ant 's tenement can be surrounded by one ring fence. The lord has his house and homestead; each tenant has his house with more or less curtilage surrounding it; but the arable por tions of the demesne and of the various other tenements lie mixed up together in the great open fields. " In paragraph 758 of Halsbury 's Laws of England, 4th Edn., Vol. 9, on the destruction of customs it is said: "As manorial customs attached to the tenure as distinguished from the mere locality of the lands, it followed that upon the destruction of the tenure by enfranchisement of the lands at common law the customs were also destroyed. A statutory enfranchisement must have effect, however, in accordance with the terms of the statute, and where the statute preserves rights notwithstanding the enfranchisement and the extent of the rights so preserved depended upon custom, the custom remains relevant to define the rights preserved by the statute. " 421 The basic concept of domain or home farm land and the concept of cultivation as private land by the landholders used in the definition had, therefore, to be borne in mind in determining private land. The observation of the Division Bench in the impugned Judgment that it is not possible to regard the pronouncement in Zamindar of Chellapalli vs Somayya, (supra) as an authority for the proposition that domain within the meaning of section 3 (10) of the Estates Land Act must be held to mean land around the mansion home of lord and appurtenant thereto, has therefore to be rejected. The decision of the High Court of Madras in Chellapalli case was confirmed by the Privy Council in Yerlagadda Mallikarju na Prasad Nayudu vs Somayya, (supra). The learned Single Judge in the instant case also relied on the observations in Chellapalli 's case (supra). The learned Single Judge rightly observed that the test laid down by Wadsworth, Offg. C.J. were approved by the Supreme Court in Chidambaram 's case in identical language and that the legislature did not use the word domain or home farm land without attaching to them a meaning and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurte nant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is distinct from land let to tenant to be formed without any control from the lord of the manor other than such control as incident to the lease. We respectfully agree. To this extent the propositions of the learned Judges in Periannan 's case (supra) the tenability of which we doubted, can no longer be held to be good law in view of this Court 's decision in Chidambaram 's case (supra) and P. Venkataswami vs D.S. Ramireddy, In P. Venkataswami vs D.S. Ramireddy (supra) the question was whether the landlord was entitled to ryotwari patta. The High Court applied the tests in Pariannan 's case. Referring to the provisions of Sections 13 and 15(1) of the Estates Abolition Act (which we have quoted earlier).and reiterating what was said in Chidambaram 's case this Court held: "Thus even on the provisions of the Madras Estat is Land Act, 1908 considered by the Madras Full Bench, this Court appears to have taken a different view. Apart from this, the provisions we are concerned with, namely, Section 13(b)(iii) of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 requires as a condition `that the landholder has cultivated such lands himself, by his own servants or hired labour '. We are unable to agree that the 422 words `has cultivated ' could imply a mere intention to cultivate. Apart from Article 141 of the Constitution of India we are of the opinion that the decision in Chidambaram and Venka taswarni are in consonance with the objects and purposes of the Estates Land Act, the Estate Abolition Act, the Inam (Abolition and Conversion into Ryotwari) Act and the accept ed objectives of the land reforms legislation. We now take up the question as to who were entitled to ryotwari pattas in this case. The landholders admitted that if the Pariannan 's tests were not applicable, they would not be entitled to ryotwari patta. Even so we proceed to examine the question on the facts on record. As defined in section 3(15) of the Estates Land Act, "ryot" means a person who holds for the purpose of agriculture ryoti land in an estate on condi tion of paying to the landholder the rent which is legally due upon it. Under the Explanation, a person who has occu pied ryoti land for a continuous period of 12 years shall be deemed to be a ryot for all the purposes of this Act. This Explanation was added by the Estates Land Amendment Act, 1934 (Act VIII of 1934). The conferment of occupancy right on the ryot in ryoti land was an object of the Estates Land Act. The original Section 6 dealing with occupancy right in ryoti land was substituted by Section 5 of the Amendment Act VIII of 1934. Thereafter also it has undergone several amendments. At the relevant time it stood as follows: "6. Occupancy right in ryoti land: (1) Subject to the provi sions of this Act, every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding. Explanation: (1) For the purposes of this sub section, the expression `every ryot now in possession ' shall include every person who, having held land as a ryot, continues in possession of such land at the commencement of this Act. Explanation: (2) In relation to any inam village which was not an estate before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, but became an estate by virtue of that Act, or in relation to any land in an inam village which ceased to be part 423 of an estate before the commencement of that Act, the ex pression `now ' and `commencement of this Act ' in this sub section and Explanation (1) shall be construed as meaning the thirtieth day of June, 1934, and the expression `hereaf ter ' in this sub section shall be construed as meaning the period after the thirtieth day of June, 1934. Explanation: (3) In relation to any hamlet, or khandriga in an inam village which was not an estate before the commence ment of the Andhra Pradesh (Andhra Area) Estates Land (Amendment) Act, 1936, but became an estate by virtue of that Act, the expressions `now ' and `commencement of this Act ', in this sub section and Explanation (1) shall be construed as meaning the Seventh day of January 1948, and the expression `hereafter ' in this sub section shall be construed as meaning the period after the seventh day of January, 1948. Explanation: (4) Every landholder who receives or recovers any payment under Section 163 from any person unauthorizedly occupying ryoti land shall be deemed to have thereby admit ted such person into possession unless within two years from the date of receipt of recovery of payment or the first of such payments, if more than one, he shall file a suit in a Civil Court for ejectment against such person. (2) Admission to waste land under a contract for the pasturage of cattle and admission to land reserved bona fide by a landholder for raising a garden or tope or for forest under a contract for the temporary cultivation there of with agricultural crops shall not by itself confer upon the person so admitted a permanent right of occupancy; nor shall such land, by reason only of such letting or temporary cultivation, become ryoti land." (3, 4, 5 and 6 are not extracted) Section 6 A which was inserted by the Amendment Act VIII of 1934 provided that a person having a right of occupancy in land does not lose it by subsequently becoming interested in the land as landholder or by subsequently holding land as an ijaadar or farmer of rent. Section 8 provided for merger of occupancy rights and said: 424 "Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in the landholder, he shall have no right to hold the land as a ryot but shall hold it as a landholder, but nothing in this sub section shall prejudicially affect the rights of any third person. (2) Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in any co landholders, he shall be entitled to hold the land sub ject to the payments to his co landholders of the shares of the rent which may from time to time payable to them and if such co landholder lets the land to a third person; such third person, shall be deemed to be a ryot in respect of the land. (3) The merger, if any, of the occupancy right under sub sections (1) and (2) shall not have the effect of converting ryoti land into private land. (4) Where after the passing of the Act, the inter est of the ryot in the holding passes to the landholder by inheritance, the landholder shall notwithstanding anything contained in this Act have the right, for a period of twelve years from the date of succession, of admitting any person to the possession of such land on such terms as may be agreed upon between them. (5) If before the first day of November 1933, the landholder has obtained in respect of any land in an estate within the meaning of sub clause (d) of clause (2) of Sec tion 3 a final decree or order of a competent Civil Court establishing that the tenant has no occupancy right in such land, and no tenant has acquired any occupancy right in such land before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, the land holder shall, if the land is not private land within the meaning of this Act, have the right, notwithstanding any thing contained in this Act, for a period of twelve years from the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, of admitting any person to the possession of such land on such terms as may be agreed upon between them; 425 Provided that nothing contained in this sub section shall be deemed during the said period of twelve years or any part thereof to affect the validity of any agreement between the landholder and the tenant subsisting at the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936". Section 9 provided that no landholder shall as such be entitled to eject a ryot from his holding or any part hereof otherwise than in accordance with the provisions of this Act. Section 10 made the occupancy rights heritable and transferable providing that "all rights of occupancy shall be heritable, and shall be transferable by sale, gift or otherwise. " If a ryot dies intestate without leaving any heirs except the Government, his right of occupancy shall be extinguished but the land. in respect of which he has such right of occupancy shall not cease to be ryoti land. The Estates Abolition Act accepted the same definitions of occupancy right and ryot as in the Estate Land Act. The above provisions conferred permanent, heritable and trans ferable right of occupancy on the tenant. This right stemmed from the will of the legislature and involved an element of social engineering through law star pro ratione voluntas populi: the will of the people stands in place of a reason. The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper per spective. Statuta pro publico late interpretatur. Statute made for the public good ought to be liberally construed. The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant. The aforesaid doubtful propositions formulated by the learned Judges in Periannan 's case must, therefore, be held to be erroneous. For the same reason the observation of the Division Bench in this case that the decision in Periannan 's case is still good law in face of the decision of this Court in Chidambaram (supra), and subsequent deci sion in Venkataswami 's case (supra) must be held to be equally erroneous and to that extent must be overruled and the decisions in Zamindar of Chellapalli vs Rajalapati Somayya, (supra); Jagadeesam Pillai vs Kuppammal, (supra) and in Parish Priest of Karayar Parish vs Thiagarajaswami Devasthanam, (supra) must be held to have been correctly decided. We have no doubt that the formation and development of the land revenue system in Madras will justify the view we have taken in the facts of this case. The formation of the Madras Presidency was by 426 successive acquisitions by the East India Company. The State of Andhra Pradesh was curved out of Madras. Baden Powell in Land System of British India, Vol. 3 p. 5 wrote in 1892: "In tracing the progress of the Madras Land Revenue System, it will be advisable in the first place to review the gener al course of acquisition, by which the Madras district became British, and next to describe, in a brief and general manner, the various stages of the history of the early revenue management. Commencing with the settlement (above alluded to) in the Baramahal (1792 98), which was soon followed by those of Coimbatore (1799), the ceded districts (1800), and the Carnatik Districts (1801), we shall see how the first raiyatwari system, or rather systems, were over thrown for a time by an attempt to make a general zamindari settlement (1801 1808); how on the failure of the attempt, a proposal for `village settlements ' (in the sense of granting leases for the whole village, to a renter, a headman, or a joint body of inhabitants) was tried with various success for a few years; and how, in the end, a raiyatwari assess ment was finally ordered ( 18 12 18 18). " Ryotwari indicates a system where each field or holding is dealt with separately, and where the holder is free to pay the revenue and keep the field, or free himself by giving it up, as he pleases. The first general acquisition of territory by the East India Company the first from a revenue point of view, was the country around Madras, known as `Jagir ' because it was originally granted by the Nawab of the Karnatik as a Jagir; the revenue thus assigned was intended as a contribution towards the expenses of the wars undertaken in aid of the Nawab. The next acquisition in point of time was that of the Northern Sirkars (often written `Circar '). These territories were granted in 1765 by the Delhi Emperor; but the Madras Government, looking to the practical claim of the Nizam of Dakhan, who was hardly even in name subject to Delhi, also obtained a grant from him in 1768. The five administrative divisions known to the Mughal system as `Sirkar ' were those of chicacole (chikakol) Srikakulam, Rajahmundry (Rajamahen driveram), Eliore (Alur), Mustafanagar .(or Kandafiti), and Murtazanagar (Gantur or Kandavid). Later they formed the districts of Vizagapatam (Visakhapatnam), Gangam, Kishna and Godavari. 427 The northern Sikars had been brought under Muhammadan domin ion first in 1471 A.D., and had various fortunes under the different contending dynasties. In 1687, Aurangazeb 's con quest of the Dakhan added them to the Mughal empire, and they were ultimately taken over by the Subedar of the Dakhan (Nizam ul Mulk) nominally from the Emperor Karukhsir in 1713 A.D. "These came at once under British administration. It was found that they consisted (1) of lands settled under zamin dars, as in Bengal, (2) of haveIi lands, those reserved for the support of the royal family and its immediate depend ants, and therefore `crown ' property. Such a state of things invited the application of the Bengal system; the zamindars were accordingly left in possession and the haveIi lands were parcelled out and leased to revenue farmers for a term of years. The Jagir lands were in 1780, divided into blocks and put under a similar system of revenue leases. " When the Board of Revenue issued instructions to adopt a system of village lesses so as to prepare for some form of zamindari settlement, i.e. one man should be made answerable for the revenue of each village or other estate after the passing of Permanent Settlement Regulations in Bengal. The Zamindari Regulation No. XXV was passed in 1802 and by 1805 introduction of the system was effected. In the Northern Sirkars land was permanently settled with the zamindars; and the `HaveIi ' lands were made into percels or mutthas, and sold to the highest bidder. The Mutthadars (or Mittadars) became the proprietors and permanent settlement holders. Each settlement became an estate. In some districts the `poligars ' became landlords holding sanad i milkiat i istim rar or title deed of perpetual ownership their estates being called `settled polliems '. According to Paden Powell the zamindari estates were found chiefly in the North East ern districts and especially in the Ganjam and Vizagapatam districts. There were also few Feudatory States which paid only a fixed tribute. The village leases continued with some form of joint or individual middlemen with varying periods of 3 to 10 years made with a view to eventual permanency. But the system was not successful. Between the ryotwari and village lease system the general difference was that the ryotwari only assessed the `field ' or survey unit, and left the ryot. to hold it or not as he pleased, provided he gave notice of his intention in proper time; if he kept the field he must pay the assessment that was all. The lease system involved payment of a certain sum for a fixed area, whether the land was cultivated or not. It was no use 428 for the middlemen lease holder to throw up his land, for that would not relieve him of his contract liability. The idea was to make the villagers jointly and severally respon sible, though the lease was to the head inhabitants of each village. Desire was to see a system under which the proprie tary inhabitants at large of each village should enter into engagements with the Government, and derive a common and exclusive interest in the cultivation of their lands in proportion of their right of property. Ultimately the Ryotwari system was adopted. The end of the lease proposals and the village system inquiry was that the home authorities, as Baden Powell says, probably influ enced by the opinion of Munro, who visited England in 1807, finally decided for the Ryotwari system as it was believed that the village system failed. Hence the Estates Abolition Act protected the rights of the ryots by defining private land on the one hand and preserving the occupancy rights of the ryots on the other. In doing so the two concepts of `private land ' and `ryoti ' land along with those of `estate ' and `occupancy ' assumed significance. The two villages concerned in the instant case are said to be inam viiages. But the origin of the lands in dispute was admittedly not known. The characteristics of the inam estates and the rights and liabilities of the Inamdars from time to time have therefore to be taken into account. Baden Powell wrote at pp.78 80 Vol. 3: Section Ill Settlement of inam Claims. "The Settlement, as we have seen, only assesses the land under raiyatwari tenure. If, however, there is land in the village, consisting of a few fields or even a division of the village, held revenue free, or at a reduced rate, such an area is shown in the village registers. But it may be that a whole village is `inam '. If so, it constitute a separate estate, like a Zamindari or a `pollam ', and does not come within the scope of the Settle ment. Government has no claim to the land or to the revenue, unless there is a fixed quit rent, which is recorded as is the permanently settled revenue or `peshkash ' of the Zamind ari or pollam estate. There was accordingly a special proce dure under which the right and title of the holders of these favoured estates was elucidated and put on a sound 429 basis; and the quit rent, Or reduced rate, where the estate is not entirely revenue free, determined by rule. All native governments were in the habit of reward ing favourites, providing for the support of mosques, tem ples, religious schools, shrines, and for almsgiving and the maintenance of Brahmans or Muhmmadan saints, & C., by grant ing the revenue on the land, whether they granted the land itself or not." The Inam Commission of Madras appointed on 16.11. 1858 had the task of validating and issuing title deeds for inams lawfully in possession for fifty years and in resuming others, or commuting them for money pensions. The Commission dealt with all kinds whether they included right in the lard or only Government revenue; they were: (1) Inams proper, where the land granted, was either a field, or a village, or a group of villages. (2) Muhammadan jagirs, which were personal grants and might or might not include the land. (3) Shrotriyams (Srotriyam) and agraharams, grants certain (different) classes of Branmans which did not give more than the revenue, leaving the land in its original occupancy, unless it could be shown that the occupancy was also granted. The following nine kinds of inams (classified according to their object or purpose) were enumerated: (1) For religious institutions and services connect ed therewith. Nearly a million and a half acres were so assigned, including temples, pagodas, and mosques. The largest grants were in the southern districts. (2) For purposes of public utility. Such as support of chatrams (places where refreshment was given gratuitous ly), water pandais (drinking places), topes or groves, flower gardens for temple service (mandavanam), schools (Patshalas), for maintaining bridges, ponds and tanks, etc. 430 (3) `Dasabandham ' inams for the construction, mainte nance, and repair of irrigation works in the Ceded dis tricts, in Kistna, Nellore, North Arcot and Salem. (4) To Brahmans and other religious persons for their maintenance called `Bhatavritti ' and (Muhammadan `Khairat '. They formed nearly half the inams of the Presidency, and covered more than three and a half million acres. (5) Maintenance grants for the families of poligars and ancient land officers. These were grants to families of dispossessed poligars in Baramahal and the ceded districts; to Kanungos (Chingleput), and to Deshmukhs etc. (6) Lands alienated for the support of members of the family (also for religious persons) by poligars, etc. These were the `bisai ' (bissoye), doratanam, mukhasa, jivitham, arearam (North Arcot) umlikai, etc. (7) Grants connected with the general police of the country under former rulers: Such were `kattubadis '. (8) Grants to village headmen, karnams, and village police (Gramamaniyam, etc. ). (9) Grants to village artisans, where they were not paid by the fees called merai (or in addition to them). The Commission also took up enfranchisement of the inams, i.e. to convert into his own private property by payment of a moderate quit rent. From this the inams could be classified as (1) still unenfranchised; (2) enfranchised but liable to jodi or quit rent as the case may be; (3) enfranchised, the rent being commuted or redeemed. The Commission work was closed in November 1869. A member of the Board of Revenue continued thereafter. The nature and histo ry of the inam villages would, therefore, have been helpful in deciding the claims. It was perhaps easier for the landholders to trace the origin of the inam villages than for the tenants to do so. Admittedly that was not done. We have also considered the question of practice and pre sump 431 tions if any in this regard. By Madras Act VIII of 1865 it was enacted that inamdars and other landholders should enter into written agreements with their tenants, the engagements of the land owners being termed pattas and those of tenants being termed Muchlika. The patta should contain, amongst other things, "all other special terms by which, it is intended the parties shall be bound. The muckhlika should at the option of the landholders, be counterpart of the patta, or a simple engagement to hold according to the terms of the patta. In the instant case the pattas and the muchlikas are not claimed to have shown anything to establish the lands to be private lands. Only the facts of occasional change of tenants and rents have been shown. The Privy Council in Suryanarayana vs Patanna, [1918] 41 ILR Madras 10 12, where the decision of the appeal mainly depended on the question whether the Agraharam Village of Korraguntapalem in the Northern Circars of then Presidency of Madras was an estate, observed that the "term kudivaram is not defined in the Act. It is a tamil word, and literally signifies a cultivator 's share in the produce of the land held by him as distinguished from the landlord 's share in the produce of the land received by him as the rent. The landlord 's share is sometimes designated `melvaram" The Privy Council held that there was no presumption of law to the effect that in the case of an inamdar it should be presumed, in the absence of inam grant under which he held, that the grant was of the royal share of the revenue only. "In their Lordships ' opinion there is no such presump tion of law. But a grant of a village by or on behalf of the Crown under the British rule is in law to be presumed to be subject to such rights of occupancy, if any, as the cultiva tors at the time of grant may have had. " As against the above, we now have the statutory presumptions in Section 185(3) of the Estates and Act, namely, "that the land shall be presumed not to be private land until the contrary is proved," and in case of estate within the meaning of sub clause (d) of clause (2) the second proviso (i) and (ii). This evolution of the land revenue system concerned is likely to remind one of what Sir Henry Maine showed in his Ancient Law, "that in early times the only social brother hood recognised was that of kinship, and that almost every form of social organisation, tribe, guild, and religious fraternity, was conceived under a similitude of it. Feudal ism, converted the village community based on a real or assumed consanguinity of its members, into the fief in which the relations of tenant and lord were those of contract, while those of the 432 unfree tenant rested on status. " It also reminds one what was said in the context of rights over land. "This earth", says Jagannatha, "is the cow which grants every wish; she affords property of a hundred various kinds (inferior, if the owner need the assent of another proprietor superior, if his right precede assent); while she deludes hundred owners, like a deceiving harlot, with the illusion of false enjoy ment; for, in truth, there is no other lord of this earth but one, the Supreme Lord. " For the foregoing reasons we set aside the impugned Judgment, restore that of the learned Single Judge and allow the appeals. We leave the parties to bear their own costs in these appeals. R.S.S. Appeals allowed.

The appellants are the tenants and the respondents are the landholders in respect of the tenanted agricultural lands of the hitherto inam estates. After the coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948. the inam estates were abolished, the land stood vested in the Government free of all encumbrances, and the pre existing rights, title and interest of erstwhile landholders ceased except to claim ryotwari patta. The respondents landholders claimed that the lands, in question, were either under their personal cultivation or they intended to resume those for private cultivation, and as such those were their private lands and they were enti tled to ryotwari pattas. The appellants tenants on the contrary claimed that those lands were neither under the personal cultivation of the landholders nor the landlords intended to resume those for personal cultivation, but were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates. The Settlement Officer, after making inquiry under section 15 of the Estates Abolition Act, held that the landholders failed to establish that they were personally cultivating the lands or that they intended to resume the lands for personal cultivation, and as such rejected their claims. The landholders ' appeals to the Estates Abolition Tribu nal were allowed. The Tribunal held that the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3 (10)(b)(i) of the Andhra Pradesh (Andhra Area) Estates Land Act, 1908 and that the tenants were not entitled to ryotwari pattas in respect of the same. 394 The appellants tenants moved writ petitions before the High Court. The learned Single Judge observed that it was common ground before the Subordinate Tribunal, as well as before him, that the nature of the lands at the inception, whether ryoti or private, was not known; that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and the lands were sometimes leased under short term leases, there were no other circumstances indi cating that the landholders intended to resume cultivation of the lands. The learned Single Judge held that after the pronouncement of this Court in Chidambaram Chettiar vs Santhanaramaswamy Odayar, the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (F.B.) could no longer be considered good law, and further that the decision in Jag deesam Pillai vs Kuppammal, ILR and in Perish Priest of Narayar vs Thingaraja Swami Devasthanam, App. 176 178 and 493 of 1946, once more held the field. It was also observed that since in all the cases the only mode of proof attempted by the landholders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no attempt was made to prove personal cultivation or any intention to resume personal cultivation. The Division Bench, in writ appeals filed by the land holders, held that, in the first place, the observations of this Court in Chidambaram 's case were in accord with the rule in Periannan 's case, and secondly, even if some of the dicta in the judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been impliedly overruled by this Court. Before this Court, it was inter alia contended on behalf of the appellants tenants (i) that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as these were neither under their personal cultivation nor they were intended to be resumed for personal cultivation, and applying the rule in Chidambaram 's case, the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; (ii) that the learned Single Judge correctly held that Perriannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, it was held that the definition of private land in section 3(10) of the Estate Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the 395 test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases; (iii) that it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases; and (iv) that the Division Bench erred in holding that Periannan 's tests were still applicable. On the other hand, it was contended that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case, and the Division Bench correct ly applied those tests to find that the lands were private lands of the landholders. Allowing the appeals, setting aside the judgment of the Division Bench, and restoring that of the learned Single Judge, this Court, HELD: (1) To find out whether a village was designated as inam village or not, prima facie the revenue accounts of the Government which were there at the time of the Inam Abolition Act came into force had to be looked into. If it was so shown, no further proof was necessary. Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the Evidence Act. [406H; 407A B] (2) An interpretation of the words "private land" and "ryoti land" had to be made in consonance with the legisla tive purpose, provisions and scheme of the enactment. Inter pretare at Concordare leges legibus, est optimus interpre tundi modus. To interpret and in such a way as to harmonize laws with laws in the best mode of interpretation. [410E] (3) The Estate Abolition Act accepted the definitions of occupancy right and ryoti as in the Estates Land Act, 1908. The above provisions conferred permanent, heritable and transferable right of occupancy on the Tenant. This right stemmed from the will of the legislature and involved an element of social engineering through law star pro rationa voluntas populi: the will of the people stands in place of reason. The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper perspective. Statuta pro publico late interpretaur. Statute made for the public good ought to be liberally construed. [425E F] 396 (4) The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant. [425E] The learned Single Judge in the instant case rightly observed that the legislature did not use the word domain or home farm land without attaching to them a meaning, and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurtenant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is dis tinct from land let to tenant to be farmed without any control from the lord of the manor other than such control as incident to the lease. To that extent, the propositions of the learned Judges in Periannan 's case can no longer be held to be good law in view of this Court 's decisions in Chidambaram 's case and Venkataswami 's case, and the decision in Zamindar of Challapali vs Rajalapati/Jagadesan Pillai vs Kuppamal, and in Parish Priest of Karayar Perish vs Thiapa rajaswami Devasthanam mast be held to have been correctly decided. [421C E] Zamindar of Chellapalli vs Rajalapato Somayya, 39 Mad. 341; Jagadeesam Pillai vs Kuppamal, ILR ; Parish Priest of Karayar Parish vs Thiagarajaswami Devastha nam, App. 176 178 & 493 of 1946; Chidambaram Chettiar vs Santhanaramaswamy Odayar, ; ; Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR PC; P. Venkataswami D.S. Ramireddy, ; Suryanara yana vs Patanna, , referred to. Periannan vs Amman Kovil, AIR 1952 Mad. 323 F.B. partly overruled. (6) In the instant case the pattas and the muchilkas are not claimed to have shown anything to establish the lands to be private lands. Only the facts of occasional change of tenants and rents have been shown. [431B]

8k-16k

ON: Criminal Appeal No. 392 of 1974 Appeal by Special Leave from the Judgment and order dated the 25th April, 1974 of the Andhra Pradesh High Court in Criminal Appeal No. 701 of 1972. P. Basi Reddy and G. Narasimhulu, for the appellant, A, section Mulla, T. V. section N. Chari and P. P. Rao, for the respondent. The Judgment of the Court was delivered by SARKARIA J. This appeal is directed against a judgment of the High Court of Andhra Pradesh, converting on appeal by the State the acquittal of the appellants into conviction. Appellant No. 1 (for short A 1) was an arrack contractor doing liquor business inter alia within the territorial jurisdiction of Police Station Indukurpet, District Nellore, while Appellant No. 2 (for short, A 2) was a Sub Inspector of Police in charge of this Police Station, The appellants and one other person were tried by the Firs Additional Sessions Judge Nellore on charges under ss.120 B, 366, 376, 302/34., 201, 218, 468/34, 324, Penal Code relating to the abduction, rape and murder etc. Of two sisters, named Kalarani and Chandrika Rani of Nellore. The Sessions Judge acquitted the three accused of all the charges. Against the acquittal of the appellants only the State preferred an appeal. The High Court partly allowed the appeal, set aside the acquittal on charges 7, 8, 9 and convicted A 2 and A I. under ss, 201, 201b34, Penal Code and sentenced each of them to five years rigorous imprisonment. A 2 and A 1 were further Convicted under section 218 and 218/109, Penal Code and sentenced to two years rigorous imprisonment, each. They were also convicted under 605 section 468 and 468/34, Penal Code and sentenced to two years rigorous imprisonment each. The sentences on all the counts were directed to run concurrently. Their acquittal on the remaining charges, including those of abduction, rape and murder, was upheld. The facts of the prosecution case, as they emerge from the record" arc as follows: Kalarani and Chandrika Rani deceased were two of the six daughters of PW1, a legal practitioner of Nellore. Kalarani was aged 21 and a graduate from the local Women 's College, Nellore. She used to be the President of the College Union and as such was well known. Chandrika Rani was, aged 17 and a B.A. student in that very college. on 6 6 1971 in the morning the deceased girls along with their parents and other sisters attended a marriage in the house of a family friend (P.W.2). In the afternoon they went away from the marriage house saying that they were going out to have coca cola. At about 4 p.m. they boarded a bus bound for Mypaud which is a sea shore resort at a distance of 11 miles from Nellore. At about 5.40 p.m. they were seen alighting from the bus as Mypaud and then proceeding towards Sagarvilla, a Travellers ' Bungalow situated near the seashore. They were last seen at about 6 30 p.m. On the seashore by P.Ws. 11, 12, 13 and 14. Shortly there after, P.W. 18, a rickshaw puller was attracted to the seashore by the outcry of a woman. When be proceeded in hat direction, Chandrika Rani came running to him for help. P.W. 18 saw 4 persons including A 1 and A 2 carrying away Kalarani who was groaning. On seeing P.W. 18, A 1 and A 2 turned on him. A 1 first slapped and then stabbed P.W. 18 on his right arm with a pen knife, while A 2 gave blows on his back. Out of fright, P.W. 18 took to his heels while Chandrika Rani was dragged away by the appellants. On 6 6 1971 Chamundeshwari Festival was being celebrated in Gangapatnam and neighbouring areas at about 9 p.m. It was a bright moonlight On learning that the dead body of a girl had been seen on the beach of Pallipalem which is a hamlet o Gangapatnam, many persons went there. P.W. 23, a fisherman of Pallipalem and P.W. 25. an employee of the Electricity Department were also among those persons. It was the body of a girl, aged about 21 or 22 years, of fair complexion and stout built. Blood was oozing from a reddish abrasion on the forehead. There was a gold ring with a red stone on the finger of the body. Next morning, P.W. 23 went to P.W. 26, the Sarpanch of Gangapatnam and informed the later about the corpse on the seashore. P.W. 23 and P.W. 26 then went to the village Karnam (P.W. 27) as they found the village Munsiff absent. The Kamam scribed a report to the dictation of P.W. 23. The Sarpanch signed it and sent it at about 7 30 a.m. through a bus driver (P.W. 29) to the Police Station, Indukurpet. The report was handed over in the Police Station at about 8 30 a.m. to the Head Constable (P.W. 34), as A 2. the Sub Inspector was away. The Head Constable (P.W. 34). read the report and returned it to P.W. 29 with the objection that the bearer should fetch a report drawn up on the printed form and signed by the village Munsiff. Within a few minutes 606 of the return of the report, between 8 30 and 8 45 A.M., A 2 returned to the Police Station. Just at this juncture P.W. 49, a Personal Assistant to P.W. 38, a cine actor of Madras, and A 1, arrived there in Car No. M.S.V. 1539, driven by a motor driver. The car had met an accident on the 4th June within the jurisdiction of this Police Station. The car was therefore at least theoretically in the custody of the Police. A 1 was a mutual friend of A 2 and of the owner of the car. P.W. 49 therefore, had brought A 1 to the Police Station to help the former in getting the car released. A 1 introduced P.W. 49 to A 2. A 1 then asked A 2 if he knew that the dead body of a girl was found floating on the sea shore. A 2 then asked the head Constable (PW 34) if any report regarding the dead body was received. The Head Constable replied that a report from the Sarpanch about the dead body seen on the sea shore at Pallipalem had been received but had been returned, as it was not from the village Munsiff. A 2 said some person might have drowned as it usually happened on the seashore. The Head Constable and A 1 told A 2 that the body found on the shore was said to have been wearing drawers and might be of a person of high class family. A 2 said that he himself would go and enquire about it. A 2 asked P.W.4 to take him in his car to the spot. Thereupon" A 1, A 2, P.W. 49, two constables and two others in addition to the driver, proceeded in the car. After going some distance, the two "others" got down. A 1 and A 2 had a talk with them. The car was then taken to Ramudupalem. There at about 11.30 A.M., A 1 and A 2 met the Sarpanch (P.W. 26) and asked him to follow them to Pallipalem. The car was then taken to Gangapatnam. There the Constables were dropped. They left a message for the Karnam of the village to reach Pallipalem. Thereafter, they proceeded to the sea shore of Pallipalem. The car was left at the canal before the sea. A 2, A 1, P.W. 49 and P.W. 26; then at about Noon, went to the beach where the dead body lay. P.W. 23 and P.W. 25 were guarding the deadbody. It was the body of a fair, stout girl aged about 20 years, who was wearing brassiers, blouse, striped drawers and a white petticoat. P.W. 23 handed over the ring M.O.9 to A 2 after removing the same from the body. On being directed by A 2, P.W. 23 washed ' the face of the corpse. There was a mark on the forehead from which blood was oozing out. There was a reddish abrasion on the thigh and blood marks on the drawer of the dead body. On seeing the blood marks on the drawer, A 2 said that she might be in menses. A 2 further remarked that the body appeared to be of a girl from a high class family who had been out of doors. A 2 did not hold any inquest there on the dead body. He did not prepare any record there. He directed the village vettis (menials) to bury the dead body forthwith while he himself proceeded along with his companions towards the village. In the distance they saw the Constables coming towards them. A 2 signalled them not to come near the dead body but to proceed to the Travellers ' Bungalow at Mypad, while A 2 and party went to Mahalaxamma Tample in village Pallipalem. There A 2 607 secured the signature of P.W. 25, P.W. 26, P.W. 28 and A 1 on a blank sheet of paper. A 2 and his companions then went to the car. The Karnam (P.W. 27) was there. A 2 reproached the Karnam for coming late and added that he had finished all the work for which he (Karnam) had been sent for. He further told the Karnam that he had got the body buried. The karnam asked as to why A 2 did not send the body for post mortem examination A 2 replied that the body was of a prostitute who had committed suicide and that he did not suspect any foul play and so he ordered burial The Karnam then enquired if any relation of the deceased had come. A 1 replied "yes", while A 2 pointed towards P.W. 49 and said that he was the person connected with the deceased. A 1, A 2, P.W. 26, P.W. 27 and P W. 49 then got into the car and proceeded. P.Ws. 26 and 27 were dropped near their houses. On the way P.W. 49 asked A 2 as to why he had represented him (P.W. 49) as a relation of the deceased. A 2 assured P.W. 49 that there was nothing to worry. According to the prosecution, this dead body found ashore near Pallipalem which is about 2 miles from Mypad was of Kala Rani deceased who was well known to A 2. Inspite of it in the inquest report (Ex P 11) which was not prepared on the spot but sometime later, A 2 wrote That the body was of a prostitute, named Koppolo Vijaya, daughter of Crhandravya, Baliya by caste of Ongole Town who had on 6.6.71, come to Mypad along with her prostitute friend Nirmala by Bus A.P.N. 1400 at 5.45 P.M. and thereafter both these girls committed suicide by entering sea at about 6.30 P.M. A 2 ended the report with an emphatic note: "It is conclusive that the deceased (Koppulu Vijaya) died due to drowning". Despite the presence of injuries noticed on the dead body A 2 recorded: "There are no injuries on the dead body". In order to support his version as; to the cause of death A 2, according to the prosecution falsely noted that the "stomach is bloated due to drinking of water". The prosecution case further is that A 2 fabricated some time after the burial of the deadbody, a false report (Ex. P 25) purporting to have been made to him on 7.6.1971 by one Nuthalapati Subba Rao who despite the best efforts of the investigators has remained untraced and is believed to be a fictitious person. As this report has an important bearing on the points for determination, we will reproduce it in extenso: "Statement of Nuthalapati Subbarao, son of Venkateswarlu, aged about 30 years" Vysya of Patha Guntur: Being an orphan for about 1 years, I have been doing brokerage in supplying extras in the cine field. Day before yesterday i.e. On Friday at Chirala near Lodges two girls Koppulu Vijaya d/o Sundrayya of Ongole and Paranjapi Nirmala d/o Raghavayya of Chilakaluripeta were met by me. I came to know that they live by prostitution. When I told them that I would join them in Cinema they believed me 608 and came with me. On Sunday i.e. On 6 6 1971, in the morning we came to Nellore and stayed in Venkateswara Lodge till 3.30 p.m. Their demand came for the girls. I booked two males for these two girls. Afterwards dispute arose between me and the girls in respect of my broekerage, sharing of the money got by such prostitution out of the money collected. They scolded me in an angry tone and went away crying and weeping and saying that I took them away from their places promising to join them in Cinema, cheated them and committed rowdyism without giving them money due to them. They had only wearing apparel with them. Vijaya is short, stout and fair. Nirmala is lean, tall and fair. They did not come back. I waited for a long time. 1 searched for them at the railway station, bus stand and lodges. When I was inquiring at Atmakur Bus Stand I came to know that the girls went by Mypaud bus at 4.30 p.m. I went to Mypaud and enquired. It was learnt that the two girls went towards north of Pattapulalem and entered the sea at 6 p.m. Having learnt that the body of Vijaya was washed ashore I went and saw the dead body. She had died and appears to have committed suicide. It was also learnt that the second girl also committed suicide but her dead body was not washed ashore. Other facts about them are not known. Sd/ N. Subbarao Taken down by me, read over to the person and admitted by him to be correct. On this 7th day of June 1971 at 11 30. Sd/ B. Manoharan S.I., E 3, dt. 7 6 1971. H.C. 1212 Issue F.I.R. u/s 174, Cr. P.C. and send copy to me for investigation. Sd/ B. Manoharan, S.I. E 3, Camp Mypaud dt. 7 6 1971. " The dead body of the other girl, Chandrika Rani was not washed ashore. But in the morning of 7 6 1971, P.W. 36, a fisherman saw the dead body of a girl agled 16 or 17 years floating in the sea at a distance of about 21 or 3 mils from Pallipalem, P.W. 36 saw a piercing wound on the left arm and black marks indicating throttling, on the neck of the deadbody. P.W. 36 removed a wrist watch, a ring and an ear ring from the deadbody and allowed it to drift away. These articles were later handed over by P.W. 36 to the investigating officer and were identified to be of Chandrika Rani. The disappearance of the deceased girls caused a sensation. The local newspapers took up the matter. Representations were made to the Home Minister to get the matter investigated by the C.I.D. The Superintendent of Police directed P.W. 59, a Probationer D.S.P., to investigate the matter. On 18 6 1971, at the request of P.W. 59, the Tehsildar (P.W. 40) proceeded to exhume the deadbody of Kalarani. The place was pointed out by P.W. 33. A 2 was also present there. On digging the bit only some clothes were found in it. But close to 609 it, was found a skeleton. No marks of violence were detected on the skeleton by the Medical officer, P.W. 45, who examined it at the spot. The skeleton was sent to P.W. 44, Professor of Forensic Medicine. Who opined that it was of a female aged between 18 to 25 years. Further investigation of the case was taken over by P.W. 60, the C.I.D. Inspector who, after completing it laid the charge sheet against A 1, A 2 and one other person in the court of the Magistrate. A 1 pleaded that he had been falsely implicated. He stated that he knew nothing about the deceased girls. He added that on 7 6 1971, he was in the Travellers ' Bungalow at Mypad and went away from that place in the afternoon. He admitted that he had accompanied, P.W. 49, to the Police Station on 7 6 1971 to assist the latter in getting the car release, and from the Police Station both of them (A 1 and P.W. 49) on being asked by A 2, went with the latter in the car to the spot. He further admitted that he had slab signed on a sheet of paper like others but he expressed ignorance if any inquest was held by A 2. The plea of A 2 was that he had duly made an inquiry as to the cause of the death and prepared the inquest report exhibit P l 1. He denied that there were injuries on the dead body. Pleading alibi for the 5th and 6th June 1971, he said that on these dates he was away on casual leave to attend the marriage of a cousin at Chiraja which at a distance of about 100 miles from Indukurpet. He said that he had proceeded to Chiraja in a car on the 5th morning., and after attending the marriage returned to Nellore on the 6th by 5 30 p.m. and then on the morning of the 7th June, resumed duty at Indukurpet Police Station. On receiving information about the corpse of a female washed ashore, he went to Mypad and enquired about a person named Nathalapati Subba Rao. The latter gave the information, exhibit P.25, which he (A 2) reduced into writing and then held the inquest in the presence of this Subba Rao and other Panchaitdars at the spot. He did not know if Vijaya and Nirmala mentioned in exhibit P. 25 and exhibit P. 11 were fictitious persons. He further admitted that he was unable to produce this Subba Rao in response to the memo dated 15 6 1971, issued by the D.S.P. (P.W. 59) during the stipulated time of 48 hours. The Additional Sessions Judge held that the dead bodies found floating near the sea shore were of Kala Rani and Chandrika Rani. He further found that PW 18, who claimed to be an eye witness of the occurrence, was not worthy of credit, and consequently, the charges of abduction, rape and murder had not been proved against the accused. Regarding the charge under section 201, Penal Code, the trial Judge held that the prosecution had failed to`prove that an offence had been committed in respect of the deceased. While holding that the identity of the deceased was wrongly mentioned in exhibit P. 25 and exhibit P. 11 as Vijaya and Nirmala, prostitutes he did not rule out the possibility of suicide. In the result? he acquitted the accused of all the charges. In appeal by the State, the learned Judge of the High Court, after an exhaustive survey of the evidence, upheld the acquittal of the 610 accused in respect of the charge of abduction, rap and murder, but reversed the findings of the trial Judge in regard to the charges under sections 201, 218 and 468, Penal Code against Al and A2. In order to bring home an offence under section 201, Penal Code the prosecution has to prove: (1) that an offence has been committed; (2) that the accused knew or had reason to believe the com mission of such offence (3) that with such knowledge or belief he (a) caused any evidence of the commission of that offence to disappear, or (b) gave any information respecting that offence which he then knew or believed to be false; (4) that he did so as aforesaid, with the intention of screening the offender from legal punishment (5) If the charge be of an aggravated form, as in the present case, it must be proved further that the offence in respect of which the accused did as in (3) and (4), was punish able with death, or with imprisonment for life or imprisonment extending to ten years. The High Court has found that all these ingredients of section 201, were established in the present case. Mr. Basi Reddy, learned Counsel for the appellant assails the finding of the High Court with particular reference to the first and the last ingredients enumerated above. Counsel contends that the conviction under section 201 cannot be sustained as there is no credible evidence on record to show that an offence had been committed. It is maintained that the prosecution has been unable to prove that the two girls met a homicidal death. In all probability, proceeds the argument, the deceased girls committed suicide by jumping into the sea and were drowned. For reasons that follow we are unable to accept these contetions. The concurrent finding of the courts below that the dead body washed ashore near Pallipalem was of Kala Rani deceased and that seer. floating in the sea, two miles away was of Chandrika Rani deceased, has not been disputed before us. It is also not controverted that these two girls died an unnatural death on the night between the 6th and 7th of June, 1971 sometime after 6.30 P.M. at Mypad. Only the cause of their death is in issue. In regard to such cause, there could be only three possibilities, the choice of any of which would lead to the exclusion of the other two. First, the girls committed suicide by drowning. Second, that their deaths were accidental. Third, that they were done to death by some person or persons. 611 After a careful consideration of these alternatives in the light of ' evidence on record, the learned Judges of the High Court firmly ruled out the first and the second possibilities, and concluded in favour of the third. In our opinion, the credible circumstantial evidence on record reinforced by the inferences available from the incriminating conduct o ' ' the appellants, particularly of A2 in deliberately preparing false records to suppress the identity and cause of the deaths of the deceased girls, fully justifies the conclusion reached by the learned judges. We, therefore, do not feel the necessity of embarking upon a reappraisal of the entire evidence. It would be sufficient to survey and consider the salient circumstances bearing on the alternatives posed above First, we take up the possibility of suicide. Mr. Reddy submits with reference to the statement of PW1, the father of the deceased girls. that on a previous occasion both these girls had without the permission of their parents, run away from home and were ultimately traced to the Rescue Home in Madras. that Kala Rani deceased had about 4 or 5 years before the occurrence taken an overdone of tranquilizers presumably to end her life that they did not feel happy in their parental house and once attempted to join the Ashram. This background, according to the learned Counsel, shows that the deceased had a predisposition to commit suicide. In the alternative, suggests Mr. Reddy, something might have happened at Mypad on the 6th June, 1971, which impelled them to commit suicide. Might be the girls got themselves into such a situation that they thought suicide was the only course left to them to get out of the same. We are not impressed by these arguments. It is wrong to assume that these girls were very unhappy in their parental house, or their relations with their parents were estranged. Kala Rani, particularly, was a mature graduate girl of 22 years. She used to be the leader of the College Union. On the day of occurrence, the deceased girls along with their parents and sisters had participated in the festivities of a marriage in the house of a family friend. They took their meals in the marriage house. From Nellore, these girls brought change of clothes for two or three days ' stay. Thereafter, they came happily to Mypad. They first went to the Travellers ' Bungalow and were then last seen together at about 6 30 p.m. On the sea shore. It is in evidence that the evening of the 6th June, was an occasion of Channdamma Festival. Procession of the deity accompanied by festivities was being taken out by the devotees of the neighbouring villages. These circumstances unmistakably show that the diseased girls had come to enjoy and stay at the sea side resort of Mypad for 2 or 3 days. They were not suffering from any mental depression or schizophrenia with suicidal tendencies . Another circumstance in the case of Kala Rani which is contraindicative of suicide, is that her dead body though seen within an hour or two of the occurrence on the beach, was in a semi nude condition. 612 The sari was not on her dead body, which she was wearing when last seen at about 6 3 P.M. It can be argued that the sari was washed off her body by the sea waves. But considering that her dead body was detected only within a couple of hours of the occurrence and the fact that it is customary for women living in or near the coastal towns to tie their series tightly, the possibility of the sari having been swept off by the sea waves was remote. The inference is that in all probability, she was not wearing this sari when her body was immersed in water. Ordinarily, no Indian woman would commit suicide by jumping into the sea by getting into such a near nude condition and thereby expose her body to the risk of post mortem indignity. Another important circumstance which militates against the suggestion of the death of Kala Rani from drowning is that when the body was first seen at 9 P.M., its stomach was not in a bloated condition, for was any froth seen coming out of the mouth of the corpse. the fact was vouched by PW 23, a fisherman, who was rightly found worthy of credence by the High Court. It may be added that contrary to what PW 23 has testified A 2 has in the inquest report said that the stomach was bloated with water and froth was coming out of the mouth. But as shall be presently discussed, these notes regarding the condition of the dead body, were invented by A2 to support his false report that the deceased had committed suicide and her death was from drowning. Medical jurisprudence tells us that in a case of death from drowning, the stomach is ordinarily found bloated with air and water which is instinctively swallowed by the drowning person during the struggle for life (see Taylor 's Medical Jurisprudence, 12th Edn. 374 375). The facts that the stomach was not filled with water and bloated and no froth was coming out of the mouth of the deceased, are important symptoms which to a long way to exclude the possibility of death being as a result of suicide by drowning. Then there were injuries and blood marks on the dead body. PWs 23, 25, 26 and 27, all testified with one voice that they had seen one injury, from which blood was oozing out on the forehead, another on the thigh and blood marks on the drawer (under garment) of the deceased. In examination in chief, even PW 49, who in cross examination tried to dilute his version in a possible attempt to favour A2, stated that he had seen a reddish strain (stain ?) on the forehead and blood marks on the drawer of the deceased. Out of these PWs, 23, 25 and 26 were present near the dead body when A2, accompanied by Al and P.W. 49, went there to hold the presence of an inquest. PW 23 was a fisherman of Pallipalem, PW 25 was also a resident of the same hamlet. He was an employee of the Electricity Department. PW 27 was the Karnam of Gangapatnam. PWs 23 and 25 were among those villagers who had seen the deadbody washed ashore at about 9 P.M. On 6 6 71. The High Court found that the version of these witnesses in regard to the injuries and blood marks on the deadbody was entirely reliable. No reason has been shown why we should take a different view of their evidence. 613 It is further in the evidence of PWs. 23, 25, 26 and 49 that when the blood marks on the drawer pointed out to A2, the latter ignored it saying that the girl had been out of doors and was in menstruation. Contrary to what he and the PWs. had observed at the spot, A2 wrote in the inquest report, P 11, Col. VII: "There are no injuries on the dead body". Having excluded the possibility of suicide, we may now consider,. whether the deaths of these girls were accidental. It is no body 's case that on the 6th June, 1971, any sea craft, vessel or boat met with an accident off or near about Mypad resulting in loss of human life. No suggestion of accidental death of any person, much less a women, off or. On the sea share near or far from Pallipalem was put to any of the prosecution witnesses. Nor such a plea has been put forward by the accused in their statements recorded under section 342, Cr. P.C Indeed, tie learned Counsel for the appellants has not pursued any such line of argument. We have, therefore, no hesitation in negating the possibility of accidental death. This process of elimination inevitably leads us to the conclusion that in all probability the death of these girls, at any rate of Kala Rani, was due to culpable homicide. Now we come to the last but the most telling circumstance which not only confirms this conclusion and puts it beyond doubt, but also. unerringly establishes, by inference, the other ingredients of the offence, including that the accused knew or had reason to believe that culpable homicide of Kala Rani had been committed. This circumstance is the conduct of A2, in intentionally preparing false records and its abetment by A1. From its very start the investigation conducted by A2 was dishonest and fraudulent. He intentionally indulged in suppressio veri and suggestio falsi at every step. He had been informed by the Head Constable (PW 34) at about 8 or 8 45 A.M. in the Police Station that a report from the Sarpanch had been received about the dead body of a girl bearing injuries, found washed ashore near Pallipalem. This in formation which was passed on to A 2 and on receiving which he proceeded from the Police Station for investigation, was the real I.R. It was the duty of A 2 to enter faithfully and truly the substance of this information in the Station Diary and to record further that he was proceeding for investigation on the basis thereof. Instead of doing so, he intentionally suppressed the factum and substance of this first information and the real purpose of his departure from the Police Station in the records prepared by him or by his subordinates in his immediate presence or under his supervision. Instead of retrieving the written report that had been first received at 8 A.M. in the Police Station and was, returned by the Head Constable to the Sarpanch, he fabricated the document exhibit P. 25, purporting to be the F.I.R. given to him at Mypad by one N. Subba Rao. The false story contained in this document has been substantially repeated in the inquest report, exhibit P. 25. 614 P.Ws. 23, 25, 27 and 49 discount the presence of any such person, named N. Subba Rao either at the inspection of the dead body in the sea shore by A 2 or at the 'Temple, where according to A 2, he prepared the inquest report. None of these PWs has sworn that a statement of any N. Subba Rao was recorded in their presence by A 2. No specific question was put by the defense to PW 49 in cross examination to establish that the report exhibit P 25 was scribed by A2 at Mypad at about 11.30, to the dictation of N. Subba Rao or any other person although the witness was generally questioned as to the number of persons carried in the car. P. W. 27, the Karnam, has definitely excluded the presence of any informant named Subba Rao. P.W. 27 testified that after the inquest, Al" A2, P.W. 26 and "a new person" implying PW 49, met him and thereafter all the five (including PW 27) got into the car and proceeded to the village. P.W. 27 did not vouch the presence of a sixth man in the car. Only PW 26 has stated that R2 had recorded the statements of witnesses including that of a per son named N. Subba Rao. PW 26 had reason to tell a lie on this point. PW 26 admitted that at the time of the inquest, he was an accused in a criminal case of Indukurpet Police Station. A2 was at the material time In charge of that Police Station and was presumably concerned with the investigation of that case against PW 26. PW 26 therefore appears to have deviated from truth in regard to the presence of N. Subba Rao, under the influence of the accused. In any case, the evidence of PW 26 on this point stands contradicted by the reliable testimony of PWs 23, 25, 27 and 49. In the inquest report, as also in exhibit P 25, the address of this mysterious person is recorded as "Nuthalapatti Subba Rao son of Venkateswarlu, aged about 37 years, Vysya of Patha Guntur." Despite efforts, the investigating officers, PWs 59 and 60, could not trace on the basis of this address, any person bearing the said particulars at Pata Guntur or anywhere else in the District. In response to the memo issued by the D.S.P. (PW 59) A 2 could neither produce this N. Subba Rao, nor give any indication about his existence, though A2 claimed to have known him. For these reasons, the High Court was right in holding that this Nathalapatti Subba Rao was a fictitious person of A2 's imagination. Similarly, during investigation all efforts made by PWs 59 and 60 to trace and find if Vijay and Nirmala prostitutes, represented in exhibit P 25 and exhibit P 11 as the deceased persons ever existed in flesh and blood, remained futile. In these premises, the High Court was right in concluding that Vijaya and Nirmala prostitutes were also the coinage of the brain of A2. It is necessary to say something more about exhibit P 25 because the entire story was spun around it by A 2. It did not see the light of the day till the 11th June. A 2 did not send it to the Police Station for registration before that date. It is in the evidence of P. W. 55, who at the material time was a Head Constable posted in this Police Station, that after his departure in the morning of the 7th, A 2 returned to the Police Station on the 10th evening and it was then that he handed over this document to the witness with the direction that the latter should enter that report in the relevant register, dating it as the 7th June, 1971. The Head Constable after slight hesitation 615 agreed and inserted this report in the blank space meant for the entries of the 7th June, and thereafter, as required by A2, handed over to the latter, a copy of that report. A 2 also made an entry (exhibit P 34) in the General Diary of the Police Station, dated 10.6.1971 on 11.6.1971 at 2 A.M. It reads: "Returned to P.S. after leaving it on 7.6.71 at 9.30 a.m. visited Mypadu en route to Gangapatnam at 11 00 hours at 11 30 a.m., recorded statement of N. Subba Rao, sent to Police Station for issuing First Information Report u. sec. 174 Cr. P.C. then visited Pallipalem at 12 30 p.m. investigated, held inquest over dead body of K. Vijaya. At 20 30 p.m., left village reached Mypadu at 21.30 hours, made enquiries in Cr. 48/71 and halted. On 9.6.71 visited Gangapatnam detailed duties for bandobust and visited Ravur, investigated into Cr. 47/71, visited Nellore at 12 30 hours" did bandobust for festival and halted for the night. On 9.6.71 visited Mypadu for petition enquiry and investigated into Cr. 48/71, 41,42 and 44/71 and hailed. On 10 6 71 visited Gangapatnam, supervised and did bandobust for car festival at 00. 30 hours, received First Information Reports in Cr. 49 to 51/71 at 00 45 hours, left the village with men and reached Police Station. " A mere glance at this report betrays its falsity. This shows how in his anxiety to suppress the truth he tried to reinforce and cover up one falsehood with another. In this connection, it may be noted that the D.S.P. persistently pressed A 2 to send the copies of the F.I.R. and the Inquest Report. A 2 was unable to supply any copy of the F.I.R. before the 12th of June, when the D.S.P. himself came to the Police Station and collected it. The D.S.P. (P.W. 59) testified that on the 11th June, 1971, he had questioned A 2 about the First Information Report and the inquest report. As a result he received a copy of the F.I.R. On the 12th but did not receive any copy of the inquest report. Consequently on 14.6.71, he telephoned to A2 to send the case diaries and inquest report without further delay. Despite these efforts, the D.S.P. did not receive whose records on that day. on 15.6.71, he issued a memo. to A 2 directing the latter to produce immediately the complaint of N. Subba Rao, the inquest report and the case diaries. It was only then that A2 produced the persistently requisitioned records. These inordinate delays in sending the records prepared by A2, confirm the testimony of PWs 23, 25 and 49 that no inquest on the dead body was held at the spot, nor was the inquest report or any other record prepared there and then, and that their signatures were obtained by A2 on a blank sheet of paper. Of course PW 26 stated that A2 had recorded statements of witnesses and had prepared the inquest report at the Temple. As already noticed, it is not prudent to accept this version of PW 26. He had a motive to favour A2. Moreover, his version stands inferentially falsified by the circumstances including the unusual delay in registering the report exhibit P 25 in the Police Station and in sending the copies of the records to the D.S.P. 616 Section 174, Cr.P.C peremptorily requires that the officer holding an inquest on a deadbody should do so at the spot. This mandate is conveyed by the word "there" occurring in sec. 174(1). Sub section (3) of the Section further requires the officer holding the inquest to forward the body with a view to its being examined, by the medical man appointed by the State Government in this behalf, if the state of the weather and the distance admit of its being so forwarded without risk of such purification on the road as would render such examination useless. The sub section gives a discretion to the Police officer not to send the body for post mortem examination by the medical officer only in. One case, namely, where there can be no doubt as to the cause of the death. This discretion however is to be exercised prudently and honestly. Could it be said in the circumstances of the case, that there was no doubt as to the death of Kala Rani being from drowning ? In this connection it is important to note that Kala Rani was not a total stranger to A 2. It is in evidence that A 2 used to go to Nellore for Bandobust and there he had sufficient opportunity to come across Kala Rani who was a prominent student leader. The testimony of P.W. 47 is to the effect that when on 17.7.1971, A2 came to him and requested the witness to dissuade the father of the deceased from getting the dead body exhumed, he (A2) admitted that Kala Rani deceased was well known to him The body was not in an unidentifiable condition. A 2 therefore could he under no mistake that it was the body of Kalarani deceased particularly when he inspected it after its face had been washed by PW. 23 under the orders of A 2. Despite such knowledge, he laid a false trail and prepared false record mentioning that the deadbody was of a prostitute named Vijaya. Medical jurists have warned that in the case of a deadbody found floating in water, the medical man from a mere observance of the external condition of the body should not jump to the conclusion that the death was from drowning. Only internal examination of the body can reveal symptoms which may indicate with certainty as to whether the death was from drowning or from. unlawful violence before the body was immersed in water. That is what Taylor the renowned medical jurist, has said on the point: "When a deadbody is thrown into the water. and has remained there sometimes water. fine particles of sand, mud. weeds etc. may pass through the windpipe into the large air tubes. In these circumstances, however, water rarely penetrates into the smaller bronchi and alveoli as it may by aspiration, and even the amount which passes through the glottis is small. If immersed after death the water is found only in the larger air tubes and is unaccompanied by mucous froth. Water with suspended matters can penetrate even to the distant air tubes in the very smallest quantity even when not actively inhaled by respiratory efforts during life The quality, or nature of the suspended matter may be of critical importance.***When decomposition is advanced the lungs 617 may be so putrefied as to preclude any opinion as to drowning but the demonstration of diatoms in distant parts of the body inaccessible except to circulatory blood, provides strong evidence of immersion in life if not of death from drowning." (emphasis supplied) A2 was a Police officer of standing and experience. He knew the deceased. He saw injuries on her deadbody. He must have known if he were honest that in the circumstances of the case autopsy of the deadbody by a medical officer was a must to ascertain the cause of her death. Instead of sending the deadbody for post mortem examination, he in indecent haste, purposely got it buried without holding, any inquest at the spot. He did not send for the relations of the deceased. Even a layman like the Karnam (PW 27) felt something strangely amiss in this conduct of A2. In response to the queries made by the Karnam, A2 made false excuses. He intentionally misrepresented (in concert with A1) that PW 49 was a relation of the deceased. He flouted all the salutary requirements of section conduct in distorting and suppressing material evidence and in preparing false records (exhibit P 11 and P 25) as to the identity of the deadbody, the cause of the death and the falsification of the data bearing on that cause, could not be explained on any reasonable hypothesis save that of his guilt. The circumstances established in this case unmistakably and irresistably point to the conclusion that within all human probability, accused No. 2 knew or had reasons to believe that Kala Rani had been done to death by some person or persons. All the elements of the charge under section 201 had thus been proved to the hilt against him. Before considering the case of Al, we may notice here the decision of this Court in Palvinder Kaur, vs State of Punjab(1). This decision was cited by the learned Counsel for the appellants in support of his argument that the circumstances: that the deceased died, that the appellant prepared false record regarding the cause of her death or caused post haste disposal of the dead body without any autopsy or its identification by the relations of the deceased, do not establish the cause of Kalarani 's death or the manner and the circumstances in which it came about. Counsel laid particular stress on the observation of this Court in that case that in cases depending on circumstantial evidence courts should safeguard themselves against the danger of basing their conclusions on suspicions howsoever strong. The decision in Palvinder Kaur 's case (supra) is a precedent on its own facts. The observations of this Court to the effect, that "Jaspal died, that his body was found in a trunk and was discovered from a well and that the appellant took part in the disposal of the body do not establish the cause of his death or the manner and circumstances in which it came about" cannot be construed as an enunciation of a rule of law of general application. Whether the circumstantial evidence in a particular case is sufficient and safe enough to warrant a finding that an offence has been committed. is (1) 9 L925SupCI/75 618 a question which belongs to the realm of facts and not of law. So is the question whether the accused knew or had reasons to believe that such an offence has been committed. It is true that this question further depends on an assessment of the accused 's mind. Nevertheless, it is a question of fact "The state of a man 's mind", quoth Lord Bowen, "is as much a fact as the state of his digesion". In Palvinder Kaur 's case (supra) there was, in the first place, no material, direct or indirect, justifying a finding that the death of Jaspal was caused by the administration of potassium cyanide and if the defence version was believed his death would be the result of an accident. In that version was disbelieved then there was absolutely no proof of the cause of his death. In the method and the manner in which the deadbody of Jaspal was dealt with and disposed of by the accused did raise some suspicion but from these facts, the Court found it unsafe to draw a positive conclusion that he necessarily died an unnatural death. Nor could the possibility of the commission of suicide by Jaspal be totally ruled out. The position of A2 in the present case was very different. He was a Police officer and as such was expected to discharge the duties entrusted to him by law with fidelity and accuracy. He was required to ascertain the cause of the death and to investigate the circumstances and the manner in which it was brought about. His duty it was to make honest efforts to reach at the truth. But he flagrantly abused the trust reposed in him by law. He intentionally fabricated false clues, laid false trails, drew many a red herring across the net, smothered the truth, burked the inquest, falsified official records and short circuited the procedural safeguards. In short, he did everything against public justice which is penalised by s 201, Penal Code. The other circumstantial evidence apart, the series of these designed acts of omission and commission on the part of A2, were eloquent enough to indicate in no uncertain terms that A2 knew or had reasons to believe that Kalarani 's death was homicidal. It is not disputed that A1 was a friend of A 2. It was A l who had supported A 2 's idea that the latter should himself go to the spot to investigate as the deceased girl appeared to be from a high class family. Standing alone, this circumstance is not of a conclusive tendency. But in the context of his subsequent conduct it assumes significance. He wilfully conducted himself in such a manner that there could be no doubt that he was a guilty associate of A 2. When in the context of the burial of the deadbody ordered by A 2 without sending the body for post mortem, the Karnam (PW 27) asked whether any relation of the deceased had come, A 2 pointed towards PW 4 saying that he was related to the deceased. Simultaneously, A 1 said . "Yes". This concerted conduct of A 1 in fraudulently representing PW 49 to be a relation or the deceased, when he knew that PW 49 was not such a relation, clearly marks him out as an intentional abettor and a guilty partner in the commission of the offence under sec. 201, Penal Code. 619 There can be no doubt that on the basis of the facts found, the charges under sections 218, 468, Penal Code had been fully established against the appellant; A 2 being a public servant charged with the preparation of official record relating to the investigation of the cause of the death of Kalarani, framed that record in a manner which he knew to be, incorrect with intent to save or knowing to be likely that he will thereby save the true offender or offenders from legal punishment. obviously, he prepared this false and forged record with the fraudulent and dishonest intention of misleading his, superior officers and in during them to do or omit to do anything which they would not do or omit if they were not so deceived or induced. A l, as discussed already, facilitated and intentionally aided A 2, in the preparation of the false and forged record. For the foregoing reasons we uphold the convictions and sentences of the appellants, on all the counts, as recorded by the High Court, and dismiss the appeal. V.P.S. Appeal dismissed.

On a report given by the father, regarding the disappearance of his two daughters, investigation was taken up by the D.S.P. because of certain special circumstances. After completing the investigation, A 2, a sub inspector of police, A 1, his friend, and another were charged with offenses under sections 120B, 366, 376. 302/34, 201, 218, 468/34, and 324 I.P.C. for conspiracy, abduction, rape, murder, calling evidence of crime to disappear, fabricating reports, forgery and causing hurt. The trial court acquitted all the accused. On appeal by the State, the High Court convicted A.1 and A.2 for offences under sections 201, 218 and 468 I.P.C. Dismissing the appeal to this Court, ^ HELD: (1) In order to bring home an offence under section 201, I.P.C., the prosecution has to prove; (a) that an offence has been committed; (b) that the accused knew or had reason to believe that the offence has been committed; (c) that with such knowledge or belief he, (1) caused any evidence of the commission of that offence to disappear, or, (ii) gave any information`respecting that offence which he then knew or believed to be false; (d) that he did so with the intention of screening the offender from legal punishment; and (e ) if the charge be of an aggravated form, as in the present case, that the offence in respect of which the accused caused evidence to disappear was punishable with death or with imprisonment for life or with imprisonment extending to 10 years. [610A E] Whether the circumstantial evidence in a particular case is sufficient and safe enough to warrant a finding that an offence has been committed, is a question which belongs to the realm of facts and not of law. So is the question whether the accused knew or had reason to believe that such an offence has been committed. [617H 618B] F Palvinder Kaur vs State of Punjab , explained. (2) In the present case the two girls died an unnatural death. The corpse of one was found on a beach having been washed ashore and the Corpse of the other was seen floating in the sea. A fisherman who noticed the second body saw marks indicating throttling. He removed a wrist watch and ornament, from it and allowed the body to drift away. The wrist watch and ornaments were identified as belonging to the younger sister of the first victim. The 3 possibilities are, that they committed suicide by drowning, or that their deaths were accidental, or that they were done to death by some person or persons. The choice of any of these possibilities would lead to the exclusion of the other two. [610G H] 3(a) The elder sister was a graduate and a nature girl of 22 who used to be the leader of the College Union. On the day of the occurrence the deceased girls along with their parents had participated in certain festivities. They were cheerful and there was no evidence to show that they were suffering from any mental depression with suicidal tendencies. [611E H] 603 (b) The body on the sea shore was in a semi nude condition. It had on only blouse, brassiere, petticoat and drawers but no sari. From the fact that it is customary for women of the locality to tie their series, tightly the possibility of the sari having been swept off be waves was remote. This shows that she was not wearing her sari when her body was immersed in water, but no Indian woman would commit suicide by jumping into sea in such a near nude condition because. ii would expose her body to post mortem. indignity. [611 H 162 C] (c) When the body was first seen there were, an injury on the forehead from which blood was oozing, a reddish abrasion on the thigh and blood marks on the drawers. the stomach, however, was not in a bloated condition. These circumstances show that death was not due to drowning. [612 G; E F] (4) It was nobody s case that any boat met with an accident off or near the sea shore resulting in loss of human life. No suggestion of accidental death of any person or woman was put to and prosecution witness. Such a plea had not ever been put forward by the accused in their statements recorded under s, 342, Cr. P.C. Therefore, the possibility of accidental death must also be excluded. [613 B D] (5) This process of elimination of suicide and accidental death inevitably leads to the conclusion that the death of these two girls, or at any rate of the first victim, was due to culpable homicide. [613 D] (6) From the very start, the investigation conducted by A. 2 was dishonest and fraudulent. He intentionally indulged in suppessio veri and suggestio falsi. [613 E F] (a) The morning after the night when the dead body was seen on the beach, a report was handed at the Police Station but the Head Constable returned it saying that it should be drawn up in the printed form and signed by the village Munsuff. A little later, A 2, the sub inspector incharge of the police station, came there and the Head Constable told him about the report. At that time A.1 and P. W. 49, also came to the Police Station, and A.1 also referred to the finding of the dead body on the seashore. Thereafter, A.1` A 2 and P.W. 49 and others went to the seashore at about noon. A 2 did not hold any inquest on the dead body, but instead, directed the body to be buried. When the Karnam questioned A 2 why he did not send the body for post mortem examination, A 2 replied that the body was that of a prostitute though the body was in an identifiable condition and he new the victim personally. He also said that it was a case of suicide and that P.W, 49 was a relation of the victim. A.1, who heard this, also said that P.W. 49 was a relation of the victim. Thereafter, A 2 fabricated an Inquest Report in which he stated falsely that there were no injuries on the dead body and that the stomach was bloated due to drinking of water, suggesting that it was a case of death by drowning. He also fabricated a false report as if given to him by one who knew the victim and the other girl to be prostitutes. That report was handed over by A 2 at the Police Station only 5 days later and he asked the Head Constable to note the date as if given 3 days before. The Head Constable did so after some hesitation. Inspire of persistent requests by the D.S.P., A.2 sent the copies of the F.I.R. and Inquest Report prepared by him only after an inordinate delay. A 2 also made false entries in the General Diary of the Police Station to corroborate the false Inquest Report and the fictitious complaint. He even tried to dissuaded the father from getting the body, which was buried, exhumed. [605 G 607 C; 614 G 616 E] (b) It was A 2 s duty to enter faithfully and truly the substance of the information in the station diary and to record further that he was proceeding for investigation on the basis thereof when he received information from the Head Constable about the reports regarding the finding of a dead body on the seashore. Instead of retrieving the written report that had been first received at the police station and returned by the head constable, he fabricated another document purporting to be the first information. All the reliable witnesses for the prosecution have deposed that no such person as the one who gave the first information was present at the scene of occurrence. When the D.S.P. was investigating into the matter, A 2 was not able to produce or give any indication about that informant though he claimed to have known him. Efforts to trace the existence of the two prostitutes mentioned in that report were also futile leading to the inference that they were also fictitious persons. [613 F 614 F] 604 The credible circumstantial evidence on record re inforced by the inference available from the incriminating conduct of the appellants, particularly A 2, in deliberately preparing false records to suppress the identity and the cause of death of the deceased girls fully justifies the conclusion reached by the High Court. [611 B C] (c) Section 174, Cr. P.C. peremptorily requires that the officer should hold an inquest on a dead body at the spot. This mandate is conveyed by the word there occurring in section 174(1). Section 174(3) gives a discretion to the Police officer not to sent the body for post mortem examination only in one case, namely, where there can be no doubt as to the cause of the death. This discretion has to be exercised prudently and honestly. [616 A C] (d) A 2 is a police officer of standing and experience, who was expected; to discharge the duties entrusted to him by law with fidelity and accuracy. He was required to ascertain the cause of death and investigate the circumstances and the efforts in which it was brought about. His duty was to make honest efforts to reach at the truth. He knew the deceased and saw the injuries on her dead body and must have known that in the circumstances of the case autopsy of the dead body was necessary to ascertain the cause or her death. He flouted all the salutary requirements of section 174. P.C. and his conduct in distoring and suppressing material evidence and preparing false records as to the identity of the dead body the cause of death and the falsification of the data bearing on that cause, could not be explained on any reasonable hypothesis save that of his guilt. [617 B E; 618 D F] (7) As regards A 1, his concerted conduct, including that in supporting the fraudulent misrepresentation made by A 2 to the Karnam. regarding PW 49 being a relation of the deceased, shows that he was a guilty associate of A 2.

8k-16k

Civil Appeal Nos. 1819 1821 of 1970. Appeals by Special Leave from the Judgment and Order dated the 8/9th July 1969 of the High Court at Bombay in Income Tax Reference No. 29 of 1963. G.C. Sharma, O.P. Dua, Annoop Sharma and P.K. Mukherjee for the Appellants. S.T. Desai, P.L. Juneja and S.P. Nayar for the Respondent. The Judgment of the Court was delivered by CHANDRACHUD, J. The appellant, Surjit Lal Chhabda, had three sources of income. He had a share in the profits of two partnership firms, he received interest from Bank accounts and he received rent from an immovable property called "Kathoke Lodge". These were his self acquired properties and until the assessment year 1956 57, he used to be assessed as an individual in respect of the income thereof. On January 26, 1956 he made a sworn declaration before a Presidency Magistrate in Bombay that he had thrown the property Kathoke Lodge into the 'family hotchpot ' in order to impress that property with the character of joint family property and that he would be holding that property as the Karta of the joint Hindu family consisting of himself, his wife and one child. That child was an unmarried daughter. In the assessment proceedings for 1957 58, the appellant contended that since he had abandoned all separate claims to Kathoke Lodge, 167 the income which he received from that property should be assessed in the status of a Hindu Undivided Family. The income tax authorities and the Income tax Appellate Tribunal rejected that contention for varying reasons. The Income tax Officer held that in the absence of a nucleus of joint family property, there was nothing with which the appellant could mingle his separate property and secondly, that there could not be a Hindu undivided family without there being undivided family property. The appellant carried the matter in appeal to the Appellant Assistant Commissioner who differed from the Income tax Officer on both the points but dismissed the appeal on two other grounds. The A.A.C. held that even after the declaration, the appellant was dealing with the income of Kathoke Lodge in the same way as before which showed that the declaration was not acted upon and secondly, that even assuming that the property was thrown into the common stock and was therefore joint family property, the income from that property could still be taxed in the appellant 's hands as he was the sole male member of the family. The Tribunal accepted the declaration as genuine and differed from the A.A.C. 's finding that it was not acted upon. The appellant, according to the Tribunal, was the Karta of the joint Hindu family and it was irrelevant as to how he dealt with the joint family income. The Tribunal however held that the appellant had invested his separate property with the character of joint family property, he being a sole surviving coparcener continued to have the same absolute and unrestricted interest in the property as before and therefore, in law, the property had to be treated as his separate property. The appellant moved the Tribunal for referring five questions to the High Court while the respondent applied for the reference of one other question. The Tribunal referred the following question only for the opinion of the Bombay High Court under section 66(1) of the Income tax Act, 1922: "Whether, on the facts and in the circumstances of the case, the income from property known as 'Kathoke Lodge ' was to be assessed separately as the income of the Hindu undivided family of which the assessee was karta?" In the High Court, it was contended on behalf of the appellant that it is open to a male member of a joint Hindu family to convert his self acquired property into joint family property by throwing it into the common hotchpot; that for effectuating this purpose it is neither necessary that there should be an ancestral or joint family nucleus nor that there should be more than one male in the joint family; and since Kathoke Lodge was impressed with the character of joint family property, its income belonged to the joint Hindu family of which the appellant was the Karta, the other members being his wife and unmarried daughter. On the other hand, the Department contended that it was contrary to the basic concept of a Hindu Undivided Family that a single male along with females could form a joint Hindu family; that though a joint Hindu family could include a wife and unmarried daughters, a 168 sole male member could not constitute a joint Hindu family along with females; and that it was necessary for the formation of a joint Hindu family that there should be more than one male capable of claiming partition of the joint family property. In the alternative, it was urged by the Department that a single male could form a joint Hindu family along with a coparcener 's widow who is capable of making an adoption to her deceased husband but not with his own wife and unmarried daughter. The argument that the existence of ancestral or joint family property was an essential pre requisite to throwing the self acquired property into the common stock was raised but was not pressed in the High Court. On these contentions, the real controversy before the High Court was whether a single male can form a joint Hindu family with his wife and unmarried daughter; if yes, whether the Karta of such a family can impress his self acquired property with the character of joint family property by throwing it into the family hotchpot; and, lastly, whether the income of such property can be assessed as the income of the joint family. The High Court did not enter into these questions and made its task simple by saying: "Several authorities were referred to on either side in support of their respective contentions. We do not, however, propose in deciding this reference to go into the larger question as to whether the property of the assessee, which was originally self acquired property, assumed the character of a Hindu undivided family property, as to what are the incidents of a Hindu undivided family property and under what circumstances can separate property become Hindu undivided family property. Some of these questions have been directly answered in the authorities which were cited before us. "The question referred is confined to the 'income ' from Kathoke Lodge. We would, therefore, without going into these larger questions, prefer to rest our decision on the short point whether the income from the property known as Kathoke Lodge after the declaration was the income of a Hindu undivided family and in this respect whether the principle laid down by the Privy Council in Kalyanji 's case was correctly applied. " The High Court assumed for the purposes of argument that there need not be more than one male member for forming a joint Hindu family as a taxable unit and that a joint Hindu family could lawfully consist of a single male member, his wife and unmarried daughter. On these assumptions the High Court concluded that Kathoke Lodge, from the date of the declaration by which it was thrown into the common stock, was the Property of the Hindu undivided family. It, however, held: "But the assessee has no son and therefore no undivided family. His ownership of the property and its income in fact remains the same as before. The fact of the existence of a wife or of a wife and daughter would make no difference 169 to his ownership of that property. His position as a member of the joint family after the declaration would be the same as that of a sole surviving coparcener, but it is now settled law that a person who for the time being is the sole surviving coparcener is entitled to dispose of the coparcenary property as if it were his separate property. That is the position which the assessee held so far as his property is concerned. So far as the income is concerned, he has the complete power of disposal over the income and, even assuming that he is the karta of a joint Hindu family, there is no one who can question his spending, i.e., whether or not it is for legal necessity or other justifiable purpose. If then, his right to the income remains under his personal law the same as it was before he made the declaration, the question arises whether under the Income tax Act it must be held to be the income of the karta of the Hindu undivided family. That is precisely the question which the Privy Council answered against the assessee in Kalyanji 's case. .In our opinion, therefore, the assessee 's case would fall squarely within the principle enunciated by their Lord ships of the Privy Council in Kalyanji 's case and upon that view the income in the hands of the assessee would be liable to be assessed as his individual income. " The Privy Council decision on which the High Court relies is Kalyanji Vithaldas vs Commissioner of Income tax.(1) The judgment of the High Court is reported in Before examining the validity of the High Court 's reliance on Kalyanji 's case and the correctness of its conclusion that the instant case falls within the ratio of that decision, it is necessary to have regard to the principles of Hindu Law governing joint families. The High Court did not examine those principles, calling them "larger questions", and preferred wholly to rely on, so to say, the magic touch of Kalyanji 's case. It assumed that a joint family may consist of a single male, a wife and daughter which means that it assumed that the appellant was a member of a joint Hindu family consisting of himself, his wife and daughter. However, in the very next breath the High Court concluded: "But the assessee has no son and therefore no undivided family." An examination of fundamentals might have saved the High Court from the inconsistency that a single male can constitute a "joint family" with his wife and daughter but if that male has no son, there can be no "undivided family". In the first place, joint family and undivided family are synonymous terms. Secondly, when one says that a joint Hindu family consists of a single male, his wife and daughter, one implies necessarily that there is no son. If there were a son, there would be two males. For our limited purpose, fundamentals do not any more require a study of Sastric texts, digests and commentaries because judicial decisions rendered over the last century and more have given a legalistic form to what was in a large measure a mingling of religious and 170 moral edicts with rules of positive laws. Hindu law today, apart from the piecemeal codification of some of its branches like the laws of marriage, succession, minority, guardianship, adoption and maintenance is Judge made law, though that does not detract from the juristic weight of Smritis like the Yajnavalkya Smriti nor from the profundity of Vijnaneshwara 's Commentary on it, the critique bearing the humble title of 'Mitakshara '. The appellant is governed by the Mitakshara school of Hindu law but that is not of any particular consequence for the purposes of this appeal. The differences between the Mitakshara and Dayabhaga schools on the birth right of coparceners and the rules of inheritance have no bearing on the issues arising in this appeal, particularly on the question whether a single male can constitute a joint or undivided family with his wife and unmarried daughter. A joint Hindu family under the Dayabhaga is, like a Mitakshara family, normally joint in food, worship and estate. In both systems, the property of joint family may consist of ancestral property, joint acquisitions and of self acquisitions thrown into the common stock(1). In fact, whatever be the school of Hindu law by which a person is governed, the basic concept of Hindu undivided family in the sense of who can be its members is just the same. Section 2(9) of the Income tax Act, 1922 defines a "person" to include inter alia a "Hindu undivided family". Under sections 3 and 55 of that Act, a Hindu undivided family is a taxable unit for the purposes of income tax and super tax. The expression 'Hindu undivided family ' finds reference in these and other provisions of the Act but that expression is not defined in the Act. The reason of the omission evidently is that the expression has a well known connotation under the Hindu Law and being aware of it, the legislature did not want to define the expression separately in the Act. Therefore, the expression 'Hindu undivided family must be construed in the sense in which it is under stood under the Hindu law(1). There is no substance in the contention of the respondent that in the absence of an antecedent history of jointness, appellant cannot constitute a joint Hindu family with his wife and unmarried daughter. The lack of such history was never before pleaded and not only does it find no support from the record but such an assumption ignores the plain truth that the joint and undivided family is the normal condition of Hindu society. The presumption therefore is that the members of a Hindu family are living in a state of union, unless the contrary is established.(3) The strength of the presumption may vary from case to case depending upon the degree of relationship of the members and the farther one goes from the founder of the family, the 171 weaker may be the presumption. But, generally speaking, the normal state of every Hindu family is joint and in the absence of proof of division, such is the legal presumption. Thus, a man who separates from his father or brothers may, nevertheless continue to be joint with the members of his own branch. He becomes the head of a new joint family, if he has a family, and if he obtains property on partition with his father and brothers, that property becomes the ancestral property of his branch, qua him and his male issue. It is true that the appellant cannot constitute a coparcenary with his wife and unmarried daughter but under the Income tax Act a Hindu undivided family, not a coparcenary, is a taxable unit. A Hindu coparcenary is a much narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property and these are the sons, grandsons and great grandsons of the holder of the joint property for the time being, that is to say, the three generations next to the holder in unbroken male descent. Since under the Mitakshara Law, the right to joint family property by birth is vested in the male issue only, females who come in only as heirs to obstructed heritage (sapratibandha days), cannot be coparceners. But we are concerned under the Income tax Act with the question whether the appellant 's wife and unmarried daughter can with him be members of a Hindu undivided family and not of a coparcenary. In the words of Sir George Rankin who delivered the opinion of the Judicial Committee in Kalyanji 's case : "The phrase `Hindu undivided family ' is used in the statute with reference, not to one school only of Hindu law, but to all schools; and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the words `Hindu co parcenary ', all the more that it is not possible to say on the face of the Act that no female can be a member." (p. 95). Outside the limits of coparcenary, there is a fringe of persons, males and females, who constitute an undivided or joint family. There is no limit to the number of persons who can compose it nor to their remoteness from the common ancestor and to their relationship with one another. A joint Hindu family consists of persons lineally descended from a common ancestor and includes their wives and unmarried daughters. The daughter, on marriage, ceases to be a member of her father 's family and becomes a member of her husband 's family. The joint Hindu family is thus a larger body consisting of a group of persons who are united by the tie of sapindaship arising by birth, marriage or adoption. "The fundamental principle of the Hindu joint family is the sapindaship. Without that it is impossible to form a joint Hindu family. With it as long as a family is living together, it is almost impossible not to form a joint Hindu family. It is the family relation, the sapinda relation, which distinguishes the joint family, and is of its very essence. "(1) 172 The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption. But the absence of an antecedent history of jointness between the appellant and his ancestors is no impediment to the appellant, his wife and unmarried daughter forming a joint Hindu family. The appellant 's wife became his sapinda on her marriage with him. The daughter too, on her birth, became a sapinda and until she leaves the family by marriage, the tie of sapindaship will bind her to the family of her birth. As said by Golapchandra Sarkar Sastri in his "Hindu Law" (Eighth Ed., p. 240), "Those that are called by nature to live together, continue to do so" and form a joint Hindu family. The appellant is not by contract seeking to introduce in his family strangers not bound to the family by the tie of sapindaship. The wife and unmarried daughter are members of his family. He is not by agreement making them so. And as a Hindu male, he himself can be the stock of a fresh descent so as to be able to constitute an undivided family with his wife and daughter. That it does not take more than one male to form a joint Hindu family with females is well established. In Gowli Buddanna vs Commissioner of Income tax, Mysore, Bangalore(1), one Buddappa, his wife, his two unmarried daughters and his adopted son Buddanna were members of a Hindu undivided family. On Buddappa 's death a question arose whether the adopted son who was the sole surviving coparcener could form a joint Hindu family with his mother and sisters and could accordingly be assessed in the status of a manager of the Hindu undivided family. Speaking for the Court, Shah J. observed : "The plea that there must be at least two male members to form a Hindu undivided family as a taxable entity also has no force. The expression `Hindu undivided family ' in the Income tax Act is used in the sense in which a Hindu joint family is understood under the personal law of Hindus. Under the Hindu system of law a joint family may consist of a single male member and widows of deceased male members, and apparently the Income tax Act does not indicate that a Hindu undivided family as an assessable entity must consist of at least two male members. " In N. V. Narendranath vs Commissioner of Wealth tax, Andhra Pradesh, Hyderabad(2), the appellant filed returns for Wealth Tax in the status of a Hindu undivided family which at the material time consisted of himself, his wife and two minor daughters. The claim to be assessed in the status of a Hindu undivided family rested on the circumstance that the wealth returned consisted of ancestral property received or deemed to have been received by the appellant on partition with his father and brothers. The High Court held that as the appellant 's family did not have any other male coparcener, the assets must 173 be held to belong to him as an individual and not to the Hindu undivided family. That decision was set aside by this Court on the ground that a joint Hindu family could consist under the Hindu law of a single male member, his wife and daughters and that it was not necessary that the assessable unit should consist of at least two male members. In both of these cases, Gowli Buddanna 's and Narendranath 's the assessee was a member of a pre existing joint family and had, in one case on the death of his father and in the other on partition, become the sole surviving coparcener. But the decision in those cases did not rest on the consideration that there was an antecedent history of jointness. The alternative argument in Gowli Buddanna 's case (p. 266) was an independent argument uncorrelated to the pre existence of a joint family. The passage which we have extracted from the judgment of Shah J. in that case shows that the decision of this Court did not proceed from any such consideration. The Court held in terms categorical that the Hindu undivided family as an assessable entity need not consist of at least two male members. The same is true of the decision in Narendranath 's case (see p. 886). Thus the contention of the Department that in the absence of a pre existing joint family the appellant cannot constitute a Hindu undivided family with his wife and unmarried daughter must fail. The view of the High Court that the appellant has "no son and therefore no undivided family" is plainly unsound and must also be rejected. Accordingly, the question whether the income of the Kathoke Lodge can be assessed in the hands of the appellant as a Karta or manager of the joint family must be decided on the basis that the appellant, his wife and unmarried daughter are members of a Hindu undivided family. By the declaration of January 26, 1956, the appellant threw Kathoke Lodge into the family hotchpot abandoning all separate claims to that property. The genuineness of that declaration was accepted by the Tribunal. The High Court too decided the reference on the footing that the appellant had thrown the property into the common hotchpot and that `after the declaration, the property . would be property of a Hindu undivided family in the hands of the assessee" (p. 471). Learned counsel for the Department attempted to raise a new contention before us that there is no such thing under the Hindu law as impressing separate property with the character of joint, family property, that the only doctrine known in this behalf to Hindu law is the doctrine of blending and since, prior to the declaration the family hotchpot in the instant case was empty, there was nothing with which the Kathoke Lodge or its income could be blended and therefore, the declaration is ineffective to convert that property into joint family property. Learned counsel for the appellant cited several decisions of the High Courts to controvert the Department 's contention. But apart from the merits of the point we ruled that the contention was not open to the Department. The statement of case framed by the Tribunal shows that such a contention was not raised before the Tribunal. The Commissioner of Income tax himself asked for the reference of a question to the High 174 Court for its opinion. That question concerns the point whether having regard to the conduct of the appellant his self acquired property could be said to be impressed with the character of joint family property. The question did not cover the contention raised before us on behalf of the Department. But above all, though an argument was raised in the High Court on behalf of the Department that for the operation of the doctrine of blending it was essential that there should exist not only a coparcenary but also a coparcenary property, learned counsel who appeared for the Department in the High Court "did not, after some discussion, press that there should necessarily be coparcenary property. " This was not a concession on a question of law in the sense as to what the true legal position was. What the Department 's counsel stated in the High Court was that he did not want to press the particular point. In our opinion, it is not open to the Department to take before us a contention which in the first place does not arise out of the reference and which the Department 's counsel in the High Court raised but did not press. Having examined the true nature of an undivided family under the Hindu law and in view of the findings of the Tribunal and the High Court on the second aspect, two points emerge clear : Firstly that the appellant constituted a Hindu undivided family with his wife and unmarried daughter and secondly that Kathoke Lodge which was the appellant 's separate property was thrown by him in the family hotchpot. It remains now to consider whether the income of Kathoke Lodge must be assessed in the hands of the appellant as an individual or whether it can be assessed in his status as manager of the Hindu undivided family. Since the conclusion reached by the High Court that the income of Kathoke Lodge cannot be assessed in the appellant 's status as a manager of the Hindu undivided family is based wholly on the decision in Kalyanji 's case and since that decision also loomed large in the arguments before us, it is necessary to examine it closely. The relevant facts of that case are these : One Sicka had two sons, Moolji and Purshottom. From his first wife, Moolji had two sons, Kanji and Sewdas both of whom were married but neither of whom had a son. From his second wife, Moolji had a son Mohan Das. Kanji had a wife and a daughter while Sewdas had a wife but no issue. Moolji, Kanji and Sewdas separated from one another in about 1919. In the same year Moolji made gifts of capital to Kanji and Sewdas. Moolji continued to live jointly with his second wife and the son Mohan Das born of her. Purshottom had a wife, a son and a daughter. There was another family of which the head was one Vithaldas. He had three sons, Kalyanji, Chaturbhuj and Champsi. Kalyanji had a wife, three sons and a daughter while Chaturbhuj had a wife and daughters. Moolji and Purshottom, the two sons of Sicka, who had already separated from each other started in 1912 a business called Moolji Sicka and Company in partnership with Kalyanji, the son of Vithaldas. 175 The three partners employed their self acquired properties for the purpose of that business. In course of time, Moolji 's sons Kanji and Sewdas, and Vithaldas ' sons Chaturbhuj and Champsi were taken into the partnership with the result that by 1930 the partnership came to consist of seven partners : Moolji, his sons Kanji and Sewdas; Moolji 's brother Purshottom; and Vithaldas 's sons Kalyanji, Chaturbhuj and Champsi. The interest of Kanji and Sewdas in the firm was a gift from their father Moolji and that of Chaturbhuj a gift from his brother Kalyanji. Those of the partners whose interest in the firm was separate property were not shown to have thrown that property or the receipts therefrom into the common stock. The Privy Council had six appeals before it which were filed by the partners of the firm except Chapsi. The appeals related to the assessment year 1931 32. The controversy was whether the partners should each be assessed to super tax upon his share of the profits as an individual or whether the six shares should each be assessed as income of a Hindu undivided family. Three partners out of the six, namely, Moolji, Purshotom and Kalyanji, were each members of a Hindu undivided family. Each of these three partners had a son or sons from whom he was not divided. But the income which these partners received from the firm was their separate and self acquired property. Since the income was not thrown into the common stock, the Privy Council held that it could not be regarded as the income of the respective joint families. The fourth partner Chaturbhuj had no son. His interest in the firm was obtained from his brother Kalyanji and therefore the income which he received from his share in the profits of the firm was a self acquired and not ancestral property. The Privy Council observed that even if Chaturbhuj were to have a son, that son would have taken by birth no interest in the income which fell to Chaturbhuj 's share and therefore the income was assessable in the hands of Chaturbhuj as his separate income and not that of the joint Hindu family. According to the Privy Council, in none of the cases of these four partners was the result affected by the fact that any partner had a wife and a daughter or a wife and more than one daughter. If the mere existence of a son did not make a father 's self acquired property joint family property, it was untenable that the existence of a wife or a daughter could do so. In the case of the remaining two partners, Kanji and Sewdas, their interest in the firm was obtained under a gift from their father. The Privy Council assumed, without deciding the question, that such an interest was ancestral property in the hands of the sons so that if either Kanji or Sewdas had a son, the son would have taken interest in the property by birth. But neither Kanji nor Sewdas had a son. Kanji 's family consisted of himself, his wife and daughter while Sewdas 's family consisted of himself and his wife. The Privy Council held that the wife and daughter may be entitled to be maintained out of a person 's separate as well as joint family property but the mere existence of a wife or daughter did not make ancestral property joint. 176 The crucial facts in Kalyanji 's case on which the ultimate decision rested are these : (i) In regard to three partners, Moolji, Purshottom and Kalyanji, though each of them was the head of his joint family which included in every case a son or sons, the income which each received from the firm was his separate and self acquired property which was not thrown into the common stock. (ii) In regard to Chaturbhuj, though he had no son, that fact was irrelevant because his interest in the firm was his self acquired or separate property in which the son could have taken no interest by birth. (iii) And in regard to Kanji and Sewdas, even if their interest in the firm was assumed to be ancestral property, the income which they received from the firm was their separate property as neither of them had a son who could take interest in the ancestral property by birth. The appeals of the six partners before the Privy Council fall into two classes. Those of Moolji, Purshottom, Kalyanji and Chaturbhuj fall in one class while those of Kanji and Sewdas fall in another class. There is a point of distinction between the cases of the four partners falling within the first class on one hand and that of the appellant on the other. But the point of distinction is not that Moolji, Purshottom and Kalyanji had a son or sons and the appellant has none, because though the three partners were heads of their respective joint families which included in every case a son or sons, the income which each received from the firm was his separate and self acquired property which was not thrown into the common stock. The mere existence of a son or sons in a joint Hindu family does not make the father 's separate or self acquired property joint family property. Though Chaturbhuj had no son that fact would not by itself bring his case on par with the appellant 's because Chaturbhuj 's interest in the firm was his separate property which also was not thrown in the common stock. If the mere fact that Moolji, Purshottom and Kalyanji had each a son or sons did not make their separate property joint family property, the mere existence of a wife or daughter could not bring about that result in Chaturbhuj 's case. As contrasted with the cases of these four partners, Kathoke Lodge which was once the separate property of the appellant was thrown by him in the common stock, which raises the question whether that circumstance is sufficient to justify the assessment of the income from that property in the appellant 's status as the manager of the joint family. On this point the cases of Kanji and Sewdas furnish a near parallel. They did not have to throw their interest in the firm in the common stock because that interest was, on assumption, their ancestral property. But even though the property was ancestral, the income which they received from it was treated as their separate property as neither of them had a son who could take interest in the ancestral property by birth. Applying that analogy, even if Kathoke Lodge were to be an ancestral asset, its income would still have to be treated as the appellant 's separate property as he has no son who could take interest in that property by birth. On this reasoning, the effect of the appellant throwing Kathoke Lodge into the family hotchpot could not be more telling than if that property was his ancestral property. 177 But then it is urged by the learned counsel for the appellant that the Privy Council was in error in its decision on the nature of income received by Kanji and Sewdas from what was assumed to be ancestral property and therefore the decision on that aspect of the matter ought not to be followed in determining the true nature of the income received by the appellant from Kathoke Lodge. This submission is founded on the disapproval by this Court of certain observations made by the Privy Council in Kalyanji 's case. The Privy Council, in its judgment in Kalyanji 's case, referred in passing to "Laxminarayan 's case" and observed that "The Bombay High Court on the other hand, in Lakshminarayan 's case having held that the assessee his wife and mother were a Hindi undivided family, arrived too readily at the conclusion that the income was the income of the family". The decision of the Bombay High Court which the Privy Council had in mind is Commissioner of Income tax, Bombay vs Gomedalli Lakshminarayan There is a fundamental distinction between Lakshminarayan 's case and Kalyanji 's case which, with respect the Privy Council failed to notice. In Lakshminarayan 's case the joint Hindu family consisted of a father, his wife, their son and the son 's wife. The property of the joint family was ancestral in the hands of the father and the son 's had acquired by birth an interest therein. (See the Judgment of Rangnekar J. at p. 369). There was a subsisting undivided family during the father 's life time and that undivided family did not come to an end on the father 's death. The same undivided family continued after the death of the father, with the son, his mother and his wife as its members. The effect of the father 's death was merely this that the son, instead of the father, became the manager of the joint family. The income from ancestral property was the income of the joint family during the father 's life time and after his death it continued to be the income of the self same joint family. The only change that had come about was that one link in the chain was snapped by death. But the death of a member of a joint Hindu family does not ordinarily disrupt the joint family. The Bombay High Court therefore held that the income of the ancestral property should be assessed in the son 's status as a manager of the undivided family and not in his individual capacity. When Lakshminarayan 's case came up before the Privy Council in appeal(1), it regarded itself as bound by the interpretation put in Kalyanji 's case on the expression "Hindu undivided family" as employed in section 55 of the Indian Income tax Act and observed that the facts of the case were not materially different from the facts of Kalyanji 's case. The Privy Council therefore answered the question by holding that "the income received by right of survivorship by the sole surviving male member of a Hindu undivided family can be taxed in the hands of such male member as his own individual income for the purposes of assessment to super tax under Sec. 55 of the Indian Income Tax Act, 1922". The decision of the Privy Council in Lakshminarayan 's case and the observations made by it in Kalyanji 's case regarding the view taken 178 by the Bombay High Court in Lakshminarayan 's case were expressly disapproved by this Court at least in two cases. In Gowli Buddanna 's case(1), after discussing the decisions in Kalyanji 's case and Lakshminarayan 's case this Court observed : "It may however be recalled that in Kalyanji Vithaldas 's case income assessed to tax belonged separately to four out of six partners; of the remaining two it was from an ancestral source but the fact that each such partner had a wife or daughter did not make that income from an ancestral source income of the undivided family of the partner, his wife and daughter. In Gomedalli Lakshminarayan 's case the property from which income accrued belonged to a Hindu undivided family and the effect of the death of the father who was a manager was merely to invest the rights of a manager upon the son. The income from the property was and continued to remain the income of the undivided family. This distinction which had a vital bearing on the issue falling to be determined was not given effect to by the Judicial Committee in A. P. Swamy Gomedalli 's case. " In Narendranath 's(2) case too this Court disapproved of the Privy Council decision in Lakshminarayan 's case and pointed out that the Privy Council had failed to notice the distinction between the facts of Kalyanji 's case and those of Lakshminarayan 's case in observing that the Bombay High Court "arrived too readily at the conclusion that the income was the income of the family". The appellant 's counsel is thus right in his submission that the observations made by the Privy Council in Kalyanji 's case as regards the correctness of the Bombay view in Lakshminarayan 's case is not good law. In fact, the decision of the Privy Council in appeal from the judgment of the Bombay High Court in Lakshminarayan 's case has itself been disapproved by this Court. But that does not affect the correctness of the Privy Council decision in Kalyanji 's case itself as regards the nature of the income received by the six partners from the firm. That part of the judgment in Kalyanji 's case has never been doubted and is open to no exception. For the matter of that, the error of the Privy Council 's decision in Lakshminarayan 's case consisted in overlooking the factual distinction between that case and Kalyanji 's case, as a result of which the ratio of Kalyanji 's case came to be wrongly applied to Lakshminarayan 's case. The ratio of Kalyanji 's case would therefore apply to the instant case, the parallel being furnished by the cases of Kanji and Sewdas. But a word of explanation is necessary in the interests of clarity. The reason why the cases of Kanji and Sewdas furnish a close parallel is the very reason for which their cases were held by this Court to be distinguishable from Lakshminarayan 's case. In Lakshminarayan 's case the property was ancestral in the hands of the father, the son had acquired an interest by birth therein, there was a subsisting Hindu un 179 divided family during the life time of the father and since that family did not come to an end on the death of the father, the Bombay High Court had rightly held that the income continued to be income of the joint family and was liable to super tax as such income. In regard to Moolji, Purshottom, Kalyanji and Chaturbhuj no such question arose as their interest in the firm was their separate property which was not thrown into the common stock. As regards Kanji and Sewdas, they were divided from their father Moolji at least since 1919 in which year Moolji made gifts of capital to them. Kanji joined the firm in 1919 and Sewdas in 1930. The assessment year in reference to which the dispute arose was 1931 32. Thus the gifted property of which the income was to be charged to super tax was not the ancestral or joint family property of a subsisting Hindu undivided family consisting of Moolji, Kanji and Sewdas. Were it so, the case would have fallen within the ratio of the judgment of the Bombay High Court in Lakshminarayan 's case. As in the cases of Kanji and Sewdas, so here, the property of which the income is to be brought to tax was not the joint family property of a subsisting Hindu undivided family which had devolved on a sole surviving coparcener. In that latter class of cases the view has been consistently taken, except for the decision of the Privy Council in Lakshminarayan 's case, that property of a joint family does not cease to belong to the family merely because the family is represented by a single coparcener who possesses rights which an owner of property may possess. The decision of the Privy Council in Attorney General of Ceylon vs A. R. Arunachalam Chettiar and Others(1), the decisions of this Court in the cases of Gowli Buddanna and Narendranath and the decision of the Bombay High Court in Lakshminarayan 's case fall within that class and are not to be confused with cases like the one on hand, which fall within the rule in Kalyanji 's case. In Arunachalam Chettiar 's case, a father and son constituted a joint Hindu family along with females including the widow of a pre deceased son. On the death of the son in 1934 the father became the sole surviving coparcener. By a Ceylonese Ordinance, property passing on the death of a member of a Hindu undivided family was exempt from payment of Estate Duty. On the death of the father a question arose whether, in view of the ordinance, his estate was liable to Estate Duty. The Privy Council held that the father was at his death a member of a Hindu undivided family, the same undivided family of which his son, when alive was a member, and of which the continuity was preserved after the father 's death by adoptions made by the widows who were members of the family. In Gowli Buddanna 's case, there was a subsisting Hindu undivided family between a father, his wife, two unmarried daughters and an adopted son. In respect of the income from dealings of the family, the father was assessed during his life time in the status of a manager of the Hindu undivided family. After the death of the father the adopted son contended that he should be assessed as an individual. This contention was rejected uniformly at all stages. After examining various authorities including Kalyanji 's case, Lakshminaryan 's case and Arunachalam 's case, this Court held that property which belongs to a Hindu undivided family does not cease to belong 180 to it because of the temporary reduction of the coparcenary unit to a single individual, who possesses rights which an owner of property may possess. A similar view was taken by this Court in Narendranath 's case which raised a question under the Wealth Tax Act. Narendranath 's family consisted, at the material time, of his wife and two minor daughters. Since the wealth returned consisted of ancestral property received by him on partition with his father and brothers, it was held by this Court that his status was that of a Hindu undivided family and not that of an individual. While dealing with the question whether the assets which came to Narendranath 's share on partition ceased to bear the character of joint family properties and became his individual property, this Court observed : "In this connection, a distinction must be drawn between two classes of cases where an assessee is sought to be assessed in respect of ancestral property held by him : (1) where property not originally joint is received by the assessee and the question has to be asked whether it has acquired the character of a joint family property in the hands of the assessee and (2) where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and the question required to be considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into absolute property of the assessee." After referring to Kalyanji 's case and noticing the observation of the Judicial Committee that income from an ancestral source does not necessarily become the income of the undivided family consisting of a man, his wife and daughter, this Court held : "Different considerations would be applicable, where property already impressed with the character of joint family property comes into the hands of a single coparcener. The question to be asked in such a case is whether the property retains the character of joint family property or whether it sheds the character of joint family property and becomes the absolute property of the single coparcener. " In the result the Court concluded that the case fell within the rule in Gowli Buddanna 's case. There are thus two classes of cases, each requiring a different approach. In cases falling within the rule in Gowli Buddanna 's case, the question to ask is whether property which belonged to a subsisting undivided family ceases to have that character merely because the family is represented by a sole surviving coparcener who possesses rights which an owner of property may possess. For the matter of that, the same question has to be asked in cases where the family, for the time being, consists of widows of deceased coparceners as in Commissioner of Income tax, Madras vs Rm. Veerappa Chettiar(1), so long as the property which was originally of the joint Hindu family 181 remains in the hands of the widows of the members of the family and is not divided amongst them. In cases falling within the rule in Kalyanji 's case, the question to ask is whether property which did not belong to a subsisting undivided family has truly acquired the character of joint family property in the hands of the assessee. In this class of cases, the composition of the family is a matter of great relevance for, though a joint Hindu family may consist of a man, his wife and daughter, the mere existence of a wife and daughter will not justify the assessment of income from the joint family property in the status of the head as a manager of the joint family. The appellant 's case falls within the rule in Kalyanji 's case since the property, before it came into his hands, was not impressed with the character of joint family property. It is of great relevance that he has no son and his joint family consists, for the time being, of himself, his wife and daughter. Once it is realised that there are two distinct classes of cases which require a different approach, there would be no difficulty in understanding the implications of the apparently conflicting tests evolved as guides for deciding the two classes of cases. In Kalyanji 's case the Privy Council observed: "In an extra legal sense, and even for some purposes of legal theory, ancestral property may perhaps be described, and usefully described, as family property; but it does not follow that in the eye of the Hindu law it belongs save in certain circumstances, to the family as distinct from the individual. By reason of its origin a man 's property may be liable to be divested wholly or in part on the happening of a particular event, or may be answerable for particular obligations, or may pass at his death in a particular way; but if, in spite of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom as his income, it is chargeable to income tax as his, i.e., as the income of an individual. In their Lordships ' view it would not be in consonance with ordinary notions or with a correct interpretation of the law of the Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of having a wife and daughters. " On the other hand, in Arunachalam 's case which falls within the rule in Gowli Buddanna 's case, the Privy Council observed: "But though it may be correct to speak of him (the sole surviving coparcener) as the 'owner ', yet it is still correct to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality: it is such too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. And these are incidents which arise, notwithstanding his so called ownership, just because the property has been and has not ceased to be 182 joint family property. it would not appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single coparcener and that in the hands of two or more coparceners. " Holding that it was an irrelevant consideration that a single coparcener could alienate the property in a manner not open to one of several coparceners, the Privy Council said: "Let it be assumed that his power of alienation is unassailable: that means no more than that he has in the circumstances the power to alienate joint family property. That is what it is until he alienates it, and, if he does not alienate it, that is what it remains. The fatal flaw in the argument of the appellant appeared to be that, having labelled the surviving coparcener 'owner ', he then attributed to his ownership such a congeries of rights that the property could no longer be called 'joint family property '. The family, a body fluctuating in numbers and comprised of male and female members, may equally well be said to be owners of the property, but owners whose ownership is qualified by the powers of the coparceners. There is in fact nothing to be gained by the use of the word 'owner ' in this connection. It is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as 'joint property ' of the undivided family. " These two sets of tests, both evolved by the Privy Council govern two distinct sets of cases and there is no inconsistency between the two tests. The test evolved in Kalyanji 's case, not in Arunachalam 's or Gowli Buddanna 's case, has to be applied to the instant case. Kathoke Lodge was not an asset of a pre existing joint family of which the appellant was a member. It became an item of joint family property for the first time when the appellant threw what was his separate property into the family hotchpot. The appellant has no son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of Kathoke Lodge while it was his separate property. Their rights in that property are not enlarged for the reason that the property was thrown into the family hotchpot. Not being coparceners of the appellant, they have neither a right by birth in the property nor the right to demand its partition nor indeed the right to restrain the appellant from alienating the property for any purpose whatsoever. Their prior right to be maintained out of the income of Kathoke Lodge remains what it was even after the property was thrown into the family hotchpot: the right of maintenance, neither more nor less. Thus, Kathoke Lodge may be usefully described as the property of the family after it was thrown into the common stock but it does not follow that in the eye of Hindu Law it belongs to the family, as it would have, if the property were to devolve on the appellant as a sole surviving coparcener. 183 The property which the appellant has put into the common stock may change its legal incidents on the birth of a son but until that event happens the property, in the eye of Hindu Law, is really his. He can deal with it as a full owner, unrestrained by considerations of legal necessity or benefit of the estate. He may sell it, mortgage it or make a gift of it. Even a son born or adopted after the alienation shall have to take the family hotchpot as he finds it. A son born, begotten or adopted after the alienation has no right to challenge the alienation. Since the personal law of the appellant regards him as the owner of Kathoke Lodge and the income therefrom as his income even after the property was thrown into the family hotchpot, the income would be chargeable to income tax as his individual income and not that of the family. For these reasons, we dismiss the appeal but there will be no order as to costs. P.H.P. Appeal dismissed.

The appellant Surjit Lal was the owner of an immovable property called "Kathoke Lodge". He used to derive rent income from the said property in addition to deriving income under other heads. In 1956, he made a declaration throwing the said property into the family hotchpotch. The family consisted of himself his wife and an unmarried daughter. The appellant contended before the Income Tax Officer that the rent income derived from the said property should be assessed in the status of a Hindu Undivided Family. The Income Tax Officer held: 1. In the absence of a nucleus of joint family property there was nothing with which the appellant could mingle his separate property. There could not be a Hindu Undivided family without there being Undivided family property. An appeal filed before the Appellate Assistant Commissioner was dismissed but on the following grounds: (1) After the declaration the appellant was dealing with the income of the property in the same way as before and, therefore, the declaration was not acted upon. (2) Even assuming that the property was thrown into the common stock and was therefore joint family property, the income from that property could still be taxed in the appellant 's hands as he was the sole male member of the family. The matter was further taken to the Income Tax Appellate Tribunal by the appellant. The Tribunal accepted the declaration as genuine and differed from the A.A.C. that it was not acted upon. The Tribunal however, held that though the appellant had invested his separate property with the character of joint family property, he being a sole surviving coparcener continued to have the same absolute and unrestricted interest in the property as before and, therefore, in law, the property had to be treated as his separate property. Thereafter the Tribunal referred the question of law to the High Court. Before the High Court it was contended by the appellant that it is open to a male member of a joint Hindu Family to convert his self acquire property into joint family property by throwing it into the common hotchpotch, and that it was not necessary that there should be an ancestral nucleus or that there should be more than one male in the joint family. On the other hand, the department contended that it was contrary to the basic concept of a Hindu undivided family that a single male alongwith females could form a joint Hindu family and that it was necessary for the formation of a joint Hindu family that there should be more than one male entitled to claim partition of the joint family property. 165 The High Court did not go into the larger question and assumed for the purpose of argument that there need not be more than one male member for forming a joint Hindu family as a taxable unit. The High Court held that since the assessee had no son, there was no undivided family. According to the High Court, the case of the appellant fell within the ratio laid down by the Privy Council in Kalyanji 's case and that since under the personal law, the right to the income remained as it was before the appellant made the declaration, the income from Kathoke Lodge was liable to be assessed as the appellant 's individual income. Dismissing an appeal by Special Leave, ^ HELD: (1) Even in the absence of an antecedent history of jointness, the appellant could constitute a joint Hindu Family with his wife and unmarried daughter. True that the appellant could not constitute a coparcenary with his wife and unmarried daughter but under the Income Tax Act a Hindu undivided family, not a coparcenary is taxable unit. A Hindu coparcenary is a much narrower body than the joint family. [170F, 171B] (2) The joint family with all its incidents, is a creature of law and cannot be created by act of parties except to the extent to which a stranger may be affiliated to the family by adoption. The appellant, however, was not by contract seeking to introduce in his family strangers not bound to the family by the tie of a sapindaship. That it does not take more than one male to form a joint Hindu family with females, is well established. [172A & G] (3) The contention of the Department that since prior to the declaration. the family hotchpotch in the instant case was empty and there was nothing with which the property or its income could be blended and therefore, the declaration is ineffective to convert that property into joint family property was not raised before the Tribunal, and the same was not pressed in the High Court. It was, therefore, not open to the department to take before this Court a contention which in the first place does not arise out of the reference and which the department 's counsel in the High Court raised but did not press. [173G H, 174A C] (4) The cases of Kanji and Sewdas in Kalyanji 's case furnish a near parallel to the present case. Though the property in their hands was assumed to be ancestral, income which Kanji and Sewdas received from it was treated as their separate property, as neither of them had a son who could take interest in the ancestral property by birth. Applying that analogy, even if Kathoke lodge were to be an ancestral asset, its income would still have to be treated as the appellant 's separate property as he had no son who could take interest in that property by birth. The ratio of Kalyanji 's case would, therefore, apply to the instant case. The reason why the case of Kanji and Sewdas furnished a close parallel is the very reason for which their cases were held by this Court to be distinguishable from Lakshmi Narain 's case. In Lakshmi Narain 's case the property was ancestral in the hands of the father, the son had acquired an interest by birth therein there was a subsisting Hindu Undivided family during the lifetime of the father and since that family did not come to an end on the death of the father, the Bombay High Court rightly held that the income continued to be the income of the joint family and was liable to be taxed as such. The property of a joint family does not cease to belong to the family merely because the family is represented by a single coparcener who possesses rights which an owner of property may possess. [176 D G, 177A, 178, G H, 179A] (5) There are thus two classes of cases each requiring a different approach. In cases where the property belongs to a subsisting undivided family the property does not cease to have that character merely because the family is represented by a sole surviving coparcener who possesses rights which an owner of property may possess, or for that matter even if the family for the time being consists only of widows of deceased coparceners. In cases where the property did not belong to a subsisting undivided family, whether any property has acquired the 166 character of joint family property has acquired the character of joint family property in the hands of an assessee depends on the composition of the family. A joint Hindu family can consist of a man, his wife and daughter but the mere existence of a wife or daughter will not justify the assessment of income from the joint family property in the status of the head as a manager of the joint family. Once it is realised that there are two distinct classes of cases which require a different approach there would be no difficulty in understanding the implications of the apparently conflicting tests evolved as guides for deciding the two classes of cases. Kathoke Lodge was not an asset of a pre existing joint family. It became an item of joint family property for the first time when the appellant threw what was his separate property into the family hotchpotch. The appellant had no son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of Kathoke Lodge while it was his separate property. Their rights in that property are not enlarged for the reason that the property was thrown into the family hotchpotch. Not being co parceners of the appellant, they have neither a right by birth in the property nor the right to demand partition nor indeed the right to restrain the appellant from alienating the property for any purpose whatsoever. The property which the appellant has put into the common stock may change its legal incidence on the birth of a son but until that event happens, the property in the eyes of Hindu Law is really his. He can deal with it as a full owner, unrestrained by considerations of legal necessity or benefit of the estate. He may sell it mortgage it or make a gift of it. Even a son born or adopted after the alienation shall have to take the family hotchpotch as he finds it. [180 G, H, 181 A D, 182 E H, 183A] (7) Since the personal law of the appellant regards him as the owner of Kathoke lodge and the income therefrom as his income even after the property was thrown into the family hotchpotch, the income would be chargeable to income tax as his individual income and not that of the family. [183B C]

8k-16k

Civil Appeal No. 166 of 1969. From the Judgment and order dated 4 5 1966 of the Rajasthan High Court in D.B. Civil Misc. Writ No. 74 of 1965. M. N. Phadke, M. Qamaruddin, Mrs. M. Qamaruddin and V. M. Phadke for the Appellant. section section Ray, section M. Jain, D. D. Patodia and section K. Jain for Respondents 1 and 2. 151 Appeal set down Ex parte against RR. 3 and 4. The Judgment of the Court was delivered by SEN, J. This appeal by certificate is directed against the judgment of the Rajasthan High Court dated May 4, 1966 holding that inclusion of the disputed property in the list of wakfs published by the Board of Muslim Wakfs, Rajasthan under sub section (2) of section 5 of title is not binding on the respondents No6. 1 and 2, the mortgagee purchasers and restraining the Board from taking only sleeps under section 36B of the Act for evicting them from the same. The subject matter in dispute is a two storeyed building, knows as Dharamshala or Musafirkhana, situate on Mirza Ismail Road at Jaipur. The building was constructed by the late Haji Mohammad Ali Khan, a Sessions Judge of the erstwhile Princely State of Jaipur, who owned a considerable estate, on a plot of land admeasuring 5 bighas and 3 biswas obtained from the Mehakma Mensa Aliya Council with the approval of the Ruler of Jaipur under a Patta dated February 23, 1886 for construction of a Haveli and Dharamshala. It appears that Haji Mohammad Ali Khan before his death in the year 1912, had executed two wills, one on February 17, 191 O and the other on July 1, 1911, by which after making several bequests he acknowledged that he had dedicated the said property in wakf, for its use as a Dharammshala and appointed his son Ehsen Ali Khan as its Mutawalli. After the death of Haji Mohammad Ali Khan, there was a suit for partition of the property brought by his son Faiyaz Ali Khan against his brother Ehsari Ali Khan, being original Suit No. 128 of 1930 and the building was left out of partition being wakf property. It, however, appears that the mutawalli Ehsan Ali Khan mortgaged the property with possession, with Seth Bijaylal, father of respondent No. 2, and Bhuramal, father of respondent No. 1, for Rs. 7,999, ' and executed a mortgage deed dated July 30, 1944 in Their favour for the purpose or purchasing a strip of land in front of the building from the Municipal Council Jaipur and thereafter constructed verandahs on the ground floor and the first floor. For making this construction, he raised a further loan of Rs. 9,999/ by effecting a second mortgage by executing the mortgage deed dated July 7, 1945 in favour of the said mortgagees. the respondents Nos. 1 and 2 purchased the ground floor of the building from Ehsan Ali Khan for Rs. 19,999/ by means of a registered sale dead dated November 23, 1954. The consideration was applied towards satisfaction of the two previous mortgages. Thereafter, they purchased the first floor of the said building from him for Rs. 13,999/ by means of a registered sale deed dated July 31, 1956. 152 The wakf Act, 1954 was extended to the State of Rajasthan on February 1, 1955. The Board of Muslim wakfs, Rajashthan was constituted by the State Government on August 6, 1962 in accordance with section 9 and thereafter the Government appointed a Commissioner of Wakfs under sub s.(1) of s.4 for the purpose of making survey of wakf properties existing in the State, at the date of the commencement of the Act. On August 30, 1962, one Shauket Ali Khan, the respondent No. 3 applied to the Commissioner of Wakfs alleging that the aforesaid property was wakf property and therefore, its transfer by Ehsan Ali Khan, who was its mutawalli, in favour of the respondents Nos. 1 and 2 was invalid and consequently prayed that the property be declared to be Wakf property and possession of the same be handed over to the wakf Committee. The Commissioner of Wakfs accordingly issued notice to the respondents. Nos. 1 and 2 the mortgagee purchasers. In response to the notice, the respondents Nos. 1 and 2 appeared before the Commissioner of Wakfs on September 19, 1962 and raised a preliminary objection as to the jurisdiction denying that the disputed property was wakf property and contended that the Commissioner of Wakfs had no jurisdiction to make an enquiry as to whether a particular property is wakf property or not. The Commissioner of Wakfs by his order Dated September 19, 1962 over ruled the objection. Thereupon, the respondents Nos. 1 and 2 filled a writ petition before the Rajasthan High Court, but the High Court by its order dated October 11, 1962 dismissals the petition liming observing that the Commissioner had obviously no jurisdiction j to decide any question relating to the title of the respondents Nos. 1 and 2 or to eject them from the property without taking recourse to a civil suit. The Commissioner of Wakfs, however, felt that he was not bound by these observations of the High Court since he was not served with a notice and accordingly decided to proceed with the enquiry. consequence thereof, the respondents Nos. 1 and 2 had to participate in the proceedings. On October 19, 1962 they filed their reply before the Commissioner of Wakfs and joined issue on the question as to whether the disputed property was wakf property or not. In their reply they pleaded, inter alia that the property was not a wakf and that the wills had indeed been cancelled in a suit. The Commissioner of Wakfs by his report dated December is, 1964 on the basis of the evidence led before him, held the disputed property to be wakf property recommended that it be recorded as such, and accordingly, forwarded a report to that effect to the State Government as required under sub s.(3) of s.4. On receipt of the report of the Commissioner of Wakfs forwarded to it by the State Government under sub section (1) of section S, the Board of Muslim 153 Wakfs published a notification for inclusion of the property in dispute A in the list of Wakfs existing in the State in the Rajasthan Rajpatra dated December 2, 1965. Thereafter, the respondents Nos. ] and 2, filed a writ petition in the High Court challenging the legality and validity of the proceedings taken by the Commissioner of Wakfs. It was contended that on the basis of such report, the Board of Muslim Wakfs was not entitled to include their property in the list of wakfs published under sub s.(2) of s.5. In allowing the petition, the High Court held that the entire scheme or the , indicates that the Board of Wakfs jurisdiction is confined to matters of administration of the wakfs and not to adjudication of questions of title. In view, it was evident that the Act did not invest the Board of Wakfs or the Commissioner of Wakfs with the power to decide the question whether a property belonged to a wakf or not; and more so, where a person claiming title is a stranger to the wakf. It accordingly held that a Commissioner of Wakfs appointed under sub s.(1) of s.(4) of the Act has no jurisdiction under sub s.(3) of section 4 to enquire whether or not a certain property is wakf property when such a dispute is raised by such a person. It further held that the object of section 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and the person interested in the wakf, as defined in section 3. Consequently, the High Court held that the failure of a stranger to the wakf to institute a suit in a court of competent jurisdiction for a decision of such question, namely, whether a particular property is a wakf property or not, cannot make the inclusion of such property in the list of wakfs published by the Board under sub section (2) of section 5 of the Act final and conclusive under sub section (4) of section 6 of the Act. It also held that the Board is not invested with jurisdiction to enquire into and decide the questions of title to, or possession of, the properties belonging to third parties under section 27 of the Act. It is argued for the appellant, firstly, that the words 'for the purpose of making a survey of wakf properties ' are wide enough and confer ample power on the Commissioner 'to investigate and adjudicate ' upon the question whether a certain property is wakf property or not during the course of his survey of. wakf properties in the State of Rajasthan; and secondly, the failure of the respondents Nos. l and 2 to file a suit within the time allowed by sub section (1) of section 6 of the Act makes the inclusion of the disputed property in the list of wakfs published by the Board of Wakfs under sub s.(2) of s.5, final and conclusive. Tn support of the contentions, it is urged that the word 'therein ' in the expression 'any per son interested therein ' appearing in sub s.(1) of s.6, qualify title words 'wakf property ' and, therefore, the expression 'any person interested 817SCI/78 154 therein ' cannot, in the context in which it appears, mean 'person interested in a wakf ' as defined in section 3(h) of the Act, as wrongly assumed by the High Court. It is therefore, urged that the right of suit given under section 6(1) of the Act can be availed of by a person affected by the publication of the list of wakfs under sub s.(2) of s.5, i.e. it includes even a stranger. In reply, it is submitted on behalf of the respondents Nos. 1 and 2, that the scope of section 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and any person interested in the wakf, as defined in section 3(h). It is urged that the High Court was, therefore, right in holding that 6 refers only to such a dispute and cannot affect the right and title of a stranger to the wakf, particularly of a person belonging to another religious denomination. The submission is that the word 'therein ' in sub section (1) of section 6, in the context and setting in which it appears, does not fit in with the words 'wakf property ' in the collocation of words, but qualifies the words 'the wakf ' immediately presiding it. It is said that the word 'therein ' has been used to avoid repetition of the words 'the wakf ', and not to extend the ambit of the section to persons who fall outside the scope of the expression 'person interested in a wakf ' as defined in s.3(h). It is, therefore, urged that the respondents Nos. 1 and 2 are wholly outside the purview of s.6(1) and, therefore, they must necessarily fall outside the scope of the enquiry under, s.4(1), as the provisions contained in s.4, 5 and 6 form part of an integrated scheme. It is pointed out that on the terms of s.4 the Commissioner of Wakfs has no power ' to enquire whether or not a certain property is wakf property when such dispute is raised by a stranger to the wakf. In support of the contention, the language of section 4 is contrasted with that of s.27 and it is said that, while the Board of Wakfs has the power to hold an enquiry as to whether a particular property is wakf property or not under s.27, the Commissioner of Wakfs has no power to hold such an enquiry. In order to appreciate the implications of the rival contentions, it Is necessary not only to examine the scheme of the Act but also the purpose and object of the legislation. The , "the Act", as the preamble shows, was enacted 'to provide for the better administration and supervision of wakfs '. The avowed object and purpose of the Act was to bring the management of Wakfs, though it vests immediately in a mutawalli, subject to the supervision the State. It was enacted to replace the Mussalman Wakf Act, 1923, which merely provided for the submission of audited accounts by mutawallis, and was found to be wanting in 155 several respects and really not of much practical value. It was found k that proceedings could be successfully defeated simply on the plea taken by the mutawalli that there was no wakf. To remove the lacunae, the Mussalman Wakf (Bombay Amendment) Act, 1935 amended the Act. The Bengal Wakf Act, 1934 was enacted to create a machinery for the supervision of wakfs in Bengal. The United Provinces followed suit and the United Provinces Muslim Wakf Act, 1936 was passed creating a Central Wakf Board. Similarly, Bihar also passed a legislation almost on the same lines. The working of these Acts brought out the necessity for one uniform and consolidated legislation by the Center. It was with this view that the was enacted. The scheme of the Act may be briefly indicated. Section 2 makes the Act applicable to all wakfs in India except to Durgah Khawaja Saheb, Ajmer. Section 3 defines certain terms, and the term 'wakf ' and the expression 'person interested in a wakf ' have been defined as follows: "3.(h) 'person interested in a wakf ' means any person who is entitled to receive any pecuniary or other benefits from the wakf and includes, (i) any person who has a right to worship or to perform any religious rite in a mosque, idgah, imambara, dargah, Khangah, maqbara, graveyard or any other Religious institution connected with the wakf or to participate in any religious or charitable institution under the wakf; (ii) the wakif and any descendant of the wakif and the mutawalli. (1) 'wakf ' means the permanent dedication by a person professing Islam of any movable or irremovable property for any purpose recognised by the Muslim law as pious, religious or charitable and includes (i) a wakf by user; (ii) grants (including mashrut ul khidmat) for any purpose recognised by the Muslim law as pious, religious or charitable; and (iii)a wakf alal aulad to the extent to which the property is dedicated for any purpose recognised by Muslim law as pious, religious or charitable; and 'wakif ' means any person making such dedication. ' 156 The Act consists of several chapters and can conveniently be divided into three parts. The first part relates to the survey of wakfs. Chapter II is headed 'Survey of Wakfs '. Sub section (1) of section 4 empowers the State Government to appoint for the State by a notification a Commission of Wakfs for the purpose of making survey of wakf properties existing at the time of the commencement of the Act. Sub section (3) enjoins the Commissioner to submit his report to the State Government after making such enquiry as he may consider necessary and the report is to contain the following particulars namely: (a) the number of wakfs in the State, or as the case may be, any part thereof, showing the Shia Wakfs and Sunni Wakfs separately; (b) the nature and objects of each wakf; (c) the gross income of the property comprised in each wakf; (d) the amount of land revenue, cesses, rates and taxes payable in respect of such property; (e) the expenses incurred in the realisation of the income and the pay or other remuneration of the mutawalli of each wakf; and (f) such other particulars relating to each wakf as may be prescribed. " Sub section (4) enjoins that the Commissioner, while making such enquiry, shall have certain powers as are vested in a civil court under the Code of Civil Procedure, 1908, namely, summoning and examining any witness, requiring the discovery and production of any document, re questioning any public record from any court or office, issuing commissions for the examination of any witness or accounts, making any local inspection or local inspection etc. Sub section (5) of s.4 runs thus: "(5) If, during any such inquiry, any dispute arises as to whether a particular wakf is a Shia wakf or Sunni wakf and there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of such deed. " Section 5 provides for publication of a list of wakfs and is as follows: "5.(1) on receipt of a report under sub section (3) of Section 4, the State Government shall forward a copy of the same to the Board. 157 (2) The Board shall examine the report forwarded to it under sub section (1) and publish, in the official (Gazette, a list of wakfs existing in the State, or as the case may be, the part of the State to which the report relates, and containing such particulars as may be prescribed. " Section 6, which relates to adjudication of dispute regarding wakfs, B so far as material, reads: "6.(1) If any question arises whether a particular property specified as wakf property in a list of wakfs published under sub section (2) of the section 5 is wakf property or not or whether a wakf specified in such list is a Shia wakf or Sunni wakf the Board or the mutawalli of the wakf or any person interested therein may institute a suit in a civil court of competent jurisdiction for the decision of the question and the decision of the civil court in respect of such matter shall be. final: Provided that no such suit shall be entertained by the civil court after the expire of one year from the date of the public cation of the list of wakfs under ' sub section (2) of section 5. . . . . (4) The list of wakfs published under sub section (2) of section S shall, unless it is modified in pursuance of a decision of the civil court under sub section (1), be final and conclusive." Chapter IIA is about the constitution of the Central Wakf Council, with which we are not concerned. Chapter III provides for establishment of a Board of Wakfs and defines the nature of its duties, powers and functions. This chapter also provides for certain incidental matters. Sub section (1) of section 15 provides that the general superintendence of all wakfs in a State shall vest in the Board so established for the State, and it shall be the duty of the Board to ensure that the wakfs under its superintendence are properly maintained, controlled and administered and the income thereof is duly applied to the objects and for the purpose for which such wakfs were created or intended. Sub section (2) enumerates the various functions of the Board. The next stage is that of registration of wakfs. That subject is dealt with in Chapter IV. Section 25 lays down that every wakf, whether created before or after the commencement of the Act, shall be registered at the office of the Board. Section 26 requires the Board to maintain a register of wakfs. Under section 27, the Board is invested 158 with the power to decide whether a certain property is wakf property and reads as follows: "27. (1) The Board may itself collect information regarding any property which it has reason to believe to be wakf property and if any question arises whether a particular property is wakf property or not or whether a wakf is a Sunni wakf or a Shia Wakf, it may after making such inquiry as it may deem fit, decide the question. (2) The decision of the Board on any question under sub section (1) shall, unless revoked or modified by a civil court of competent jurisdiction, be final. " Section 28 empowers the Board to direct a mutawalli to apply for the registration of a wakf or to supply any information regarding a wakf, and the Board may itself cause the wakf to be registered or May at any time amend the register of wakfs. The third stage then arises. After completing the survey and finalising the registration of wakfs, the Board which is an administrative body, is empowered to supervise and administer wakf property. Chapter V deals with mutawallis and wakf accounts. This chapter provides in detail as to how mutawalli shall submit budget and tho accounts and in what manner the Board will be exercising its control over the wakf properties. Section 36A relates to transfer of immovable property of wakfs. According to this section, no transfer of the wakf property is valid without the previous sanction of the Board. Section 36B empowers `the Board to recover certain wakf properties transferred without the previous sanction of the Board by sending a requisition to the Collector. Chapter VI relates to the finance of tho Board. Chapter VII to judicial proceedings and Chapter VIII to miscellaneous matters. It would thus appear that the Act is a complete code dealing with the better administration and supervision of wakfs. The High Court, in its considered opinion, in the light of the historical background and precedents, observed: " The present Act No. 29 of 1954 is, no doubt an improvement on the Mussalman Wakf Act, 1923, but in our view, this also does not empower the Board of Wakfs to decide the question whether a particular property is wakf property or not, if such a dispute is raised by a person who is a stranger to wakf. " There is a considerable body of authority interpreting section 10 of the Mussalman Wakf Act 1923, in favour of the view that where 159 the existence of a wakf was itself in dispute, the District Judge had no jurisdiction to inquire into its existence, and the matter could be settled only by instituting a regular suit. The question came up for consideration before several High Courts in India as will appear from Nasrulla Khan vs Wajid Ali, (1) Wahid Hasan vs Abdul Rahman,(2) Syed Ali Mohammed vs Collector ff Bhagalpur,(3) Mohammad Baqar vs Mohammed Qasim,(4) Nanha Shah vs Abdul Hasan,(5) and Abdul Hussain vs Mohmmad Ebrahim Riza.(x) The general trend of opinion was that the District Judge in dealing with in application under section 10) of that Act had, in the absence of a clear provision in that behalf, no jurisdiction to try an issue as to whether certain property was wakf property. It was pointed out that if the legislature had the intention to confer such power, there would have been a provision like section S of Charitable and Religious Trusts Act, 1920. In Abdul Hussain vs Mohmmad Riza (supra) it was observed: "Considering the terms of the enactment and the scope and purpose of the Act is clear that the legislature intended of income of wakf properties for the purpose of providing some control on the management of properties which are admittedly wakf. It could not have intended to include hl its scope the enquiry into the vital questions whether the disputed property is wakf property and the person in possession of it is a mutwalli, which are questions of fundamental character such as could be the subject matter of a suit alone." Though sub section (3) of section 4 of the Act is rather unhappily worded, of the . The does, in our opinion, furnish a complete machinery for the better administration and supervision of wakfs. Though sub section (3) of section 4 of the Act is rather unhappily worded, it is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act, and decisions rendered with reference to construction of one Act cannot apply with reference to the provisions of another Act, unless the two Acts are in pari materia. Further, when there is no ambiguity in the (1) I.L.R. 52 All. 167. (2) I.L.R. 57 All. (3) A.I.R. 1927 Pat. (4) I.L.R. 7 Luck. 601 (F.B.) (5) A.I.R. 1938 Pat. (6) I.L.R. 160 statute, it may not be permissible to refer to, for purposes of its construction, any previous legislation or decisions rendered therein. The questions that fall for determination upon the appeal are two; first, whether a Commissioner of Wakfs appointed under sub section (1) of section 4 of the , has the jurisdiction under sub section (3) of section 4 to enquire whether a certain property is wakf property or not when such a dispute raised by a stranger to the wakf and second, if so, whether the failure of such a person to institute a suit in a civil court of competent jurisdiction for decision of such question within a period of one year, as provided for under sub section (1) of section 6, makes the inclusion of such property in the list of wakfs published by the Board under sub s.(2) of section 5 of the Act final and conclusive under sub section (4) of section 6 It is needless to stress that the whole purpose of the survey of wakfs by the Commissioner of Wakfs under sub section (1) of section 4 is to inform the Board of Wakfs, as to the existence of the existing wakfs in a State, in order that all such wakfs should be brought under the supervision and control of the Board of Wakfs. While the High Court was, in our view, right in determining the scope of sub section (1) of section 6 of the Act, it was clearly in error in cur tailing the ambit and scope of an enquiry by the Commissioner of Wakfs under sub section (3) of section 4 and that by the Board of Wakfs under section 27 of the. Act In dealing with the scope of enquiry by the Commissioner of Wakfs: under sub section (3) of section 4, the High Court adverts to the,. heading of Chapter II and the marginal note of sub section (1) of section 4. It observes: "The heading of section 4 with which this chapter started was 'Preliminary survey of wakfs '. The use of the word 'Preliminary ' in the heading is one of significance. The weight of authority is in favour of the view that the marginal note upended to a section cannot be used for construing the section. Lord Macnaghten in Balraj Kunwar vs Jagatpal Singh(1) considered it well settled that marginal notes cannot be referred to for the purposes of construction. This Court after referring to the above case with approval, said in Commissioner of Income Tax vs Ahmedbhai Umedbhai Umarbhai & Co.(2): "Marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construe the statute." (1) ILR 26 All. 393 (P.C.) (2) ; 161 As explained by Lord Macnaghten in the Privy Council, marginal notes A are not part of an Act of Parliament. The very heading of Chapter II and the caption to section 4 no doubt suggest that the Commissioner makes only a preliminary survey regarding existing wakfs and the list of wakfs prepared by him is published by the Board and neither the Commissioner nor the Board is required to make any enquiry regarding, the character of the property. That is to say, the making of survey is only an administrative act and not a quasi judicial act. But, on a closer examination, it is, clear that while making a survey of the existing wakfs in a State under sub section (1) of 5. 4, the Commissioner is required by sub section (3) to submit a report to the State Government in regard to the serval matters referred to in cls. (a) to (f) thereof. There may be a dispute as between the Board, the mutawalli or a person interested in the wakf, as regards (a) the existence of a wakf, i.e. whether a particular property is wakf property, (b) whether it is a Shia wakf or a Sunni wakf, (c) extent of the property attached to the wakf, (d) the nature and object of the wakf, etc. While making such an enquiry, the Commissioner is invested by sub section (4) with the powers vested in a civil court under the Code of Civil Procedure, 1908 in respect of the summoning and examining of any witness, requiring the discovery and production of any document, requisitioning any public record from any court or office, issuing commissions for the examination of any witness or accounts, making any local inspection or local investigation etc. In view of these comprehensive provisions, it is not disputed before us that the enquiry that the Commissioner makes for the purpose of submission of his report under sub section (3)? while making a survey of existing wakfs in the Estate under sub section (1), is not purely of an administration nature but partakes of a quasi judicial in character, in respect of the persons falling within the scope of sub section (1) of section 6. It would be illogical to hold that while making a survey of wakf properties existing in the State a Commissioner of Wakfs appointed by the State Government under sub section (1) of section 4, should have no power to enquire whether a particular property is wakf property or not. If we may refer to sub section (1) of section 4, so far as material, it reads: "The State Government may, by notification in the official Gazette, appoint for the State a Commissioner of Wakfs. for the purpose of making a survey of wakf properties existing in the State at the date of the commencement of this Act. " It will be clear that the words "for the purpose of making a survey of wakf properties" is a key to the construction of the section The 162 ordinary meaning of the word "survey", as given in the Random House Dictionary of English Language, is 'to take a general or comprehensive view of or appraise, as a situation '. If the Commissioner of Wakfs has the power to make a survey, it is but implicit that in the exercise of such power he should enquire whether a wakf exists. The making o such an enquiry is a necessary concomitant of the power to survey. The High Court was clearly in error in observing: "Except sub section (5) there is nothing in section 4 or in the rules made by the State to show that the Commissioner is empowered to adjudicate on a question, if one arises, whether a particular property is a wakf property or not. " We are of the opinion that the power of the Commissioner to survey wakf properties under sub section (1) or to enquire and investigate into the several matters set out in cls. (e) to (f) of sub section (3) cannot be curtailed by taking recourse to Sub 5. The High Court was wholly wrong in understanding the true implication of sub section (5) of section 4. It only lays down that if, during any such enquiry, any dispute arises as to whether a particular wakf is a Shia wakf or a Sunni wakf, and there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of such deed. It, therefore, makes the wakf deed conclusive as to the nature of the wakf, i.e. whether it is a Shia or a Sunni wakf. In our view, sub s.(5) of section 4 cannot be projected into sub section (1) for determining the question whether a certain property is a wakf property or not. Nor does it enter into an enquiry as to several of the matters adverted into some of the clause of sub section (3). The matter can also be viewed from another angle. If sections 4, 5 and 6 are parts of an integrated scheme, as asserted, then it follows as a necessary corollary that the enquiry envisaged by sub sections (1) and (3) of section 4 must cover the field defined by sub section (1) of section 6. The opening words of the section are: "If any question arises whether a particular property specified as wakf property in a list of wakfs published under sub section (2) of section 5 is wakf property or not or whether a wakf specified in such list is a Shia wakf or Sunni wakf . " They clearly envisage that the enquiry by the Commissioner is not con fined to the question as to whether a particular wakf is Shia wakf or Sunni wakf. It may also embrace within itself a dispute as to whether a wakf exists. This is a conduction which sub section (1) of s.4 must, in its context and setting, bear. Any other construction would, indeed, make the Act unworkable. 163 While it is true that under the guise of judicial interpretation the court cannot supply casus omissus, it is equally true that the courts in construing an Act of Parliament must always try to give effect to the intention of the legislature. In Crawford vs Spooner(1) the Judicial Committee said: "We cannot aid the legislature 's defective phrasing of an Act, we cannot add and mend, and, by construction, make up deficiencies which are left there." To do so would be to usurp the function of the legislation. At the same time, it is well settled that in construing the provisions of a statute the course should be slow to adopt a construction which tends to make any part of the statute meaningless or ineffective. Thus, an attempt must always be made to reconcile the relevant provisions so as to advance the remedy intended by the statute. It would certainly have been better if the legislature had inserted a provision like section 6 C incorporated in the Mussalman Wakf Act, 1923 by the Mussalman Wakf (Bombay Amendment) Act, 1935, which was in force in the States of Maharashtra and Gujarat, namely: "6 C. Power of the Court to enquire: (1) The court may, either on its own motion or upon the application of any person claiming to have an interest in a wakf, hold an enquiry in the prescribed manner act any time to ascertain (i) whether a wakf exists. " Failure to insert such a provision in sub. (3) of section 4, however, is of little consequence. As already indicated, the power of the Commissioner to make a survey of existing wakf properties, carries, with it, by necessary implication, the power to enquire as to the existence of a wakf. Perhaps, the legislature thought it to be a superfluity. That leaves us with the question as to the scope of sub section (1) of section 6. All that we have to consider in this appeal is, whether if the Commissioner of Wakfs had jurisdiction to adjudicate and decide against the respondents Nos. l and 2 that the property in dispute was wakf property, the list of wakfs published by the Board of Wakfs under sub section (2) of 5. 5 would be final and conclusive against them under section 6(4) in case they had not filed a suit within a year from the publication of the lists The question as to whether the respondents Nos. 1 and 2 can be dispossessed, or their possession can be threatened by the Board of Wakfs by proceeding under section 36B without filing a suit in a civil court of competent jurisdiction does not arise for our consideration (1) [1846] 6 Moors P.C. 1. 164 In the present case, the respondents Nos. 1 and 2 who are non Muslims, contended that they are outside the scope of sub section (1) of section 6, and consequently, they have no right to file the suit contemplated by that sub section and, therefore, the list of wakfs published by the Board of Wakfs under sub section (2) of S!. 5 cannot be final and conclusive against them under sub section (4) of section 6, it was urged that respondents Nos,. 1 and 2 were wholly outside the purview of sub section (1) of section 6 and they must, therefore, necessarily fall outside the scope of the enquiry envisaged by sub section (1) of section 4, as the provisions contained ' in sections 4, 5 and 6 form part of an integrated scheme. The question that arises for consideration, therefore, is as to who are the parties that could be taken to be concerned in a proceeding under sub section (1) of section 6 of the Act, and whether the list published under subs. (2) of section S declaring certain property to be wakf property, would bind a person who is neither a mutawalli nor a person interested in the wakf. The answer to these questions must turn on the true meaning and construction of the word 'therein ' in the, expression 'any person interest ted therein ' appearing in sub section (1) of section 6. In order to understand the meaning of the word 'therein ' in our view, it is necessary to refer to the preceding words 'the Board or the mutawalli of the wakf '. The word 'therein ' must necessarily refer to the 'wakf ' which immediately pre cedes it. It cannot refer to the 'wakf property '. Sub section (1) of section 6 enumerates the persons who can file suits and also the questions in respect of which such suits can be filed. In enumerating the persons who are empowered to file suits under this provision, only the Board, the mutawalli of the wakf, and 'any person interested therein ', thereby necessarily meaning any person interested in the wakf, are listed. It should be borne in mind that the Act deals with wakfs, its institutions and its properties. It would, therefore. , be logical and reasonable to infer that its provisions empower only those who are interested in the wakfs to institute suits. In dealing with the question, the High Court observes: "In our opinion, the words "any person interested therein" appearing in sub section (1) of section 6 mean no more than a person interested in a wakf as defined in clause (h) of section 3 of the Act It is urged by learned counsel for the petitioners that the legislature has not used in section 6(1) the words "any person interested in a wakf" and, therefore, this meaning should not be given to the words "any person interested therein". This argument is not tenable because the words "any person inte 165 rested therein" appear soon after "the mutawalli of the wakf" A and therefore the word 'therein ' has been used to avoid re petition of the words "in the wakf" and not to extend the scope of the section to persons who fall outside the scope of the words "person interested in the wakf". The purpose of section 6 is to confine the dispute between the wakf Board, the mutawalli and a person interested in the wakf. " That, in our opinion, is the right construction. We are fortified in That view by the decision of this Court in Sirajul Hag Khan & ors. vs The Sunni Central Board of Wakf, U.P. & ors While construing section 5(2) of the United Provinces Muslins Wakf Act, 1936, this Court interpreted the expression "any person interested in a wakf" as meaning 'any person interested in what is held to be a wakf ', that is, in the dedication of a property for a pious, religious or charitable purpose. It will be noticed that sub section (1) of section 6 of the Act is based in sub section (2) of section 5 of the United Provinces Muslims Wakf Act, 1936, which runs thus: "The mutawalli of a wakf or any person interested in a wakf or a Central Board may bring a suit in a civil court of competent jurisdiction for a declaration that any transaction held by the Commissioner of Wakfs to be a wakf is not a wakf, or any transaction held or assumed by him not to be a wakf, or that a wakf held by him to pertain to a particular sect does not be long to that sect, or that any wakf reported by such Commissioner as being subject to the provisions of this Act is exempted under section 2, or that any wakf held by him to be so exempted is subject to this Act. " The provision to that section prescribed the period of one year 's limitation, as here, to a suit by a mutawalli or a person interested in the wakf. The two provisions are practically similar in content except that the language of the main enacting part has been altered in sub section (1) of section 6 of the present Act and put in a proper form. In redrafting the section, the sequence, of the different clauses has been changed, therefore, for the expression "any person interested in a wakf" the legislature had to use the expression "any person interested therein". The word 'therein ' appearing in sub section (1) of section 6 must, therefore, mean 'any person interested in a waker ' as defined in section 3(h). The object of sub section (1) of s 6 is to narrow down the dispute between the Board of Wakfs, the mutawalli and the person interested in the wakf, as defined in section 3 (h) (1) 166 In this context, the scope of section 6 was examined by the High Court and it observed: "The purpose of sec. 6 is to confine the dispute between the Wakf Board, the mutawalli and a person interested in the wakf. In other words, if there is a dispute whether a particular property is a wakf property or not, or whether a wakf is a Shia wakf or a Sunni wakf, then the Board or the mutawalli of the wakf or a person interested in the wakf as defined in sec. 3 may institute suit in a civil court of competent jurisdiction for the decision of the question. They can file such a suit within one year of the date of the publication of the list of wakfs and if no such suit is filed, the list would be final and conclusive between them. The very object of the Wakf Act is to provide for better administration and supervision of wakfs and the Board has been given powers of superintendence over all wakfs which vest in the Board. This provision seems to have been made in order to avoid prolongation of triangular disputes between the Wakf Board, the mutawalli and a person interested in the wakf who would be a person of the same community. It could never have been the intention of the legislature to cast a cloud on the right, title or interest of persons who are not Muslims. That is, if a person who is non Muslim whether he be a Christian, a Hindu, a Sikh, a Parsi or of any other re ligneous denomination and if he is in possession of a certain property his right, title and interest cannot be put in jeopardy simply because that property is included in the list published under sub sec. (2) of Sec. 5. The Legislature could not have meant that he should be driven to file a suit in a Civil Court for declaration of his title simply because the property in his possession is included in the list. Singularly, the legislature could not have meant to curtail the period of limitation available to him under the Limitation Act and to provide that he must file a suit within a year or the list would be final and conclusive against him. In our opinion, sub section (4) makes the list final and conclusive only between the Wakf Board, the mutawalli and the person interested in the wakf as defined in Section 3 and to no other person. " We are in agreement with this reasoning of the High Court. It follows that where a stranger who is a non Muslim and is in possession of a certain property his right, title and interest therein cannot be 167 put in jeopardy merely because the property is included in the List. Such a person is not required to file a suit for a declaration of his title within a period of one year. The special rule of limitation laid down in proviso to sub section (1) of section 6 is not applicable to him. In other words, the list published by the Board of Wakfs under sub section (2) of section S scan be challenged by him by filing a suit for declaration of title even after the expiry of the period of one year, if the necessity of filing such suit arises. Incidentally, the High Court also dealt with section 27 of the Act, and observed. "section 27 does not seem to suggest that it empowers the Board to decide the question whether a particular property is wakf property or not, if that challenge comes from a stranger who is neither mutawalli nor a person interested in the wakf, but who belongs to another religious denomination and who claims a valid title and lawful possession over that property. To ac kept the respondents argument would mean that the Board would be given the powers of the Civil Court to decide such disputes between itself and strangers and thus to make the Board 's decision final unless it is changed by a Civil Court of competent jurisdiction. If a dispute is raised by a non Muslim, the Board cannot by simply entering the property in the register of wakfs drive him to take recourse to a Civil Court In our judgment, the High Court was clearly in error in dealing with section 27 or section 36B of the Act. It appears from the writ petition field the High Court that no relief was as sought in respect of any action under section 27. The observations of the High Court were, therefore, strictly not called for in regard to section 27. It should have left the question open. The question may arise if and when, action under section 27 is taken. We, therefore, refrain from expressing any opinion as to the scope of section 27 of the Act. Likewise, the High Court went on to consider the impact of section 36B, and observed: "In our opinion, this section cannot apply in the case of a property which is in the hands of a stranger over whom the Board has no control under the Act, simply because the Board happens to enter the property in its register. In a case like the present one, where the petitioners claim their possession over the property as mortgagees from the year 1944 and fur their claim their title and possession as vendees over the same property from the year 1954, the Board of Wakfs cannot, by 168 simply entering the property in the list of wakfs or registering it in the register of wakfs, drive them to file a suit to establish their title or retain their possession. It cannot also seek to dispossess them from the property by resorting to section 36B. It is for the Board to file a civil suit for a declaration that the property in dispute is a wakf property and to obtain its possession. " It was really not necessary for the High Court to decide whether section 36B of the Act was attracted or not, in the facts and circumstances of the case. We must accordingly held that the Commissioner of Wakfs acted within jurisdiction in holding the disputed property to be wakf property. It must, therefore, follow that the Board of Muslim Wakfs, Rajasthan was justified in including the property in the list of wakfs published under sub section (2) of section S of the Act. We must also hold, on a construction of sub section (1) of section 6 that the list of wakfs so published by the Board was not final and conclusive under sub s (4) of section 6 against the respondents Nos. l and 2 due to their failure to bring a suit within one year as contemplated by sub section (1) of section 6. In view of the foregoing, the right of the respondents Nos. 1 and 2 in respect of the disputed property, if at all they have any, will remain unaffected by the impugned notification. They are at liberty to bring a suit for the establishment of their right and title, if any, to the property. Accordingly, the order of the High Court allowing the writ petition and declaring that the inclusion of the property in dispute in the list of wakf published by the Board bf Muslim Wakfs, Rajasthan under sub section (2) of section 5 of the was not binding on the respondents Nos. 1 and 2 is upheld, but its direct restraining the Board of Muslim Wakfs from entering the disputed property in the register of wakfs and from dispossessing the respondents Nos. 1 and 2, except by way of a suit in a civil court of competent jurisdiction is set aside as it proceeds on the assumption that sections 27 and 36B of the Act are not applicable, which question did not arise for its consideration. The parties are left to take recourse to their remedies according to law, with advertence to the observations made above, Subject to this modification, the appeal fails and is dismissed. There shall he no order as to costs. P.B.R. Appeal Dismissed.

To provide for the better administration and supervision of Wakfs, the Wakfs Act 1954, sought to bring the management of wakfs under the supervision of the State. The Act envisages the appointment of a Commissioner of Wakfs for the purpose of survey of wakf properties existing at the time of the commencement of the Act. The Commissioner is enjoined to submit his report to the State Government after making such enquiries as he may consider necessary. While making enquiries the Commissioner is invested with powers as are vested in a Civil Court under the Code of Civil Procedure. Section 6 of the Act provides that if any question arises as to whether a particular property specified in the list of wakfs published under section 5(2) was wakf property or not and such other related matters, the Board of Muslim Wakfs or the Mutawalli of the wakf or any person interested therein may institute a suit in a Civil Court for decision of the question. Respondents 1 and 2 were mortgagee purchasers of the property in dispute, which was claimed to be wakf property. Respondent. No. 3 in his application to the Commissioner of Wakfs alleged that the property in dispute being wakf property its transfer by the mutawalli to the respondents was invalid and prayed that the property be taken over by the wakf committee. While denying that the property in dispute was wakf property respondents 1 and 2 contended before the Commissioner that he had no jurisdiction to make an enquiry whether a particular property was wakf property or not. The Commissioner rejected these contentions and submitted a report to the State Government. On receipt of the Commissioner 's report the Board of Muslim Wakfs included the property in the list of wakfs in the Stat. In the respondents ' Writ Petition, the High Court held (i) that the jurisdiction of the Board of Wakfs was confined to matters of administration of the wakfs and not to adjudication of questions of title and that the Act did not invest either the Board or the Commissioner with power to decide the question whether a property belonged to a wakf or not and therefore the Commissioner had no jurisdiction under section 4(3) of the Act to enquire whether or not the property was wakf property and (ii) that the failure of a stranger to the wakf to institute a suit in a court of competent jurisdiction within a period of one year on the question whether a particular property was wakf property or not could not make the inclusion of such property in the list of wakfs final and conclusive. 149 In appeal to this Court it was contended on behalf of the appellants that (i) the words "for the purpose of making a survey of wakf properties" are wide enough to confer power on the Commissioner to investigate and adjudicate upon the question whether a particular property was or was not wakf property and (ii) failure of the respondents to file a suit within the time allowed by s, 6(1) made the inclusion of the property in the list of wakfs final and conclusive. The word "therein" occurring in "any person interested therein" in section 6 ( 1 ) qualifies the words "wakf property" and not "person interested in the wakfs" as wrongly assumed by the High Court. Dismissing the appeal to this Court ^ HELD: While the High Court was right in determining the scope of section 6(1), it was clearly in error in curtailing the ambit and scope of enquiry by the Commissioner under section 4(3 ) . [160 E] 1. (a) The Commissioner of wakfs acted within his jurisdiction in holding the disputed property to be wakf property. [168 C] (b) The whole purpose of the survey of the wakfs by the Commissioner under section 4(1) is to inform the Board of Wakfs as to existence of the wakfs in the State in order that all such wakfs should be brought under the supervision and control of the Board. [160 D] (c) The words "for the purpose of making a survey" are the key to the construction of the section. If the Commissioner has the power to make a survey it is but implicit that in the exercise of such power he should enquire whether or not a wakf exists. The making of such an enquiry is a necessary concomitant of the power to survey. The High Court was, therefore, wrong in holding to the contrary. [162 A Bl (d) It would be illogical to hold that while making a survey of wakf properties existing in the State the Commissioner of wakfs should have no power to enquire whether a particular property was wakf property or not. After making the survey the Commissioner is required to submit a report to the State Government in regard to the several matters referred to in clauses (a) to (f) thereof. There may be a dispute as between the Board, the mutawalli or a person interested in the wakf, as regards the existence of wakf i.e. whether a particular property is wakf property, whether it is a Shia wakf or a Sunni wakf, the extent of the property attached to the wakf, the nature and object of the wakf and so on. While making such an enquiry, the Commissioner is invested with the powers vested in a Civil Court under the Code of Civil Procedure, 1908. In view of the comprehensive provisions contained in the Act the enquiry which the Commissioner makes is not purely of an administrative nature but partakes of a quasi judicial character in respect of persons falling within the scope of section 6(1). [161 F; C E] (e) The power of the Commissioner to survey wakf properties or to enquire and investigate into the several matters set out in sub section (3) cannot be curtailed by taking recourse to section 4(S). Sub section (S) only lays down that, if during an enquiry any dispute arises as to whether a particular wakf is a Shia wakf or Sunni wakf and if there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of 150 such deed. It, therefore, makes the wakf deed conclusive as to the nature of the wakf Sub section (5) cannot be projected into sub section (1) determining the question whether a certain property is a wakf property or not. Nor does it enter into an enquiry as to several of the matters adverted to in some of the clauses of sub section (3). [162 D E] (f) Moreover section 6 and section 6(1) clearly envisage that the enquiry by the Commissioner was not confined to the question as to whether a particular wakf was a Shia Wakf or Sunni Wakf. It might also embrace a dispute is to whether a wakf existed or not. [162 H] 2. (a) Where a stranger is a non Muslim and is in possession of certain property, his right. title and interest therein cannot be put in jeopardy merely because the property is included in the list of wakfs. Such a person is not required to file a suit for a declaration of his title within a period of one year. The special rule of limitation laid down in proviso to section 6(1) is not applicable to him. In other words, the list published by the Board of Wakfs under section 5(2) can be challenged by him by filing a suit for declaration of title even after the expiry of the period of one year, if the necessity of filing such suit arises. h 167 A B] (b) The word "therein" occurring in section 6(1) after the words "any person interested therein" must necessarily refer to the "Wakf" which immediately precedes it. It cannot refer to the wakf property. Section 6 ( 1 ) enumerates the persons who can file suits and also the questions in respect of which such suits can be filed. In enumerating the persons who are empowered to file suits under this provision only the Board, the mutawalli of the Wakf; and "any person interested therein", thereby necessarily meaning any person interested in the wakfs, are listed. Its provisions empower only those who are interested in the wakfs to institute suits. [164 E Fl Sirajul Hag Khan & Ors. vs The Sunni Central Board of Wakf, U.P. Ors., , referred to. (c) The word "therein" in section 6(1) must mean "any person interested in a wakf" as defined in section 3(h). The object of the section is to narrow down the dispute between the Board of Wakfs, the Mutawalli and the person interested in the wakf as defined in section 3(h). [165 H] (d) The right of the respondents 1 and 2 in respect of the disputed property, if at all they have any, will remain unaffected by the impugned Notification. They are at liberty to bring a Suit for the establishment of their right and title, if any, to the property. [168 E]

8k-16k

Appeal No. 45 of1964. Appeal from the judgment and order dated July 30, 1962, of the Bombay High Court in Special Civil Application No. 69 of 1962. G.S. Pathak, M. M. Gharekhan and 1. N. Shroff, for the appellant. 911 C.K. Daphtary, Attorney General, R. Ganapathy Iyer, Gopal Singh and R. N. Sachthey, for the respondent. The Judgments of P. B. GAJENDRAGADKAR C.J., K. N. WANCHOO, M. HIDAYATULLAH and J. R. MUDHOLKAR JJ. was delivered by GAJENDRAGADKAR C.J. RAGHUBAR DAYAL J. delivered a dissenting Opinion. Gajendragadkar C.J. This appeal arises from a writ petition filed by the appellant Navnit Lal C. Javeri in the Bombay High Court in which he challenged the validity of section 12(1B) read with section 2 (6A) (e) of the Indian Income tax Act, 1922 (No. 11 of 1922) (hereinafter called the Act) as it stood in 1955. The High Court has rejected the appellant 's contention that the said section is invalid, and the appellant has come to this Court with a certificate granted by the High Court. The appellant holds 11 out of 845 shares in a private limited company named the Malegaon Electricity Co., (Private) Ltd. (hereinafter referred to as the company). The value of each share is Rs. 100. The business of the company is to supply electricity to the residents of Malegaon. Some time during 1955, the appellant took a loan amounting to over Rs. 4 lakhs from the company. A notice was issued to the appellant by the 8th, Income Tax Officer under section 22(2) of the Act calling, upon him to make his return for the assessment year 1956 57. The Income tax Officer computed his income at Rs. 3,58,460. This amount included a sum of Rs. 2,83,126 representing the accumulated profits of the company. The Income tax Officer took the view that under section 2 (6A) (e) the said amount must be deemed to be dividend received by the appellant, and as such, must be included in the total income of the appellant as income from other sources within the meaning of section 12(1B) of the Act. This order was challenged by the appellant by preferring an appeal before the Appellate Assistant Commissioner. The appeal, however, failed and was dismissed. The appellant then preferred a second appeal before the Income Tax Appellate Tribunal. Whilst this appeal was pending, before the said Tribunal, the appellant moved the High Court under Articles 226 and 227 of the Constitution, and contended that the relevant section under which the department had purported to levy assessment against him on the sum of Rs. 2,83,126, was ultra vires. That is how the only question which the High Court had to decide in the present writ proceedings was whether section 12 (1B) read with section 2 (6A) (e) was constitutionally valid. 912 in order to deal with this point, it is necessary to read the two relevant provisions of the Act. Section 2(6C) defines "income" as including dividend. Section 2 (6A) defines "dividend" in an inclusive manner. Section 2 (6A) (e) provides "Dividend" includes (e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case, possesses accumulated profits; but dividend does not include (i) (ii) any advance or loan made to a shareholder by a company in the ordinary course of its business where the lending of money is a substantial part of the business ,of the company; (iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub clause (e), to the extent to which it is so set off." Thus, the inclusive definition of "dividend" takes in the payments to which clause (e) of section 2(6A) refers and makes them dividend for the purpose of the Act. Section 12(1) provides that the tax shall be payable by an assessee under the head "Income from other sources" in respect of income, profits and gains of every kind which may be included in his total income (if not included under any of the preceding heads). Section 12(lB) provides : "any payment by a company to a shareholder by way of advance or loan which would have been treated as a dividend within the meaning of clause (e) of subsection (6A) of section 2 in any previous year relevant to any assessment year prior to the assessment year ending on the 31st day of March, 1956, had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the 913 assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year". Both these provisions viz., section 2(6A)(e) and section 12(lB) were introduced in the Act by the Finance Act 15 of 1955 which came into operation on the 1st of April, 1955. It is thus clear that the combined effect of these two provisions is that three kinds of payments made to the shareholder of a company to which the said provisions apply, are treated as taxable dividend to the extent of the accumulated profits held by the company. These three kinds of payments are: (1) payments made to the shareholder by way of advance or loan; (2) payments made on his behalf; and (3) payments made for his individual benefit. There are five conditions which must be satisfied before section 12(lB) can be invoked against a shareholder. The first condition is that the company in question must be one in which the public are not substantially interested within the meaning of section 23A as it stood in the year in which the loan was advanced. The second condition is that the borrower must be a shareholder at the date when the loan was advanced; it is immaterial what the extent of his shareholding is. The third condition is that the loan advanced to a shareholder by such a company can be deemed to be dividend only to the extent to which it is shown that the company possessed accumulated profit at the date of the loan. This is an important limit prescribed by the relevant section. The fourth condition is that the loan must not have been advanced by the company in the ordinary course of its business. In other words, this provision would not apply to cases where the company which advances a loan to its shareholder carries on the business of money lending itself ; and the last condition is that the loan must have remained outstanding at the commencement of the shareholder 's previous year in relation to the assessment year 1955 56. In dealing with the question about the constitutionality of the impugned provisions, it is necessary to bear in mind these respective conditions which govern the application of the said provisions. There is another material circumstance which cannot be ignored. It appears that when these amendments were introduced in Parliament, the Hon 'ble Minister for Revenue & Civil Expenditure save an assurance that outstanding loans and advances which are otherwise liable to be taxed as dividends in the assessment year 1955 56 will not be subjected to tax if it is shown that they had been genuinely refunded to the respective companies before the 30th June, 1955. It was realized by the Government 914 that unless such a step was taken, the operation of section 12(1B) would lead to extreme hardship, because it would have covered the aggregate of all outstanding loans of past years and that may have imposed an unreasonably high liability on the respective shareholders to whom the loans might have been advanced. In order that the assurance given by the Minister in Parliament should be carried out, a circular [No. 20(XXI 6)/55] was issued by the Central Board of Revenue on the 10th May, 1955. It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision. The officers were, therefore, asked to intimate to all the companies that if the loans were repaid before the 30th June, 1955 in a genuine manner, they would not be taken into account in determining the tax liability of the shareholders to whom they may have been advanced. In other words, past transactions which would normally have attracted the stringent provisions of section 12(lB) as it was introduced in 1955, were substantially granted exemption from the operation of the said provisions by making it clear to all the companies and their shareholders that if the past loans were genuinely refunded to the companies, they would not be taken into account under section 12(lB). Section 12(1B) would, therefore, normally Apply to loans granted by the companies to their respective shareholders with full notice of the provisions prescribed by it. Mr. Pathak for the appellant contends that the impugned provision is constitutionally invalid, because it is beyond the legislative competence of Parliament. He argues that Entry 82 in List I of the Seventh Schedule which deals with "taxes on income other than agricultural income" cannot justify the impugned provision, because a loan advanced to a shareholder by the company cannot, in any legitimate sense, be treated as his income; and so, the artificial manner in which such dividend is ordered to be treated as income by the impugned provision is not justified by the said Entry. He also contends that the said provision offends article 19(1) (f) & (g) and cannot be said to be justified by clause (5) or (6) of the said article. There is no doubt that if the impugned provision is beyond the legislative powers of Parliament, it would be bad. Similarly, it is now well settled that even tax 915 legislation must stand the scrutiny of the fundamental rights guaranteed by the Constitution, and so, there can be no doubt that if the impugned provision invades the fundamental rights of the appellant and the invasion is not constitutionally justified, it would be invalid. In dealing with this point, it is necessary to consider what exactly is the denotation of the word "income" used in the relevant Entry. It is hardly necessary to emphasis that the entries in the Lists cannot be read in a narrow or restricted sense, and as observed by Gwyer C.J. in the United Provinces vs Atiqa Begum(1). " each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. " What the entries in the List purport to do is to confer legislative powers on the respective Legislatures in respect of areas or fields covered by the said entries . and it is an elementary rule of construction that the widest possible construction must be put upon their words. This doctrine does not, however, mean that Parliament can choose to tax as income an item which in no rational sense can be regarded as a citizen 's income. The item taxed should rationally be capable of being considered as the income of a citizen. But in considering the question as to whether a particular item in the hands of a citizen can be regarded as his income or not, it would be inappropriate to apply the tests traditionally prescribed by the Income tax Act as such. In Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City(1), this Court had occasion to consider the question as to whether capital gains could be treated as income within the meaning of item 54 of List I of the Seventh Schedule to the Government of India Act, 1935. Section 12 B of the Indian Income tax Act, 1922 which had been inserted in the said Act by Act XXII of 1947, had imposed tax on 'capital gains '. The validity of this provision was challenged on the ground that capital gains cannot be treated as income within the meaning of entry 54. This plea was rejected by this Court on the ground that the words used in a constitutional enactment conferring legis lative powers ought to be construed most liberally and in their widest amplitude. Adopting this approach Das J. as he then was, speaking for the Court, observed that the word "income" used in the said entry must be given its ordinary, natural and grammatical meaning and that was, income is a thing that comes in. On this view, the Court found no difficulty in coming to the conclusion that income would include capital gains. If the traditional (1) (2) [1955]1 S.C.R. 829. Sup./65 916 sense of income had been accepted, then, of course, capital gains could not be treated as income. That, in fact, was the argument which was pressed by Mr. Kolah who appeared for the appellant. "If we hold", observed the learned Judge, "as we are asked to do, that the meaning of the word 'income ' has become rigidly crystallised by reason of the judicial interpretation of that word appearing in the Income tax Act, then logically no enlargement of the scope of the Income tax Act, by amendment or otherwise, will be permissible in future. " And he has significantly added that a conclusion so extravagant and astounding can scarcely be contemplated or countenanced. This decision, therefore shows that the word "income" used in entry 54 which corresponds to the present entry 82 in List I of the 7th Schedule to our Constitution, was liberally construed, and capital gains were deemed to be included within its scope. This aspect of the matter has also been clearly enunciated by Gwyer C.J. in In re: The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (No. 14 of 1938) (1). "I conceive", said the learned Chief Justice, "that a broad and liberal spirit should inspire those whose duty it is to interpret it (the Constitution); but I do not imply by this that they are free to stretch or pervert the language of the enactment in the interests of any legal or constitutional theory, or even for the purpose of supplying omissions or of correcting supposed errors". The next decision to which we ought to refer deals with section 23A of the Act. In Sardar Baldev Singh vs Commissioner of Income tax, Delhi & Ajmer(1) the validity of the said section was challenged. Section 23A(1) provides, inter alia, that subject to the provisions of sub sections (3) and (4), where the Income tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company within the twelve months immediately following the expiry of that previous year are less than sixty per cent of the total income of the company of that previous year as reduced by the amounts specified in clauses (a), (b) & (c) of the said sub section, the Income tax Officer shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable, make an order in writing that the company shall, apart from the sum (1) at p. 37. (2) ; 917 determined as payable by it on the basis of the assessment under section 23, be liable to pay super tax at the rate specified by the said sub section. The object of this section is to prevent avoidance of super tax by shareholders of a company in which the public are not substantially interested. As is well known, the rates,of super tax applicable to companies are much lower than the rates applicable to individual assessees. The legislature thought that individuals tried to avoid the payment of super tax at a higher rate by transferring to a private limited company it). return for shares the sources of their income, and then the profits made by the company were allowed to accumulate in the hands of the company, dividends not being declared, and the said profits would ultimately be distributed in a capital form by one device or another. The object of section 23A was to defeat such attempts. The main effect of the provisions of section 23A appears to be that a company should not accumulate more than 40 per cent of its net profits to build up reserves or to provide for capital expenditure. It will be recalled that section 2(6A) has taken within the definition of 'dividend" the accumulated profits of such companies, and so section 23A attempts to reach such accumulated profits for the purpose of taxation. The argument which was urged before this Court in the cast of Sardar Baldev Singh(1) was that a company and its share, holders are different persons, and so, section 23A was ultra vires inasmuch as it purported to tax the shareholders on the income of the company in which they hold shares. If the accumulated profits are distributed amongst the shareholders by way of dividends, the shareholders could legitimately be taxed in respect of the dividends received by them; but when section 23A attempts to tax the shareholders for accumulated profits even though they are not distributed as dividends, what, the section purports to do is to tax the share holders for the profits made by the company; and that, according to the appellant, made section 23A invalid. This argument was repelled by this Court on the ground that the obvious intention of section 23A was to prevent evasion of tax, and it was held that entry 54 should be read not only as authorising the imposition of a tax, but also as authorising an enactment which prevents the tax imposed being evaded; otherwise the power to tax a person on his income might often be made in fructuous by ingenious contrivances. It would be noticed that section 23A wanted to deal with a situation where shareholders did not deliberately distribute the accumulated profits as dividends amongst themselves. Section (1) ; 918 23A, therefore, provides that these accumulated profits will be deemed to have been distributed to the shareholders and tax levied against them on that basis. It is likely that in such a case, hardship may be caused in some honest cases; but this Court made it perfectly clear that considerations of hardship are irrelevant for determining questions of legislative competence. It is thus clear that the result of the decision of this Court in Sardar Baldev Singh(1) is that the income which technically belonged to the 'company, was treated, as income belonging to the share holders in proportion to the shares they held in the company, and on that footing tax was levied on them; and yet the said tax was held to be constitutionally valid. There is yet another case in which a similar question was considered. In Balaji vs Income tax Officer, Special Investigation Circle, (2) a person and his wife started business in partnership and admitted their three minor sons to it. In computing the total income of the said person for the purpose of assessment, the Income tax Officer included the share of the income of his wife and three minor sons under section 16 (3) (a) (i) & (ii) of the Act. The validity of this provision was challenged on the ground that the impugned section purported to tax a person for the income of other persons, namely, his wife and minor sons. In rejecting the contention raised against the validity of the impugned section, this Court held that the Entries in the Legislative Lists are not powers but fields of legislation and the widest import and significance should be attached to them. On this view, the conclusion reached by this Court was that Entry 54 of the Federal Legislative List covered legislation like section 16 (3) (a) (i) & (ii), because it was intended to prevent evasion of tax. It appears from the judgment that the validity of the said section was also challenged on the ground that it contravened Articles 14 and 19(1) (f) & (g) of the Constitution. This plea was also rejected. One of the considerations which weighed with the Court in repelling the said plea was that the additional payment of tax made on the income of the wife or the minor children would ultimately be home by them in the final accounting between them. Having regard to this con sideration and bearing in mind the fact that the mode of taxation authorised by the impugned section, though harsh, was thought to be necessary to prevent evasion of payment of tax, this Court held that the said section was valid. It is in the light of these decisions that we must proceed to consider Mr. Pathak 's argument that section 12(1B) of the Act is ultra wires. (1) ; (2) ; In dealing with Mr. Pathak 's argument in the present case, let us recall the relevant facts. The companies to which the impugned section applies are companies in which at least 75 per cent of the voting power lies in the hands of persons other than the public, and that means that the companies are controlled by a group of persons allied together and having the same interest. In the case of such companies, the controlling group can do what it likes with the management of the company, its affairs and its profit within the limits of the Companies Act. It is for this group to determine whether the profits made by the company should be distributed as dividends or not. The declaration of dividend is entirely within the discretion of this group. When the legislature realized that though money was reasonably available with the company in the form of profits, those in charge of the company deliberately refused to distribute it as dividends to the shareholders, but adopted the device of advancing the said accumulated profits by way of loan or advance to one of its shareholders, it was plain that the object of such a loan or advance was to evade the payment of tax on accumulated profits under section 23A. It will be remembered that an advance or loan which falls within the mischief of the 'impugned section is advance or loan made company which does not normally deal in money lending is made with full knowledge of the provisions contained impugned section. The object of keeping accumulated without distributing them obviously is to take the benefit lower rate of super tax prescribed for companies. This was defeated by section 23A which provides that in the case distributed profits, tax would be levied on the shareholders on the basis that the accumulated profits will be deemed to have been distributed amongst them. Similarly, section 12(1B) provides that if a controlled company adopts the device of making a loan or advance to one of its shareholders, such shareholder will be deemed to have received the said amount out of the accumulated profits and would be liable to pay tax on the basis that he hag received the said loan by way of dividend. It is clear that when such a device is adopted by a controlled company, the controlling group consisting of shareholders have deliberately decided to adopt the device of making a loan or advance. Such an arrangement is intended to evade the application of a. 23A. The loan may carry interest and the said interest may be received by the company; but the main object underlying the loan is to avoid payment of tax. It may ultimately be repaid to the company and when it is so repaid, it may or may not be treated as part of 920 accumulated profits. It is this kind of a well planned device which section 12(1B) intends to reach for the purpose of taxation. It appears that such a device is adopted by private companies in many countries. Simon has referred to this device in these words : "Generally speaking, surtax is charged only on individuals, not on companies or other bodies corporate. Various devices have been adopted from time to time to enable the individual to avoid surtax on his real total income or on a portion of it, and one method involved the formation of what is popularly called a 'one man company '. He individual transferred his assets, in exchange for shares, to a limited company, specially registered for the purpose, which thereafter received the income from the assets concerned. The individual 's total income for tax purposes was then limited to the amount of the dividends distributed to him as practically the only shareholder, which distribution was in his own control. The balance of the income, which was not so distributed, remained with the company to form, in effect, a fund of savings accumulated from income which had not immediately attracted surtax. Should the individual wish to avail himself of the use of any part of these savings he could effect this by borrowing from the company, any interest payable by him going to swell the savings fund; and at any time the individual could acquire the whole balance of the fund in the character of capital by putting the company into liquidation. "(1) What Simon says about one man company can be equally true about the controlled company whose affairs are controlled by a group of persons closely knit and having the same interest. The question which now arises is, if the impugned section treats the loan received by a shareholder as a dividend paid to him by the company, has the legislature in enacting the section exceeded the limits of the legislative field prescribed by the present Entry 82 in List I. As we have already noticed, the word "income" in the context must receive a wide interpretation; how wide it should be it is unnecessary to consider, because such an enquiry would be hypothetical. The question must be decided (1) Simon 's Income tax, 2nd Ed. 3, para 592, p. 341. 921 on the facts of each case. There must no doubt be some rational connection between the item taxed and the concept of income liberally construed. If the legislature realises that the private controlled companies generally adopt the device of making advances or giving loans to their shareholders with the object of evading the payment of tax, it can step in to meet this mischief, and in that connection, it has created a fiction by which the amount Ostensibly and nominally advanced to a shareholder as a loan is treated in reality for tax purposes as the payment of dividend to him. We have already explained how a small number of shareholders controlling a private company adopt this device. Having regard to the fact that the legislature was aware of such devices, would it not, be competent to the legislature to device a fiction for treating the ostensible loan as the receipt of dividend? In our opinion, it would be difficult to hold that in making the fiction, the legislature has traveled beyond the legislative field assigned to it by entry 82 in List 1. It is, however, urged by Mr. Pathak that while providing for such a fiction, the legislature should have required the Income tax Officer to consider in each case whether the loan was genuine, or was the result of a device; and he argues that since no such provision has been made and a uniform presumption by fiction is, sought to be raised, the legislature has gone beyond its legislative competence. In support of this argument, Mr. Pathak has referred to the fact that under section 108(1) of the Commonwealth Income tax Act it is provided that the amount paid to the shareholder by way of advance or loan can be taxed if in the opinion of the Commissioner it represents distributions of income, Such a provision would have made the impugned section valid, Mr. Pathak argues that omission of Parliament to exclude from the operation of section 12(lB) genuine loans or advances, and its failure to distinguish between such loans and advances and loans and advances made as a device shows, that it has acted blindly and must, therefore, be held to have exceeded its legislative power. We are not inclined to accept this argument. If the legislature thinks that the advances or loans are in almost every case the result of a device, it would be competent to it to prescribe a fiction and hold that in cases of such advances or loans, tax should be recovered from the shareholder an the basis that he has received the dividend. Therefore, we are satisfied that the High Court was right in coming to the conclusion that the impugned section is not beyond the legislative competence of the legislature. 922 Then it is argued by Mr. Pathak that the impugned provision contravenes the appellant 's fundamental rights under article 19(1) (f) & (g) and is not saved by clauses (5) & (6) of the said article. It is not easy to appreciate this argument. article 19(1) (f) recognises the right of a citizen to acquire, hold and dispose of property and article 19(1)(g) recognises the right to practice any profession, or to carry on any occupation, trade or business. The impugned provision does not contravene either of these rights. The shareholder 's right to borrow money from his own company cannot be said to be a fundamental right; besides all that the impugned section does is to provide that if a loan is borrowed by a shareholder from a company to which the said provision applies, it will be deemed to be a receipt by him of the dividend. This provision does not affect the appellant 's right to borrow money from any other source; and his company from which he borrows does not ordinarily do money lending business. That is why the restriction imposed by the section cannot be said to be unreasonable at all. In dealing with the question about the reasonableness of this provision, we cannot also overlook the fact that past transactions were excluded from its operation by the issue of a circular to which we have already referred. There is no element of unfairness in the fiction, because the other shareholders have deliberately agreed to make the loan or the advance and the shareholder to whom the loan is advanced deliberately takes it with a view to assist the company to evade the payment of tax and to have the benefit of the use of, the amount subject to the payment of interest. The company receives interest, the shareholder enjoys the use of the money, and in the process the payment of due tax is evaded. That is the assumption made by the legislature in making this provision. How can it be urged that either the shareholder who is taxed, or the other shareholders who deliberately make the advance to a colleague of theirs, are unfairly dealt with by the impugned provision. In our opinion, there is no scope for arguing that the fundamental rights of the shareholder under article 19 (1) (f ) & (g) have been contravened by the impugned provision. Therefore, we must reject Mr. Pathak 's argument that the impugned provision is invalid on the ground that it contravenes article 19(1)(f) & (g). There is obviously no scope for suggesting that the impugned provision contravenes article 14; and in fact Mr. Pathak has not raised this point before us. In that connection, he himself fairly invited our attention to the decision of the Madras High Court in K. M. section Lakshmana Aiyar vs Additional Income tax Officer, Special 923 Circle, Madras, (1) where the challenge to the validity of the impugned section on the ground that it contravened article 14 has been repelled. The result is, the appeal fails and is dismissed with costs. Raghubar Dayal J. I am of opinion that the appeal should be allowed as sections 12 (1B) and 2 (6A) (e), of the Indian Income tax Act, 1922, hereinafter called the Act, as they stood in 1955, are void. The two provisions were enacted by Parliament in view of Entry 82, List 1, Seventh Schedule of the Constitution which reads : "Taxes on income other than agricultural income". It is not disputed that whatever wide connotation the word 'income ' in this Entry may have, the item taxed should really be capable of being considered as income, that there be some rational connection between the item taxed and the concept of "income" and that it is not open to Parliament to choose to tax, as income, an item which in no rational sense can be regarded as income. It is also not disputed that Parliament can enact a law dealing with the evasion of payment of income tax. In Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City(1) this Court had to consider the content of the word "income" as used in Entry 54, List 1, Seventh Schedule to the Government of India Act, 1935 (which is identical with Entry 82. List 1, Seventh Schedule to the Constitution), in determining whether the imposition of a tax under the head "capital gains" by the Central Legislature, was ultra vires. Section 12 B inserted in the Income tax Act by the Indian Income tax and Excess Profits Tax (Amendment) Act, 1947 (Act XXII of 1947) provided for the imposition of a tax on capital gains arising from certain transactions mentioned in the section. This Court said that "income", according to the dictionary, means "a thing that comes in" and that in the United States of America and Australia, the word "income" was used in a wide sense so as to include "capital gains". It referred to certain cases of those countries in which a very wide meaning was ascribed to the word "income" as its natural meaning and held that "its natural meaning embraces any profit or gain which is actually received". In the United States, the word "income" was first defined in Stratton 's Independence vs Howhert(3) decided on December 1, 1913, as "gain derived from capital, from labour, or from both (1) (2) [1955] 1 S.C.R. 829. (3) L. Ed. 285. 924 combined". The court had to construe the word "income" as used in section 38 of the Corporation Excise Tax Act of August 5, 1909, which imposed an excise tax "equivalent to one per centum upon the entire net income . received by it from all sources during the year". In Eisner vs Macomber(1) referred to by this Court in Mafatlal 's case(1), the court had to construe the word "income" as used in the XVI Amendment of the Constitution of the United States, which is : "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." and observed, at p. 206: " Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised. For the present purpose we require only a clear definition of the term 'income, ' as used in common speech, in order to determine its meaning in the Amendment; and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue. After examining dictionaries in common use we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of August 5, 1909. 'Income may be defined as the gain derived from capital, from labour, or from both combined, ' provided it be understood to include profit gained through a sale or conversion of capital assets. to which it was applied in the Doyle case Brief as it is, it indicates the characteristic and distinguishing attribute of income, essential for a correct solution of the present controversy. " The definition of "income" given in this case has been followed in the other two cases referred to in Mafatlal 's case(2) ViZ., Merchants ' Loan & Trust Co. vs Smietanka(3) and United States (1)252 U.S. 189=64 L. Ed. 521. (2) [19551 1 S.C.R. 829. (3) ; L. Ed. 751. 925 vs Stewart(1), cases which dealt with the taxation of gains from the sale of capital assets. The question in the Australian case viz., Resch vs The Federal Commissioner of Taxation(1) was about the validity of the provinces in the income tax legislation to the effect that distribution of profits in the course of winding up of a company would be treated on the same footing as the distribution by the company as a going concern. The provision was held valid as Parliament possessed power to bring to charge in an income tax Act all profits and gains accruing to a tax payer, without distinguishing whether the profit or gain should be regarded as a receipt on capital or on income or revenue account. The word "income" has been interpreted in a natural sense in these cases and the definition given in Eisner 's case($) is much narrower and limited in content than the widest meaning which is now sought to be given to it by the respondent. In Mafatlal 's case (4) too, this Court has not given such a wide meaning to the word "income" as to include "anything which comes in" and therefore to include the amount of a loan which may be said to come in the hands of the borrower. Loans borrowed by a shareholder from the company do not, as such, come within the above general definition of "income". They do not represent gains from his labour or capital or profits gained through sale of capital assets. The borrower has to repay them. If a shareholder is really paid his share of the profits ostensibly as a loan, such a nominal loan but really a share of profits can be taxed as "income" under an appropriate enactment. We may now consider the nature of what had been taxed in this case and to which objection has been taken on the ground that sections 2 (6A) (e) and 12 ( 1 B) are invalid. The appellant holds 11 out of 845 shares in a private limited company. The value of each share is Rs. 100. In 1955 he took a loan of over Rs. 4,00,000 from the company. Rs. 2,83,126, the amount of accumulated profits the company had then, have been added to the appellant 's total income for the relevant assessment year, in view of sections 2(6A)(e) and 12(1B) of the Act. He appellant 's share in the accumulated profits, if distributed as dividend would be 11/845the of Rs. 2,83,126 i.e., Rs. 3,686. Rs. 2,79,440, the balance, would then be the dividend payable to the other co sharers. The appellant contends that Rs. 2,79,440 (1) ; = 85 Ed 40 (3) ; L. Ed. 521. (2) ; (4) [1955] 1 S.C.R. 829. 926 is not his income and that Parliament was not competent to enact sections 2 (6A) (e) and 12 ( 1B) which treat it as his "income" from dividend. Before dealing with the contention, reference may be made to what the impugned sections provide. Section 2 (6A) (e) defines "dividend", in the circumstances mentioned in that clause, to include any payment by a company of any sum by way of advance or loan to a shareholder, or any payment by any Such company on behalf of or for the individual benefit of a shareholder to the extent to which the company in either case possesses accumulated profits. Section 12(1B) provides that any such payment to a shareholder made by way of advance or loan in certain circumstances would be treated as dividend received by him in the previous year relevant to the assessment year ending March 31, 1956, if such loan or advance remained outstanding on the first day of such previous year. Now, the contention for the appellant is that though Parliament can enact a law dealing with evasion of payment of income tax, it cannot tax what is not "income", that the amount in excess of his proportionate share in Rs. 2,83,126, if it had been actually distributed as profits by the company, could not have been his income from dividend, that he could not have evaded payment of income tax on this amount from its being not distributed as dividend and that therefore Parliament could not enact that such excess amount be treated as dividend paid to him and, consequently, as his "income". The contention has force. The essence of an amount paid as dividend is that it has to represent the proportionate amount a particular shareholder is to get on the basis of the shares held by him out of the profits of the company set apart for payment of dividend to shareholders. Any ad hoc payment of money to a shareholder as advance or loan unrelated to his share in the accumulated profits cannot rationally come within the expression "dividend". I am therefore of opinion that it is not open to the legislature to describe any payment of money by a company to a shareholder by the word "dividend" and then provide that such payment (called dividend) will come within the expression "income" for the purposes of any law enacted by virtue of Entry 82, List 1, Seventh Schedule to the Constitution. The definition of "dividend" must have rational connection with the concept of "dividend" in the context of the profits of a company and its distribution amongst shareholders at any time after the profits have been earned. Clauses (a) to (d) of section 2 (6A) may be said to have such a connection. 927 It is conceivable, and not disputed for the appellant, I that attempts are made by persons to evade payment of income tax and that one mode of such attempts is that companies accumulate profits, do not use them for payment of dividends and later pay the amount to shareholders by way of profits but in the form of advance of moneys or loans to some shareholders who pass on the ratable share of the remaining shareholders and the shareholders thus escape payment of super tax at a higher rate as their receiving such amounts could not be treated as "dividends" and so could not be added to their "income '. At the same time, it is not disputed for the respondent that there can be genuine cases of loans taken by shareholders from a company when the company was in a position to lend money out of its funds. In fact, after the enactment of section 2(6A)(e), the Central Board of Revenue issued a Circular directing its officers to intimate to all companies that if loans advanced by them were repaid before June 30, 1955, in a genuine manner, they would not be taken into account in determining the tax liability of the shareholders to whom they had been advanced as it was likely that some companies might have advanced loans to their shareholders as a result of genuine transactions of loans and the idea was not to affect such transactions and not to bring them within the mischief of the new provision. The provisions of section 2 (6A) (e) take into account all cases of advances or loans made by companies to their shareholders, be they bona fide or be they for the purpose of evading payment of super tax, and make the borrower liable for the tax on even such amount of the loan as be in excess of his proportionate share in the accumulated profits up to the amount of the loan. Reference may be made to the fact that in other countries too, notice has been taken of attempts to evade payment of income tax by similar devices, and that enactments to defeat the devices have been made by the legislatures of those countries. We have been referred to section 108 of the Income Tax and Social Services Contribution Assessment Act 1936 53 (of the Commonwealth of Australia) which deals with loans to shareholders. Its provisions materially differ in one respect from those of the impugned sections. Only so much of the advances or loans are deemed to be dividends paid by the company as in the opinion of the Commissioner represents distributions of income. The entire amount of advance of loan is not treated as dividend received by the borrower shareholder. Imposition of a tax is a restriction on the, right of an assessee 928 to hold property and a particular tax can be justified only as a reasonable restriction on the exercise of that right in the interests of the general public. The shareholder who takes a loan or advance from a company which possesses accumulated profits is, under the impugned provisions, treated to have received the amount of the loan or advance to the extent of the accumulated profits, as dividend. As already stated, the amount of profits set apart for dividends is to be proportionately distributed among the various shareholders. If any enactment provides that certain profits of the company, though not distributed as dividend, be treated as used for the payment of dividends, it should necessarily follow that a particular shareholder be deemed to have received a proportionate amout of such profits as dividend. It would be unreasonable to provide that a particular shareholder should be deemed to have received an amount in excess of his proportionate share as dividend. The other shareholders should, in the circum stances, be deemed to have received their proportionate shares of the profits deemed to have been distributed as dividends. A reasonable law may provide for their assessment as wan on the amount of dividends deemed to have been distributed to them. It appears to me unreasonable that a particular shareholder who receives a loan or advance from a company be deemed to have received that entire amount as dividend when his proportionate share be much less. I would, for this reason also, consider the provisions of the impugned sections to amount to imposing unreasonable restrictions on the fundamental right to hold property under article 19(1)(f). I would now refer to certain cases on which reliance is placed for the proposition that this Court has held valid laws made to cover attempts for evasion of income tax and that therefore the impugned provisions enacted with the same object to cover attempts to evade payment of super tax should be held valid. These case are : Mafatlal 's case(1), already referred to; Sardar Baldev Singh vs Commissioner of Income tax, Delhi & Ajmer (2) ; and Balaji vs Income tax Officer, Special Investigation Circle(a). Mafatlal 's case(1) dealt with the validity of the tax on capital gains under section 12B of the Act. In that case what was taxed was what had been gained by the assessee as a result of some dealing in capital assets. The capital gain was to be computed after making certain deductions including the actual cost to the assessee of (1)[1955] 1 S.C.R. 829. (3) ; (2) ; 929 The capital assets, and did not represent the entire amount that came in as a result of the transaction. This case is therefore an authority for the simple proposition that the word "income" in Entry 82, List 1, Seventh Schedule 'to the Constitution, has wide connotation and is not to be restricted to have the same content as judicial decisions had given to that word as used in the Act. "Income", in the Act, has been construed in the context of the scheme of the Act and has been considered to mean generally what one earns mostly in a recurring form from some existing sources. The profits that one earns from the transfer of a capital asset could be rationally considered, as held by this Court, to be income, as it represented the amount in excess of what the transferor assessee had spent in acquiring that asset. Baldev Singh 's case(1) was concerned about the validity of the provisions of section 23A of the Act which authorised the Income tax Officer to order in writing that the undistributed portion of the ostensible income of a company calculated as profit therein shall be deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid and that thereupon the proportionate share thereof of each shareholder shall be included in the total income of such shareholder for the purpose of assessing his total income. The Income tax Officer was to make such an order only when he was satisfied that the profits and gains distributed as dividends by any company up to the end of the sixth month after its accounts for the previous year are laid before the company in general meeting, were less than 60% of the assessable income of the company and that payment of a larger dividend would not be unreasonable keeping in view the losses incurred by the company in the earlier years and of the smallness of the profits made. It will be noticed that the order of the Income tax Officer could not be to the effect that the undistributed profits would be deemed to be the dividend paid to any particular shareholder or shareholders but could be to the effect that they were distributed as dividends amongst all the shareholders. The validity of this provision was not questioned in the case. What was questioned in the case was that the proportionate share of Baldev Singh, assessee, in such undistributed profits, could not be added to his total income of the particular year to which it was added. It was held that in view of the deeming provision with respect to the distribution of profits as dividends amongst shareholders, the proportionate share of the dividends would be deemed to be (1) [1961]1 S.C.R. 482. 930 income of the assessee and that therefore, when it was not taxed, would be deemed to have escaped assessment for the purposes of section 34 of the Act. The case is distinguishable on several grounds. One is that the Income tax Officer is to make the order when he is satisfied that a larger dividend could have been justifiably distributed, a view necessarily leading to the inference that a lower dividend was distributed in order to escape payment of super tax by shareholders liable to pay such tax. The other is that the Income tax Officer was given power to make the order only when profits less than 60% of the assessable income were distributed as dividend. This indicates that the company could accumulate profits up to 40% of the assessable income for reasons which would be deemed to be genuine. This should lead to the inference that the accumulation of profits with respect to which no action has been taken under section 23A was justified and that therefore if in case a company could spare the money to advance to a shareholder for his needs, that alone should not lead to the inference that the advance was made to evade the payment of super tax by the shareholder. The third point of distinction, and of signi ficance, is that no individual shareholder is made liable for tax on an amount of the undistributed profits in excess of his proportionate share in those profits. The shareholder is not thereby prejudiced. His income is increased by an amount which he could have legitimately got from the company if the persons in control had acted reasonably and had retained such profits undistributed as were necessary for the purposes of the company. Another objection taken in Baldev Singh 's case(1) was about the constitutionality of section 23A on the ground that it purports to tax the shareholders on the income of the company in which they held shares, especially when it does not give a right to the shareholders to realise from the company the dividend which by the order is deemed to have been paid to them. The section was held to be constitutionally valid as it was enacted for preventing evasion of tax in view of the conditions of its applicability. In the circumstances of the cases covered by section 23A, there was a reasonable connection between the amount deemed to be distributed as dividend and the possible attempt for evading payment of super tax. The assessee could not have been prejudiced if the persons in control of the management of the company had acted reasonably or actually distributed that amount as profits subsequent to the order of the Income tax Officer. (1) ; 931 In Balaji 's case(1), the validity of section 16(3) (a), clauses (i) and (ii), came up for consideration. These clauses provide that in computing the total income of any individual for the purpose of assessment there shall be included so much of the income of his wife or minor child as arises directly or indirectly from the membership of the wife in a firm of which her husband is a partner or from the admission of the minor to the benefits of partnership in a firm of which such individual is partner. These provisions were held valid. The Court left open the question whether A could be taxed on the income of B and formulated the question for decision as whether section 16(3) (a), clauses (i) and (ii), is a provision made by the Legislature to prevent evasion of tax and answered it in the affirmative, as the husband or the father could nominally take his wife or minor child, in partnership with him, so that the tax burden may be lightened and as this device enabled the assessee to secure the entire income of the business and yet evade income tax which he would otherwise have been liable to pay. It was said at p. 999: "The scope of the provisions is limited only to a few of the intimate members of a family who ordinarily are under the protection of the assessee and are defendants of him. The persona selected by the provisions, namely, wife and minor children, cannot also be ordi narily expected to carry on their business independently with their own funds when the husband or the father is alive and when they are under his protection. " It is therefore clear that the basis for holding section 16(3) (a), clauses (i) and (ii), valid was that in effect the husband or the father was the real person who ran the firm and that the others were made partners nominally and therefore the partnership was not genuine. In this view, there could be no question of the provisions affecting the husband or the father prejudicially or including in his income amounts which were not his income. This, however, cannot be said in the present case or in cases which come within the purview of the impugned sections. In dealing with the contention that the provisions of section 16 (3) (a), clauses (i) and (ii), contravened article 14 of the Constitution, it was said at p. 991 : "We have held that the object of the legislation was to prevent evasion of tax. A similar device would not ordinarily be resorted to by individuals by entering (1) [1962) 2 S.C.R. 983. 1/65 932 into partnership with persons other than those mentioned in the sub section, as it would involve a risk of the third party turning round and asserting his own rights. The Legislature, therefore, selected for the purpose of classification only that group of persons who in fact are used as a cloak to perpetrate fraud on taxation. " Such a risk is always involved in a company making payments as advances or loans to a shareholder when it possesses accumulated profits as the other shareholders run the risk of not getting their proportionate share of profits which they would have got if they had been really distributed as dividends. This consideration, again, points to the conclusion that the probability of such an advance or loan being genuine would be dependent not so much on the existence of accumulated profits but on the number of shareholders in the company and the proportion of the number of shares the borrower has to the total number of shares held by the shareholders of the company. The lesser the proportion, the greater is the chance of the advance or loan being genuine, as there would in that case be greater risk of the other shareholders losing their share in the profits deemed to be distributed as dividends. I am therefore of opinion that the impugned sections viz., sections 2(6A) (e) and 12(1B) of the Act are void and that this appeal should be allowed. Appeal allowed.

The assessee was a share holder in a private limited company whose ordinary business was not money lending business. He took a loan amounting to over Rs. 4 lakhs from a company. The Income tax Officer computed the assessee 's income at Rs. 3 lakhs and odd, under section 12(1B) read with section 2 (6A) (e) of the Income tax Act, 1922. That amount included a sum of over Rs. 2 lakhs representing the accumulated profits of the company. The assessee 's share in the accumulated profits, if distributed as dividend, would be an amount proportionate to the number of shares held by him. He therefore contended, that the balance of the accumulated profits was not his income and that the Legislature was not competent to enact the two sections according to which that amount was also treated as his income. His writ petition in the High Court challenging. the constitutional validity of the two sections was dismissed. He appealed to the Supreme Court. HELD (Per Gajendragadkar, C. J., Wanchoo, Hidayatullah and Mudholkar JJ.) : (i) The sections are not beyond the legislative competence of Parliament. The companies to which section 12(1B) applies are companies in which at least 75% of the voting power lies in the hands of persons other than the public. They are controlled by a group of persons allied together and having the same interest. The controlling group can determine whether the profits made by the company should be distributed as dividends or not. When they deliberately refused to distribute the accumulated profits as dividends but adopted the device of advancing the profits by way of loan to one of the shareholders, it was with the object of evading the payment of tax by the company on the accumulated profits. Section 12(1B) provides that if a controlled company adopts the device of making a loan to one of its shareholders, he will be deemed to have received the amount out of the accumulated profits as dividend and would be liable to pay tax on his income. The word "income" in Entry 82 in List I of the 7th Schedule to the Constitution must receive a wide interpretation depending on the facts of each case. Having regard to the fact that the Legislature was aware of the devices to evade tax, it would be within its competence to devise a fiction for treating an ostensible loan as the receipt of the dividend. [919 A H. 920 H; 921 C D] (ii) The absence of a provision enabling the income tax officer to consider in each case whether the loan was genuine or the result of a device does not make the section go beyond the competence of the Legislature. [921 D E] If the Legislature thought that in almost every case the advances or loans were the result of a device to evade tax, it would be competent to 910 it to prescribe a fiction and hold that in cases of such advances or loans, tax should be recovered from the shareholder on the basis that he had received a dividend. [921 G H] (iii) Section 12(lB) does,not impose an unreasonable restriction on the appellant 's fundamental rights under article 19(1) (f) and (g) of the Constitution. [922 A] The section does not affect the appellant 's right to borrow money. There is no element of unfairness, because the other shareholders have deliberately agreed to make the loan or the advance and the shareholder to whom the loan is advanced deliberately takes it with a view to assist the company to evade the payment of tax and to have the benefit of the use of the amount subject to the payment of interest. The company receives interest, the shareholder enjoys the use of the money and in the process the payment of tax is evaded. Further, past transactions were excluded from the operation of the sections by the issue of a circular by the Central Board of Revenue. [922 B F] Per Raghubar Dayal J. (dissenting) : (i) Sections 2(6A) (e) and 12(lB) of the Income tax Act, 1922 as they stood in 1955 are void. [923 B] It is not open 'to the Legislature to describe any payment of money by a company to a shareholder by the word "dividend" and then provide that such payment will come within the expression "income" in item 82, List I of Schedule 7. The definition of dividend must have a rational connection with concept of dividend in the context of the profits of the company and its distribution amongst the shareholders. The essence of an amount paid as dividend is that it has to represent the proportionate amount a particular shareholder is to get on the basis of the shares held by him out of the profits of the company set apart for payment of dividend to shareholders. Any ad hoc payment of money to a shareholder as advance or loan unrelated to his share in the accumulated profits cannot rationally come within the expression dividend. [926 E H] (ii) The provisions of the impugned sections impose unreasonable restrictions on the fundamental right to hold property under article 19(1)(f) of the Constitution. [928 E] If any enactment provides that certain profits of the company, though not distributed as dividend, be treated as used for the payment of dividends it should necessarily follow that a particular shareholder be deemed to have received a proportionate amount of such profits. It would be unreasonable to provide that a particular shareholder should be deemed to have received an amount in excess of his proportionate share as dividend. It is unreasonable that a particular shareholder who receives a loan or advance from a company be deemed to have received that entire amount as dividend when his proportionate share would be much less. [928 B E] Navinchandra Mafatlal vs Commissioner of Income tax, Bombay City, [1955] 1 S.C.R. 829, Sardar Baldev Singh vs Commissioner of Income tar, Delhi and Agra [1961] 1 S.C.R. 482 and Balaji vs Income tax Officer, Special Investigation Circle, ; , referred to.

8k-16k

Civil Appeal No.86 of 1958. Appeal by special leave from the Award dated November 15, 1956, of the Industrial Tribunal, Assam, at Dhubri. M. C. Setalvad, Attorney General for India, section N. Mukherjee and B. N. Ghose, for the appellants. Niharendu Dutt Mazumdar and Dipak Dutta Choudhri, for the respondents. October 14. The Judgment of the Court was delivered by SINHA C. J. This is an appeal by special leave from the Award dated November 15, 1956, made by the Industrial Tribunal, Assam. The dispute arose between the employers, the Indian General Navigation 3 & Railway Company Limited, carrying on business at No. 4, Fairlie Place, Calcutta, and the Rivers Steam Navigation Company Limited, carrying on business at No. 2, Fairlie Place, Calcutta, which will be referred to, in the course of this judgment, as the appellants ', and their workmen at Dhubri Ghat, represented by the Dhubri Transshipment Labour Union and Dhubri Local Ghat Transhipment Labour Union, Dhubri, which will be referred to hereinafter as the respondents '. The Award aforesaid was published in the Assam Gazette on December 19, 1956. It is necessary to state the following, facts in order to appreciate the points arising for decision in this case: The appellants carry on business of inland water transport in North East India and in Pakistan, in association with each other, and are commonly known as the Joint Steamer Companies. The appellants jointly maintain a large number of wharves, jetties, godowns, etc., at different river stations in India and in Pakistan, for the purposes of their business. One such station is at Dhubri in Assam. At that station, a large number of workmen are employed for the purpose of loading and unloading the appellant 's vessels and for transshipping goods from railway wagons to the appellants ' vessels and vice versa. Before May, 1954, such workmen were employed by a contractor called the Assam Labour Supply Syndicate which will hereinafter be referred to as 'the Syndicate '. Those workmen were organized under two labour unions, called (1) the Dhubri Transhipment Labour Union which was affiliated to the Indian National Trade Union Congress which is, a Federation of Trade Unions, and (2) the Dhubri Local Ghat Transhipment Labour Union. There were differences between the Syndicate and its employees who made certain demands, and has threatened to go on strike to enforce their demands. Conciliation proceedings under the industrial Disputes Act, 1947 (which will hereinafter be referred to as the Act), took place, in the course of which certain agreements to be referred to in greater detail hereinafter, were reached between the Syndicate and the respondents on 4 February 23, 1953, and March 30, 1953. On May 3, 1954, by virtue of a Memorandum of that date, an agreement was arrived 'at between the appellants and the respondents, whereby the appellants agreed that instead of employing a contractor to handle the work of loading and unloading and transhipment of goods, the appellants would employ supervisors and agents to handle the work " pending the proposed Tripartite Conference to decide the issue of permanent direct employment of employees for the future ". The appellants also agreed to maintain continuity of service of the workmen and the existing terms and conditions of their service. The Tripartite Conference contemplated by the Agreement, was to consist of the represent. natives of the appellants, the workmen and the Government of Assam. As a result of the Tripartite Con ference held on July 9 & 10, 1954, an agreement was reached between the appellants and the Indian National Trade Union Congress, which was incorporated in the form of a letter dated July 16, 1954, from the General Secretary of the Congress, Assam Branch, Dhubri Ghat, to the several Unions at different stations, including Dhubri. As a result of this agreement, the appellants agreed, inter alia, to introduce permanent direct employment at all the transhipment ghats of Assam, progressively, without prejudicing the agreement of May 3, 1954. It will be necessary hereinafter to consider some of the terms of this agreement in detail, when dealing with the several points in controversy between the parties. After the agreement aforesaid, there arose certain differences amongst the workmen represented by the two Unions aforesaid, in respect of the election of their office bearers. As a result of those internal dissensions amongst the employees, two rival groups, each claiming to represent a section of the workmen, came into existence. The appellants, thereupon, notified the Indian National Trade Unions ' Congress, that recognition to the Dhubri Transhipment Labour Union, was being withdrawn pending satisfactory settlement of the internal differences. Thus, came into existence, a new Trade Union known as the 5 Dhubri Transhipment Workers ' Union, in or about July, 1955. Meanwhile, between May 2, 1955, and July 31, 1955, the appellant 's, on five different occasions and on different charges, dismissed eight of their employees, after making such inquiries as they thought necessary against those workmen, and after giving them each an opportunity of explaining their conduct. On July 21, 1955, one B. Chakravarty, Secretary, Dhubri Transhipment Labour Union, served a notice on the appellants under sub section (i) of section 22 of the Act, that " I propose to call a strike on the 11th August, 1955, from zero hours, if the following demands be not fulfilled within fourteen days on receipt of this notice". Then followed an annexure containing ten demands which need not be set out here. A similar notice was also served by the Secretary Dhubri Local Ghat Transhipment Labour Union on the same date ' the annexure in this case containing eleven demands. On July 26, 1955, the Conciliation Officer of the Government of Assam, received the notice of the strike. He held conciliation proceedings on August 6, 1955, but those proceedings ended abruptly without arriving at any settlement. On August 8, 1955, the said Conciliation Officer, who was the Labour Officer of Gauhati, by his letter bearing the same date, informed the Labour Commissioner, Assam, about the failure of the conciliation proceedings, and forwarded copies of that letter to the appellants and the workmen 's Union at Dhubri. Without waiting for the statutory period of seven days from the date of failure of the conciliation proceedings, a large number of workmen concerned went on strike with effect from the mid night of August 10, 1953, in pursuance of the notices of strike aforesaid. They were alleged by the appellants not only to have gone on strike, but also to have forcibly entered the appellants ' jetties and other working places and prevented the loyal workmen, who were willing to carry on the transhipment work, from carrying on their normal work. The strike is, therefore, alleged to have been illegal. On August 11, 1955, the District Magistrate, Goal para, promulgated an 'order under 6 section 144 of the Code of Criminal Procedure, prohibiting the "holding of any meetings, demonstrations, pro cessions, or causing threat, obstructions, annoyance or injury directed against the persons lawfully employed in the following areas in the Dhabri Town and its suburbs". Then followed a specification of the ghats to which the prohibition applied This order was to remain in force till September 10, 1955, In consequence of the aforesaid strike which was treated by the appellants as illegal, they declared a lock out on August 11, 1955, in respect of 91 workmen named in the notice issued to them. Another lock out notice was issued on August 13, 1955, in respect of a much larger number of workmen in different groups described as belonging to a particular Sardar 's gang. The legality of these lock out notices, was seriously challenged by the respondents. The Workers ' Union called off the strike with effect from August 19, and the appellants lifted the lock out with effect from August 27. The appellants took proceedings against those employees who had taken part in the strike. They suspended those workmen who were alleged to have not only taken part in the strike, but also had obstructed those workmen who were willing to work. But those workmen who were alleged to have only participated in the strike, were not suspended during the inquiry. On September 8, 1955, 37 of the employees were convicted under section 188 of the Indian Penal Code, for violation of the aforesaid order under section 144 of the Criminal Procedure, Code, with the result that on September 9, they were Dismissed by the appellants. Another batch of 52 employees were convicted under a 143/188 of the Indian Penal Code, on February 17,1956. Meanwhile, on September 13, 1955, the Government of Assam bad constituted a Board of Conciliation, consisting of three persons, namely, (1) Labour Commissioner of Assam, as the Chairman, (2) D. N. Sarma of Gauhati, as representing the interest of the employees, and (3) P. J. Rayfield, as representing the interest of the employers, with a view to promoting settlement of the dispute between the appellants and their workmen 7 at Dhubri. The appellants alleged that they had dismissed their workmen as a result of the inquiry held by their nominee into the conduct of the persons who had participated in the alleged illegal strike and/ or had caused obstruction, before they became aware of the constitution of the Board of Conciliation, as aforesaid. On coming to know of the constitution of the said Board of Conciliation, the appellants subsequently passed orders, holding the order of dismissal of the two hundred and twenty three employees in abeyance, pending the disposal of their application to the Board for permission to dismiss the said two hundred and twenty three employees. The Board of Conciliation, by majority, P. J. Rayfield dissenting, came to the conclusion that as regard the dismissal of the thirty seven workmen, the Management had violated section 33 of the Act, because, in their opinion, the proceedings of the Board of Conciliation had commenced from August 26, and not from September 13. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, by a similar majority, it was held that although the strike prima facie was illegal, it was not unjustified. The dissenting member, P. J. Rayfield, recorded his note of dissent to the effect that the conciliation proceedings commenced on September 13, 1955, and not earlier, as decided by the majority, and consequently, the dismissal of the,thirty seven workmen ( 'discharge ' of 37 workmen, as stated in the note of dissent), was not in contravention of section 33 of the Act, and that the permission to dismiss the two hundred and twenty three workmen on the ground that they had been found guilty, by a departmental inquiry, of participating in an illegal strike and forcibly preventing others from attending work, should have been granted. This conclusion was sought to be based on the alleged legal position that the Board had no power to withhold the permission applied for, and had not the power to decide as to the kind of punishment to be imposed upon the workmen who had admittedly taken part in a strike which had unanimously been held to be illegal. The dissenting note also sought to 8 show that the finding of the majority of the Board that the strike was justified, was not based on a proper appreciation of the facts of the case. The report of the Board of Conciliation was published on Decem ber 5, 1955. As the parties had come to a stalemate, the Government of Assam, by its order dated December 7, 1955,as subsequently amended by its order dated January 23, 1956, referred the dispute to Shri Radhanath Hazarika as an Industrial Tribunal, for the adjudication of the dispute on the following issues: " 1 (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing the following eight workers: Manzoor Hussain, Sudam Singh, ldrish, Tazmal Hussain (S/o S.K. Gaffur) Jahangir Sardar, Keayamat Hossain, Panchu Shah and Ram Ekbal Singh? (b) If not, what relief, if any, are they entitled to ? (2) (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing and/or suspending as the case may be 260 workers at Dhubri Ghat on or about the 29th August, 1955? (b) If not, to what relief, if any, are the workers entitled ? " The parties to the dispute filed their written statement before the Tribunal and tendered both oral and documentary evidence before it. The Tribunal made its Award which was published in the Assam Gazette on December 19, 1956, as already stated. The Tribunal held that the strike, though illegal, was justified, but that in the absence of standing orders whereby participation in any illegal strike, could justify a punishment of dismissal, the appellants were not entitled to dismiss those workmen whose case was before the Tribunal. The Tribunal, by its Award, directed reinstatement of 208 out of 260 workmen whom the appellants had dismissed, or had sought permission to dismiss. The remaining 52 workmen were ordered to be refused reinstatement on the ground that they had been convicted under section 143 of the Indian Penal Code, which implied an offence involving 9 use of criminal force. It also directed the appellants to pay full wages and allowances from August 20, 1955, till the date of reinstatement of the workmen who had been directed to be reinstated. The Tribunal also held that the dismissal of the eight workmen who were the subject matter of the issue 1(a) aforesaid of the Reference, was bad, and therefore, those 8 workmen were also ordered to be reinstated with back wages. The present appeal by special leave is directed against the said Award of the Tribunal. Before we deal with the merits of the controversy between the parties, it is convenient at this stage to deal with certain arguments by way of preliminary objections to the maintainability and competence of the appeal, raised on behalf of the respondents. Those objections are of a three fold character, (1) no appeal lies, (2) the appellants did not exhaust their statutory remedies under section 17A of the Act, and (3) the appeal is not competent also for the reason that the Government of Assam has not been impleaded as party respondent to the appeal, In our opinion, there is no substance in any one of these objections. With reference to the first ground, the argument runs as follows: The Tribunal made its Award on November 15, 1956, and, submitted the same to the Assam Government under section 15 of the Act. On December 8 of that year, the Government of Assam directed the said Award to be published in the Assam Gazette, and it was so published on December 19, 1956. According to the order of the State Government, the Award became enforceable under section 17A, on the expiry of 30 days from the date of publication, namely, December 19, 1956. Accordingly, the Award became enforceable on January 18,1957, and acquired the force of law by the operation of the statute. By virtue of section 17(2) of the Act, the Award became " final and shall not be called in question by any court in any manner whatsoever ", subject to the provisions of section 17A. It was, therefore, further contended that in the events which had happened before January 18, 1957, the Award had become enforceable and had 2 10 acquired the force of law by operation of the statute, had, thus, passed beyond the pale of litigation and adjudication by any court of law. This argument has only to be stated to be rejected in view of the provisions of the Constitution. It is manifest that the provisions of the Act are subject to the paramount law as laid down in the Constitution. Article 136 of the Constitution, under which this Court grants special leave to appeal (in this case, from a determination of the Tribunal), cannot be read as subject to the provisions of the Act, as the ' argument on behalf of the respondents would postulate. The provisions of the Act must be read subject to the over riding provisions of the Constitution, in this case, article 136. Therefore, whatever finality may be claimed under the provisions of the Act, in respect of the Award, by virtue of sections 17 and 17A of the Act, it must necessarily be subject to the result of the determination of the appeal by special leave. It was further contended that the Award had merged in the orders of the Government, on publication in the Official Gazette, under section 17 of the Act, but this is the same argument stated in another form, and any argument based on the provisions of the, Act, making the Award final and enforceable, must always be read as being subject to the decision of this Court, in the event of special leave being granted against such determination by the Tribunal and as adopted by the Government. The same argument was advanced in still another form, namely, that the appellants should have moved this Court before the lease of the time contemplated by section 17 and section 17A of the Act, that is to say, before January 18, 1957. Apart from the consideration that this argument tends to curtail the period of limitation, prescribed by this Court by statutory rules, the operation of sections 17 and 17A of the Act, is not automatically stayed by making an application for special leave. It is only by virtue of specific orders made by this Court, staying the operation of the Award or some such order, that the appellant becomes, for the time being, immune from the operation of those provisions of the 11 Act, which impose penalties for the infringement of the terms of the Award. Adverting to the second branch of the preliminary objection, it appears that the provisions of section 17A, particularly, the provisos, have been sought to be pressed in aid of the respondents ' contention, without realizing that the Award in question in this case, does not come within the purview of either of those provisos. The State Government was not a party to the Industrial dispute, nor was it an Award given by a National Tribunal. Hence, there is no substance in the contention that the appellants did not exhaust their statutory remedies under section 17A of the Act. The third branch of the preliminary objection is based on the contention that the Government of Assam was a necessary and proper party, as it had acted under delegated powers of legislation under the Act, in making the Award enforceable and giving it the force of law. It is a little difficult to appreciate how the State Government became a necessary or proper party to this appeal. The State Government does not play any part in the proceedings, except referring the dispute to the Tribunal under section 10 of the Act. The publication of the Award under section 17, is automatic on receipt of the same by the Government. Its coining into operation is also not subject to any action on the part of the State Government, unless the case is brought within the purview of either of the provisos to section 17A. In view of these considerations, it must be held that there is no merit in the preliminary objection. The appeal must, therefore,, be determined on its merits. On the merits of the controversy between the parties, it has been argued by the learned counsel for the appellants that the Tribunal, having held the strike to be illegal, has erred in holding that it was justified; that an illegal strike could never be justified and that the Tribunal was wholly in error in losing sight of the fact that the appellants were carrying on what had been notified as a public utility service. In this connection, it was further argued that in view of 12 the proviso to section 10(1) of the Act, the State Government was bound to make a Reference of the dispute to an Industrial Tribunal when notice of strike under section 22 of the Act had already been given, and that, therefore, the failure of the employer to enter into direct negotiations with the employees, upon receipt of the strike 'notice, could not be used by the Tribunal for coming to the finding that the strike was justified. It was also urged that the Tribunal had clearly erred in holding that the lock out declared by the appellants, was illegal, and that, in coming that conclusion, it had over looked the provisions of section 24(3) of the Act. The Tribunal, it was further argued, had erred in holding that, in the absence of standing orders to the effect that participation in an illegal strike is a gross misconduct, an employer could not dismiss its workmen for mere participation in an illegal strike. Assuming that the last stated argument was not well founded it was argued that the standing orders governing the relations between the Syndicate and the workmen, would also govern the relations between the appellants and the workmen, as a result of the agreement aforesaid whereby the appellants undertook all the liabilities of the Syndicate in relation to the workmen, and guaranteed to them the same conditions of service. In this connection, it was also argued that the Tribunal bad made a serious mistake of record in treating the standing orders of the Syndicate as a mere draft and, therefore, of no binding force as between the employers and the employees; that the Tribunal erred, while considering the case of the eight workmen dismissed before the commencement of the strike, in proceeding upon an unfounded assumption that no charge sheets had been served upon those workmen during the inquiry against them, and that, therefore, the Award, in so far as it related to those 8 workmen, was entirely erroneous. As against the two hundred and eight workmen ordered by the Tribunal to be reinstated, it was argued that the departmental inquiry held by the appellants had resulted in the distinct finding that they bad not only participated in the illegal strike, but had also instigated loyal workmen 13 to join in the illegal strike, and had obstructed tranship ment work by loyal workmen. In this connection, it was also argued that in any view of the matter, the thirty seven persons, who had been convicted by the criminal court under section 188 of the Indian Penal Code, for having transgressed the prohibitions contained in the prohibitory order under section 144 of the Code of Criminal Procedure, were clearly liable to be dismissed on the findings of the criminal court itself, apart from any other considerations bearing on the regularity of the inquiry against them; that the Tribunal was in error in holdidg that the inquiry against the dismissed workmen was not in accordance with the prescribed procedure; and lastly, that this was not a case of reinstatement of the dismissed workmen, and that only compensation should have been awarded to them. On behalf of the respondents, their learned counsel, besides raising the preliminary objection already dealt with, urged that the Tribunal was fully justified in holding that the strike, though illegal, was " perfectly justified " and virtually provoked by the appellants. Though in the statement of the case, the argument had been raised that the strike could not be illegal, because the notification declaring the service at the ghats to be public utility service, was ultra vires, that argument was not persisted in before us, but it was vehemently argued that there were no standing orders either of the Syndicate or of the appellants, which could govern the service conditions of the workmen, and that in any event, mere participation in an illegal strike would not entitle the employers to dismiss those workmen who had joined the strike; that the dismissal orders in all cases, were sheer acts of victimization and unfair labour practice. It was also sought to be argued that the lock out was entirely illegal, and that in any view of the matter, its continuance after the strike had been called of, was wholly unjustified and against the principles of " social justice ". Further, it was urged that the appellants had dismissed and/or suspended 260 workmen without framing any specific charges against them; that the dismissal of the eight workmen 14 in view of the incidents before the commencement of the strike, was also illegal, and in any event, irregular, because, it was urged, no specific charges had been framed against them. It was also sought to be argued that the notice ' inviting the workmen to join their work, being unconditional without any reservations, amounted to a condonation of the strike, and therefore, the dismissal orders against the two hundred and sixty workmen were bad in law. Some other arguments also were advanced on behalf the respondents, but we do not propose to take notice of them, because they were ultimately found to be without any foundation in the record of the case. As a matter of fact, the arguments on behalf of the respondents, were not marked by that strict adherence to the record of the case, or the case made out before the Tribunal, as ought to be the case before courts of justice generally, and certainly, before the highest Court in the land. Now, turning to the merits, it is better to deal with the first issue first, that is to say, whether the dismissal of the eight workmen, named in the Issue as amended, was justified, and if not, to what relief they were entitled. The Tribunal dealt with the individual cases of those workmen, and came to the conclusion that the dismissal of none of them was justified, and that, therefore, all of them were entitled to reinstatement with all their back wages and other benefits accruing to them from the date of their suspension and subsequent dismissal until the date of their reinstatement, minus what had been paid to them. Thus, the first issue in both the parts, was decided entirely in favour of the workmen. We have, therefore, to examine how far the determination of Tribunal on the first issue, is open to question. The cases of Manzoor Hussain, Sudama Singh, Idrish and Tazmal Hussain, have been dealt with together by the Tribunal below. These four workmen had been dismissed by the appellants, upon a report made by Rayfield, the enquiring officer under the appellants, on the allegation that they had assaulted their Labour Supervisor section P. Tevari on May 2, 1955. This charge against those four workmen, was examined by 15 a Magistrate who tried them for the alleged assault on Tewari. The Magistrate found them not guilty and acquitted them by his judgment given in April, 1956. The departmental inquiry by Rayfield was held on May 17, 1955, when a member of witnesses were examined by him on behalf of the appellants. In their joint written statement, these four workmen stated that as the police case was pending against them in regard to these very charges, they were not in a position to make any further statement in their defence. The Tribunal came to the conclusion that, on the material before it had not been made out that Tewari had been actually assaulted, while on duty, and that the dismissal order was passed " possibly with a view to frighten the other workmen and to satisfy the whims of Tewari ". We have examined the record, and we do not find any justification for differing from the conclusions of the Tribunal. With reference to the case against Panchu Shah and Ram Ekbal Singh, it appears that the Tribunal definitely came to the conclusion that their dismissal order was vitiated because it was an act of victimization and was mala fide. In the face of this clear finding,we do not think that we can interfere with the determination of the Tribunal in respect of these two workmen. But the case against Jahangir Sardar and Keayamat Hussain, stands on a different footing. The charge against Jahangir was two fold, namely, (1) wilful insubordination and disobedience, and (2) conduct prejudicial to good order and discipline. To these charges, Jahangir demurred and objected, saying he could not " understand the reasons for the charge sheet ". On this demurrer, a letter dated May 7, 1955, was issued to him, giving him the details of the acts charged against him, with reference to the time, date and place. The charge against Keayamat was similarly, a two fold one, namely, (1) disorderly behaviour and inciting others to disturbance and violence, and (2) conduct prejudicial to good order and discipline. Keayamat also demurred to the charge in the same way that it was vague, and that 16 he was not aware of anything wrong having been done by him. On May 7, Keayamat was also given a similar letter, explaining to him the details of the charge aforesaid, with reference to the time, place and date of the acts which formed the gravamen of the charge against him. A number of witnesses were examined by Raymond who held the inquiry. In both these cases, the Tribunal refused to accept the result of the inquiry, chiefly on the ground that no specific charge had been laid against them, and that the allegations were much too vague. In recording this finding, the Tribunal has fallen into a grievous error of record. It has completely omitted to consider the letter issued to both these workmen on May 7, giving full particulars of the charges against them. If it had considered that letter issued to both these workmen, it would not have fallen into this serious error which has vitiated its award in respect of them. The Tribunal further proceeded to comment on the evidence led before the inquiring officer and remarked that the evidence was meager or insufficient. It also observed that the " degree of proof, even in the departmental enquiry, is the same as required in a Court of Law ". In our opinion, the Tribunal misdirected itself in looking into the sufficiency of proof led before the inquiring officer, as if it was sitting in appeal on the decision of the employers. In the case of these two employees, there is no finding by the Tribunal that the order of dismissal against them, was actuated by any mala fides, or was an act of victimization. In view of these considerations, the dismissal order made by the appellants on a proper inquiry, after giving the workmen concerned sufficient opportunity of explaining their conduct, must be upheld. The appeal in respect of these two workmen, must, therefore, be allowed, and the order of the Tribunal in respect of them, accordingly, set aside. The order of the Tribunal in respect of the other six workmen, is confirmed. Having dealt with the orders of dismissal in respect of the incidents before the strike of August 11, 1955, 17 we now turn to the strike itself The first question that arises in this connection, is whether the strike was illegal as alleged by the appellants and as found by the Tribunal. The learned counsel for the respondents sought to reopen the finding about the illegality of the strike, basing his submissions mainly on the contention that there were no conciliation proceedings pending either in fact or in law on the date of the strike, and that, therefore, the finding of the Tribunal was not correct. It was not disputed on behalf of the respondents that the notices of the strike given by the workmen on July 21, 1955, had been duly received by the Conciliation Officer on July 26, 1955, and that the conciliation proceedings were commenced on August 6, 1955. What was contended on their behalf, was that the proceedings had to be stopped, as it appears from the record of those proceedings, without any settlement of the dispute as the "workers ' representative expressed their inability to take further part in the proceedings, on a question of leave to their other representatives". We shall examine the question later as to which party was to blame for the break down of the conciliation proceedings at the very outset. It is enough to observe that under section 20 of the Act, the conciliation proceedings must be deemed to have commenced on July 26, 1955, when the notice of the strike was received by the Conciliation Officer, and those proceedings shall be deemed to have concluded when the report of the Conciliation Officer is received by the Government. In this case, the report to the Government was made by the Conciliation Officer on August 8, 1955. It is not absolutely clear as to when this report of the Conciliation Officer was actually received by the Government. It is clear, therefore, that the conciliation proceedings certainly lasted between July 26 and August 8, 1955. The strike, having commenced on August 11, was clearly illegal in view of the provisions of section 22 of the Act. We must, therefore, hold in agreement with the Tribunal, that the strike was clearly illegal. The Tribunal, having held that the strike was illegal, proceeded to discuss the question whether it 3 18 was justified, and came to the conclusion that it was "perfectly justified". In the first place, it is a little difficult to understand how a strike in respect of a public utility service, which is clearly, illegal, could at the same time be characterized as "perfectly justified". These two conclusions cannot in law co exist. The law has made a distinction between a strike which is illegal and one which is not, but it has not made any distinction between an illegal strike which may be said to be justifiable and one which is not justifiable. This distinction is not warranted by the Act, and is wholly misconceived, specially in the case of employees in a public utility service. Every one participating in an illegal strike, is liable to be dealt with departmentally, of course, subject to the action of the Department being questioned before an Industrial Tribunal, but it is not permissible to characterize an illegal strike as justifiable. The only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case. Therefore, the tendency to condone what has been declared to be illegal by statute, must be deprecated, and it must be clearly understood by those who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers. There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence. Apart from the basic error of treating the illegal strike to be perfectly justified, the Tribunal has indulged in language which is not characteristic of a judicial approach. The following observations by the Tribunal, in the course of its inordinately long Award, covering about 42 pages in print, are illustrative of the attitude of the Tribunal towards the appellants : " By this letter the Company 's Joint Agent at Dhubri instead of taking a friendly attitude approached the District Magistrate asking for police help. 19 If the Company 's Agent at Dhubri had the honest intention he could have immediately moved the appropriate authority to come immediately to the spot to stop the proposed strike. But instead of that he has provoked the Union by adopting this back door policy to suppress the demands of the workers. It was really unfair on the part of the Agent. It seems that he bad mala fide intention." For this outburst of the Tribunal, justification is sought in the letter which D. J. Milner, the Joint Agent of the appellants, wrote to the Secretary to the Government of Assam, Transport and Industries Department, Labour Commissioner, Government of Assam, Superintendent of Police, Goalpara District, Labour Officer, Lower Assam, and General Secretary, I.N.T.U.C., Assam Branch, on August 9, 1955, informing them of the threatened strike. The last paragraph of the letter explained the reasons for the long letter addressed by the Joint Agent: " In the interest of maintaining this vital link in Assam 's flood stricken communications and protecting our property,, and that of the Railway, as well as our own staff, Railway Staff and loyal laborers, we have to request that adequate police be available at each of our Ghats from shortly prior to midnight on the 10th instant in order that unlawful damage may not be caused by these illegal strikers who will be acting in defiance of Government regulations, and accepted industrial dispute procedure". We see nothing sinister in this letter, justifying the remarks by the Tribunal, quoted above. It was the usual ,request for the maintenance of public peace and for the prevention of acts of violence by misguided persons. It was also addressed to the I.N.T.U.C., the guardian of Labour. On the same date, that is, August 9,1955, B. Chakravarty, the Secretary of the Dhubri Transhipment Labour Union, addressed a letter to the Superintendent of Police, Goalpara, and Deputy Commissioner, Goalpara, alleging that the Joint Agent of the appellants had instructed the officers in charge of the jetties at the Ghats to raise a " hallah " after the zero hour of August 11, 1955, that the labourers of the 20 Transhipment Department were looting the goods of the ship, when they would go for picketing purposes to strengthen their strike. Those allegations of the Secretary, the Tribunal has taken as proof of those allegations, and has observed: ". it is clear that Mr. Milner hatched a plan to create a trouble and the Secretary of the Union got scent of all the secret arrangements made by the Company to create disturbance at the Ghats just immediately after the strike is declared. " This is the first reason assigned by the Tribunal for coming to the conclusion that the strike was "perfectly justified". The second reason for coming to this conclusion, according to the Tribunal, is to be found in the Conciliation Officer 's report that the appellants did not agree to grant leave to the labour representatives to sit in the conciliation proceedings which were held on August 6, 1955. The Tribunal has observed that it appeared also from the appellant 's attitude in refusing to grant leave to the five representatives of the Union, that the appellants were not inclined to give facilities for the conciliation proceedings. Is this observation justified on the record as it stands ? As already indicated, the Conciliation Officer received a copy of the strike notice on July 26, 1955. He fixed August 6, 1955, 10 a.m., at Dhubri, for the conciliation proceedings. The parties to the dispute were apprised of this meeting of August 6, 1955, on August 1, 1955 (ext. O, p. 119). From the proceedings of the Conciliation Officer, it appears that the Union applied to the appellants for leave to five workmen, officials of the Union, to enable them to represent the workmen in the conciliation proceedings. The attitude of the appellants was that they were agreeable to grant leave even on a verbal request, if the request came from those individual workmen, either direct or through the Union, but the appellants were not prepared to grant leave on a petition from the Union alone. On the other hand, the Union was not agreeable that the petition for leave should be made by the workmen themselves, and the Union insisted that it had the right to apply for leave on behalf of those workmen. Upon this, the Union 21 did not take any further part in the proceedings. It would be a travesty of facts to suggest that the appellants were not prepared to grant leave to those five workmen. In the first instance, leave should have been applied for before the date fixed for the commencement of the conciliation proceedings. Secondly, the application should have been made by the workmen concerned, either direct or through the Union. The Tribunal seems to have been under the impression that this attitude of the appellants amounted to a breach of one of the terms of the agreement as a result of the Tripartite Conference aforesaid. That, again, is an assumption which is not justified by the terms of the Agreement. Secondly, the five workmen selected for representing the workmen in the conciliation proceedings, should have applied in good time to their employers for leave for the purpose, but what we find is that an application (ext. M at p. 118) was made on August 6, 1955, not by those workmen themselves, but by the Secretary of the Union, and a copy of the application was forwarded to the Labour Officer and to the Deputy Commissioner, for information. Apparently, the Union was treating the matter as of sufficient importance, but they did not think it necessary to put in the application in time on behalf of the workmen themselves, even though the application might have been made through the Union. That the appellants were not to blame for the attitude they took in the matter of the procedure for application for leave to particular workmen, becomes clear on a reference to the terms of the Agreement dated February 23, 1953, between the Syndicate and their workmen represented by the Dhubri Transhipment Labour Union, at p. 75, Part 1 of the record. The Demand 5(f) was agreed to in these terms : " All leave applications be submitted by a representative of the Union on Tuesday or Friday in a week before the Management, and the decision be communicated to the Union the next day of submission of the application. " On the other band, in respect of leave, the terms of the Agreement reached between the Syndicate and the 22 Dhubri Local Ghat Transhipment Labour Union, on March 13, 1953, are as follows: " It is agreed that the workers will submit leave applications to the management who will communic ate their decision to the workers direct within three days of receipt of the applications and a copy thereof will he sent to the Union for information". It is clear, therefore,that the conciliation proceedings stopped abruptly not because the Management was to blame for not granting leave to the five chosen representatives of the workmen, but because B. Chakravarty insisted that the leave application would not be made by individual workmen but only by the Union. Even that application was made too late, and in the teeth of the terms of the Agreement, quoted above. If the Secretary had not taken this unreasonable attitude, and if he had been anxious that the conciliation proceedings should continue, the easiest thing for him to have done, was to get those five workmen to make their applications for leave, which the Management was prepared to grant even at that late hour. In our opinion, the conciliation proceedings failed because the Secretary took an unreasonable attitude. The Tribunal, therefore, was in error in throwing the blame for the failure of the conciliation proceedings on the Management. The third ground of attack on the bona fides of the appellants, was said to have been the attempt of the Management to interfere in the internal affairs of the Unions. The following remarks of the Tribunal are another instance of its intemperate language with which the Award bristles: " Curiously enough it appears that the Company 's Joint Agent at Dhubri dabbled in politics and meddled in internal administration of the Unions. He propped up another Union and backed it up to stand as a rival Union. " On an examination of the record of the case, it appears that the Indian National Trade Unions ' Congress, to which the Unions were affiliated, was not in favour of the strike. That would be an indication of the fact that the relation between the employers 23 and the employees had not come to the breaking point, and that the Congress, naturally, expected that conditions of service of the employees, could be improved more effectively by peaceful negotiations than by taking recourse to a strike in respect of a service which had been declared by the Government to be a public utility service . But the Secretary of one of the Unions, B. Chakravarty aforesaid, appears to have brought matters to a head without giving the Conciliation Officer a reasonable chance, as already indicated, of bringing about a reconciliation between the view points of the employers and the employees. The appellants had only recently taken over the workmen under their direct employment, and the Tripartite Conference between them, the representatives of the employees, and the Government, was yet to settle all the outstanding Questions between the parties. Hence, the fact that two rival Unions had come into existence, could not be laid at the door of the appellants as an act of unfair labour practice. The Tribunal was not, therefore, in our opinion, justified in holding that the Management had either meddled in the internal administration of the Unions, or dabbled in politics, and had, thus, been guilty of unfair labour practice. The Tribunal has been rather generous to the workmen without being just to the appellants. This is also shown by the fact that, after having held the strike to be illegal, the Tribunal considered the legality of the lock out declared by the appellants on August 11, 1955, in respect of one Ghat, and on August 13, 1955, in respect of the other Ghat. In this connection, the conclusion of the Tribunal may best be stated in its own words to demonstrate its attitude to the appellants: " In this case the Company used the weapon of lock out just to intimidate and put pressure on the employees to withdraw the demands. The lock out is also prohibited under Section 22(2)(d) of the Act. Therefore, both lock out and strike are illegal. The Company had no justification whatsoever to declare a lock out. " 24 Apparently, the Tribunal ignored the provisions of section 24(3) of the Act. The lock out was clearly not illegal. It is another question whether there was a justification for the appellants to continue the lockout even after the strike had been called off on August 19. The Joint Agent of the appellants, by his letter dated August 17, 1955, to the two Unions, had intimated to them that in view of the illegal strikes, lockout had been declared at the local Ghat on August 11, and at the Transhipment Ghat on August 13, and that the lock out " will remain in force until disciplinary action can be instituted against those of our employees chiefly responsible for leading and continuing the illegal strikes ". The continuance of the lock out after August 19, may be unjustified; but that does not make the lock out itself illegal. It was in pursuance of that order of the Joint, Agent, that proceedings were taken against the socalled leading strikers, leading upto their dismissal. Those orders of dismissal, to be presently discussed, are the main points in controversy between the parties in this Court. But before those orders of dismissal were passed, the Management issued a notice on August 26, 1955, lifting the lock out with effect from the next day. It required the employees to report for duty to the Joint Agent personally, at his office between the hours of 9 and 10 a.m. It also contained the threat that any employee who did not report for duty on August 30, " will in the absence of a letter of explanation and good reason, be treated as having voluntarily terminated his services." R. N. Biswas was then appointed the Inquiry Officer by the appellants, and he held the inquiry in batches, the first batch consisting of 26 workmen, the second, of 114, the third, of 68, the fourth, of 17 and the fifth, of 7. These inquiries related to different incidents in connection with the strikes. Biswas appears from the record as placed before us, to have recorded the statements of Milner, Rayfield, C. R. Das and section P. Tewari officers of the appellants in proof of the allegations against the strikers. We do not think any useful purpose will be served by 25 going into the details of the evidence given by those witnesses, because we have come to the conclusion that those several inquiries suffer from the fundamental defect that there is no satisfactory evidence on the record that charges, giving the details of the acts of violence or obstruction, against the strikers, were served upon the workmen against whom those inquiries had been instituted. As a result of each one of these inquiries, the Inquiry Officer, R. N. Biswas, reported that the charge against each one of the workmen, had been proved to his satisfaction. But before the inquiry was held, the Joint Agent on September 9, 1955, informed the thirty seven workmen who had been convicted as aforesaid, of the criminal charge under section 188 of the Indian Penal Code, that their services were terminated from that date, and that they were to call at his office by the 15th of the month to collect their dues and to vacate the quarters of the appellants. As regards the remaining two hundred and twenty three workmen, orders were passed on September 16, to the effect that as the departmental inquiry made against them, had resulted in the charges against them being proved, they were dismissed from the service of the appellants with effect from August 29, 1955. They were called upon to call at the Labour Office on September 18, to collect their dues, and to vacate the quarters of the appellants. Realising that as the Government had appointed a Board of Conciliation on the 13th instant, to resolve the dispute between the parties, the orders aforesaid of dismissal or termination of services of the thirty seven workmen and of the two hundred and twenty three workmen, as aforesaid, would be illegal, the Joint Agent informed the workmen on September 20, 1955, that those orders would be held in abeyance, pending permission from the Board to dismiss them, and they would be deemed to be under suspension. It may be recalled that the Government had constituted a Board of Conciliation, consisting of three persons, viz., H. P. Duara, the Labour Commissioner of Assam, as the Chairman, and D. N. Sarma and P. J. Rayfield as members, representing the interests of the employees and the employers 4 26 respectively. The Board of Conciliation considered the question of the dismissal or suspension of those thirty seven plus 223 workmen, along with the application, of the Management, asking permission to dismiss 223 workmen for their having taken part in the illegal strike, and forcibly preventing willing workmen from attending work. Two of the three persons constituting the Board, namely, the Chairman and D. N. Sarma, came to the conclusion that as regards the dismissal of the thirty seven workmen the order of dismissal was illegal, as in their opinion, the conciliation proceedings had commenced from August 26, and not from September 13. On the question of suspension of 223 workmen, the Board was of the opinion that suspension without pay, pending the permission of the Board to dismiss the workmen, was no punishment, and therefore, no action was called for. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, again by a majority, those two members were of the opinion that although the strike was prima facie illegal, it was not unjustified and therefore, the permission sought, could not be given. Rayfield, the other member of the Board, as already stated, submitted his Minute of dissent. He pointed out that the conciliation proceedings commenced on September 13, and therefore, the discharge of the thirty seven workmen, was not in contravention of section 33 of the Act. He further held that the Board had no power to withhold the permission asked for to dismiss 223 workmen on the ground that they had been found guilty, on a departmental inquiry, of having participated in an illegal strike, and of having forcibly prevented workmen from attending work. He added that the grant of the permission would not debar the Union from raising an industrial dispute in that matter. It may be added that the Board unanimously agreed that dismissal " is an appropriate punishment for participation in an illegal and unjustified strike. " The Tribunal also took the same view of the legal position, when it observed, " If the strike is not justified and at the same time it contravenes the provisions of 27 Section 22 of the Act, ordinarily the workmen participating in it are not entitled to any relief. " As a matter of fact, the Tribunal has closely followed the findings of the majority of the Board of Conciliation. But as we have already pointed out, there can be no question of an illegal strike being justified. We have further held, in agreement with the Tribunal, that the strike was illegal, and that it was not even justified in disagreement with the Tribunal assuming that such a situation could be envisaged, in accordance with the provisions of the Act. We have, therefore, to determine the question what punishment, if any, should be meted out to those workmen who took part in the illegal strike. To determine the question of punishment, a clear distinction has to be made between those workmen who not only joined in such a strike, but also took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand, and those workmen who were more or less silent participators in such a strike, on the other hand. It is not in the interest of the Industry that there should be a wholesale dismissal of all the workmen who merely participated in such a strike. It is certainly not in the interest of the workmen themselves. An Industrial Tribunal, therefore, has to consider the question of punishment, keeping in view the over riding consideration of the full and efficient working of the Industry as a whole. The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on. While dealing with this part of the case, we are assuming, without deciding, that it is open to the Management to dismiss a workman who has taken part in an illegal strike. There was a great deal of argument at the Bar on the question whether the Management, in this case, was entitled to dismiss the workmen who had taken part, in the illegal strike. 28 A good deal of argument was devoted to the further question whether there were certified standing orders as between the Syndicate and the workmen, or later, as between the appellants and the workmen, and Whether, even apart from such standing orders, it was open to the employers to deal so drastically with their employees who had taken part in the illegal strike. In our opinion, it is not necessary to decide those general questions, in view of our conclusion, to be presently stated, on the question of the regularity of the inquiry held in different batches, as indicated above, by Biswas, the officer appointed by the appellants to hold the departmental inquiry. In order to find out which of the workmen, who had participated in the illegal strike, belong to one of the two categories of strikers who may, for the sake of convenience, be classified as (1) peaceful strikers, and (2) violent strikers, we have to enquire into the part played by them. That can only be done if a regular inquiry has been held, after furnishing a charge sheet to each one of the workmen sought to be dealt with, for his participation in the strike. Both the types of workmen may have been equally guilty of participation in the illegal strike, but it is manifest that both are not liable to the same kind of punishment. We have,therefore, to look into the nature of the inquiry alleged to have been held by or on behalf of the appellants. On the one hand, the workmen took the extreme position that no inquiry had at all been held, and on the other hand, the employers took up the position that the Inquiring Officer had held a regular inquiry, after furnishing a charge sheet to each one of the workmen against whom the inquiry was held. That there was an inquiry held by Biswas, admits of no doubt. The proceedings before him and the evidence recorded by him, have been placed on record. But the most serious question that we have to determine is whether a charge sheet, giving notice to each workman concerned, as to what the gravamen of the charge against him was, had or had not been furnished to him. On this part of the case, the record is admittedly incomplete. The appellants relied upon the following observations 29 of the Tribunal in support of their case that the inquiry had been entirely regular: " The charges are for fomenting and participating in an illegal strike from the 11th August, 1955 and forcibly preventing other labourers from working on the same day. " On the other hand, reliance was placed on behalf of the workmen on the following passage in the Award of the Tribunal: " In this case the Company has not framed any specific charge against those 260 workers alleging that they indulged in violence or acts subversive of discipline. " The finding of the Tribunal is that no such individual charge sheet was delivered to the workmen. This conclusion of the Tribunal was assailed on behalf of the appellants on the ground that as this point had not been specifically made in the written statement of the workmen, the appellants did not put in those charge sheets in evidence, and had contented themselves with only producing the record of proceedings before the Inquiring Officer. As we, naturally, attached a great deal of importance to this question, we were inclined to give another opportunity to the appellants to remove the lacunas in the evidence bearing upon that question, even at this late stage. More than once, during the course of the arguments by the learned Attorney General, we suggested that he might put in those charge sheets, if they were in existence, as additional evidence in this Court, so that we might be satisfied that there had been a regular inquiry according to the requirements of natural justice. After making the necessary investigation, the learned Attorney General informed us on the last day of the arguments, that no such documents were in existence. It was alleged that the entire bundle of documents, containing those individual charges, had been lost, and that, therefore, there were no means of satisfying this Court by documentary evidence, that there were in fact such individual charge sheets delivered to the workmen concerned. We find, therefore, no good reasons for displacing the finding of the 30 Tribunal that there were no such individual charges,in spite of apparently conflicting observations made by it, as quoted above. The position, therefore, is that the strikes were illegal, that there was no question of those strikes being justified, and that, assuming that the strikers were liable to be punished, the degree and kind of punishment had to be modulated according to the gravity of their guilt. Hence, it is necessary to distinguish between the two categories of strikers. The Tribunal attempted to make such a distinction by directing that the 52 workmen, who had been convicted under section 143, read with section 188 of the Indian Penal Code, were not entitled to reinstatement, and the remaining 208 workmen were so entitled. Dealing with the case of the thirty seven workmen, who had been convicted only under section 188 of the Indian Penal Code, for transgression of the prohibitory orders under section 144 of the Code of Criminal Procedure, the Tribunal put those workmen on the same footing as the rest of the workmen. But, in our opinion, those 37 workmen do not stand on the same footing as the others. Those 37 workmen, who were convicted under section 188 of the Indian Penal Code, had been found to have violated the prohibitory orders passed by the public authorities to keep the public peace. Those convictions were based upon evidence adduced before the Magistrate, showing that the workmen had proceeded to the steamer flat through the jetty, in defiance of the orders promulgated under section 144. We have examined the record and we find that there is sufficient indication that those 37 workmen were among the violent strikers, and could not be placed in the category of peaceful strikers. Hence, it is clear that those workmen not only joined the illegal strike by abstaining from their assigned duty, but also violated regularly promulgated orders for maintaining peace and order. Such persons,apparently,cannot be said to be peaceful strikers, and cannot,therefore, be dealt with as lightly as the Tribunal has done. The Tribunal, in our opinion, is wrong in taking the view that the appellants had nothing to do with the violation of the order under section 144 of the 31 Code of Criminal Procedure, promulgated by the District Magistrate, with a view to maintaining peace and order at the site of work. These 37 workmen, therefore, should not have been ordered to be reinstated. As regards the remaining workmen, the question is whether the Tribunal was entirely correct in ordering their reinstatement with full back wages and allowances on and from August 20, 1955, till reinstatement. This would amount to wholly condoning the illegal act of the strikers. On the findings arrived at before us, the workmen were guilty of having participated in an illegal strike, for which they were liable to 'be dealt with by their employers. It is also clear that the inquiry held by the appellants, was not wholly regular, as individual charge sheets had not been delivered to the workmen proceeded against. When the blame attaches to both the parties, we think that they should divide the loss half and half between them. We, therefore, direct that those workmen whose reinstatement by the Tribunal is upheld by us, should be entitled only to half of their wages during the period between the date of the cessation of the illegal strike (i.e. from August 20, 1955) and the date the Award became enforceable. After that date they will be entitled to their full wages, on reinstatement. In this connection, it has also got to be borne in mind that those workmen, as observed in the judgments of the criminal courts which inflicted nominal fines on them on their conviction, were " day labourers who earned their livelihoods by day to day labour ". It is only natural that during all these years that the workmen have not been employed by the appellants, the workmen should have been earning their living by doing day to day labour. It must, therefore be assumed that they were working for their living, and were not wholly unemployed. Therefore, the burden of the back wages for the long period that has elapsed between the date of the end of the strike and the date of the Award, ordering their reinstatement, should be divided half and half between the parties. The appeal is, therefore, allowed in part, as indicated above, that is to say, (1) the order of reinstatement 32 in respect of Jahangir Sardar and Keayamat Hussain,is set aside, (2) similarly, the order of reinstatement in respect of the thirty seven workmen, who had been convicted under section 188 of the Indian Penal Code, is also Set aside, and (3) the order for payment of full back wages, etc., is modified by reducing those amounts by half, for the period aforesaid. As success between the parties has been divided, they are directed to bear their own costs in this Court. Appeal allowed in part.

It was a contradiction in terms to say that a strike in a public utility service, which was clearly illegal, could also be justified. The law does not contemplate such a position nor is it warranted by any distinction made by the . It should be clearly understood by workmen who participate in such a strike that they cannot escape their liability for such participation and any tendency to condone such a strike must be deprecated. The only question of practical importance, that arises in such a strike is, what should be the kind and quantum of the punishment to be meted out to the participants and that question has to be decided on the charge sheet served on each individual workman and modulated accordingly. In determining the question of punishment, distinction has to be made between those who merely participated in such a strike and those who were guilty of obstructing others or violent demonstrations or defiance of law, for a wholesale dismissal of all the workmen must be detrimental to the industry itself. If the employer, before dismissing a workman, gives him Sufficient opportunity of explaining his conduct, and no question of mala fides or victimisation arises, it is not for the Tribunal, in adjudicating the propriety of such dismissal, to look into the sufficiency or otherwise of the evidence led before the enquiring officer or insist on the same degree of proof as is required in a Court of Law, as if it was sitting in appeal over the decision of the employer. In such a case it is the duty of the Tribunal to uphold the order of dismissal. Consequently, in the present case, where the appellants, who were carrying on business in water transport service, notified as a public utility service, dismissed their workmen for joining an illegal strike, on enquiry but without serving a charge sheet oil 2 each individual workman and the Industrial Tribunal directed their reinstatement, excluding only those who had been convicted under section 143 of the Indian Penal Code but including those convicted under section 188 of the Code, with full back wages and allowances, Held, that the decision of the Tribunal to reinstate those who had been convicted under section 188 of the ' Code must be set aside and the wages and allowances allowed to those reinstated must be reduced by half and the award modified accordingly. Held, further, that the , Must be read as subject to the paramount law of the land, namely, the Constitution, and the finality attaching to an award under sections 17 and 17A of the Act, must, therefore, yield to the overriding powers of this Court under article 136 of the Constitution. As the award in the instant case did not fall within the Provisos to section 17 of the Act, it was not correct to contend that the appellants had any other remedies thereunder to exhaust before they could come up in appeal to this Court. Nor was it correct to contend that the Government of Assam was a necessary party in the appeal inasmuch as it had acted by virtue of delegated powers of legislation under the Act in making the award enforceable as law. A State Government plays no part in such a proceeding except to make the reference under section 10 of the Act, nor has it anything to do with regard to the publication of the award, which is automatic under section 17 of the Act, or its operation, unless the case falls within the provisos to section 17A of the Act. A lock out lawfully declared under section 24(3) of the Act, does not cease to be legal by its continuance beyond the strike, although such continuance may be unjustified.

8k-16k

Civil Appeals Nos. 1652 to 1657 of 1978 Appeals by Special leave from the Judgment and order dated the 31st August, 1978 of the Andhra Pradesh Administrative Tribunal in Representation Petitions Nos. 595 and 985 of 1977 and 340, 289, 466 and 533 of 1978. WITH Civil Appeal Nos. 1658 and 1659 of 1978. Appeals by Special leave from the Judgment and order dated the 8th September, 1978 of the Andhra Pradesh Administrative Tribunal in Representation Petitions Nos. 561 and 59 of 1978. AND Civil Appeal No. 415 of 1979. Appeal from the Judgment and order dated the 31st August, 1978 of the Andhra Pradesh Administrative Tribunal in Transferred Writ Petition No. 941 of 1976. 549 M.N. Phadke, M. R. K Chaudhary, B. Kanta Rao and Miss Nalini, for the Appellants in CA. 1652 59/78. section N. Kacker and B. Parthasarthi, for the Appellants in CA 415. T. section Krishnamoorthy Iyer, K Ramkumar and Mrs. J. Ramachandran, for RR. 3, 5, 8 and 9 in CAS. 1652 59/78. P. Ram Reddy, and G. Narayana Rao for RR. 1 and 2 in CA. 1652 59 and 415 of 1979. The Judgment of the Court was delivered by VARADARAJAN J. These appeals by special leave are directed against the Judgments of the Andhra Pradesh Administrative Tribunal, Hyderabad in Representation Petitions 595 of 1977 and batch and transferred Writ Petition 941 of 1976. C. As. Nos. 1652 to 1659 of 1978 have been filed against the common judgment dated 31.8.1978 in Representation Petition 595 of 1977 and batch in which common issues arose for consideration while C.A. No. 415 of 1979 has been filed against the separate judgment, dated 31.8.1978 in Transferred Writ Petition 941 of 1976. All these appeals by the petitioners before the Tribunal were heard together in this Court and will be disposed of by a common judgment. The main judgment of the Tribunal in Representation Petition 595 of 1977 and batch is in Representation Petition 595 of 1977 in accordance with which the other Representation Petitions in the batch have been disposed of as stated elsewhere in this judgment. Representation Petition 595 of 1977 was filed by seven petitioners of whom petitioners Nos 1 to 6 were working as Principals of Junior Colleges at various places while the seventh petitioner was working as a Junior Lecturer in Government College, Srikakulam in Andhra Pradesh and claimed to be ripe for promotion as Principal of Junior College on the basis of his original seniority among junior Lecturers. We will refers to the parties in these appears as arrayed before the Tribunal for the sake of convenience. The seven pettioners in Representation Petition 595 of 1977 who were working as Post Graduate Assistants or Headmasters in 550 the Zilla Parishad Higher Secondary Schools at different places were appointed as junior Lecturers in 1969 as they were all Post Graduates who had passed in the first or second class with 50% marks and above and were fully eligible for appointment as Junior Lecturers. The petitioners ' contention is that under the Adhoc Rules governing Junior Lecturers they being Post Graduates who had passed in first or second class, should be placed in the seniority list above Post Graduate Assistants who hold only third class Post Graduate degrees. The second respondent, joint Director of Higher Education, Andhra Pradesh, prepared a subject wise seniority list in 1974 as per the rules,, placing the seven petitioners in Representation Petition 595 of 1977 at Nos. 17, 15, 20, 21, 23, 40 and 41 respectively. On the basis of that seniority Junior Lecturers upto the rank of 40 in that list were promoted as Principals of various junior Colleges. The 1st respondent State of Andhra Pradesh, prepared a revised seniority list as per the directions of the Andhra Pradesh High Court in Writ Petition No. 4358 of 1974 and Writ Appeal No. 920 of 1975. In that revised seniority list issued in 1976 the petitioners in Representation Petition 595 of 1977 have been placed at Nos. 380, 54, 390, 392, 406, 368 and 374 respectively. The petitioners ' contention was that third class Post Graduate degree holders who were appointed for the first time in 1970 and 1975 as junior Lecturers were shown in the said revised seniority list as seniors to the petitioners though the petitioners had all been appointed as junior Lecturers in 1969 itself and were regularised as early as in November 1969 and under the Adhoc Rules framed by the Government, Post Graduate Assistants with first and second class Post Graduate degrees should be treated as one group and as senior to Post Graduate Assistants with third class Post Graduate degrees, who should be treated as another group. The petitioners in Representation Petition 595 of 1977 prayed in these circumstances for quashing the revised seniority list issued by the first respondent State of Andhra Pradesh on 27.12.1976 so far as they are concerned and for restoration of their old seniority as per the earlier seniority list of 1974 or in the alternative for declaring that Rule 13 (1) of the Adhoc Rules, 1973 dealing with seniority of Junior Lecturers is violative of Articles 14 and 16 of the Constitution Rule 13 (ll and (2) of the Adhoc Rules framed by the Government under Article 309 of the Constitution read as follows: "Rule 13 (1) The seniority of a person appointed under clauses (i) and (ii) of sub rule (l) of Rule 3 shall be 551 determined with reference to the date of his actual appointment as a Post Graduate Assistant of the. probable date on which he would have been appointed as Post Graduate Assistant but for his appointment or promotion to a higher post; (ii) The seniority of any person appointed under clause (iii) of sub rule (1) of Rule 3 shall be determined with reference to the date of commencement of his probation. Provided that no such person shall be senior to any person appointed under clause (i) or (ii) of sub rule (1) of Rule 3; Provided further that no person appointed under sub clause (b), sub clause (c) or clause (iii) of sub rule (I) of Rule 3 shall be senior to a person appointed under sub clause (a) of that clause. " Rule 3 of the Adhoc Rules, 1973 reads as follows: 4 "Rule 3 of Appointment: (1) Appointment to this class shall be made as follows: (i) First by appointment of Post Graduate Assistants in Category I A of Class II and Selection Grade Assistants in Grade I of Category 2 of Class II in the Andhra Pradesh Educational Sub ordinate Service or Headmasters of High Schools and Post Graduate Assistants in Zila Parishads High Schools and such of the Municipal Schools as are converted into Junior Colleges; (ii) Secondly, if there are no suitable and qualified persons available for appointment under clause (i) then by appointment of Trained Graduates a possessing Post Graduate Diploma in Physical Sciences in the scale of pay admissible to Post Graduate Assistants immediately before the commencement of these rules; (iii) Thirdly, if there are no suitable and qualified persons available for appointment under sub clause (i) or sub clause (ii) 552 (a) by recruitment from among the Headmasters and Post Graduate Assistants in recognised Multipurpose or Higher Secondary Schools under private management or under the management of the Municipality which are not converted into Junior Colleges; or (b) By transfer from School Assistants in Grade II or Category 2 in Class II and Pandits (including Hindi Pandits), Munshis Grade I in Category I of Class III of the Andhra Pradesh Educational Subordinate Service or by recruitment by transfer from any other service; or (c) by direct recruitment. (2) Preference shall be given for appointment under clause (i) or sub clause (a) of clause (iii) of sub rule (I)(a): (a) Firstly to persons with first or second class Post Graduate degree; (b) Secondly to persons with a third class Post Graduate degree with not less than five years of service as a Post Graduate Assistant or Selection Grade Assistant in the Andhra Pradesh Educational Subordinate Service or as a Headmaster of a Zila Parishad High School or a Post Graduate Assistant in a school under the management of a Zila Parishad or a Municipality; (c) Thirdly to persons with a third classs Post Graduate degree with less than five years ' service as a Post Graduate Assistant or Selection Grade Assistant in the Andhra Pradesh Educational Subordinate Service or as a Headmaster of a High School or Post Graduate Assistant in a School under the management of a Zila Parishad or a Munici pality. ." 553 The Andhra Pradesh Government decided in 1964 that the Secondary School Education should be of 10 years ' duration instead . 4 of 11 years and that it should be followed by a two years ' Intermediate Collegiate education in the place of the then existing Higher Secondary and Multi purpose system commencing from 1969 70. Accordingly, the Government decided in G.O.Ms 1920, Education, dated 25.10.1968 that in the existing colleges two year Intermediate Course should be introduced in the place of one year P.U.C. The staff pattern and pay scales of staff in junior Colleges started for the two year Intermediate Course were laid down by the Government in G.O. Ms 2063, Education, dated 25.8.1969. In G.O.Ms. 2186, Education, dated 17.9.1969 the Government issued the following instructions regarding the absorption of Post Graduate Teachers in Junior Colleges: "In regard to the appointment of Post Graduates as Junior Lecturers in Junior Colleges, priority will be given to those who are in the scales of pay of Rs. 180 350 and who are suitable and willing to be absorbed as per seniority as indicated below: (a) First or second class Post Graduates working as Post Graduate Assistants: (b) Third class Post Graduates with not less than 5 years of service, working as Post Graduate Assistants: (c) Third class Post Graduates with less than of 5 years of service, working as Post Graduate Assistants. and (d) Lastly Trained Graduates possessing Post Graduate diploma in Physical Sciences, working in the Post Graduate Assistant 's scale. It was stated in that G. O. that all the existing Post Graduates who will be absorbed as Junior Lecturers in Junior Colleges will be appointed temporarily as Junior Lecturers pending framing of adhoc rules in due course. The Government ordered in G.o. Ms. 1147, Education, dated 4.6.1970 that in the common seniority list first rank should be given only to those who have secured first and second 554 class Post Graduate degree with 50 per cent marks and above. These G. Os. were all executive instructions. There is no dispute that the petitioners are holders of first or second class Post Graduate and that the private respondents 3 to 8 in Representation Petition 595 of 1977 who have been placed as their seniors in the impugned seniority list of 1976 are holders only third class Post Graduate degrees. The petitioners relied heavily I J on the above rule 3 of the Adhoc Rules, according to which persons with first or second class Post Graduate degrees are to be given preference over Post Graduates holding third class degrees and contended that they should, therefore. be given seniority over the third class Post Graduate degree holders in determining the inter se seniority in the cadre of Junior Lecturers in Junior Colleges as was done in the seniority list prepared in 1974. The contention of the first respondent, State of Andhra Pradesh, was that the executive instructions given in Government orders regarding appointments of Junior Lecturers pending the framing of Adhoc Rules under Article 309 of the Constitution ceased to operative once those adhoc rules were framed and that under Adhoc Rule 13 the seniority of Post Graduate Assistants of former Higher Secondary Schools and Multipurpose Schools with first, second and third class Post Graduate degrees and Post Graduate diploma shall have to be determined with reference to the actual date of appointment as Post Graduate Assistants. The Government denied that Rule 13 (l) is violative of Articles 14 and 16 of the Constitution and contended in the counter affidavit that the Education Department followed the judgment of the Andhra Pradesh High Court in W.P. No. 4358 of 1974 and Writ Appeal 920 of 1975 and cancelled the earlier seniority list of 1974 and framed the revised seniority list of 1976 according to Rule 13 (1) of the Adhoc Rules. Thus the Government opposed the Representation Petitions. The Tribunal has taken note in Paragraph 9 of its judgment of the fact that the petitioners arc first and second class Post Graduate degree holders while respondents 3 to 8 are only third class Post Graduate degree holders correctly, but it has wrongly observed that both the categories of Post Graduate Assistants have been appointed as Junior Lecturers under Rule 3 (1) (i) of the Adhoc Rules issued in G.O.Ms 939, Education, dated 19.9.1973. It was not disputed 555 before us that the petitioners being first and second class Post Graduates with 50 per cent and more marks were appointed as Junior Lecturers in 1969 and that respondents 3 to 8 who are third class Post Graduates were appointed as Junior Lecturers only in 1970 and 1975. Therefore, the petitioners and some of respondents 3 to 8 had been appointed in 1969 and 1970 before the Adhoc Rules were framed on 19.9.1973 and only some of the respondents 3 to 8 B were appointed in 1975 under Rule 3 (1) (i) of those Adhoc Rules. The fact that the petitioners were appointed as Junior Lecturers earlier than the respondents was conceded by Mr. Shiv Shankar before the Tribunal as seem from paragraph 8 of the Tribunal 's judgment. The Tribunal noted the following further facts: (1) That Government had decided in G.O.Ms. 2063, Education, dated 25.8.1969 that first and second class Post Graduates would be given a higher starting pay of Rs 260 in in the scale of Rs. 200 500 and that third class Post Graduates would be allowed only the pay drawn by them before they were appointed as Junior Lecturers in the above scale; (2) That the Government expressed the view in G.O.Ms. 1147, Education, dated 4.6.1970 that in the common seniority list first rank should be given only to those who have secured first or second class Post Graduate degrees with 50 per cent marks and above which is the qualification prescribed for direct recruitment of Junior Lecturers; and (3) That in Rule 3 (1) (i) of the Adhoc Rules framed on 19.9.1973 it is stipulated that at the time of appointment to the category of Junior Lecturers persons with first or second class Post Graduate degrees would have preference over persons with third class Post Graduate degrees. But the Tribunal relied heavily on the fact that the Andhra Pradesh High Court had directed in Writ Appeals 920 and 938 of 1975 that the seniority list should be prepared in accordance with Rule 13 (1) of the Adhoc Rules, 1973 which have been given retrospective effect from 1.8.1969 and held that the impugned seniority list framed as per Rule 13(1) of the Adhoc Rules having precedence over the earlier executive instruction is valid and that as the petitioners and respondents 3 to 8 belonged to the same category of Post Graduate Assistants, there is no question of violation of Articles 14 and 16 of the Constitution as Adhoc Rule 13 (1) says that seniority of Post 566 Graduate Assistants appointed as Junior Lecturers shall be determined with reference to the dates of their actual appointment as Post Graduate Assistants or the probable dates on which they would have been appointed as Post Graduate Assistants but for their appointment or promotion to higher posts. The Tribunal has observed that if the intention of the Government was otherwise they would have specifically provided accordingly. In this view the Tribunal rejected the petitioners ' prayer for restoring the old seniority list prepared in 1974 which in its opinion is contrary to Rule 13 (1) of the Adhoc Rules. Accordingly the Tribunal dismissed Representation Petition 595 of 1977 and in view of its judgment in that Petition either rejected or dismissed Representation Petitions 985 of 197? and 289, 340, 446 and 553 of 1978. In Representation Petition 273 of 1978 the Tribunal observed that the plea of the petitioners that first and second class Post Graduate degree holders should be given preference over third class Post Graduate degree holders in the matter of seniority as Junior Lecturers is covered by its judgment in Representation Petition 595 of 1977 and that since the petitioners in Representation Petition 273 of 1978 have already acquired B. Ed. qualification, which is a prerequisite for regular appointment as Post Graduate Assistants, the question of those petitioners ' regularisation in the posts of Post Graduate Assistants should be examined in accordance with the rules and their service should be regularised in that category and thereafter their seniority as Junior Lecturers should be determined in accordance with Rule 13 (I) of the Adhoc Rules. In Transferred Writ Petition 1246 of 1976 the Tribunal has stated in its judgment that in the judgment of the High Court in Writ Appeals 920 and 938 of 1975, the High Court has ordered that a fresh seniority list should be prepared in accordance with Rule 13 (1) of the Adhoc Rules, that the relief prayed for by the four petitioners in that Writ Petition has already been given and that Writ Petition is disposed of accordingly. The Tribunal has ordered that Transferred Writ Petition 78 of 1976 also stands disposed of, presumably in the same manner as Transferred Writ Petition 1246 of 1976 was disposed of, without specifically indicating bow that Writ Petition is disposed of. In Transferred W.P. 941 of 1976 out of which C.A. No. 415 of 1979 filed by 34 petitioners in that Petition has arisen, the reliefs prayed for were: (I) that a correct seniority list based on Rule 13 of the Adhoc Rules 1973 should be issued in respect of all the Junior Lecturers, (2) that Rule 6 of the adhoc Rules framed in G.O.Ms. 557 502, Education, dated 19.6.1974, under which first or second class Post Graduate degree has been prescribed as the qualification for promotion to the posts of Principal of Junior Colleges should be struck down as illegal and (3) that adhoc appointments of seven third class Post Graduate Junior Lecturers as Principals of Junior Colleges made in the proceedings dated 14.3.1974 by the second respondent Director of Public Instruction, Andhra Pradesh should be declared as illegal, Here also we shall refer to the parties as arrayed before the Tribunal for the sake of convenience as stated earlier. The 34 petitioners in this petition were working as School Assistants in Higher Secondary schools in Andhra Pradesh. They were subsequently appointed as Junior Lecturers in junior colleges in terms of Rule 3 of the Adhoc Rules which states that first preference for appointment as junior Lecturers in Junior Colleges should be given to Post Graduate Assistants in Category I A of Class II and Selection Grade Assistants in Grade I of Category 2 of Class II in the Andhra Pradesh Educational Subordinate Service or Headmasters or High Schools and Post Graduate Assistants in Zilla Parishad High Schools and such of the Municipal Schools as are converted into Junior Colleges. The rule also provides that preference should be given to persons with first or second class Post Graduate degrees. Rules 13 (1) of the Adhoc Rules provides that seniority is to be determined with reference to the date of their actual appointment as Post Graduate Assistants or the probable date on which they would have been appointed as Post Graduate Assistants but for their appointment or promotion to higher posts. The petitioners contended that seniority of Junior Lecturers, which is being maintained subjectwise, should be integrated and there should be a combined seniority list and not subject wise list. In the Adhoc Rules framed by the Government in G.O.Ms. 939, Education, dated 19.9.1973 there were no rules regarding promotion of Junior Lecturers to the posts of Principals of junior Colleges. Pending the framing of Adhoc Rules in that regard the second respondent, Director of Public Instruction, issued proceedings in R.C. No. 775 Cl/2/74 dated 14.3.1973 promoting under Rule 10 (a) (i) of the State and Subordinate Service Rules, seven persons as Principals of Junior Colleges though they did not hold first or second class Post Graduate degrees. Subsequently, Adhoc Rules were framed by the Government in G.O.Ms. 502, Education, dated 19.6.1974 under the proviso to Rule 309 of the Constitution with retrospective effect from 1.8.1969 558 regarding promotion to the posts of Principals of Junior Colleges. Under these Rules Junior Lecturers holding a first or second class Post Graduate degrees who have put in a service of three years as Junior Lecturers in the Educational Subordinate Service are eligible or promotion as Principals of junior Colleges. But Rule 8 of the Adhoc Rules, 1974 which is a saving clause, reads as follows "Notwithstanding anything contained in these Rules a person who held a post of a Principal of Junior College immediately before the issue of these Rules shall be continued as Principal and be given option either to continue in the Post of a Principal or to revert to his original Post". The tribunal affirmed in its judgment in this Transferred Writ Petition its judgment in Representation Petition 595 of 1977 and observed that judgment would apply as regards the interpretation of Rule 13 in the matter of fixing inter se seniority among Post Graduate School Assistants appointed as Junior Lecturers under Rule 3 (l) (1) of the Adhoc Rules, 1973, and that seniority should be determined with reference to the date of appointment as Post Graduate School Assistants without reference to the nature of the Post Graduate degrees, whether they are first, second or third class degrees. The Tribunal held that subject to that provision regarding fixing of over all seniority subject wise seniority can also be fixed and that for purposes of promotion to the posts of Principals the overall seniority in the category of junior Lecturers fixed in accordance with Rule 13 of the Adhoc Rules should be followed. It was submitted before the Tribunal on behalf of the Government that considering the nature of the duties of Principals there is a reasonable classification between first and second class Post Graduate School Assistants and such Assistants holding only third class Post Graduate degrees, and there is no contravention of Articles 14 and 16 of the Constitution in prescribing first and second class Post Graduate degree for Junior Lecturers to be promoted as Principals of Junior Colleges and that clear distinction has been maintained between holders of first and second class Post Graduate degrees and those holding only third class Post Graduate degrees, and the former class of Post Graduate degree holders have been given advance increments on their appointment as junior Lecturers while the latter have been given only the pay they were drawing as 559 Post Graduate School Assistants when they were appointed as junior Lecturers. It was also submitted before the Tribunal that academic qualification is germane in the educational field and that classification made on the basis of qualification for the post of Principal cannot be termed as discriminatory. On a perusal of G.O.Ms. 939, Education, dated 19.9.1973 in which Adhoc Rules under the proviso to Article 309 of the Constitution have been framed by the Government the Tribunal found that weightage is to be given for first and second class Post Graduate degree holders over third class Post Graduate degree holders. The Tribunal accepted the contention of the Government that in academic institutions excellence in academic attainments is a relevant considera tion and that any discrimination based on excellence in academic attainments has direct nexus with the object of achieving excellence in a teaching institution and that it does offend Articles 14 and 17 of the Constitution, more . O when third class Post Graduate degree holders are not permanently debarred from improving their standard of qualifications for becoming eligible to the posts of Principals of Junior Colleges. The Tribunal thus rejected the second prayer of the petitioners that the prescription of first and second class Post Graduate degree as qualification for eligibility for promotion to the posts of Principals of Junior Colleges contravenes Articles 14 and 16 of the Constitution. The Tribunal found nothing objectionable in Rule 8 of the Adhoc Rules 1974 referred to above which protects the rights of third class Post Graduate degree holders who had been promoted under Rule 10 (a) (i) of the State and Subordinate Service Rules pending framing of Adhoc Rules which were actually framed subsequently on 19.6.1974. On these findings the Tribunal dismissed Transferred Writ Petition No. 941 of 1976. Pursuant to the policy decision taken by the Andhra Pradesh Government in 1964 that the secondary school duration should be 10 years instead of 11 years and it should be followed by a two years ' intermediate course in the place of then existing PUC instead of the then prevailing Higher Secondary and Multi purpose system, commencing from the academic years 1969 70 the Government decided in G.O.Ms. 1920, Education, dated 25.10.1968 that in the existing 560 colleges the two years ' intermediate course should be introduced instead of the one year PUC, and laid down in G.o. Ms. 2063, Education, dated 25.8.1969 the staff pattern and pay scales of staff in junior Colleges started for the two years ' intermediate course. In implementing this scheme Post Graduates Assistants in certain categories of schools were appointed as Junior Lecturers in Junior Colleges. The petitioners in Representation Petition 595 of 1977 and batch, out of which Civil Appeals 1652 to 1659 of 1978 have arisen and Transferred Writ Petition 941 of 1976, out of which Civil Appeal 415 of 1979 has arisen and those in certain other Representation Petitions and Transferred Writ Petitions 785 and 1246 of 1976 were appointed as Junior Lecturers. Prior to their appointment as Junior Lecturers they were all Post Graduate School Assistants or Headmasters in various schools. The private respondents in Representation Petitions 595 of 1977 and batch and the petitioners in Transferred Writ Petition 941 of 1976 were seniors as Post Graduate School Assistants to the petitioners in Representation 595 of 1977 and batch and the private respondents in Transferred Writ Petition 941 of 1976. The said senior Post Graduate Assistants are all third class Post Graduate degree holders whereas the said Junior Post Graduate School Assistants are all first or second class Post Graduate degree holders. Based on their superior academic qualification those first and second class Post Graduate School Assistants were given priority and treated as seniors to the said third class Post graduate School Assistants in the seniority list prepared in 1974 after they were appointed as Junior Lecturers. The petitioners in Representation Petitions 595 of 1977 and batch and the petitioners in Transferred Writ Petition 941 of 1976 were appoint ed in 1969, 1970 and 1975 as Junior Lecturers. In Writ Appeals 1? 920 and 938 of 1975 the Andhra Pradesh High Court gave directions to prepare a common seniority list of junior Lecturers in accordance with Rule 13(1) of the Adhoc Rules framed by the Government in G.o. Ms. 939, Education, dated 19.9.1973. Pursuant to that direction a revised seniority list of Junior Lecturers was issued by the Govern ment on 27.12.1976. In the seniority list of 1974 the petitioners in Representation Petition 595 of 1977 had been placed at Nos 17, 15 20, 21, 23, 40 and 41 respectively, and on the basis of that seniority junior Lecturers up to the rank of 40 in that list had been promoted as Principals of various junior Colleges and the seventh petitioner in Representation Petition 595 of 1977 who had been placed at No. 41 in that list was awaiting his promotion as Principal of junior College. But in the revised seniority list of 1976 those petitioners have been 561 placed at Nos. 380, 54, 390, 392, 406, 368 and 374 respectively and the private respondents in that Representation Petition have all been 4 placed above them as their seniors. The seniority of the petitioners in the other Representation Petitions in the batch was also disturbed to their disadvantage in the revised seniority list of 1976. The Representation Petitions were therefore filed for quashing the revised seniority list issued by the first respondent State of Andhra Pradesh in 1976 so far as the petitioners are concerned and for restoration of their old seniority as per the earlier seniority list of 1974 or in the alternative for declaring that Rule 13(1) of the Adhoc Rules, 1973 dealing with seniority of junior Lecturers is violative of Articles 14 and 16 of the Constitution. The only question arising for consideration in Representation Petition 595 of 1977 and batch out of which Civil Appeals 1652 to 1659 of 1978 have arisen is the question of seniority of the Petitioners in those petitions (appellants in Civil Appeals 1652 to 1659 of 1978). Though in Transferred Writ Petition 941 of 1976 out of which Civil Appeal 415 of 1979 has arisen three reliefs were prayed for viz. (1) that an integrated seniority list based on Rule 13 of the Adhoc Rules, 1973 should be issued in respect of all Junior Lecturers; (2) that Rule 6 of the Adhoc Rules framed in G.O.Ms. 502, Education, dated 19.6.1974 by which first and second class post graduate degree has been prescribed for promotion of junior Lecturers as Principals of Junior Colleges should be struck down as being illegal and (3) that adhoc appointments of seven third class Post Graduate degree holders as Principals of Junior Colleges made in proceedings dated 14.3.1974 of the second respondent, Director of Public Instructions should be declared illegal, Mr. S.N. Kackar, Senior Advocate appearing for the appellants in Civil Appeal 415 of 1979 confined his arguments to the second prayer alone viz. the attack on Rule 6 of the Adhoc Rules framed G.O.Ms. 502, Education, dated 19.6.1974 which prescribes first or second class Post Graduate degree for promotion of Junior Lecturers as Principals of Junior Colleges, which has been dealt with by the Tribunal in paragraph 6 of its judgment in Transferred Writ Petition 941 of 1976. We shall consider these two questions in this common judgment. We shall also consider briefly the third prayer made in Transferred Writ Petition 941 of 1976 which has been negatived by the Tribunal. We may state that the first prayer made in Transferred Writ Petition 941 of 1976 will be covered by our finding on the only point arising for consideration in Civil Appeals 165 to 1659 of 1978. Mr. M.N. Phadke, Senior Advocate appearing for the appellants in Civil Appeals 1652 to 1659 of 1978 drew our attention to the 562 special provisions in various Government orders which are executive instructions issued before the Adhoc Rules were framed under the proviso to Article 309 of the Constitution on 19.9.1973 and to some special provisions made even in those adhoc rules showing preference and priority for Post Graduate School Assistants holding first and second class Post Graduate degrees over such Assistants holding only third class Post Graduate degrees in the matter of appointment as Junior Lecturers in Junior Colleges and of promotion of Junior Lecturers as Principals of Junior Colleges and submitted that fixing seniority of Junior Lecturers holding first and second class Post Graduate degrees, forming one group and of those holding third class Post Graduate degrees, forming another group, on the basis of the dates of their original appointment as Post Graduate School Assistants is arbitrary and therefore the impugned seniority list of 1976 should be quashed and the seniority of the petitioners in the representation Petitions (appellants in Civil Appeals 1652 to 1659 of 1978) fixed in the list of 1974 should be restored. But Mr. T.S. Krishna Moorty Iyer Senior Advocate appearing for the contesting private respondents 3, 5, 8 and 9 in Civil Appeals 1652 to 1659 to 1978 argued that before their appointment as Junior Lecturers Post Graduate Assistants holding first, second and third class Post Graduate Degrees were doing the same work and drawing the same scale of pay. He submitted that though in G.O.Ms. 2063, Education, dated 25.8.1969 it was stated that first or second class Post Graduates will be given a higher start of Rs. 260 in the pay scale of Rs. 200 15 320 20 500 and third class Post Graduates will be allowed only the pay drawn by them before their appointment as Junior Lecturers in the pay scale of Rs. 200 500 if their pay was more than the minimum of the new scale on their appointment as Junior Lecturers, nothing is mentioned in the Adhoc Rules, 1973 about salary, and this would show that under the Adhoc Rules no new service was created but only the previous service created by the executive instructions was continued and that in alt fairness and justice the private respondents in Civil Appeals 1652 to 1659 of 1978 who had been appointed as Post Graduate School Assistants prior to the appellants in those appeals should be regarded as their seniors as had been done in the impugned seniority list of 1976 prepared in accordance with the directions given by the Andhra Pradesh High Court in its judgment in Writ Appeals 920 and 938 of 1975. Mr. P. Rama Reddy, Senior Advocate appearing for the official respondents in all the civil appeals supported the impugned judgment of the Tribunal saying that the first, second and third class Post Graduate Assistants before they 563 were appointed as Junior Lecturers belonged to the same class and were drawing the same pay and doing the same kind of work and that seniority after their appointment as Junior Lecturers should be fixed on the basis of the dates of their original appointment as Post Graduate School Assistants, as has been done in the impugned seniority list of 1976. As stated above, in G.O.Ms. 2063, Education, dated 25.8.1969 Government ordered that first or second class Post Graduates will be given a higher start of Rs. 260 in the new Junior Lecturers ' pay scale of Rs. 200 15 320 20 500 and third class Post Graduates will be allowed only the pay drawn by them before their appointment as Junior Lecturers in the scale of Rs. 200 500 if their pay was more than the minimum of the new scale of Rs. 200 15 320 20 500. In G.O.Ms. 2186, Education, dated 17.9.1969 Government decided that all the existing Post Graduate teachers who will be absorbed in Junior Colleges will be appointed temporarily as Junior Lecturers pending framing of adhoc rules in due course and that in regard to appointment of Post Graduates as Junior Lecturers in Junior Colleges priority will be given to those who are in the scale of pay of Rs. 180 350 and are suitable and willing to be absorbed as per seniority as indicated below: (a) First and second class Post Graduates working as Post Graduate Assistants: (b) Third class Post Graduates with not less then five years of service, working as Post Graduate Assistants; (c) Third class Post Graduates with less than five years of service, working as Post Graduate Assistants; (d) Lastly, trained graduates possessing Post Graduate Diploma in Physical Sciences, working in the Post Graduate Assistants ' scale. In G.O.Ms. 1147, Education, dated 4.6.1970 Government reiterated the aforesaid decision taken in G.O.Ms. 2186, Education, dated 17.9.1969 regarding priority to be given to first and second class Post Graduates over third class Post Graduates, based on the recommendations of the Vice Chancellors ' Conference and stated 564 that they consider that in the common seniority list first rank should be given only to those who have secured first or second class with 50 marks and above and third class Post Graduates should be given rank with reference to their services viz. those with five years of service, working as Post Graduate Assistants, next to the first and second class Post Graduates, working as Post Graduates Assistants and thereafter those with less than five years of service, working as Post Graduate Assistants. Government have observed in that G.O. that this manner of creating seniority is reasonable. These orders are all no doubt in the nature of executive instructions. The Adhoc Rules were framed under the proviso to Article 309 of the Constitution with retrospective effect from 1.8.1969 in G.O.Ms. 939, Education, dated 19.9.1973 for the temporary posts of Junior Lecturers in Government Degree and Junior Colleges in Andhra Pradesh. Rule 3 (1) and (2) of those rules reads as follows "3. Appointment: (1) Appointments to this class shall be made as follows: (i) firstly by appointment of Post Graduate Assistants in Category I A of Clause II and Selection Grade Assistants in Grade I of Category 2 of Class II of The Andhra Pradesh Educational Subordinate Service, or Head Masters of High Schools and Post Graduate Assistants in Zilla Parishad High Schools and such of the Municipal Schools as are converted into Junior Colleges. (ii) Secondly, if there are no suitable and qualified persons available for appointment under clause (i), then, by appointment of trained Graduates possessing Post Graduate Diploma in Physical Sciences in the scale of pay admissible to Post Graduate Assistants immediately before the commencement of these rules. (iii) Thirdly, if there are no suitable and qualified persons available for appointment under sub clause (i) or sub clause (ii): (a) By recruitment from among the Head Masters and Post Graduate Assistants in recognised 565 multi purpose or Higher Secondary Schools under private management or under the management of a Municipality which are not converted into Junior Colleges; or (b) By transfer from School Assistants in Grade II Category 2 in Class II and Pandits (including Hindi pandits), Munshis Grade I in Category I of Class III of the Andhra Pradesh Educational Subordinate Service or by recruitment by transfer from any other service; or (c) By direct recruitment. (2) Preference shall be given for appointment under clause (1) or sub clause (a) of Clause (iii) of sub clause 1 (a) Firstly to persons with First or Second class P.G. Degree: (b) Secondly to persons with a third class Post Graduate Degree with not less than five years of service as Post Graduate Assistants or Selection Grade Assistants in the Andhra Pradesh Educational Subordinate Service or as a Head Master of a Zilla Parishad High School or as a Post Graduate Assistant in a School under the management of a Zilla Parishad or a Municipality; (c) Thirdly to person with a third class Post Graduate Degree with less than five years of service as a Post Graduate Assistant or a Selection Grade Assistant in the Andhra Pradesh Educational Subordinate Service or as a Head Master of a High School or Post Graduate Assistant in a school under the management of a Zilla Parishad or of Municipality. . . . . . . ". It is not disputed before us that the petitioners in Representation. Petition 595 of 1977 and batch (appellants in Civil Appeals 566 1652 to 1659 of 1978) fall under the above preferred clause (a) and that the contesting private respondents in those appeals and the appellants in Civil Appeal 415 of 1979 fall under the above clause (b) or clause (c) and they would have come up for consideration for appointment as Junior Lecturers only after those falling under the above second clause (a). Thus, the preference given to first and second class Post Graduate Assistants in the matter of appointment as Junior Lecturers in G.O.Ms. 2186, Education dated 17.9.1969 has been maintained even in the Adhoc Rules, 1973. As submitted by Mr. T.S. Krishna Moorthy Iyer there is nothing in the Adhoc Rules, 1973 regarding the salary of first and second class Post Graduate Assistants on the one hand and of third class Post Graduate School Assistants on the other on their appointment as Junior Lecturers. Therefore, G.O.Ms. 2063, Education, dated 25.8.1969 by which first and second class Post Graduates are given a higher start of Rs. 260 in the new Junior Lecturers ' pay scale of Rs. 200 15 320 20 500 and third class Post Graduates are given only the pay drawn by them before their appointments as Junior Lecturers in the scale of Rs. 200 500 if their pay was more than the minimum of the new scale of Rs. 200 15 320 20 500 continues to govern the matter of pay. This position is not disputed before us. Thus, in the matter of pay also first and second class Post Graduate Assistants who are appointed as Junior Lecturers are placed in a better and preferential position than third class Post Graduate Assistants who are appointed as Junior Lecturers. Some time after the Adhoc Rules were framed on 19.9.1973, Government framed Adhoc Rules under the proviso to Article 309 of the Constitution in G.O.Ms. 502, Education, dated 19.6.1974 for the temporary posts of Principals of Junior Colleges in Andhra Pradesh with retrospective effect from 1.8.1969. According to those rules the posts of Principals of Junior Colleges form a separate class in the administrative section of the Andhra Pradesh Educational Service, and appointment to that class should be made; (a) by recruitment by transfer from Junior Lecturers in the Andhra Pradesh Educational Subordinate Service who have opted or are deemed to have opted to remain as Junior Lecturers, or (b) by recruitment by transfer of Schools Assistants in Grade I and Deputy Inspectors of Schools Grade I in Category 2 of clause II of the Andhra Pradesh Educational Subordinate Service. Rule 6 of those Rules states that no person shall be eligible for appointment to this class unless he 567 holds a first or second class Post Graduate degree of M.A., M. Sc., M. Com., B.A. (Hons.), B. Sc. (Hons.), or B. Com (Hons.) of a University in India established or incorporated by or under a Central Act or a Provincial Act or a State Act or institutions recongnised by the University Grants Commission. This rule which is impugned in Civil Appeal 415 of 1979 prescribes a first or second class Post Graduate degree for promotion of Junior Lecturers to the posts of Principals of Junior Colleges. Under this rule third class Post Graduate Junior Lecturers are not eligible for promotion as Principals of Junior Colleges. Thus, even in the matter of promotion as Principals of Junior Colleges, first and second class Post Graduate Junior Lecturers have priority and preference over third class Post Graduate Junior Lecturers who are not eligible at all for promotion as Principals on account of the inferiority of their academic attainments so long as they remain only third class Post Graduates. Now Rule 13 dealing with seniority of junior Lecturers reads as follows: 13. Seniority: (1) The seniority of a person appointed under clause (i) and (ii) of Sub rule (1) of Rule 3 shall be determined with reference to the date of the actual l appointment as a Post Graduate Assistant or the probable date on which he would have been appointed as a Post Graduate Assistant but for his appointment or promotion to a higher post; (2) The seniority of any person appointed under clause (ii) of sub rule (1) of Rule 3 shall be determined with reference to the date of commencement of his probation; Provided that no such person shall be senior to any person appointed under clause (i) or (ii) of sub rule (1) of Rule 3. Provided further that no person appointed under sub clause(b) or sub clause (c) of clause (iii) of sub rule(1) of Rule 3 shall be senior to a person appointed under sub clause (a) of that clause". 568 It was submitted before us that these two provisos to sub rule (2) of Rule 13 have been struck down by the Andhra Pradesh Administrative Tribunal. The main question for consideration is whether in spite of the aforesaid provisions in the executive instructions and adhoc rules providing for preferential treatment and position to holders of first and second class Post Graduate Degrees in the matter of appointment as Junior Lecturers, their starting pay and subsequent promotion as Principals of Junior Colleges, particularly (1) G.O.Ms. 1147, Education, dated 4.6.1970 in which Government considered and decided that in the common seniority list first rank should be given only two those who have secured first or second class Post Graduate degree with 50 per cent marks and above and third class Post Graduate Degree holders with not less than five years of service, working as Post Graduate Assistants should be ranked next and third class Post Graduate Degree holders with less than five years of service, working as Post Graduate Assistants, should rank next, and (2) Rule 3(1) (i) and (2) of the Adhoc Rules, 1973 according to which in the appointment of Junior Lecturers preference has to be given firstly to persons with first or second class Post Graduate Degrees, secondly to persons with third class Post Graduate Degrees with not less than five years of service as Post Graduate Assistants and thirdly to persons with third class Post Graduate Degrees with less than five years of service as Post Graduate Assistants, Rule 13(1) of the Adhoc Rules confers seniority on third class Post Graduate Junior Lecturers over first and second class Post Graduate Junior Lecturers based on their earlier appointment as Post Graduate Assistants. There is nothing on record to show that while framing Rule 13(1) of the Adhoc Rules Government intended to depart from the policy earlier enunciated in G.O.Ms. 1147, Education, dated 4.6.1970 as regards conferment of seniority on first and second class Post Graduate School Assistants appointed as Junior Lecturers and Rule 3(1) (i) and (2) of the Adhoc Rules, 1973 as regards preference of first and second class Post Graduate School Assistants over third class Post Graduate School Assistants. On the other hand, the fact that in the seniority list prepared in 1975 so soon after the Adhoc Rules were framed on 19.9.1973 higher places were given to first and second class Post Graduate Junior lecturers over third class Post Graduate Junior Lecturers although the first and second class Junior lecturers were Juniors to the third class Post Graduate Junior 569 Lecturers when they were all Post Graduate School Assistants would indicate that the Government who framed the Adhoc Rules themselves interpreted Rule 13(1) in the manner in which the appellants in Civil Appeals 1652 to 1659 of 1978 invite us to do, giving full effect to the priority laid down in Rule 3(1) and (2) of the Adhoc Rules which follows the policy laid down in that regard in G.O.Ms. 1147, Education, dated 4.6.1970. lt is true that we cannot base our decision on this question on that fact alone especially having regard to the stand now taken before us and the Tribunal by the Government as regards the interpretation of Rule 13(1) which perhaps they are obliged to take in view of the direction given by the Andhra Pradesh High Court in Writ Appeals 920 to 938 of 1975 which is binding on them to prepare a fesh seniority list as has been done by them subsequently in 1976 which is impugned in Civil Appeals 1652 to 1659 of 1978. As stated earlier there is no material on record to show that the Government had any reason, policy or otherwise, when they framed the Adhoc Rules, 1973 to depart from what they had decided in G.O.Ms. 1147, Education, dated 4.6.1970 about how seniority should be accorded. There is no reason to think that the Government intended by Rule 13(1) of the Adhoc Rules to take away from the first and second class Post Graduate Junior Lecturers the preference shown to them over third class Post Graduate Junior Lecturers in the executive instructions especially G.O.Ms. 1147, Education, dated 4.6.1970 and even in Rule 3(1) and (2) of the Adhoc Rules, 1973. As contended by the appellants in Civil Appeals 1652 to 1659 of 1978 Rules 3(1) and (2) and 13(1) have to be read together. Only then there will be harmony between those rules. If Rule 13(1) is read without reference to Rule 3(1) and (2) the consequence will be disharmony and the first and the second class Post Graduate Junior Lecturers who were given preference over third class Post Graduate Junior Lecturers by the other provisions mentioned above, will be placed in a less advantageous and inferior position as compared with third class Post Graduate Junior Lecturers as regards seniority alone, which will not even help them in the matter of promotion as Principals of Junior Colleges in view of Rule 6 of Adhoc Rules, 1974 so long as they do not improve their academic attainment by obtaining a first or second class Post Graduate Degree. Every rule in the Adhoc Rules must be given its full, natural and legal effect. There is no doubt that Rule 13(1) is inartistically worded though when read Rule 3(1) and (2) it would be clear that the principal laid down in it has to be applied separately to each of the three categories of Junior Lecturers mentioned in Rule 3(1) and (2) viz. 1) first and 570 second class Post Graduates, (2) third class Post Graduates with not less than five years of service, working as Post Graduate School Assistants, and (3) third class Post Graduates with less than five years of service, working as Post Graduate School Assistants according to the order in which they have to be selected for appointment as Junior Lecturers. Each of these three categories forms a distinct and separate category. The first category consists of first and second class Post Graduate, and on their appointment as Junior Lecturers their inter se seniority has to be fixed under Rule 13(1) with reference to the dates of their original appointment as Post Graduate School Assistants. When Post Graduates with not less than five years of service working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed likewise under Rule 13(1) on the basis of the dates of their original appointment as Post Graduates School Assistants. Similarly, when Post Graduates with less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed on the basis of the dates of their original appointment as Post Graduate School Assistants. If Rule 13(1) is interpreted in this manner, no disharmony will result in the consequences of applying all the adhoc rules We think that only by construing Rule 13(1) in this manner the Government framed the seniority list of 1974 soon after framing the Adhoc Rules, 1973 by according seniority to the first and second class Post Graduate Junior Lecturers over the third class Post Graduate Junior Lecturers who were senior to them when all of them were working as Post Graduate School Assistants before they were appointed as Junior Lecturers, As stated earlier, before the Tribunal it was argued for the private respondents 3 to 8 in Representation Petition 595 of 1977 that the prayer for quashing Rule 13 (1) of the Adhoc Rules has to be negatived in view of the High Court 's judgments in Writ Petition 4358 of 1974 and Writ Appeals 920 and 938 of 1975 and that it is not the contention of the petitioners in that petition that the impugned revised seniority list of 1976 is contrary to the directions given in those judgments. In the view we take regarding the interpretation of Rule 13 (1) there is no need for quashing that rule. It is true that the petitioners in Representation Petition 595 of 1977 have not contended that the impugned seniority list of 1976 is not in accordance with the directions given in the High Court 's Judgments in those Writ Petition and Writ Appeals. The petitioners in 571 Representation Petition 595 of 1977 have contended that those judgments relate to the 1969 batch and that they belong to 1960 batch and would not be affected by them. Whatever this may mean, it must be noted that it has not been contended by the respondents in Civil Appeals 1652 to 1659 of 1978 that the appellants in those appeals were parties to those judgments and they constitute res judicata and are binding on them. Therefore, there is no substance in this contention of the private respondents in Representation Petition 595 of 1977. Next it was contended before the Tribunal by the private respondents in Representation Petition 595 of 1977 that they were appointed earlier as Post Graduate School Assistants than the petitioners in that petition and were qualified to be appointed as Junior Lecturers when the petitioners in that petition were appointed as such, but were not available for posting, and that under Rule 33 (c) of the Andhra Pradesh State and Subordinate Service Rules they are entitled to seniority. That rule applies to persons who were transferred from one class or category of service to another class or category of the same service, and would not apply to the facts of the present case where Junior Lecturers have been appointed by selection amongst Post Graduate School Assistants in the manner indicated in Rule 3 (1) and (2) of the Adhoc Rules and there is no question of transfer of Post Graduate School Assistants as Junior Lecturers. Therefore, there is no merit even in the second contention put forward on behalf of the private respondents in Representation Petition 595 of 1977. There is no question of this Court striking down Rule 13 (1) of the Adhoc Rules on the ground that any other rub which in the opinion of the Court would have been better or more appropriate. Therefore, the decision in Reserve Bank of India vs N.C. Paliwal(1) relied on for the private respondents 3 to 8 in Representation Petition 595 of 1977 before the Tribunal is not relevant. It is only a question of interpreation of Rule 13 (1) read with Rule 3 (1) and (2) of the Adhoc Rules, 1973. In these circumstances we hold that Rule 13(1) of the Adhoc Rules, 1973 has to be interpreted in the manner indicated above, and seniority has to be fixed accordingly and there is no need to 572 quash that rule and that the impugned seniority list of 1976 has to be quashed and the seniority list of 1974 has to be restored. It would follow that the first prayer in Civil Appeal 415 of 1979 regarding fixing of seniority as prayed for by third class Post Graduate Junior Lecturers has to be rejected and it is accordingly rejected. Coming now to the only point argued by Mr. section N. Kackar, Senior Advocate for the petitioners in Transferred Writ Petition 941 of 1976 (Civil Appeal 415 of 1979) that Rule 6 of the Adhoc Rules, 1974 prescribing a first or second class Post Graduate Degree for a Junior Lecturer 's promotion as Principal of a Junior College, thereby excluding third class Post Graduate Junior Lecturers from eligibility for promotion as Principals, we would like to state at the outset that the contention put forward before the Tribunal that the posts of Principals are administrative posts and no teaching experience is required is incorrect. The Director of Public Instructions has stated in his Proceedings Rc. No. 1068/IC 4/70 dated 16.1.1971 that Principals of Junior Colleges must take at least six periods of work per week if not more. Therefore, Principals of Junior Colleges have to take up teaching work in addition to their administrative duties. They are administrative heads of Junior Colleges where first, second and third class Post Graduates work as Junior Lecturers. They have to exercise administrative control over first, second and third class Post Graduate Junior Lecturers. I. is therefore very desirable that the Principals should be first or second class Post Graduates. Post of Principals of Junior Colleges are gazetted while those of Junior Lecturers of those colleges are not gazetted. According to G.O.Ms. 2068, Education, dated 25.8.1969 Principals of Junior Colleges will have the status of Senior Lecturers in Degree Colleges and their pay scale is Rs. 400 800 while the pay scale of Junior Lecturers is Rs. 200 15 320 20 500. The object of achieving excellence in educational institutions like Junior Colleges is a laudable one, and excellence in academic attainments of heads of such institutions is a relevant fact. Promotion of Junior lecturers as Principals is based only on merit judged by their academic distinction which cannot be said to be discriminatory. The ratio of this Court 's decision in section M. Pandit vs State of Gujarat(1) referred to above cannot be applied to the facts of the present case. Prescribing a first or second class Post Graduate Degree for the head of an educational 573 institution has a direct nexus with the object of excellence sought to be achieved, and it cannot be said to be discriminatory. Therefore, we do not think that Rule 6 of the Adhoc Rules, 1974 is liable to be struck down as being discriminatory and illegal. Pending the framing of Adhoc Rules for the temporary posts of Principals of Junior Colleges, the Director of Public Instructions issued proceedings in Rc 775 Cl/2/74 dated 14.3.1974 promoting under Rule 10(a) (i) of the State and Subordinate Service Rules seven third class Post Graduate Junior Lecturers as Principals of Junior Colleges. The third prayer in Transferred Writ Petition 7146 of 1976 is that those appointments should be declared as illegal. Under Rule 6(ii) of the Adhoc Rules, 1974 framed subsequently in G.O.Ms. 502, Education, dated 19.6.1974 three years ' service in the Andhra Pradesh Educational Subordinate Service is prescribed as a qualification for promotion of Junior Lecturers as Principals of Junior Colleges in addition to a first or second class Post Graduate Degree. It is not known whether when those promotions of seven 4 third class Post Graduate Junior Lecturers as Principals were made first or second class Post Graduate Junior Lecturers were not available for promotion or why after the Adhoc Rules, 1974 were framed within about three months thereafter those third class Post Graduate Junior Lecturers were not reverted as Junior Lecturers. Their promotions were irregular having regard to the fact that even for appointment as Junior Lecturers preference has to be given to first and second class Post Graduate School Assistants. The irregularity has been sought to be overlooked by providing a saving clause by way of Rule 8 of the Adhoc Rules, 1974 where it is stated that notwithstanding anything contained in those rules a person who F held the post of Principal of a Junior College immediately before the issue of those rules and who was not appointed in accordance with those rules, shall be continued as Principal and he is given an option either to continue in the post of Principal or to revert to his original post. We do not think that there could have been any valid necessity to continue those adhoc promotions made even after the Adhoc Rules, 1974 were framed within about three months of those promotions. We think that there is no meaning in providing for the option in that rule as it is not likely that a person who has been promoted as Principal in the grade of Rs. 400 800 would voluntarily opt for reverting to his original post of Junior Lecturer in the grade of Rs. 200 15 320 20 500. However, having regard to 574 the long lapse of time we do not think it desirable to declare those appointments as illegal. In the result Civil Appeals 1652 to 1659 of 1978 are allowed as indicated above and Civil Appeal 415 of 1979 is dismissed. The contesting respondents in Civil Appeals 1652 to 1659 of 1978 shall pay the costs of the appellants in those appeals. Advocate 's fees one set. The parties shall bear their respective costs in Civil Appeal 415 of 1979. H.S.K. CA Nos. 1652 59 of 1978 allowed and CA No. 415 of 1979 dismissed.

Pursuant to tho policy decision taken by the Andhra Pradesh Government in 1964 that the secondary school duration should be 10 years instead of 11 years and it should be followed by a two years ' intermediate course, the Government decided in G.O.Ms. 1920, Education, dated 25.10.1968 that in the existing colleges the two years ' intermediate course should be introduced and laid down in G.O.Ms. 2063, Education, dated 25.8.69 the staff pattern and pay scales of staff m Junior Colleges started for the two years ' intermediate course. In G.O.Ms. 2186, Education, dated 17.9.1969 the Government issued instructions regarding the absorption of Post Graduate teachers in Junior Colleges on the basis of the Post Graduate degree and the number of years of service rendered by them. It was stated in that G.O. that all the existing Post Graduates who will be absorbed as Junior Lecturers in Junior Colleges will be appointed temporarily as Junior Lecturers pending framing of adhoc rules in due course. The Government ordered in G.O. Ms, 1147, Education, dated 4.6.1970 that in the common seniority list first rank should be given only to those who have secured first and second class Post Graduate degree. On 19.9.1973 the Government framed Adhoc Rules, 1973 with retrospective effect from 1.8.1969 for the temporary post of Junior Lecturers in Junior Colleges. Rule 13 of the Adhoc Rules, 1973 says that seniority of Post Graduate Assistants appointed as Junior Lecturers shall be a determined with reference to the dates of their actual appointment as Post Graduate Assistants. Rule 3 states that post graduates with first or second class degrees are to be given preference over Post Graduates holding third class degrees. On 19.6.1974 the Government framed Adhoc Rules, 1974 for the temporary posts of principals of Junior Colleges with retrospective effect from 1.8.1969. Rule 6 of the Adhoc Rules, 1974 prescribes first or second class Post Graduate degree for promotion of Junior Lecturers to the posts of Principals of Junior Colleges. Rule 8 of the Adhoc Rules 1974 says that a person who held the post of Principal of a Junior College immediately before 546 the issue of these Rules shall be continued as Principal and given option either A to continue in the post of Principal or to revert to his original post. The appellants in Civil Appeals 1652 1659 of 1978 who were working as Post Graduate Assistants and were first or second class Post Graduate degree holders were appointed as Junior Lecturers in 1969. Soon after the Adhoc Rules, 1973 were framed the second respondent, Joint Director of Higher Education, prepared a subjectwise seniority list in 1974 and on the basis of their seniority in that seniority list all the appellants except one were promoted as Principals of different Junior Colleges. The first respondent State, under the directions of the High Court in a separate proceeding to prepare the seniority list as per Rule 13(1) of the Adhoc Rules, 1973, prepared a revised seniority list in 1976 in which respondents 3 to 8, who were third class Post Graduate degree holders and were appointed as Junior Lecturers in 1970 and 1975 were placed as seniors to the appellants. The appellants as petitioners filed petitions in the Administrative Tribunal for quashing the revised seniority list of 1976 and restoring the earlier seniority list of 1974 or in the alternative for declaring that Rule 13(1) of the Adhoc Rules, 1973 is violative of Articles 14 and 16 of the Constitution. The petitioners contended that under the Adhoc Rules Post Graduate Assistants with first and second class Post Graduate degrees should be treated as one group and as senior to Post Graduate Assistants with third class Post Graduate degrees The Tribunal held that the seniority list of 1976 framed as per Rule 13(1) of the Adhoc Rules, 1973 having precedence over the earlier executive instruction is valid and as the petitioners and respondents 3 to 8 belonged to the same category of Post Graduate Assistants, there is no question of violation of Articles I 1 and 16 of the Constitution. The appellants in Civil Appeal 415 of 1979 who were working as School Assistants in Higher Secondary Schools and were third class Post Graduates were appointed as Junior Lecturers in Junior Colleges in terms of Rule 3 of t the Adhoc Rules, 1973. Pending the framing of Adhoc Rules for the temporary posts of Principals of Junior Colleges, the second respondent, Director of Public Instructions, issued proceedings dated 14.3.1974 promoting under Rule 10(a) (i) of the State and Subordinate Services Rules seven third class Post Graduate Junior Lecturers as Principals of Junior Colleges. The appellants as petitioners challenged in the Administrative Tribunal these Adhoc promotions. They also challenged the validity of Rule 6 of the Adhoc Rules, 1974 on the ground that it violates Articles 14 and 16 of the Constitution. The Tribunal held that Rule 6 does not contravene Articles 14 and 16 of the Constitution. The Tribunal found nothing objectionable in Rule 8 of the Adhoc Rules, 1974 which protects the right of third class Post Graduate degree holders who had been promoted under Rule 10(a) (i) of the State and Subordinate Services Rules pending framing of Adhoc Rules. Allowing Civil Appeals 1652 59 and dismissing Civil Appeal 415, ^ HELD: There is no need to quash Rule 13(1) of the Adhoc Rules, 1973 which has to be interpreted in the manner indicated in the Judgment and 547 seniority has to be fixed accordingly. The seniority list of 1976 is quashed and the seniority list of 1974 is restored. Rule 6 of the Adhoc Rules, 1974 is valid. [571 H, 572 A] There is no reason to think that the Government intended by Rule 13(1) of the Adhoc Rules, 1973 to take away from First and second class Post Graduate Junior Lecturers the preference shown to them over third class Post Graduate Junior Lecturers in the executive instructions especially G.O. Ms. 1147, Education, dated 4,6.1970 and even in Rule 3(1) and (2) of the Adhoc Rules, 1973. Rules 3(1) and (2) and 13(1) have to be read together. Only then there will be harmony between those rules. If Rule 13(1) is read without reference to Rule 3(1) and (2) the consequence will be disharmony and the first and second class Post Graduate Junior Lecturers who were given preference over third class Post Graduate Junior Lecturers will be placed in a less advantageous and inferior position as compared with third class Post Graduate Junior Lecturers as regards seniority alone, which will not even help them in the matter of promotion as Principals of Junior Colleges in view of Rule 6 of Adhoc Rules, 1974 so long as they do not improve their academic attainment by obtaining a first or second class Post Graduate Degree. Every rule in the Adhoc Rules must be given its full, natural and legal effect. There is no doubt that Rule 13(1) is inartistically worded though when read with Rule 3(1) and (2) it would be clear that the principle laid down in it has to be applied separately to each of the three categories of Junior Lecturers mentioned in Rule 3(1) and (2). Each of these three categories forms a distinct and separate category. The first category consists of first and second class Post Graduates, and on their appointment as Junior Lecturers their inter se seniority has to be fixed under Rule 13(1) with reference to the dates of their original appointment as Post Graduate School Assistants. When Post Graduates with not less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed like wise under Rule 13(1) on the basis of the dates of their original appointment as Post Graduate School Assistants. Similarly, when Post Graduates with less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed on the basis of the dates of their original appointment as Post Graduate School Assistants. If Rule 13(1) is interpreted in this manner, no disharmony will result from applying all the adhoc rules. It is only by constructing Rule 13(1) in this manner the Government framed the seniority list of 1974. [569 D H 570 A F] The object of achieving excellence in educational institutions like Junior Colleges is a laudable one, and excellence in academic attainments of heads of such institutions is a relevant fact. Promotion of Junior Lecturers as Principals is based only on merit judged by their academic distinction which cannot be said to be discriminatory. Prescribing a first or second class Post Graduate Degree for the head of an educational institution has a direct nexus with the object of excellence sought to be achieved, and it cannot be said to be discriminatory. Therefore, it is not possible to hold that Rule 6 of the Adhoc Rules? 1974 is liable to be struck down as being discriminatory and illegal. [572 G H, 573 A] 548 section M. Pandit vs State of Gujarat, not applicable. The promotion of seven third class Post Graduate Junior Lecturers as Principals were irregular having regard to the fact that even for appointment as Junior Lecturers preference has to be given to first and second class Post Graduate School Assistants. The irregularity has been sought to be overlooked by providing a saving clause by way of Rule 8 of the Adhoc Ruler, 1974. It is not possible to think that there could have been any valid necessity to continue those adhoc promotions made even after the Adhoc Rules, 1974 were framed within about three month of those promotions. There is no meaning in providing for the option in that rule as it is not likely that a person who has been promoted as Principal would voluntarily opt for reverting to his original post of Junior Lecturer. However, having regard to the long lapse of time it is not desirable to declare those appointments as illegal. [573 E H, 574 A] Rule 33(c) of the Andhra Pradesh State and Subordinate Services Rules applies to persons who were transferred from one class or category of service to another class or category of the same service and would not apply to the fact of the present case where Junior Lecturers have been appointed by election amongst Post Graduate School Assistants in the manner indicated in Rule 3(1) and (2) of the Adhoc Rules and there is no question of transfer of Post Graduate School Assistants as Junior Lecturers. [571 C E] Reserve Bank of India vs N. C. Paliwal, A.I.R. 1976 S.C. 2342 not applicable.

8k-16k

ivil Appeal No. 417 of 1984. From the Judgment and Order dated 12.8.1981 of the Delhi High Court in C.W.P. No. 1835 of 1981. A.K. Ganguli, A. Sharan for the Appellant. Kapil Sibal, Additional Solicitor General, Raju Rama chandran, Rajiv Dhawan, C.V. Subba Rao and Mrs. Sushma Suri for the Respondents. T. Prasad for the Secretary, Ministry of Defence. The Judgment of the Court was delivered by S.C. AGRAWAL, J. This appeal, by special leave, is directed against the order dated August 12, 1981, passed by the High Court of Delhi dismissing the writ petition filed by the appellant. In the writ petition the appellant had challenged the validity of the finding and the sentence recorded by the General Court Martial on November 29, 1978, the order dated May 11, 1979, passed by the Chief of Army Staff confirming the findings and the sentence recorded by the General Court Martial and the order dated May 6, 1980, passed by the Central Government dismissing the petition filed by the appellant under Section 164(2) of the (hereinafter referred to as 'the Act '). 48 The appellant held a permanent commission, as an offi cer, in the regular army and was holding the substantive rank of Captain. He was officiating as a Major. On December 27, 1974, the appellant took over as the Officer Commanding of 38 Coy. ASC (Sup) Type 'A ' attached to the Military Hospital, Jhansi. In August 1975, the appellant had gone to attend a training course and he returned in the first week of November 1975. In his absence Captain G.C. Chhabra was the officer commanding the unit of the appellant. During this period Captain Chhabra submitted a Contingent Bill dated September 25, 1975 for Rs.16,280 for winter liveries of the depot civilian chowkidars and sweepers. The said Contingent Bill was returned by the Controller of Defence Accounts (CDA) Meerut with certain objections. Thereupon the appellant submitted a fresh Contingent Bill dated December 25, 1975 for a sum of Rs.7,029.57. In view of the difference in the amounts mentioned in the two Contingent Bills, the CDA reported the matter to the headquarters for investiga tion and a Court of Enquiry blamed the appellant for certain lapses. The said report of the Court of Enquiry was considered by the General Officer Commanding, M.P., Bihar and Orissa Area, who, on January 7, 1977 recommended that 'severe displeasure ' (to be recorded) of the General Officer Com manding in Chief of the Central Command be awarded to the appellant. The General Officer Commanding in Chief. Central Command did not agree with the said opinion and by order dated August 26, 1977, directed that disciplinary action be taken against the appellant for the lapses. In view of the aforesaid order passed by the General Officer Commanding in Chief, Central Command, a charge sheet dated July 20. 1978, containing three charges was served on the appellant and it was directed that he be tried by Gener al Court Martial. The first charge was in respect of the offence under Section 52(f) of the Act, i.e. doing a thing with intent to defraud. the second charge was alternative to the first charge and was in respect of offence under Section 63 of the Act, i.e. committing an act prejudicial to good order and military discipline and the third charge was also in respect of offence under Section 63 of the Act. The appellant pleaded not guilty to the charges. The prosecution examined 22 witnesses to prove the charges. The General Court Martial. on November 29, 1978, found the appellant not guilty of the second charge but found him guilty of the first and the third charge and awarded the sentence of dismissal from service. The appellant submit 49 ted a petition dated December 18, 1978, to the Chief of Army Staff wherein he prayed that the findings and the sentence of the General Court Martial be not confirmed. The findings and sentence of the General Court Martial were confirmed by the Chief of the Army Staff by his order dated May 11, 1979. The appellant, thereafter, submitted a post confirmation petition under Section 164(2) of the Act. The said petition of the appellant was rejected by the Central Government by order dated May 6, 1980. The appellant thereupon filed the writ petition in the High Court of Delhi. The said writ petition was dismissed, in limine, by the High Court by order dated August 12, 1981. The appellant approached this Court for grant of special leave to appeal against the said order of the Delhi High Court. By order dated January 24, 1984, special leave to appeal was granted by this Court. By the said order it was directed that the appeal be listed for final hearing before the Constitution Bench. The said order does not indicate the reason why the appeal was directed to be heard by the Constitution Bench. The learned counsel for the appellant has stated that this direction has been given by this Court for the reason that the appeal involves the question as to whether it was incumbent for the Chief of the Army Staff, while confirming the findings and the sentence of the General Court Martial, and for the Central Govern ment, while rejecting the post confirmation petition of the appellant, to record their reasons for the orders passed by them. We propose to deal with this question first. It may be mentioned that this question has been consid ered by this Court in Som Datt Datta vs Union of India and Others, ; In that case it was contended before this Court that the order of the Chief of Army Staff confirming the proceedings of the Court Martial under Sec tion 164 of the Act was illegal since no reason had been given in support of the order by the Chief of the Army Staff and that the Central Government had also not given any reason while dismissing the appeal of the petitioner in that case under Section 165 of the Act and that the order of the Central Government was also illegal. This contention was negatived. After referring to the provisions contained in Sections 164, 165 and 162 of the Act this Court pointed that while Section 162 of the Act expressly provides that the Chief of the Army Staff may "for reasons based on the merits of the case" set aside the proceedings or reduce the sentence to any other sentence which the Court might have passed, there is no express obligation imposed by Sections 164 and 165 of the Act on the confirming authority or upon the Central Government to give reasons in support of its decision to confirm the proceedings of the Court Martial. This Court observed that no other section of the Act or any of the rules made 50 therein had been brought to its notice from which necessary implication can be drawn that such a duty is cast upon the Central Government or upon the confirming authority. This Court did not accept the contention that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, there is a general principle or a rule of natural justice that a statutory tribunal should always and in every case give reasons m support of its decision. Shri A.K. Ganguli has urged that the decision of this Court in Som Datt Datta 's case (supra) to the extent it holds that there is no general principle or rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision needs reconsid eration inasmuch as it is not in consonance with the other decisions of this Court. In support of this submission Shri Ganguli has placed reliance on the decisions of this Court in Bhagat Raja vs The Union of India and Others, ; ; Mahabir Prasad Santosh Kumar vs State of U.P. and Others, ; ; Woolcombers of India Ltd. vs Woolcombers Workers Union and Another, and Siemens Engineering & Manufacturing Co. of India Limited vs Union of India and Another, The learned Additional Solicitor General has refuted the said submission of Shri Ganguli and has submitted that there is no requirement in law that reasons be given by the con firming authority while confirming the finding or sentence of the Court Martial or by the Central Government while dealing with the post confirmation petition submitted under Section 164 of the Act and that the decision of this Court in Som Datt Datta 's case (supra) in this regard does not call for reconsideration. The question under consideration can be divided into two parts: (i) Is there any general principle of law which requires an administrative authority to record the reasons for its decision; and (ii) If so, does the said principle apply to an order con firming the findings and sentence of a Court Martial and post confirmation proceedings under the Act? On the first part of the question there is divergence of opinion in the common law countries. The legal position in the United States is different from that in other common law countries. 51 In the United States the courts have insisted upon recording of reasons for its decision by an administrative authority on the premise that the authority should give clear indication that it has exercised the discretion with which it has been empowered because "administrative process will best be vindicated by clarity in its exercise" Phelps Dodge Corporation vs National Labour Relations Board, [1940] 85 Law Edn. 1271 at P. 1284. The said requirement of record ing of reasons has also been justified on the basis that such a decision is subject to judicial review and "the Courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review" and that "the orderly functioning of the process of review requires that the grounds upon which the administra tive agency acted be clearly disclosed and adequately sustained." Securities and Exchange Commission vs Chenery Corporation, ; at P. 636. In John T. Dunlop vs Waiter Bachowski, ; 377) it has been observed that a statement of reasons serves purposes other than judicial review inasmuch as the reasons promotes thought by the authority and compels it to cover the rele vant points and eschew irrelevancies and assures careful administrative consideration. The Federal Administrative Procedure Act, 1946 which prescribed the basic procedural principles which are to govern formal administrative proce dures contained an express provision (Section g(b) ) to the effect that all decisions shall indicate a statement of findings and conclusions as well as reasons or basis the, for upon all the material issues of fact, law or discretion presented on the record. The said provision is now contained in Section 557(c) of Title 5 of the United States Code (1982 edition). Similar provision is contained in the state stat utes. In England the position at Common law is that there is no requirement that reasons should be given for its decision by the administrative authority (See: Regina vs Gaming Board for Great Britain Ex Party Benaim and Khaida, [1970] 2 Q.B. 417 at p. 431 and McInnes vs Onslow Fane and Another, at p. 1531). There are, however, observa tions in some judgments wherein the importance of reasons has been emphasised. In his dissenting judgment in Breen vs Amalgamated Engineering Union and Others, Lord Denning M.R., has observed that: "the giving of reasons is one of the fundamental of good administration." (P. 191) In Alexander Machinery (Dudley) Ltd. vs Crabtree, Sir John Donaldson, as President of the National Industrial Relations Court, has observed that: 52 "failure to give reasons amounts to a denial of justice. " In Regina vs Immigration Appeal Tribunal Ex parte Khan (Mahmud), Lord Lane, CJ., while expressing his reservation on the proposition that any failure to give reasons means a denial of justice, has observed: "A party appearing before a tribunal is entitled to know either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind." (P. 794) The Committee on Ministers ' Powers (Donoughmore Commit tee) in its report submitted in 1932, recommended that "any party affected by a decision should be informed of the reasons on which the decision is based" and that "such a decision should be in the form of a reasoned document avail able to the parties affected." (P. 100) The Committee on Administrative Tribunals and Enquiries (Franks Committee) in its report submitted in 1957, recommended that "decisions of tribunals should be reasoned and as full as possible." The said Committee has observed: "Almost all witnesses have advocated the giving of reasoned decisions by tribunals. We are convinced that if tribunal proceedings are to be fair to the citizen reasons should be given to the fullest practicable extent. A decision is apt to be better if the reasons for it have to be set out in writing because the reasons are then more likely to have been properly thought out. Further, a reasoned decision is essential in order that, where there is a right of appeal, the applicant can assess whether he has good grounds of appeal and know the case he will have to meet if he decides to appeal." (Para 98) The recommendations of the Donoughmore Committee and the Franks Committee led to the enactment of the Tribunals and Enquiries Act, 1958 in United Kingdom. Section 12 of that Act prescribed that it shall be the duty of the Tribunal or Minister to furnish a statement, either written or oral, of the reasons for the decision if requested, on or before the giving of notification of the decision to support the deci sion. The said Act has been replaced by the Tribunals and Enquiries Act, 1971 which contains a similar provision in Section 12. This requirement is. however, confined. in its applications to tribunals and statu 53 tory authorities specified in Schedule I to the said enact ment. In respect of the tribunals and authorities which are not covered by the aforesaid enactment, the position, as prevails at common law, applies. The Committee of JUSTICE in its Report, Administration Under Law, submitted in 1971, has expressed the view: "No single factor has inhibited the development of English administrative law as seriously as the absence of any gener al obligation upon public authorities to give reasons for their decisions. " The law in Canada appears to be the same as in England. In Pure Spring Co. Ltd. vs Minister of National Revenue, at P. 539 it was held that when a Minister makes a determination in his discretion he is not required by law to give any reasons for such a determination. In some recent decisions, however, the Courts have recognised that in certain situations there would be an implied duty to state the reasons or grounds for a decision (See: Re R D.R. Construction Ltd. And Rent Review Commission, and Re Yarmouth Housing Ltd. And Rent Review Commission, In the Province of Ontario the Statutory Powers Procedure Act, 1971 was enacted which provided that "a tribunal shall give its final deci sion, if any, in any proceedings in writing and shall give reasons in writing therefore if requested by a party." (Section 17). The said Act has now been replaced by the Statutory Powers and Procedure Act, 1980, which contains a similar provision. The position at common law is no different in Australia. The Court of Appeal of the Supreme Court of New South Wales in Osmond vs Public service Board of New South Wales, had held that the common law requires those entrusted by Statute with the discretionary power to make decisions which will affect other persons to act fairly in the performance of their statutory functions and normally this will require an obligation to state the reasons for their decisions. The said decision was overruled by the High Court of Australia in Public Service Board of New South Wales vs Osmond, and it has been held that there is no general rule of the common law, or principle of natural justice, that requires reasons to be given for administrative decisions, even decisions which have been made in the exercise of a statutory discretion and which may adversely affect the interests or defeat the legitimate or reasonable expectations, of other persons. Gibbs CJ., in his leading judgment, has expressed the view that "the 'rules of natural justice are 54 designed to ensure fairness in the making of a decision and it is difficult to see how the fairness of an administrative decision can be affected by what is done after the decision has been made. " The learned Chief Justice has. however. observed that "even assuming that in special circumstances natural justice may require reasons to be given, the present case is not such a case." (P. 568). Deane J., gave a concur ring judgment, wherein after stating that "the exercise of a decision making power in a way which adversely affects others is less likely to be. or appear to be, arbitrary if the decision maker formulates and provides reasons for his decision", the learned Judge has proceeded to hold that "the stage has not been reached in this country where it is a general prima facie requirement of the common law rules of natural justice or procedural fair play that the administra tive decision maker. having extended to persons who might be adversely affected by a decision an adequate opportunity of being heard. is bound to furnish reasons for the exercise of a statutory decision making power." (P. 572). The learned Judge has further observed that the common law rules of natural justice or procedural fair play are neither stand ardized nor immutable and that their content may vary with changes in contemporary practice and standards. In view of the statutory developments that have taken place in other countries to which reference was made by the Court of Ap peal, Deane, J. has observed that the said developments "are conducive to an environment within which the courts should be less reluctant than they would have been in times past to discern in statutory provisions a legislative intent that the particular decision maker should be under a duty to give reasons." (P. 573). This position at common law has been altered by the Commonwealth Administrative Decisions (Judicial Review) Act. Section 13 of the said Act enables a person who is entitled to apply for review the decision before the Federal Court to request the decision maker to furnish him with a statement in writing setting out the findings on material questions of fact, referring to the evidence or other mate rial on which those findings were based and giving the reasons for the decision and on such a request being made the decision maker has to prepare the statement and furnish it to the persons who made the request as soon as practica ble and in any event within 28 days. The provisions of this Act are not applicable to the classes of decisions mentioned in Schedule I to the Act. A similar duty to give reasons has also been imposed by Sections 28 and 37 of the commonwealth Administrative Appeals Tribunal Act. In India the matter was considered by the Law Commission in 55 the 14th Report relating to reform in Judicial Administra tion. The Law Commission recommended: "In the case of administrative decisions provision should be made that they should be accompanied by reasons. The reasons will make it possible to test the validity of these deci sions by the machinery of appropriate writs." (Vol. II P. 694). No laws has, however, been enacted in pursuance of these recommendations, imposing a general duty to record the reasons for its decision by an administrative authority though the requirement to give reasons is found in some statutes. The question as to whether an administrative authority should record the reasons for its decision has come up for consideration before this Court in a number of cases. In M/s. Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala and Others, ; , a Constitution Bench of this Court. while dealing with an order passed by the Central Government in exercise of its appellate powers under Section 111(3) of the in the matter of refusal by a company to register the transfer of shares, has held that there was no proper trial of the appeals before the Central Government since no reasons had been given in support of the order passed by the Deputy Secretary who heard the appeals. In that case it has been observed: "If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order." (P. 357) In Madhya Pradesh Industries Ltd. vs Union of India and Others, ; the order passed by the Central Government dismissing the revision petition under Rule 55 of the Mineral Concession Roles, 1960, was challenged before this Court on the ground that it did not contain reasons. Bachawat, J., speaking for himself and Mudholkar, J., re jected this contention on the view that the reason for rejecting the revision application appeared on the face of the order because the Central Government had agreed with the reasons given by 56 the State Government in its order. The learned Judges did not agree with the submission that omission to give reasons for the decision is of itself a sufficient ground for quash ing it and held that for the purpose of an appeal under Article 136 orders of courts and tribunals stand on the same footing. The learned Judges pointed out that an order of court dismissing a revision application often gives no reasons but this is not a sufficient ground for quashing it and likewise an order of an administrative tribunal reject ing a revision application cannot be pronounced to be in valid on the sole ground that it does not give reasons for the rejection. The decision in Hari Nagar Sugar Mills case (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal. According to the learned Judges there is a vital difference between an order of reversal and an order of affirmance. Subba Rao, J., as he then was, did to concur with this view and found that the order of the Central Government was vitiated as it did not disclose any reasons for rejecting the revision applica tion. The learned Judge has observed: "In the context of a welfare State, administrative tribunals have come to stay. Indeed, they are the necessary concomi tants of a Welfare State. But arbitrariness in their func tioning destroys the concept of a welfare State itself. Self discipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The compulsion of disclosure guarantees consideration. The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds, A reasoned order is a desirable condition of judicial disposal." (P. 472). "If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officer may turn out to be a potent weapon for abuse of power. But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if its discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should not be deprived of this only safeguard." (P. 472). 57 "There is an essential distinction between a court and an administrative tribunal. A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but an executive officer generally looks at things from the standpoint of policy and expediency. The habit of mind of an executive officer so formed cannot be expected to change from function to function or from act to act. So it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affect ing the rights of parties; and the least they should do is to give reasons for their orders. Even in the case of appel late courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it. But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons." (P. 472 73). With reference to an order of affirmance the learned Judge observed that where the original tribunal gives rea sons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons and that what is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by refer ence to those given by the original tribunal. This matter was considered by a Constitution Bench of this Court in Bhagat Raja case (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional powers under Section 30 of the read with rules 54 and 55 of the Mineral Concession Rules, 1960. Dealing with the question as to whether it was incum bent on the Central Government to give any reasons for its decision on review this Court has observed: "The decisions of tribunals in India are subject to the supervisory powers of the High Courts under article 227 of the Constitution and of appellate powers of this Court under article 136. It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or "dismissed". In 58 such a case, this Court can probably only exercise its appeallate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal. This will certainly be a very unsatisfactory method of dealing with the appeal." (P. 309). This Court has referred to the decision in Madhya pra desh Industries case (supra) and the observations of Subba Rao, J., referred to above, in that decision have been quoted with approval. After taking note of the observations of Bachawat, J., in that case, the learned Judges have held: "After all a tribunal which exercises judicial or quasijudi cial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of par ties of far reaching consequences to them are adjudicated upon in a summary fashion, without giving a personal hearing when proposals and counter proposals are made and examined, the least that can be expected is that the tribunals shall tell the party why the decision is going against him in all cases where the law gives a further right of appeal." (P.315). Reference has already been made to Som Datt Datta 's case (supra) wherein a Constitution Bench of this Court has held that the confirming authority, while confirming the findings and sentence of a Court Martial, and the Central Government, while dealing with an appeal under Section 165 of the Act, are not required to record the reasons for their decision and it has been observed that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, it could not be said that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision. In that case the Court was primarily concerned with the interpretation of the provisions of Act and the Army Rules, 1954. There is no reference to the earlier decisions in Harinagar Sugar Mills case (supra) and Bhagat Raja case (supra) wherein the duty to record reasons was imposed in view of the appellate jurisdiction of this Court and the supervisory jurisdiction of the High Court under Articles 136 and 227 of the Consti tution of India respectively. In Travancore Rayon Ltd. vs Union of India, 59 "The Court insists upon disclosure of reasons in support of the order on two grounds; one, that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other, that the obligation to record reasons operates as a deter rent against possible arbitrary action by the executive authority invested with the judicial power." (P. 46) In Mahabir Prasad Santosh Kumar vs State of U.P. and Others (supra) the District Magistrate had cancelled the licence granted under the ' U.P Sugar Dealers ' Licensing Order, 1962 without giving any reason and the State Govern ment had dismissed the appeal against the said order of the District Magistrate without recording the reasons. This Court has held: "The practice of the executive authority dismissing statuto ry appeal against orders which prima facie seriously preju dice the rights of the aggrieved party without giving rea sons is a negation of the rule of law." (P. 204) "Recording of reasons in support of a decision on a disputed claim by a quasi judicial authority ensures that the deci sion is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may deter mine whether the facts were properly ascertained, the rele vant law was correctly applied and the decision was just." (P. 205) In Woolcombers of India Ltd. case (supra) this Court was dealing with an award of an Industrial Tribunal. It was found that the award stated only the conclusions and it did not give the supporting reasons. This Court has observed: "The giving of reasons in support of their conclusions by judicial and quasi judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrari 60 ness in reaching the conclusions. The very search for rea sons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well known principle that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclu sions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi judicial authorities to this Court by special leave granted under Article 136. A judgment which does not disclose the reasons, will be of little assistance to the Court." (P. 507) In Siemens Engineering & Manufacturing Co. of India Limited case (supra) this Court was dealing with an appeal against the order of the Central Government on a revision applica tion under the . This Court has laid down: "It is now settled law that where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes. Every quasijudicial order must be supported by reasons." (P 495) "If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then along administrative au thorities and tribunals, exercising quasi judicial function will be able to justify their existence and carry credibili ty with the people by inspiring confidence in the adjudica tory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partera, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its 61 proper spirit and mere pretence of compliance with it would not satisfy the requirement of law." (496) Tarachand Khatri vs Municipal Corporation of Delhi & Others, [1977] 2 SCR 198 was a case where an inquiry was conducted into charges of misconduct and the disciplinary authority, agreeing with the findings of the Inquiry Offi cer, had imposed the penalty of dismissal. The said order of dismissal was challenged on the ground that the disciplinary authority had not given its reasons for passing the order. The said contention was negatived by this Court and distinc tion was drawn between an order of affirmance and an order of reversal. It was observed: " . . while it may be necessary for a disciplinary or administrative authority exercising quasi judicial functions to state the reasons in support of its order if it differs from the conclusions arrived at and the recommendations made by the Inquiry Officer in view of the scheme of a particular enactment or the rules made thereunder, it would be laying down the proposition too broadly to say that even an ordi nary concurrence must be supported by reasons." (P. 208) In Raipur Development Authority and Others vs Mls. Chokhamal Contractors and Others, [1989] 2 S.C.C. 721 a Constitution Bench of this Court was considering the ques tion whether it is obligatory for an arbitrator under the Arbitration Act, 194(1 to give reasons for the award. It was argued that the requirement of giving reasons for the deci sion is a part of the rules of natural justice which are also applicable to the award of an arbitrator and reliance was placed on the decisions in Bhagat Raja case (Supra) and Siemens Engineering Co. case (Supra). The said contention was rejected by this Court. After referring to the decisions in Bhagat Raja case (Supra); Som Datt Datta case (Supra) and Siemens Engineering Co. case (Supra) this Court has ob served: "It is no doubt true that in the decisions pertaining to Administrative Law, this court in some cases has observed that the giving of reasons in an administrative decision is a rule of natural justice by an extension of the prevailing rules. It would be in the interest of the world of commerce that the said rule is confined to the area of Administrative Law . . But at the same time it has to be borne in mind that what applies generally to settlement of disputes by 62 authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settle ment of private disputes." (P. 751 52) The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consid eration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decisionmaking. In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by con siderations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi judicial func tions, would no doubt facilitate the exercise of its juris diction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the re cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrari ness and ensures a degree of fairness in the process of decision making. The said purpose would apply equally to all decisions and its application cannot be confined to deci sions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an admin istrative authority exercising quasijudicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added 63 that it is not required that the reasons should be as elabo rate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional author ity agrees with the reasons contained in the order under challenge. Having considered the rationale for the requirement to record the reasons for the decision of an administrative authority exercising quasi judicial functions we may now examine the legal basis for imposing this obligation. While considering this aspect the Donough more Committee observed that it may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it judicial or quasi judi cial. The committee expressed the opinion that "there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings are open to the disappointed party by way of appeal or otherwise" and that "where further proceedings are open to a disappointed party, it is contrary to natural justice that the silence of the Minister or the Ministerial Tribunal should deprive them of the opportunity." (P 80) Prof. H.W.R. Wade has also ex pressed the view that "natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man 's sense of justice." (See Wade, Administra tive Law, 6th Edn. P. 548). In Siemens Engineering Co. case (Supra) this Court has taken the same view when it observed that "the rule requiring reasons to be given in support of an order is, like the principles of audi alteram parlem, a basic principle of natural justice which must inform every quasi judicial process." This decision proceeds on the basis that the two well known principles of natural justice, namely (i) that no man should be a Judge in his own cause and (ii) that no person should be judged without a hearing, are not exhaustive and that in addition to these two princi ples there may be rules which seek to ensure fairness in the process of decision making and can be regarded as part of the principles of natural justice. This view is in conso nance with the law laid down by this Court in A.K. Kraipak and Others vs Union of India and Others, , wherein it has been held: 64 "The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules namely (i) no one shall be a Judge in his own cause (nemo dabet esse judex propria causa) and (ii) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice." (P. 468 69) A similar trend is discernible m the decisions of Eng lish Courts wherein it has been held that natural justice demands that the decision should be based on some evidence of probative value. (See: R. vs Deputy Industrial Injuries Commissioner ex P. Moore, ; Mahon vs Air New Zealand Ltd., The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fairplay in action." As pointed out earlier the requirement about re cording of reasons for its decision by an administrative authority exercising quasi judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision making. Keep ing in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by adminis trative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an adminis trative authority including exercise of judicial or quasi judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provi sion to that affect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Deci sions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the sub ject matter, the scheme and the provisions of the 65 enactment. The public interest underlying such a provision would outweight the salutary purpose served by the require ment to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administra tive authority exercising judicial or quasi judicial func tions is required to record the reasons for its decision. We may now come to the second part of the question, namely, whether the confirming authority is required to record its reasons for confirming the finding and sentence of the court martial and the Central Government or the competent authority entitled to deal with the post confirma tion petition is required to record its reasons for the order passed by it on such petition. For that purpose it will be necessary to determine whether the Act or the Army Rules, 1954 (hereinafter referred to as 'the Rules ') ex pressly or by necessary implication dispense with the re quirement of recording reasons. We propose to consider this aspect in a broader perspective to include the findings and sentence of the court martial and examine whether reasons are required to be recorded at the stage of (i) recording of findings and sentence by the court martial; (ii) confirma tion of the findings and sentence of the court martial; and (iii) consideration of post confirmation petition. Before referring to the relevant provisions of the Act and the Rules it may be mentioned that the Constitution contains certain special provisions in regard to members of the Armed Forces. Article 33 empowers Parliament to make law determining the extent to which any of the rights conferred by Part Ill shall, in their application to the members of the Armed Forces be restricted or abrogated so as to ensure the proper discharge of their duties and the maintenance of discipline amongst them. By clause (2) of Article 136 the appellate jurisdiction of this Court under Article 136 of the Constitution has been excluded in relation to any judg ment, determination, sentence or order passed or made by any Court or tribunal constituted by or under any law relating to the Armed Forces. Similarly clause (4) of Article 227 denies to the High Courts the power of superintendence over any Court or tribunal constituted by or under any law relat ing to the Armed Forces. This Court under Article 32 and the High Courts under Article 226 have, however, the power of judicial review in respect of 66 proceedings of courts martial and the proceedings subsequent thereto and can grant appropriate relief if the said pro ceedings have resulted in denial of the fundamental rights guaranteed under Part III of the Constitution or if the said proceedings suffer from a jurisdictional error or any error of law apparent on the face of the record. Reference may now be made to the provisions of the Act and the Rules which have a bearing on the requirement to record reasons for the findings and sentence of the court martial. Section 108 of the Act makes provision for four kinds of courts martial, namely, (a) general courts martial; (b) district courts martial; (c) summary general courtsmar tial and (d) summary courts martial. The procedure of court martial is prescribed in Chapter XI (Sections 128 to 152) of the Act. Section 129 prescribes that every general court martial shall, and every district or summary general court martial, may be attended by a judge advocate, who shall be either an officer belonging to the department of the Judge Advocate General, or if no such officer is available, an officer approved of by the Judge Advocate General or any of his deputies. In sub section (1) of Section 131 it is pro vided that subject to the provisions of sub sections (2) and (3) every decision of a courtmartial shall be passed by an absolute majority of votes, and where there is an equality of votes on either the finding or the sentence, the decision shall be in favour of the accused. In sub section (2) it is laid down that no sentence of death shall be passed by a general courtmartial without the concurrence of at least two thirds of the members of the court and sub section (3) provides that no sentence of death shall be passed by a summary general court martial without the concurrence of all the members. With regard to the procedure at trial before the General and District courts martial further provisions are made in Rules 37 to 105 of the Rules. In Rule 60 it is provided that the judge advocate (if any) shall sum up in open court the evidence and advise the court upon the law relating to the case and that after the summing up of the judge advocate no other address shall be allowed. Rule 61 prescribes that the Court shall deliberate on its findings in closed court in the presence of the judge advocate and the opinion of each member of the court as to the finding shall be given by word of mouth on each charge separately. Rule 62 prescribes the form, record and announcement of finding and in sub rule (1) it is provided that the finding on every charge upon which the accused is arraigned shall be recorded and, except as provided in these rules, shall be recorded simply as a finding of "Guilty" or of "Not guilty". Sub rule (10) of Rule 62 lays down that the finding on charge shall be announced forthwith in open court as subject to confirmation. Rule 64 lays down 67 that in cases where the finding on any charge is guilty, the court, before deliberating on its sentence, shall, whenever possible take evidence in the matters specified in sub rule (1) and thereafter the accused has a right to address the court thereon and in mitigation of punishment. Rule 65 makes provision for sentence and provides that the court shall award a single sentence in respect of all the offences of which the accused is found guilty, and such sentence shall be deemed to be awarded in respect of the offence in each charge and in respect of which it can be legally given, and not to be awarded in respect of any offence in a charge in respect of which it cannot be legally given. Rule 66 makes provisions for recommendation to mercy and sub rule (1) prescribes that if the court makes a recommendation to mercy, it shall give its reasons for its recommendation. Sub rule (1) of Rule 67 lays down that the sentence together with any recommendation to mercy and the reasons for any such recommendation will be announced forthwith in open court. The powers and duties of judge advocate are pre scribed in Rule 105 which, among other things, lays down that at the conclusion of the case he shall sum up the evidence and give his opinion upon the legal bearing of the case before the court proceeds to deliberate upon its find ing and the court, in following the opinion of the judge advocate on a legal point may record that it has decided in consequences of that opinion. The said rule also prescribes that the judge advocate has, equally with the presiding officer, the duty of taking care that the accused does not suffer any disadvantage in consequences of his position as such, or of his ignorance or incapacity to examine or cross examine witnesses or otherwise, and may, for that purpose, with the permission of the court, call witnesses and put questions to witnesses, which appear to him neces sary or desirable to elicit the truth. It is further laid down that in fulfilling his duties, the judgeadvocate must be careful to maintain an entirely impartial position. From the provisions referred to above it is evident that the judge advocate plays an important role during the courts of trial at a general court martial and he is enjoined to maintain an impartial position. The court martial records its findings after the judge advocate has summed up the evidence and has given his opinion upon the legal bearing of the case. The members of the court have to express their opinion as to the finding by word of mouth on each charge separately and the finding on each charge is to be recorded simply as a finding of "guilty" or of "not guilty". It is also required that the sentence should be announced forth with in open court. Moreover Rule 66(1) requires reasons to be recorded for its recommendation in cases where the court makes a recommendation to mercy. There is no such require 68 ment in other provisions relating to recording of findings and sentence. Rule 66(1) proceeds on the basis that there is no such requirement because if such a requirement was there it would not have been necessary to have a specific provi sion for recording of reasons for the recommendation to mercy. The said provisions thus negative a requirement to give reasons for its finding and sentence by the court martial and reasons are required to be recorded only in cases where the courtmartial makes a recommendation to mercy. In our opinion, therefore, at the stage of recording of findings and sentence the court martial is not required to record its reasons and at that stage reasons are only required for the recommendation to mercy if the court mar tial makes such a recommendation. As regards confirmation of the findings and sentence of the court martial it may be mentioned that Section 153 of the Act lays down that no finding or sentence of a General, District or summary General, Court Martial shall be valid except so far as it may be confirmed as provided by the Act. Section 158 lays down that the confirming authority may while confirming the sentence of a court martial mitigate or remit the punishment thereby awarded, or commute that pun ishment to any punishment lower in the scale laid down in Section 71. Section 160 empowers the confirming authority to revise the finding or sentence of the court martial and in sub section (1) of Section 160 it is provided that on such revision, the court, if so directed by the confirming au thority, may take additional evidence. The confirmation of the finding and sentence is not required in respect of summary court martial and in Section 162 it is provided that the proceedings of every summary court martial shall Without delay be forwarded to the officer commanding the division or brigade within which the trial was held or to the prescribed officer; and such officer or the Chief of the Army Staff or any officer empowered in this behalf may, for reasons based on the merits of the case, but not any merely technical grounds, set aside the proceedings or reduce the sentence to any other sentence which the court might have passed. In Rule 69 it is provided that the proceedings of a general court martial shall be submitted by the judge advocate at the trial for review to the deputy or assistant judge advocate general of the command who shall then forward it to the confirming officer and in case of district court martial it is provided that the proceedings should be sent by the presiding officer, who must, in all cases. where the sentence is dismissal or above, seek advice of the deputy or assistant judge advocate general of the command before confirmation. Rule 70 lays down that upon receiving the proceedings of a general or district Court Martial, the confirming authority may 69 confirm or refuse confirmation or reserve confirmation for superior authority, and the confirmation, non confirmation, or reservation shall be entered in and form part of the proceedings. Rule 71 lays down that the charge, finding and sentence, and any recommendation to mercy shall, together with the confirmation or non confirmation of the proceed ings, be promulgated in such manner as the confirming au thority may direct, and if no direction is given, according to custom of the service and until promulgation has been effected, confirmation is not complete and the finding and sentence shall not be held to have been confirmed until they have been promulgated. The provisions mentioned above show that confirmation of the findings and sentence of the court martial is necessary before the said finding or sentence become operative. In other words the confirmation of the findings and sentence is an integral part of the proceedings of a court martial and before the findings and sentence of a court martial are confirmed the same are examined by the deputy or assistant judge advocate general of the command which is intended as a check on the legality and propriety of the proceedings as well as the findings and sentence of the court martial. Moreover we find that in Section 162 an express provision has been made for recording of reasons based on merits of the case in relation to the proceedings of the summary courtmartial in cases where the said proceedings are set aside or the sentence is reduced and no other requirement for recording of reasons is laid down either in the Act or in the Rules in respect of proceedings for confirmation. The only inference that can be drawn from Section 162 is that reasons have to be recorded only in cases where the proceed ings of a summary court martial are set aside or the sen tence is reduced and not when the findings and sentence are confirmed. Section 162 thus negatives a requirement to give reasons on the part of the confirming authority while con firming the findings and sentence of a court martial and it must be held that the confirming authority is not required to record reasons while confirming the findings and sentence of the courtmartial. With regard to post confirmation proceedings we find that subsection (2) of Section 164 of the Act provides that any person subject to the Act who considers himself ag grieved by a finding or sentence of any court martial which has been confirmed, may present a petition to the Central Government, the Chief of the Army Staff or any prescribed officer superior in command to the one who confirmed such finding or sentence and the Central Government, the Chief of the Army Staff or other officer, as the case may be, may pass such orders 70 thereon as it or he thinks fit. In so far as the findings and sentence of a court martial and the proceedings for confirmation of such findings and sentence are concerned it has been found that the scheme of the Act and the Rules is such that reasons are not required to be recorded for the same. Has the legislature made a departure from the said scheme in respect of post confirmation proceedings? There is nothing in the language of sub section (2) of Section 164 which may lend support to such an intention. Nor is there anything in the nature of post confirmation proceedings which may require recording of reasons for an order passed on the post confirmation petition even though reasons are not required to be recorded at the stage of recording of findings and sentence by a court martial and at the stage of confirmation of the findings and sentence of the court martial by the confirming authority. With regard to record ing of reasons the considerations which apply at the stage of recording of findings and sentence by the court martial and at the stage of confirmation of findings and sentence of the courtmartial by the confirming authority are equally applicable at the stage of consideration of the post confir mation petition. Since reasons are not required to be re corded at the first two stages referred to above, the said requirement cannot, in our opinion, be insisted upon at the stage of consideration of post confirmation petition under Section 164(2) of the Act. For the reasons aforesaid it must be held that reasons are not required to be recorded for an order passed by the confirming authority confirming the findings and sentence recorded by the court martial as well as for the order passed by the Central Government dismissing the post confir mation petition. Since we have arrived at the same conclu sion as in Sorn Datt Datta case (Supra) the submission of Shri Ganguli that the said decision needs reconsideration cannot be accepted and is. therefore, rejected. But that is not the end of the matter because even though there is no requirement to record reasons by the confirming authority while passing the order confirming the findings and sentence of the CourtMartial or by the Central Government while passing its order on the post confirmation petition, it is open to the person aggrieved by such an order to challenge the validity of the same before this Court under Article 32 of the Constitution or before the High Court under Article 226 of the Constitution and he can obtain appropriate relief in those proceedings. We will, therefore, examine the other contentions that have 71 been urged by Shri Ganguli in support of the appeal. The first contention that has been urged by Shri Ganguli in this regard is that under sub section (1) of Section 164 of the Act the appellant had a right to make a representa tion to the confirming authority before the confirmation of the findings and sentence recorded by the court martial and that the said right was denied inasmuch as the appellant was not supplied with the copies of the relevant record of the court martial to enable him to make a complete representa tion and further that the representation submitted by the appellant under sub section (1) of Section 164 was not considered by the confirming authority before it passed the order dated May 11, 1979 confirming the findings and sen tence of the court martial. The learned Additional Solicitor General, on the other hand, has urged that under sub section (1) of Section 164 no right has been conferred on a person aggrieved by the findings or sentence of a court martial to make a representation to the confirming authority before the confirmation of the said findings or sentence. The submis sion of learned Additional Solicitor General is that while sub section (1) of Section 164 refers to an order passed by a court martial, sub section (2) of Section 164 deals with the findings or sentence of a court martial and that the only right that has been conferred on a person aggrieved by the finding or sentence of a court martial is that under sub section (2) of Section 164 and the said right is avail able after the finding and sentence has been confirmed by the confirming authority. We find considerable force in the aforesaid submission of learned Additional Solicitor Gener al. Section 164 of the Act provides as under: "(1) Any person subject to this Act who considers himself aggrieved by any order passed by any court martial may present a petition to the officer or authority empowered to confirm any tinging or sentence of such court martial and the confirming authority may take such steps as may be considered necessary to satisfy itself as to the correct ness. legality or propriety of the order passed or as to the regularity of any proceeding to which the order relates. (2) Any person subject to this Act who considers himself aggrieved by a finding or sentence of any court martial which has been confirmed, may present a petition to the Central Government, the Chief of the Army Staff or any prescribed officer superior in command to the one who 72 confirmed such finding or sentence and the Central Govern ment, the Chief of the Army Staff or other officer, as the case may be, may pass such orders thereon as it or he thinks fit. " In sub section (1) reference is made to orders passed by a courtmartial and enables a person aggrieved by an order to present a petition against the same. The said petition has to be presented to the officer or the authority empowered to confirm any finding or sentence of such court martial and the said authority may take such steps as may be considered necessary to satisfy itself as to the correctness, legality or propriety of the order or as to the regularity of any proceedings to which the order relates. Sub section (2), on the other hand, makes specific reference to finding or sentence of a court martial. and confers a right on any person feeling aggrieved by a finding or sentence of any court martial which has been confirmed, to present a peti tion to the Central Government, Chief of the Army Staff or any prescribed officer. The use of the expression "order" in sub section (1) and the expression "finding or sentence" in sub section (2) indicates that the scope of sub section (1) and sub section (2) is not the same and the expression "order" in sub section (1) cannot be construed to include a "finding or sentence". In other words in so far as the finding and sentence of the court martial is concerned the only remedy that is available to a person aggrieved by the same is under sub section (2) and the said remedy can be invoked only after the finding or sentence has been con firmed by the confirming authority and not before the con firmation of the same. Rule 147 of the Rules also lends support to this view. In the said Rule it is laid down that every person tried by a court martial shall be entitled on demand, at any time after the confirmation of the finding and sentence, when such confirmation is required, and before the proceedings are destroyed, to obtain from the officer or person having the custody of the proceeding a copy thereof including the proceedings upon revision, if any. This Rule envisages that the copies of proceedings of a court martial are to be supplied only after confirmation of the finding and sentence and that there is no right to obtain the copies of the proceedings till the finding and sentence have been confirmed. This means that the appellant cannot make a grievance about non supply of the copies of the proceedings of the court martial and consequent denial of his right to make a representation to the confirming authority against the findings and sentence of the court martial before the confirmation of the said finding and sentence. Though a person aggrieved by the finding or sentence of a courtmar tial has no right to make a representation before the confi ramtion 73 Of the same by the confirming authority, but in case such a representation is made by a person aggrieved by the finding or sentence of a court martial it is expected that the confirming authority shall give due consideration to the same while confirming the finding and sentence of the court martial. In the present case the representation dated December 18, 1978 submitted by the appellant to the confirming au thority was not considered by the confirming authority when it passed the order of confirmation dated May 11, 1979. According to the counter affidavit filed on behalf of Union of India this was due to the reason that the said represen tation had not been received by the confirming authority till the passing of the order of confirmation. It appears that due to some communication gap within the department the representation submitted by the appellant did not reach the confirming authority till the passing of the order of con firmation. Since we have held that the appellant had no legal right to make a representation at that stage the non consideration of the same by the confirming authority before the passing of the order of confirmation would not vitiate the said order. Shri Ganguli next contended that the first and the second charge levelled against the appellant are identical in nature and since the appellant was acquitted of the second charge by the court martial his conviction for the first charge can not be sustained. It is no doubt true that the allegations contained in the first and the second charge are practically the same. But as mentioned earlier, the second charge was by way of alternative to the first charge. The appellant could be held guilty of either of these charges and he could not be held guilty of both the charges at the same time. Since the appellant had been found guilty of the first charge he was acquitted of the second charge. There is, therefore, no infirmity in the court martial having found the appellant guilty of the first charge while holding him not guilty of the second charge. Shri Ganguli has also urged that the findings recorded by the court martial on the first and third charges are perverse inasmuch as there is no evidence to establish these charges. We find no substance in this contention. The first charge was that the appellant on or about December 1975, having received 60.61 meters woollen serge from M/s Ram Chandra & Brothers, Sadar Bazar, Jhansi for stitching 19 coats and pants for Class IV civilian employees of his unit with intent to defraud 74 got 19 altered ordnance pattern woollen pants issued to the said civilian employees instead of pants stitched out of the cloth received. To prove this charge the prosecution exam ined Ram Chander P.W. 1 and Triloki Nath P.W. 2 of M/s Ram Chandra & Brothers, Sadar Bazar, Jhansi who have deposed that 60.61 meters of woollen serge cloth was delivered by them to the appellant in his office in December, 1975. The evidence of these witnesses is corroborated by B.D. Joshi, Chowkidar, P.W. 3, who has deposed that in the last week of December, 1975, the appellant had told him in his office that cloth for their liveries had been received and they should give their measurements. As regards the alteration of 19 ordnance pattern woollen pants which were issued to the civilian employees instead of the pants stitched out of the cloth that was received, there is the evidence of N/sub. P. Vishwambharam P.W. 19 who has deposed that he was called by the appellant to his office in the last week of December, 1975 or the first week of January, 1976 and that on reaching there he found ordnance pattern woolien pants lying by the side of the room wall next to the appellant 's table and that the appellant had called Mohd. Sharif P.W. 15 to his office and had asked him to take out 19 woolien trousers out of the lot kept there in the office. After Mohd. Sharif had select ed 19 woollen trousers the appellant told Mohd. Sharif to take away these pants for alteration and refitting. The judge advocate, in his summing up, before the court martial, has referred to this evidence on the first charge and the court martial, in holding the appellant guilty of the first charge, has acted upon it. It cannot, therefore, be said that there is no evidence to establish the first charge levelled against the appellant and the findings recorded by the court martial in respect of the said charge is based on no evidence or is perverse. The third charge, is that the appellant having come to know that Capt. Gian Chand Chhabra while officiating OC of his unit, improperly submitted wrong Contingent Bill No. 341/Q dated September 25, 1975 for Rs.16,280 omitted to initiate action against Capt. Chhabra. In his summing up before the court martial the judge advocate referred to the CDA letter M/IV/191 dated November 20, 1975 (Exh. 'CC ') raising cert in objection with regard to Contingent Bill No. 341/Q dated September 25, 1975 for Rs.16,280 and pointed out that the said letter was received in the unit on or about November 28, 1975 and bears the initials of the appellant with the aforesaid date and remark "Q Spk with details". This would show that the appellant had knowledge of the Contingent Bill on November 28, 1975. It is not the case of the appellant that he made any complaint against Captain 75 Chhabra thereafter. It cannot, therefore, be said that the finding recorded by the court martial on the third charge is based on no evidence and is perverse. In the result we find no merit in this appeal and the same is accordingly dismissed. But in the circumstances there will be no order as to costs. R.N.J. Appeal dismissed.

The Appellant was officiating as a Major though he held a substantive rank of Captain as a permanent Commissioned Officer of the army when on December 27, 1974 he took over as the Officer Commanding 38 Coy. A.S.C. (Sup) Type 'A ' attached to the Military Hospital, Jhansi. In August, 1975 the Appellant went to attend a training course and returned in the first week of November. In his absence Captain G.C. Chhabra was commanding the unit of the appellant and he submitted a Contingent Bill dated September 25, 1975 for Rs.16,280 for winter liveries of the depot civilian chowki dars and sweepers. The said Bill was returned by the Con troller of Defence Accounts (CDA) with certain objections. Thereupon the appellant submitted a fresh contingent Bill dated December 25, 1975 for a sum of Rs.7,029.57. In view of the wide difference in the two Contingent Bills, the CDA reported the matter to the Headquarters for investigation and a Court Enquiry blamed the appellant for certain lapses. After considering the said report of the Court of En quiry the General Officer Commanding, M.P., Bihar and Orissa recommended that 'severe displeasure ' (to be recorded) of the General Officer Commanding in Chief of the Central Command be awarded to the appellant. The General Officer Commanding in Chief Central Command, however. did not agree with the said opinion and by order dated August 26, 1977 directed that disciplinary action be taken against the appellant for the lapses. Pursuant to the said order a charge sheet dated July 20, 1978 containing three charges was served on the appellant and it was directed that he be tried by General Court Mar tial. The first charge was, doing of a thing with intent to defraud under section 52(f) of the Act. The second charge was alternative to the first charge i.e. commit 45 ting an act prejudicial to good order and military disci pline under section 63 of the Act and the third charge was also in respect of offence under section 63 of the Act. 'the appellant pleaded not guilty to the charges. The General Court Martial on November 29, 1978 found him guilty of first and third charge and awarded the sentence of dis missal from service. Thereupon the appellant submitted petition dated December 18, 1978 to the Chief of Army Staff praying that the findings of the General Court Martial be not confirmed. The Chief of the Army Staff by his order dated May 11, 1979 confirmed the findings and sentence of the General Court Martial. The appellant thereafter submit ted a post confirmation petition under section 164(2) of the Act. This was rejected by the Central Government by order dated May 6, 1980. Thereupon the appellant filed a writ petition in the High Court of Delhi which was dismissed in limine. Hence this appeal by special leave directed to be heard by the Constitution Bench for the reason that it involves the question as to whether it was incumbent for the Chief of the Army Staff, while confirming the findings and sentence of the General Court Martial and for the Central Government while rejecting the post confirmation petition of the appellant to record their reasons for the orders passed by them. Dismissing the appeal, this Court, HELD: The requirement that reasons be recorded should govern the decisions of an administrative authority exercis ing quasi judicial functions irrespective of the fact wheth er the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. [62H; 63A B] The need for recording of reasons is greater in a case where the order is passed at the original stage. The appel late or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revision al authority agrees with the reasons contained in the order under challenge. [63B] Except in cases where the requirement has been dispensed with expressly or by necessary implication, an administra tive authority exercising judicial or quasi judicial func tions is required to record ' the reasons for its decision. [65B] 46 The provisions contained in the and the Army Rules, 1954 negative a requirement to give reasons for its findings and sentence by a Court Martial and reasons are not required to be recorded in cases where the Court Martial makes a recommendation to mercy. Similarly, reasons are not required to be recorded for an order passed by the confirm ing authority confirming the findings and sentence recorded by the Court Martial as well as for the order passed by the Central Government dismissing the post confirmation peti tion. [70E F] Sub section (1) of section 164 of the enables a person aggrieved by an order passed by a Court Martial to present a petition against the same. The expression "order" under sub section (1) does not include a finding or sentence of the Court Martial and in so far as the finding and sen tence of the Court Martial is concerned the only remedy that is available to a person aggrieved by the same is under sub section (2) of section 164 of the and the said remedy can be invoked only after the finding or sentence has been confirmed by the confirming authority and not before the confirmation of the same. [72B; D E] Though a person aggrieved by the finding or sentence of a Court Martial has no right to make a representation before the confirmation of the same by the confirming authority, but in case such a representation is made by a person ag grieved by the finding or sentence of a Court Martial it is expected that the confirming authority shall give due con sideration to the same while confirming the finding and sentence of the Court Martial. [72H; 73A] Som Datt Datta vs Union of India & Ors., [1969] 2 S.C.R. 177; Bhagat Raja vs The Union of India & Ors., ; ; Mahabir Prasad Santosh Kumar vs State of U.P. & Ors., ; ; Woolcombers of India Ltd. vs Woolcombers Workers Union & Ant., [1974] I S.C.R. 503; Siemens Engineering & Manufacturing Co. of India Ltd. vs Union of India & Anr., ; Phelps Dodge Corporation vs National Labour Relations Board, [1940] 85 Law Edn. 1271 at p. 1284; Securities and Exchange Commis sion vs Chenery Corporation; , at p. 636; John T. Dunlop vs Waiter Bachewski, ; 377; Regina vs Gaming Board for Great Britain, Exparte Benaim & Khaida, ; at p. 431; Mc Innes vs Onslow Fane & Anr., at p. 1531; Breen vs Amalgamated Engineering Union & Ors., ; Alexander Machinery (Dudley) Ltd. vs Crabtree, [1974] I.C.R. 120; Regina vs Immigration Appeal Tribunal Ex Parte Khan (Mahmud), ; Pure Spring Co. Ltd. vs Minister of National Revenue, 47 at p. 539; Re R.D.R. Construction Ltd. & Rent Review Commission, 168; Re Yar mouth Housing Ltd. & Rent Review Commission, ; Osmond vs Public Service Board of New South Wales, ; Public Service Board of New South Wales vs Osmond, ; M/s. Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala & Ors., ; ; Madhya Pradesh Industries Ltd. vs Union of India & Ors., ; ; Tranvancore Rayon Ltd. vs Union of India; , ; Tarachand Khatri vs Municipal Corporation of Delhi & Ors., [1977] 2 S.C.R. 198; Raipur Development Authority & Ors. vs M/s. Chokhamal Con tractors & Ors., [1989] 2 S.C.C. 721; A.K. Kraipak & Ors. vs Union of India & Ors. , ; R. vs Deputy Industrial Injuries Commissioner ex P. Moore, [1965] 1 Q.B. 456 and Mahon vs Air New Zealand Ltd., , referred to.

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ition No. 343 of 1972. (Article 32 of the Constitution.) A. K. Sen, Anil Bhatnagar, K. Khaitan, section R. Agarwal and Praveen Kumar for the Petitioners. A. P. Chatterjee, Govind Mukhoty and G. section Chatterjee for the Respondent. 620 The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The old question "what is compensation" is back again, Fortunately, Constitutional Amendments and Judicial precedents have narrowed the scope for controversy. The question has arisen this way: The appellant, the oriental Gas Company Ltd. was originally constituted in England by a deed of settlement in April 1853, as the oriental Gas Company for the purpose of manufacture, supply distribution and sale of fuel gas in Calcutta. It was later incorporated in accordance with the provisions of the English Joint Stock Companies Act, 1862. By a subsequent arrangement the control and management of the Company passed from British into Indian hands. Over the course of the years the Company acquired extensive properties and became the owner of large plants. machinery, buildings, lands pipelines, stores etc. 'the total market value of the appellants industrial undertaking was estimated by the appellant as on 22nd March, 1962, at Rs. 7,00,00,000/ . In 1958, the Government of West Bengal, being of the view that the Company which enjoyed a monopoly in the supply of Gas in Calcutta was negligent in looking after the interest of the consumers, appointed a Committee to inquire into the unsatisfactory condition of supply of gas in Calcutta and to suggest remedial measures including valuation of the undertaking for the purpose of taking over the gas supply undertaking. The Member of the Committee were: the Chief Secretary, the Sheriff of Calcutta, the Secretary, Commerce and Industries Department, the Administrator, Durgapur Project and the Director, Central Fuel Research Institute. The Committee was assisted by several experts. The Committee re F ported that the present Gas Works in Calcutta including the distributing system was in a bad state of disrepair and a very poor state of maintenance. The Committee recommended that the Gas Works and the distribution system should be taken over immediately under the management of the State Govt. in order to ensure and maintain the supply of gas to the consumers in Calcutta. After the report of the Committee was received by the Government of West Bengal, the West Bengal Legislature enacted the oriental Gas Company Act (West Bengal Act XV of 1960) providing for the taking over for a limited period, of the management and control and the subsequent acquisition of the undertaking of the oriental Gas Co. Ltd. The "undertaking of the Company" was defined to mean "the properties of the company, movable or immovable other than cash balances and reserve funds but including works, workshops, plants, machineries, furniture, equipments and stores, and lands appertaining thereto, actually in use immediately 621 before the commencement of this Act, or intended to be used, in connection with the production of gas or supply thereof in Calcutta and its environs;". Section 3 of the Act provided for the taking over of the management and control of the undertaking of the Company for a period of five years from the date specified in a notification to be issued. Section 7 provided for the acquisition of the undertaking of the Company at any time within the period of the said five years. Section 8(])(a) provided for the payment of annual compensation during the period of the take over of the management and control of the undertaking of the Company. Section 8(1)(b) provided for the compensation payable for the acquisition of the undertaking of the Company. In the present appeal we are concerned with the compensation payable for the acquisition of the undertaking of the Company, that is, we are concerned with Section 8(1) (b) only. Section 8 (1) (1) as originally enacted was as follows: "8 (1) (b) in the case of acquisition of the undertaking of the company, the total compensation payable shall be a sum representing the purchase price of the undertaking of the company reduced by such depreciation as may he allowed by the Tribunal referred to in sub section (2) after considering the period and the nature of the use and the present condition of the properties concerned on the date of vesting in the State Government under Section 7, or a sum representing eight times the average net income of the undertaking of the company over a period of five complete years preceding the year in which the undertaking of the company has been transferred to the State Government under clause (a) of Section 4 for the purpose of management and control, whichever is less. Explanation In this sub section (i) "Purchase price of the undertaking of the company" means the aggregate of the prices of the different parts of the undertaking of the company at the respective dates on which parts were purchased, acquired or constructed by the Company; (ii) "net income of the undertaking of the Company" means the difference between the amount of gross revenue, receipts and other general receipts, accountable in the assessment of Indian Income tax arising from, and ancillary or incidental to, the business of the company and the amount of expenditure incurred on the following 622 (a) rents, rates and taxes, (b) interest on loans and security deposits, (c) maintenance and repair, (d) collection charges, (e) cost of management, including the remuneration of managing agents, if any, (f) other expenses admissible under the law for the time being in force in the assessment of Indian income tax and arising from, and ancillary or incidental to, the business of the Company, and (g) such other expenses as may be prescribed by rules made under this Act". Section 8(2) provided that the compensation was to be deter mined by a Tribunal to be appointed by the State Government. The decision of the Tribunal was subject to an appeal to the High Court. Section 9(2) provided that the amount of compensation was to be paid by the State Government in bonds carrying interest at the rate of 3% per annum from the date of issue and payable in 20 equal annual instalments. Pursuant to the provisions of the oriental Gas Company Act, 1960, a notification dated 3rd October, 1960, was issued to take over the management and control of the undertaking for a period of five years. Later by a notification dated 22nd March, 1962, the undertaking of the oriental Gas Company Ltd., was acquired by the Government pursuant to the power vested in it by Section 7 of the Oriental Gas Company Act. In the meanwhile the Company filed a petition under Article 226 of the Constitution before the Calcutta High Court challenging the vires of the Act on various grounds. The Calcutta High Court dismissed the writ Petition upholding the validity of the Act. Ray, J. (as he then was) held: (i) The appellant has no legal right to maintain the petition (2) The appellant could not question the validity of the Act on the ground that its provisions infringed its fundamental rights under Articles 14, 19, and 31 in view of Article 31A(1)(b) of the Constitution; (3) The West Bengal Legislature had the legislative competence to pass the impugned Act by virtue of Entry 42 of List III of the Seventh Schedule to the Constitution; (4) Entry 25 of List IT also conferred sufficient authority and power on the State Legislature to make laws affecting gas and gas works; and (5) even if the Act inci 623 dentally trenched upon any production aspect, the pith and substance of the legislation was gas and gas work within the meaning of entry 25 of List II. The Company preferred an appeal to the Supreme Court. The question relating to fundamental rights was not raised before the Supreme Court. The Supreme Court, while upholding the locus standi of the Company to file the Writ Petition, rejected the contention of the Company relating to the competence of the West Bengal State Legislature to pass the impugned Act. The decision of the Supreme Court was rendered on 5th February, 1962, and is reported in The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and others(1). As mentioned by us earlier, the undertaking of the Company was acquired on 22nd March, 1962, by a notification of that date. By further notification issued under Section 8 of the Act a Tribunal was constituted for the purpose of determining the compensation payable in respect of the acquisition of the undertaking. In August 1965, the oriental Gas Company Ltd. filed a petition under Article 226 of the Constitution challenging the provisions of the Act relating to compensation. The Writ Petition was, however, dismissed as withdrawn in May 1969 as the oriental Gas Company Act, 1960 was amended in the meanwhile by the President 's Act is of 1968, the oriental Gas Company (Amendment) Act 1968. The Amending Act substituted a different provision for what was the original Section 8 (1) (b) . Section 8(1)(b) as amended by the President 's Act is of 1968 was as follows: "8(1) (b) In the case of acquisition of the undertaking of the Company, the compensation payable by the State Government shall be determined in accordance with the principles specified in the Schedule". The schedule referred to in the amended Section 8(1)(b) was as follows: "THE SCHEDULE [See Section 8 (1) (b)] Principles for determining compensation for acquisition of the undertaking of the company. Paragraph 1: The compensation to! be paid by the State Government to the Company in respect of acquisition of the undertaking thereof shall be an amount equal to the sum total of the value of the (1) [1962] Suppl. 3 SC.R. 1. 6 549 SCI/78 624 properties and assets of the Company as on the date of acquisition of the undertaking of the Company calculated in accordance with the provisions of paragraph II less the sum total of the liabilities and obligations of the Company as on that date calculated in accordance with the provisions of paragraph III, together with the interest on such amount calculated in accordance with the provisions of paragraph IV. Paragraph II: (a) The market value on the date of acquisition of the undertaking of the company; (i) of any land or buildings; (ii) of any plant, machinery or other equipment; (iii) of any shares, securities, or other investments held by the Company; (b) the total amount of the premiums paid by the Company up to the date of acquisition of the undertaking of the Company in respect of all leasehold properties reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (c) the amount of debts due to the Company on the date of acquisition of the undertaking of the Company, whether secured or unsecured, to the extent to which they are reasonably considered to be recoverable; (d) the amount of cash held by the Company on the date of acquisition of the undertaking of the company, whether in deposit with a Bank or otherwise; (e) the market value on the date of acquisition of the undertaking of the company of all tangible assets and properties other than those falling within any of the preceding clauses. Paragraph III: The total amount of liabilities and obligations incurred by the Company in connection with the formation. management and administration of the under taking of the Company and subsisting immediately before the date of acquisition of the undertaking of the company; Provided that any of the properties, assets, liabilities or obligations of the Company as on the date of acquisition of the undertaking of the Company shall not include such properties or assets as were added, invested or acquired and such liabilities or obligations as were incurred in connection with 625 such addition, investment or acquisition by the State Government during the period of management and control of the undertaking of the company. Paragraph IV: The interest referred to in Paragraph I shall be on the amount mentioned in the said paragraph for the period commencing from the date of vesting of the under taking of the Company under sub section (2) of Section 7 and ending with the date immediately before the date of enactment of the oriental Gas Company (Amendment) Act, 1968, calculated at the average bank rate during the said period". It should also be mentioned here that Section 9(2) was also amended and it was provided that the Bonds should carry interest from the date of enactment of the amending Act and not from the date of issue. The main provisions of the amending Act relating to the determination and payment or compensation were, however, short lived. In 1970 the West Bengal Legislature passed the Oriental Gas Company (Amendment) Act, 1970 (West Bengal Act 6 of 1970) once again substituting a new Section 8(1) (b) and Section 9(2). The new Section 8(1) (b) was as follows: "8(1)(b) In the case of acquisition of the undertaking of the Company, the compensation payable by the State Government shall be a sum representing eight times the average net income of the undertaking of the Company over a period of five complete years preceding the year in which the under taking of the Company has been transferred to the State Government under clause (a) of. Section 4 for the purpose of management and control. Explanation: In this sub section, "net annual income of the undertaking of the Company" means the difference between the amount of gross revenue receipts and other general receipts accountable in the assessment of Indian income tax arising from, and ancillary or incidental to, the business of the Company and the amount of expenditure incurred on the following (a) rents, rates and taxes, (b) interest on loans and security deposits, (c) maintenance and repair, (d) collection charges, (e) cost of management, including the remuneration of. Managing Agents, if any, (f) other expenses admissible under the law for the time 626 Being force in the assessment of Indian income tax and arising from, and ancillary or incidental to, the business of the Company". The amended Section 9(2) provided for interest on the bonds from the date of vesting of the Undertaking of the Company under Section 7. It is thus seen that the provisions of the oriental Gas Company Act as originally enacted in 1960 provided for the determination of compensation by the method of cost less depreciation, or the method of capitalisation and directed the payment of whichever was less, in the shape of bonds carrying interest at 3% from the date of issue of the bonds. The Act as amended in 1968 provided for the determination of compensation on the basis of the full market value of the undertaking and the payment of the compensation in the shape of bonds carrying interest from the date of the enactment of the Amendment Act of 1968 i.e. 7th May, 1968. The Act as finally amended in 1970 and as it now stands provides for the determination of the compensation by the method of capitalisation and the payment of the compensation in bonds carrying interest from the date of the acquisition. The appellant Company is aggrieved by the method of determination of compensation under the Act as amended in 1970 and has filed the present Writ Petition in this Court questioning the vires of Sections 8(1)(b) and 9(2) of the Act. The submissions of Shri A. K. Sen, learned Counsel for the appellant were as follows: Article 31(2) of the Constitution as it stood on the date of the acquisition of the undertaking required the legislature to specify the principles on which compensation, i.e. a 'just equivalent ' af what the owner had been deprived of, had to be determined. The principles so specified had necessarily to be relevant to the determination of such compensation. The principle of capitalising net profit as a sole factor was not a relevant principle in determining the compensation payable for the acquisition of a public utility undertaking. It might be a relevant principle to determine the value of the intangible assets of a public utility undertaking but was wholly irrelevant to determine the value of the tangible assets of a public utility undertaking. Section 8(1)(b) of the oriental Gas Company Act, as amended in 1970, therefore, offended article 31 (2) of the Constitution. The choice of the period of five years immediately preceding the take over for the purpose of calculating the average annual net profit was inappropriate as it did not reflect the true earning capacity of the undertaking. There were special reasons why the profits were 627 low during the two or three years immediately preceding the takeover. The choice of the multiplier of eight was also not based on any relevant principle. The provision for payment in bonds payable in twenty years and carrying interest at 3% per annum at once had the effect of reducing the compensation in such a manner as not to approximate to what was determined. This too was violative of Article 31(2). Shri Sen relied upon the decision of this Court in Rustom Cavasjee Cooper vs Union of India(1) and passages from Alfred Jahr 's Eminent Domain, Valuation and Procedure, American Jurisprudence Vol. 27 and American Law Reports 2nd series, Vol. A resume of Constitutional history and the story of the ding dong legal battles that were fought may not be out of place here. It may help us to understand and, perhaps even to solve the problem before us. It will enable us to appreciate the relevance or irrelevance of the principle specified for determining compensation. Clauses (1) and (2) of Article 31 of the Constitution, as they stood originally, were as follows: "31. Compulsory acquisition of property. (1) No person shall be deprived of his property save by authority of law. (2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given". The word 'compensation ' occurring in Article 31(2) was not qualified by any adjective such as 'just ' or 'fair ' unlike Section Sl of the Commonwealth of Australia Constitution Act and the 5th Amendment to the Constitution of America, in both of which provisions, the qualifying adjective just is used. Even, so, in Bela Banerjee 's case(2) the Supreme Court introduced the concept of a 'just equivalent ' and held that compensation meant 'a just equivalent of what the owner had H (1) ; (2) ; 628 been deprived of. It was said that the principles to be laid down by the legislature to determine the compensation were to be subject to the 'basic requirement of full indemnification of the expropriated owner '. If the principles did not take into account 'all the elements which make up the true value of the property appropriated ' the legislation was liable to be struck down. In other words what was to be given was full compensation on the basis of the market value of the property acquired. The decision was capable of creating great difficulty in the sense of discomfiting legislation for the taking over of big estates and the nationalisation of large industrial undertakings. In the words of Shah, J., in State of Gujarat vs Shri Shantilal Mangaldas & ors.(l), the decisions in Bela Banerjee 's case and Subodh Gopal Bose 's(2) case " . were therefore likely to give rise to formidable problems, when the principles specified by the Legislature as well as the amounts determined by the application of those principles, were declared justiciable. By qualifying 'equivalent ' by the adjective 'just ', the enquiry was made more `controversial; and apart from the practical difficulties, the law declared by this Court also placed serious obstacles in giving effect to the directive principles of State policy incorporated in article 39". So it was that Article 31 was amended by the Constitution 4th Amendment Act in 1955. `The second clause of Article 31 as amended by the Constitution 4th Amendment Act was as follows: "No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate. " The true effect of the amendment was that the adequacy of the compensation provided by 'the law was made non justiciable. Again in the words of Shah, J., in Shantilals case, "A challenge to a statute that the principles specified by it do not award a just equivalent will be in clear violation of the Constitutional declaration that the inadequacy of the compensation provided is not justiciable". The intended effect (1) ; (2) ; 629 of the amendment had, however been previously nullified to a large extent by the decisions in P. Vajravelu Mudaliar vs Special Deputy Collector, Madras & Anr.(1) (p. 614) and the Union of India vs The Metal Corporation of India Ltd. & Anr.(2) where it was reiterated that the word 'compensation ' signified a, 'just equivalent ' of what the owner has been deprived of. In Vajravelu 's case it was observed (at p. 626): "The fact that Parliament used the same expressions namely, "compensation" and "principles" as were found in article 31 before the Amendment is a clear indication that it accepted the meaning given by this Court to those expressions in Mrs. Bela Banerjee 's case. It follows that a Legislature in making a law of acquisition or requisition shall provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the 'just equivalent ' of what the owner has been deprived of. If Parliament intended to enable a Legislature to make such a law. without providing for compensation so defined, it would have used other expressions like 'price ' 'consideration ' etc." Having said that, Subba Rao, J., however, went on to say that the argument that because the word compensation meant 'just equivalent ' for the property acquired, therefore, this Court could ascertain whether it was a 'just equivalent ' would render the amendment of the Constitution nugatory. He observed that neither the principles prescribing the 'just equivalent ' nor the 'just equivalent ' could be questioned by the Court on the ground of the inadequacy of the compensation fixed or arrived at by the working of the principles. The matter was illustrated by the statement that the value of a ' house which was acquired could be fixed in many ways: estimate by an Engineer, value rejected by comparable sales, capitalisation of rent etc. The application of (different principles might lead to different results. No one could insist that only that principle which yielded the highest result should be adopted. On the other hand the value of land acquired in 1950 could not be fixed on the basis of its value in 1930 or though 100 acres were acquired compensation would be given only for 50 acres. Principles so fixing the compensation would be irrelevant. Subba Rao, J., summarised the position thus (at p. 629): "If the Legislature makes a law for acquiring a property by providing for an illusory compensation or by indicating the principles for ascertaining the compensation which do not (1) ; (2) ; 630 relate to the property acquired or to the value of such property at or within a reasonable proximity of the date of acquisition or the principles are so designed and so arbitrary that they do not provide for compensation at all, one can easily hold that the Legislature made the law in fraud of its powers. Briefly stated the legal position is as follows: If the question pertains to the adequacy of compensation, it is not justiciable; if the compensation fixed or the principles evolved for fixing it disclose that the legislature made the law in fraud of powers in the sense we have explained, the question is within the jurisdiction of the Court". In Vajravelu 's case the compensation to be paid was the value of the land at the date of the publication of the notification under the Land Acquisition Act or an amount equal to the average market value cf the land during the five years immediately preceding such date, whichever was less. It was also provided that compensation. was to be determine on the basis on the use to which the land was actually put on the date of publication of the notification and not on the basis of any potential value of the acquired land. This Court held that in the context of continuous rise of land prices owing to abnormal circumstances it could not be said that the fixation of average price during the preceding five years was not a relevant principle for ascertaining the value of the land on or about the date of acquisition. It was also held that though the potential value of the acquired land was generally an element to be considered in valuing land? the exclusion of such an element from consideration merely related to the inadequacy of the compensation and did not constitute a fraud on power so as to invalidate the provision. The decision amounted to this that while the principles specified should aim at the ascertainment of a just equivalent, the principles so aimed could not be said to be irrelevant merely because the application of some other principles might have yielded results more favorable to the owner of the acquired property. In the case of Metal Corporation of India & Anr., Subba Rao, C. J., observed: "The law to justify itself has to provide for the payment of a 'just equivalent ' to the land acquired or lay down principles which will lead to that result. If the principles laid down are relevant to the fixation of compensation and are not arbitrary, the adequacy of the resultant product cannot be called in question in a Court of law. The validity of the principles, judged by the above tests, falls within judicial scrutiny, and if they stand the tests, the adequacy of the pro duct falls outside its jurisdiction". Judging by those tests, the two 631 principles specified for the ward of compensation in the Act impugned in that case namely "(i) compensation equated to the cost price in the case of unused machinery in good condition, and (ii) written down value as understood in the Incometax law as the value of used machinery" were held to be irrelevant to the fixation of the value of the machinery on the date of acquisition. The case of Vajravelu and Metal Corporation of India & Anr. were both considered in great detail in Shantilal 's case. The decision in the case of Metal Corporation of India was expressly overruled and the two principles which were found to be irrelevant in Metal Corporation of India 's case were held to be relevant principles for determination of compensation. The observations in Vajravelu 's case suggesting that compensation meant a 'just equivalent ' and that the principles to be specified must relate to ascertainment of a 'just equivalent ' were held to be obiter. The effect of the amendments of Article 31(2) made by the Constitution 4th Amendment Act 1955 was stated to be as follows: D "it clearly follows from the terms of article 31(2) as amended that the amount of compensation payable, if fixed by the Legislature, is not justiciable,, because the challenge in such a case, apart from a plea of abuse of legislative power, would be only a challenge to the adequacy of compensation. If compensation fixed by the Legislature and by the use of the expression 'compensation ' we mean what the Legislature justly regards as proper and fair recompense for compulsory expropriation of property and not something which by abuse of legislative power though called compensation is not a recompense at all or is something illusory is not justiciable, an the plea that it is not a just equivalent of the property compulsorily acquired, is it open to the Courts to enter upon an enquiry whether the principles which are specified by the Legislature for determining compensation do not award to the expropriated owner a just equivalent ? In our view, such an enquiry is not open to the Courts under the statutes enacted after the amendments made in the Constitution by the Constitution (Fourth Amendment) Act. If the quantum of compensation fixed by the I legislature is not liable to be canvassed before the Court on the ground that it is not a just equivalent, the principles specified for determination of compensation will also not be open to challenge on the plea that the compensation determined by 632 the application of those principles is not a just equivalent. The right declared by the Constitution guarantees that com compensation shall be given before a person is compulsorily compulsorily of his property for a public purpose. What is fixed as compensation by statute, or by the application of principles specified for determination of compensation is guaranteed: it does not mean however that some thing fixed or determined by the application of specified principles which is illusory or can in no sense be regarded as compensation must be upheld by the Courts, for, to do so, would be to grant a charter of arbitrariness, and permit a device to defeat the constitutional guarantee. But compensation fixed or determined on principles specified by the Legislature cannot be permitted to he challenged on the somewhat indefinite plea that it is not a just or fair equivalent. Principles may be challenged on the ground that they are irrelevant to the determination of compensation but not on the plea that what is awarded as a result of the application of those principles is not just or fair compensation. A challenge to a statute that the principles specified by it do not award a just equivalent will be in clear violation of the constitutional declaration that inadequacy of compensation provided is not justiciable". After Shantilal 's case, the effect of the amendment of Article 31(2) by the Constitution 4th Amendment Act again fell to be considered by this Court in R. C. Cooper vs Union of India(l) a decision of the Full Court. There is a controversy whether this case was a retreat from the position taken in Shantilal 's case. Later in Keshavananda Bharti 's(2) case Shelat, Hegde, Grover, Jaganmohan Reddy and Mukherjee JJ., expressed the view that Cooper 's case did not over rule Shantilal 's case while Dwivedi and Chandrachud, JJ. expressed the view that Shantilal 's case was in substance overruled by Cooper 's case. This uncertainty which is said to have resulted from the decision e in Cooper 's case led to the 25th Amendment of the Constitution. As a result of the 25th Amendment Article 31(2) came to read as follows : "31(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for requisitioning or requisitioning of (1) ; (2) 633 the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or deter mined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash: Provided that in making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority referred to in clause (1) of article 30, the State shall ensure that the amount fixed or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause". So much for Constitutional history. We are not concerned in this case. with the 25th Amendment. We are concerned with Article 31(2) as it stood after the 4th Amendment and before the 25th Amendment. On a question of interpretation or Article 31(2) the decision in Cooper 's case, therefore, has the final word. In Cooper 's case Shah, J., who spoke for the Court recognised the apparently conflicting views expressed in Vajravelu 's case and E case but held, that both the lines of thought converged in the ultimate result that the principles specified by the law for determination of compensation were beyond the pale of challenge, if they were relevant to the determination of compensation and were recognised principles applicable in the determination of compensation for properly compulsorily acquired and if the principles were appropriate in determining the value of the class of property sought to be acquired. The provisions of the Banking Companies (Acquisition and Transfer of Undertaking) Act 22 of 1969 were struck down on the ground that relevant principles were not specified for the determination of compensation. Instead of providing for valuing the entire undertaking as a unit, the Act provided for determining the value, reduced by the liabilities, of only some of the components which constituted the undertaking. It also provided for different methods of determining compensation in respect of different components. Since the undertaking was sought to be acquired as a going concern the goodwill and the value of the un. expired long term leases had also to be included in the assets of the banks. These important components of the Undertakings were excluded. It was, therefore, held that the principles specified were irrelevant for the determination of compensation of Banking Companies. The Court, however, observed that the science of valuation of property recognised 634 several principles or methods for determining the value to be paid as compensation to the owner for loss of his property and that if an appropriate method or principle for determination of compensation was applied, the fact that by the application of another principle which was also appropriate, a different value was leached, would not justify the Court in entertaining the contention that out of the two appropriate methods, one more generous to the owner should have been applied by the Legislature. It was observed that if several principles were appropriate and one was selected for determination of the value of the property to be acquired, selection of that principle to the exclusion of other principles was not open to challenge since the selection had to be left to the wisdom of the Parliament. The Court then went on to refer to some of tile important methods of determination of compensation, and observed (at p. 600 and 601): "The important methods of determination of compensation are (i) market value determined from sales of comparable properties, proximate in time to the date of acquisition, similarly situate, and possessing the same or similar advantages and subject to the same or similar disadvantages. Market value is the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase; (ii) capitalization of the net annual profit out of the property at a rate equal in normal cases to the return from gilt edged securities. Ordinarily value of the property may be determined by capitalizing the net annual value obtainable in the market at the date of the notice of acquisition; (iii) where the property is a house, expenditure likely to be incurred for constructing a similar house? and reduced by the depreciation for the number of years since it was constructed; (iv) principle of reinstatement where it is satisfactorily established that reinstatement in some other place is bona fide intended, there being no general market for the property for the purpose for which it is devoted (the purpose being a public purpose) and would have continued to be devoted, but for compulsory acquisition. Here compensation will be assessed on the basis of reasonable cost of reinstatement; (v) when the property has outgrown its utility and it is reasonably incapable of economic use, it may be valued as land plus the break up value of the structure. But the fact that the acquirer does not intend to use the property for which it is used at the time of acquisition and desires to demolish it or use it for other purposes is irrelevant; and (vi) the property to be acquired has ordinarily to be 635 valued as a unit. Normally an aggregate of the value of A different components will not be the value of the unit. These are, however, not the only methods. The method or determining the value of property by the application of an appropriate multiplier to the net annual income or profit is a satisfactory method of valuation of lands with buildings, only if the land is fully developed, i.e., it has been put to full use legally permissible and economically justifiable, and the income out of the property is the normal commercial and not a controlled return, or a return dcpreciated on account of special circumstances. It the property is not fully developed, or the return is not commercial the method may yield a misleading result. xxx xxx But when an undertaking is acquired as a unit the principles for determination of compensation must be relevant and also appropriate to the acquisition of the entire under taking. In determining the appropriate rate of the net pro fits the return from gilt edged securities may, unless it is otherwise found unsuitable, be adopted". It is worthy of notice that Shall, J., very carefully refrained, throughout the discussion, from using the expression 'just compensation ' or 'just equivalent ' nor did he draw inspiration from any American or Australian cases. Realising the implication of the use of adjectives like 'just ' or 'fair ', he was content to use the expression 'compensation ' and to say that the principle specified must be relevant for determination of compensation. F Dealing with the question whether compensation might be provided in the form of bonds, the Court said (at p. 608 609): "Compensation may be provided under a statute, other . than in the form of money . it may be given as equivalent of money, i.e., a bond. But in judging whether the law provides for compensation, the money value at the date of expropriation of what is given as compensation, must be considered. If the rate of interest compared with the ruling commercial rate is low, it will reduce the present value of the bond. The Constitution guarantees a right to compensation an equivalent of the property expropriated and the right to compensation cannot be converted into a loan on terms which do not fairly compare with the prevailing com 636 mercial terms. If the statute in providing for compensation devises a scheme for payment of compensation by giving it in the form of bonds, and the present value of what is deter mined to be given is thereby substantially reduced, the statute impairs the guarantee of compensation. A scheme for payment of compensation may take many forms. If the present value of what is given reasonably approximates to what is determined as compensation according to the principles provided by the statute, no fault may be found. But if the law seeks to convert the compensation determined into a forced loan, or to give compensation in the form of a bond of which the market value at the date of expropriation does not approximate the amount determined as compensation, the Court must consider whether what is given is in truth compensation which is inadequate, or that it is not compensation at all. Since we are of the view that the scheme in Sch. II of the Act suffers from the vice that it does not award compensation according to any recognized principles, we need not dilate upon this matter further". We may now examine the submissions of Shri A. K. Sen in the light of the principles enunciated in Cooper 's case without confusing ourselves with imported expression like 'just compensation ' or 'just equivalent '. Shri A. K. Sen 's primary submission was that the principle of capitalising net profit as the sole factor for determining the compensation payable for the acquisition of a public utility Under taking was not a relevant principle. According to him a Public. Utility Undertaking was under an obligation to provide services to the community irrespective of whether its activities resulted in profit or loss It was subject to a rigid price control. It did not have the freedom to extend or curtail its activities based on consideration of profit. An Undertaking like the appellant 's, he said, was bound to render services even in unprofitable lines of supply and areas. Therefore, the method of capitalising income was No. relevant to determine the compensation payable to a Public Utility undertaking. It might be relevant to assess the value of the intangible assets of the Public Utility Under taking but it was not relevant for valuing its tangible assets. Shri Sen invited our attention to certain passages from Alfred Jahr 's Eminent Domain Valuation and Procedure, Valuation by Bright, American Jurisprudence 2nd Edn. Vol. 27 and American Law Reports 2nd series, Vol. It is hardly necessary tc point out that American authorities are not of any avail on the question before us since the 637 basic assumption of the American authorities is that what is payable is a 'just compensation ' and every and all principles necessary to arrive at a 'just compensation ' have to be applied. That, as we have seen, is not the position in India. What we have to see is whether the particular principle specified by the statute is a relevant principle. Even so we will refer to the authorities cited by Shri Sen. These authorities themselves show that the method of capitalisation of net profit is an unquestionably relevant principle in assessing compensation. In fact the very argument of Shri Sen that the principle of capitalisation of net profit as a sole factor to determine compensation is not relevant, appears to us to imply that it is a relevant, principle alongwith others. C Alfred Johr in his Eminent Domain Valuation and Procedure, states in Section 66: "At the outset, we must bear in mind that when private property is acquired for public use under the power of eminent domain, just compensation must be paid to the owner. How is the just compensation determined ? That is the problem which we will discuss at some length". Dealing particularly with the question of valuation of Public Utilities, the author mentions the reasons why the principles of valuation in the case of acquisition of Public Utilities are sometimes different from those pertaining to the usual acquisitions. Then he proceeds to say that in estimating a 'just compensation ' of Utility property consideration must be given to two types of properties, the tangible properties and the intangible properties. Tangible property such as land may be valued at the market value while property like plant etc. may have to be valued on the basis of original cost, cost of permutation, allowance for depreciation etc. In the case of intangible property the author states that the Courts do not indicate the method used in reaching the intangible item of 'going concern value ' . and confesses that "there probably is none". After remarking that valuation of a going concern based on capitalisation of net earnings assumes too many contingencies, the author refers to the case of Appleton Water Co. vs Railroad Commission , 148, , , where the Court said that the fundamental difficulty with an attempt to set a definite sum as representing going concern value is "that it is an attempt to divide a thing which is in its nature practically indivisible. The value of the plant and business is an indivisible gross amount. It is not obtained by adding up a number of separate items, but by taking a comprehensive view of each and all of the elements of property, tangible and intangible, including property rights, and considering them all, not as separate things, hut as inseparable parts of one harmonious entity". 638 Bright in his 'Valuation ', deals with the question under the heading 'Capitalized Earning Power Versus So Called Physical value as a measure of just compensation '. After referring to various difficulties ` in arriving at the just compensation on the basis of the method of capitalisation, the author ends the statement: "No doubt the practical objections urged by the courts . against capitalized earnings as a basis of valuation are well founded. But valuations based on replacement cost are indefensible if judged by the assumed objective of an award t in condemnation, which is to indemnify the owners of the property for the loss. Difficult as it is to determine fairly the value of a business enterprise by estimating its future earnings, no alternative method of valuation is acceptable, unless one is content to use the market prices of outstanding stocks and bonds". In American Jurisprudence, 2nd Edn. 27, the discussion of the question of 'Measure and elements of compensation ' starts in paragraph 266 with the sentence "the right of Eminent Domain cannot be exercised except upon condition that just compensation be made to the owner". In paragraph 339 the valuation of Public Utility properties is considered and the unique problems presented are mentioned. It is then said : no rigid measures can be prescribed for the determination of 'just compensation ' under all circumstances and in all cases. . The amount of net income actually received by a public utility company may and should be considered as a factor in determining the valuation, although such earnings are not conclusive, especially if a large sum would be necessary to put the plant in good condition. Capitalization of earnings, or the "economic" value, is a method of appraisal in condemnation cases which has met with approval in some jurisdictions, although usually rejected as a sole test. This test has its limitations (primarily because of the speculative factors involved). but is unquestionably relevant, particularly when attempting to measure the intangibles of a public utility". In American Law Reports 2nd series Vol 68, at pages 398 399 it is stated that in valuing utility property various tests have been applied, alone and in combination, the usual method being the ascertainment of market value. It is then pointed out that there is a difference in ascertaining the market value for the purpose`sc of condemnation proceedings and for the purpose of rate making. It is said: "In condemnation proceedings just compensation is the market value of the property taken. In rate making cases, the standard or market value of the investment cannot be applied in determining just compensation, for the simple reason that marker value is dependent upon 639 earning capacity and fluctuates with that capacity; consequently in determining what earning capacity is just, the market value of the investment which is a result of earning capacity cannot be utilised as a basis for the determination of what constitutes the reasonable or just earning capacity of the plant". We may also refer to Principles and Practice of Rating Valuation by Roger Emeny and Hector M, Wilks. At page 197 of the 3rd edn., public utility undertakings are considered and it is said: 'Public Utility Undertakings were prior to 1950 valued by the profits method. This method was used because public utility undertakings were not generally speaking let, added to which they enjoyed some element of monopoly. insofar that there are public utility undertakings or quasi public utility undertakings which are not covered by a formula, and in the absence of rental evidence, it is probable that the profits method of valuation would be applicable. There is no shortage of case law to help the valuer when using the profits method for public utility undertaking". It is thus clear from the very authorities cited by Shri Sen. that tangible and intangible property of a public utility undertaking, may not necessarily be valued separately and it is a sound principle to treat them as indivisible and value the undertaking as an integrated whole. The authorities also treat the capitalisation of net profit as one of the recognised principles of valuation of Public Utility Undertaking, though it may not be the best in the sense that it may not yield that result which is most advantageous to the owner of the undertaking. But we are not concerned with the question which principle will yield the result most advantageous to the owner of the undertaking but with the question whether the particular principle is a relevant principle at all. In the language used in 'American Jurisprudence ' the principle of capitalisation of net income is "unquestionably relevant" even in the case of Public Utility Undertakings. Tn our view, it requires no authority to say that capitalisation of net income is a sound principle of valuation. Any purchaser will immediately put himself the question what profit does the undertaking make and how much should I invest to get the return ' ? He may pay more if the prospects of better income in the future are bright and if the plant, machinery and buildings are in excellent condition. He may pay less if the future is not so bright and if the plant, machinery and buildings are in a poor state and require immediate replacement and repair. He may pay more ll if the undertaking is possessed of substantial, unencumbered properties. He may pay less if the lease of the land on which the factory 640 is located is about to expire. Thus the price may vary depending on various factors but the basic consideration is bound to be the profit yielding capacity of the undertaking. Shri Sen asserted that the lands belonging to the company which were purchased by way of investment, can fetch a price of Rupees six to seven crores. There is nothing in the petition to indicate that any lands were purchased by way of investments and not for the purpose of gas works or that the lands are capable of being sold independently of the undertaking. Perhaps, no one will come forward to purchase land next to a gas works. Perhaps there are other factors which make the land unsale able or which depreciate the value of the land. We do not know. Suffice it to say that the assertion of Shri Sen is not borne out by any statement to that effect in the Writ Petition. Shri Sell suggested that the petitioner might be given an opportunity to amend the Writ Petition. We do not think we can do that. The acquisition was made in 1962. The impugned Act was passed in 1970. The Writ Petition was filed in 1971 and has been pending in this Court for sever years. If there was any substance in the present assertion, the petitioner would surely have mentioned it prominently in the Writ Petition. It would not have taken the petitioner so many years to discover a circumstance claimed by his Counsel to be so very vital. We do not think we will be justified in permitting any amendment at this stage. The case of the petitioner right through has been that the principle of capitalisation of income was irrelevant. With that submission we emphatically do not agree. Shri Sen 's next submission was that the choice of the period of five years immediately preceding the take over of the management and control of the Company for the purpose of calculating the average annual income was arbitrary as those five years were particularly lean years for the Company because of some special circumstances. The charge of arbitrariness is baseless. The five years immediately preceding the take over of the control and management of the Company were the years 1955 56, 1956 57, 1957 58, 1958 59 and 1959 60 during which years the profits according to the balance sheets of the Company, were Rs. 15,86,789, Rs. 13,81,177, Rs. 7,50,582, Rs. 1,64,158 and Rs. 1,82,123/ respectively. Now, if the Legislature wanted to be unfair to the Company, the last year 's profit could have been taken as the criterion on the ground that the value to be ascertained was the value on the date of take over and not some hypothetical anterior date. Or, instead of taking the advantage of the period of the preceding five years, the Legislature could well have taken the average of the preceding three years. If 643 that. We should not however be understood as having decided that A Section 9 (2) offends Article 31 (2) of the Constitution. Shri Chatterjee, learned Counsel for the State of West Bengal, argued that the earlier decision of the Calcutta High Court in the petition under Article 226 of the Constitution operated as res judicata. In the view that we have taken on the main question it is unnecessary to consider this argument except to say that there does not appear to be any substance in it. In the result the Writ Petition is dismissed with costs. P.B.R. Petition dismissed.

In 1958, the Government of West Bengal, being of the view that the appellant company which enjoyed a monopoly in the supply of gas in Calcutta was negligent in looking after the interest of the consumers appointed a Committee to enquire into the unsatisfactory condition of supply of gas in Calcutta and to suggest remedial measures, including valuation of the Undertaking for the purpose of taking it over. The Committee reported that the distribution system was in a bad state of disrepair and that the maintenance system was in a very poor state. It recommended that the distribution system should be taken over immediately under the management of the Government to ensure and maintain supply of gas to consumers in Calcutta. On the basis of this recommendation, the oriental Gas Company (West Bengal Act XV of 1960) was passed by the State Legislature. Section 3 of the Act provided for the taking over for a limited period of the management and control and subsequent acquisition of the Undertaking of the Company Section 7 provided for the acquisition of the Undertaking of the Company at any time within a period of five years. Section 8(1)(b) provided for payment of compensation for the acquisition of the Undertaking of the Company, by the method of cost less depreciation or the method of capitalisation whichever was less. Section 9(2) provided that the compensation should be paid in bonds carrying interest at 3% p.a. from the date of issue and payable in 20 equal annual instalments. The Act was amended in 1968. The amended Act provided for the determination of compensation on the basis of full market value of the Undertaking and payment of compensation in the shape of bonds carrying interest from the date of enactment of the 1968 Act. In 1970 the Act was again amended. It provided for the determination of compensation by the method of capitalisation and payment of compensation in bonds carrying interest from the date of acquisition. Aggrieved by the method of determination of compensation the appellant filed a writ petition under article 32 of the Constitution questioning the vires of section 8(1)(b) and section 9(2) of the Act. The petitioner contended that (1) the principle of capitalising net profit as the sole factor for determining compensation payable for the acquisition of a public utility undertaking was not a relevant principle because a public utility concern was under an obligation to provide services to the community irrespective of whether its activities resulted in profit or loss; (2) the choice of the period of five years immediately preceding the take over of the management and control of the company for the purpose of calculating the average annual income was arbitrary; (3) at the time when the Undertaking was 618 acquired in 1962 the gilt edged securities were fetching 6% p.a. and therefore a higher multiplier than eight should have been provided and (4) the method of payment of compensation in the shape of bonds payable in twenty years at 3% interest had the effect of reducing the compensation to less than half of what was determined. Dismissing the petition, ^ HELD: (1) (a) The principles specified by the law for determination of compensation are beyond the pale of challenge, if they are relevant to the determination of compensation and are recognised principles applicable in the determination of compensation for property compulsorily acquired and if the principles are appropriate in determining the value of the class of property sought to be acquired. The science of valuation of property recognised several principals or methods for determining the value to be paid as compensation to the owner for loss of his property. If an appropriate method or principle for determination of compensation was applied, the fact that by the application of another principle which was also appropriate a different value was reached, would not justify the court in entertaining the contention that out of the two appropriate methods, one more generous to the owner should have been applied by the Legislature. If several principles were appropriate and one was selected for determination of the value of the property to be acquired, selection of that principle to the exclusion of other principles was not open to challenge since the selection to be left to the wisdom of the Parliament. [633 F H] R. C. Cooper vs Union of India, ; followed. Case law discussed. (b) It is well established that tangible and intangible property of a public utility undertaking may not necessarily be valued separately and it is a sound principle to treat them as indivisible aqud value the undertaking as an integrated whole. The authorities also treat capitalisation of net profit as one of the recognised principles of valuatior; of Public Utility Undertakings, though it may not be the best in the sense that it may not yield that result which is most advantageous to the owner of the undertaking. Any purchaser will put himself the question what profit does the undertaking make ? and how much should he invest to get the return. He may pay more if the prospects of better income in the future are bright and if the plant, machinery and buildings are in an excellent condition. He may pay less if the future is not so bright and if the plant, machinery and buildings are in a poor state and require replacement and repair. He may pay more if the undertaking is possessed of substantial, unencumbered properties. He may pay less if the lease of land on which the factory is located is about to expire. Thus the price may vary depending on various factors but the basic consideration is bound to be the profit yielding capacity of the undertaking. [639 E, G H] In the instant case there is nothing in the writ petition to indicate that lands were purchased by way of investment and not for the purpose of gas works or that the lands were capable of being sold independently of the Undertaking. The petitioner 's assertions are not borne out by any statement to that ecect in the petition. Therefore, there would be no justification now to allow the petitioner to amend the petition filed in 1971. Had there been 619 any substance in this assertion the petitioner would have mentioned it prominently in the petition itself. It would not have taken it so many years to discover a circumstance claimed to be so very vital. The case of the petitioner right through had been that the principle of capitalisation of income was irrelevant. [640 C E] (2)(a). There is no force in the charge of arbitrariness. There is nothing wrong with the choice of the period of five years preceding the take over for the purpose of calculating the average annual income. [640 F G] (b) If the legislature wanted to be unfair to the company, the previous year 's profit could have been taken as criterion on the ground that the value to be ascertained was the value on the date of take over and not somo hypotheticol anterior date, or instead of taking the average of the period of the proceeding five years the legislature could well have taken the average of the preceding three years. If either of these courses had been adopted compensation would be much less. Instead, the legislature fairly adopted a five year period for calculating the average annual income. It may be that in the historical part the undertaking was making much profit It may be that in the past there were lean years. Neither a specially fat nor a specially lean period from the past could properly be taken into account as that would be. irrelevant. The legislature was concerned with the value of the undertaking on or about the date of acquisition. It, therefore, very properly chose the period of five years immediately preceding The take over. [640 H; 641 A B] Appleton Water Co. vs Railroad Commission, 154 Wis. 121, 148, , referred to. Eminent Domain by Alfred Jahr, Valuation by Bright, Principles and Practice of Rating Valuation by Roger Emeny and Hector M. Wilks referred to. (3) There is equally no force in the argument that the legislature should have specified a higher multiplier than 'eight ' in fixing the compensation. If the legislature thought that a. return of 12% in the case of large industrial undertaking such as the petitioner 's was reasonable and on that basis adopted the multiplier 'eight ', it is not for this Court to sit in judgment over that decision and attempt to determine a more appropriate multiplier. The use of the term 'normal cases ' used in Cooper 's case where this Court pointed out that capitalisation of the net annual value of the property at a rate equal in normal cases to the return from gilt edged securities was an important method of determination of compensation, showed that it was not intended to lay down any invariable rule that whenever a method of capitalisation of net profits was adopted, return from gilt edged securities was to be the basis. That should depend on a variety of circumstances such as the nature of the property, the normal return which could be expected on like investment, the state of the capital market and several such factors. [641 G H; 642 A]

8k-16k

N: Criminal Appeal Nos. 270 271 of 1977. From the Judgment and Order dated 10 5 1977 of the Madras High Court in W.P. No. 429 and Crl. R.P. No. 50/77. K. K. Venugopal, N. A. Subramaniam, C. section Vaidyanathan, Mrs. Shanta Venugopal, K. R. Chowdhary and Mrs. Veena Devi Khanna for the Appellant. section N. Kackar, Sol. (In Crl. A. No. 270) R. B. Datar and R. N. Sachthey, for the Respondent. V. P. Raman, Adv. Genl and A. V. Rangam for the State of Tamil Nadu. 260 The Judgment of the Court was delivered by FAZAL ALI, J. These two appeals by certificate are directed against a common order of the Madras High Court dated 10th May, 1977 dismissing the applications filed before the High Court by the appellant for quashing the order of the Special Judge, Madras dated 4th January, 1977 refusing to discharge the appellant under section 239 of the Code of Criminal Procedure (hereinafter referred to as the Code). The facts of the case have been detailed in the judgment of the High Court and it is not necessary for us to repeat the same all over again. However, in order to understand the points in issue, it may be necessary to give a resume of the important stages through which the case has passed and the constitutional points argued before us. The appellant, M. Karunanidhi, was a former Chief Minister of Tamil Nadu and was the petitioner before the High Court in the applications filed by him before the High Court. On 15 6 1976 a D.O. letter was written by the Chief Secretary to the Government of Tamil Nadu to the Deputy Inspector General of Police, CBI requesting him to make a detailed investigation into certain allegations against the appellant and others who were alleged to have abused their official position in the matter of purchase of wheat from Punjab. A first information report was accordingly recorded on 16 6 1976 and four months later sanction under section 197 of the Code was granted by the Governor of Tamil Nadu for the prosecution of the appellant under sections 161, 468 and 471 of the Indian Penal Code and section 5(2) read with section 5 (1)(d) of the Prevention of Corruption Act (hereinafter referred to as the Corruption Act). Thereafter, the police submitted a charge sheet against the appellant for the offences mentioned above and alleged that the appellant had derived for himself pecuniary advantage to the extent of Rs. 4 to Rs. 5 lakhs from Madenlal Gupta for passing favourable orders in respect of some firms. The case was registered before the Special Judge and the necessary copies of the records were furnished to the appellant. The appellant on appearing before the Special Judge filed an application for discharging him under section 239 of the Code on the ground that the prosecution against him suffered from various legal and constitutional infirmities. The Special Judge, however, after hearing counsel for the parties rejected the application of the appellant as a result of which the appellant filed two applications in the High Court for quashing the proceedings and for setting aside the order of the Special Judge refusing to discharge the appellant. As indicated 261 above, the High Court rejected the applications of the appellant but granted a certificate for leave to appeal to this Court and hence these appeals before us. As far back as 30th December, 1973 the Madras Legislature had passed an Act known as The Tamil Nadu Public Men (Criminal Misconduct) Act, 1973 hereinafter referred to as the State Act. The State Act was passed after obtaining the assent of the President of India. This State Act was, however, amended by Act 16 of 1974 and the President 's assent was received on 10th April, 1974. According to the provisions of the State Act the statute was brought into force by virtue of a notification with effect from 8 5 1974. According to the allegations made against the appellant, the acts said to have been committed by him fell within the period November 1974 to March, 1975. On 31 1 1976 by virtue of the provisions of Article 356 President 's rule was imposed in the State of Tamil Nadu and the Ministry headed by the appellant was dismissed and a Proclamation to his effect was issued on the same date. The High Court decided the petitions of the appellant on 10 5 1977 and granted a certificate for leave to appeal to this Court on 27 7 1977. Subsequently, however, the State Act was repealed and the President 's assent to the repealing of the State Act was given on 6 9 1977. Thus, it is manifest that by the time the appeal has reached this Court and was taken up for hearing the State Act no longer exists. Consequently, some of the constitutional points raised by the learned counsel for the appellant before the Court do not survive for consideration before us. Faced with this situation, Mr. Venu Gopal, learned counsel for the appellant has raised only two points before us. In the first place, he submitted that even though the State Act was repealed on 6 9 1977 during the time that it was in force, it was wholly repugnant to the provisions of the Code, the Corruption Act and the Criminal Law Amendment Act and by virtue of Article 254(2) of the Constitution of India the provisions of the aforesaid Central Acts stood repealed and could not revive after the State Act was repealed. The constitutional position, it is submitted, was that even though the State Act was repealed the provisions of the Central Acts having themselves been protanto repealed by the State Act when it was passed could not be pressed into service for the purpose of prosecuting the appellant unless those provisions were re enacted by the appropriate legislature. A number of grounds were raised by counsel for the appellant in support of the first plank of his argument that the State Act was repugnant to the provisions of the Central Acts as a result of which the former was rendered void. 262 Secondly, it was argued that even assuming that the State Act has ceased to exist and the Central Acts apply to the facts of the present case, the appellant cannot be prosecuted under any of the sections of the Penal Code or the Corruption Act, because being the Chief Minister of the State at the relevant time he was not a public servant as defined in section 21 clause (12) of the Indian Penal Code. The argument was that by virtue of the position that the appellant enjoyed as Chief Minister there was no relationship of master and servant between him and the Government and he was acting as a constitutional functionary and, therefore, could not be described as a public servant as contemplated by section 21(12) of the Penal Code. We propose to deal with the two arguments separately. We would first deal with the question of repugnancy as raised by learned counsel for the appellant. It is true that the State Act was passed by the Legislature of Tamil Nadu and the assent of the President was obtained on 30th December, 1973. By virtue of the provisions of Article 254 (2) of the Constitution since the assent of the President had been given the State Act was to prevail over the Central Acts so far as the State of Tamil Nadu was concerned, but the serious question to be considered is as to whether or not there was a real repugnancy resulting from an irreconcilable inconsistency between the State Act and the Central Acts. Article 254 of the Constitution runs thus: "254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States: (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: 263 Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of State". It would be seen that so far as clause (1) of Article 254 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the State law would be void to the extent of the repugnancy. This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act. In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parliament and the State Legislatures. First, regarding the matters contained in List I, i.e. the Union List to the Seventh Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances : 1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy. Where however a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254. Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List 264 the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List an entrenchment, if any, is purely incidental or inconsequential. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254. So far as the present State Act is concerned we are called upon to consider the various shades of the constitutional validity of the same under Article 254(2) of the Constitution. It is neither alleged or argued that Parliament has at any time after the State Act was passed proceeded to pass any law as contemplated by the Proviso to Article 254. As, however, the State law has already been repealed and the President 's assent to the said repeal has been received as far back as 6 9 1977 we are concerned only with the limited question as to whether if the State law had repealed or overruled the provisions of the Central law what will be the position after the State law itself ceases to exist. It is true that the doctrine of eclipse would not apply to the constitutionality of the Central law and the only question we have to determine is whether there was such an irreconcilable inconsistency between the State Act and the Central Acts that the provisions of the Central Act stood repealed and unless re enacted the said provisions cannot be invoked even after the State Act was itself repealed. In order, however, to enter into the domain of repugnancy of the two Acts we have to consider the relevant provisions of the Central Acts and of the State Act. The High Court has on a very careful and cautious analysis of the various provisions of the two Acts come to a clear finding that there is no repugnancy between the State Act and the Central Acts, but the State Act merely creates a new and distinct offence which in its nature and purport is essentially different from the offences contemplated by the Indian Penal Code and the Corruption Act. It has been pointed out by the High Court as also 265 by the Solicitor General that not only the ingredients of the offences created by the State Act are different from those of the Central Act, but even the procedure is different. It was further argued by the Solicitor General that there is absolutely no repugnancy between the two Acts and both can operate in their respective fields. In order to appreciate this question, we would briefly refer to the scheme of the State Act. Section 2 defines certain dignitaries like Commissioner, Additional Commissioner, Government, Public man, public servant. Clause (a) of section 2 defines 'Commissioner ' thus: " 'Commissioner ' or "Additional Commissioner" means the Commissioner of Inquiries or an Additional Commissioner of Inquiries, as the case may be, appointed under section 4". Clause (c) of section 2 defines 'public man ' thus: "Public man" means (i) any person who is or has been the Chief Minister or any other Minister of the State; (ii) a person who is or has been a Member of the Legislative Assembly or of the Legislative Council of the State; or (iii)a person who is or has been a Mayor or Deputy Mayor of the Municipal Corporation of Madras or of Madurai or Chairman of any Standing or Subject or other Committee constituted or deemed to be constituted under the Madras City Municipal Corporation Act, 1919 (Tamil Nadu Act IV of 1919) or the Madurai City Municipal Corporation Act, 1971 (Tamil Nadu Act 15 of 1971) as the case may be; (iv) a person who is or has been the Chairman or Vice Chairman of a Municipal Council or Chairman of any Standing or Subject or other Committee constituted or deemed to be constituted under the Tamil Nadu District Municipalities Act, 1920 (Tamil Nadu Act V of 1920) or any other law for the time in force; (v) a person who is or has been the Chairman or Vice Chairman of a Panchayat Union Council or Chairman or President of any Standing or Subject or other Committee of such council constituted or deemed to be 266 constituted under the Tamil Nadu Panchayats Act, 1958 (Tamil Nadu Act XXXV of 1958), or any other law for the time being in force; (vi) a person other than a Government servant who is or has been the Chairman of (a) any corporation (not being a local authority) established by or under a State or Provincial Act and owned or controlled by the State Government; (b) any Government company within the meaning of section 617 of the (Central Act 1 of 1956), in which not less than fifty one per cent of the paid up share capital is held by the State Government, or any company which is a subsidiary of a company in which not less than fifty one per cent of the paid up share capital is held by the State Government". It may be noticed here that the concept of public man as contemplated by the State Act differs in certain respects from that of a public servant as contemplated by section 21(12) of the Penal Code. To begin with, under the State Act a public man clearly includes the Chief Minister or any other Minister of the State as also a member of the State Legislative Assembly or Legislative Council. Secondly, the word 'public man ' appearing in Section 2(c) clearly excludes a Government servant, unless he falls within the categories of (a), (b) and (c) of clause (vi) of section 2 of the State Act. This is a basic departure from the provisions of the Penal Code where the word 'public servant ' has been used in the widest possible sense so as to include not only Government servants who are receiving salary from the Government, but also other dignitaries who are in the pay of the Government. Section 3 clauses (1), (2) and (3) define criminal misconduct which is almost the same as defined by the provisions of the Corruption Act and the Penal Code (sections 5(2) and 5(1) (d) of the Corruption Act and section 161 of the Indian Penal Code). It may, however, be noted here that the State Act does not make sections 468 and 471 of the Indian Penal Code any offence under this Act. Section 4 prescribes the procedure for appointment of a high 267 powered tribunal for the purpose of holding investigation into the allegations made against any public man. Sections 4 and 5 run thus: "4. Appointment of Commissioner of Inquiries and Additional Commissioner of Inquiries: (1) For the purpose of conducting investigation in accordance with the provisions of this Act, the Government shall, on the recommendation of the Chief Justice of the High Court appoint, by notification, a person to be known as Commissioner of Inquiries and one or more persons to be known as Additional Commissioner of Inquiries. (2) The Commissioner shall be a person who is, or who is qualified for appointment as, or who has been, a Judge of a High Court and an Additional Commissioner shall be a person who is, or who is qualified for appointment as, or who has been, a District Judge. (3) Every person appointed as the Commissioner or Additional Commissioner shall, before entering upon his office, make and subscribe before the Chief Justice of the High Court or some person appointed in that behalf by him an oath for affirmation in the form set out for the purpose in the First Schedule. (4) The Additional Commissioner shall be subject to the administrative control of the Commissioner, and in particular, for the purpose of convenient disposal of investigations under this Act, the Commissioner may issue such general or special directions as he may consider necessary to the Additional Commissioner; Provided that nothing in this sub section shall be construed to authorise the Commissioner to question any finding conclusion or recommendation of an Additional Commissioner. x x x x x 5. Term of office and other conditions of service of Commissioner and Additional Commissioner: x x x x x (4) There shall be paid to the Commissioner and the Additional Commissioner such salaries as are specified in the Second Schedule. 268 (5) The allowances and pension payable to, and other conditions of service of, the Commissioner or Additional Commissioner shall be the same as admissible (a) to a Judge of a High Court in the case of the Commissioner, (b) to a District Judge in the case of an Additional Commissioner: Provided that the allowances and pension payable to, and other conditions of service of, the Commissioner or an Additional Commissioner shall not be varied to his disadvantage after his appointment". Another important provision which is contained in the State Act but not in the Central Acts is a provision regarding limitation. Under section 8 which was introduced by section 2 of the Tamil Nadu Amending Act 16 of 1974 it is provided that the Commissioner or the Additional Commissioner shall not investigate any complaint involving criminal misconduct which is made after the expiry of 5 years from the date on which the criminal misconduct complained against was alleged to have been committed or after the expiry of one year from the date on which the public man ceased to be such public man. The provisions of section 8 may be extracted thus: "6. Limitation for preferring complaints: (1) The Commissioner or an Additional Commissioner shall not investigate or cause to be investigated any complaint involving criminal misconduct if the complaint is made: (i) after the expiry of five years from the date on which the criminal misconduct complained against was alleged to have been committed; or (ii) after the expiry of one year of the date on which the public ceases to be such public man, Whichever is later. (2) Notwithstanding anything contained in sub section (1), the Commissioner or an Additional Commissioner shall not investigate or cause to be investigated any complaint involving criminal misconduct, the complaint is made after the expiry of one year from the date on which the action complained against becomes known to the complainant". 269 Similarly section 10 of the State Act confers plenary powers on the Commissioner or the Additional Commissioner to prescribe a procedure for conducting an investigation in respect of a complaint and runs thus: "10. Procedure in respect of investigation of criminal misconduct: (1) The procedure for conducting any investigation in respect of a complaint of criminal misconduct against any public man shall be such as the Commissioner or the Additional Commissioner considers appropriate in the circumstances of the case. (2) Subject to the provisions of sub section (1), where any complaint of criminal misconduct against a public man is received by the Commissioner or Additional Commissioner, the Commissioner or Additional Commissioner shall make or cause to be made a preliminary investigation to find out whether there is any prima facie case against the public man in respect of the allegation of criminal misconduct: x x x (3) Where the Commissioner or Additional Commissioner gives a finding under sub section (2) that there is no prima facie case against the public man in respect of the allegation of criminal misconduct, he shall dismiss the complaint after briefly recording his reasons for doing so: Provided that the Commissioner or Additional Commissioner shall not dismiss any complaint under this sub section, unless the complainant has been given an opportunity of being heard, if such complainant has not already been heard under clause (a) of the proviso to sub section (2). x x x x" Under clause (3) of section 10 the Commissioner or the Additional Commissioner is empowered to dismiss the complaint if he is satisfied that no prima facie case against the public man has been made out, but such an order of dismissal can be made only after the complainant has been given an opportunity of being heard. Section 11 is also a new provision as compared to the Central Acts which provides for grant of compensatory costs to the public man if the allegation made against him are found to be false, frivolous or vexatious to the knowledge of the complainant. 270 Section 12 gives a right of appeal to a Division Bench of the High Court against any order passed by the Commissioner or Additional Commissioner under sub section (1) of section 11 granting compensatory costs to the public man and runs thus: "Appeal against an order under section 11: (1) Against any order passed by the Commissioner or Additional Commissioner under sub section (1) of section 11, the complainant may, within such period as may be prescribed, appeal to a Special Appellate Tribunal consisting of two Judges of the High Court nominated from time to time by the Chief Justice in that behalf". Section 14 provides the procedure for examination of witnesses, receiving of affidavits, issuing of commissions etc. Section 15 provides an enhanced punishment of seven years for criminal misconduct as compared to the punishment provided by the Corruption Act. Section 16 provides for prosecution of a complainant if his complaint is found to be false, frivolous and vexatious and such a complainant is liable to be punished for a term which may extend to three years and fine, but such a prosecution can be launched only with the previous sanction of the Commissioner. Section 16 runs thus: "16. Punishment for false, frivolous or vexatious complaint: (1) Notwithstanding anything contained in this Act, every person who makes a false, frivolous or vexatious complaint against a public man under this Act, shall on conviction be punished with imprisonment for a term which may extend to three years and shall also be liable to fine". A careful analysis, therefore, of the various provisions of the State Act leads to the irresistible inference that the State Act was passed with a view to afford sufficient protection to a public man by enjoining a summary inquiry or investigation by a high and independent Tribunal of the status of a High Court Judge or a Senior District Judge to instill confidence in the people and to prevent public man from being prosecuted on false, frivolous and vexatious allegations. Although the ingredients of criminal misconduct as defined in section 5(1) (d) of the Corruption Act are substantially the same in the State Act as in the Central Acts but here also the punishment is much severer in the case of the State Act than the one contained in the Central Acts. It is, therefore, manifest that the State Act does not contain any provision which is repugnant to the Central Acts, but is a sort of comple 271 mentary Act which runs pari passu the Central Acts mentioned above. After the investigation by the Commissioner under the State Act is complete and a report is submitted, section 18 of the State Act provides thus: "18. Report of the Commissioner and Additional Commissioner: (1) Where as a result of any detailed investigation under sub section (4) of section 10 in respect of a complaint of criminal misconduct against a public man, the Commissioner or an Additional Commissioner is of opinion, (a) that it is expedient in the interest of justice that the public man against whom criminal misconduct has been alleged, should be prosecuted for an offence under section 15; or (b) that the allegation has not been substantiated, he shall record a finding to that effect stating his reasons therefor and report the same to the Government. (2) In cases falling under clause (a) of sub section (1), the public man shall be prosecuted and tried under section 6 of the Criminal Law (Amendment) Act, 1952 (Central Act 46 of 1952)". The State Act enjoins that the public man concerned will have to be prosecuted under the Criminal Law (Amendment) Act of 1952. Thus, far from there being any inconsistency, the provisions of the Criminal Law (Amendment) Act are directly applied to a public man by the State Act after the preliminary investigation by the Commissioner is over. It seems to us that what the State Act does is merely to create different and distinct offences and not to over rule any provisions of the Central Act. It was, however, strongly contended by Mr. Venu Gopal that the provisions contained in the State Act run counter to those of the Central Acts in respect of the following matters: 1. The procedure for investigation of the offences by a Central agency as contemplated by the Corruption Act is dispensed with and is instead invested in a Commissioner appointed under the State Act. The provision under the Prevention of Corruption Act regarding the grant of sanction under section 197 of the Code to the accused is given a complete go by and instead a Commissioner is appointed to hold a regular 272 inquiry for himself and then to submit his report. Thus, an accused who has been tried under the State Act is deprived of protection afforded to every Government servant regarding grant of a sanction by the appointing authority. It is thus suggested that the protection, if any, given by the State Act is purely illusory. In order, however, to understand the argument of the learned counsel for the appellant, it may be necessary to consider the question of repugnancy in a little broader perspective. It is well settled that the presumption is always in favour of the constitutionality of a statute and the onus lies on the person assailing the Act to prove that it is unconstitutional. Prima facie, there does not appear to us to be any inconsistency between the State Act and the Central Acts. Before any repugnancy can arise, the following conditions must be satisfied: 1. That there is a clear and direct inconsistency between the Central Act and the State Act. That such an inconsistency is absolutely irreconcilable. That the inconsistency between the provisions of the two Acts is of such a nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other. In Colin Howard 's Australian Federal Constitutional Law, 2nd Edition the author while describing the nature of inconsistency between the two enactments observed as follows: "An obvious inconsistency arises when the two enactments produce different legal results when applied to the same facts". In the case of Hume vs Palmer Knox, C.J. observed as follows: "The rules prescribed by the Commonwealth Law and the State law respectively are for present purposes substantially identical, but the penalties imposed for the contravention differ. . . . In these circumstances, it is I think, clear that the reasons given by my brothers Issacs and Starke for the deci 273 sions of this Court in Union Steamship Co. of New Zealand vs Commonwealth(1) and Clyde Engineering Co. vs Cowburn establish that the provisions of the law of the State for the breach of which the appellant was convicted are inconsistent with the law of the Commonwealth within the meaning of sec. 109 of the Constitution and are therefore invalid". Issacs, J. observed as follows: "There can be no question that the Commonwealth Navigation Act, by its own direct provisions and the Regulations made under its authority, applies upon construction to the circumstances of the case. It is inconsistent with the State Act in various ways, including (1) general supersession of the regulations of conduct, and so displacing the State regulations, whatever those may be; (2) the jurisdiction to convict, the State law empowering the Court to convict summarily, the Commonwealth Law making the contravention an indictable offence, and therefore bringing into operation sec. 80 of the Constitution, requiring a jury; (3) the penalty, the State providing a maximum of $ 50 the Commonwealth Act prescribing a maximum of $ 100, or imprisonment, or both; (4) the tribunal itself". Starke, J. observed as follows: "It is not difficult to see that the Federal Code would be 'disturbed or deranged ' if the State Code applied a different sanction in respect of the same act. Consequently the State regulations are, in my opinion, inconsistent with the law of the Commonwealth and rendered invalid by force of sec. 109 of the Constitution". In a later case of the Australian High Court in exhibit Parte Mclean(3) Issacs and Starke, JJ. while dwelling on the question of repugnancy made the following observation: "In Cowburn 's case (supra) is stated the reasoning for that conclusion and we will now refer to those statements without repeating them. In short, the very same conduct by the same persons is dealt with in conflicting terms by the Commonwealth and State Acts. A Court, seeing that, has 274 no authority to inquire further, or to seek to ascertain the scope or bearing of the State Act. It must simply apply sec. 109 of the Constitution, which declares the invalidity protanto of the State Act". Similarly Dixon, J. observed thus: "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and sec. 109 applies. That this is so is settled, at least when the sanctions they impose are diverse Hume vs Palmer (supra)". In the case of Zaverbhai Amaidas vs The State of Bombay(1) this Court laid down the various tests to determine the inconsistency between two enactments and observed as follows "The important thing to consider with reference to this provision is whether the legislation is 'in respect of the same matter '. If the later legislation deals not with the matters which formed the subject of the earlier legislation but with other and distinct matters though of a cognate and allied character, then Article 254 (2) will have no application. The principle embodied in section 107 (2) and Article 254 (2) is that when there is legislation covering the same ground both by the Centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State". "It is true, as already pointed out, that on a question under Article 254 (1) whether an Act of Parliament prevails against a law of the State, no question of repeal arises; but the principle on which the rule of implied repeal rests, namely, that if subject matter of the later legislation is identical with that of the earlier, so that they cannot both stand together, then the earlier is repealed by the later enactment, will be equally applicable to a question under Article 254(2) whether the further legislation by Parliament is in respect of the same matter as that of the State law". In the case of Ch. Tika Ramji & Ors. vs The State of Uttar Pradesh & Ors.(2) while dealing with the question of repugnancy 275 between a Central and a State enactment, this Court relied on the observations of Nicholas in his Australian Constitution, 2nd Ed. p.303, where three tests of inconsistency or repugnancy have been laid down and which are as follows: "(1) There may be inconsistency in the actual terms of the competing statutes R. Brisbane Licensing Court(1). (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive code Clyde Engineering Co. Ltd. vs Cowburn (supra). (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter Victoria vs Commonwealth(2) Wenn vs Attorney General(3) This Court also relied on the decisions in the case of Hume vs Palmer as also the case of Ex Parte Mclean (supra) referred to above. This Court also endorsed the observations of Sulaiman, J. in the case of Shyamakant Lal vs Rambhajan Singh (4) where Sulaiman, J. observed as follows: "When the question is whether a Provincial legislation is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repugnant should be on the party attacking its validity. There ought to be a presumption in favour of its validity, and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other, and care should be taken to see whether the two do not really operate in different fields without encroachment. Further, repugnancy must exist in fact, and not depend merely on a possibility". In the case of Om Prakash Gupta vs State of U.P.(5) where this Court was considering the question of the inconsistency between the two Central enactments, namely, the Indian Penal Code and the Prevention of Corruption Act held that there was no inconsistency and observed as follows: "It seems to us, therefore, that the two offences are distinct and separate. This is the view taken in Amarendra 276 Nath Roy vs The State(1) and we endorse the opinion of the learned Judges, expressed therein. Our conclusion, therefore, is that the offence created under section 5 (1) (c) of the Corruption Act is distinct and separate from the one under section 405 of the Indian Penal Code and, therefore, there can be no question of section 5 (1) (c) repealing section 405 of the Indian Penal Code. If that is so, then, Article 14 of the Constitution can be no bar". Similarly in the case of Deep Chand vs The State of Uttar Pradesh & Ors. (2) this Court indicated the various tests to ascertain the question of repugnancy between the two statutes and observed as follows: "Repugnancy between two statutes may thus be ascertained on the basis of the following three principles: (1) Whether there is direct conflict between the two provisions; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field". In the case of Megh Raj and Ors. vs Allah Rakhia & Ors.(3) where Varadachariar, J. speaking for the Court pointed out that where as in Australia a provision similar to section 107 of the Government of India Act, 1935 existed in the shape of section 109 of the Australian Constitution, there was no corresponding provision in the American Constitution. Similarly, the Canadian cases have laid down a principle too narrow for application to Indian cases. According to the learned Judge, the safe rule to follow was that where the paramount legislation does not purport to be exhaustive or unqualified there is no inconsistency and in this connection observed as follows: "The principle of that decision is that where the paramount legislation does not purport to be exhaustive or unqualified, but itself permits or recognises other laws restricting or qualifying the general provision made in it, it can 277 not be said that any qualification or restriction introduced by another law is repugnant to the provision in the main or paramount law". "The position will be even more obvious, if another test of repugnancy which has been suggested in some cases is applied, namely, whether there is such an inconsistency between the two provisions that one must be taken to repeal the other by necessary implication" In the case of State of Orissa vs M. A. Tulloch & Co. (1) Ayyangar J. speaking for the Court observed as follows: "Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation". In the case of T. section Balliah vs T. section Rangachari(2) it was pointed out by this Court that before coming to the conclusion that there is a repeal by implication, the Court must be satisfied that the two enactments are so inconsistent that it becomes impossible for them to stand together. In other words, this Court held that when there is a direct collision between the two enactments which is irreconcilable then only repugnancy results. In this connection, the Court made the following observations: "Before coming to the conclusion that there is a repeal by implication, the Court must be satisfied that the two enactments are so inconsistent or repugnant that they cannot 278 stand together and the repeal of the express prior enactment must flow from necessary implication of the language of the later enactment. It is therefore necessary in this connection to scrutinise the terms and consider the true meaning and effect of the two enactments". "The provisions enacted in section 52 of the 1922 Act do not alter the nature or quality of the offence enacted in section 177, Indian Penal Code but it merely provides a new course of procedure for what was already an offence. In a case of this description the new statute is regarded not as superseding, nor repealing by implication the previous law, but as cumulative". "A plain reading of the section shows that there is no bar to the trial or conviction of the offender under both enactments but there is only a bar to the punishment of the offender twice for the same offence. In other words, the section provides that where an act or omission constitutes an offence under two enactments, the offender may be prosecuted and punished under either or both the enactments but shall not be liable to be punished twice for the same offence". On a careful consideration, therefore, of the authorities referred to above, the following propositions emerge: 1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field. That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes. That where the two statutes occupy a particular field, there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field. 279 In the light of the propositions enunciated above, there can be no doubt that the State Act creates distinct and separate offences with different ingredients and different punishments and it does not in any way collide with the Central Acts. On the other hand, the State Act itself permits the Central Act, namely, the Criminal Law (Amendment) Act to come into its aid after an investigation is completed and a report is submitted by the Commissioner or the Additional Commissioner. It was contended however by Mr. Venu Gopal that by virtue of the fact that the State Act has obtained the assent of the President, it will be deemed to be a dominant legislation, and, therefore, it would overrule the Central Acts. Doubtless, the State Act is the dominant legislation but we are unable to agree with Mr. Venu Gopal that there are any provisions in the State Act which are irreconcilably or directly inconsistent with the Central Acts so as to overrule them. Last but not the least there is a very important circumstance which completely and conclusively clinches the issue and takes the force out of the argument of Mr. Venu Gopal on the question of repugnancy. It would be seen that in the original State Act, section 29 ran thus: "Act to overrule other laws, etc. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any custom, usage or contract or decree or order of a court or other authority". This section underwent an amendment which was brought about by Tamil Nadu Act 16 of 1974 which substituted a new section 29 for the old one. The new section which was substituted may be extracted thus: "Saving The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt any public man from any proceeding by way of investigation or otherwise which might, apart from this Act, be instituted against him". This amendment received the assent of the President on 10th April, 1974 and was published in the Tamil Nadu Government Gazette Extraordinary dated 16th April, 1974. We have already shown that although the State Act was passed as far back as 30th December, 1973 it received the assent of the President on the 10th April, 1974 that is to say, on the same date as Act 16 of 1974. The Act was however brought into force on the 8th May, 1974 when the new section 29 280 which had already replaced the old section and had become a part of the statute. Therefore, for all intents and purposes the State Act cannot be read in isolation, but has to be interpreted in conjunction with the express language contained in section 29 of the State Act. This section has in unequivocable terms expressed the intention that the State Act which was undoubtedly the dominant legislation would only be "in addition to and not in derogation with any other law for the time being in force" which manifestly includes the Central Acts, namely, the Indian Penal Code, the Corruption Act and the Criminal Law (Amendment) Act. Thus, the Legislature about a month before the main Act came into force clearly declared its intention that there would be no question of the State Act colliding with the Central Acts referred to above. The second part of section 29 also provides that nothing contained in the State Act shall exempt any public man from being proceeded with by way of investigation or otherwise under a proceeding instituted against him under the Central Acts. It is, therefore, clear that in view of this clear intention of the legislature there can be no room for any argument that the State Act was in any way repugnant to the Central Acts. We have already pointed out from the decisions of the Federal Court and this Court that one of the important tests to find out as to whether or not there is repugnancy is to ascertain the intention of the legislature regarding the fact that the dominant legislature allowed the subordinate legislature to operate in the same field pari passu the State Act. Craies in his Interpretation on Statute Law 6th Ed. p. 369 observes as follows: "Many earlier statutes contain clauses similar in effect to the general rule, but without the confusing words as to contrary intention. These statutes, of some of which a list is given below, seem not to be affected by the above rule, save so far as it enables the revisers of the statute book to excise the particular clauses. In accordance with this rule, penalties imposed by statute for offences already punishable under a prior statute are regarded as cumulative or alternative and not as replacing the penalty to which the offender was previously liable. " Such an intention is clearly discernible from the provisions of section 29 of the State Act. Mr. Venu Gopal tried to rebut this argument on the ground that section 29 would have no application where the inconsistency between the dominant statute and the subordinate statute is direct and complete. We have already found on a discussion of 281 the various provisions of the State Act that there is no direct inconsistency at all between the State Act and the Central Acts, and this affords a sufficient answer to the argument of Mr. Venu Gopal. Having, therefore, given our anxious consideration to the import and ambit of section 29 it seems to us that the provisions of section 29 would be presumptive proof of the fact that there is no repugnancy between the State Act and the Central Acts nor did either the legislature or the President intend to create any repugnancy between these Acts as a result of which the criticism regarding the repugnancy is completely obliterated in the instant case and we, therefore, hold that the State legislature never intended to occupy the same field covered by the Central Acts. It was also contended by Mr. Venu Gopal that if the Central Acts being repugnant to the State Act are pressed into service even after the repeal of the State Act, the Central Acts would stand repealed hence the prosecution of the appellant would be hit by Article 20(3) of the Constitution, i.e. the appellant cannot be prosecuted for an ex post facto offence. On our findings in this case that there is no inconsistency between the State Act and the Central Acts the application of Article 20(3) of the Constitution to the facts of this case does not arise at all. We, therefore, find ourselves in complete agreement with the view taken by the High Court that the State Act creates new and distinct offences and is not in any way repugnant to any provisions of the Central Acts and consequently overruled the first limb of the argument of counsel for the appellant. Similarly the contention of Mr. Venu Gopal as to whether or not the prosecution of the appellant would be violative of Article 14 of the Constitution is not available to the appellant, and consequently the learned counsel gave up this point and in our opinion very rightly because since the State Act has now been repealed the question of the prosecution of the appellant hereafter under the State Act does not arise at all, and, therefore, the question of two remedies being open to the prosecution which they may elect at their own option does not arise in this case. The appellant can be prosecuted only under the Corruption Act and the Penal Code and under no other Act at the moment. Moreover, it was obviously wrong to say that the earlier Central Law became violative of Article 14 as soon as the State law was enacted. This brings us to the second limb of the argument of the learned counsel for the appellant which relates to the import and connotation of the term 'public servant ' appearing in section 21(12) of the Indian 282 Penal Code. Clause 12 of section 21 which is the relevant provision so far as the present case is concerned runs thus : "21. The words 'public servant ' denote a person falling under any of the descriptions hereinafter following namely: X X X Twelfth Every person (a) in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government: X X X It was vehemently contended by Mr. Venu Gopal that having regard to the constitutional and public duties of a Chief Minister or a Minister he cannot be deemed to be a public servant in any sense of the term. He further contended that the entire clause (12) (a) should be read as a whole and cannot be severed into two limbs in as much as the words 'in the service or pay of the Government ' are used as synonyms. It was further contended that the words 'in the service or pay of the Government ' clearly connote the relationship of master and servant a relationship which is completely beyond the concept of the position of a Minister or a Chief Minister. We, however, agree that so far as the first part of clause (12) (a) is concerned, namely "in the service of the Government ' undoubtedly signifies a relationship of master and servant where the employer employs the employee on the basis of a salary or remuneration. But we are of the opinion that so far as the second limb 'in the pay of the Government ' is concerned, that appears to be of a much wider amplitude so as to include within its ambit even public servant who may not be a regular employee receiving salary from his master. In other words, we think that even a Minister or a Chief Minister will be clearly covered by the expression 'person in the pay of the Government '. Mr. Venu Gopal, however, relied on the meaning of the words "in the pay of ' as appearing in the various dictionaries. In Shorter Oxford English Dictionary the expression 'in the pay of ' is defined thus "To give money, etc., in return for something or in discharge of an obligation. Of a thing or action. To yield an adequate return. To give money or other equivalent value for". Similarly 'Payer ' is defined thus: "One who pays a sum of money". 283 In Webster 's Third New International Dictionary the expression 'in the pay of ' is indicated to mean: "Compensate, remunerate, satisfy, reimburse, indemnify, recompense, repay. Pay is a general term, lacking particular connotation but sometimes bluntly stressing the purchase of service, pay a machinist high wages". "Wages, salary remuneration". In Webster 's New World Dictionary the expression 'in the pay of ' is thus defined: "Stresses the idea of payment for a service rendered, but it often also carries an implication of reward (a bumper crop remunerated the farmer for his labors)". In Words and Phrases, Permanent Edition Vol. 31A p. 176 the meaning of the word 'pay ' is given thus: "Pay" is remuneration, wages or salary. To remunerate; to recompense, to give any pay". In Venkataramaya 's Law Lexicon Vol. II p.1122 the expression 'to pay money ' has the following connotation: "To pay money is to pay it in respect of a right which some person has to receive it". In Corpus Juris Secundum Vol. 70 at page 200 the word 'pay ' if used as a noun is defined as remuneration, wages, compensation, salary and the following observations are also made: "To noun 'pay ' has been held equivalent to, or synonymous with, 'compensation ', salary and wages and has been compared with, or distinguished from, 'allowance ' and 'consideration '". A careful analysis of the meanings assigned to the word 'pay ' in the various dictionaries and the texts referred to above would clearly reveal that the expression 'in the pay of ' connotes that a person is getting salary, compensation, wages or any amount of money. This by itself however does not lead to the inference that a relationship of master and servant must necessarily exist in all cases where a person is paid salary. This aspect of the matter would become crystal clear if we examine the nature and the constitutional position and status of a Minister or a Chief Minister. 284 Article 164 of the Constitution runs thus: "Other provisions as to Ministers: (1) The Chief Minister shall be appointed by the Governor and the other Ministers shall be appointed by the Governor on the advice of the Chief Minister, and the Ministers shall hold office during the pleasure of the Governor: Provided that in the States of Bihar, Madhya Pradesh and Orissa, there shall be a Minister in Charge of tribal welfare who may in addition be in charge of the welfare of the Scheduled Castes and backward classes or any other work". This Article clearly shows that a Chief Minister is appointed by the Governor and having been appointed by the Governor it is manifest that he is subordinate to the Governor. Even in section 52 (1) of the Government of India Act, 1935 which preceded our Constitution the provision was worded thus: "52 (1) The Governor of a Governor 's province may, by notification, appoint ministers, not being members of his executive council or other officials to administer transferred subjects, and any ministers so appointed shall hold office during his pleasure: There may be paid to any minister so appointed in any province the same salary as is payable to a member of the executive council in that province, unless a smaller salary is provided by vote of the legislative council of the province". In this section also it was the Governor who alone had the power to choose the ministers. In fact, in Article 164 the word 'appointment ' is much higher than the concept of a person being chosen. Article 164(5) provides for the salary and allowances of Ministers and runs thus: "164 (5) The salaries and allowances of Ministers shall be such as the Legislature of the State may from time to time by law determine and, until the Legislature of the State so determines, shall be as specified in the Second Schedule". Under this provision the Ministers on being appointed by the Governor are entitled to such salaries and allowances as the Legislature of the State may determine from time to time and until this is done, the emoluments will be such as are specified in the Second 285 Schedule. As however all the Legislatures of the States as also Parliament have already passed Acts providing for the salaries and emoluments of the Chief Minister and the Ministers the specification of their emoluments in the Second Schedule to the Constitution have been deleted. Article 167 lays down the duties of the Chief Minister and runs thus: "167. Duties of Chief Minister as respects the furnishing of information to Governor etc. It shall be the duty of the Chief Minister of each State (a) to communicate to the Governor of the State all decisions of the Council of Ministers relating to the administration of the affairs of the State and proposals for legislation; (b) to furnish such information relating to the administration of affairs of the State and proposals for legislation as the Governor may call for; (c) if the Governor so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council". It is, therefore, clear that by virtue of the provisions contained in Article 167, the Chief Minister undoubtedly performs a public duty of the nature as enjoined by clauses (a) to (c) of Article 167. It is also clearly provided in the Constitution that the Chief Minister or the Ministers are entitled to salaries or allowances obviously in lieu of public duties that they perform. The salaries given to the Chief Minister or the Ministers are given from the Government funds, and therefore, there will be no difficulty in holding that the Ministers are in the pay of the Government inasmuch as they receive their salaries, remunerations or wages from the Government. Mr. Venu Gopal, however, submitted that no analogy can be drawn between the constitutional provisions and the provisions contained in the Government of India Act because the constitutional position of a Chief Minister under the Constitution was not the same as under the Government of India Act where the Governor enjoyed vast and plenary powers and was not bound by the advice of the Council of Ministers as the Governor is under our Constitution. It is not necessary to probe into this aspect of the matter, because the Constitution clearly lays down that the Governor appoints the Chief Minister and being the appoint 286 ing authority he is also the dismissing authority. We are not at all concerned in the instant case as to the circumstances under which the Governor can appoint or dismiss the Chief Minister. Once it is conceded that the Governor appoints the Chief Minister who is paid a salary according to a statute made by the legislature from the Government funds, the Chief Minister becomes a person in the pay of the Government so as to fall squarely within clause (12) of section 21 of the Penal Code. There is another circumstance to show that a Chief Minister or a Minister is undoubtedly a public servant which was relied upon by the High Court in repelling the argument of Mr. Venu Gopal. Section 199 of the Code runs thus: "199 (2) Notwithstanding anything contained in this Code, when any offence falling under Chapter XXI of the Indian Penal Code is alleged to have been committed against a person who, at the time of such commission is the President of India, the Vice President of India, the Governor of a State, the Administrator of a Union Territory or a Minister of the Union or of a State or of a Union territory, or any other public servant employed in connection with the affairs of the Union or of a State in respect of his conduct in the discharge of his public functions a Court of Session may take cognizance of such offence, without the case being committed to it, upon a complaint in writing made by the Public Prosecutor". The use of words 'other public servants ' following a Minister of the Union or of a State clearly show that a Minister would also be a public servant as other public servants contemplated by section 199 (2) of the Code are the Code being a statute complimentary and allied to the Penal Code can be looked into for the purpose of determining the real meaning and import of the words 'public servant ' as used in the aforesaid section. The Solicitor General placed reliance on the decision of this Court in the case of Dattatraya Narayan Patil vs State of Maharashtra(1) where this Court had held in a slightly different context that a Minister was a public servant. Mr. Venu Gopal has, however, distinguished this decision on the ground that this Court proceeded on the assumption that it was not disputed before the Court that the Minister was a Public Servant and the case having been decided on the concession 287 of the parties cannot be relied upon by the Solicitor General. In that case to which two of us (Untwalia and Fazal Ali, JJ.) were parties to the judgment, the following observations were made: "The duty assigned to a public servant by his master, be it be under a statute or by an executive order, will assume the character of public duty, provided the duty assigned is not illegal or against public policy. Will it make any difference in the case of a Minister? In our judgment, not. The Minister is a public servant not disputed". These observations no doubt fortify our opinion that the Chief Minister is a public servant which is based on the reasons that we have already given and which are different from those given in the case cited before us. In the case of Emperor vs Sibnath Banerji & Ors.(1) the Privy Council clearly held that it was not in a position to accept the suggestion of the counsel that the Minister was not subordinate to the Governor. This was the precise argument which had been put forward by Mr. Venu Gopal when he contended that the Chief Minister is not subordinate to the Governor. The Privy Council observed as follows in this connection: "So far as it is relevant in the present case, their Lord ships are unable to accept a suggestion by counsel for the respondents that the Home Minister is not an officer subordinate to the Governor within the meaning of s.49 (1), and so far as the decision in Emperor vs Hemendra Prosad Ghoshe (19) I.L.R. decides that a Minister is not such an officer their Lordships are unable to agree with it. While a Minister may have duties to the Legislature, the provisions of s.51 as to the appointment, payment and dismissal of Ministers, and s.59 (3) and (4) of the Act of 1935, and the Business Rules made by virtue of s.59, place beyond doubt that the Home Minister is an officer subordinate to the Governor". We find ourselves in complete agreement with the view taken by the Privy Council. In fact the case of the Privy Council referred to above was noticed and relied upon by this Court in the case of Rao 288 Shiv Bahadur Singh & Anr. vs The State of Vindhya Pradesh(1) where this Court observed as follows: "Clause 9 of section 21 Indian Penal Code shows that every officer in the service or pay of the Crown for the performance of any public duty is a 'public servant '. The decision of the Privy Council in King Emperor vs Sibnath Banerji(2) is decisive to show that a Minister under the Government of India is 'an officer ' subordinate to the Governor. On the same reasoning there can be no doubt that the Minister of Vindhya Pradesh would be an 'Officer of the State of Vindhya Pradesh. Therefore, prior to the passing of ordinance No. XLVIII of 1949 and on the view that the Indian Penal Code with necessary adaptation mutatis mutandis was in force at least in the Rewa portion of Vindhya Pradesh (if not in the entirety of Vindhya Pradesh) the first appellant was a public servant as defined in section 21, Indian Penal Code, as adapted. The amendment of the said section brought about therefore no substantial change in the position of the first appellant". In the case of Namdeo Kashinath Aher vs H. G. Vartak & Anr(3) Deshpande, J. Observed as follows: "Whatever be the practical and actual position, the fact remains that it is the Governor who can accept the resignation of the Ministry or Minister and it is the Governor again who can dismiss or remove the Minister from office. Under section 3(60) of the , the word 'State Government ' has been defined. Clause (c) of section 3(60) is applicable to the present case and therefore the State Government is to mean the Governor for the purpose of the present case. The result therefore is that accused No.1 is a public servant who can be said to be removable only by the State Government, meaning thereby the Governor, and I do not find any difficulty in coming to the conclusion that the second requirement of Section 197, Cr. P.C. also is fully satisfied as far as accused No.1 is concerned". 289 In the case of section Tara Singh vs Director Consolidation of Holdings, Punjab, Jullundur & Ors.(1) the Punjab High Court took the same view and observed as follows: "It follows from the above conclusion that under Article 154 (1) of the Constitution the Governor may act directly or through his subordinate officers. In the present case he has acted through the Development Minister. The question arises whether he could so act. Obviously the executive authority carries on the business of the Government and part of this business is the power given to the State Government under section 42 of the Consolidation Act. Under Article 166 (3) of the Constitution the Governor can allocate this business to any Minister he likes. . Moreover there can be no doubt that a Minister is subordinate to the Governor. The Governor is the executive head of the State and this position he does not share with the Chief Minister or any other Minister. He allocates his executive duties to various Ministers under Article 166 (3) of the Constitution. He appoints a Minister albeit on the advice of the Chief Minister and the Minister holds office during his pleasure. Therefore it is open to a Governor under the Constitution to dismiss an individual Minister at his pleasure. In these circumstances there can be no doubt that a Minister is to be considered as an officer subordinate to the Governor". We find ourselves in complete agreement with the view taken and the reasons given by the Punjab High Court in the aforesaid case. To the same effect is a decision of the J & K High Court in the case of Bakshi Ghulam Mohd. vs G. M. Sadiq & Ors(2) where Anant Singh, J. observe as follows: "A Minister of a State is paid from its public exchequer, and he is paid for doing public duty and, in my opinion, a Minister is a 'public officer ' within the meaning of Sec. 80 as defined in Sec. 2 (17) (h) of the Civil Procedure Code". The opinion expressed by the learned Judge is clearly in consonance with the view that we have taken in this case. 290 Three facts, therefore, have been proved beyond doubt: 1. That a Minister is appointed or dismissed by the Governor and is, therefore, subordinate to him whatever be the nature and status of his constitutional functions. That a Chief Minister or a Minister gets salary for the public work done or the public duty performed by him. That the said salary is paid to the Chief Minister or the Minister from the Government funds. It is thus incontrovertible, that the holder of a public office such as the Chief Minister is a public servant in respect of whom the Constitution provides that he will get his salary from the Government Treasury so long he holds his office on account of the public service that he discharges. The salary given to the Chief Minister is coterminous with his office and is not paid like other constitutional functionaries such as the President and the Speaker. These facts, therefor, point to one and only one conclusion and that is that the Chief Minister is in the pay of the Government and is, therefore, a public servant within the meaning of section 21 (12) of the Penal Code. For the reasons given above, we are satisfied that a Chief Minister or a Minister is undoubtedly a public servant as defined in section 21(12) (a) of the Penal Code and the view taken by the High Court on this point was absolutely correct in law. The result is that all the contentions raised by Mr. Venu Gopal, counsel for the appellant fail and the appeals are dismissed. The case before the Special Judge will now proceed to its ultimate end according to law. N.V.K. Appeals dismissed.

In December 1973, the Madras Legislature passed an Act known as the Tamil Nadu Public Men (Criminal Misconduct) Act, 1973 after obtaining the assent of the President. The State Act was amended by Act 16 of 1974 and the President 's assent was received on April 10, 1974. The provisions of the State Act were brought into force with effect from May 8, 1974. The State Act was repealed and the President 's assent to the repealing Act was given on September 6, 1977. The Act provided for the investigation in respect of a complaint of criminal misconduct against any 'public man by a Commissioner or the Additional Commissioner of Inquiries appointed for this purpose. The word 'public man ' had been given a specific connotation in section 2(c) of the Act and clearly excluded a Government servant. The appellant was the former Chief Minister of the State of Tamilnadu. On June 15, 1976 the Chief Secretary to the State Government requested the Central Bureau of Investigation to make a detailed investigation into certain allegations that the appellant and others were alleged to have abused their official position in the matter of purchase of wheat from Punjab. With the State Governor 's sanction a charge sheet was filed after investigation for the prosecution of the appellant under sections 161, 468 and 471 IPC and section 5(2) read with section 5(1) (d) of the Prevention of Corruption Act for allegedly having derived pecuniary advantage to the extent of Rs. 4 to 5 lakhs for passing favourable orders in respect of some firms. The appellant applied for discharge under section 239 Cr. P.C. on the ground that the prosecution against him suffered from various legal and constitutional infirmities. On the application being rejected, the appellant applied to the High Court for quashing the proceedings and for setting aside the order of the Special Judge refusing to discharge him. The High Court rejected the applications. 255 In the appeals to this Court, it was contended on behalf of the appellant: (1) Even though the State Act was repealed, the provisions of the Central Acts having themselves been protanto repealed by the State Act when it was passed could not be pressed into service for the purpose of prosecuting the appellant unless these provisions were re enacted by the appropriate legislature. (2) It was contended that even assuming that the State Act had ceased to exist and the Central Acts applied, the appellant cannot be prosecuted under any of the sections of the Penal Code or the Corruption Act, because by virtue of the position that the appellant enjoyed as Chief Minister, there was no relationship of master and servant between him and the Government and he was acting as a constitutional functionary, and therefore could not be described as a 'public servant ' as contemplated by section 21(12) of the Penal Code. (3) The provisions contained in the State Act run counter to those of the Central Acts in respect of the following matters; (a) The procedure for investigation of the offences by a Central Agency as contemplated by the Corruption Act is dispensed with and is instead invested in a Commissioner appointed under the State Act. (b) The provisions under the Prevention of Corruption Act regarding the grant of sanction under section 197 of the Code to the accused is given a complete go by and instead a Commissioner is appointed to hold a regular inquiry for himself and then to submit his report. An accused who has to be tried under the State Act is thus deprived of the protection afforded to every Government servant regarding grant of a sanction by the appointing authority. Therefore the protection if any, given by the State Act is purely illusory, and (4) By virtue of the fact that the State Act has obtained the assent of the President, it will be deemed to be a dominant legislation, and therefore it would over rule the Central Acts. Dismissing the appeals, ^ HELD: 1. The scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parliament and the State Legislatures. First, regarding the matters contained in List I, i.e. the Union List to the Seventh Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by article 254(1). Thirdly, so far as the matters in List II, i.e. the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. [263 D E] 2. In such matters repugnancy may result from the following circumstances: (i) Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy. 256 (ii) Where however a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with cl. (2) of article 254. (iii) Where a law passed by the State legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the lay may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List an entrenchment, if any, being purely incidental or inconsequential. (iv) Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with or repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Art 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and over rule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to article 254. [263 F 264 D] 3. A careful analysis, therefore, of the various provisions of the State Act leads to the irresistible inference that the State Act was passed with a view to afford sufficient protection to a public man by enjoining a summary inquiry or investigation by a high and independent Tribunal of the status of a High Court Judge or a Senior District Judge to instil confidence in the people and to prevent public men from being prosecuted on false, frivolous and vexatious allegations. Although the ingredients of criminal misconduct as defined in section 5(1) (d) of the Corruption Act are substantially the same in the State Act as in the Central Acts but here also the punishment is much severer in the case of the State Act than the one contained in the Central Acts. It is, therefore, manifest that the State Act does not contain any provision which is repugnant to the Central Acts, but is a sort of complementary Act which runs pari passu the Central Act. [270 G 271 A] 4. Prima facie, there does not appear to be any inconsistency between the State Act and the Central Acts. Before any repugnancy can arise, the following conditions must be satisfied: (i) That there is a clear and direct inconsistency between the Central Act and the State Act; (ii) that such an inconsistency is absolutely irreconcilable; (iii) that the inconsistency between the provisions of the two Acts is of such a nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other. [272D E] 5. (1) In order to decide the questions of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, 257 so that they cannot stand together or operate in the same field; (2) that there can be no repeal by implication unless the inconsistency appears on the face of the two statutes; (3) that where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results; (4) that where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field. [278 F H] Hume vs Palmer, ; ; Union Steamship Co. of New Zealand vs Commonwealth, ; ; Clyde Engineering Co. vs Cowburn, ; exhibit Parte McLean; , ; Zavarbhai Amaidas vs State of Bombay, [1955] 1 SCR 799; Ch. Tika Ramji & Ors. vs The State of U.P. & Ors. ; Shyamakant Lal vs Rambhajan Singh, ; Om Prakash Gupta vs State of U.P., ; ; Deep Chand vs State of UP & Ors. [1959] 2 Supp. SCR 8, Megh Raj & Ors. vs Allah Rakhia & Ors. AIR 1942 FC 27; State of Orissa vs M. A. Tulloch & Co. ; ; T. section Balliah vs T. section Rangachari; , ; referred to. Colin Heward 's Australian Federal Constitution Law 2nd Edn. Nicholas Australian Constitution 2nd Edn. p. 303 referred to. There can be no doubt that the State Act creates distinct and separate offences with different ingredients and different punishments and it does not in any way collide, with the Central Acts. On the other hand, the State Act itself permits the Central Act, namely, the Criminal Law (Amendment) Act to come to its aid after an investigation is completed and a report is submitted by the Commissioner or the Additional Commissioner. [279 A B] 6. Doubtless, the State Act is the dominant legislation but there are no provisions in the State Act which are irreconcilably or directly inconsistent with the Central Acts so as to over rule them. [279 C] The original section 29 of the State Act underwent an amendment which was brought about by Tamil Nadu Act 16 of 1974 which substituted a new section 29 for the old one. This amendment received the assent of the President on 10th April, 1974 and was published in the Tamil Nadu Government Gazette Extra ordinary, dated 16 April, 1974. Although the State Act was passed as far back as 30 December, 1973 it received the assent of the President on the 10 April, 1974 that is, on the same date as Act 16 of 1974. The Act was however brought into force on the 8 May, 1974 when the new section 29 which had already replaced the old section and had become a part of the statute. Therefore, for all intents and purposes the State Act cannot be read in isolation, but has to be interpreted in conjunction with the express language contained in section 29 of the State Act. The legislature has in unequivocal terms expressed the intention that the State Act which was undoubtedly the dominant legislation would only be "in addition to and not in derogation with any other law for the time being in force" which manifestly includes the Central Acts, namely, the Indian Penal Code, the Corruption Act and the Criminal Law (Amendment) Act. Thus, the Legislature about a month before the main Act came into force clearly declared its intention that there would be no question of the State Act colliding with the Central Acts referred to above. The second part 258 of section 29 also provides that nothing contained in the State Act shall exempt any public man from being proceeded with by way of investigation or otherwise under a proceeding instituted against him under the Central Acts. It is, therefore, clear that in view of this clear intention of the legislature there can be no room for any argument that the State Act was in any way repugnant to the Central Acts. [279 D 280 D] 7. The provisions of section 29 would be presumptive proof of the fact that there is no repugnancy between the State Act and the Central Acts nor did either the legislature or the President intend to create any repugnancy between these Acts as a result of which the criticism regarding the repugnancy is completely obliterated in the instant case and we, therefore, hold that the State legislature never intended to occupy the same field as covered by the Central Acts. [281 B] 8. So far as the first part of cl. (12) (a) is concerned, namely 'in the service of the Government undoubtedly signifies a relationship of master and servant where the employer employs the employee on the basis of a salary or remuneration. However, the second limb of the clause, 'in the pay of the Government ' is concerned, that appears to be of a much wider amplitude so as to include within its ambit even a public servant who may not be a regular employee receiving salary from his master. A Minister or a Chief Minister will be clearly covered by the said expression. [282 E F] A careful analysis of the meanings assigned to the word 'pay ' in the various dictionaries and the texts would clearly reveal that the expression 'in the pay of ' connotes that a person is getting salary, compensation, wages or any amount of money. This by itself however does not lead to the inference that a relationship of master and servant must necessarily exist in all cases where a person is paid salary. [283 G H] Shorter Oxford English Dictionary; Websters Third New International Dictionary: Websters New World Dictionary: Words and Phrases, Permanent Edition Vol. 31A p. 176. Venkataramaya 's Law Lexicon Vol. 11 p. 1122. Corpus Juris Secundum Vol. 70 p. 200; referred to. By virtue of the provisions contained in article 167, the Chief Minister undoubtedly performs a public duty of the nature as enjoined by clauses (a) to (c) of article 167. It is also clearly provided in the Constitution that the Chief Minister or the Ministers are entitled to salaries or allowances obviously in lieu of public duties that they perform. The salaries given to the Chief Minister or the Ministers are given from the Government funds, and, therefore, there will be no difficulty in holding that the Ministers are in the pay of the Government inasmuch as they receive their salaries, remunerations or wages from the Government. [285 E F] Once it is conceded that the Governor appoints the Chief Minister who is paid a salary according to a statute made by the legislature from the Government funds, the Chief Minister becomes a person in the pay of the Government so as to fall squarely within cl. (12) of section 21 of the Penal Code. [286 B] 259 10. The use of the words 'other public servants ' following a Minister of the Union or of a State clearly show that a Minister would also be a public servant as other public servants contemplated by section 199(2) of the Code and the Code being a statute complementary and allied to the Penal Code can be looked into for the purpose of determining the real meaning and import of the words 'public servant ' as used in the aforesaid section [286 F] Dattatraya Narayan Patil vs State of Maharashtra, [1975], Supp. SCR 145; Emperor vs Sibnath Banerji & Ors., AIR 1945 PC 156; Rao Shiv Bahadur Singh & Anr. vs The State of Vindhya Pradesh, ; ; referred to. section Tara Singh vs Director Consolidation of Holdings, Punjab, Jullundur & Ors. AIR 1958 Pub. 302, Bakshi Ghulam Mohd. vs G. M. Sadiq & Ors., AIR 1968 J & K 98; approved. Three facts that have been proved beyond doubt: (i) That a Minister is appointed or dismissed by the Governor and therefore, subordinate to him whatever be the nature and status of his constitutional function. (ii) That a Chief Minister or a Minister gets salary for the public work done or the public duty performed by him. (iii) That the said salary is paid to the Chief Minister or the Minister from the Government funds. [290A B] 12. It is thus incontrovertible, that the holder of a public office such as the Chief Minister is a public servant in respect of which the Constitution provides that he will get his salary from the Government Treasury so long he holds his office on account of the public service that he discharges. The salary given to the Chief Minister is coterminus with his office and is not paid like other constitutional functionaries such as the President and the Speaker. These fact, therefore, point to one and only one conclusion and that is that the Chief Minister is in the pay of the Government and is, therefore, a public servant within the meaning of section 21(12) of the Penal Code. [290 C D]

8k-16k

minal Appeal No. 193 of 1964. Appeal from the judgment and order dated April 29, 1964 ,of the Calcutta High Court in Criminal Appeal No. 369 of 1962. section D. Banerjee, Advocate General for the State of West Bengal, B. Sen, P. K. Chatterjee, M. K. Banerjee and P. K. Bose, for the appellant. M.C. Setalvad, A. N. Sinha and Sukumar Ghose, for the respondent, N.S. Bindra, R. H. Dhebar and R. N. Sachthey, for inter vener No. 1. A. V. Rangam, for intervener No. 2. V. A. Seyid Muhamad, Advocate General for the State of Kerala and A. G. Puddisery, for intervener No. 3. O. P. Rana, for intervener No. 4. I. N. Shroff, for intervener No. 5. K. B. Mehta, for intervener No. 6. The Judgment of SUBBA RAO, C.J., WANCHOO, SIKRI, RAMASWAMI, SHELAT, BHARGAVA and VAIDIALINGAM, JJ. was delivered by SBBBA RAO, C. J. BACHAWAT J., delivered a separate concurring Judgment. SHAH, J. delivered a dissenting Opinion. Subbarao, C.J. This Full Bench of 9 Judges has been cons tituted to consider the correctness of the decision of this Court 175 in Director of Rationing and Distribution vs The Corporation of Calcutta(1). The relevant facts are simple and are not in dispute. The State of West Bengal was carrying on the trade of a daily market at 1, Orphanganj Road, Calcutta, without obtaining a licence as required under section 218 of the Calcutta Municipal Act, 1951 (West Bengal Act 33 of 1951) hereinafter called the Act. The Corporation of Calcutta filed a complaint against the State of West Bengal in the Court of the Presidency and Municipal Magistrate, Calcutta, under section 541 of the Act for contravening the provisions of section 218 thereof. Under section 218 of the Act, every person who exercises or carries on in Calcutta any trade, shall take out a licence and shall pay for the same such fee as is mentioned in that behalf in Schedule IV to the Act. Admittedly for the year 1960 61, the Government of West Bengal did not take out a licence under the said section but carried on the said trade. The main contention of the Government was that the State was not bound by the pro visions of the Act. The learned Magistrate, accepting the said contention, acquitted the State. On appeal, the High Court of Calcutta held that the State was carrying on the business of running a market and, therefore, it was as much bound as a private citizen to take out a licence. It distinguished the decision of this Court in Director of Rationing and Distribution vs The Corporation of Calcutta(1) on the ground that the said decision was concerned with the sovereign activity of the State. In the result the State of West Bengal was convicted under section 537 of the Act section 537 appears to be a mistake for section 541 and sentenced to pay a fine of Rs. 250, with the direction that when realized, it should be paid to the Corporation. Hence the present appeal. Learned Advocate General of West Bengal raised before us the following points: (1) The State is not bound by the provisions of a statute unless it is expressly named or brought in by necessary implication; (2) the said principle equally applies to sovereign and non sovereign activities of a State; and Mr. N. section Bindra, learned counsel appearing for the Attorney General raised before us the third point, namely, this Court has no power under the Constitution to review its earlier judgment. While the learned Advocate General contended that the rule of construction in favour of the State was part of the common law of England accepted as the law of this country and, therefore, was law in force within the meaning of article 372 of the Constitution, Mr. N. section Bindra argued that the said rule of construction was law of the land in that it was declared to be so by the Judicial Committee in Province of Bombay vs Municipal Corporation of (1) ; 176 the City of Bombay(1) and, therefore, it was law in force within the meaning of article 372 of the Constitution. The third contention need not detain us, for it has been rejected by this Court in The Bengal Immunity Company Limited vs The State of Bihar(2). There a Bench of 7 Judges unanimously held that there was nothing in the Constitution which prevented the Supreme Court from departing from a previous decision of its own if it was satisfied of its error and of its baneful effect on the general interests of the public. If the aforesaid rule of construction accepted by this Court is inconsistent with the legal philosophy of our Constitution, it is our duty to correct ourselves and lay down the right rule. In constitutional matters which affect the evolution of our polity, we must more readily do so than in other branches of law, as perpetuation of a mistake will be harmful to public interests. While continuity and consistency are conducive to the smooth evolution of the rule of law, hesitancy to set right deviations will retard its growth. In this case, as we are satisfied that the said rule of construction is inconsistent with our republican polity and, if accepted, bristles with anomalies, we have no hesitation to reconsider our earlier decision. At the outset it will be convenient to notice the facts of the decision of this Court in Director of Rationing and ' Distribution vs The Corporation of Calcutta(3) and the reasons given by this Court for applying the said rule of construction to an Indian statute. There, the Director of Rationing and Distribution was using certain premises in Calcutta for storing rice flour, etc. without taking out any licence under section 385 (1)(a) of the Calcutta Municipal Act, 1923. The Corporation of, Calcutta filed a complaint against the said Director in the Magistrate 's Court for the contravention of the said provision. This Court held that the State was not bound by the provisions of section 386 (1)(a) of the said Act and that the appellant was not liable to prosecution for the contravention of the said section. Sinha, C. J., speaking for Imam and Shah, JJ., gave one judgment, Sarkar, J., gave a separate but concurrent judgment, and Wanchoo, J., recorded his dissent. The reasoning of Sinha, C.J., is found in the following passage : "It is well established that the common law of England is that the King 's prerogative is illustrated by the rule that the Sovereign is not necessarily bound by a statutory law which binds the subject. This is further enforced by the rule that the King is not bound by a statute unless he is expressly named or unless he is bound by necessary implication or unless, the statute being for the public good, it would be absurd to exclude the King from it." (at page 170). (1) [1946] L.H. 73 I.R. 271. (2) (3 ; 177 "That was law applicable to India also, as authoritatively laid down by the Privy Council in the case referred to above [(1946) L. R. 73 I.A. 271)]. it (law in force under article 372 of the Constitution) must be interpreted as including the common law of England which was adopted as the law of this country before the Constitution came into force." (At p. 173). Sinha, C.J., therefore, held that the said rule of construction was, part of the common law of England, that it was adopted by this, country and that Art ' 372 of the Constitution continued it. Sarkar, J., on the other hand, agreed with the conclusion arrived at by Sinha, C.J., but on a different ground. He based his conclusion not on any common law doctrine, but simply on the ground that the said rule of construction of statutory provisions was accepted and followed in England, America and India. Wanchoo, J., in his dissent, put the case in a different perspective. The following, passage brings out his line of thought : "Two things are clear from this modern conception of royal prerogative, namely (1) that there must be a Crown or King to whom the royal prerogative attaches, and (2) that the prerogative must be part of the common law of England. Both these conditions existed when the Privy Council decision in Province1 of Bombay vs Municipal Corporation of the City of Bombay(1) was given in October 1946; the King was still there and the Privy Council held that the English common law rule of construc tion applied to Indian legislation as much as to English ,statutes." (At p. 184). "In our country the Rule of Law prevails and our Constitution has guaranteed it by the provisions contained in Part III thereof as well as by other provisions in other Parts. It is to my mind inherent in the conception of the Rule of Law that the State, no less than its citizens and others, is bound by the laws of the land. When the King as the embodiment of all power executive, legislative and judicial has disappeared and in our republican Constitution, sovereign power has been distributed among various organs created 'thereby, it seems, to me that there is neither justification nor necessity for continuing the rule of construction based on the royal, prerogative." (At p. 185). "But where the royal prerogative is merely a rule of construction of statutes based on the existence of the Crown in England and for historical reasons, I fail to see why in a democratic republic, the courts should not follow the ordinary principle of construction that no one (1) [1946] L.R. 73 I.A. 271. 178 is exempt from the operation of a statute unless the statute expressly grants the exemption or the exemption arises by necessary implication." (At pp. 188 189). The conflict between the two views expressed by the learned Judges in the earlier decision mainly rests on the meaning of the expression "law in force" in article 372 of the Constitution. While Sinha, C.J., took the view that the common law of England, including the rule of construction, was accepted as the law of this country and was, therefore, the law in force within the meaning of the said Article, Wanchoo, J., took the view that whatever might be said of the substantive laws, 'a rule of construction adopted by the common law of England and accepted by the Privy Council at a time when the Crown was functioning in India, was not the law in force within the meaning of the said Article. We shall now consider the validity of the conflicting views The common law of England is clear on the subject. In Halsbury 's Laws of England, 3rd Edn., Vol. 7, in Part 5 of the Chapter on "Constitutional Law" under the heading "The Royal Prerogative", the Royal prerogatives are enumerated and their limitations are given. In para 464 it is stated : "The general rule is that prerogatives cannot be affected or parted with by the Crown, except by express statutory authority. " The prerogative right can be taken away by law because the law is made by the Crown with the assent of the Lords and the Commons. It can be taken away only by law to which the Crown is a party. Whether a particular statute has taken away such right pertains to the domain of the rule of construction. The relevant rule of construction evolved by judicial decisions in England may be stated thus : "At all events, the Crown is not reached except by express words or by necessary implication in any case where it would be ousted of an existing prerogative or interest. " (See Perry vs Eames) (1). It is said much to the same effect in Maxwell 's Interpretation of Statutes, 11th Edn., at page 129, thus : "It is presumed that the legislature does not intend to deprive the Crown of any prerogative, right or property, unless it expresses its intention to do so in explicit terms, or makes the inference irresistible." The same rule is given in Bacon 's Abridgment 7th Edn., 9.462. The legal position in England may be summarised thus : (1) [1891] 1 179 "The substantive rule of law is that the prerogative of the Crown can only be taken away by law. The rule of construction evolved by the courts to ascertain the legislative intention is, that it is presumed that a statute has not taken away the prescriptive right unless it has expressly or by necessary implication done so. " There is an essential distinction between a substantive law and a rule of construction and that is well expressed by Craies in his book "On Statute Law", 6th Edn., at p. 10, thus : "A rule of law, e.g., the Rule against Perpetuities or the Rule in Shelley 's case (abolished in 1925), exists independently of the circumstances of the parties to a deed, and is inflexible and paramount to the intention expressed in the deed. A rule of law cannot be said to control the construction of a statute, inasmuch as a British statute is itself part of the supreme law of the land and overrides any pre existing rules with which it is inconsistent. A rule or canon of construction, whether of will, deed or statute, is not inflexible, but is merely a presumption in favour of a particular meaning in case of ambiguity. This was well expressed by Bowen, L.J. in L. N. W. Ry. vs Evans:(1) 'These canons do not override the language of a statute where the language is clear : they are only guides to enable us to understand what is inferential. In each case the Act of Parliament is all powerful, and when its meaning is unequivocally expressed the necessity for rules of construction disappears and reaches its vanishing point. " The same principle was stated by Bhashyam Ayyangar, J., in Bell vs The Municipal Commissioners for the City of Madras(2) thus : "These compendious canons of interpretation which are in the nature of maxims can only be regarded as mere guides to the interpretation of Statutes and ought not to be applied as if they were statutory clauses, enacted with all the precision and provisos of an Interpretation Act. " Franfurter, J., said to the same effect in United States vs United Mine Workers of America thus : (3) "At best, this canon, like other generalities about statutory construction, is not a rule of law. Whatever persuasiveness it may have in construing a particular (1) [1893] I Ch. 16, 27. (2) I.L.R. [1902] 25 Mad. 457, 484. (3) [1947] 91 L. ed. 180 statute derives from the subject matter and the terms of the enactment in its total environment. " Even in England this rule of interpretation has not been treated as inflexible. It is gradually losing ground in many branches of law. The incongruity of the rule of discrimination in favour of the Crown was pointed out by Glanville L. Williams in his treatise on "Crown Proceedings", at p. 53 : "The rule originated in the Middle Ages, when it perhaps had some justification. Its survival, however, is due to little but the vis inertiae. " The author continues at p. 54 : "With the great extension in the activities of the State and the number of servants employed by it, and with the modern idea, expressed in the Crown Proceedings Act, [compare in this connection article 300 of our Constitution], "that the State should be accountable in wide measure to the law, the presumption should be that a statute binds the Crown rather than it does not. " The next question is, how far and to what extent the common law of England relating to the prerogatives of the Crown has been accepted as the law of our country? Nothing has been placed before us to show that the entire body of the common law pertaining to prerogatives was accepted as the law throughout India. India at the relevant time comprised Provinces and Native States. As Bhashyam Ayyangar, J., pointed out in Bell vs The Municipal Commissioners for the City of Madras() "the prerogatives of the Crown in India a country in which the title of the British Crown is of a very mixed character may vary in different provinces, as also in the Presidency towns as distinguished from the mofussil. 'The determination, with anything like legal precision, of all the prerogatives of the British Crown in India is by no means an easy task. " It is well known that the Common law of England was applied as such in the original sides of the High Courts of Calcutta, Bombay and Madras, and that in the mofussil courts the principles embodied in the common law were invoked in appropriate cases on the ground of justice, equity and good conscience. It cannot, therefore, be posited that either the entire body of common law of England relating to prerogatives of the King or even the rule of construction as forming part of that law was accepted as law in every part of the country. It has to be established whenever a question arises as to what part of the common law was accepted as the law in a particular part of the country. Learned Advocate General of West Bengal referred us to the decision of the Privy Council in Province of Bombay vs Municipal (1) I.L.R. ,484. 181 Corporation of the City of Bomhay(1) in support of his contention that the common law of England was accepted as the law of our country in that regard. In that case the question was whether the Crown was not bound by section 222(1) and section 265 of the City of Bombay Municipal Act, 1888 which gave the Municipality power to carry water mains for the purposes of water supply through across or under any street and into, through or under any land "whatsoever within the city. " When the Municipal Corporation wanted to lay water mains through the land belonging to the Government of Bombay, the Government did not agree except on some condi tions. Thereafter, the dispute between the parties was referred to the High Court. Ultimately, setting aside the order of the High Court, the Privy Council held that the rule that no statute bound the Crown unless the Crown was expressly or by necessary implication made bound thereunder applied to the Crown in India and that there was no such express intention or necessary implication in the said section. Indeed, the High Court also accepted that principle, but on the construction of the relevant provisions it came to the conclusion that there was such a necessary implication thereunder. On the application of the principle there was no contest before the Privy Council. The Privy Council expressly stated so at p. 274, when it observed : "The High Court held, following previous decisions of its own, that the principle to be applied for the decision of the question whether or not the Crown is bound by a statute is no different in the case of Indian Legislation from that which has long been applied in England. The parties concurred in accepting this view, and their Lordships regard it as correct. " The decision made on a concession made by the parties even though the principle conceded was accepted by the Privy Council without discussion, cannot be given the same value as one given upon a careful consideration of the pros and cons of the question raised. Further, no argument was raised before the Privy Council that the Common law of England had legal force only in the said three Presidency towns and not in the rest of the country, for that case happened to be one that arose in the City of Bombay. The observations of the Privy Council that the principles obtaining in England also governed the Crown in India are, rather wide. Nor any argument was raised before the Privy Counsel making a distinction between substantive branches of common law and mere rules of construction. It is not possible to predicate what the Privy Council would have said if that distinction had been placed before it. Be that as it may, this decision cannot be taken as finally deciding the question that is raised before us. (1) [1946] L.R. 73 I.A. 271. 182 Learned counsel relied upon a series of Indian decisions in. support of his contention that this rule of construction had become the law of the land. It was held in The Secretary of State in Council of India vs The Bombay Landing and Shipping Company (Limited)(1) that in a winding up proceedings the Crown was entitled to the same precedence in regard to the debts due to it, in England, in Ganpat Putava vs Collector of Kanara(2) that the Crown was entitled to the same precedence in regard to fees payable to it by a pauper plaintiff, in The Secretary of State for India vs Mathura Bhai() that section 26 of the Limitation Act, 1877 being a branch of substantive law did not affect the Crown 's right, in Motilal Virchand vs The Collector of Ahmedabad(4) that the Mamlatdars ' Courts could not entertain and decide a suit to which the collector was a party in The Government of Bombay vs Esufali Salebhai(5) that the Crown had a prerogative right to intervene and claim compensation in Land Acquisition proceedings, in Hiranand Khushiram vs Secretary of State(6), that the Crown was not bound by the provision of the Bombay Municipality Act, in The Secretary of State for India vs The Municipal Corporation of Bombay (No. 1)(7) that the Crown was subject to a charge under section 212 of the Bombay City Municipal Act. A careful study of these decisions discloses that all of them related to particular prerogatives of the Crown and that the Court held either that the prerogative of the Crown Was taken away by the statute or not, having regard to the construction placed by it on the relevant statute. It is true that in some of the decisions the said rule of construction was noticed, but as the decisions turned upon the construction of the relevant provisions, it could not be said that the said rule had been accepted as an inflexible rule of construction by the Bombay High Court. In one of the judgments even the applicability of the rule of construction was doubted. A learned thesis on the subject is found in the judgment of Bhashyam Ayyangar, J., in Bell vs The Municipal Commissioners for the City of Madras(8). The Superintendent of the Government Gun carriage Factory, Madras, having brought timber belonging to the Government into the City of Madras without taking out a licence and paying the licence fees prescribed by section 341 of the City of Madras Municipal Act, was prosecuted. There was no mention of Government in the said section. A Division Bench of the Madras High Court (1) [1868] 5 Ho H. C. Rep. 23,27. (3) Bom. (5) Bom. (7) , 509. (2) Dom. 7. (4) Bom. (6) A.I.R. 1934 Bom. (8) I.L.R. (I 902) , 484. 183 Indian legislation, statutes imposing duties or taxes bound the Government unless the very nature of the duty or tax was such is to be inapplicable to it. Bhashyam Ayyangar, J., in his judgment, after considering all the relevant material on the subject statutes and English and Indian decisions came to the conclusion that exemption from the payment of tolls, rates and taxes was not in reality a prerogative of the Crown, but depended solely upon the right construction to be put on the Crown grant or the statute in question. Though the learned Judge noticed the rule of construction and affirmed its application both to English and Indian statutes vis a vis the Crown, he pointed out that the said rule, like every cognate rule of construction was not really a pre rogative of the Crown but only a canon of interpretation and a mere guide to the interpretation of statutes. That case arose in the Madras City. In Madras the_ position was that non liability of the Crown to taxes was not treated as its prerogative and the aforesaid rule of construction was only treated as a guide in interpreting the provisions of a statute. Now coming to Calcutta, a Division Bench of the Calcutta High Court in Corporation of Calcutta vs Bhupal Chandra Sinha(1) held that the Crown was bound by section 421 of the Calcutta Municipal Act, 1923 and that the unwholesome barley found in the Government stores was liable to be destroyed. No doubt, the Court re stated the said rule of construction and came to the conclusion that by necessary implication the State was bound by the said provision. A Division Bench of the same High Court in Corporation of Calcutta vs Director of Rationing and Distribution(2) held that the State Government which was carrying on a trade at premises No. 259, Upper Chitpur Road, Calcutta, and was using or permitting the use of the said premises for the purpose of storing rice etc. without licence was liable to be convicted under section 386(1)(a) of the Calcutta Municipal Act, 1923, read with section 488 thereof When the said rule of construction was pressed upon the learned Judges, they held that the law, even after coming into force of the Government of India Act, 1935, was that the Crown or the Government was bound by the statute unless it was exempted from its operation either expressly or by necessary implication. They did not, therefore, accept the rule of construction laid down by the Privy Council. It cannot, therefore, be said that in the City of Calcutta there was a universal recognition of the rule of construction in favour of the Crown. The legislative practice in India establishes that the various Legislatures of the country provided specifically exemptions in (1 ) A.I.R 1950 Cal. (2)A.I.R. 1955 Cal.282. 184 favour of the Crown whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions, see, for instance, section 74 of the Contract Act, section 9 of the Specific Relief Act, section 90 of the Indian Registration Act, section 2(a) and (b) of the Indian Easements Act, The Crown Grants Act XV of 1895, sections 295 (proviso), 356(b) and 411 and 616 (a) of the Code of Civil Procedure (old), section 212 (proviso) of the Indian Companies Act, section 20 (proviso) of the , section 1(4)(i) of the Indian Ports Act, section 3, proviso (1) of the Indian Stamps Act, 1899, and section 3 of the India Act XI of 1881 etc. What is more, Act XI of 1881 empowered the Governor General in Council by order to prohibit the levy by a Municipal Corporation of any specified tax payable by the Secretary of State for India and to direct the Secretary of State for India to pay to the Municipal Corporation in lieu of such tax some definite amounts. This Act was a pointer against the contention that there was a presumption in favour of the Crown that a statute was not binding on it. It is true that there are other Acts where there are specific provisions to the effect that the provisions of the Acts shall be binding on the Government: see section 10 of the Arbitration Act (Act X of 1940), section 116 of the Oil Field Regulation and Development Act (Act LIII of 1948). Subsequent to the making of the Constitution also there were Acts where such a provision was found. There is no firm legislative practice based upon the said presumptive rule of construction. Different statutes adopted different devices to achieve their desired results. The legislative practice, therefore, does not support the contention that in India the said rule of construction was accepted. It only shows that wherever an exemption was intended to be given to the Government it was expressly mentioned and wherever there might have been any doubt of the liability of the Government, it was expressly made liable. The rule of construction was not statutorily recognised either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country. Some of the American decisions may usefully be referred to at this stage. It was said that in America where the Crown did not exist, the same rule of construction was adopted in that country as law of the land and therefore by analogy the same legal position must be accepted in India. The decision in H. Snowden Marshall vs People of the State of New York(1) only lays down that the State of New York has the common law prerogative right of priority over unsecured creditors. This case has nothing to do with the rule of construction but was based upon the common law prerogative of the (1) (1920) 65 L.cd. 185 Crown expressly embodied in the State 's Constitution. The decision in Guarantee Trust Company of New York vs United States of America(1) accepted the immunity of the sovereign from he operation of statutes of limitation. That decision was based upon the doctrine of public policy evolved by courts, though in evolving the said policy the courts had been influenced, to some extent, by the doctrine of the pregrogative of the Crown. This decision also does not express any opinion on the rule of construction. The decision in United States of America vs United Mine Workers of America(2) ruled that statutes which in general terms, divested pre existing rights and privileges would not be applied to the sovereign without express words to that effect. But Frankfurter, J., after citing the said rule, pointed out that "At best, this canon, like other generalities about statutory construction, is not a rule of law. " The same rule was again re stated in United States of America vs Reginald P. Wittek.(3) The question there was whether the District of Columbia Emergency Rent Act did not apply to Government owned defence houses in the District such as Bellevue Houses. The Court relied not only upon the said rule of construction but also on other circumstances in support of the conclusion that the United States was exempt from the operation of that Act by necessary implication. In Jess Larson, as War Assets Administrator and Surplus Property Administrator vs Domestic and Foreign,, Commerce Corporation,(4) the purchaser of surplus coal from the War Assets Administration filed a suit against the said Administration for an injunction prohibiting the latter from selling or delivering the coal to any other person. The suit was dismissed on the ground that the sovereign immunity in suits for injunction or for specific performance was based upon public policy. But it was argued that the principle of sovereign immunity was an archaic hangover not consonant with modern morality; the majority conceded that there was substance in such a viewpoint as applied to suits for damages. Mr. Justice Frankfurter in his dissent went further and pointed out that the doctrine of sovereign immunity was in disfavour. The American decisions, therefore, were mainly based either on the provisions of the constitution of the State or on. the ground of public policy evolved by Courts. The founding fathers carried with them the English doctrine of the Crown Prerogative and it continued to influence some of the principles of public policy evolved in that country. Even so, the decisions made it clear that the rule of construction was relied upon only as one of the guides to arrive at the intention of a particular statute. That apart, the fact that the common law of England pertaining to 2,1.4 (1)(1938) 82 L. ed. 1224. (3)(1949) 93 L. ed. 1406. M19Sup. C.I./66 13 (2) (1947) 91 L. ed. 884,923. (4) (1949) 93 L. ed. 186 prerogatives influenced some of the decisions of the Supreme Court ,of the United States cannot help us in coming to a conclusion whether the said rule had become part of the Law in India. Mr. Bindra, the learned counsel appearing for the Attorney General sought to reach at the same result by a different process. He argued that the decision of the Privy Council in Province of Bombay vs Municipal Corporation of the city of Bombay and another(1) is a law of the country. We have already noticed the decision in another context. It accepted the rule of construction on a concession made by the counsel. Even if it was a considered decision on the point, it was nothing more than an application of a rule of construction with which it was familiar for ascertaining the intention of statutory provisions applicable to the Bombay city. To sum up : some of the doctrines of common law of England were administered as the law in the Presidency Towns of Calcutta, Bombay and Madras. The Common Law of England was not adopted in the rest of India. Doubtless some of its principles were embodied in the statute law of our country. That apart, in the mofussil, some principles of Common Law were invoked 'by courts on the ground of justice, equity and good conscience. It is, therefore, a question of fact in each case whether any particular branch of the Common Law became a part of the law of India or in any particular part thereof. The aforesaid rule of construction is only a canon of interpretation, it is not a rule of substantive law. Though it was noticed in some of the judgments of the Bombay High Court, the decisions therein mainly turned upon the relevant statutory provisions. One decision even questioned its correctness. There is nothing to show that it was applied in other parts of the country on the ground of justice, good con.science and equity. In Madras, it was not considered to be a binding rule of law, but only as a simple canon of construction. In Calcutta there was a conflict : one Bench accepted the construction and the other rejected it. The Privy Council gave its approval to the rule mainly on the concession of Advocates and that decision related to Bombay City. It is, therefore, clear that the said rule of construction was not accepted as a rule of construction throughout India and even in the Presidency towns it was not regarded as inflexible rule of construction. In short it has not become a law* of the land. Let us now proceed on the assumption that it has been accepted as a rule of construction throughout India. This leads us to the question whether the said rule of construction is the law of the land after the Constitution came into force. Under Article 372, (1)73 I.A. 271. 187 all the laws in force in the territory of India immediately before the commencement of this Constitution shall continue in force, therein until altered or repealed or amended by a competent Legislature or other competent authority. Can it be said that the said canon of construction was a 'law in force ' which can only be amended by a Legislature? Under Explanation (1) to the said Article, the expression 'law in force ' shall include a law passed or,. made by a Legislature or other competent authority in the territory of India before the commencement of the Constitution. it has been held by this court that the said expression includes not only enactments of the Indian Legislatures but also the Common Law of the land which was being administered by the Courts in India. (See Director of Rationing and Distribution vs The Corporation of Calcutta and others() and V. section Rice and Oil Mills & others vs State of Andhra Pradesh(2). But it is not possible to hold. that a mere rule of construction adopted by English Courts, and also by some of the Indian Courts to ascertain the intention of the Legislature was a law in force within the meaning of this term. There is an essential distinction between a law and a canon of construction. This distinction between law and the canon of construction has been noticed by us earlier and we have held that a canon of construction is not a rule of law. We are not concerned here. with the statutory rules of interpretation. We are, therefore, of the opinion that a rule of construction is not a 'law in force ' within the meaning of Article 372. The next question is whether this Court should adopt the rule of construction accepted by the Privy Council in interpreting statute vis a vis the Crown. There are many reasons why the said rule of construction is inconsistent with and incongruous in the present set up we have no Crown, the archaic rule based on the prerogative and perfection of the Crown has no relevance to a democratic republic; it is inconsistent with the rule of law based on the dictrine of equality. It introduces conflicts and discrimination. To illustrates: (1) State "A" made a general Act without expressly making the Act binding on the said State. In the same State States "B", "C" and "D" and the Union have properties. Would the rule of construction apply only to the properties of State "A? ' or to the properties of all the States and the Union ? (2) The Central Act operated in different States; the rule of construction was accepted in some States and rejected in other States. Is the Central Act to be construed in different States in different ways ? (3) Acts in general terms might be made in different States States where the said rule of construction was accepted and the States where it was not so accepted. 'Should different States construe (1) [1961] 1.S.C.R. 158. (2) 188 the General Acts in different ways, some applying the presumption and some ignoring it ? There is, therefore, no justification for this Court to accept the English canon of construction, for it brings about diverse results and conflicting decisions. On the other hand, the normal construction, namely, that the general Act applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the said anomalies. 'It prima facie applies to all States and subjects alike, a construction consistent with the philosophy of equality en shrined in our Constitution. This natural approach avoids the archaic rule and moves with the modern trends. This win not cause any hardship to the State. The State can make an Act, if it chooses, providing for its exemption from its operation. Though the State is not expressly exempted from the operation of an Act, under certain circumstances such an exemption may necessarily be implied. Such an Act, provided it does not infringe fundamental rights, will give the necessary relief to the State. We, therefore, hold that the said canon of construction was not 'the law in force ' within the meaning of article 372 of the Constitution and that in any event having regard to the foregoing reasons the said canon of construction should not be applied for construing statutes in India. In this view it is not necessary to express our opinion on the question whether the aforesaid rule of construction would not apply to the trade activities of the State, even if it applied to its sovereign activities. Even so, it was contended that by necessary implication the State was excluded from the operation of section 218 of the Act. It was contended that, as the infringement of the said provision entailed a prosecution and, on conviction, imposition of fine and imprisonment, and that as the State could not obviously be put in prison and as the fine imposed on the State would merge in the consolidated fund of the State, it should necessarily be implied that the State was outside the scope of the section. This argument was based upon the reasoning of Wanchoo, J., in his dissenting judgment in Director of Rationing and Distribution vs Corporation of Calcutta(1). To appreciate the argument it is necessary to notice the relevant provisions of the Act. Under section 218(1) every person who exercises or carries on in Calcutta any of the trades indicated in Schedule IV shall annually take out a licence before the prescribed date and pay the prescribed fee. Section 218 is in Ch. Under section 541(1)(b) if any person exercises on or after the first day of July in any year any profession, trade or calling referred to in Chapter XIII without having the licence prescribed by that chapter, he shall be punished with fine; and under section 541(2) (1) ; 189 such fine, when levied, shall be taken in full satisfaction of the demand on account of the said licence. Under section 547A, which was inserted in the Act by section 96 of the Calcutta Municipal (Amendment) Act, 1953 (West Bengal Act XIX of 1953), in every case of an offence punishable with imprisonment or fine, or with fine only, in which the offender is sentenced to pay an fine, it shall be competent to the Court to direct that in default of payment of the fine the offender shall suffer imprisonment for such term or further term not exceeding six months as may be fixed by the Court. Under the Act there is a distinction between fines imposed under section 537 and under section 541 of the Act. The fines under section 537 are in respect of offences enumerated therein and they certainly go to the coffers of the States. In respect of such offences it may be contended that, as the fines paid reach the State itself, there is an implication ' that the State is not bound by the sections mentioned therein, for a person who receives the fine cannot be the same person who pays it. This incongruity may lead to the said necessary implication. But the same cannot be said in respect of the provisions covered by section 541. Under the said section the fine recovered for the infringement of the said provisions, when levied, shall be taken in full satisfaction of the demand on account of the licence not taken thereunder. Though the expression "fine" is used, in effect and substance, section 541 is a mode of realization of the fee payable in respect of the licence: it goes to the municipal fund and forms part of it. In this context, section 115 of the Act is relevant. Under that section, there shall be one Municipal Fund held by the Corporation in trust for the purposes of the Act to which the moneys realised or realisable under the Act (other than fine levied by Magistrates) and all moneys otherwise received by the corporation shall be credited. Reliance is placed upon the words within the brackets, viz., "other than fine levied by Magistrates" and an argument is raised that the fine levied under section 541 will not be credited to the Municipal Fund. That interpretation brings that section into conflict with section 512. On the other hand, a harmonious construction of these two provisions makes it clear that the fine mentioned in section 115 is the fine imposed under section 537, for section 541(2) in terms directs that the fine shall be credited to the demand. All amounts credited towards demands, it cannot be denied, necessarily have to be credited in the Municipal Fund. Nor section 547A detracts from our conclusion. Under that section in every case of an offence where the offender is sentenced to pay a fine, it shall be competent to the court to direct that in default of payment of the fine the offender shall suffer imprisonment. It was said that this section necessarily implied that the State could not be, hit by section 218, as it could not obviously be imprisoned for default of payment of fine. But it will be noticed that this section only confers a discretionary power on the court and the court is not bound to 190 direct the imprisonment of the defaulter. It is only an enabling provision. There are other ways of collecting the money from ]persons against whom an order under section 547A is not made. This enabling provision does not necessarily imply an exemption in favour of the State. For all the aforesaid reasons we hold that the State is not exempt from the operation of section 218 of the Act. In the result we hold that the conclusion arrived at by the High Court is correct. The appeal fails and is dismissed. Shah, J. The High Court of Calcutta convicted the State of West Bengal of the offence of carrying on trade as owner and occupier of a market at Calcutta without obtaining a license under section 218 of the Calcutta Municipal Act, 1951, and imposed a sentence of fine of Rs. 250/ . In this appeal, it is urged that the State not being by express enactment or clear intendment bound by the provisions of the Act relating to the obtaining of a license for carrying on trade as owner or occupier of a market, the order of conviction is not sustainable, and reliance is placed upon the judgment of this Court in Director of Rationing & Distribution vs The Corporation of Calcutta & Ors.(1) The Corporation contends that since India became a Republic, the rule that "Crown is not bound by statute unless specially named, or clearly intended" has no application to the interpretation of the Calcutta Municipal Act, 1951. The argument is urged on two grounds : (i) since India has ceased to be governed in the name of the British Crown, the rule in terms has no application; and (ii) even if it be assumed that the rule applies to the State as the sovereign authority, it must be deemed to be superseded, for to accept it would be to countenance unequal treatment between the State and the citizens. The origin of the rule in England that the Crown is not bound by a statute unless expressly named or clearly intended lay undoubtedly in the prerogative of the British Crown. In Bacon 's Abridgement, 7th Edn., p. 462, the general rule is stated thus: "where a statute is general, and thereby any prerogative, right, title or interest is divested or taken away from the King, in such case the King shall not be bound, unless the statute is made by express terms to extend to him." But the Crown is bound where it is expressly named or by clear implication intended to be bound. An inference that the Crown was intended to be bound by implication is, however, not to be raised merely because the Crown assented to the statute, for as stated by Plowden "when the King gives his assent he does not mean to prejudice himself or to bar himself of his liberty and his privilege, but he assents that it shall be a law among his subjects. " (1) [1961]1 S.C.R. 158. 191 The common law of England was adopted in this country subject to local variations and the personal law of the parties, within the Presidency towns by the establishment of Mayors ' Courts in the, 18th century with the express, injunction to apply that law. In the mufassal of the three Presidencies the common law was adopted by the Regulations constituting tribunals for administration of justice enjoining them to decide disputes according to justice, equity and good conscience ', and elsewhere by the diverse Civil Courts Acts imposing similar injunctions. In the three Presidency towns of Calcutta, Madras and Bombay the charters of 1726 which established the Mayors ' Courts introduced within their jurisdiction the English common and statute law in force at the time so far as it was applicable to Indian circumstances. By the statute of 1781 (21 Geo. III c. 70, section 17) the Supreme Court at Calcutta was enjoined to apply in the determination of actions against the Indian inhabitants of the town in matters of succession and inheri tance to lands, rents, goods, and in all matters of contract and dealing between party and party, their personal law if both parties belonged to the same community, and by the law and usages of the defendant if they belonged to different communities. The English common law in its application to Hindus and Mahomedans in the matters enumerated in the statute was to that extent superseded, but in other matters the English common law unless it was inconsistent with statute or Indian conditions continued to apply. Similar statutes were passed enjoining the Courts in the Presidency towns of Madras and Bombay in 1797 (37 Geo. III c. 142, section 13), to apply in the enumerated matters the personal law of the parties. it may however be observed that by the Supreme Court charters, English law, not in its entirety but as nearly as the circumstances of the place and of the inhabitants admit, was applied: Advocate General of Bengal vs Ranee Surnomove Dossee.(1) In the mufassal Courts by Bengal Regulation III of 1793 in respect of Bengal, by Regulation 11 of 1802 in respect of Madras, it was ordained that where no specific rule existed the Courts were to act according to "justice, equity and good conscience" which expression was interpreted to mean the rules of English common law in so far as they were applicable to Indian society and circumstances: Waghela Rajsanji vs Shekh Masludin(2). The Bombay Regulation IV of 1827 provided by section 26 that the law to be observed in the trial of suits shall be Acts of Parliament and Regulations of Government; in the absence of such acts and regulations the usage of the country in which the suit arose; if none such appears, the law of the defendant, and in the absence of specific law and usage equity and good conscience. By the Letters Patents of the High Courts of the three principal Courts of Calcutta, Madras and Bombay by cls. 19 in exercise of the original jurisdiction law or equity to be applied (1) (1864) 9 M. 1. A. 387. (2) (1887) 14 1. A. 89. 192 was such law or equity which would have been applied if the Letters Patents had not been issued. By cl. 20 in respect of suits tried in exercise of the extraordinary original jurisdiction, and by cl. 21 in respect of the appellate jurisdiction, the High Courts were directed to apply law or equity and the rule of good conscience which the Court in which the proceeding was originally instituted would have applied. Similar provisions were made in the Letters Patents of the Allahabad, Patna, Lahore and Nagpur High Courts by cls. 13 & 14 and in respect of Jammu & Kashmir High Court by cls. 14 & 15, and in respect of Rajasthan by cls. 33 & 34 of the Rajasthan High Court Ordinance, 1949. The jurisdiction of the Assam and Orissa High Courts was derived from their respective parent High Courts the Calcutta High Court and the Patna High Court. In the Courts in the mufassal, the Civil Courts Acts e.g. section 37; the , section 5; the Central Provinces Laws Act, 1875, sections 5, 6; the , section 3. require the Courts to decide cases according to justice, equity and good conscience. There can therefore be no doubt that the Courts which functioned in the former British India territory were enjoined to decide cases not governed by any specific statutory rules according to justice, equity and good conscience, which meant rules of English common law in so far as they were applicable to Indian society and circumstances. By a long course of decisions of the High Courts in India the rule of the English common law that the Crown is not, unless expressly named or clearly intended, bound by a statute was applied in India. In The Secretary of State in Council of India vs Bombay Landing and Shipping Co. Ltd.(1) the Secretary of State for India claimed priority in the payment of a debt in the course of winding up of a company and it was held by the High Court of Bombay that a judgment debt due to the Crown is in Bombay entitled to the same precedence in execution as a like judgment debt in England, if there be no special legislative provision affecting that right in the particular case. The Court held that as the Crown is not, either expressly or by implication, bound by the Indian Companies ' Act (X of 1866), and as an order made under that Act for the winding up of a Company does not work any alteration of property against which execution is sought, such an order does not enable the Court to stay the execution of a judgment debt due to the Crown, or to the Secretary of State in Council for India. Westropp, J., who delivered the judgment of the Court after an exhaustive review of the earlier authorities observed "The King, by his prerogative, regularly is to be preferred, in payment of his duty or debt, before any subject although the King 's debt or duty be the latter." (1) 5 Bom. H.C.R O.CJ. 193 The learned Judge also observed that the rule was recognised by the laws of many countries as applicable to the claims of the Sovereign or the State, e.g. France, Spain, America and Scotland and that principle was no novelty in India, because at an earlier date it was promulgated by Hindu jurists Yajnavalkya and others. In The Secretary of State for India vs Mathurahbai and Ors.(1) the rule was held to apply to India as a rule of construction of statutes. In that case the inhabitants of a village sued to establish their right of grazing their cattle on certain Government land and for an injunction restraining the Government from interfering with their right. It was held by the High Court of Bombay that the right of free pasturage which the plaintiffs enjoyed did not necessarily confer that right on any particular piece of land, and that section 26 of the Limitation Act 15 of 1877 did not bind the Secretary of State. It was also applied in three later decisions of the Bombay High Court: Hiranand Khushiram Kirpalani vs Secretary of State; (2) Secretary of State vs Municipal Corporation Bombay (No. 1)(3) and Province of Bombay vs The Municipal Corporation of Bombay(4). In the first case the Secretary of State was held not bound by sections 305, 489 and 491 of the Bombay City Municipal Act, 1888, which deal with levelling, metalling or paving, sewering, draining, channelling and lighting of private streets and with execution of that work to the satisfaction of the Commissioner, if the work be not done in accordance with the requisition and for recovery of the expenses incurred in that behalf. In the second case, the Court held that the Crown was bound by necessary implication in respect of the charge which arises under section 212 of the Bombay City Municipal Act 3 of 1888, that section being an integral part of the general scheme of the Act imposing tax on land in Bombay including Government land. In the third case the Bombay High Court observed that the general principle is that the Crown is not bound by legislation in which it is not named expressly or by necessary implication. But reading the relevant sections in the Act relating to the water supply it appeared that it would be impossible to carry them out with reasonable efficiency, unless Government was bound by them. The view of the High Court in the last judgment that the Province was bound by the statute by imp lication was overruled by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(5) to which I will presently refer. The Madras High Court in Bell vs The Municipal Commissioners for the City of Madras(6) also upheld the rule which prevailed in the Bombay High Court that the Crown is not bound by a statute unless expressly named or clearly intended. In that case the Superintendent of the Gun 2,1.5 (1) 1. L. R. (3) I.L.R. (5) I.L.R. 73 I.A. 271. (2) I.L.R. (4) I.L.R. (6) I.L.R. 194 Carriage Factory in Madras brought timber belonging to Government into Madras without taking out a licence, and paying the license fee prescribed by section 341 of the ' City of , Madras Municipal Act. The Court held that the timber brought into Madras by or on behalf of Government was liable to the duty imposed by section 341 of the City of Madras Municipal Act, although Government was not named in the section. Bhashyam Ayyangar, J., entered upon a detailed analysis of the case law and set out certain principles at p. 500. The learned Judge was of the view that "the canon of interpretation of Statutes that the prerogative or rights of the Crown cannot be taken away except by express words or necessary implication, is As applicable to the Statutes passed by the Indian Legislatures as to Parliamentary and Colonial Statutes". But he held that "the English law as to the exemption of the Crown and Crown property from payment of tolls, poor rates and other taxes, local or imperial, imposed by statutes rests partly upon historical reasons and principally upon judicial decisions which do not proceed upon a course of reasoning or principle which will be binding on Indian Courts". It is not necessary to express any opinion on the question whether the general exception engrafted by the learned Judge on the rule in so far as it relates to taxing statute is wholly correct and applied to all taxing statutes in India. The Municipal Corporation of Calcutta is, it may be recalled, seeking to collect the license fee by prosecuting the State of West Bengal, but the primary purpose of the prosecution is to enforce compliance with the pro visions relating to the conduct of a market by compelling the State to take out a license, and paying a fee in lieu of services rendered to the owners of the markets. These decisions were affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(1). The question which fell to be determined was whether by section 222(1) and section 265 of the City of Bombay Municipal Act, 1888, which invested the Municipality with power to carry water mains through, across or under any street and "into,, through or under any land whatsoever within the city" bound the Crown in whom the lands were vested either expressly or by necessary implication. The Judicial Committee observed that the general principle applicable in England in deciding whether the Crown is bound by a statute that it must be expressly named or be bound by necessary implication applies to Indian legislation. The Board observed at p. 274 : "The maxim of the law in early times was that no statute bound the Crown unless the Crown was expressly named therein, "Roy n 'est lie per ascun statute si il ne soit expressment nosme." But the rule so laid down is subject (1) L.A. 73 I.A. 271. 195 to at least one exception. The Crown may be bound, as has often been said, "by necessary implication". If, that is to say, it is manifest from the very terms of the statute, that it was the intention of the legislature that the Crown should be bound, then the result is the same as if the Crown had been expressly named. It must then be inferred that the Crown, by assenting to the law, agreed to be bound by its provisions. " It is true that counsel appearing before the Judicial Committee accepted the correctness of the rule "that the question whether or not the Crown is bound by a statute is no different in the case of Indian legislation from that which has long been applied in England." But the judgment of the Judicial Committee did not proceed upon a concession: the Board expressly observed that they regarded the rule "as correct". The Union of India now includes territory of the former Indian States in which the law as originally existing and which the Courts are enjoined to apply may have been somewhat different. But that is not peculiar to the application of the rule of interpretation which was adopted by the Courts in British India that the State shall not be deemed to be bound by an enactment unless it is expressly named or by clear intendment included in the statute. Even in respect of matters of personal law, procedure and jurisdiction of the Courts and in other matters where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the Courts administering justice. But the present case concerns the administration of the law in the town of Calcutta which has for nearly 250 years been governed by the English common law as adopted by the various Acts, Regulations and finally by the Letters Patents. It may also be necessary to observe that we are not called upon to decide whether all the prerogatives of the British Crown have been incorporated in our system of law. Some of those are so wholly inconsistent with the system of law personal and common in India, that they have not been held applicable, e.g. the rule of English law incapacitating aliens from holding real property to their own use, and transmitting it by descent or devise has never been in troduced in India so as to create forfeiture of lands held in Calcutta or the mofussil by an alien and devised by will for charitable purposes. Mayor of the City of Lyons vs The East India Company(1): the English law of felo de se and forfeiture of goods does not extend to a Hindu committing suicide: Advocate General of Bengal vs Ranee Surnomoye Dossee(2). But the rule that the Crown debt is entitled to priority in payment of debts due to it has been adopted,. and the State is entitled to priority in payment of debts due to it : (1) L.R. I Moare 's I.A. 173. (2) (1864) 9 M.I.A. 196 The Secretary of State for India in Council vs The Bombay Landing A Shipping Co. Ltd.(1) and M/s. Builders Supply Corporation vs The 'Union of India(2). As I have already stated the adoption of the English law was not in its entirety, but as nearly as the circumstances of the case and of the inhabitants of the place admit. It would be confusing the issue to hold that because some prerogatives have not been adopted, no prerogative of the State may have any place in our system of law. Again in considering the limited question as to the application of the rule of interpretation under discussion, it would be an idle exercise to enter upon a detailed discussion of the prerogatives which have and which have not been assimilated in our system of law. In Director of Rationing & Distribution vs The Corporation of Calcutta & Ors.(3) this Court regarded the rule as one of interpretation, and it is so expressly stated in State of West Bengal vs Union of India(4); Sri Vankata Seetaramanjaneva Rice and Oil Mills vs State of Andhra Pradesh(5) and M/s. Builders Supply Corporation vs Union of India(2). In England and the Colonies the rule has not been restricted to common Crown actions or the personal prerogatives of the Crown. It excludes from the operation of statutes all public servants acting under the authority of the Crown. It is well settled that in the Colonies the executive government represents the Crown as it does in England, and therefore the Executive Government of the Commonwealth of Australia or of a State in Australia is not bound by a statute unless the intention that it shall be bound is apparent : Roberts vs Ahern(6). Again because of the origin of the rule, its protection is not restricted to the property and rights of the Crown alone, and applies to State property, actions and rights. When a statute expressly includes the State in its operation, no difficulty arises in giving effect to the statute. Even if there be no express provision, the State may be bound by clear intendment of the statute, having regard to the nature of the legislation, if the beneficent purpose intended to be served thereby would be wholly frustrated unless the State is bound. The rule of interpre tation applies only when the Court has no indication either by express reference or by clear intendment in the statute: a presumption arises in such a case that the words of the statute even though general are not intended to bind the State. The question is one of presumed intention where the language, purpose and the nature of the statute give no clear indication and mere general words .ire used. It was urged that in the Act there are certain provisions which ,expressly refer to the liability of the State and the binding character 5 Bom. H.C.R. O.C.J. 23. (2) ; (1) ; (3) 4 [1964] 1 S.C.R. 371. (5) [1964]7 S.C.R. 456. (6) ; 197 of those provisions against the State is not in doubt. But that cannot be a ground for holding that the remaining provisions apply to the State. , The Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another() observed : "They (the Judicial Committee) were pressed with the argument that such an inference might be drawn from certain express references to the Crown in other parts of the Act itself, and from the fact that by the Government Building Act, 1899, the legislature had provided for the exemption of Government buildings from certain municipal laws. The argument was that no express provisions saving the rights of the Crown would be necessary if the Crown were already immune. This is not an unfamiliar argument, but, as has been said many times, such provisions may often be inserted in one part of an Act, or in a later general Act, ex abundanti cautela, and, so far as the Act of 1899 is concerned, it is fallacious to argue that the legislature which passed it must have had in mind the particular sections of the Act of 1888 which are not under review, or that it was impliedly interpreting those sections. " The argument that the rule had not received recognition in the High Courts in India, before the judgment of the Judicial Committee reported in Province of Bombay vs Municipal Corporation of the City of Bombay and Anr.(1) was pronounced, is belied by the course of authorities summarised earlier. There was practically a consistent course of authorities prior to the Constitution in support of the principle which was affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay and Another(1). The origin of the rule undoubtedly was in the prerogative of the Crown, but there is even in the country of its origin authority for the view that the rule is regarded primarily as one of construction. In Madras Electric Supply Corporation Ltd. vs Boarland(2), in dealing with the question whether "the immunity" of the Crown "from taxation depends on the construction of the statute or arises, from the prerogative in some other way", Lord MacDermott observed : "Whatever ideas may once have prevailed on the subject it is, in my opinion, today impossible to uphold the view that the Crown can find in the prerogative an immunity from tax if the statute in question, according to its true construction, includes the Crown amongst those made liable to the tax it imposes. The appropriate rule as I under (1) L.R. 73 I.A. 271. (2) H.L. 198 stand it is that, in an Act of Parliament, general words shall not bind the Crown to its prejudice unless by express provision or necessary implication. That, however, is, and has long been, regarded as a rule of construction. Lord Reid concurred in the view that the immunity depends upon construction of the statute rather than on royal prerogative. Lord Keith of Avonholm appeared to express a different view. In India the rule has been accepted as a rule of interpretation of statutes and applicable to all statutes which governed State actions, authority or property. Is there any reason then to hold that on January 26, 1950, the rule which previously applied to interpretation of statutes ceased to apply thereto on the date on which the Constitution came into force ? The rule of interpretation was, as already stated, a settled rule and was law in force in the territory of India within the meaning of article 372 of the Constitution. I am unable to agree with the contention that a rule of interpretation is not "law in force" within the meaning of article 372. There is no warrant for holding that a rule of interpretation which is incorporated in a statute e.g. The Indian Succession Act, or the General Clauses Act is law in force, and not a rule which was enunciated by the highest Court in the realm. The circumstance that a rule of interpretation is a rule for determination of intention of the legislature and for its application requires determination of facts and circumstances outside the statute will not make it any the less a rule of law. Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution is law does not involve the view that it is immutable. A statute may be repealed, and even retrospectively, it would then cease to be in operation : a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it is law in force. It may be pertinent to bear in mind that it was never seriously argued before us that the judgment of the Judicial Committee which affirmed the view expressed in a long course of decisions was erroneous in the circumstances then prevailing. It was said by counsel for the Corporation that it is one of the fundamental principles of our Constitution that there is equality between the State and the citizens and discrimination is not permissible in the application of a law generally expressed. it was claimed that if other occupiers of markets take out licenses, and comply with the regulatory provisions of the Act, and the State is not obliged to abide by the rules, there would be unequal treatment between owners similarly situate and that the State may ignore 199 the rules regulating the markets, and on that account the public interest would suffer. There is no reason however to assume that the State under a democratic Constitution would be impervious to public opinion, and would merely because it is not bound by a regulatory Act perpetuate 'a nuisance. If it be assumed that such be the attitude of the State there would be nothing to prevent the State from enacting express legislation excluding itself from the operation of the regulatory laws relating to markets. I do not think that the guarantee of the equal protection clause of the Constitution extends to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens. Nor can it be said that under our Constitution equality in matters of interpretation between the State and the citizens is predicated in all respects. It must be remembered that our Constitutional set up is built up not anew, but on the foundations of our old institutions. The political set up is indisputably changed, but can it be said that our concept of a State is so fundamentally altered that the traditional view about State privileges, immunities and rights must be abandoned because they had a foreign origin, an on the supposed theory of equality between the State and the citizens a theory which seeks to equate common good of the people represented by the State with the rights and obligations of the individual the Court should decline to give effect to the State privileges and immunities ? If it be granted that the State in making laws is entitled to select itself for special treatment different from the treatment accorded to the citizen and it is not denied that in order to achieve public good it can do so even if there is a differential treatment between the State and the citizen is there any reason to suppose that a statute which evidently was framed on the basis of the well settled rule of the pre Constitution days which accorded to the State a special treatment in the matter of interpretation of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizen ? The fact that in our federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a statute, unless expressly named or clearly implied, conflicts between the State enacting a law and the Union, or another State may arise does not give rise to any insuperable difficulty which renders the rule in applicable to the changed circumstances, for it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation, and not any other State. It was urged that even if the rule that the State is not, unless expressly named or by necessary implication intended, to be bound, applies, its application must be restricted to cases where an action of the State in its sovereign capacity is in issue. Where, however, 200 the State is following a commercial or trading activity, the rule can have no application. But in the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. The State was originally regarded as merely concerned with the maintenance of law and order, and was not concerned with any trading activity. But that is now an exploded doctrine. For the welfare of the people the State does and is required in modern times to enter into many trading activities, e.g. to effectuate control of prices, prevent hoarding and distribute commodities in short supply, besides maintenance of departments like Posts, Telegraphs, Railways, Telephones etc., activities which may have been regarded as trading activities in the past. But if initiation and completion of schemes for social welfare of the people be regarded as an attribute of the exercise of sovereign authority, it is difficult to regard activities undertaken by the State for setting up markets for effective distribution of goods as merely trading. Assuming that conducting a market in a metropolitan town may be regarded in a sense as a trading activity there is, in my judgment, no sufficient reason to justify any distinction in the application of the rule of interpretation to statutes concerning sovereign authority and trading activity. Under the provisions of the Calcutta Municipal Act the owner or occupier of a market is required to take out a license. But there is no express reference to the State: nor is there anything peculiar in the nature, purpose and object or in the language used in the enactment relating to the issue of licenses which may suggest that the State must by necessary implication be bound by its provisions. I am, therefore, of the view that the High Court was in error in holding that the State of West Bengal was bound by the provisions relating to the issue of licenses for occupation or conduct of a market. I do not deem it necessary to consider the argument that since the State cannot be imprisoned in enforcement of the general provisions, and imposing a fine upon the State would be futile because the hand which pays and the hand which receives the fine is the same, an implication arises that it was not intended that the State should be bound by section 218 of the Calcutta Municipal Act. in my view the penal provision of s.541 is, though in form a provision creating an offence, intended to enable the Corporation to collect the license fee. The offender and the recipient of fine are therefore not the same bodies. Bachawat, J. By the common law of England, the Crown is not bound by a statute save by express provision or necessary implication. This rule was applied to Indian legislation in 201 Province of Bombay vs Municipal Corporation of the City of Bombay(1). In The Director of Rationing and Distribution vs Corporation of Calcutta(2), this Court followed the Privy Council decision. On the subject of the royal prerogative regarding statutes Chitty in his book on "Prerogatives of the Crown at P. 382 said "The general rule clearly is, that though the King may avail himself of the provisions of any Acts of Parliament, he is not bound by such as do not particularly and expressly mention him '. It has been said that the reason of the rule is that "it is inferred prima facie, that the law made by the Crown, with the assent of the Lords and the Commons, is made for the subjects, and not for the Crown" per Alderson, B. in A.G. vs Bonaldson (3). Two rules follow from the proposition that the law is prima facie made for subjects and not for the Crown: (i) the Crown is not bound by a statute save by express words or by necessary implication, (ii) that the Crown may take advantage of a statute, though not bound by it, unless expressly or impliedly prohibited from doing so. This Court categorically rejected the second rule in V. section Rice and Oil Mills vs State of Andhra Pradesh(4) and held that the State cannot be permitted to rely upon the artificial rule that the State can take advantage of a statute though not bound by it. I think that this Court should have refused to recognise the first rule also. The exception of the Crown from the operation of statutes is based sometimes on the royal prerogative, and sometimes on a rule of construction. Originally, the exemption was claimed and allowed on the ground of the prerogative. The King by virtue of his prerogative could claim that a statute was made for subjects only and he stood outside it. He waived this prerogative right by assenting to a statute which bound him expressly or by necessary implication. The immunity of the Crown is now couched in the form of a rule of construction. In spite of this modem disguise, there is high authority for the view that this immunity is still based upon the prerogative. In Madras Electric Supply Corporation Ltd vs Boarland(5) Lord Keith said: "The true explanation, easily understandable on his torical and legal grounds, is that words in a statute capable of applying to the Crown may be overridden in the exercise of the prerogative. That is necessarily involved in the oft repeated phrase that the King is not bound by a statute (1) [1946] L.R. 73 I.A. 271. (2) ; (3) ; ,124. (4) ; , 463, 463 4. (5) , 694. CI/66 14 202 unless by express words or by clear implication. If the statute does not apply to him there can be no question of his being bound by it. It is only because it can apply to him that appeal to the prerogative is necessary. The conception of the prerogative, in my view, is of something that stands outside the statute, on which the Crown can rely, to control the operation of the statute so far as it prejudices the Crown". But the prerogative right of overriding statutes did not extend to India. When the Crown of England became sovereign in India, it acquired such prerogative rights as were enjoyed by the former Indian sovereigns and such other prerogative rights as may be said to inhere in every sovereign power. But the common law was never bodily imported into India and the Crown never possessed in India all the prerogatives allowed to the Crown by the law of England. In The Mayor of the City of Lyons vs Hon. East India Company(1), the Privy Council held that the common law as to alienage and the royal prerogative of forfeiture of the lands held by a deceased alien on the ground of the incapacity of the alien to hold real property and transmit it by devise or descent was never ' introduced in the Presidency town of Calcutta or the mofussil. Such a right was not enjoyed by the Indian sovereign, nor was it a necessary incident of sovereignty. Lord Brougham said at pp. 280, 281, 282 and 286 of the Report: "But it seems to be contended both here and below, that there is something in the law incapacitating aliens, which makes it, so to speak, of necessary application wheresoever the sovereignty of the Crown is established, as if it were inherent in the nature of sovereign power. To this a sufficient answer has been already afforded, if the acts of the sovereign power to which we have referred, show that no such application to Bengal ever was contemplated, unless direct authority can be produced to show that the right is inseparable from the sovereignty, and, as it were, an essential part of it. It certainly is not an incident to sovereignty; in several countries the sovereign has no such right. . . Besides, if reference be made to the prerogative of the English Crown, that prerogative in other particulars is of as high a nature, being given for the same purpose of protecting the State; and it is not contended that these branches are extended to Bengal. Mines of precious metals, treasuretrove, royal fish, are all vested in the Crown, for the purpose of maintaining its power, and enabling it to defend the State. They are not enjoyed by the sovereign in all or even in most (1) 203 countries, and no one has said that they extend to the East Indian possessions of the British Crown. . . Upon the whole, their Lordships are of opinion that the law, incapacitating aliens from holding real property to their own use, and transmitting it by descent or devise, has never been introduced into Calcutta." The common law of attainder or corruption of blood and the prerogative right of forfeiture or escheat on conviction of treason or felony now abolished by the Forfeiture Act, 1870 (33 & 34 Vict. c. 23) did not prevail in India, see Papamma vs Appa Rau(1) ' Nor did the English law as felo de se and the forfeiture of goods and chattels consequent upon suicide apply to a Hindu, though a British subject, committing suicide at Calcutta, see Advocate General of Calcutta vs Ranee Surnomoye Dossee(2). At Common law, no proceedings, civil or criminal, were maintainable against the Sovereign in person for, it was said, that as the Courts were her own they could have no jurisdiction over her, see Halsbury 's Law of England, Vol. 7, article 544, p. 249. In India, the government did not enjoy a general immunity from suits and legal proceedings, see The Peninsular and Oriental Steam Navigation Company vs The Secretary of State for India.(1) The subjection of the Government to suits where it was liable to be sued before the Constitution is preserved by article 300 of the Consti tution. Though orders of mandamus and injunction cannot issue to the Crown in England, see Halsbury 's Laws of England, 3rd Edn. II, article 25 and 184 pages 16 and 98, such orders can issue to Government under articles 32 and 226 of the Constitution. See also State of Bihar vs Sonavati Kumari(4). Province of Bombay vs Khusaldas Advani(5). In England the King by his prerogative may sue in what Court he pleases, see Craies on Statute law, 6th Edn., p. 435. The prerogative of choice of Courts by the Crown never applied in India. The State can sue only in a Court competent to entertain the suit under the general law. In England it was the prerogative of the Crown not to pay costs in any judicial proceeding, see Craies on Statute Law, 6th edn, p. 432. But this prerogative was never recognised in India. The State pays and receives costs like a private individual. The Indian law did not deny that the Crown had certain pre rogatives. The Crown inherited the prerogatives enjoyed by the former Indian Sovereigns and had other prerogatives inherent in the nature of sovereignty. It was the prerogative of the King in Council to hear appeals and petitions from his Indian subjects, (1) 1. L. R. ,396. (2) (3) 5 Bom. H.C.R. Appendix 1. (4) ; (5) ; ,697. 204 see Modee Kai Khocscroo Hormusjee vs Cooverbhaee(1). prerogative was taken away by the Abolition of Privy Council Jurisdiction Act 1949. When there is a failure of heirs on a person dying intestate, the Crown had the prerogative right to take his property by escheat, and this right was said to rest on grounds of general or universal law, see the Collector of Masulipatam vs Cavaly Vencata Narrainapa(2), Sonet Koor vs Himmut Bahadoor(3) Mussammat Khursaidi Begun vs Secretary of State for India(4). The right of the Government to take the property by escheat or lapse on the failure of heirs or as bona vacantia for want of a rightful owner is recognised by article 300 of the Constitution. The prerogative right of the Crown to priority in payment of its claims was recognised on the ground that this right did not arise out of any peculiar quality in the writ of extent and the Hindu, Muhammadan and Poituguese Sovereigns had enjoyed a similar right, see Secretary of State for India vs Bombay Landing and Shipping company(5). The extent of this prerogative right may be limited by a statutory scheme of administration, see GrovernorGeneral in Council vs Shiromani Sugar Mills Ltd. (in liquidation)(6). It has been held that the Government continues to enjoy this prerogative right of precedence after the Constitution came into force, see Builders Supply Corporation vs Union of India (7), Bank of India vs J. Boman(8). The Crown as parens partriae had other prerogative rights. The Crown may have also enjoyed in India certain prerogative rights which were not allowed to the Crown of England by the common law and those prerogatives might vary in different parts of India, see Bell vs Municipal Commissioners for the City of Madras(9).Gopalan vs State of Madras (10). But in India the Crown never enjoyed the general prerogative of overriding a statute and standing outside it. Such a right is not indigenous to India, nor is it a necessary incident of sovereignty. In The Secretary of State for India in Council vs Bombay Landing and Shipping Company(5), Ganpat Putava vs The Col lector of Canars (11) the Bombay High Court held that a prerogative of the Crown cannot be taken away except by express words or by necessary implication. To appreciate these rulings, it is necessary to remember that until 1861 there were constitutional restrictions on the power of the Indian legislature to affect the prerogative of the Crown, see Statutes 3 and 4 William cap. LXXV section 43 and 16 and 17 Vict. cap XCV section 43, which were swept away by later statutes, see the Indian Councils Act, 1861 section 24, the Government of India Act 1915, section 84 (1) (A), the Government of (1) 6 M.I.A. 448,455. (3) [1876] I.L.R. I Cal.391. (5) (7) (9) I.L.R. (2) [1859 61] 8 M.I.A. 500. (4) Patna 538. (6) (8) A.I.R. 1956 Bom. 305 (10) Mad. 798,802. (11) [1875] I.L.R. I Bom. 205 India (Amendment) Act, 1917, section 2 as interpreted in The Secretary of State vs Bombay Municipality(1), with one exception introduced by the Government of India Act, 1935, section 1 10(b)(ii). Having regard to this historical background, it was considered that the prerogative of the Crown was a very special subject matter and in the absence of express words or necessary implication, it should be presumed that general words of an Indian Act were not intended to affect the prerogative. In Bells case(2) Sir Bhashyam Ayyangar J.therefore pointed out that the doctrine that the prerogative could not be taken away save by express words or by necessary implication could be based on the maxim generalia specialibus non derogant. This maxim does not exempt the Crown from the operation of statutes generally whenever a statute prejudicially affects it. In order to invoke this doctrine, the Crown must, establish that it has some prerogative right which it claims to be outside the purview of the statute. As pointed out already under the Indian law the Crown could not claim a general exemption from statutes on the ground of the prerogative. But there is high authority for the view that such an exemption is allowed to the Crown in England on the basis of a rule of construction. In Madras Electric Supply Corporation vs Boarland(3) at p. 685 Lord Macdermott said that the rule that in an Act of Parliament general words shall not bind the Crown to its prejudice unless by express words or by necessary implication has long been regarded as a rule of construction. This rule has a wide sweep, and is not limited to cases where the prerogative right or property of the Crown is in question. It protects the Crown whenever general words in a statute may operate to, its prejudice. See Broom ' s Legal Maxims, 10th Edn., pp. 39 40, Glanville L. Willams ' Crown Proceedings, p. 48 (f. n.). A review of the decided cases shows that until the decision of the Privy Council in the Province of Bombays case(4) this wide rule of construction had not obtained a firm foothold in India. In Verubai vs The Collector of Nasik(5), the Bombay High Court held that the Government was bound by article 167 of Schedule 11 of the Indian Limitation Act, 1877. Westropp, C.J. said: "The legislature in passing the Limitation Act of 1871, which is applicable to this case, where it intends that Government should have a longer period than the subject, has been careful expressly to say so, as for instance, in article 150 of Schedule II, where the period assigned to suits brought by the Secretary of State is sixty years from the time of the accruer of the cause of action; but the Legislature makes no difference between Government and its subjects (1) (2) I.L.R. (3)[1955] A.C. 667,685. (4) [1946] L.R. 73 I.A. 271. (5) I.L.R. 206 in the case of appeals or applications see Govind Lakshman vs Narayan Moreshvar(1)". In Appava vs The Collector of Vizagapatam (2), the Madras High Court held that the Government was bound by article 178 of the Indian Limitation Act, 1877. Turner, C.J. and Muttusami Ayyar, J.said: "If the maxim on which the counsel for the Crown relies applies to this country and the Crown is not bound by the provisions of any Act unless they are expressly declared binding on the Crown it may be inferred from the circumstance that this Act contains provisions prescribing a Limitation to the Government for the institution of suits and presentation of criminal appeals that the Legislature contemplated that the Crown should be subject to the provisions of the Act and should enjoy a privilege to the extent expressed and no further expressum facit cessare tacitum" In the last two cases, the Courts did not apply the strict English rule that the Crown under the prerogative was not bound by the statute of limitation, see Bank Voor Handel vs Hungarian Administrator(3). In The Secretary of State for India vs Mathurabhai(4) Sargent, C. J. was inclined to apply the English rule that the Crown is not included in an Act unless there are words to that effect and to hold that the Government was not bound by section 26 of the Indian Limitation Act, 1877. But he observed that it was not necessary to express a decided opinion on the question. In Bells, case(5), the Madras High Court held that the Government was bound by the taxing provisions of section 341 of the City of Madras Municipal Act, 1884, though not named in that section. Sir Bhashyam Ayyangar, J. reviewed the earlier cases and decisively rejected the general claim of immunity of the Crown from a statute imposing a tax on the basis of any prerogative right or supposed rule of construction. In Motilal vs The Collector of Ahmedabad(6). Russel, Acting C. J. and Beaman, J. doubted the application of the English rule of construction in this country. They said: "It is contended that the maxim of English law that the Crown cannot be bound by any statute unless expressly named therein applies, and reference is made to the cases of Ganpat Putaya vs The Collector of Kanara(7) The Secretary of State for India vs Mathurabhai(8). Without in any way wishing to prejudge the question or fetter future argument, (1) 1 1. (2) [1882] I.L.R.4 Mad. 135. (3) , 984 (H.L). (4) Bom. (5) I.L.R. (6) Bom. 86, 89. (7) [1875] I.L.R. I Bom. 1 (8) Bom. 207 we may say that as at present advised we entertain some doubt whether an exact analogy exists between the privileges and immunities of the Crown under the Constitutional Law of England and those of servants of the Indian Government. " The full Bench left the question open. In The Secretary of State vs Mohammed Yysuf(1), Pratt J. held that sections 17(2) (vii) and 90 of the Indian contained an implication that the Crown was bound by the Act. In Hiranand Khushiram vs Secretary of State for India(2), Beaumont, C. J. and Rangnekar, J. applied the strict English rule of construction and held that since the Crown was not named either expressly or by necessary implication in sections 305, 489 and 491 of the City of Bombay Municipal Act, 1888, the Crown was not bound by those sections. Soon thereafter, the same learned Judges held in Secretary of State for India vs The Municipal Corporation of Bombay(3), that the Crown was bound by section 212 of the City of Bombay Municipal Act, 1888 by necessary implication, though not expressly named therein. In Province of Bombay vs The Municipal Corporation for the City of Bombay(4), Beaumont, C. J. and Rajadhayaksha, J. held that sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 by necessary implication bound the Crown. They refused to follow the dictum of Day, J. in Corton Local Board vs Prison Commissioner(5) that the test of necessary implication binding the Crown involves that the legislation is unmeaning unless the Crown is bound. They said: ". . if it can be shown that legislation cannot operate with reasonable efficiency, unless the Crown is bound, that would be a sufficient reason for saying that the Crown is bound by necessary implication. " This decision was reversed by the Privy Council on appeal in Province of Bombay 's case(6). The Privy Council rejected the test laid down by the Bombay High Court. They held that the strict English rule of construction exempting the Crown from the operation of statutes applied in the case of Indian legislation. The parties appearing before the Privy Council concurred in accepting this view. The attention of the Privy Council was not drawn to Bell 's case(7) and the propriety of applying the English rule to Indian legislation was not considered. Lord Du Parcq said: "If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficient purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound." (1) , 1136.(2) Bom. (3) (4) I.L.R. 1944 Dom. 95. (5) (6) (1946) L.R. 73 I.A. 271. (7) I. L. R. 208 They held that the Crown was not bound by sections 222(1) and 265 of the City of Bombay Municipal Act, 1888 and an inference of necessary implication binding the Crown could not be drawn from certain express references to the Crown in other parts of the same Act and from the exemption of the Crown in a later general Act since such provisions are often inserted ex abundanti cautela. It is to be noticed that in several earlier decisions the Bombay High Court had drawn an inference of necessary implication binding the Crown in other sections of the same Act. Moreover, except the Bombay High Court, no other High Court held that the English c of Crown exemption from statutes applied to India. Even in Bombay, some of the Judges doubted the applicability of the rule to Indian conditions. The imposition of the strict rule of construction by the Privy Council decision was received very unfavourably in India. In Corporation of Calcutta vs Sub Postmaster, Dharamtala(1), the Calcutta High Court felt bound to follow the Privy Council decision, and held that the Government was not bound by the provisions of the Calcutta Municipal Act, 1923. Mookerjee, J., however, said: "Had the question been res integra and had it been open , to us to consider the question untrammelled by a decision of the Judicial Committee we might have considered the reasonableness and propriety of applying the principles as enunciated by the English Courts and also how far they should be applied to Indian conditions. For some years past the position of the Crown with regard to liability and procedure has been considered by the lawyers in England as being antiquated and absurd as contrasted with that of ordinary individuals and reform in this respect has been considered to be long overdue. " In The Corporation of Calcutta vs Director of Rationing and Distribution(2), the Calcutta High Court refused to follow the Privy Council decision and held that the State was bound by section 386(1) (a) of the Calcutta Municipal Act, 1923. This decision was reversed in The Director of Rationing and Distribution 's case (3) and a majority of a Bench of this Court held that the law was correctly laid down in the Province of Bombay 's case(4) and continued to apply in this country even after the Constitution came into force, and the State was not bound by section 386(1) (a) of the Calcutta Municipal Act, 1923. Wanchoo, J. dissented and held that the rule laid down by the Privy Council did not apply to the construction of Indian statutes after the Constitution came into force. Later decisions of this Court disclose a tendency to relax and soften the rigour of (1) [1948]54 C. W. N. 429. (3) ; (2) A.I.R. 1955 Cal. 282. (4) (1964) L.R. 73 I.A. 271. 209 this rule. In Sri Venkata Seetaramanjaneya Rice and Oil Mills and others vs State of Andhra Pradesh(1) this Court held that an inference of necessary implication binding the State may be drawn if "the conclusion that the State is not bound by the specific provision of a given statute would hamper the working of the statute, or would lead to the anomalous position that the statute may lose its efficacy". In other words, the Court was inclined to revive the Bombay heresy rejected by the Privy Council. With regard to this rule of exemption of the Crown from statutes, Glanville L. Williams in his book on "Crown Proceedings", 1948, pp. 53 and 54 said: "The rule originated in the Middle Ages, when it perhaps had some justification. Its survival, however, is due to little but the vis inertiae. The chief objection to the rule is its difficulty of application . With the great extension in the activities of the State and the number of servants employed by it, and with the modern idea, expressed in the Crown Proceedings Act, that the State should be accountable in wide measure to the law, the presumption should be that a statute binds the Crown rather than that it does not. " Thus, the artificial rule of construction has not escaped criticism even in England. This rule of construction is unsuitable to Indian conditions and should never have been applied to India. Before 1946 there was no settled course of decisions of the Indian Courts necessitating or justifying the application of this rule to the construction of Indian statutes. Rules of English law which could not suitably be applied to Indian conditions were not introduced even in the Presidency Town of Calcutta by 13 Geo HI c 63 or 21 Geo III c 70 or any other cognate statute or by the Charter of Charles II in 1661 see The Mayor of the City of Lyons vs The Hon. East India Company(2) The Advocate General of Calcutta vs Ranee Surnomoyee Dossee(3). Technical rules of English common law were not applied even in the Presidency Towns if they clashed with principles of justice, equity and good conscience, see Abdul Kawder vs Mahomed Mera (4) Mool Chand vs Alwar Chetty (5). In the mofussil, common law had no force proprio vigore but the Judges were free to adopt and apply any rule of common law if it was consonant with principles of justice, equity and good conscience. Artificial rules of Common Law based on feudal notions had no application in India. In Mithibai vs Limii Nowroji Benaji(6), the Bombay High Court refused to apply the rule in Shelley 's case in a case arising between Parsis in the mofussil. In The State of Rajasthan vs Mst. Vidyawati(7) (1) ; , 462 (2) [1837]1 M. A. 175, 246 9, 274 5. (4) I.L.R (5) I.L.R. , 553. 506,531. (3) , 407 13, 424 30. (7) [1962] 2 Supp. S.C.R 989, 1007. (6) Bom. 506, 531. 210 this Court refused to apply rules of immunity of the Crown based on old, feudalistic notions. In interpreting a statute, it is the duty of the Court to give effect to the expressed intentions of the legislature. There is no compelling reason why the Courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England. No doubt, there are many Indian Acts which expressly provide that the Crown or the Government shall be bound by their provisions. See the Indian Arbitration Act No. 10 of 1940, section 43, Trades and Merchandise Marks Act No. 43 of 1958, section 130, the Factories Act No. 63 of 1948, section 116, the Oil Fields (Regulation and Development) Act No. 53 of 1948, the , section 85. Some of these Acts are modelled on English statutes which contain similar provisions. In some Acts, the express provision binding the Government is inserted by way of abundant caution. But the bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated. Many Acts like the Code of Civil Procedure, 1908 and the make special provisions for the Government in respect of particular matters on the assumption that in respect of all other matters the Government will be bound by the general provisions of the Act. The Indian Limitation Act 1882 provided a special period of limitation for suits by the Government on the assumption that the Government like the subjects will be bound by its other general provisions. To apply the technical rule of construction exempting the Crown from the operation of Indian statutes will be to stultify the intention of the legislature in most cases. The English Courts have gone to the length of deciding that the Crown is not bound even by general regulations as to public safety, see Cooper vs Hawkins(1). Such a result has not escaped criticism even in England. In India, no one has doubted that general regulations as to public safety bind the Government equally like the citizens. The Director of Rationing and Distribution 's case(2) left open the question whether the State could claim immunity from the provisions of a statute with regard to its trading or commercial activities. But the executive power of the State extends to the carrying on of a trade or business, see article 298 of the Constitution. On a question of construction of a statute, no rational distinction can be made between the trading and non trading activities of the State. If the State is not bound by a statute, it would seem that it is not so bound in respect of all its activities. in a country having a federal system of government, it is difficult to apply the rule of Crown exemption from statutes. In (1) (2) ; 211 R vs Sutton(1), the High Court of Australia held that this presumption should not, be applied so as to bring about either State exemption from federal laws or federal exemption from State statutes. But the contrary opinion seems to have prevailed in later cases, see Minister of Works (W.A.) vs Gulson(2). The Commonwealth of Australia vs Bogle(3). This branch of Australian law is discussed in detail by Dr. Wynes in his book on Legislative, Executive and Judicial Powers, 3rd Edition pp. 518 to 544. We should not import in this country either the English rule of implied exception of the Crown or the subtle distinctions engrafted on it by the Australian Courts. Our system of Government is federal in character. The taxing power is vested both in the Union and the States. Subject to certain constitutional restrictions, the Union can tax the State and the State can tax the Union. There is no ground for presuming that the States are excluded from the scope of a general taxing statute enacted by Parliament or that the Union is outside the purview of the general words of a taxing statute enacted by a State legislature. I am therefore of the opinion that the rule that the Govern ment is not bound by a statute unless it is expressly named or bound by necessary implication does not prevail in this country and the decisions in the Province of Bombay 's case(4) and The Director of Rationing and Distribution 's case(s) and the subsequent decisions applying the rule to the construction of Indian Acts should not be followed. The imposition of this artificial rule has been harmful to our body politic. We have power to reconsider our previous decisions, see The Bengal Immunity Company Ltd. vs The State of Bihar(6). This is a fit case where we should exercise this power. If the rule of common law controlling the operation of a statute on the ground of the prerogative applied to India, it would be a law in force before the Constitution and would continue to be in force by virtue of article 372 of the Constitution. It would be the law in force because it would limit and control the operation of the existing Indian Acts. But we have ample power to say that this rule was not in force in India and the Indian law was not correctly laid down by the Privy Council in the Province of Bombay 's case(4) and the decisions which followed it. There is no presumption that the provisions of an Act do not bind the State (using the expression "State" in a compendious sense as including the Union and the States). In each case, it is a question of fair construction of the Act whether or not any particular provision of the Act binds the State. The intention of the legislature has to be gathered on a careful scrutiny of the Act in question. Particular care should be taken in scrutinising the pro visions of a taxing or a penal Act. If the application of the Act (1) ; (3) ; , 254. (5) ; (2) ; (4) [1946] L.R. 73 I.A. 271. (6) 212 leads to some absurdity, that may be a ground for holding that the State is excluded from its operation by necessary implication. If the only penalty for an offence is imprisonment, the State cannot be convicted of the offence, for the State cannot be locked up in prison. If the penalty for the offence is fine and the fine goes to the consolidated fund of the State, it may be presumed that the penal provision does not bind the State, for the legislature could not have intended that the State will be the payer as well as the receiver of the fine. Presumably, the Union is not bound by the Central Income tax Act because if it paid income tax, it will be both the payer and the receiver. Likewise, a State is prima facie not bound by a State Agricultural Income tax Act where the tax is receivable by it. Moreover cases may conceivably arise where "press provisions in a statute binding the State in respect of certain specific matters may give rise to the necessary implication that the State is not bound in respect of other matters. The Calcutta Municipal Act, 1951 contains special provisions exempting the Government from some of its provisions. Section 167(2) exempts from the consolidated rate certain open spaces and parade grounds which are the property of the Government. Section 208(1)(b) exempts certain carriages and animals belonging to the Government from payment of tax on carriages and animals. Section 225(1) (c) proviso exempts carts which are the property of the Government from payment of registration fees. Sections 218(1) and 541(1)(b) are however framed in general terms and do not expressly exempt the Government from their operation. Under section 218(1) it is the duty of every person carrying on any of the trades mentioned in schedule TV to take out a licence and to pay the prescribed fee. Under section 541(1) (b) any person carrying on such a trade without taking out the licence is punishable with fine. Prima facie, the two provisions apply to all persons including the State Government. Section 218 is a taxing section and its object is to levy revenue for the municipality. There is no reason why the State Government like any other person should not take out a license and pay the prescribed fee if it chooses to exercise or carry on a trade and why it should not be punished with fine under section 541(1)(b) if it chooses to carry on a trade without taking a license. By section 541(2), such fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the license Fee. Section II 5 of the Act no doubt provides that all monies realised or realisable under the Act (other than fine levied by magistrates) shall be credited to the municipal fund. Reading sections 115 and 541(2) together it appears that the excepting words "other than fine levied by magistrates" in section 115 do not refer to the fine levied under section 541. The general provisions of section 115 must be read subject to the special provisions of section 541(2) and the fine realisable under section 541 is receivby the Municipality. It follows that the State Government is 213 the payer but is not the receiver of the fine. There is nothing to indicate that the State Government should be excluded from the purview of section 218(1) and section 541(1)(b). Section 218 renders the State liable to pay the license fee. Section 541(1) provides the remedy for the recovery of the fee in case of default in taking out the license and payment of the fee. If we are to hold that section 218 (1) applies to the State but section 541(1) (b) does not, the result would be that though the State is liable to pay the license fee, the Municipality will have no remedy against the State for the recovery of the fee. The legislature could not have contemplated such a result. Section 541 (1)(b) is a penal provision. But the State is not necessarily exempt from the operation of a statute having a punitive aspect. No doubt, under section 547(A) the Court is competent to direct imprisonment of the offender in default of the payment of fine under section 547(1)(b). Obviously, this provision cannot be applied to the State, because the State cannot be detained in prison. But there is no reason why section 541(1) (b) should not be applied to the State. In Rani Sonavati Kumari vs The State of Bihar( ') this Court held that under the punitive provisions of 0 39, r. 2(3) of the Code of Civil Procedure, 1908, the Court could direct attachment of the property of the State for breach of an order of injunction, though the Court could not direct detention of the State in civil prison. The High Court found that the State of West Bengal was carrying on a trade referred to in schedule IV of the Calcutta Municipal Act, 1951, and was bound to take out a license under section 218(1). It is common case that the State did not take out a license for 1960 61. The State was therefore rightly convicted by the High Court under section 541(1). In the judgment of the High Court it is stated by inadvertence that the conviction was under section 537, but from the materials on the record it is clear that the High Court intended to pass the order of conviction under section 541. It was argued that the State was the owner of a market and did not carry on any business. it was suggested that the trades, if any, in the market were carried on by the stall holders and not by the Government. But the High Court has recorded the finding that the Government carried on a trade. In this appeal under article 136 of the Constitution, I do not propose to interfere with this finding Of fact. This judgment will not preclude the Government from proving in any future case that it is not carrying on any trade or business at 1, Orphanage Road, Calcutta, The appeal is dismissed. ORDER In accordance with the opinion of the majority, the appeal is dismissed. Y. P. (1) [1961] S.C.R.728.

The appellant State of West Bengal was carrying on trade as owner and occupier of a market at Calcutta without obtaining a licence as required under section 218 of the Calcutta Municipal Act, 1951. The respondent Corporation of Calcutta filed a complaint against the State for contravention thereof. The trial Magistrate, accepting the State 's contention that the State was not bound by the provisions of the Act acquitted the State. on appeal, theHigh Court convicted the State and sentenced it to a fine, holding thatthe State was as much bound as a private citizen to take out a licence. In appeal to this Court the appellant, relying on this Court 's decision inDirector of Rationing vs Corporation of Calcutta, ; ,contended that the State was not bound by the provisions of a statute unless it was expressly named or brought in by necessary implication and this common law rule of construction, accepted as the law in India was "law in force" within the meaning of article 372 of the Constitution and that in any event by necessary implication the State was excluded from the operation of section 218 of the Act. Held:Per Subba Rao C.J., Wanchoo, Sikri, Bachawat, Ramaswami, Shelat, Bhargava and Vaidialingam, JJ. (Shah, J. dissenting) : The State was not exempt from the operation of section 218 of the Calcutta Municipal Act, 1951 and was rightly convicted. Per Subba Rao C. J. Wanchoo, Sikri, Ramaswami. Shelat, Bhargava and Vaidialingam, JJ. (i) The Common Law rule of construction that the Crown is not, unless expressly named or clearly intended, bound by a statute,, was not accepted as a rule of construction throughout India and even in the Presidency Towns, it was not regarded as an inflexible rule of construction. It was not statutorily recognized either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country. The legislative practice establishes that the various legislatures of country provided specifically, exemptions in favour of the Crown 171 whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions. Even those courts that accepted it considered it only as a simple canon of construction and not as a rule of substantive law. In the City of Calcutta there was no universal recognition of the rule of construction in favour of the Crown. The Privy Council, in Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 27 gave its approval to the rule mainly on concession made by counsel. [180 D G; 183 H; 184 E F; 186 D G] The archaic rule based on the prerogative and perfection of the Crown has no 'relevance to a democratic republic it is inconsistent with the rule of law based on the, doctrine of equality and introduces conflicts and anomalies. The normal construction, namely, that an enactment applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the anomalies and is consistent with the philosophy of equality enshrined in the Constitution. B] If a rule of construction accepted by this Court is inconsistent with the legal philosophy of the Constitution it is the duty of this Court to correct its self and lay down the right rule. This Court must more readily do so in constitutional matters than in other branches of law. [176 B C] Director of Rationing vs Corporation of Calcutta, ; ,, reversed. Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Bengal Immunity Co. vs State of Bihar, , referred to. Case law discussed. (ii)Even assuming that the common law rule of construction was accepted as a canon of interpretation throughout India the rule is not "law in force" within the meaning of Article 372 of the Constitution. There is an essential distinction between a law and a rule of construction. A rule of construction adopted to ascertain the intention of the legislature is not a rule of law. [187 D] (iii)The State is not excluded from the operation of section 218 of the Act by necessary implication. The State is not the payer as well as the receiver of the fine, or the fine, when levied goes to the municipal fund. Though the expression fine ' is used, in effect and substance, section 541 is a mode of realization of the, fee payable in respect of the licence. The provision for imprisonment in default of fine is only an enabling provision and the court is not bound to direct the imprisonment of the defaulter. [189 D H; 190 A B] Per Bachawat, J : (i) This Court should have in Director of Rationing and Distribution vs Corporation of Calcutta, , refused to recognise the rule that the Crown is not bound by a statute save by express words or by necessary implication. In India the Crown never enjoyed the general prerogative of overriding a statute and 'standing outside it. The doctrine of the general immunity of the Crown from the operation of statutes so far as it is based upon the 'royal prerogative was never imported into India. Nor is there any compelling reason why the courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England. The bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated. The 172 rule,as rule of construction, never gained a firm foothold in untilthe Privy Council decision in Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, in 1946, till which time there was no settled course of decisions of the Indian courts necessitating or justifying the application of this rule to the construction of Indian statutes; and even in this decision the propriety of applying the rule to Indian legislation was not considered. The imposition of this strict rule of construction by the Privy Council was received very unfavourably in India till this Court 's decision in the Director of Rationing case wherein Province of Bombay was held to have laid down the correct law. But subsequent decisions of this Court disclosed a tendency to relax and soften the rigour of the rule. Further, in a country having a federal system of government it is difficult to apply the rule of Crown exemption from statutes. This rule was not in force in India and therefore was not "law in force" within the meaning of article 372 of the Constitution. [201 D E; 202 C; 210 A B, C D; C, H; 210 H; 211 F] This Court has power to reconsider its previous decisions and this is a fit case where this power should be exercised. [211 E] Director of Rationing vs Corporation of Calcutta, ; , reversed. Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable. Shivenkata Seetararnanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; and Bengal Immunity Co. vs State of Bihar, , referred to. Case law discussed. (ii)On a question of construction of a statute no rational distinction can be made between the trading and non trading activities of the State. [210 G] (iii)There is nothing in the Act to indicate that the State should be excluded from the purview of section 218(1) 'requiring the taking out of a licence on payment of the prescribed fee and section 5441(1) providing the remedy for the recovery of fee in face of default. If the State is to be exempt from the application of section 541(1)(b) it would lead to the anomaly that the State is liable to pay the licence fee but the Municipality will have no remedy for the recovery of the fee. Also, the fact that under section 547(A) the court is competent to direct imprisonment in default of fine is no reason why section 5411 1) (b) should not be applied to the State. The special provisions of section 541(2) indicate that the fine realizable under section 541 is receivable by the Municipality. It follows that the State Government is the payer but is not the receiver of the fine. The fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the licence fee. [212 H; 213B] State of Bihar vs Rani Sonavati Kumari ; , relied on. Shah, J. (Dissenting); (i) The English Common Law rule that the Crown is not, unless expressly named or clearly intended, bound by a statute, is a rule of construction and was settled law in India before the Constitution. [197 F; 198 D] The Common Law of England was adopted in this country subject to local variations and the personal law of the parties and the courts which functioned in the former British India territory were enjoined to cases not governed by any specific statutory rules according to equity and good conscience,, which meant rules of English Common Law 173 in so far as they were applicable to Indian society. Them was practically a consistent course of decisions of the High Courts in India, prior to the Constitution, in support of the view, affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, that the rule that the Crown is not unless expressly named or clearly intended bound by a statute applied to India. It was accepted as a rule of interpretation ofstatutes applicable to all statutes governing state action, authority or property. A difference may have prevailed in Parts of the territories now comprising theIndian Union. But this is not peculiar to this rule of interpretation adoptedby the Courts in British India. Where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the courts administering justice. The present case concerns the administration of law in the town of Calcutta which has for more than two centuries been governed by the English Common Law as adopted by the various Acts, Regulations and finally by the Letters Patent. [191 A D; 192 D E; D F] Director of Rationing and Distribution vs The Corporation of Calcutta, ; , followed. Province of Bombay vs Municipal Corporation of the City of Bom. bay, L.R. 73 I.A. 271, applied. State of West Bengal vs Union, [1964] 1 S.C.R. 371 Srivenkata Seetaramanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; , Builders Supply Corporation vs Union of India, ; , referred to. Case law referred to. There is no reason to hold that the rule which previously applied to the interpretation of a statute ceased to apply. on the date on which the Constitution came into force. The Constitution has not so fundamentally altered our concept of 'State ' as to abandon the traditional view about State privileges, immunities and rights because they had a foreign origin and on the supposed theory of equality between the State and its citizens. The guarantee of equal protection clause of the Constitution does not extend to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens nor has the Constitution predicated in all respects equality in matters of interpretation between the State and its citizens. A State can, in the interest of public good, select itself for special treatment. This being so, there is no reason to suppose that a Statute which was framed on the basis of a well settled rule of pre Constitution days which accorded the State a special treatment in the matter of interpretation. of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizens. [198 H 199 F] The fact that in the Indian federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a Statute, unless expressly named or clearly implied, conflict between the State enacting a law and the Union,, or another State, may arise, does not give rise to any insuperable difficulty which renders the rule inapplicable to the changed circumstances, for, it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation and not any other State. [199 G] (ii)The rule of interpretation being a settled rule is "law in force" within Me meaning of article 372 of the Constitution. A rule is not any 174 the less a rule of law because it is a rule for determination of the intention of the legislature and for its application requires determination of facts and circumstances outside the statute. Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution, is law, does not involve the view that it is immutable. A statue may be repealed, ' and even retrospectively, it would then cease to be in ,operation; a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it was law in force. [198 D G] (iii)The application of the rule cannot be restricted to cases where an action of the State in its sovereign capacity is in issue. In the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading. [200 A B] (iv)The State of West Bengal was not bound by the provisions relating to the issue of licences for occupation or conduct of a market. [200 F] There is no, express reference to the State, nor is there anything peculiar in the nature purpose and object or in the language used in the enactment relating to the issue of licences, which may suggest that the State must by necessary implication be bound by its provision. [200 E]

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Nos. 712, 715 739, 760 764, 765 770, 779 780, 781 84, 838 855, 861 873 & 874 892 of 1977. A. K. Sen (in WP. 712), V. M. Tarkunde (in WP 715 39) J. L. Jain (in WP 861 892) & P. P. Juneja for the petitioners in W. P. Nos. 712, 715 739, 874 892 and 861 873/77. 77. D. Goburdhan for the Petitioners in WP Nos. 760 64 & 765 70/77 2 277 SCI/78 302 A. K. Sen (in WP 779 780), section B. Sanyal, Alit K. Mittar & P. K. Mukherjee for the petitioners WP 779 80/77 D. P. Mukherjee & A. K. Ganguli for the petitioners in W. P. Nos. 781 784/77. section section Ray, A. K. Punja & H. K. Puri for the Petitioners in W.P. Nos. 838 855/77 section N. Kackar, Sol. (WP Nos. 812 & 838), R. P. Bhatt (WP 861), E. C. Agarwala and Girish Chandra for the respondent. 770, L. N. Sinha & U. P. Singh for R/State of Bihar in W. P. No. 765781 784/77 A. P. Chatterjee, Mukti Maitre & G. section Chatterjee for R/State of West Bengal The following Judgments were delivered BEG, C.J. The ninety one writ petitions before us for delivery of our reasons in support of our order dated 23 November, 1977 dismissing them, raised a common question of the validity of an order (hereinafter referred to as 'the Control Order), passed on 30th September, 1977, by the Ministry of Civil Supplies and Cooperation of the Government of India, which runs as follows "ORDER New Delhi, the 30th September 1977 section O. WHEREAS the Central Government is of opinion that it is necessary and expedient so to do for securing equitable distribution and availability at fair prices, of mustard oil; NOW, THEREFORE, in exercise of the powers conferred by section 3 of the (10 of 1955), the Central Government hereby makes the following orders namely : 1. Short title, extent and commencement. (1)This Order may be called the Mustard Oil (Price Control) Order, 1977. (2) It extends to the whole of India. (3) It shall come into force at once. Definition. In this Order, "dealer" means a person engaged in the business of the purchase, sale or storage for sale of mustard oil. Price at which a dealer may sell. No dealer shall, either by himself or by any person on his behalf, sell or offer to sell any mustard oil at a retail price exceeding Rs. 10/ per kilogram, exclusive of the cost of container but inclusive of taxes. Sd/ (T. Balakrishnan) Joint Secretary to the Govt. of India (File No. 26(16)/77 ECR)" 303 The order WAS passed in exercise of the powers conferred upon the Central Government by section 3 of the (hereinafter referred to as 'the Act '). This provision lays down: "3(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may, by order, provide for regulating or prohibiting the production. supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by subsection (1), an order made thereunder may provide (a) xxx xxx xxx xxx xxx (b) xxx xxx xxx xxx xxx (c) for controlling the price at which any essential commodity may be bought or sold; (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity; (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) for requiting any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity," (a) to sell the whole or a specified part of. the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him. to the Central Government or a State Government or an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order. Explanation I. An order made under this clause in relation to foodgrains, edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such foodgrains, edible oilseeds and edible oils, 304 fix the quantity to be sold by the producers in such area and may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of, the producers. Explanation 2. For the purpose of this clause, "production" with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar;" We are not concerned here with other provisions of section 3 (2). Section 3(3), which will be relevant for the purposes of interpretation, runs as follows : "3 (3) Where any person sells any essential commodity in compliance with an order made with reference to clause (f) of sub section (2), there shall be paid to him the price therefore as hereinafter provided (a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale. " Again, section 3A lays down: "3A(1) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices, or preventing the hoarding, of any foodstuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub section (3), the price at which the foodstuff shall be sold in the locality in compliance with an order made with reference to clause (f) of sub section (2) shall be regulated in accordance with the provisions of this sub section. (ii) Any notification issued under this sub section shall remain in force for such period not exceeding three months as may be specified in the notification. (hi) Where, after the issue of a notification under this sub section, any person sells foodstuff of the kind specified therein and in the locality so specified, in compliance with an order made with reference to clause (f) of sub section (2), there shall be paid to the seller as the price therefore. (a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price; 305 (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither clause (a) nor clause (b) applies, the price calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification. (iv) For the purposes of sub clause (c) of clause (iii), the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality and the average market rate so determined shall be final and shall not be called in question in any court. " Additional sub sections (3B) and (3C,) will also require consideration in order to arrive at the correct meaning of section 3(2). They read as follows "(3B) Where any person is required, by an order made with reference to clause (f) of sub section (2), to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government, any grade or variety of foodgrains, edible oilseeds or edible oils in relation to which no notification has been issued under sub section (3A), or such notification having been issued has ceased to be in force, there shall be paid to the person concerned notwithstanding anything to the contrary contained in sub section (3), an amount equal to the procurement price of such foodgrains, edible oilseeds or edible oils, as the case may be specified by the State Government, with the previous approval of the Central Government having regard to (a) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains, edible oilseeds or edible oils; (b) the general crop prospects; (d) the recommendations, if any, of the Agricultural grains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable section of the consumers; and (d) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of foodgrains, edible Oilseeds or edible oils. 306 (3C) Where any producer is required by an Order made with reference to clause (f) of subsection (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or to any other person or class of persons and either no notification in respect of such sugar has been issued under sub section (3A) or any such notification, having been issued hag ceased to remain in force by efflux of time, then, notwithstanding anything contained in sub section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, (determine, having regard to (a) the minimum price, if any, fixed for sugarcane by the Central Government under this, section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar. Explanation. For the purposes of this sub section, "producer" means a person carrying on the business of manufacturing sugar. " It is necessary to keep other clauses of section 3 also in one 's mind to get a true picture of the statutory context of the power of price control. The drastic measures which the Central Government may adopt, extending to virtually taking over of management of appointing Authorised Controllers of particular undertakings, so as to carry out the objects 'stated in section 3(1) of the Act, and the mechanism of control visualised to ensure due and proper exercise of the statutory powers are also very significant. The provisions containing these are : "3(4) If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity, it may, by order, authorise any person (hereinafter referred to as an authorized controller) to exercise, with respect to the whole or any art of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein. and so long as such order is in force with respect to any undertaking or part thereof," 307 (a) the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government, so, however, that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in charge of the management of the undertaking, except in so far as may be specifically provided by the order; and (b) the undertaking or part shall be carried on in accordance with any directions given by the authorized controller under the provisions of the order, and any person having any functions of management in relation to the undertaking or part shall comply with any such directions. 3(5) An order made under this section shall, (a) in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and (b) in the case of an order directed to a specified individual be served on such individual (i) by delivering or tendering it to that individual, or (ii) if it cannot be so delivered or tendered, by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighbourhood. 3 (6) Every order made under this section by the Central Government or by 'any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be, after it is made. " It has also to be remembered that if the mechanism of price/, control of some essential commodities fails, there is under our Constitution, with its socialistic orientation and objectives, the provision in Article 19 (6) (ii) for "the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service,, whether to the exclusion, complete or partial, of citizens or otherwise". The petitioners assail the control order on four grounds : firstly, that it violates the fundamental rights of the petitioners to property under Article 19 (1) (f) and to carry on their trade and business guaranteed by Article 19(1) (g) of the Constitution; secondly, that the petitioners are denied the benefits of Article 14 of the Constitution; thirdly, that the order is hit by Article 301 of the Constitution; 308 and, fourthly, that the Central Order is outside the scope of section 3 of the Act. We need not consider Article 301 of the Constitution as the petitions do not, beyond citing the provision, set out any facts to show how this Article is involved. This Article is meant for protecting inter State as well as intrastate "freedom of trade, commerce, and intercourse". But, Article 302 provides "Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the, territory of India as may be required in the public interest." Although, Article 302 does not speak of "reasonable" restrictions, yet, it is evident that restrictions contemplated by it must bear a reasonable nexus with the need to serve "public interest". It the tests of Section 3 of the Act are satisfied by an Order, it could not fail to serve public interest. Hence, from this point of view also, it is enough if we consider whether the Control Order falls within section 3 of the Act. It was evidently for this reason that, beyond mentioning Article 301, counsel for the petitioners did not, quite rightly, advance much argument to show how Article 301 is involved here. We will, therefore, not consider it any more here. It was, however, vehemently urged on behalf of the petitioners that the Control Order is assailable for violating Article 14 and 19(1) (f) and (g) despite the fact that the Act itself was placed in 1976 in the 9th Schedule of the Constitution. The result of placing it there by a constitutional amendment is that section 3 of the Act became free from any limitations based on the provisions of Part III of the Constitution. Article 31B, providing for a removal of the protection to fundamental rights given by Part III of our Constitution, lays down : "31B. Validation of certain Acts and Regulations. Without prejudice to the generality. of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent legis lature to repeal or amend it, continue in force. " It is evident that Article 31B protects only Acts and Regulations specified in the Ninth Schedule from the vice of invalidity for inconsistency with provisions of Part III of the Constitution but not anything done or to be done in future under any of the provisions of 3 0 9 any Act so specified, such as an order passed under section 3 of the Act. , If section 3 of the Act, which was held in Shri Hari Kishan Bagla vs State of Madhya Pradesh(1) to pass the tests of validity imposed by articles 14 and 19 (1) (f) and (g), read with articles 19 (5) and (6), a Control Order passed under section 3 would also be required to pass these tests as its scope could not be wider than that of the provisions which authorises its promulgation. A delegate or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force. If Bagla 's case (supra) is good law (no party has questioned its correctness) Articles 14 and 19(1) (f) and (g) could be deemed to be, if one may so put it, "written into" section 3 of the Act itself. They would control the scope of orders which could be passed under it. That is, undoubtedly ' the way in which guarantees of fundamental rights could and should function if the Act containing section 3 itself had not been placed in the Ninth Schedule so as to take, away ',be guaranteed of fundamental rights from the substance of it. The question of interpretation before us is : What is the effect of putting the Act in the Ninth Schedule upon Control Orders passed under section 3 of the Act? The answer to this question must necessarily depend upon the effect of such a change of the legal position upon the provisions of section 3 itself which authorise control orders passed under it. If the effect was to widen the orbit of section 3 of the Act or to remove the limitations put by Article 14 and 19 upon the exercise of powers under it, the logical and natural result would be to enlarge also the scope or sweep of the orders passed under it. But, if it has no such effect upon section 3 of the Act itself, orders passed under it would continue to be subject to provisions of section 3 of the Act as controlled by Articles 14 and 19 of our Constitution so that they will have to satisfy what may be described as a "dual test" : firstly that of provisions of section 3 of the Act itself; and, secondly, that of provisions of Chapter III of the Constitution containing fundamental rights. Learned Counsel for the petitioners suggested that the placing of the Act in the Ninth Schedule protected only the grant of powers under section 3 of the Act but not their exercise. Article 31B, no doubt, speaks of "specified" Acts and Regulations. But it makes no distinction whatsoever between any grants of powers and their exercise. Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use. The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part 111. If ',his be the correct position, it would, quite naturally and logically, follow that their use is what is really protected. (1) [1955] 1 SCR380. 310 In practice, it is the exercise of power which is generally assailed and not the mere conferment of it which raises the somewhat different question of legislative competence. Indeed, the Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative compete defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule. But, questions of conflict with fundamental rights and of transgression of Legitimate or reasonable, limit.% upon their exercise arise when citizens complain of unreason. able impediments to the exercise of their fundamental rights. The distinction between protection to a mere grant of powers and to their exercise, therefore, seems specious in the context of the protection. It cannot explain why, if section 3 is protected by the Ninth Schedule. the exercise of power granted by it, which manifests itself. in control orders, is not protected. It would be so protected, if at all, not be cause the orders to be made in future, as such are protected, but because the power actually conferred and found in existence in section 3 is protected. The protection is given to a power which is specified and in existence which has to be used 'of certain purposes and not to what may be specified in future. If orders passed under section 3 of the Act also get a protection it would be what may be described as a "derivative" protection so long as the orders are covered by section 3 of the Act. It is available only so long as and because the source of their authority section 3 of the Act is protected by the Ninth Schedule. Orders purporting to be made under section 3 of the Act must, however, satisfy the tests found in section 3 itself in every case. They can never escape the basic tests whether section 3, the source of their authority, is protected by the Ninth Schedule or not. The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act, but not after they have been deliberately delinked or removed from section 3, if one may so describe the effect of the inclusion of the Act in the Ninth Schedule. The Solicitor General contended that section 3 of the Act constituted what he described as "skeleton" legislation, over which the exercised of powers given by section 3 built, so to say, a body of "flesh and blood". The term "skeleton" legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts. It is doubtful whether the , could be spoken of as a piece of "skeleton" legislation. Section 3, sub s.(1) of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act. These schemes and policies to serve the stated purposes may differ as. regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances. 311 Orders passed under section 3 of the Act, in pursuance of such schemes or policies, do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution. On the strength of the views expressed by this Court in Godavari Sugar Mills Ltd. & Ors. vs section B. Kamble & Ors.,(1) with which we respectfully agree, the most one can say is that orders passed under the Act, before, its inclusion in the Ninth Schedule, could also be said to be protected directly by the Ninth Schedule if mentioned there. But, there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act before us just as none could be given to either the amendments of an Act or to regulations passed under the Act which were considered in Godavari Sugar Mills case (supra). As already indicated above, the impugned control order is assailed mainly on the ground that it violates Articles 14 and 19(1) (f) and (g) of the Constitution. It is alleged that the manufacturers of oil having invested a great deal of capital in Mustard oil manufacturing industry and having purchased oil seeds at higher rates than those which have entered into the calculation of the Government in fixing the price of mustard oil for the consumer cannot be made to sell oil, into which Mustard seed is converted, at prices below those at which they could themselves produce oil. It is submitted that to require them to do so amounts to confiscation of property contrary to law as well as a restriction upon the right guaranteed by Article 19(1)(g) of the Constitution upon them to carry on an industry or business free from unreasonable restrictions. Valid restrictions, it is submitted, can only be reasonable and in the interests of the general public. It was suggested that the protection of Article 31(1) against deprivation of property contrary to law was also involved here. The main question ,to be decided therefore, is whether Part III of the Constitution is available at all to test the validity of the impugned control order. In Latafat Ali Khan & Ors. vs State of U.P.,(1) a Constitution Bench of this Court decided such a question quite rightly in our opinion as follows (at p. 720) : "It seems to us that if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B, it is difficult to say that the rule must further be scrutinised under articles 14, 19 etc, Rule 4(4) seems to us to be a rule which does not go beyond the powers conferred under section 6(xvii), read with section 44 of the Act. At any rate, section 6(xvii) and rule 4(4) are part of a scheme of land reform in U.P. and would be protected from attack under article 31B of the Constitution". In that case, the rule made under the provisions of the Imposition of Ceiling on Land Holdings Act 1960 of U.P. was under attack. The section under which the rule was made enjoyed the protection of both Articles 3 1 A and 3 1B of the Constitution. Hence, it was held that the rule was not to be questioned if it fell within the empowering (1) ; (2) [1971] Suppl. S.CR.719at720. 312 provision of the Act. The position before us is very similar. The Control order passed under section 3 of the provisions of the Act before us, included in the Ninth Schedule, is assailed on the ground that, although section 3 of the Act may be protected by the 9th Schedule of the Act, yet, an order passed under this provision is not so protect ed. Although, we agree that the impugned order is not protected for this reason, yet, if the section under which it was passed is protected from any attack based on the provisions of Part III of the Constitution, the only question which survives is whether the control order is covered by the protected empowering provision. If it falls outside the empowering provision it would be invalid in any case. If it falls within the empowering provision but could be found to be struck by the provisions of article 19 (1 ) (f) and (g) of the Constitution, an attack on the control order, by reason of Article 19(1) (f) or (g), would be really one against the empowering provision itself which is protected. The control order, therefore, enjoys what may be called a derivative protection. All that has to be shown by the Central Government is that it falls within the empowering provision. No further test, based on fundamental rights in Chapter III of the Constitution, can be applied to it in such a case. All the tests of validity of the impugned price control or fixation order are, therefore, to be found in section 3 of the Act. Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an Essential commodity or for securing its equitable distribution at fair prices the criteria of validity. it is evident that an assessment of either the expediency or necessity of a measure, in the light of all the facts and circumstances which have a bearing on the subjects of price fixation, is essentially a subjective, matter. It is true that objective criteria may enter into determinations of particular selling prices of each kilogram of mustard oil at various times. But, there is no obligation here to fix the price in such. a way as to ensure reasonable profits to the producer or manufacturer. It has also to be remembered that the object is to secure equitable distribution and availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time. Hence the most important objective fact in fixing the price of mustard oil, which is consumed generally by large masses of people of limited means is, the paying capacity of the average purchaser or consumer. Statistics of rise in prices of mustard oil throughout the country indicated a very sharp rise during the period preceding the control order. It was no longer available at a reasonable price to the average consumer. It is difficult to understand how the average consumer could buy mustard oil at more than Rs. 10/ for each kilogram of mustard oil unless his purchasing capacity was increased by pumping money into his pocket artificially. This would necessarily imply a general rise in wages of the working classes and salaries of middle classes which do not share the profits of an inflationary economy. In other words, a 313 fixation of price above Rs. 10/ per kg. of mustard oil could have, contributed to push the country down the slippery slope of inflation towards economic crisis and disaster. Price control and planning may have been forced upon all nations of the world due to the needs and exigencies of modern "total" warfare. But, as has been observed, the problems of the aftermath or of the peace and reconstruction, which follow (according to some they "break out") are no less demanding. In addition, it is common knowledge that the population explosion, unemployment, and rising prices in our country, due to the inflationary spiral pose problems with no less grave implications for the whole country than a war. It would be no exaggeration to say that the fate of every government depends ultimately upon a satisfactory solution of these problems, and, particularly, on its capacity to check rise in prices of essential commodities. We have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the country will suffer so that they would give up producing or dealing in mustard oil. It was urged that this would, quite naturally, have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately. We do not think that it is the function of this Court or of any Court to sit in judgment over such matters of economic policy as must necessarily be left to the Govt. of the day to decide. Many of them, as a measure of price fixation must necessarily be, are matters of production of ultimate results on which even experts can seriously err and doubtless differ. Courts can certainly not be expected to decide them without even the aid of experts. It is impossible for any Court to take evidence from all over the country to determine whether particular concerns or parties which have come up before this Court or could not reasonably produce mustard oil at a cost which could make it reasonable for them to sell it at Rs. 10 /per kg. Learned Counsel before us have tried to perform this impossible task. We think that it should not even have been attempted in a case of this kind because the price at which mustard oil was sold commonly in the market not very long ago and the price which prevailed at the time when the control order of 30th September, 1977, was passed are matters of common knowledge. All that the Govt. need have done was to take a policy decision based on what could reasonably be the paying capacity of the average buyer of mustard oil and the likely effects of the intended price fixation. It seems to us to have done that. It is true that sufficient material, from these points of view, was 'not placed before us by the Union of India. Nevertheless, the matter is so obvious and glaring that we do not think that detailed statistics are needed. We deliberately do not go into the great mess of materials which have been sought to be placed before us from the point of view of present cost of producing mustard oil and the fixation of a reasonable price based on a determination of that. The more essential questions to answer, from the point of view of provisions of section 3 of the Act were : Can the mass of ordinary consumers pay more than Rs. 10/ per kg ? Even if the price of mustard oil is fixed at less than the cost price to the ducers, is it not necessary to take such a measure in order to break the 314 vicious inflationary spiral and bring down prices ? The last question could only be answered by waiting and watching the ultimate effects of a particular price, fixation on prices of mustard seed and cost of production of mustard oil ultimately. If the object of price fixation suggested by this question is very 'necessary to take into account, from the point of view of availability of mustard oil at fair prices to consumers, as we think it is, the actual cost of production to the purchasers could certainly not be the sole or the decisive factor. It could only be one out of a Dumber of relevant facts and circumstances. The net result of the mass of statistics placed before us on behalf of the petitioners is that the price fixed should have been about Rs. 3/ per kg. more, that is to say, about Rs. 13/ per kg. Even if we accept this to be correct estimate for normal times, when fair and reasonable profits to the producers could be an important consideration, we think that a price fixed at Rs. 10/ per kg., as a part of an attempt to break the vicious inflationary circle, is not at all an unreasonable step. Students and observers of economic systems tell us that inflation is no problem in socialist countries because the whole. economy is so completely controlled that there is no question of a rise in prices. Under which our system is known as a "mixed economy" planning and price fixation are part of that social control which becomes inevitable under certain conditions. Indeed, it seems quite unavoidable, under any system which adopts socialistic measures to achieve the common good. The argument on behalf of the Union is that the result of this fixation, even below cost price, will necessarily produce desired effects upon the free sector in which price of mustard seed is still not controlled. The control imposed will make it impossible for producers to offer excessive prices for mustard oil seed demanded by the growers. Hence, it was argued that the cost of production was bound to come down in course of time if petit loners could only wait a little. Fixation at even uneconomic selling price implied temporary loss to the producers, so as to serve their own ultimate interests and those of general welfare. Such sacrifices ought it was suggested, be readily borne by producers of mustard oil in a, system like ours. If they were not able to bear them, they could close down their factories. They could hot claim a right to carry on business or manufacture on their own terms. Such is not the right guaranteed even by article 19 (1) (g) of the Constitution. However, as we have already indicated, it seems that the Act was put in the Ninth Schedule to prevent the invocation of Articles 14, 19 and 31 for obstructing measures so necessary as price fixation of essential commodities is for promoting the objectives of a socialist welfare economy. This, in our opinion, would be a sufficient answer to all the arguments which had been put forward at considerable length before us on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price. It may be mentioned, en passant, that even during the interval between the passing of our order dismissing Writ Petitions for the enforcement of fundamental rights protected by Part III of the Constitution and the delivery of these reasons, so beneficial was the effect of the order of 30th September, 1977, that price of mustard oil has 315 fallen in the neighbourhood of Rs. 7/ per kg. Apparently, this is enough to cover reasonable profits of producers as well as middlemen. We are informed that the impugned Control Order has itself been withdrawn by the Central Government. We can take judicial notice of those facts which illustrate the extreme inadvisability of any interference by any court with measures of economic control and planning directed at maximising general welfare. It is not the function of the Courts to obstruct or defeat such beneficial measures devised by the Govt. of the day. Courts cannot pass judgments on the wisdom of such actions, unless actions taken are so completely unreasonable that no law can be cited to sanction them. If the impugned order of 30th September, 1977, falls within this provision, as we think it does, no question of violating a fundamental right could arise. If an impugned order were to fall outside section 3 of the Act, no question of applying any test of reasonableness contemplated by Article 19(6) need arise because it would then be a purely illegal I restriction upon the right conferred by Article 19(1) (g) which would fall for lack of authority of any law to support it. We have also heard considerable argument on principles of fair fixation of price which, it was submitted, must take into account the cost of production as well as a reasonable amount of profit to the manufacturer and the middleman. As indicated above, such principles apply only in those cases where there is an obligation upon the price fixing authority to take certain matters. into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers. Section 3 of the Act set out above,, as already indicated, has very different purposes in view. It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 3(1) of the Act. But, in cases where the effects of a policy or a measure adopted in achieving purposes set out in Section 3 (1 ) are matters of guess work, after experimentation, the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work and reveal its results. Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 3(1) of the Act. Mr. Kacker, learned Solicitor General has rightly drawn our attention to a distinction between merely, regulatory orders and those of price fixation or price control under section 3 (2) (c) of the Act. A price fixation to meet the general purposes set out in section 3(1) of the Act, aimed at reversing the vicious inflationary spiral of rising prices, may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producer, , which is not the object of section 3(1) of the Act. The whole evidence of the petitioners is misdirected inasmuch as it proceeds on the assumption that what could be no more than a relevant consideration is the whole and sole object of section 3(1) of the, Act. About other matters there is practically no evidence so that we are left in the region of guesswork. 316 No case has been cited before us to show that an Order meant to serve a purpose the execution of which may, as indicated above, require fixation of price even below cost price for the time being, is outside Section 3 (1) of the Act. It was rightly urged on behalf of the Union that the Control order is a temporary and experimental device for achieving a particular purpose, covered by Section 3(1) of the Act at a particular time, in a particular state of affairs. It was submitted that, after the purpose is achieved, the order could be and will be withdrawn by the Govt. of India. As already 'stated above, that order has been withdrawn because the purpose has been achieved. Even if that purpose had not been achieved, the order could be withdrawn if it became evident to the Government that such control would not achieve the desired object. It is extremely hazardous for Courts to enter the sphere of experimentation in matters of economic policy which must be, left to the Government of the day. It will be seen from the provisions of Section 3 (3) of the Act that price fixation on certain given principles is enjoined only when there is an order under Section 2 (f) of the Act compelling the sale of a whole stock or a specified part of it to the Central or a State Government or to authorities or persons as directed by them. Again, Section 3 (a) (iii) provides a machinery for price fixation in special cases. Similar is the position with orders under sections 3B and 3C. The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices, it will be seen, is much more comprehensive than the machinery for price fixation in special cases on given principles. The cases cited before us on price control relate to the sphere in which the criteria for fixation of were indicated either by a statutory provision or by orders= thereunder. In Panipat Cooperative Sugar Mills vs Union of India(1), this Court said : "Two principal questions arise in these appeals : (1) what is the true interpretation of section 3 (3C) and (2) whether the price of Rs. 124.63 was in accordance with the provisions of section 3 (3C) ?" Thus, statutory principles for price fixation were under consideration there. Again, in Shree Meenakshi Mills Ltd. vs Union of India(2), there were directions given under the Cotton Textiles Control Orders prescribing sales through certain channels. The principles on which the sale prices of textiles were to be fixed, in accordance with relevant rules, were explained by this Court. In Meenakshi Mills ' case (supra) may, C.J., disapproved of the decision of this Court in Premier Automobiles Ltd. vs Union of India(3), in the following words (1) [1973] 2 S.C.R. 860. (2) (3) ; 317 .lm15 "The Premier Automobiles (supra) decision does not consider that the concept of fair prices vanes with circumstances in which and the purposes for which the price control is sought to be imposed. This decision because of the special agreement there does not consider that the fixation of fair price with a view to holding the prices line may be stultified by allowing periodic increase in price. " It was also observed there : "In Premier Automobiles case (supra) this Court said that the concept of fair price fixed under section 18G takes in all the elements to make it fair for the consumer leaving a reasonable margin of profit to the manufacturer without which no one will engage in any manufacturing activity. These observations were made on the basis of the agreement of the parties there that irrespective of technical or legal points the Court should base its judgment on examination of correct and rational principles and should direct deviation from the report of the Commission of Inquiry appointed by it with the concurrence of the parties only when it is shown that there has been a departure from the established princi ples or the conclusions of the commission are shown to be demonstrably wrong or erroneous. '. ' In other words, the judgment was not to provide a precedent for anything similar to be done by Courts in other cases. In Saraswati Industrial Syndicate Ltd. etc. vs Union of India(1) the cases mentioned above were discussed by this Court in the context of Suger Control Order, 1966, where clause (7) laid down certain matters to be considered in determining fair price. It was held there "Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material. It could not, therefore, give rise to a complaint that a rule of natural justice has, not been followed in fixing the price. Nevertheless, the criterion adopted must be reasonable." The guiding factors laid down in clause (7) of the Sugar Control Order, 1966, were held to afford only indicate to help the Government in fixing prices on the lines indicated in the Control Order. We think that unless, by the terms of a particular statute, or order, price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation. A legislative measure does not concern itself with the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class. In the case before us, the Control Order applies to sales of mustard oil anywhere in India by any dealer. Its validity does not depend on the observance (1) ; 3 277SCI/78 318 of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity. The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or in other words by reasonableness judges by possible or probably consequences. It is true that even executive or legislative action must be confined to the limits within which it can operate. It must fall reasonably within the scope of the powers conferred. The scope of the powers conferred depends upon the terms of the empowering provision. As we have already mentioned, the empowering provision in the instant case is widely worded. The validity of section 3 has not been challenged before us. As indicated above, it could not be challenged by reason of Article 31B after its inclusion in the 9th Schedule of the Constitution. The result necessarily is that, in a case in which the Central Government is the judge of expediency and necessity to the extent that even the protection of guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency, it challenge on the grounds on which it was attempted before us could not succeed. We may also mention that the view we have taken of the dominant purpose of section 3(1) of the Act is in accordance with the following elucidation of its purpose in Meenakshi Mills case (supra): "The question of fair price to the consumer with reference to the dominant object and Purpose of the legislation claiming equitable distribution add Availability at fair price is completely lost sight of if profit and the producer 's return are kept in the forefront. The maintenance or increase of supplies of the commodity or the equitable distribution and availability at fair prices are the fundamental purposes of the Act. " We do not think that we need deal with American cases in price 'fixation such as Leo Nebbia vs People of the State of New York(1), where the guarantee of due process against capricious action was involved. in this country, such guarantees in regard to rights of property or to carry on industry or trade or business could only arise by reason of Articles 14 and 19 of the Constitution which it, excluded here because of the protection conferred upon section 3 of the Act by the 9th Schedule of the Constitution. I may, however, mention that in Permian Basin Area Rate cases(2), where the majority of learned judges of the U.S. Supreme Court laid down, inter alia, with regard to price fixation by a body of experts of Federal Power Commission required to proceed quasi judicially, that in order to "over turn the Commission 's judgment" the petitioners must "undertake the heavy burden of making a convincing showing that it is invalid, because it is unjust and unreasonable in its consequences". That was a case in which a Commission was charged with a duty to fix rates in accordance (1) 291 U.S. (78 Law. En.) 502. (2) ; p. 312. 319 with certain principles after taking evidence and hearing parties effected. Nevertheless, the duty of the petitioners was held to extend to demonstrating the unreasonableness and injustice of the consequences. A fortiori, patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control, in the nature of either legislative or purely administrative action, is assailed. So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 3(1) of the Act it cannot be set aside or declared invalid. The test has to be that of consequences on objects sought by section 3 ( 1 ) of the Act. Judged by this test we think that the Order of 30th September, 1977, fell within the purview of section 3 of the Act and it has served ,its purposes. For reasons given above, the order of dismissal of Writ Petitions already passed by us on 23rd November, 1977 is, in our opinion, fully justified. ORDER Y. V. CHANDRACHUD, P. N. BHAGWATI, section MURTAZA FAZAL ALI, P. N. SHINGHAL AND JASWANT SINGH JJ. We will give our reasons later since as at present advised, with great respect, we are not disposed to agree with a part of the reasoning of the learned C.J. (Dated May 5, 1978) CHANDRACHUD, C.J. On September 30, 1977, the Government of India in its Ministry of Civil Supplies and Cooperation issued the Mustard Oil (Price Control) Order 1977, in exercise of the power conferred by section 3 of the , 10 of 1955. The Price Control Order provides by clause 3 that no dealer shall either by himself or by any person on his behalf sell or offer to sell any mustard oil at a retail price exceeding Rs. 10/ per kilogram, exclusive of the cost of container but inclusive of taxes. Clause 2 defines a 'dealer ' to mean a person engaged in the business of purchase, sale, or storage for sale of mustard oil. The Price Control Order was challenged in this Court by several ,dealers on the ground, mainly that it violates articles 14, 19 (1 ) (f) and 19 (1) (g) of the Constitution. Article 301 was cited but not argued upon with any seriousness. The argument that the Price Control Order offends against the right to property and the right to carry on trade or business requires 'for its appreciation and decision the awareness that by the 40th Amendment passed in 1976, the was placed in the 'Ninth Schedule to the Constitution as item 125. One of the main con tentions of the Union Government in answer to the petitioners ' challenge to the constitutionality of the Price Control Order is that since the Act, by reason of its being placed in the Ninth Schedule, is immune from attack on the ground that its provisions violate the funda 320 mental rights guaranteed by Part III of the Constitution, the Price Control Order which is but a creature of the Act must enjoy the same immunity. This contention has found favour with the learned Chief Justice, Shri M. H. Beg but, with respect, we are unable to share his view. Article 3 1 A of the Constitution saves laws which provide for matters mentioned in clauses (a) to (e) thereof from a challenge under articles 14, 19 or 31 notwithstanding anything contained in article 13 of the Constitution. Article 31A which was introduced by the Constitution (First Amendment) Act, 1951, validates certain Acts and Regulations providing that without prejudice to the generality of the provisions contained in Article 31A, "none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof" shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of Part III. On a plain reading of this article it seems to us impossible to accept that the protective umbrella of the Ninth Schedule takes in its ever widening wings not only the Acts and Regulations specified therein but also Orders and Notifications issued under those Acts and Regulations. Article 31B constitutes a grave encroachment on fundamental rights and doubtless as it may seem that it is inspired by a radiant social philosophy, it must be construed as strictly as one may, for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences. An express provision of the Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded, must be construed as demarcating the farthest limit of exclusion. Considering the nature of the subject matter which article 31B deals with, there is, in our opinion, no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights. The article affords protection to Acts and Regulations specified in the Ninth Schedule. Therefore, whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is sought to be repelled by the State on the plea that the law is placed in the Ninth Schedule, the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule. If it is, the provisions of article 31B would be attracted and the challenge would fail without any further inquiry. On the other hand, if the law is not specified in the Ninth Schedule, the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of the fundamental rights conferred by Part III. It is then no answer to say that though the particular law, as for example a Control Order, is not specified in the Ninth Schedule, the parent Act under which the Order is issued is specified in that Schedule. The Mustard Oil (Price Control) Order, 1977, was passed under section 3 of the , which by the relevant part of its sub section (1) empowers the Central Government to provide by an order for regulating or prohibiting the production, 321 supply and distribution of an essential commodity or trade and commerce therein, if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price. Since the Act of 1955 has been placed in the Ninth Schedule, none of its provisions, including of course section 3(1), is open to attack on the ground that it ever was or is inconsistent with or takes away or abridges any of the rights conferred by any provision of Part III of the Constitution. But that is the farthest that the immunity offered by article 31B can go. In other words, speaking of a provision directly in point, section 3(1) of the Act of 1955 is not open to challenge on the ground, to take a relevant instance, that it violates the guarantee contained in article 19 (1) (f) or 19 (1) (g) of the Constitution. But there is no justification for extending the protection of that immunity to an Order passed under section 3 of the Act like the Mustard Oil (Price Control) Order. Extending the benefit of the protection afforded by article 31B to any action taken under an Act or Regulation which is specified in the Ninth Schedule, appears to us to be an unwarranted extension of the provisions contained in article 31B, neither justified by its language nor by the policy or principle underlying it. When a particular Act or Regulation is placed in the Ninth Schedule, the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability, propriety or necessity of placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of Part III. Such an assumption cannot, in the very nature of things, be made in the case of an Order issued by the Government under an Act or regulation which is placed in the Ninth Schedule. The fundamental rights will be eroded of their significant content if by judicial interpretation a constitutional immunity is extended to Orders the validity of which the Parliament at least theoretically, has had no opportunity to apply its mind. Such an extension takes for granted the supposition that the authorities on whom Dower is conferred to take appropriate action under a statute will act both within the framework of the statute and within the permissible constitutional limitations, a supposition which past experience does not justify and to some extent falsifies. In fact, the upholding of laws by the application of the theory of derivative immunity is foreign to the scheme of our constitution and accordingly orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution. The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an offspring of the Act like a Price Control Order issued under the authority of the Act. it is therefore open to the petitioners to invoke the writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violate articles 14, 19 (1) (f) and 19 (1) (g) of the Constitution. The learned Solicitor General relies, justifiably, on two decisions of this Court in Vasantlal Maganbhai Sanjanwala vs The State of Bom 32 2 bay and Others(1) and Latafat Ali Khan and Ors. vs The State of U.P.(2), in support of his argument that the Price Control Order must receive the protection of the Ninth Schedule to the same extent as the under which that order was issued and which has been placed in the Ninth Schedule. In Vasantlal Maganbhai(1), the vires of section 6(2) of the Bombay. Tenancy and Agricultural Lands Act, 1948, was challenged on the ground that it suffered from the vice of excessive delegation. In exercise of the power con feared by section 6(2), the State Government had issued a Notification fixing the maximum rent payable by tenants of lands situated in the areas specified in the schedule appended to the Notification. The validity of that Notification was challenged on the ground. that it offended against Article 31 of the Constitution. The first contention was rejected by the majority which held that section 6(2) did not suffer from excessive delegation. 'On the second question it was held by the Court that since the Bombay Tenancy Act was placed in the Ninth Schedule, the Notification which was issued under section 6(2) of that Act could not be challenged on the ground that it violated article 31. Subba Rao J., who was in minority, did not consider the latter point regarding the validity of the Notification issued under section 6(2) because he took the view that section 6(2) suffered from the vice of excessive delegation and was therefore unconstitutional. This decision undoubtedly lends support to the contention of the Union Government that if an Act or Regulation is specified in the Ninth Schedule, any order or notification issued under it would equally be entitled to the protection of that Schedule. We are, however, of the opinion, respectfully, that the decision in Vasantlal Maganbhai (supra) does not reflect the true legal position which, according to us, is that the immunity enjoyed by an Act placed in the Ninth Schedule cannot be extended to an order or notification issued under it. The decision of. the Court appears to have been influenced largely by the consideration that the only argument advanced against the validity of the notification was that in substance it amended the provisions of section 6(1) and was therefore a fresh legislation to which article 31B could not apply. The Court rejected that argument and held that if section 6(2) was 'Valid, the exercise of the power validly conferred on the Provincial Government could not be treated as a fresh legislation. The decision in Latafat Ali Khan (supra) contains no reasons beyond the bare statement that "if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B, it is difficult to say that the rule must further be scrutinised under articles 14, 19, etc.". It is clear from the judgment that since the Court was of the opinion that " at any rate" the impugned provisions of U.P. Imposition of Ceiling on Land Holdings Act and the Rules were part of a scheme of land reform and were therefore protected from attack under article 31 A of the Constitution, it did not think it necessary to examine the question whether statutory rules framed under the Act which was placed in the Ninth Schedule would enjoy the same immunity. (1) ; (2) [1971] Supp. S.C.R. 719. 323 The decision of this Court in Godavari Sugar Mills Ltd. and Ors vs section B. Kamble and Ors.(1), appears to us to be in point and it supports the petitioners ' contention that the benefit of article 31B of the Constitution cannot be extended to an order or notification issued under an Act which is placed in the Ninth Schedule. The Bombay High Court while affording protection of article 31B to the Maharashtra Agricultural Lands (Ceilings on Holdings) Act, 1961, which was included in the Ninth Schedule, also granted the benefit of that protection to the later Amending Acts of 1968, 1969 and 1970 on the ground that they were only ancillary or incidental to section 58 of the Principal Act. That view was rejected by this Court on the ground that if the protection afforded under article 31 B is. extended to amendments made to an Act or Regulation subsequent to its inclusion in the Ninth Schedule, the result would be that even those provisions would enjoy the protection which were never scrutinised and could not, in the very nature of things, have been scrutinised by the prescribed majority vested with the power of amending the, Constitution. That, according to the Court, would be tantamount to giving a power to the State Legislature to amend the Constitution in such a way as would enlarge the contents of the Ninth Schedule to the Constitution. Khanna, J., who spoke for the Court, observed that "Article 31B carves out a protected zone", that any provision which has the effect of making an inroad into the guarantee of fundamental rights must be construed very strictly and that it is not permissible to the Court to widen the scope of such a provision or to extend the frontiers of the protected zone beyond what is warranted by the language of the provision. In the result, it was held that the entitlement to protection cannot be extended to provisions which were not included in the Ninth Schedule and that this principle would hold good irrespective of the fact whether the provision in regard to which the protection was sought dealt with new, substantive matters or with matters which were merely incidental or ancillary to those already protected. This decision shows unmistakably that the circumstance that a Control Order is a mere creature of the parent Act and is incidental or ancillary to it cannot justify the protection of the Ninth Schedule being extended to it on the ground that the parent Act is incorporated in that Schedule. But having. won the battle on a point of law, undoubtedly of public importance, the petitioners have to lose the war of price fixation because there is no substance in their grievance that the Price Control Order offends against articles 14, 19(1)(f), and 19(1)(g). Taking first the challenge under article 14 for consideration, the argument is that the impugned Order treats the entire country as one unit regardless of regional variations relating to factors like the cost of procurement of raw material and freight. The contention, in other words, is that the order is over inclusive since it treats unequals as equals by imposing an identical burden upon a wider range of individuals than those who can legitimately be treated as constituting one single class for the purpose of remedying the mischief at which the law aims. In the first place, the averments in the various Writ Petitions are far too vague and general to justify the application of article 14. The petitioners have failed (1) [1975] 3 S.C.R.885. 324 to show by acceptable data that they fall into a separate class altogether and cannot therefore be subjected to the restraints of a single order of price fixation. It may be that economic factors governing the mustard oil trade vary from region to region as in the case of any other trade and further, the pattern of the trade may differ in different growing regions and manufacturing centres like Uttar Pradesh, Rajasthan, Bihar, West Bengal, Punjab and Orissa. But that by itself cannot justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination. 'Dealers ' in Mustard Oil, wherever they operate, can legitimately comprise a single class for the purpose of price fixation, especially as it is undisputed that the two basic constants of the trade are that the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and that about 3.12 kilograms of seed goes into the extraction of one kilogram of oil. Fixation of different price this background, frustrate the very object commodity should be made available for different regions will, in of the exercise that an essen to the consumer at a fair price. Consumer goods have a disconcerting tendency to disappear from regions where prices are lower and they notoriously migrate to areas where higher prices rule. Besides, the grievance of the West Bengal dealers, that since they have to import mustard seed from Uttar Pradesh their cost of production is higher than in Uttar Pradesh can be met with the answer that in any event, West Bengal has also to import at least 1/3rd of its total annual requirement of 1.3 lakhs of Metric tonnes of Mustard Oil. Uttar Pradesh grows 66% of the total production of mustard seed whereas West Bengal grows only 6%. The question really is whether dealers in different regions can be said to be so differently situated in the context of and in relation to the purpose for which the Price Control Order is issued that one common price for dealers all over the country can reasonably be described as discriminatory as against some of them. As observed earlier, there is no reliable data to support this contention and we cannot accept the charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region. Perhaps, the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight. We are therefore unable to hold, to use the language of Mathew J., in State of Gujarat vs Shri Ambica Mills Ltd. (1) that the Government of India, in fixing one common price for mustard oil for the whole country, has acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall. It is interesting that in matters of price fixation, whichever method the authorities adopt is made the subject matter of challenge for one reason or another, often conflicting and contradictory. In Saraswati Industrial Syndicate Ltd. vs Union of India(1) one of the contentions on behalf of the manufacturers of sugar was that sugar prices should not have been determined on the basis of 22 different zones but should have been determined either on an All India basis or for a unit of fix zones. That contention was rejected by this Court but the case is (1) ; , 762. (2) ; 325 an instance of how a division of the country into separate zones for the purpose of fixing the price of an essential commodity does not offer a commonly acceptable solution. It is doubtless that if lower prices were fixed for Uttar Pradesh on the ground that the dealers there were not required to import raw material from outside, a hue and cry would have been raised that the Government of India was victimising the dealers in a particular area for the irrelevant reason that it grew the raw material in abundance. In the ultimate analysis, the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid. That takes us to the petitioners ' contention that the Price Control Order is violative of the petitioners ' right under articles 19(1) (f) and 19 (1 ) (g) of the Constitution. The case of M/s Prag Ice & Oil Mills who are petitioners in Writ Petition No. 712 of 1977 is as follows : The average cost of production mustard oil, when the Price Control Order was issued, was about Rs. 1351.10p ' per quintal i.e. Rs. 13.51 per kilogram. Taking into consideration overhead costs and allowing for a reasonable margin of profit, the fair selling price of mustard oil would come to Rs. 14.01 per kilogram at the factory gate. Petitioners, being wholesalers, sell their goods to other wholesalers and retailers some of whom have to transport the goods at considerable distances from the petitioners ' factory. Under the impugned Order the price of mustard oil is fixed at Rs. 10/ per kilogram 'which means that the petitioners have to sell the goods to the retailer at about Rs. 8.50 per kilogram since the retailer has to provide for a margin of at least Rs. 1.50 per kilogram for his costs and a small I profit. Thus the petitioners have to suffer a loss of over Rs. 5/ per kilogram as a result of the Price Control Order. By this method, the petitioners are deprived of their right to acquire and hold their property and carry on their trade or business of extracting, manufacturing and selling mustard oil. The price of Rs. 10/ per kilogram has been fixed, according to the petitioners, arbitrarily and without any application of mind. These allegations contained 'in the Writ Petition of M/s. Prag Ice & Oil Mills may be taken as representing broadly the grievance of the other petitioners who are more or less similarly situated. Those allegations have been traversed by Shri V. Srinivasan, Deputy Secretary to the Ministry of Civil Supplies and Cooperation Government of India, on behalf of the Union Government. Shri Srinivasan has stated in his affidavit that in March 1977, the retail price of mustard oil in several mustard oil consuming centres ranged between Rs. 9.75 and Rs. 10.81 per kilogram. It became necessary to issue the impugned Order in view of the fact that the price of mustard oil was increasing persistently in spite of the fact that the prices of other edible oils were showing a declining trend. The available stocks disappeared from the market suddenly and the Government had to intervene in order to control the distribution of an essential commodity in public interest. The fixation of price in these circumstances was necessarily empirical, for which purpose the Government took into account prices which were 326 prevailing in the market when the goods were freely available, the general level of prices of other edible, oils the purchasing power of the consumer and the amount of loss which the industry was able to absorb after it had made huge profits in prosperous years. The affidavit further says that even at Rs. 10/ per kilogram, it was possible for the petitioners to make a small profit but, whether or not the dealers. made any profit, the validity of the Price Control Order was not liable to be challenged on the ground that the dealers would incur a loss if they were obliged to sell mustard oil at Rs. 10/ per kilogram. The question as to which was the fair price to the consumer was kept by the Government in the forefront and by that method alone could the dominant object of the be achieve effectively. Shri Srinivasan 's affidavit further states that mustard seed is grown mainly in the rabi season, i.e., from September to October and February to March and the peak marketing season is from April to June. The mustard crop is by and large grown by small farmers who have no staying ability and who, in their anxiety to dispose of their produce as quickly as possible after the harvest, sell their produce between April and June. From this it is stated to follow that the millers effect the bulk of their purchases during the first quarter of the year and therefore, the petitioners could not be heard to contend that the price of mustard seed after the coming into force of the impugned Price Control Order should be taken into account for determining the cost which they have to incur in producing mustard oil. The affidavit con tains a table showing the prices paid by the millers and the prices, received by the farmers for the mustard seed. The fair price of the mustard oil, according to the Government, could be fixed on the basis, of weighted average price or the mean price of the mustard seed. But in order not to cause hardship to the dealers, the price was fixed at Rs. 10 per kilogram on the basis of the average of the highest and the lowest of the market prices prevailing during the period of bulk arrivals of the seed in the market, The prices ranging at ten different centres are alleged to have been taken into account, namely, Aligarh, Allahabad, Hapur, Gauhati, Hathras, Jullundur, Kanpur, Moga, Rohtak and Sriganganagar. , Those prices yield a mean price of around Rs. 350/ per quintal of mustard seed and upon that basis the retail price works out to be less than Rs. 10/ viz., Rs. 9.95 per kilogram. Considering these rival contentions and the data which has been produced,before us in support thereof, we are unable to accept the petitioners ' submission that the Price Control Order is violative of their rights under articles 19 (1) (f ) and 19 (1) (g) of the Constitution. In the first place, it is impossible to determine in these Writ Petitions the accuracy of the petitioners ' case that they purchase mustard seed from month to month and from week to week as the crushing of the seed progresses. We see no reason to doubt the statement contained in the affidavit filed on behalf of the Government of India that most of the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to sell their produce immediately after the harvesting season, that is to say, between March 32 7 and June. If the prices of mustard seed prevailing during that period are taken into account, it is difficult to accept that the price of Rs. 10 per kilogram is so patently unreasonable as to be violative of the petitioners right to hold property or to do trade or business. the petitioners that it is futile to fix the price of oil without at the same time fixing the ceiling price of the raw material, namely, the mustard seed. This Contention is also effectively met by the: respondent 's plea that the bulk of the, purchases are made by the petitioners immediately after the harvesting season and that, considering the pattern of the trade in mustard seed it is wholly unnecessary to control the price of the seed in order effectively to control the price of mustard oil. It is significant that whereas mustard seed was sold in certain areas at prices ranging between Rs. 480/ and Rs. 530/ per quintal in September 1977, prices after the promulgation of the impugned Price Control Order had come down to a range between Rs. 365/and Rs. 390/ per quintal. This has not been denied by the petitioners but they describe the phenomenon as irrelevant for the purpose of determining the legality of the Price Control Order. Their contention, in which we find no ' substance, is that the. consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles. The proof of pudding, as the saying goes, is in the eating, and no court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material. The basic rule of construction in these matters, as observed in Vrajlal Manilal & Co. & Ors. vs State of Madhya Pradesh & Ors.(1) is that a mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards ,hereunder are concerned. In cases of such a kind, two rules of construction have to be kept in mind : (1) that courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the court must examine the object and the purpose of the impugned Act,. the mischief it seeks to prevent and ascertain from such factors its true scope and meaning. Section 3(1) of the , empowers the Central Government to fix the prices of essential commodities if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at a fair price. Sub section (2) (c) of section 3 provides that without prejudice to the generality of the power conferred by sub section (1), an order made under that sub section may provide for controlling the price at (1) [1970] S.C.R.400,409. 328 which any essential commodity may be bought or sold. The dominant purpose of these provisions is to ensure the availability of essential commodities to the consumers at a fair price. And though patent injustice to the producer is not to be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3(1) and section 3(2)(c) of the . The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration. We are not impressed by the play of statistics on the part of the petitioners which is designed to show that as a result of the Price Control Order, they are faced with a loss of about Rs. 5/ per kilogram on the sale of mustard oil. We will ignore, while we are on this point, the pronounced reiteration of the respondent that the, peti tioners have made huge profits in past years and that their concerns are sufficiently prosperous to be able to absorb a small loss for a temporary period. But even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years, we are of the opinion that the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the pro mulgation of the Price Control Order will not render the Order constitutionally invalid. The interplay of economic factors and the laws of demand and supply are bound eventually to have their impact on the pattern of prices prevailing in the market. If the dealer cannot lawfully sell the finished product at more than Rs. 10/ per kilogram, the price of raw material is bound to adjust itself to the price of the product. Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on 'the, price of mustard seed. But above all things, it is necessary to bear in mind in matters of the present nature what Krishna Iyer, J., said in B. Banerjee vs Anita Pan.(1) that such provisions have to be viewed through a socially constructive, not legally captious microscope to discover a glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears, affecting vested rights, is virtually impossible. Having considered the matter from every possible angle, we are unable to accept the petitioners ' contention that the impugned Price Control Order is so unreasonable as to be constitutionally invalid. As observed by Beg J., in Saraswati Industrial Syndicate, (supra) it is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price. Learned counsel for the petitioners expressed the fear that the fixation of an uneconomic price will drive the manufacturers out of the market and thus the very source of supply of an essential (1) [1975](2) S.C.R. 774, 782. 329 commodity will dry up , thereby frustrating the object of the that the consumer must get his basic needs at a fair price. The fallacy of this contention is that immediately prior to the promulgation of the Price Control Order the consumer was denied the chance to get the mustard oil at a price which lie could reasonably afford. For him, therefore, the supply had already dried up. If, after the issuance of the order, the supply position shows no improvement, that consequence cannot be legitimately attributed to the operation of the Price Control Order, At best, the Order can then be said to have failed to achieve its purpose. This discussion will not be complete without reference to the decision of a Constitution Bench of this Court in Shree Meenakshi Mills Ltd. vs Union of India(1). The question which arose in that case was as regards the validity of a notification fixing fair prices of cotton yarn. It was contended on behalf of the petitioners therein that the price fixed was arbitrary because the fluctuation in the price of cotton was not taken into consideration, the price of raw materials, the liability for wages and the necessity for ensuring reasonable profit to the trader were not taken into account; and above everything else, the industry was not ensured a reasonable return on its investment. These contentions were rejected by this Court on the ground that, just as the industry cannot complain of rise and fall of prices due to, economic factors in an open market, it cannot similarly complain of some increase in or reduction of prices as a result of a notification issued under section 3(1) of the because, such increase or reduction is also based on economic factors. Dealing with the contention that a reasonable profit must be assured to the manufacturers, the Court held that ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of, if the producer 's profit was kept in the fore front. Ray C.J., speaking for the Court, observed : "In determining the reasonableness of a restriction imposed by law in the field of industry, trade or commerce, it has to be remembered that the mere fact that some of those who are engaged in these are alleging loss after the imposition of law will not render the law unreasonable. By its very nature, industry or trade or commerce goes through periods of prosperity and adversity on account of economic and sometimes social and political factors. In a , largely free economy when controls have to be introduced to ensure availability of consumer goods like foodstuff, cloth and the like at a fair price, it is an impracticable proposition to require the Government to go through the exercise like that of a Commission to fix the prices." Another passage from the judgment of the learned Chief Justice which has an important bearing on the instant case is to the following effect (1) [1974] 2 S.C.R.398. 330 "When available stocks go underground and the Government has to step in to control distribution and availability in public interest, fixing of price can, therefore, be only empirical. Market prices at a time when the goods did not go underground and were freely available, the general rise in prices, the capacity of the consumer specially in case of consumer goods like food stuff, cloth etc. the amount of loss which the industry is able to absorb after having made huge profits in prosperous years, all these enter into the calculation of a fair price in an emergency created by artificial shortages. " On this aspect of the matter, the Court cited with approval a passage from an American decision, Secretary of Agriculture vs Central Reig Refining Company(1) to the effect that Courts of Law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation. Counsel for the petitioners relied upon the decisions in Panipat Co operative Sugar Mills vs Union of India(2) and Anakapalle Cooperative Agricultural and Industrial Society Ltd. vs Union of India(3) in support of their contention that fixation. of a price without ensuring a reasonable return to the producers or dealers is unconstitutional. The infirmity of this argument, as pointed out in Meenakshi Mills vs Union of India, (supra) is that these two decisions turn on the language of section 3(3c) of the under which it is statutorily obligatory to ensure to the industry a reasonable return on the capital employed in the business of manufacturing sugar. These decisions can, therefore, have no application to cases of price fixation under section 3 (1) read with section 3 (2) (c) of the Act. Cases failing under sub sections 3A, 3B and 3C of section 3 of that Act belong to a different category altogether. It is customary in price fixation cases to cite the oft quoted decision in Premier Automobiles Ltd. & Anr. etc. vs Union of India(4) which concerned the fixation of price of motor cars. It is time that it was realized that the decision constitutes. no precedent in matters of price fixation and was rendered for reasons peculiar to the parti cular case. At page 535 of the Report Grover J., who spoke for the Court, stated at the outset of the judgment : "Counsel for all the parties and the learned Attorney General are agreed that irrespective of the technical or legal points that may be involved, we should base our judgment on examination of correct and rational principles and should direct deviation from the report of the Commission which was an expert body presided over by a former judge of a High Court only when it is shown that there has been a departure from, established principles or the conclusions of the Commission are shown to be demonstrably wrong or erroneous. " By an agreement of parties the (1) 94Law Ed. 381. (2) A.T.R. (3) A.T.R. (4) ; 331 Court was thus converted into a Tribunal for considering every minute detail relating to price fixation of motor cars. Secondly, as regards the escalation clause, the Court recorded at page 543 that it was not disputed on behalf of the Government, and the Attorney General accepted the position, that a proper method should be devised for escalation or de escalation. Thirdly, it is clear from page 544 of the Report that the Learned Attorney General also agreed that a reason able return must be allowed to the manufacturers on their investment. The decision thus proceeded partly on an agreement between the parties and partly on concessions made at the Bar. That is the reason why the judgment in Premier Automobiles (supra) cannot be treated as a precedent and cannot afford any appreciable assistance in the decision of price fixation cases. The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit. In the very nature of things, orders passed under section 3(1) read with section 3(2) of the are designed primarily to meet urgent situations which require prompt and timely attention. If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so at to bring an essential commodity within the reach of the ordinary consumer, the order shall have lost its justification and would in all probability be withdrawn. That in fact is what has happened in the instant case. It appears that the supply position having improved, or, so at any rate seems to be the assessment of the situation by the Government, the order has been recently with,drawn. Learned counsel for the petitioners laid great stress on the circumstance that, as is shown by the affidavit filed on behalf of the Union Government, the Price Control Order did not take into account the circumstance that the cost of production of mustard oil includes a fairly large margin of profit of the middleman. It is urged that small millers cannot afford to take large investments and lock up their limited capital and therefore resort is required to be had to the intervention of the middleman who is in a position to invest a: large capital in the purchase of raw material and who, naturally, expects a fair return on his investment. The intervention of the middleman is an acknowledged reality of all trades and businesses. The fact that the middleman 's profit increases the price (A goods which the consumer has to pay, was described by this Court in Narendra Kumar and Others vs The Union of India and Others(1) as 'axiomatic. As observed in, that case, since the middle mans charges often add to a considerable sum, it has been the endeavour in modern times for those responsible for social control to keep the middleman 's activities to the minimum and to attempt to replace them largely by cooperative sale societies of producers and cooperative purchase societies of consumers. The elimination of the middleman is bound to cause trouble and inconvenience, 1 [1960] 2S.C.R.375. 332 but the ultimate savings in the cost of the finished product could more than balance that inconvenience. The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please, mostly in a traditional manner, regardless of its impact on public interest. But, property rights are not absolute, and important as the right of property may be, the right of the 'public that such rights be regulated in common interest is of greater importance. These correlative rights, as observed in Lea Nebbia vs People of the State of New York(1), are always in collision : "No exercise of the private right can be imagined which will not ever slight, affect the public; no exercise of the to regulate abridge his liberty or affect his property. But subject only to constitutional restraint the private right must yield to the public the words of Justice Roberts who delivered the opinion of in Leo Nebbia (supra) : "The Constitution does not secure to any one liberty to conduct his business in such fashion as to inflict injury upon the, public at large, or upon any substantial group of the people. Price control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty. " Counsel for the petitioners characterised the fixation of price in the instant case as a veiled transgression of power conferred by section 3 ( 1 of the . In support of that submission the judgment of this Court in K. C. Gajapati Narayan Deo anti Others vs The State of Orissa(2) was cited in which it was said that when a legislative power is defined by reference to purpose, legislation not directed to that purpose will be invalid. We are unable to appreciate how, if the Government has got the power to fix a fair price of an essential commodity, it can be said that they have under a pretext trespassed upon a field which does not properly belong to them. The power conferred by section 3(1) of the is undoubtedly purposive. But it seems to us incontrovertible that the Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 3(1) of the Act. The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is effective to mitigate an evil may show that it has failed to achieve its purpose, highlighting thereby the paradox of reform. But, as observed in Joseph Beaubarnais vs People of the State of Illinois(1) , that "is the price to be paid for the trail and error inherent in legislative efforts to dial with obstinate social issues". We are, therefore, unable to hold that by fixing a fair price for mustard oil, the Government has committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy. (1) 78 Lawyers ' Edition 940. (2) ; (3) 96 Lawyers 'Edition 919. 333 To sum up, it seems to us impossible to accept the contention of the petitioners that the impugned Price Control Order is an act of hostile discrimination against them or that it violates their right to property or their right to do trade or business. The petitioners have taken us into the mutest details of the mechanism of their trade operations and they have attempted to demonstrate in relation thereto that a factor here or a factor there which ought to have been taken into account while fixing the price of mustard oil has been ignored. Dealing with a similar argument it was observed in Metropolis Theater Company vs City of Chicago(1) that to be able to. find fault with a law is not to demonstrate its invalidity. "It may seem unjust and oppressive, yet be free from judicial interference. The problems of government are practical ones and may justify, if they do not require rough ,accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void. " The Parliament having entrusted the fixation of prices to the expert judgment of the Government, it would be wrong for this Court, as was done by common consent in Premier Automobiles (supra) to examine each and every minute detail pertaining to the Governmental decision. The Government, as was said in Permian Basin Area Rate Cases, (supra) is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary, discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt. The interest of the producer and the investor is only one of the variables in the "constitutional calculus of reasonableness ' and Courts ought not to interfere so long as the exercise of Governmental power to fix fair prices is broadly within a "zone of reasonableness '. If we were to embark upon an examination of the desperate contentions raised before us on behalf of the contending parties we have no doubt that we shall have exceeded our narrow and circumscribed authority. Before closing, we would like to mention that the petitioners rushed to this Court too precipitately On the heels of the Price Control Order. Thereby they deprived themselves of an opportunity to show that in actual fact, the Order causes them irreparable prejudice. Instead, they were driven through their ill thought haste to rely on speculative hypotheses in order to buttress their grievance that their right to property and the right to do trade was gone or was substantially affected. A little more patience, which could have been utilised to observe how the experiment functioned, might have paid better dividends. The impugned Price Control Order is, therefore, valid and the challenge made thereto by the petitioners his to fail. These are our reasons in support of the order passed earlier that the Petitions be dismissed with costs. S.R. Petitions dismissed. (1) 57Lawyers Edition730.

Sub section (1) of section 3 of the which is placed in the Ninth Schedule of the Constitution, empowers the Central Govt. to provide by an order for regulating or prohibiting the production, supply and distribution of an essential commodity or trade or commerce therein, if it is of the opinion, that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price. In exercise of the power conferred by section 3 of the , 10 of 1955, the Government of India in its Ministry of Civil Supplies and Cooperation issued on 'September 30, 1977 the Mustard Oil (Price Control) Order, 1977. The Price Control Order provided by Clause (3) that no dealer was either by himself or by arty person on his behalf to sell or offer to sell any mustard oil at a retail price exceeding Rs. 10 per Kg. exclusively of the cost of container but inclusive of taxes. Clause 2 defines a dealer to mean a person engaged in the ,business of purchase, sale, or storage for sale of mustard oil. The Price Control Order was challenged in this Court by several dealers on the ground mainly, that it violated Articles 14. 19(1)(f) and 19(1)(g) of the Constitution, article 301 was cited but not argued upon with any seriousness. Upholding the validity of the impugned Price Control Order and dismissing the appeals the Court, HELD: Per majority The Mustard Oil (Price Control Order, 1977) is constitutionally valid. The impugned Price Control Order is not an act of hostile discrimination against the traders. It does not violate their right to property or their right to trade or business. [319C; 331G] 294 Per Chandrachud, J. was he then was] (On behalf of Bhagwati, Murtaza Fazal Ali, Shirghal, Jaswant Singh, JJ. and himself). On a plain reading of article 31 A it cannot be said that the protective umbrella of the Ninth Schedule takes in not only the acts and regulations specified therein but also orders and notifications issued under those acts and regulations. [320 C] (a) article 31 B constitutes a gave encroachment on fundamental rights, and though it is inspired by a radiant social philosophy, it must be construed as strictly as one may, for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences. The Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded, must be construed as demarcating the farthest limit of exclusion. Considering the nature of the subject matter which, article 31 B deals with, there is no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights; [320 D E] (b) The article affords protection to Act and Regulation specified in the Ninth Schedule. Therefore, whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is ought to be repelled by the State on the plea that the law is placed in the Ninth Schedule the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule. If it is, the provisions of article 31 B would be attracted and the challenge would fail without any further inquiry. On the other hand, if the law is not specified in the Ninth Schedule, the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of 'the fundamental rights conferred by Part III. It is then no answer to say that though the particular law, as for example a Control Order, is not specified in 'the Ninth Schedule, the parent Act under which the order is issued is specified in that Schedule; [320 E G] (c) Extending the benefit of the protection afforded by article 31 B to any action taken under an Act or Regulation which is specified in the Ninth Schedule. is an unwarranted extension of the provisions contained in Article 31 B, neither justified by its language nor by the policy or principle underlying it. When a particular Act or Regulation is placed in the Ninth Schedule, the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability, property or necessity or placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of part III. Such an assumption cannot, in the very nature of things, be made in the case of an order issued by the Govt. under an Act or Regulation which is placed in the Ninth Schedule, The fundamental rights will be eroded of their significant content if by, judicial interpretation a constitutional immunity is extended to Orders to the validity of which the Parliament, at least theoretically, has had no opportunity to, apply its mind. Such an extension takes for granted the supposition that the authorities on whom power is conferred to take appropriate action under a statute will act within the permissible constitutional limitations, a supposition which past experience, does not justify and to some extent falsifies. [321 C F] 2. The unholding of laws, by the application of 'he theory of derivative immunity is foreign to, the scheme of our Constitution and accordingly Orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution. The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an off spring of the Act like a Price Control Order issued under the authority of the Act. It is therefore open to the petitioners to invoke the 295 writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violates article 14, 19(11)(f) and 19(1)(g) of the Constitution. [321 F G]. Vasantlal Maganbhai Sanjanmal vs State of Bombay and Ors. , ; , Latafat Alikhan and Ors. vs State of U.P., [1971] Supp. S.C.R. 719; Explained. Godavari Sugar Mills Ltd. and Ors. vs section B. Kamble and Ors. ; Applied. Price Control Order does not offend against article 14 of the Constitution [323 F] (a) The averments in the various Writ Petitions are far too vague and general to justify the application of article 14. The petitioners have failed to show by acceptable data that they fall into a separate class altogether, and cannot therefore be subjected to the restraints of a single order of price fixation. [323 H, 324 A] (b) Variation in economic factors governing the mustard oil trade from region to region or differences in the pattern of trade. in different growing regions and manufacturing centres cannot by itself justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination. [324 A B] (c) Dealers in mustard oil, wherever they operate can legitimately comprise a single class for the purpose of price fixation, especially as it is undisputed that the two basic constants of the trade are : (i) the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and (ii) about 3.12 kilograms of seed goes into the extraction of one kilogram of oil. Fixation of different prices for different regions will, in this background, frustrate the very object of the exercise that an essential commodity should be made available to the consumer at a fair price. [324 B C] (d) There is no reliable, data to support the contention, that dealers in different regions are so differently situated in the context of and in relation to the, purpose for which the Price Control Order is issued that fixation of common price for dealers all over the country can reasonably be described as discriminatory as against some of them. [324 E] (e) The charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region cannot be accepted. Perhaps the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight. The Government of India. in fixing one common price for mustard oil for the whole country, has not acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall. [324 F F] State of Gujarat vs Sri Ambica Mills Ltd., ; @ 782 referred to. (f) The mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid. [325 B] Saraswati Industrial Syndicate Ltd. vs Union of India ; referred to. 4. The Price Control Order is not violative of the petitioners ' rights under articles 19(1)(f) and 19(1)(g) of the Constitution. [326 G] (a) It is impossible to determine in these writ petitions the accuracy of the petitioners ' allegation that they purchase mustard seed from month to. month and from week to week as the crushing of the seed progresses. Most of 296 the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to. sell their produce immediately after the harvesting season, that is to say, between March and June. If the prices of mustard seed prevailing during that period are taken into account, it is difficult to accept that the price of Rs. 10/ per kilogram is so patently unreasonable as to be violative of the petitioners ' right to hold property or to do trade or business [326 G H, 327 A] (b) Since the bulk of the purchases are made by the petitioners immediately after the harvesting season considering the general pattern of the trade in mustard seed, it is wholly unnecessary to control the price of mustard seed, in order effectively to control the price of mustard oil. [327 B C] (c) The contention that the consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles cannot be upheld. No Court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material. [327 C D] (d) A mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned. In cases of such a kind, two rules of construction have to be kept in mind : (1) that Courts generally lean towards the constitutionality of a legislative measure upon the presumption that a legislature will not deliberately flout a constitutional safeguard or right, and that (2) while construing an enactment, the Court must examine its object and the purpose, the mischief it seeks to prevent and ascer tain from such factors its true scope and meaning. [327 E F] Vrajlal Manilal & Co. and Ors. vs State of M.P. and Ors. ; , 409, reiterated. (e) The dominant purpose of the provisions of sub section (1) and 2(c) of Section 3 of the is to ensure the availability of essential commodities to the consumers at a fair price. And though patent injustice to the producer is not to be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3(1) and section 3(2)(c) of the . The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration. [328 A B] (f) Even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years, the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the promulgation of the Price Control Order will not render the Order constitutionally invalid. The interplay of economic factors and the laws of demand and supply are bound eventually to. have their impact on the pattern of prices prevailing, in the market. If the dealer cannot lawfully sell the finished product at more than Rs. 10/ per kilogram, the price of raw material is bound to adjust itself to the piece of the product. Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on the price of mustard seed. In matters of the present nature, such provisions have to be viewed through a socially constructive. not legally captious microscope to discover a glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears, affecting vested rights is virtually impossible. [328 C F] B. Panerjee vs Anita Pan, ; @ 782 followed. (g) The impugned Price Control Order is not so unreasonable as to be constitutionally invalid. It is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price. [328 G] 297 Saraswati industrial Syndicate vs Union of India, ; ; referred to. (h) Immediately prior to the promulgation of the price control order the consumer was denied the chance to get the mustard 'Oil at a price which he could reasonably afford. For him, therefore, the supply had already dried,up. If, after the issuance of the order, the supply position shows no improvement, that consequence cannot be legitimately attributed to the operation of the Price Control Order. At worst, the Order can then be said to have failed to achieve its purpose. [329 A B] (i) Just as the industry cannot complain of rise and fall of prices due to economic factors in an open market it cannot similarly complain of some increase or reduction in prices as a result of a notification issued under section 3(1) of the because, such increase or reduction is also based on economic factors. Ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of, if the producer 's profit was kept in the forefront. [329 D E] Shree Meenakshi Mills Ltd. vs Union of India, , Secretary of Agriculture vs Central Reig Refining Co., 94 Law. Edn. 381; applied. Panipat Cooperative Sugar Mills vs Union of India, A.LR. ; Anakapalle Cooperative Agricultural and Industrial Society Ltd. vs Union of India, A.I.R. 1973 S.C. 734; held inapplicable. Premier Automobiles Ltd. & Anr. vs Union of India, ; ; distinguished, (j) Courts of law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation. [331 A B] 5. The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit. In the very nature of things orders passed under section 3(1) read with section 3(2) of the are designed primarily to meet urgent situations which require prompt and timely attention. If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so as to bring an essential commodity within the reach of the ordinary consumer, the order shall have lost its justification and would in all probability be withdrawn. That in fact is what has happened in the instant case. It appears that the supply position having improved. or so at any rate seems to be the assessment of the situation by the Government, the order has been recently withdrawn. [331 C E] 6. The 'intervention of the middlemen is an acknowledged reality of all trades and businesses. The fact that the middleman 's profit increases the price of 'goods which the consumer has to pay, is axiomatic. It has been the endea vour in modern times for those responsible for social control to keel) the middleman 's activities to the minimum and to attempt to replace them largely by cooperative purchase societies of consumers. The elimination of the middlemen is bound to cause trouble and inconvenience, but the ultimate saving in the cost of the finished product could more than balance that inconvenience. The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please, mostly in a traditional manner, regardless of its impact on public interest. But, property rights are not absolute, and important as the right of property may be, the right of the public, that such rights be regulated in common interest is of greater importance,. [331 G H, 332 A B] Led Nebbia vs People of, the State of New York, 78 Law Edn. p. 940 and Narendra Kumar and ' Ors. vs Union of India and Ors. , ; referred to. 298 7. If the Government has got the power to fix a fair price of an essential commodity, it cannot be said that they have under a pretext trespassed upon a field which does not properly belong to them. The power conferred by section 3(1) of the is undoubtedly purposive. The Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 3(1) of the Act. The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is ineffective to mitigate an evil may show that it has failed to achieve its purpose, highlighting thereby the paradox of reform. By fixing a fair price for mustard oil, the Government has not committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy. [332 E G] K. C. Gajapati Narayannai Rao and Ors., vs State of Orissa ; ; Joseph Beauharis vs People of the State of Illinois, 96 Law. 919 referred to. To be able to find fault with a law is not to demonstrate its invalidity. The Parliament having entrusted the fixation of prices to the expert judgment of the Government it would be wrong for this Court, to examine each and every minute detail pertaining to the Governmental decision. The Government is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary, discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt. The interest of the producer and the investor is only one of the variables in the constitutional calculus of reasonableness and Courts ought not to interfere so long as the exercise of Governmental power to, fix fair prices is broadly within a "Zone of reascuableness". The impugned Price Control Order is, therefore, valid and the challenge made, thereto by the petitioners has to fail. [333 B G] Metropolis Theater Co. vs City of Chicago, 57 Lawyers Edn. 730; Premier Automobiles & Anr. vs Union of India ; permian Basin Area Rate Cases; , 312 referred to. Per Beg, C.J. (On behalf of Desai J. and himself) (Contra) 1. Article 31 B, no doubt, speaks of "specified" Acts and Regulations. But it makes no distinction whatsoever between any grants of powers and their exercise,. Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use. The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part ITT. If this be the correct position, it would, quite naturally and logically, follow that their use is what really protected. [30F H] 2. A delegated or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force If Bagla 's case is good law (no party has questioned its correctness, Articles 14 and 19(i) (f) d (g) could be deemed to be, "written into" Section 3 of the Act itself? (They would control the scope of orders which could be passed under it. That is, undoubtedly the way in which guarantees of fundamental rights could and should function if the Act containing Section 3 itself had not been placed in the Ninth Schedule so as to take away the guarantees of fundamental rights from the substance of it. [309 B C] Hart Krishna Bagla vs State of M.P., ; referred to. If the effect was to widen the orbit of section 3 of the or to remove the limitations put by Articles 14 and 19 upon the exercise of powers under it, the logical and natural result would be to enlarge the scope or sweep of the Orders passed under it. But, if it has no such upon section 3 of the Act itself, orders passed under it would continue to subject to provisions of section 3 of the Act as controlled by Articles 14 and of the Constitution so that they will have to satisfy what may be described 299 as a "dual test", firstly, that of provisions of section 3 of the Act itself; and secondly, that of provisions of Chapter III of the Constitution containing fundamental rights. [309 D F] 4. The Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative competence defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule. The distinction between protection to a mere grant of powers and to their exercise, therefore, seem specious in the context of the protection. It cannot ,explain why, if section 3 is protected by the Ninth Schedule, the exercise of power granted by it, which manifests itself in control orders is not protected. It would be so protected, if at all, not because the Orders to be made in future, as such, are protected but because the power actually conferred and found in existence in section 3 is protected. The protection is given to a power which is specified and in existence which has to be used for certain purposes and not to what may be specified in future. [310 A C] 5. If orders passed under section 3 of the Act also get a protection it would be what may be described as a "derivative" protection so long as the Orders are covered by section 3 of the Act. It is available only so long as and because the source of their authority Section 3 of the. Act is protected by the Ninth Schedule. Orders purporting to be made under section 3 of the Act must, however satisfy the tests found in section 3 itself in every case. 'They can never escape the basic tests whether section 3, the source of their authority, is protected by the Ninth Schedule or not. The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act, but not after they have been deliberately delinked or removed from section 3. The term "skeleton" legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts. , cannot be spoken of as a piece of "skeleton" legislation. [310 D, F G] 6. Section 3, sub section (1) of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act. These schemes and policies to serve the stated purposes may differ ,as regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances. Orders passed under section 3 of the Act, in pursuance of such schemes or policies, do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution. Orders passed under the Act, before its inclusion in the Ninth Schedule, could also be said to be protected directly by the Ninth Schedule if mentioned there. But, there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act. [310 G H, 311 A B] Godavari Sugar Mills Ltd. and Ors. vs section B. Kamble and Ors., referred to. If the section under which the control order was passed is protected from any attack based on the provisions. of Part III of the Constitution, the only question will be whether the Control Order is covered by the protected empowering provision. If it falls outside the empowering Provisions it would be invalid in any case. If it falls within the empowering Provision but could be found to be struck by the provisions of article 19(1)(f) and (g) of the Constitution, an attack on the Control Order by. reason of Article 19(1)(f) and (g) would be really on against the empowering provisions itself which is protected. The Control order, therefore, enjoys what may be called derivative protection. [312 A C.] Latafat Alikhan and Ors. vs State of U.P., [1971] SUPP. S.C.R. 719 @ 720; applied. The Act was put in the Ninth Schedule to prevent the invocation of Articles 14, 19 and 31 for obstructing measures to necessary as price fixation of 300 essential commodities is for promoting the objectives of a socialist welfare economy. This would be a sufficient answer to all the argument& on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price. [314 G] As the impugned order of 30th September, 1977, falls within the provisions of section 3, question of violating a fundamental right does not arise. If an impugned order were to fall outside section 3 of the Act, no question of applying any test of reasonableness contemplated by Article 19(6) need arise because it would then be purely illegal restriction upon the right conferred by article 19(1)(g) which would fail for lack of authority of any law to support it. [315 B C] 9. Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an essential commodity or for securing its equitable distribution at fair prices the criteria of validity. It is evident that an assessment of either the expediency or necessity of a measure, in the light of all the facts and circumstances which have a bearing on the subjects of price fixation, is essentially in a subjective matter. Objective criteria may enter into determination of particular selling prices of each kilogram of mustard oil at various times. But, there is no obligation here to fix the price in such a way as to ensure reasonable profits to the producer or manufacturer, because the object is to secure equitable distribution aid availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time. The most important objective fact in fixing the price of mustard oil, which is consumed generally by large masses of people of limited means, is the paying capacity of the average purchaser or consumer. [312 D G] 10. Principles of fair fixation of price apply only in those cases where there is an obligation upon the price fixing authority to take certain matters into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers. Section 3 of the Act has very different purposes in view. It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 3(1) of the Act. But, in cases where the effects of a policy or a measure adopted in achieving purposes set out in section 3(1) are matters of guess work, after experimentation, the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work out and reveal its results. Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 3(1) of the Act. [315 D F] A price fixation to meet the general purposes set out in section 3(1) of the Act, aimed at reversing the vicious inflationary spiral of rising prices. may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producers which is not the object of section 3(1) of the Act. [315 G H] The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices , 1 is much more comprehensive than the machinery for price fixation in special cases on given principles. Price fixation on certain given Principles is enjoined under section 3(3) of the Act only when there is an order under section 2(f) of the Act compelling the sale of a whole stock or a specified Part of it to the Central or a State Government or to authorities or persons as directed by them. Again, section 3 (a) (iii) provides a machinery for price fixation in special cases. Similar is position with orders under sections 3B and 3C. [316 D E] 11. It is not the function of Supreme Court or of any Court to sit in judgment over matters of economic policy as must necessarily be left to the Government of the day to decide. Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experts can seriously err and doubtless differ. Courts can certainly not be expected to decide them without even the aid of experts. That a price fixed at Rs. 10/ per kg., as a part of an attempt to break the vicious inflationary circle, is not at all an unreasonable step. [313 C D] 301 But the, Court can take judicial notice of subsequent facts. The effect of the order of 30 9 77 was so beneficial that the rice, of mustard oil has fallen in the neighbourhood of Rs. 7/ per kg. which illustrates the extreme inadvisability of any interference by any. Court with measures of economic control and planning directed at maximising general welfare. It is not the function of the. Courts to obstruct or defect such beneficial measures devised by the Government of the day. Courts cannot pass judgments on the wisdom of such actions, unless actions taken are so completely unreasonable that no law can be cited to sanction them. [314 H, 315 A B] 12. Unless, by the terms of a particular statute, or order, price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character because it satisfies the tests of legislation. A legislative measure does not concern itself with the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class. In the case before us, the control order applies to sales of mustard oil anywhere in India by any dealer. Its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity. The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or, in other words by reasonableness judges by possible or probably consequences. [317 G H, 318 A] Panipat Corporation Sugar Mills vs Union of India, [1973] 2 SCR 860; Meenakshi Mills Ltd. vs Union of India ; Premier Automobile Ltd. vs Union of India, ; ; Saraswati Industrial Syndicate Ltd. etc. vs Union of India; , ; referred to. Even executive or legislative action must be confined to the limits within which it can operate. It must fall reasonably within the scope of the powers conferred. The scope of the powers.conferred depends upon terms of the empowering provision. The empowering provision in the instant case is widely worded. The validity of section 3 has not been challenged. and it could not be challenged by reason of Article 31 B after its inclusion in the 9th Schedule of the Constitution. [318 B C] 14. In a case in which the Central Government is judge of expediency and necessity to the extent that even the protection of the guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency, a challenge on the grounds on which it was attempted could not succeed. [318 C D] 15. Patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control, in the nature of either legislative or purely administrative action, is assailed. So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 3(1) of the Act it cannot be set aside or declared invalid. The test has to be that of consequences on objects sought by section 3(1) of the Act. Judged by this test, the order of 30th September, 1977, fall within the purview of section 3 of the Act and it has served its purposes. [319 A C] Leo Nebbia vs People of the State of New York, 29 U.S. (78 Law. Edn.) 502; Permian Basin Area Rate Cases (20 Law Edn. 2d) p. 312 referred to.

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of 1949. Appeal from a judgment of the High Court of Judicature at Calcutta (Harries C.J. and Chakravarthi J. (dated 30th November, 1948, in Civil Revision Case No. 712 of 1948. N.C. Sen Gupta (Ajit Kumar Dutta, with him) for the Appellant. Faiyaz Ali, Advocate General of East Bengal (B. Sen and Noor ud din, with him) for the Respondent. M. C, Setalvad, Attorney General for India, (section M. Sikri and V.N. Sethi, with him) for the Intervener. Dec. 4. The judgment of Kania C.J., Patanjali Sastri j. and Chandrasekhara Aiyar J. was delivered by Patanjali Sastri J. Fazl Ali and Mukherjea JJ. delivered separate judgments. PATANJALI SASTRI J. This is an appeal from a judgment of the High Court of Judicature in West Bengal reversing a finding of the Second Subordinate Judge of 24 Parganas at Alipore that he had jurisdiction to proceed with a suit after substituting the Province of East Bengal (in Pakistan)in the place of the old Province of Bengal against which the suit had originally been brought. The facts leading to the institution of the suit are not in dispute. The Bengal Agricultural Income tax Act was passed by the Provincial Legislature of Bengal in 1944. It applied to the whole of Bengal and purported to bring under charge the agricultural income of, inter alia, "every Ruler of an Indian State." Acting under the provisions of that Act, which came into force on 1st April, 1944, the Income tax Officer, Dacca Range, sent by registered post, a notice to the Manager of the Zemindari Estate called Chakla Roshanabad belonging to the Tripura State but situated in Bengal outside the territories of that State, calling upon him to furnish a return of the total income derived in the 5 previous year from lands in the Estate used for agricultural purposes. The notice was received by the Manager at Agar talla in Tripura State. Thereupon, the State, by its then Ruler, Maharaja Sir Bir Bikram Bahadur, instituted the suit in question on 12th June, 1945, against the Province of Bengal and the Agricultural Income tax Officer, Dacca Range, in the Court of the First Subordinate Judge, Dacca, contest ing the validity of the notice and the proposed assessment on the grounds that the "Provincial Legislature of Bengal had no authority to impose tax on any income of an Indian State or its Ruler" and that, in any case, "the Income tax Officer, Dacca Range, had no authority or jurisdiction to issue the said notice to the Manager of the Estate outside British India. " The cause of action of the suit was alleged to have arisen in the town of Dacca within the jurisdiction of the Court on 28th February, 1945, when the notice was issued. The reliefs sought were a declaration that the Bengal Agricultural Income tax Act: 1944, in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff as a Ruler of an Indian State was ultra vires and void and that, in any case, the notice served by the Agricultural Income tax Officer, Dacca Range, was void and no assessment could be made on the basis of such notice, and a perpetual injunction to restrain the defendants from taking any steps to assess the plaintiff to agricultural income tax. Before the defendants filed their written state ments the suit was transferred by the High Court to the Court of the District Judge, 24 Parganas, and was again transferred from that Court to the Court of the Subordinate Judge at Alipore. The ruler who brought the suit having died, the plaint was amended by the substitution in his place of his son and heir in June 1947, and the suit was pending in that Court when the partition of India took effect on the 15th August, 1947 On 9th December, 1947, the Province of East Bengal filed a petition stating that the Province of Bengal, the original defendant No. 1 in the suit, had ceased to exist with effect from 15th August, 1947, and 6 in lieu thereof two new Provinces, namely, the Province of East Bengal and the Province of West Bengal had come into existence and that, inasmuch as the Province of West Bengal was taking no interest in the suit, it was necessary in the interests of East Bengal that the suit should be contested and that a written statement should be put in on its behalf for such contest. It was accordingly prayed that the ' delay should be condoned and the written statement which was filed with that petition should be accepted. In the written statement it was pleaded that inasmuch as the Province of East Bengal was a Province of the; Dominion of Pakistan and that defendant No. 2 was a Revenue officer of that Province, the Court had no jurisdiction to hear the suit or make an order of injunction against the defendants. It was stated that the Province of East Bengal appeared only to contest the jurisdiction of the Court. By another written statement filed on the same day defendant No. 2 raised also other pleas in defence but his name was struck off the record at the plaintiff 's instance as not being a necessary party to the suit. On the 10th December, 1947, the Province of East Bengal was substituted as the defendant in the place of the Province of Bengal which had ceased to exist, and the writ ten statement filed on behalf of the former was accepted. Thereupon the Subordinate Judge framed a preliminary issue on the question of jurisdiction and, as stated al ready, found it for the plaintiff relying on section 9 of the Indian Independence Act and article 4 of the Indian Inde pendence (Legal Proceedings) Order, 1947. It may be men tioned in passing that the assessment of the plaintiff was proceeded with by the Agricultural Income tax Officer, Comilla Range (East Bengal), who, by his order dated the 22nd December, 1947, imposed on the plaintiff a tax of Rs. 1,79,848 12 0 for 1944 45 and Rs. 1,34,326 7 0 for 1945 46, but the recovery of the amounts has been deferred under orders of the Court pending the decision on the preliminary issue. As pointed out by the Federal Court in Midnapore 7 Zemindary Co. Ltd. vs The Province of Bengal and ,Others (1), the orders promulgated on the 14th August, 1947, by the Governor General of India before the partition in exercise of the powers conferred under section 9 of the Indian Independ ence Act, 1947, and containing provisions specially designed to remove the difficulties arising in connection with the transition to the new situation created by the partition are binding on both the Dominion of India and the Dominion of Pakistan. Among such Orders those relevant to the present controversy are the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabilities)Order, 1947. By article 4 of the former Order (1) All proceedings pending immediately before the appointed day in any of the special tribunals specified in col. 1 of the Schedule to this Order shall be continued in that tribunal as if the said Act had not been passed, and that tribunal shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day; * * * * (3) Effect shall be given within the territories of either of the two Dominions to any order or sentence of any such Special Tribunal as aforesaid and of any High Court in appeal or revision therefrom as if the order or sentence had been passed by a court of competent jurisdiction in that Dominion; * * * * and by article 12 (2) of the latter Order Where any Province from which property, rights or li abilities are transferred by this Order is, immediately before the transfer a party to legal proceedings with re spect to that property or those rights or liabilities the Province which succeeds to the property, rights or liabili ties in accordance with the provisions of this Order shall be deemed to be substituted for the other Province as a party to those proceedings and the proceedings may continue accordingly. (1) 8 On the effect of these provisions the learned Judges of the High Court observed: "If this provision [i.e., article 12 (2)] applies to the present case, there can be no doubt that the Province of East Bengal was substituted in the suit for the Province of Bengal by operation of law, and by reason of the Legal Proceedings Order the suit shall continue in the Court of the Second Subordinate Judge, 24 Parganas, as a suit against the substituted defendant. " With that statement of the position we entirely agree. The learned Judges, however, proceeded to examine, laying stress on the words "by this Order" in article 12 (2), whether any property, rights or liabilities could be said to have been transferred by the Indian Independence (Rights, Property and Liabilities) Order, 1947, from the Province of Bengal to the Province of East Bengal, and they took the view that neither any property, nor rights, nor liabilities were so transferred under that Order and that, therefore, the con tinuation of the proceedings against the Province of East Bengal, which was now part of an Independent Sovereign State, was governed by the principles of international law and comity of nations, and that, according to those princi ples, East Bengal, being a Province of a sovereign state, could not be sued against its will in the municipal courts of India, with the result that the suit pending in the Court at Alipore must abate. They also negatived a further con tention raised before them, apparently for the first time, to the effect that by reason of the petition filed on behalf of the Province of East Bengal for acceptance of its written statement condoning the delay involved and also by reason of sundry other proceedings for interim relief sought by the plaintiff which were actively resisted by the Province of East Bengal, that Province must be taken to have submitted to the jurisdiction of the Court. On behalf of the appel lant, Mr. Sen Gupta challenged the correctness of the deci sion on both points. Before dealing with these contentions, it will be con venient to dispose of two preliminary points raised by Mr. Faiyaz Ali, Advocate General of East Bengal. 9 In the first place, he submitted that the State of Tripura having since been merged in the Dominion of India and a Chief Commissioner having been appointed to administer its territories, the appeal could no longer be prosecuted by the present Maharaja through his mother as his next friend. It was, however, represented to us on his behalf that under the agreement of merger the Estate of Chakla Roshanabad was left to the Maharaja as his personal property and it no longer formed part of the territories of the Tripura State. The Attorney General, appearing on behalf of the Dominion of India, the intervener, confirmed that position. There is thus no substance in the objection as any formal defect in the proceeding could be set right by suitably amending the cause title. Mr. Faiyaz Ali next drew our attention to the Pakistan (Indian Independence Legal Proceedings) Order, 1948, promul gated by the Governor General of Pakistan on 13th November, 1948, with retrospective effect from the 15th August, 1947, and pointed out that in view of its provisions any decree that might eventually be passed by the Court at Alipore would receive no effect in Pakistan and that, therefore, it was unnecessary for this Court to decide the question of the jurisdiction of the Alipore Court to proceed with the suit. We are unable to take that view. The effect of the Order referred to above on any decree that may eventually be passed in the pending suit may have to be taken note of by the Court trying that suit after hearing arguments on the validity of that Order which is challenged but we are at present concerned only with the question of the jurisdic tion of that Court to try the suit and we cannot at this stage refuse to give our ruling on that question merely because any decree that might be passed in favour of the plaintiff might prove ineffectual. Turning now to the main question, it is clear that article 12 (2) of the Rights, Property and Liabilities Order applies only to property rights or liabilities which were transferred by the Order from a Province which was a party to legal proceedings 2 10 "with respect to" that property or those rights or liabili ties. As the suit in question cannot be said to have been instituted with respect to the property transferred, namely, Chakla Roshanabad, the appellant cannot rely upon the trans fer of that property from the Province of Bengal to the Province of East Bengal as part of the territories of Pakistan under the scheme of partition. Nor was there any transfer of "rights"such as was contemplated under that article, for the only right with respect to which the Prov ince of Bengal could be said to have been a party to the pending proceeding on the facts of this case was the right to tax the agricultural income of the plaintiff under the provisions of the Bengal Agricultural Income tax Act, 1944, and that right was not derived by the Province of East Bengal by transfer under the Rights, Property and Liabili ties Order. As rightly pointed out by the High Court, the right of taxation under the Bengal Act of 1944 passed to the Province of East Bengal as part of the Sovereign Dominion of Pakistan by virtue of the provisions of section 18(3) of the Indian Independence Act, 1947, which provided that "the law of British India and of the several parts thereof immediate ly before the appointed day shall, so far as applicable and with the necessary adaptations, continue as the law of each of the new Dominions and the several parts thereof, until other provision is made by the laws of the legislature of the Dominion in question or by any other legislature or other authority having power in that behalf. " The question next arises whether there was a transfer of any "liability" by the Order as contemplated in article 12(2). Mr. Sen Gupta relied in this connection on article 10 (2) (a) which provides that "where immediately before the appointed day the Province of Bengal is subject to any such liability (i.e., "any liability in respect of an actionable wrong other than breach of contract") referred to in sub section (1)that liability shall, where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of East Bengal, be a liability of that Province. " It was contended that the Province 11 of Bengal was, according to the plaintiff 's case, liable to be restrained from proceeding with the illegal and unautho rised assessment on the basis of the notice issued under the Bengal Act of 1944, and that liability, in respect of which the cause of action arose wholly in Dacca (where the as sessment proceeding had been initiated) within the territo ries of the Province of East Bengal, became a liability of that Province. The High Court rejected this contention on the ground "that article 10(2) is concerned with the liabil ity for an actionable wrong other than breach of contract and it is impossible to say that by serving a notice on the plaintiff under the Bengal Agricultural Income tax Act through one of its officers the Province of Bengal had committed an actionable wrong '. Assuming that it exceeded its power or acted under an invalid provision of law, the plaintiff may have a declaration to that effect but the Act complained of cannot be said to have been a tortious act. But even assuming that it was, it is to be remembered that the issue of the notice was an exercise of powers conferred by the Act in relation to the sovereign rights of the Crown and it is elementary that the Crown or the State is not answerable for even negligent or tortious acts of its offi cers done in the course of their official duties imposed by a statute, except where the particular act was specifically directed and the Crown profited by performance . . No liability for an actionable wrong is thus involved in the suit and Dr. Sen Gupta cannot establish a right to proceed against the Province of East Bengal on the basis that the liability was transferred to that Province under article 10(2) of the Order. " We are unable to share 'this view. The learned Judges have placed much too narrow a construction on the phrase "liability in respect of an actionable wrong". They have assumed that the phrase connotes only a liability for dam ages for a completed, tortious act and that the initiation of what according to the plaintiff was an unauthorised and illegal assessment proceeding by purporting to serve a notice requiring the plaintiff to submit a return of his total agricultural income under section 24 (2) of the Bengal Agricultural 12 Income tax Act, 1944, through an appropriate officer func tioning under that Act, the Province of Bengal had not committed an "actionable wrong". This, in our opinion, is not a correct view of the matter. Under section 9(1) (b) of the Indian Independence Act, 1947, the Governor General of British India was directed to make provision by order "for dividing between the new Dominions and between the new Provinces to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General in Council or as the case may be of the relevant Provinces which under this Act are to cease to exist", and the Indian Independence (Rights, Property and Liabilities) Order is the only Order by which such provision was made. The intention being thus to provide for the initial distri bution of rights, property and liabilities as between the two Dominions and their Provinces, a wide and liberal con struction, as far as the language used would admit, should be placed upon the terms of the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for. There is no reason, accordingly, why the words "li ability in respect of an actionable wrong" should be under stood in the restricted sense of liability for damages for completed tortious acts. We consider that the words are apt to cover the liability to be restrained by injunction from completing what on the plaintiff 's case was an illegal or unauthorised act already commenced. The service of the notice on the plaintiff under section 24(2) of the Bengal Act amounts to much more than a mere threat in the abstract to impose an illegal levy. It is the actual initiation of an illegal assessment proceeding which, in the normal course, will 'in all probability culminate in an illegal levy of tax. The failure to make a return as required by the notice would result under section 25(5) of the Act in the Income tax Officer making an ex parte assessment to the best of his judgment and determining the sum payable by the assessee on the basis of such assessment. Such failure would also expose the plaintiff under section 32(1) of the Act to the impo sition of a penalty which may equal the amount of the tax assessed on him or to a prosecution as for an offence 13 before a Magistrate under section 53 (1), at the option of the Income tax authority. It is thus plain that the service of a notice requiring a return of income to be furnished for assessment under the Act is a step fraught with serious consequences to the assessee, and if the assessment proposed was illegal and unauthorised by reason of the Act itself being ultra vires in so far as it purported to make the Rulers of Indian States liable to taxation thereunder as contended for by the plaintiff, the service of such notice marked the commencement of a wrongful act against the plain tiff by the Bengal Government under colour of the Act and there can be no doubt that such a wrongful act is actionable in the sense that an action would lie in a civil court for an injunction restraining its completion. That was the liability to which the Province of Bengal was subject ac cording to the plaintiff 's case at the time when he insti tuted the suit, and that liability, in our opinion, passed to the Province of East Bengal by virtue of article 10 (9.) (a) of the Indian Independence (Rights, Property and Liabil ities) Order, 1947. There is no question here of the li ability of the Crown for damages for the negligent or tor tious act of its officers. On the allegations in the plaint, which must, for the purpose of deciding the question of jurisdiction as a preliminary issue, be assumed to be well founded, the Province of Bengal was undoubtedly liable to be sued for an injunction restraining it from proceeding with the assessment and none the less so because the notice was served in purported exercise of powers conferred by the Bengal Act. The name of the Income tax Officer originally impleaded as the second defendant having been struck off the record, no question in regard to his liability arises. Reference was made to certain text books where a "tort" is spoken of as an "actionable wrong" and it was suggested that the two expressions are synonymous. Every tort is undoubtedly an actionable wrong but the converse does not necessarily follow. Indeed, the words "other than breach of contract" used in article 10 (1) make it plain that the expression "actionable wrong" is used in a wider sense 14 which would have included breach of contract but for those limiting words. It was said that even assuming that the service of the notice calling for a return of income was a wrongful act, it was not "actionable", as section 65 of the Bengal Act barred suits in civil courts "to set aside or modify any assessment made under this Act". The short answer to this contention is that the suit in question is not a suit "to set aside or modify an assessment" made under the Act, as no assessment had yet been made when it was instituted, and the subsequent completion of the assessment was made by the Pakistan In come tax authorities on terms agreed to between the parties and sanctioned by the Court. The decision of the Privy Council in Raleigh Investment Co. Ltd. vs Governor General in Council (1) relied on in support of the contention is distinguishable, as the main relief claimed there was repay ment of the tax alleged to have been wrongfully levied under colour of an ultra vires provision in the Indian Income tax Act. Their Lordships observed: "In form the relief claimed does not profess to modify or set aside the assessment. In substance it does, for repayment of part of the sum due by virtue of the notice of demand could not be ordered so long as the assessment stood. Further, the claim for the declaration cannot be rationally regarded as having any relevance except as leading up to the claim for repayment, and the claim for an injunction is merely verbiage. The cloud of words fails to obscure the point of the suit. " The position here is entirely different. The gist of the wrongful act complained of in the present case is sub jecting the plaintiff to the harassment and trouble by commencing against him an illegal and unauthorised assess ment proceeding which may eventually result in an unlawful imposition and levy of tax. It was suggested, somewhat faintly, that the cause of action for the suit, though stated in the plaint to have arisen in Dacca, now in the Province of East (1) 15 Bengal, did not arise wholly within the territories of the Province of East Bengal within the meaning of Article 10 (2) (a) inasmuch as the notice calling for a return, though issued from Dacca, was received by the Manager of the Estate at Agartalla in Tripura State. Assuming that the contention has any substance it is of no assistance to the respondent, for article 10 (2) (c) would then be applicable to the case and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal. We are therefore of opinion that the Province of East Bengal having succeeded to the liability to which the Province of Bengal was subject immediately before the ap pointed day, the former Province is to be deemed to be substituted for the other Province as a party to the suit and the suit must accordingly continue in the Court of the Subordinate Judge at Alipore, which has jurisdiction to proceed with it under article 4 of the Indian Independence (Legal Proceedings) Order, 1947. In this view it is unnecessary to consider the question of submission to jurisdiction urged in the alternative by the appellant. In the result the appeal is allowed, the order of the Court below is set aside and the suit now pending in the Court of the Subordinate Judge at Alipore will be heard and determined by it. The respondent will pay the appellant 's costs throughout. FAZL ALI J. The question to be decided in this appeal is whether the Subordinate Judge 's Court at Alipore in the State of West Bengal, has jurisdiction to try a suit in which the Province of East Bengal was impleaded as a defend ant, after the 15th August,1947 In what circumstances this question has arisen will appear from the facts of the case which may be briefly stated. In 1944, the Bengal Legislature passed an Act called the Bengal Agricultural Income tax Act, 1944 (Bengal Act IV of 1944), which enabled it to impose a tax on the agricul tural income of various classes 16 of persons including "every Ruler of an Indian State," holding lands within the territory of Bengal. The appel lant, who is the Ruler of the State of Tripura, holds a zamindary called Chakla Roshanabad Estates, which was situ ated in the Province of Bengal and in the District of Sylhet formerly appertaining to the Province of Assam. On the 28th February, 1945, the Agricultural Income tax Officer, Dacca Range, issued a notice under section 24 (2) of the Bengal Act to the Manager of the Chakla Roshanabad Estates calling upon him to furnish a return of the appellant 's total agri cultural income for the previous year, derived from lands situated within the Province of Bengal. On the 12th June, 1945, the appellant instituted a suit in the Court of the Subordinate Judge at Dacca, against the Province of Bengal and the Agricultural Income tax Officer, Dacca Range, claim ing the following reliefs: (1) For a declaration that the Bengal Agricultural Income tax Act, 1944, so far as it imposes a liability to pay agricultural income tax on the plaintiff is ultra vires and void and that the plaintiff ' is not bound by the same. (2) For a declaration that in any case the notice served by the Agricultural Income tax Officer, Dacca Range, above referred to, is void and of no effect and that no assessment can be made on the basis of that notice. (3) For a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff to agricultural income tax. On the 15th July, 1945, the suit was transferred to the Court of the Subordinate Judge at Alipore in the District of 24 Parganas, by an Order of the Calcutta High Court. While the suit was still pending, the new Province of East Bengal, which forms part of the territories of the Dominion of Pakistan, came into existence on the 15th August, 1947, as a result of the Indian Independence Act, 1947, and it appears that the whole of Chakla Roshanabad Estates falls within that Province. After the creation of the new Province, 17 a petition was filed on the 9th December, 1947, on behalf of the Province of East Bengal, drawing the attention of the Court at Alipore to the fact that the Province of West Bengal, which forms part of the territories of the Dominion of India, was taking no interest in the suit and asking the Court to accept a written statement which was also filed along with the petition, and in which the only plea taken was that the Alipore Court had no jurisdiction to hear the suit or make any order of injunction against the Province of East Bengal or defendant No. 2. The last paragraph of the written statement was to the following effect: "The Province of East Bengal appears only to contest the jurisdiction of the court and it submits that the suit should be dismissed on that ground. " Later on, the Province of East Bengal was irapleaded as a defendant in the suit and the name of the Income tax Officer of Dacca was removed from the category of defend ants. The Subordinate Judge then proceeded to try the question of jurisdiction as a preliminary issue, and decided that by virtue of the provisions of the Indian Independence (Legal Proceedings) Order, 1947, read with section 9 of the Indian Independence Act, 1947, the Court had jurisdiction to try the suit against the new Province. Thereupon, the respondent (the Province of East Bengal) moved the High Court at Calcutta under section 115 of the Code of Civil Procedure, against the order of the Subordinate Judge, and a Bench of the High Court consisting of Harries C.J. and Chakravarthi J. allowed the application and set aside the order of the Subordinate Judge, giving effect to the objec tion of the respondent that the Court at Alipore was not competent to try the suit against the Province of East Bengal. One of the points raised on behalf of the appellant before the High Court was that the Province of East Bengal had submitted to the jurisdiction ' of the Subordinate Judge 's Court, but this point was negatived. The appellant was thereafter granted a certificate under section 205 (1) of the Government of India Act, 1935, and on the basis of it he has preferred this appeal. 18 On a reference to the judgments of the learned Subordi nate Judge and the High Court, it appears that three provi sions were relied upon by the appellant in support of his contention that the Court at Alipore had jurisdiction to try the suit, these being section 9 of the Indian Independ ence Act, 1947, article 4 of the Indian Independence (Legal Proceedings) Order, 1947, [hereinafter referred to as 'the Legal Proceedings Order '], and section 12 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, Therein after referred to as ' the Rights, etc., Order ']. These provisions run as follows : Section 9 of the Indian Independence Act : "The Governor General shall by order make such provi sion as appears to him to be necessary or expedient (a) for bringing the provisions of this Act into effective operation; (b) for dividing between the new Dominions, and be tween the new Provinces, to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General in Council or, as the case may be, of the relevant Provinces which, under this Act, are to cease to exist . . " Section 4 of the Legal Proceedings Order : "Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independ ence Act, 1947, (1) all proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day; (2) any appeal or application for revision in respect of any proceedings so pending in any such 19 court shall lie in the court which would have appellate, or as the case may be revisional, jurisdiction over that court if the proceedings were instituted in that court after the appointed day; and (3) effect shall be given within the territories either of the two Dominions to any judgment, decree, order, or sentence of any such court in the said proceedings, as if it had been passed by a court of competent jurisdiction within that Dominion. " Section 12 of the Rights, etc. Order : "(1) Where immediately before the appointed day, the Governor General in Council is a party to any legal proceed ings with respect to any property, rights or liabilities transferred by this Order, the Dominion which succeeds to the property, rights or liabilities in accordance with the provisions of this Order shall be deemed to be substituted for the Governor General in Council as a party to the pro ceedings, and the proceedings may continue accordingly. (2) Where any Province from which property, rights or liabilities are transferred by this Order is, immediately before the transfer, a party to legal proceedings with respect to that property or those rights or liabilities, the Province which succeeds to the property, rights or liabili ties of this Order shall be deemed to be substituted for the other Province as a party to those proceedings, and the proceedings may continue accordingly. (3) Any proceedings which, immediately before the ap pointed day, are pending by or against the Secretary of State elsewhere than in the United King dom in respect of any liability of the Governor General in Council or a Prov ince shall, * * * * (b) in the case of proceedings in respect, of the Prov ince of Bengal, the Province of the Punjab, or the Province of Assam, be continued by or against the Province which suc ceeds to the liability . . " The learned Subordinate Judge based his judgment entire ly upon section 4 of the Legal Proceedings 20 Order, but the High Court has pointed out that that Order standing by itself can be of no help to the appellant. According to the High Court, that section might have enabled the appellant to prosecute his suit against the Province of Bengal, but it could not enable 'him to continue the suit against the new Province without invoking section 12 (2) of the Rights, etc. Order, which provides among other things that the Province which succeeds to the rights or liabilities of the old Province of Bengal by virtue of that Order shall be deemed to be substituted for the latter as a party to the pending proceedings. In my opinion, this is the correct view. It Was urged before us that a Court which had juris diction to try a suit against a party would, by reason of what is provided in section 4 of the Legal Proceedings Order, naturally have jurisdiction to substitute the heir or legal representative of that party. Generally speaking, this must be so, but, in the present case, the Province of East Bengal which forms part of another sovereign State could not be automatically substituted for the Province of Bengal, unless the substitution was permitted by some provision of the Indian Independence Act or any of the Orders issued thereun der. The whole case thus rests on the proper construction of section 12(2) of the Rights, etc. Order. In the High Court, it was strenuously urged on behalf of the appellant that section 12(2) is fully applicable to the present case on account of certain rights having been transferred to the Province of East Bengal from the old Province of Bengal. This argument was reiterated in this Court also, but it is obviously untenable, for the reasons set out in the judgment of the High Court. As has been pointed out by the High Court, section 12 (2) is of no help to the appellant, unless the rights in question were transferred by the Rights, etc. Order itself. The learned counsel for the appellant however failed to point out any provision of this Order, by which any of the rights referred to by him had been transferred. He had therefore to fall back upon an alternative argu ment based on section 10(2) of the same Order; and the point to be decided by this Court has thus 21 crystallized into one simple issue, namely, whether section 10(2) of the Order can be of any avail to the appellant. Section 10 (2) must be read with section 10 (1), and the material part of these two sub sections runs as follows : "10 (1) Where immediately before the appointed day the Governor General in Council is subject to any liability in respect of an actionable wrong other than breach of con tract, that liability shall, (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Dominion of India, be a liability of that Dominion;. (2) Where immediately before the appointed day the Province of Bengal is subject to any such liability as aforesaid, that liability shall, (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of East Bengal, be a liability of that Prov ince; (b) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of West Bengal, be a liability of that Prov ince; and (c) in any other case, be a joint liability of the Provinces of East and West Bengal." * * * * It is quite clear that for the application of section 10(2), it is necessary to show inter alia that the Province of Bengal was subject to a liability in respect of an ac tionable wrong other than a breach of contract. A reference to any book on tort will show that the words used in sub section (1) are commonly used to define a tort. A tort has been defined in Stroud 's Judicial Dictionary, Second Edition, page 2072, as a wrong independent of contract, and it is also so described in the Common Law Procedure Act, 1852 (15 & 16 Vict., c. 76); in Halsbury 's Laws of England and in many textbooks. The difference between "a wrong independent of contract" and "a wrong other than a 22 breach of contract" is merely verbal and has little signifi cance. A tort is also often referred to as "an actionable wrong" and the two expressions have been synonymously used by eminent writers including Sir Fredrick Pollock and Pro fessor Burdick of America, who has designated his well known book on the law of torts as "a concise treatise on civil liability for actionable wrongs to person and property". Whether the expression can be taken to be a complete defini tion of a tort may be questioned, because as Addison has pointed out in his book on torts, "to say that a tort is an actionable wrong leaves undefined the term 'actionable wrong '. " But there can be no doubt that in legal parlance, the two expressions are assumed to be interchangeable. There is also another matter to be borne in mind in construing section 10 (2) of the Rights, etc. Order, and that is the well recognized fact that the primary and most common remedy for a tort is an action for damages. That this is an important feature of a tort is shown by the fact that in many textbooks an action for damages has been made an inte gral part of the definition of a tort. A few examples will make this clear. A tort is defined by Salmond as "a civil wrong for which the remedy is a common law action for unliq uidated damages and which is not exclusively the breach of a contract or the breach of a trust or other merely equitable obligation." Professor Winfield, who did not see eye to eye with Salmond on many matters connected with the law of torts, gives the following definition of tortious liability : " Tortious liability arises from the breach of a duty primarily fixed by the law; this duty is towards persons generally and its breach is redressible by an action for unliquidated damages. " In Underhill 's law of torts, the definition runs as follows : "A tort is an act or omission which is unauthorized by law and independently of contract infringes (i) some absolute right of another, etc., and (ii) gives rise to an action for damages at the suit of the injured party. " The learned author after attempting to define a tort in this way goes on to state: "A tort is described in the Common 23 Law Procedure Act, 1852, as a wrong independent of contract. If we use the word 'wrong ' as equivalent to violation of a right recognized and enforced by law by means of an action for damages, the definition is sufficiently accurate, but scarcely very lucid;for it gives no clue to what constitutes a wrong or violation of a right recognized and enforced by law. It does, however, emphasize the fact that an essential characteristic of a tort is that the appropriate remedy for it is an action for damages. An act or omission which does not give rise to an action for damages is not a tort. " It must be recognized that an injunction may also be an appropriate remedy in a limited number of cases, but it is not a remedy of universal application, and no one has yet suggested that it may be treated as an incident of tort. In the light of the foregoing discussion, it seems to me to be permissible to infer, firstly, that section 10 of the Rights, etc. Order refers to liability for a tort, and secondly, that what is contemplated there is pecuniary liability such as liability to damages. The word "liabili ty" has a wider meaning and also a narrower meaning, and the latter would appear to be the appropriate meaning where the word is used in contrast to assets or something which corre sponds to or is in the nature of assets, and where it is used in plural or is preceded by an indefinite article, e.g., when the expression "a liability" is used. We must remember that the purpose of the Rights, etc. Order was, among other things, to divide or distribute the rights, property and liabilities of the undivided Province of Bengal between the two new Provinces. Therefore, the view that the liabilities referred to in section 10 are liabilities capable of being ascertained in terms of money and not liabilities in any abstract or academic sense, is in conso nance with the purpose of the Order as well as the well known fact that for a tort the most common and appropriate remedy is an action for pecuniary damages. This view is further confirmed by reading section 13 (2) of the Rights, etc. Order, which runs thus : 24 "Where by virtue of the preceding provisions of this Order either of the Dominions or any Province becomes sub ject to any liability, and it is just and equitable that a contribution towards that liability should be made by the other Dominion, or by another Province, as the case may be, the other Dominion shall make to the Dominion or Province primarily subject to the liability such contribution in respect thereof as, in default of an agreement, may be determined by the Arbitral Tribunal. " It should be noted that the words "becomes subject to any liability" used in the above provision are practically the words which occur in section 10 of the same Order, and the language of section 13 (2) clearly shows that the word "liabili ty" must have been used in the narrower sense of pecuniary liability, because otherwise no question of contribution towards that liability by the Dominion or Province would arise. It will be also instructive to refer to Part VII, Chapter III of the Government of India Act, 1935, the head ing of which is "Property, Contracts, Liabilities, and Suits," and upon which the Rights, etc. Order appears tohave been modeled. In section 179 of the Government of India Act, 1935, which occurs in this Chapter, the clue to the meaning of the word ' liability. ' is furnished by the provision that "any sum ordered to be paid by way of debt, damages or costs in any such proceedings, and any costs or expenses . . shall be paid out of the revenues of the Federation or the Province, as the case may be . . "I think that it will be quite a fair construction to hold that what is contemplated in section 10 of the Rights, etc. Order is that the liability referred to therein would be met out of the revenues of the Province concerned. The construction I have suggested appears to me to represent what the framers of the Order must have intended to convey by the words "liability in respect of an action able wrong", but, lest it should be said that it is too narrow a construction, I shall deal with the matter more fully giving to the words "actionable wrong" and "liability" as wide a meaning as they can 25 bear in a legal context. Proceeding on this footing, the first question to be asked is: What is a wrong other than a breach of contract ? In answering this question, it is neither possible nor helpful to ignore all that has been said in authoritative textbooks and judgments in dealing with the question of a tort, because the foundation of every tort is a wrong or a wrongful act. It is true that at one time some of the writers were inclined to think that "there was no English law of tort but there was merely an English law of torts, that is, a list of acts and omissions which under certain conditions were actionable." But, now, the view has considerably broadened, and, generally speaking, it is acknowledged that ' 'torts are infinitely various not limited or confined" (see Chapman vs pickersgill), and that wherever there is an injury by the invasion of a right, a wrong or a tort is committed. This is often conveyed by the expression injuria sine damnum. The word "wrong" has been used in sections 17, 18 and 19 of the Code of Civil Proce dure, and the following extract from Mulla 's commentary thereon will show how this word has been construed: "Wrong means a tort or actionable wrong, i.e., an act which is legally wrongful as prejudicially affecting a legal right of the plaintiff. " Underhill also construes "wrong" in the same sense, because a wrong is, according to him, equivalent to viola tion of a right recognised and enforced by law by means of an action for damages. I think therefore that in view of all that has been written and said on the subject, it may be safely stated that a wrong must consist of the following elements : (1) There must be an act or omission amounting to an infringement of a legal right of a person or a breach of legal duty towards him; and (2) The act or omission must have caused harm or damage to that person in some way, the damage being either actual or presumed. These two elements are denoted by two Latin expressions, injuria and damnum. I have to include (1) [1762] 2 Wils. 146, per Pratt C.J. 4 26 presumed damage under the second head, because in certain cases such as trespass, assault, false imprisonment, etc. the invasion of a right may be so flagrant that "the law conclusively presumes damage." (See observations of Lord Wright M.R. in Nicholls vs Ely Beet Sugar Factory(1 ). Such cases are often described as cases of absolute liability or cases where a tort is actionable per se without proof of damage. Let us then see whether the two elements of an action able wrong are present in this case. For this purpose, we must examine the best and most plausible statement of the appellant 's case which may be put more or less in the fol lowing way : The issue of a notice, which has been referred to in paragraph S of the plaint calling upon the appellant to furnish a return of his total agricultural income derived from lands situated within the Province of Bengal, was the first step in the initiation of an illegal assessment pro ceeding which was likely to lead to an illegal levy of tax, and the commencement of an illegal proceeding in this manner gave a right of action to the appellant and entitled him to claim an injunction restraining the defendants from complet ing the proceeding. Such being the position, the case is covered by section 10 of the Order under consideration, the words used there being wide enough to cover liability to be restrained by an injunction from completing an illegal or unauthorized act already commenced. Consequently, the li ability to be so restrained must be deemed to have been transferred to the Province of East Bengal, by virtue of section 10 of the Rights, etc. Order. This may appear to be a plausible way of putting the case, but, when we subject it to a close scrutiny, we find that even on the above statement the true requirements of the material provision are not satisfied. If we confine ourselves to something which has happened, as opposed to something which may happen in future, that is to say, if we look for an act or omission which must be the foundation of every wrong, we find that all that is said to have happened in this (1) 27 case is the issuing of a notice, which is not some unautho rised or prima facie unlawful act but is an act done trader the authority of a statute and enjoined by it. It has to be borne in mind that the attack in the plaint is not against the whole Act but all that is contended is that only a par ticular provision of it is ultra vires. The contention comes to this, that the issuing of a notice against every person other than the Ruler of an Indian State would have been a perfectly legitimate act, but the issuing of a notice against a Ruler is ultra vires. But that is not enough to constitute a wrong. What has to be shown is that the issu ing of the notice is a wrongful act, i.e., it amounts to an infringement of some right. What known right of person or property or any other description it infringes is not at all clear; nor has that been stated in the pleadings. It is conceded that there has been no assessment and no realiza tion of any tax and it could not also be disputed that it was open to the appellant to show to the assessing authority that he was not assessable at all. To say that a notice is the first step , in the initiation of an illegal assessment proceeding, does not carry the matter further, but it would seem to be merely a piece of verbiage used to obscure the fundamental weakness of the appellant 's case. Construing "wrong" as it should be construed, the essential thing to find out is in what way a right has been infringed or there has been a breach of duty. It is the appellant 's own case that the suit is for a threatened or apprehended wrong, but that very expression shows that the suit has been brought before the alleged wrong was committed. The other element of a wrong, namely, that the person should have sustained some harm or injury, is also wanting in this case. It is not the case of the appellant that the notice has in any way caused any actual damage to him. Nor is it suggested that this is one of those cases in which damage should be presumed. All that is said is that the notice was likely to entail trouble and harassment to the appellant, but that by itself will not constitute a wrong. 28 The matter may be tested in another way. As Underhill points out," an act or omission which does not give rise to an action for damages is not a tort. " To the same effect is the following observation in Salmond 's Law of Torts: " No civil injury is to be classed as a tort unless the appropriate remedy for it is an action for damages. Such an action is an essential characteristic of every true tort. " Again, Professor Winfield says that an action for unliqui dated damages is the one sure test of tortious liability and has cited cases where this statement has received judicial approval. I think these statements will be equally true if we drop the word "tort" and substitute the words" actionable wrong" in its place. It follows that one of the tests of an actionable wrong is that while other remedies also may be open to the plaintiff, an action for damages is the primary remedy for it. Can the appellant in this case maintain a suit for damages on the allegations made by him in his plaint? As I have already stated, a reference to the plaint shows that no damages has been either alleged or claimed and it has also not been stated that the appellant is entitled to any damage. In Rogers vs Rajendro Dutt(1)the Privy Council stated that "it is essential to an action in tort that the act complained of should be legally wrongful as regards the party complaining; that is, it must prejudi cially affect him in some legal right. " Again, it was ob served in Kali Kischen Tagoor vs Jodoo Lal Mullick(2) that"there may be, where a right is interfered within ju ria sine damno sufficient to found an action; but no action can be maintained if there is neither damnum nor injuria. " It seems to me therefore that in the absence of the two elements to which I have referred, no case for liability in respect of an actionable wrong has been made out, and it is wholly inappropriate to invoke section 10 of the Rights, etc. Order in the present case. It appears that the whole of the appellant 's arguments has been woven round the following two matters : (1) 8 Moore 's I.A. 103 at p. 135. (2) 6 I.A. 190. 29 (1) Injunction is a recognized form of action; and (2) Injunction has been asked for in the present Case, in connection with something which is said to be likely to culminate in a wrong. The situation as envisaged is however very different from what is contemplated in section 10 of the Rights, etc. Order, which is liability for an actionable wrong and not liability for something which may become a wrong in future. It is to be remembered that there are two words used in the section, viz., actionable and wrong. The mere fact that a matter is actionable will not bring the case within the four corners of ' section 10 of the Order, unless all the elements of a wrong are established. I think it will be appropriate at this stage to say a few words about the remedy by way of an injunction in cases where an actionable wrong is said to have been committed. It cannot be disputed that injunction is one of the remedies in certain cases of torts. As Addison has pointed out, "the origin of ' the remedy by way of an injunction is to be found in the inadequacy of the legal remedy by way of damages in many of the more serious wrongs, such as continuing tres passes and nuisances, where a wrongful act has been done and there was an intention to continue doing it. (See Addison 's Law of Torts, 8th Edn. 111). Injunction will also be granted to prevent a threatened injury or wrong, if it can be shown that the threatened act if carried into execution will lead to violation of a right and such will be the inevitable result. As was pointed out in an English case, the interfer ence of the court in these cases is rounded on its jurisdic tion to give relief in the shape of preventive justice in order to protect properties and rights from that which, if completed, would give a right of action. These two cases in which an injunction may be issued stand on two different footings, and the liability to an injunction does. not necessarily and always amount to "liability in respect of an actionable wrong". The two liabilities may possibly coin cide where there is a continuing wrong and the injunction is intended to stop its 30 continuance. But, as I have already stated, where no wrong has been committed, it would require considerable straining of the meaning of familiar legal expressions to say that "liability in respect of an actionable wrong" is identical with "liability to an injunction in respect of an apprehend ed wrong". "Liability in respect of an actionable wrong" means liability when an actionable wrong has been committed. It cannot mean liability to be prevented from a wrong which is apprehended. Nor can the liability which is contemplated in section 10 of the Rights, etc. Order be created by the mere filing of a suit in which an injunction is claimed. I should like to refer here to section 176 (1) of the Government of India Act, 1935, which provides as follows : "The Federation may sue or be sued by the name of the Federation of India and a Provincial Government may sue or be sued by the name of the Province, and, without prejudice to the subsequent provisions of this chapter, may, subject to any provisions which may be made by Act of the Federal Legislature or a Provincial Legislature enacted by virtue of powers conferred on the Legislature by this Act, sue or be sued in relation to their respective affairs in like cases as the Secretary of State in Council might have sued or been sued if this Act had not been passed. " This section is divisible into two parts. The first part states as to which authority should be named as a plaintiff or as a defendant in a suit brought by or against the Crown or the Government, and the second part deals with cases in which the Federal or the Provincial Government may sue or be sued. To understand the latter provision, the section is to be read with section 65 of the Government of India Act, 1858, and section 32 of the Government of India Act, 1915. Section 65 of the Act of 1858 enacted that "the Secretary of State in Council shall and may sue and be sued as well in India as in England by the name of the Secretary of State in Council as a body corporate; and all persons and bodies politic shall and 31 may have and take the same suits, remedies and proceedings, legal and equitable, against the Secretary of State in Council of India as they could have done against the said Company." (East India Co.). The same provision is substantially made in section 32 of the Act of 1915. Such being the law, the question has been posed in a number of cases from very early days as to whether, and, if so, in what cases, the Secretary of State would be liable for a wrong or a tort committed by the servants of the Crown, and it has now been definitely held that he may be liable in certain cases. So far as the present discussion is concerned, the following three points which emerge from a careful perusal of a large number of cases bearing on the subject, seem to be material : (1) The principles of the law of torts have been con sistently applied in all cases dealing with the liability of the Secretary of State for wrongs committed by the serv ants or agents of the crown or the Government. (2) It is settled law that the Secretary of State cannot be held liable for wrongs committed by the servants of the Crown in the performance of duties imposed by the Legisla ture: [See Shivabhajan vs Secretary of State for India(1). James Evans vs Secretary of State(2). Tobin vs Reg(3). Ross vs Secretary of State(4), in which this principle is fully explained and the reasons upon which it is based, are clear ly set out]. (3) It is also well settled that where a statute spe cially authorizes a certain act to be done by a certain person, which would otherwise be unlawful or actionable, no action will lie for the doing of the act. On these principles, it would appear that neither the Agricultural Income tax Officer, who has now been dismissed out of action, nor the Province of East Bengal, could be said to be subject to a liability in respect of an action able wrong, assuming that an actionable wrong has been committed. It must (1) I.L.R. (3) ; (2) A.I.R. 1920 Lah. 364. (4) I.L.R. 32 however be stated that this conclusion rests on the. as sumption that my construction of an actionable wrong is correct. It was contended that in deciding the present appeal, we must assume all the facts stated in the plaint to be correct and therefore assume that the Bengal Act is ultra vires and the notice issued was without authority. I have already pointed out that the whole Act is not attacked, but only one single provision thereof is said to be ultra vires, and I shall show later, when I deal with section 65 of the Bengal Act, that even the assumption we are asked to make will not bring the case within section 10 of the Rights, etc. Order. Mr. Setalvad, the learned Attorney General of India, who intervened on behalf of the Union of India in the ap peal, supported the judgment of the High Court on three main grounds, which may be summed up as follows : (1) that the words used in section 10 of the Rights, etc. Order do not cover this case, because here no wrong has been actually committed and a threatened wrong is different from an actual wrong; (2) that section 65 of the Bengal Agricultural Income tax Act is a bar to the suit; and (3) that the present suit must in any event end in an infructuous decree and should not be allowed to be pursued. I have already dealt with the first point, and wish simply to add that the point which is now pressed is not specifically raised in the Memorandum of Appeal presented in this Court, nor is there any trace of it in the Statement of Case filed by the appellant. The point which is mentioned in the Memorandum of Appeal and the Statement of Case is that section 12 of the Rights, etc. Order is applicable to the present case, because certain rights have been trans ferred from the old Province of Bengal to the Province of East Bengal. There is however no mention of section 10 of the Order, nor is it stated that liability to an injunction brings the case within that 33 section. Thus, a notable feature of the case is that almost every argument which was advanced in the courts below is to be discarded, and we are asked to base our decision on a point, which is not urged in the Statement of the Case, and which, in accordance with the rules of practice of this Court, cannot ordinarily be entertained. The second point urged by Mr. Setalvad is based on section 65 of the Bengal Act, which runs as follows : "No suit shall be brought in any Civil Court to set aside or modify any assessment made under this Act, and no prosecution, suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under this Act." Strictly speaking, this section does not apply to the present case, as there has yet been no assessment and ex facie the appellant 's suit cannot be regarded as a suit to set aside or modify any assessment. Mr. Setalvad however contends that this section must be read with the decision of the Privy Council in Raleigh Investment Co. vs Governor General in Council(1). That was a case under the Indian Incometax Act, 1922, the provisions of which are similar to the provisions of the Bengal Act and which contains a sec tion (section67) which is almost identical in terms with section 65 of the latter Act. In that case, an assessee paid under protest the tax assessed on him and then brought a suit for the following reliefs : (a) a declaration that certain provisions of the Income tax Act on which the assessment was based were ultra vires and so the assessment was illegal; (b) an injunction restraining the. Income tax Depart ment from making the assessments in future; (c) repayment of the sum assessed. It was strongly contended upon the facts of the case that section 67 of the Income tax Act had no application, but it was held by the Privy Council that "though in form the relief claimed did not profess to (1) 5 34 modify or set aside the assessment, in substance it did,because the repayment could not be ordered so long as the assessment stood ' '. It was further held that an as sessment made under the machinery provided by the Act, if based on a provision subsequently held to be ultra vires was not a nullity but a mistake of law in the course of its exercise. Lastly, it was held that the Act contained machin ery which enabled an assessee to raise the question whether or not a particular provision of the Act bearing on the assessment made upon him was ultra vires and that jurisdic tion to question the assessment otherwise than by use of the machinery expressly provided by the Act appeared to be inconsistent with the statutory obligation to pay 'arising by virtue of the assessment. The material part of the judgment on the last point runs as follows : "In construing the section it is pertinent in their Lord ships ' opinion, to ascertain whether the Act contains machinery which enables an assessee effectively to raise in the Courts the question whether the particular provision of the Income tax Act bearing on the assessment made is or is not ultra vires. The presence of such machinery, though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to enquire into the same subject matter. The absence of such machinery would greatly assist the appellant on the question of con struction and, indeed, it may be added that, if there were no such machinery and if the section affected to preclude the High Court in its ordinary civil jurisdiction from considering a point of ultra vires, there would be a serious question whether the opening part of the section, so far as it debarred the question of ultra vires being debated, fell within the competence of the Legislature. In their Lordships view it is clear that the In come tax Act, 1922, as it stood at the relevant, date,did give the assessee the right effectively to raise inrelation to an assessment made upon him the question whether or not a provision in the Act was ultra vires. Under section 30, an assessee whose only ground of complaint was that effect had been given in the assessment 35 to a provision which he contended was ultra vires might appeal against the assessment. If he were dissatisfied with the decision on appeal the details relating to the procedure are immaterial the assessee could ask for a case to be stated on any question of law for the opinion of the High Court and, if his request were refused, he might apply to the High Court for an order requiring a case to be stated and to be referred to the High Court . It cannot be doubted that included in the questions of law which might be raised by a case stated is any question as to the validity of any taxing provision in the Income tax Act to which effect has been given in the assessment under review. Any decision of the High Court upon that question of law can be reviewed on appeal. Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment. It is in that setting that section 67 has to be construed. In conclusion their Lordships would observe that the scheme of the Act is to set up a particular machinery by the use of which alone total income assessable for income tax is to be ascertained. The income tax exigible is determined by reference to the total income so ascertained and only by reference to such total income. Under the Act (section 45) there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income. Jurisdiction to ques tion the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsist ent with the statutory obligation to pay arising by virtue of the assessment. The only doubt, indeed, in their Lord ships ' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil Court to set aside or modify an assessment. " The authority of this decision was not questioned before us, but it was pointed out firstly that the present suit is not hit by the first part of section 65 of the Bengal Act, which refers only to suits to set aside or modify any as sessment, and secondly, that if the case is not covered by section65, the decision of the Privy Council, which was based on the construction of section 36 67 of the Income tax Act, is not applicable. Mr. Setalvad, replying to the first contention, has urged that we must not look merely to the letter of the section but to the princi ple underlying it, and he has particularly referred us to the fact that, strictly speaking, the reliefs claimed in the above mentioned case do not fall within the letter of sec tion 67 of the Income tax Act and hence the Privy Council observed in that case: "In form the relief claimed does not profess to modify or set aside, the assessment. In sub stance it does . The cloud of words fails to obscure the point of the suit. " However that may be, it seems to me that the Privy Council in arriving at their decision, were influenced not only by the language of section 67 of the Income tax Act but also by the complete machinery furnished by that Act for dealing with all questions arising in regard to the assessment, including the question of ultra vires as would appear from the fact that while laying down that there was no jurisdiction to question the assessment except by use of the machinery expressly provided by the Act, their Lord ships added: "The only doubt, indeed, in their Lordships ' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil court to set aside or modify an assessment." think that, for the purpose of understanding the full scope of section 65, we must read not only the first part of the section which bars suits to set aside or modify an assessment, but also its latter part which provides that "no suit or other proceeding shall lie against any officer of the Crown for anything in good faith. intended to be done under this Act." The latter part of the section clearly excludes the jurisdiction of the court to prevent the Income tax Officer from proceeding With an assessment which has already been started. Reference may here be made to Secretary of State vs Meyyappa Chetti ar(1) where it was held that the expression "intended to be done" signified futurity so as to preclude suits for injunction in respect of proceedings 'intended ' to be taken by the Income tax Officer. It is true that in terms the provision concerns the Income tax Officer only, but it (1) I1946] , at 352. 37 could hardly have been the intention of the Legislature that though that Officer is not liable to be restrained from proceeding with an assessment, the provision which ensures such a result may be rendered nugatory by permitting an injunction to be claimed against the Provincial Government or the State. In my opinion, it will be a strange construc tion of the section to hold that although it bars suits to modify or set aside an assessment and though it bars all proceedings to restrain the Officer who is making the as sessment from proceeding with it, yet it leaves it open to a party to stop an assessment by claiming an injunction against the Provincial Government or the State instead of the Officer concerned. There is no reference to the Provincial Government or the State at all in the first or the second part of the section, but the section as a whole concerns only with excluding the jurisdiction of the civil court in regard to certain acts done or intended to be done in connection with the assessment of agricultural income tax, and, on a fair construction, it must be held to bar all suits in connection with such assessment. In urging his third point, the learned Attorney General relied on an Ordinance passed by the Governor General of Pakistan on the 13th November, 1948, section 2 whereof runs as follows : "No judgment, decree, order or sentence referred to in paragraph (3) of Article 4 of the Indian Independence (Legal Proceedings) Order, 1947, shall affect the legislative or executive right or authority of the Central or any Provin cial Government of Pakistan and where such right or authori ty has been at issue, the judgment, decree, order or sen tence shall be invalid and inoperative subject to any decision that may be obtained from a competent court, of the Province concerned. " It was pointed out that by reason of this Ordinance, any decree which may be obtained in the present suit would be wholly infructuous and in this view this was a meaningless litigation which should not be allowed to continue. There is force in this argument, 38 but the point need not be pursued, as, in my opinion, the first two points raised by the Attorney General are suffi cient to meet the principal contention advanced by the appellant. The question of submission to jurisdiction appears to me to be unarguable upon the facts stated, and it was not seriously argued before us. The Province of East Bengal did intervene and apply for permission to file a written state ment, but the only statement made by it was that the Court had no jurisdiction to proceed with the suit. It cannot therefore be held that it had submitted to the jurisdiction of the Court. I have tried to deal with the question posed in this appeal in all its material aspects, but it can, I think, be disposed of on the simple ground that the mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act by the Agricultural Income tax Officer cannot be held to be an actionable wrong, because no right known to law can be said to have been infringed thereby. One of the recognized tests of an actionable wrong is that, while other remedies may also be open to the person to whom the wrong is done, he can always maintain an action for damages, on the principle that every injury imports damage. I am however certain that no action for damages can be maintained on the allegations made by the appellant in his plaint. I think that the entire argument urged on behalf of the appellant has been sufficiently answered by the High Court in the following passage, which appears to me to sum up the legal position accurately and concisely : "Nor was Dr. Sen Gupta right in relying on article 10 (2) for the transfer of liabilities. That Article is con cerned with liability for an actionable wrong other than breach of contract and it is impossible to say that by serving a notice on the plaintiff under the Bengal Agricul tural Income Tax Act through one of its officers, the Prov ince of Bengal had committed an actionable wrong. Assuming it exceeded its powers or acted under an invalid provision of law, the plaintiff may have a declaration to that effect, but the 39 act complained of cannot be said to have been a tortious act. But even assuming it was, it is to be remembered that the issue of the notice was in exercise of powers conferred by the Act in relation to the Sovereign rights of the Crown and it is elementary that the Crown or the State is not answerable for even negligent or tortious acts of its offi cers done in the Course of their official duties imposed by statute, except where the particular act was specifically directed and the Crown profited by its performance. There is no such allegation in the plaint in the present case. The plaintiff could not therefore have sued the Province of Bengal for an actionable wrong and the suit actually brought is not a suit of that character. It is a suit for ,certain declarations and an injunction and does not seek to make the Province liable for any actionable wrong in any way. No liability for an actionable wrong is thus involved in the suit and Dr. Sen Gupta cannot establish a right to proceed against the Province of East Bengal on the basis that the liability was transferred to that Province under article 10 (2) of the Order. " In the result, I would dismiss this appeal with costs. MUKHERJEA J I agree with my learned brother Patanjali Sastri J. that this appeal should be allowed and I would desire to indicate briefly the reasons that have weighed with me in coming to a conclusion different from that ar rived at by the learned Judges of the Calcutta High Court. All the material facts in relation to this case have been set out with elaborate fullness in the judgment of the High Court and I deem it quite unnecessary to state them over again. The whole controversy centers round the point as to whether the suit which was instituted by the plaintiff appellant against the Province of Bengal, as it was prior to the 15th of August, 1947, and which is still pending in the Court of the Subordinate Judge at Alipore can be continued against the Province of East Bengal which has come into existence, as a part of the Dominion of Pakistan, upon the 40 partition of Bengal under the Indian Independence Act; and whether the court of the Subordinate Judge of Alipore which is a court in the Dominion of India has any jurisdiction to proceed with and try such suit. The Subordinate JUdge decided these questions in favour of the plaintiff appellant basing his decision entirely upon article 4 (1) of the Indian Independence (Legal proceedings) Order, 1947, read with section 9 of the Indian Independence Act. The High Court in revision ' set aside the order of the Subordinate Judge holding inter alia that neither article 4 (1) of the Legal Proceedings Order nor article 12 (2) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, could confer upon the plaintiff any right to continue the suit against the Province of East Bengal. The Alipore Court, it has been held, has no jurisdiction to proceed with the suit and no jurisdiction has been conferred upon it by reason of the Province of East Bengal appearing in the suit and putting in a written statement only for the purpose of challenging the competency of the court to try the same. It is the propriety of this decision that has been challenged before us in this appeal. The first point that requires consideration is whether article 4 (11 of the Legal Proceedings Order has any appli cation to the facts of the present case. In my opinion, the answer to this question must be in the negative and the view taken by the High Court on this point seems to me to be perfectly sound and unassailable. The Legal Proceedings Order as well as several other orders dealing with various constitutional matters affecting the two Dominions which were to come into being on and from the 15th of August, 1947, were promulgated by the Governor General of India just on the previous day, that is to say, the 14th of August, 1947, in pursuance of section 9 (1) of the Indian Independence Act which made it a duty on the part of the Governor General to make suitable provisions for removing the difficulties arising in connection with the transition to the new constitutional order. As the two 41 Dominions came into existence under the Indian Independence Act passed by the British Parliament and these orders were made by the Governor General of India in exercise of the authority conferred upon him by the Independence Act, there cannot be any doubt that the provisions of these orders are fully binding on India as well as the Dominion of Pakistan; and they being provisions made to be applicable only for the transitional period, the question does not really arise as to whether or not they are in strict conformity with the principles of International Law which would ordinarily govern the relations between two sovereign States. Article 4(1) of the Legal Proceedings Order is worded as follows: "Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independ ence Act, 1947, (1) all proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day. " The clause of the article is couched in very wide lan guage and under it all proceedings pending in any civil or criminal court in the Province of Bengal, the Punjab or Assam immediately before the 15th of August, 1947, would continue as before and be heard and tried by the courts before which they are pending irrespective of the fact that such proceedings might relate to persons or property situat ed in the other Dominion. I agree with the High Court in holding that comprehensive though the provision is, by itself it can render no assistance to the plaintiff appel lant. The suit was commenced here by the plaintiff against the old Province of Bengal as the party defendant and against 42 that defendant the suit may be continued if the plaintiff so chooses under article 4(1) of the Legal Proceedings Order mentioned above. But this would be of no benefit or advan tage to the plaintiff for what he wants is to proceed against the Province of East Bengal which is a part of the Dominion of Pakistan as a substituted defendant in place of the Province of Bengal. Dr. Sen Gupta argues that if the court has jurisdiction to continue the suit, this would necessarily carry with it the power to make proper orders for substitution as the court considers necessary. But such substitution could be made only under the ordinary provi sions of law which regulate the conduct of such suits. There is no provision of any municipal law which contemplates or authorises the substitution of one sovereign state for another in a pending suit. If, therefore, the plaintiff wants to proceed against the new Province of East Bengal, he must find warrant for it in some of the provisions made by the Governor General of Indian exercise of the powers vested in him under the Indian Independence Act. Admittedly there is no such provision in the Legal Proceedings Act and reli ance is, therefore, placed by the plaintiff upon article 12 (2) of the Rights, Property and Liabilities Order, 1947, which is in the following terms : "Where any Province from which property, rights or liabilities are transferred by this Order is, immediately before the transfer, a party to legal proceeding with re spect to that property or those rights or liabilities, the Province which succeeds to the property, rights or liabili ties in accordance with the provisions of this Order shall be deemed to be substituted for the other Province as a party to those proceedings, and the proceedings may con tinue accordingly. It is not disputed that in order to attract the opera tion of this provision, it is incumbent upon the plaintiff to show that the right or liability to which his suit re lates has been transferred from the Province of Bengal, as it existed prior to the 15th of August, 1947, 43 to the Province of East Bengal in Pakistan in accordance with the provisions of this Order. To establish this, reli ance was placed on behalf of the plaintiff upon several provisions of the Rights, Property and Liabililies Order, 1947, and none of his contentions in this respect were accepted as sound by the learned Judges of the High Court. In this court Dr. Sen Gupta took his stand on a two fold ground. He argued in the first place that for the purpose of invoking the aid of article 12(2) of the Rights, Proper ty ' and Liabilities Order it is not necessary that the transfer of the right and liability to which the proceeding relates should take place under any of the specific articles enumerated in the Order. It would be enough according to him, if there is a transfer by or under any machinery which the Order sets up or authorises What he says is that as the Province of East Bengal is proceeding to assess and levy agricultural income tax upon the plaintiff in respect of a period anterior to 15th of August, 1947, the right to do so can vest in the Province either under an agreement between the two Dominions or the two Provinces or on the basis of an award by an arbitral tribunal as contemplated by article 3 of the Rights, Property and Liabilities Order. In either case it would amount to transfer of rights under the provi sions of the Order and would attract the operation of arti cle 12(2). This argument is manifestly unsound and cannot be ac cepted. If the right referred to by the learned Counsel means the fight to impose tax on agricultural income earned within its territory, the State of Pakistan did not acquire such right by transfer from the Province of Bengal. It is a right inherent in sovereignty itself which the Dominion of Pakistan got under the Indian Independence Act. Again if the right has been created by the Bengal Agricultural In come tax Act, the Province of East Bengal would certainly be entitled to avail itself of the provisions of that Act under section 18(3) of the Independence Act. Apart from this, Dr. Sen Gupta has not referred us to any agreement between the two Dominions or the two Provinces or to the decision of any arbitral tribunal 44 under which the right in dispute in the present case was transferred to the Province of East Bengal. This contention must therefore fail. I have now to consider the other argument on this point advanced by the learned Counsel that the liability of the Province of Bengal in respect to the cause of action upon which the plaintiff 's suit had been rounded became a liabil ity of the Province of East Bengal under the provision of article 10(2) of the Rights, Property and Liabilities Order. It is not disputed that if this contention succeeds, the plaintiff would be entitled to the benefit of clause (2) of article 12 of the Order. Clause (2) of article 10 has to be read with clause (1) of that article and taking the two clauses together the provision of article 10(2) would stand thus : "Where immediately before the appointed day the Province of Bengal is subject to any liability in respect of an actionable wrong other than a breach of contract, the li ability shall (a) when the cause of action arose wholly within the territory which as from that day are the territories of the Province of East Bengal be a liability of that Province. " If the allegations made by the plaintiff in the plaint are assumed to be correct, the Province of Bengal was liable to be restrained from proceeding to levy agricultural income tax upon the plaintiff which was illegal, as being imposed by a statute which so far as it affected the plain tiff was unconstitutional and void. The question is whether this can be said to be a liability in respect of an action able wrong other than a breach of contract within the meaning of that expression occurring in article 10 set out above. It may be noted here that the rights and liabilities arising out of contracts have been dealt with in articles 8 and 9 of the Order. The High Court took the view that the expression "actionable wrong other than a breach contract" is synonymous with 'tort '. It has held that the act com plained of cannot be a tortious act and 45 even if it is so, no action would lie upon it, it being an established proposition of law that the State is not answer able for any tortious acts of its officers done in the course of official duties imposed by a Statute. It seems to me that the learned Judges have attached a narrow and some what restricted meaning to the words of the Article men tioned above and that the plain language of the provision read in the light of the context would demand and justify a wider and more liberal interpretation. In my opinion, there can be an actionable wrong which does not arise out of a breach of contract and at the same time does not answer to the description of a 'tort ' as it is understood in English law; and if the plaintiff 's allegations are correct, it is an actionable wrong precisely of that type which we have in the present case. The word "wrong" in ordinary legal language means and signifies "privation of right". An act is wrongful it infringes the legal right of another, and "actionable" means nothing else than that it affords grounds for action in law. Ordinarily, the word "injury" is used in the same sense of actionable wrong, while "damage in contrast with injury means loss or harm occurring in fact whether actionable as injury or not"(1). In English law "tort" is a species of civil injury and so is a breach of contract; but it is not quite correct to say that the two together exhaust all forms of actionable wrongs known to English law. It is true that a tort is often described as wrong independent of contract. As a legal definition this description, as I shall show presently, is not quite accurate and unless taken with certain limitations is apt to be misleading. It is well known that in England the principles of modern law of contract and tort emerged solely out of the intricacies of the old "Forms of Action '" under which they lay buried for ages. The injuries which in modern law are described as torts were remedied in early time by certain writs, known as writs of trespass (1) Vide the observation of Viscount Simon in Crofter etc. Company Ltd vs Vetch ; , 442. 46 and trespass on the case. The latter was more elastic than the former and was capable of being adapted to new circum stances and to new types of injuries. There was no clear line of demarcation in those days between contractual and tortious liability and in fact tile aCtiOn of "assumpsit" which was the method of enforcing simple contracts was a variety of action on the case and was made use of for recov ery of compensation from a party who failed to perform his agreement on the ground that such failure amounted to a wrong in the nature of deceit(1). When the principles of substantive law gradually extri cated themselves from the entanglements of for realistic procedure, a distinction was drawn between liability for breach of contract and that for tort. In a breach of con tract the right violated owes its origin to the agreement of the parties while in tort the right infringed is one created by tile general law of the land. From about the middle of the 19th century the assumption current in England was that all civil causes of action must be rounded either on con tract or on tort and all injuries which were not breaches of contract would come under the category of torts. This as sumption as Sir Frederick Pollock observes has no historical foundation to rest upon(2). In 1852 the Common Law Proce dure Act was passed and a tort was described in the Act as "a wrong independent of contract". It cannot be denied that this mode of expression became very common in legal par lance; but as more than one modern writer on the law of torts have pointed out, the words in such description would have to be interpreted in a particular way and with certain limitations; taken literally it would not be a correct statement of law. It has been observed by Underhill in his "Law of Torts" that a description like this would be accurate in law if the word "wrong" is taken in the restricted and technical sense as equivalent to "violation of a right (1) Vide Pollock on Contract, 12th Edition, p. 111; Winfield on Tort pp, 3 4 (4th Edition). (2) Vide Pollock 's Article on Tort, Encyc. Vol.22, p. 307. 47 recognised and enforced by law by means of an action for damages". Taken in this form, the definition though it gives no clue as to what constitutes a wrong, certainly does lay stress on the essential characteristic of a tort, viz., that the appropriate remedy f9r it is an action for damages(1). It is really this characteristic that differen tiates a tort from other forms of civil injury or actionable wrong even though the latter are unconnected with any con tract. There may be other remedies besides damages avail able to the plaintiff against a tortfeasor in the shape of restitution, injunction etc. , but no "civil injury" as Salmond observes "can be classed as tort unless the appro priate remedy for it is an action for damages. Such an action is an essential characteristic of every true tort. "(2) Other remedies like injunction or restitution can be claimed by the plaintiff but it is solely by virtue of a right to damages that the wrong complained of can be regard ed as a tort. By way of illustration the author points out that a public nuisance is not to be deemed a tort, because the civil remedy by way of injunction may be obtained at the suit of the Attorney General. A refusal to perform a statu tory duty is not a tort if the remedy is by way of mandamus. Nor would any wrong be regarded as a tort if the remedy is not an action for unliquidated damages but for a liquidated sum of money. A breach of trust is certainly an actionable wrong independent of contract and the beneficiaries can claim compensation if the trustee has misappropriated trust property; but as the claim cannot be for unliquidated damages, it is not regarded as a tort(3). According to Salmond, the reason for this exclusion is purely historical as a breach of trust or any other equitable obligation was considered to be within the special jurisdiction of equity courts. It is interesting to observe that although the difference between equitable and common law jurisdiction is not existent at the present day, the old rule is still applied (1) Vide Underbill 's Law of Torts. 16th Edn., p. 4. (2) Vide Salmond 's Law of Torts, 10th Edn., pp. 7 & 8. (3) Vide Winfield 's Law of Tort, p. 11 48 to demarcate the boundary of the law of torts in English common law. Thus tort is a civil injury other than a breach of contract which is capable of sustaining an action for unliq uidated damages in a court of law. If the appropriate remedy is not a claim for unliquidated damages but for injunction or some other relief, it would not rank as a tort though all the same it would be an actionable wrong. By way of illustration I may refer to the case of Halsey vs Brotherhood(1) which was decided by Sir George Jessel. Both the plaintiff and defendant in this case were engineers and held patents for the manufacture of certain types of engines. The plaintiff brought an action against the de fendant alleging that the latter had threatened to bring legal proceedings against several persons who were actual or intending purchasers of engines from the plaintiff assert ing that the engines manufactured by the plaintiff were infringements of the defendant 's patent. There was a claim for damages and also for injunction. It was held by Sir George Jessel that the plaintiff could not claim damages on the basis of slander of title, as he nowhere alleged that the defendant 's statements or representations were not bona fide. But even though the statements had been made in good faith, the plaintiff would be entitled to an injunction against the defendant if he succeeded in proving that the latter 's allegations of infringement were not true. As no proper case for injunction on this basis was made in the claim, the action was dismissed; but liberty was given to the plaintiff to bring an action in the proper form claiming an injunction to restrain the defendant from threatening the plaintiff 's customers. This threat to customers was thus held to be an actionable wrong but as the remedy was injunc tion and not damages, it was not a tort in the legal sense of the term. In the case before us the act of the Province of Bengal complained of by the plaintiff is not a tort according to the technical rules (1) 49 of English law, but is certainly an actionable wrong as it can be sued upon in a court of law and remedied in an effective manner. The appropriate remedy for the wrong is not unliquidated damages which is essential in a tort but an injunction restraining the defendant from proceeding with the illegal assessment or from realising the amount assessed if assessment has actually taken place. If, as the plaintiff alleges, the relevant provision of the Bengal Agricultural Income tax Act, under which the plaintiff is sought to be assessed, is illegal and ultra vires, the issuing of the notice by the Income tax Officer is certainly the first and the essential step in the commis sion of the wrongful act which furnishes a sufficient cause of action for the suit. As this is not a case of tort, the principle of law, according to which a state is not liable to any damages for tortious acts of its servants, cannot be invoked as a bar to the suit. A remedy by way of injunction can be claimed against a State or Province unless the act complained of amounts to an 'act of State ' in its strict sense and is not purported to be done in exercise of the powers conferred upon the Government by any municipal law. As the avowed object of the Rights, Property and Liabilities Order is to distribute and adjust as far as possible the rights, properties and liabilities between the two Dominions which were to come into being under the Indian Independence Act, the language of the Order should be construed as liber ally as possible, and there is no warrant for putting an interpretation upon the words used more restricted than they would bear in English law. It is argued that article 10(2) (a) does not apply to this case as the cause of action did not wholly arise within the territory of the Province of East Bengal. The argument does not impress me at all. The notice was issued by the Income tax Officer of Dacca which is in Pakistan territory though it was received by the plaintiff 's manager at Agarta la which was outside British India at that time. In any event, the Province 50 of East Bengal cannot escape liability on this ground. It would be jointly liable with the Province of West Bengal under article 10(2) (c) of the Rights, Property and Liabili ties Order. In view of my decision on this point, the other question raised by Dr. Sen Gupta as to whether the defendant submit ted to the jurisdiction of the Alipore Court or not does not fall for determination. The learned Attorney General, who intervened on behalf of the Union of India, put forward certain additional grounds in support of the order made by the learned Judges of the High Court. One of the points raised by him is that section 65 of the Bengal Agricultural Income tax Act con stitutes a bar to the suit which, therefore, should not be allowed to 'continue. The other material point is that the suit cannot but result in an infructuous decree, and conse quently there is no justification for allowing it to pro ceed. It is pointed out that an Ordinance has been passed by the GovernorGeneral of Pakistan on the 13th of November, 1948, under which "no judgment, decree or order referred to in paragraph 3 of Article 4 of the Indian Independence (Legal Proceedings) Order, 1947, shall, in any way, affect the legislative or executive right or authority of the Central or any Provincial Government of Pakistan and where such authority or right has been at issue, the judgment, decree or order shall be invalid and inoperative". The first point has been dealt with by my learned brother Patan jali Sastri J. in his judgment and I concur with him in holding that section 65 of the Bengal Agricultural Income tax Act has no application to the present case. The second point, I must say, embarrassed me to some extent and if the effect of the Ordinance is, as has been stated by the learned Attorney General, a doubt may legitimately arise whether it would be worthwhile for the plaintiff to proceed with the suit and whether it would not be more to his advan tage to seek relief in the court of Dacca. But as this point was not raised before the High Court and the question whether an Ordinance of this character could override the provisions of the 51 Orders passed by the Governor General of India under the Indian Independence Act has still to be decided, I refrain from expressing any opinion on this point. In the result, the appeal, in my opinion, should be allowed and I concur in the order which has been made by my learned brother Patanjali Sastri, J. Appeal allowed. Agent for the Appellant: R.R. Biswas. Agent for the Respondent: P.K. Bose. Agent for the Inervener: P. A, Mehta.

The Income tax officer, Dacca, acting under the Bengal Agricultural Income tax Act, 1944, sent by registered post a notice to the Manager of an Estate belonging to the Tripu ra State but situated in Bengal, calling upon the latter to furnish a return of the agricultural income derived from the Estate during the previous year. The notice was received by the Manager in the Tripura State. The State, by its then Ruler, instituted a suit in June, 1946, against the Province of Bengal and the Income tax Officer, in the court of the Subordinate Judge of Dacca for a declaration that the said Act in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff was ultra vires and void, and for a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff. The suit was subsequently transferred to the Court of the Subor dinate Judge of Alipore. The partition of India under the Indian Independence Act took place on the 158h August 1947, and the 2 Province of East Bengal in which the Estate was situated, was substituted as a defendant in the place of the Province of Bengal on an application made by it, and in its written statement it contended that the court of Alipore which was situated in West Bengal had no jurisdiction to proceed with the suit. The High Court of Calcutta, reversing the order of the Subordinate Judge of Alipore held that the provisions of the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabili ties)Order, 1947, did not apply to the case and, as the matter was accordingly governed by the rules of internation al law, the court of Alipore had no jurisdiction to proceed with the suit: Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ. (FAZL ALI J. concurrinG) The suit was not one with respect to any property transferred to East Bengal by the Indian Independence (Rights, Property and Liabilities) Order, 1947, nor was it a suit in respect of any "rights" transferred by the said Order, inasmuch as the Province of East Bengal obtained the right to levy income tax not by means of any transfer under the said Order, but by virtue of sovereign rights which were preserved by section 18 (3) of the Indian Independence Act, 1947, and article 12 (2) of the said Order had no application to the case. Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA AND CHANDRASEKHARA AIYAR J.J. (FAZL ALI J, dissenting.) (i) Since the object of the Indian Independence (Rights, Property and Liabilities) Order, 1947, was to provide for the initial distribution of rights, properties and liabili ties as between the two Dominions and their Provinces, a wide and liberal construction, as far as the language used would admit, should be placed upon the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for. The words "liability in respect of an action able wrong" should not therefore be understood in the re stricted sense of liability for damages for completed acts, but so as to cover the liability to be restrained by injunc tion from completing what on the allegations in the plaint are illegal or unauthorised acts which have been commenced. As the Province of Bengal was, on the: allegations in the plaint, liable to be restrained from proceeding with an illegal assessment, that liability was, accordingly, a liability in respect of "an actionable wrong other than breach of contract" with in the meaning of article 10 (2) (a) of the above said Order; and, as the cause of action arose wholly in Dacca within the Province of East Bengal, that liability passed to the province of East Bengal under article 10 (2) (a), the latter must be deemed to be substituted as a party to the suit and the suit must continue in the court of the Subordinate Judge of Alipore, under Art.4 of the Indian Independence (Legal Proceedings) Order, 1947. (ii) Assuming that the cause of action did not wholly arise 3 in Decca, article 10 (9.) (c) would apply and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal. (iii) As the suit was not one "to set aside or modify any assessment made under the Act", section 65 of the Bengal Agricultural Income tax Act, 1944, had no application and the suit was therefore one in respect of an "actionable" wrong within the moaning of article 10 (2) (a). Per FAZL ALI J. The words "liability in respect of an actionable wrong other than breach of contract" in article 10 of the Indian Independence (Rights, Property and Liabili ties) order 1947, refer to liability capable of being ascer tained in terms of money such as liability for damages for tort and not liability in any abstract or academic sense. Even if a meaning, as wide ' as they can bear in a legal context, is given to the words "actionable wrong" and "liability" two elements are necessary to constitute an actionable wrong, namely, (i) an act or omission amounting to an infringement of a legal right of a person or breach of duty towards him, and (ii) damage or harm resulting there from. The mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act, 1944, by the Income tax Officer is not an actionable wrong because no right known to law is infringed thereby and no action for damages can be main tained in respect of such an act, even assuming that the Income tax Officer had exceeded his powers or acted under an invalid provision of law. No "liability for an action able wrong" was thus involved in the suit and no liability in respect of such a wrong could therefore be said to have been transferred to the Province of East Bengal within the meaning of article 10 (2.) of the said Order so as to entitle the plaintiff to continue the suit against the Province of East Bengal under article 10 (2). For the purpose of understanding the full scope of section 65 of the Bengal Agricultural Income tax Act, 1944 it is necessary also to read the latter part which provides that no suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under the Act. " The latter part of the section clearly excludes the jurisdiction of the courts to prevent the Income tax Officer from proceeding with an assessment which has been started and the section must on a fair construction be held to bar all suits in connection with such assessment whether against the State or an Income tax Officer of the State. If, therefore, no suit or action lies, there cab be no liability for an actionable wrong. [The nature of actionable wrongs and torts discussed.] Judgment of the Calcutta High Court reversed.

16k+

vil Appeal Nos. 8530 40 of 1983. Appeals by Certificate from the Judgment and Decree dated 30.7.1983 of the Gujarat High Court in Special Civil Application Nos. 883 of 1979, 913 of 1979, 1897 of 1981, 2316 of 1982, 2384of 1982, 2445 of 1982, 2470 of 1982, 2977 of 1982, 4194 of 1982, 4520 of 1982 and 2542 of 1982. K. Parasaran, Attorney General, B. Sen, A.K. Ganguli, Dr. Y.S. Chitley, T.S. Krishnamurthy Iyer, N. Nettar, G.S. Narayana, p. Parameshwaran, T.V.S.N. Chaff and N.N. Sharma for the Appellants. Anil B. Diwan, K.J. Kazi, Dr. L.M. Singhvi, Ms. M. Arora, Mrs. B. Chib, M. Singhvi, D.A. Dave, Mrs. M. Karanja wala, R.N. Karanjawala, Mr. P.H. Parekh, Mr. C.A. Cazi and Mrs. H.S. Anand for the Respondents D.N. Misra for the Intervenor. The Judgment of the Court was delivered by RANGANATHAN, J. These are eleven appeals preferred by the Oil and Natural Gas Commission (ONGC, for short) from a judgment and order, dated 30th July, 1983, of a Division Bench of the High Court of Gujarat at Ahmedabad in a batch of writ petitions, since reported in 1983 24(2) Gujarat Law Reporter 1437. The appeals are pursuant to a certificate of fitness granted by the High Court. The ONGC was initially a Department of the Government of India but, in view of its expanding activities in the search for strategic and vital materials like oil, petroleum and its products it was set up as a body corporate. It is now a statutory corporation constituted by and under the , (Central Act 43 of 1959, hereinafter referred to as 'the Act '). The Act provides for the establishment of a Commission "for the development of petroleum and petroleum products produced by it and for matters connected therewith". Section 2(f) of the Act de fines 'petroleum ' as having the same meaning as in the (Act 30 of 1934) and as including 'natural gas '. The Commission established under the Act took over the previously existing organisation with effect from 18.9.59. Some of the provisions of the Act which are relevant for our 164 present purposes may be set out here. Chapter III which deals with the powers and functions of the Commission con sists of Sections 14 and 15. section 14 reads thus: "14. Functions of the Commission (1) Subject to the provisions of this Act, the functions of the Commission shall generally be to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and to perform such func tions as the Central Government may, from time to time, assign to the Commission. (2) In particular and without prejudice to the generality of the foregoing provision, the Commission may take such steps as it thinks fit (a) for the carrying out of geological and geophysical surveys for exploration of petroleum; (e) for the transport and disposal of natural gas and refin ery gases produced by the Commission: Provided that no industry, which will use any of these gases as a raw material, shall be set up by the Com mission without the previous approval of the Central Govern ment. (h) to perform any other function which is supplemental, incidental or consequential to any of the functions afore said or which may be prescribed. " Section 15 empowers the Commission to exercise all such powers as may be necessary or expedient for the purpose of carrying out its functions under the Act. Such powers in clude the disposal of any property, right or privilege, the original or book value of which exceeds such amount as may be prescribed, or where no such amount has been prescribed, exceeds ten lakhs of rupees and this power could be exer cised after obtaining the previous approval of the Central Government 165 [Clause (c)I. Chapter IV of the,Act deals with finance, accounts, audit and reports. Sections 16 and 17 deal with the capital of the Commission and the vesting, in the Com mission, of the previous set up in this regard. Section 23 of the Act requires the Commission to furnish to the Central Government such returns and statements and such particulars in regard to any proposed or existing programme for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by the Commission as the Central Government may, from time to time, require. Section 24 in Chapter V (Miscellaneous) enacts that any land required by the Commission for carrying out its function under the Act shah be deemed to be needed for a public purpose and such land can be acquired by the Commis sion under the provisions of the Land Acquisition Act, 1894. section 31 confers rule making powers on the Central Government, in pursuance of which have been framed the Oil and Natural Gas Commission Rules, 1960. The only rule relevant for our present purposes is rule 25, dealing with contracts. It reads as follows: "25. Contracts: (1) The Commission may enter into contracts for the purpose of performing its functions under this Act; Provided that provision therefore exists in the budget ap proved by the Government. (2) Contracts made on behalf of the Commission shah not be binding on it unless they are executed by a person duly authorised by it. (3) A person authorised by the Commission to enter into any contract on its behalf shall not be personally liable for any assurance or contract made on its behalf and any liabil ity arising out of such assurance or contract shall be discharged from the Fund. " The statute, it may be observed, neither imposes a specific duty on the O.N.G.C. to supply its products to consumers at large nor contains any provisions regarding the fixation of prices for the commodities made available by the O.N.G.C. for sale. In the course of its drilling and exploration of oil, the ONGC discovered oil bearing fields in Cambay and Ankles war region in 1969 166 and 1961 respectively. In most of the oil fields situated in Gujarat, gas comes out along with crude oil and is commonly known as "associated gas". In Cambay area, gas is unaccompa nied by crude oil and is known as "free gas". This is easily combustible and can be used as domestic as well as industri al fuel. We are concerned here with both these commodities which are generally known as 'natural gas ' and we shall refer to them compendiously as 'gas '. In October, 1961 ONGC first thought of the idea of using natural gas in addition to fuel oil in industries. It had detailed discussions with the Gujarat State Electricity Board (GSEB) and it was agreed between them that gas should be supplied to the GSEB at a price related to fuel oil price on the basis of thermal value equivalence. On this basis, an agreement was entered into between them in March, 1963 whereunder the price of fuel oil was fixed at Rs.77.26 per tonne including rail frieght; and, based on this price and thermal value equivalence, the price of Cambay gas was fixed at Rs.80.14 per 1000 cubic metres (hereinafter referred to as 'the Unit ') and of Ankleshwar gas at Rs. 106.66 per unit, rounded off to Rs.80 and Rs. 100 per unit respectively. The ONGC began to supply gas from Cambay region of Dhruvan Power Station in 1964 and from Ankleshwar to Uttaran Power Station in 1965. The ONGC also entered into discussions with the Gujarat State Fertilizer Corporation (GSFC) and ultimately it was agreed, on the footing of the price of Rs.76 per tonne in respect of Koyali Naphtha, that associated gas should be supplied to the GSFC at between Rs.88 and Rs.90 per unit on the principle of thermal equivalence. This was in 1966. It may be mentioned here that the three parties concerned viz. the ONGC, GSEB and GSFC, had more or less agreed to the principle of determining the price of gas on the basis of thermal equivalence with an alternative fuel or feedstock emanating from the processing of crude oil. There was no reference to the cost of production of gas as such. Despite the above agreements, however, the concerned parties were not all very happy. The GSFC resented the fact that discount was not given to them as bulk purchasers and that the prices charged for the Trombay fertiliser factory and power house at Bombay were substantially lower than the prices that the ONGC charged them. Eventually, public dis content was expressed over the alleged high price that was being charged for gas by the ONGC to these organisations. It was felt that the ONGC was denying to them the advantage they should have obtained by the discovery of gas in the region of their operation. It was also felt that this treat ment resulted in discrimination against 167 them in comparison with advantages enjoyed by other States due to the availability of fuel resources such as coal or hydro power within their areas. In view of these expressions of public feeling, the question of fixing a proper price for the gas was taken up by the Government of Gujarat with the Government of India. Eventually, as no agreement could be arrived at, the disputes was referred to the sole arbitra tion of Dr. V.K.R.V. Rao who gave his award (hereinafter referred to as 'the award ') on 23.9.1967. He determined the price of natural gas at Rs.50 per unit ex well head, to which were added royalty, sales tax, depreciation and the transport charges. This award was to be enforced for a period of five years i.e. upto 31.3.1971. Between April 1971 and December 1975, the well head price was increased and fixed at Rs.66 per unit, we are all told, on the interven tion of the then Gujarat Governor. These prices were revised subsequently. The supply to GSEB was revised to Rs. 155 and the rate of supply to GSFC was revised to Rs.320 per unit. At that time, there were very few industries set up in and around Vadodara and these depended, besides electricity, on other forms of energy generated through coal or furnance oil. In July 1967, the supply of gas to some of these indus tries in and around Vadodara city was started, initially as a temporary measure pending the effective materialisation of the Gujarat Fertilizer Corporation demand, after which the industries were to go over to fuel oil if gas could no longer be supplied. After a series of discussions, the Federation of Gujarat Mills and Industries agreed to a price of Rs. 100 per unit of Ankleswar gas for this supply. The charging of ten rupees less per unit supplied to the Ferti liser Corporation was justified on the ground that such differentiation was consistent with general practice where a petroleum feed stock is used for chemical industry. Among the industries that thus received gas supply were the ten respondents (respondents 2 to 10 in these appeals) who have formed themselves, in September, 1978, into an association called "The Association of Natural Gas Consuming Industries of Gujarat", which is respondent No. 1. The supply to these industries extended later to a few more was based on individual contracts entered into with each one of the concerns. Initially, the ONGC entered into contracts valid for a period of five years at a time but, subsequently it is said, due to a fear of possible shortage in the avail ability of enough gas this was changed and the contracts were, generally, made annual, except in regard to certain public sector undertakings and, it is said, a few companies. The rates of supply were also slowly stepped up as can be seen from the following table: 168 Period Price of supply 1.1.1976 to 31.03.1976 Rs.322.63. 1.4.1976 to 31.12.1976 Rs.341.45 1.1.1977 to 31.03.1977 Rs.351.00 1.4.1977 to 31.12.1977 Rs.371.16 1.1.1978 to 31.03.1978 Rs.382.15 1.4.1978 to 31.03.1979 Rs.504.00 According to the ONGC, the price demanded from these industries and initially been based on alternative fuel cost i.e., the cost which these industries would have had to pay for fuel oil if no supply of gas had been available. Later, upto December 1975, the price was based on the cost of production, as determined by the award. After the expiry of the period of operation of the award, the basis for calcula tion of price was revised on the basis of the thermal equiv alence of coal price. The rates of supply from 1.4.78 as fixed above from time to time were also made subject to an automatic annual escalation at 5%. The contracts, as already mentioned, were annual and contained no term for renewal. On the expiry of each contract, a fresh contract had to be entered into and, naturally, the new contract stipulated prices for supply that were prevalent at the time of the respective contracts. It may be mentioned that the existing contracts with the various consumers had lapsed by efflux of time on 31.3.79 in some cases, 30.1.80 in some other cases and in 1982 in respect of others. Aggrieved by the steady rise in the prices, writ peti tion No. 883 of 1979 was filed by the respondents in the Bombay High Court in March 1979. In this writ petition it was prayed that the ONGC should be directed (a) to continue to supply the gas to them despite the contracts in their favour having lapsed; (b) to supply the break up and the data on the basis of which the price structure was arrived at and to fix the price after giving reasonable opportunity to the concerned industries or their associations; (c) to discuss and negotiate a fair, reasonable and just price for supply of gas; (d) to restrict the minimum guaranteed quan tity of offtake to 75 per cent of the contracted quantity (this was because the ONGC had been insisting on raising the said guarantee to 90 per cent) and; (e) to stop charging discriminatory prices for the supply to the respondents in comparison with the price charged to public sector undertak ings. Pending the hearing and final disposal of the peti tion, an interim order was sought restraining the ONGC from discontinuing the supply of gas to the petitioners on such terms as the Court may think fit and proper. 169 On 30.3.1979, the Court passed an interim order permit ting the petitioners to continue to pay "on the same terms as at present" ie. at Rs.504 in some cases and a slightly different figure in other cases. Subsequently, however, with the passage of time the price of gas was stepped up by the ONGC in the following manner: Period Amount 1.4.1981 to 31.12.1981 Rs. 741.00 01.1.1982 to 31.12.1982 Rs.2095.70 01.1.1983 Rs.2403.03 15.2.1983 Rs.2503.03 17.3.1985 Rs.2878.00 We are told that the sudden jump in prices w.e.f. 1.1.1982 was consequent on the decision of the ONGC to change the basis of fixation of price, once again, to furnace oil equivalence. In view of this increase in the prices demanded by it from other parties, who according to the ONGC were willing to pay the price asked for, an application was made to vacate or modify the interim order dated 30.3.1979. On 5.11.1982, the Division Bench of the High Court, after pointing out the various difficulties and questions raised by the case thought it would be fit and proper to direct the ONGC not to discontinue the supply of gas but to continue to supply it at the rate of Rs. 1,000 per unit till November 30, 1983 (unless the petition was disposed of in the mean while), subject to adjustment being made in case this Court or the machinery evolved at the time of final disposal of the petition determined the price of gas at a different rate. In other words, if, ultimately, the price of gas should be determined at a higher rate, the writ petitioners would be obliged to make good the difference. In case a lower rate should be determined, the ONGC would be obliged to refund the excess amount collected or adjust it against future supplies, as the Court may direct at the time of disposing of the matter finally. A similar order was passed on 29.12.1982 in another batch of cases. When these appeals were filed a Bench of this Court, on 6.10.1983, continued the interim price of Rs. 1,000 per unit without prejudice to the rights and contentions of the parties and directed the appeals to be expedited. It has taken six years since then for these petitions to come up for heating and till now the respondents have continued to pay at the rate of Rs. 1,000 per unit. It has been stated before us that some of the respondents have failed to pay even at the rate of Rs. 1,000 as directed 170 by this Court and that this Court had to direct, by its orders dated 15.4.87 and 30.10.87, that the respondents "will not charge, encumber or alienate, except with the leave of this Court, any of their immovable assets included in the respective undertakings and that they will make their immovable assets available for discharging the respective liabilities on account of the difference in the price of (all) the gas supplied to them (and) further during the pendency of the appeals as determined by the orders made by the Court while disposing of the appeals. " In order to complete the narration of relevant facts, it may be mentioned here that, though natural gas, being a "petroleum product" falls within the scope of the Essential Commodities Act and though control orders have been issued under the said Act regulating the supply and distribution of several petroleum products, it is only by an order dated 30.1.1987 that the price of gas has been fixed by the Gov ernment at Rs. 1400 per unit which, together with taxes, comes to about Rs. 1848 per unit. It may also be mentioned that, while on the one hand the said fixation of price has been challenged by the petitioners and certain other indus tries before the Gujarat High Court, the Government, on the other hand, is in the process of revising the prices, per haps to a higher figure, in consultation with the Bureau of Industrial Costs and Prices. In the petitions which are pending before the Gujarat High Court an interim price of Rs. 1,000 has been fixed following the orders in the matters now before us. The result is that, ever since January 1983 and till today, most of the petitioners have been paying for the gas supplied only at the rate of Rs. 1,000 per unit and some of the industries have defaulted even in doing this. A prayer was made by the Union of India to transfer to this Court the writ petition subsequently filed challenging the price fixation of 30.1.87 but this request was declined on 4th August, 1988. This court observed that, after these appeals are disposed of, the High Court can proceed to dispose of the said writ petitions in accordance with the judgment. The position, therefore, is that we are not con cerned in these appeals with the period beyond 30.1.1987 when the jurisdiction to fix prices came to be vested in the Central Government. We are concerned in these matters only with the period from the date of expiry of the contracts in favour of each of the respondents to 30.1.1987 and with the following questions: (a) whether the O.N.G.C. is at liberty to fix its own price for the gas or should be directed to fix the price in any particular manner; (b) whether the O.N.G.C. can be directed to supply data and the break up for the price charged and to negotiate the price with the par ties concerned; (c) whether the 171 O.N.G.C. can be compelled to continue to supply gas to the various petitioners at the interim prices fixed by the court subject to adjustment on fixation of prices determined in accordance with the directions of the court; and (d) whether the minimum guarantee of off take could be raised by the O.N.G.C. to 90 per cent instead of 75 per cent. It is unnecessary at this stage to set out the various contentions raised by the parties before the High Court as they will have to be discussed in some detail later. Here it may be sufficient to summarise the effect of the High Court 's judgment in disposing of these writ petitions. The High Court held: (i) The O.N.G.C. is a public utility undertaking and has a duty to supply gas to anyone who requires it so long as there is enough supply available; (ii) Price fixation is generally a legislative func tion. But the O.N.G.C., being a State instrumentality, is bound to act reasonably in the matter of fixation of price; such price is bound to be determined by following any one of the modalities suggested in the judgment of the High Court; (iii) There was no discrimination by the O.N.G.C. between the public sector undertakings on the one hand and the respondents ' undertakings on the other in charging differential prices; (iv) The clause regarding minimum guarantee was valid and enforceable. However, in view of its finding that the ONGC is a public utility undertaking, the Court took the view that it should supply gas to the respondents subject to the availability of gas supply and also that such supply should be made at a price which was to be determined in one of the four differ ent methods set out in paragraph 36 of the judgment. It was also observed by the Court that, the respondents were agree able to price fixation by anyone of three of the said meth ods. The concluding portion of the judgment, reads thus: "36. Now we come to the last part of this judgment. It is regarding what relief should be granted in this group of petitions. We have already said above that the action of the ONGC in charging the rate in the respective cases is 172 ex facie unreasonable and to that extent their demand for the said price is set. aside. The ONGC however, shall be at liberty to get the price for that period and subsequent period fixed according to the reasonable and rational norms and for that purpose it is open to the ONGC to follow any one of the following three courses: (i) They may request the Central Government to appoint a Commission for the purpose of deciding the prices of gas from time to time, including the time for which we have set aside their demand of price, invoking the provisions of the Commission of Inquiry Act or any other law; (ii) They may invoke the arbitration of some eminent econo mist in consultation with the petitioners; or (iii) They may themselves decide the price, after bringing to their consideration all relevant factors and for that purpose they may hear fully and effectively the petitioners and other persons likely to be affected thereby: If the last of the above three courses is adopted by the ONGC for deciding the price structure afresh, it would be in their interest to give hearing to the persons likely to be affected so that the possibility of a new round of litiga tion is avoided. We reiterate that as far as the petitioners are concerned, they are amenable to any of the three modes which the ONGC may choose to adopt. We accordingly set aside the prices demanded by the ONGC from these petitioners in this group of petitions, leaving it open to the ONGC to deal with the question of price fixation in any one of the three modes suggested by us. The petitions are accordingly partly allowed. Rule is accordingly made absolute in all these petitions with costs. The civil applications, in view of the final decision, do not survive and stand disposed of and till the new price fixation is had, the price charged last from these petition ers under the respective contracts with them shall continue to operate between the parties, subject to adjustments in future after prices are fixed as stated above." 173 Shri B. Sen, who appeared for the ONGC, made R clear at the outset that he was not disputing the propositions (a) that the ONGC is 'State ' within the meaning of Article 12 of the Constitution; and (b) that it has a duty to act reasona bly and fairly so as not to infringe the provisions of Articles 14 and 19 and also in consonance with the directive principles of State policy set out, inter alia, in Articles 38 and 39 (b) of the Constitution. His challenge is, pri marily, to the finding of the High Court that the ONGC is a 'public utility undertaking ' which was bound to supply gas at the request of any member of the public at large and to its direction that it should continue to supply gas to the respondents at an uncertain price till the price is fixed in accordance with the procedure outlined by it, notwithstand ing that the contracts under which the respondents procured such supplies have expired long ago. He also contests the correctness of the High Court 's conclusion that the price of gas must be determined on the basis of cost of production plus a reasonable return for the investments made, (herinaf ter referred to broadly as the "cost plus" basis). He sub mits that the prices under the contracts entered into with the respondents have been determined on the basis of a well known principle viz. the ruling prices for an alternate fuel and this cannot be said to be either arbitrary or unreasonable particularly when a large number of industries are even today willing to take the supply of gas at the prices fixed on that basis. He also complains that the High Court overlooked that the respondents are not domestic but industrial consumers. If the ONGC were to be treated as a public utility bound to supply an essential commodity of this nature to any one for the asking subject to availabili ty, it may be that the price for such supply should be fixed on a cost plus basis. But where the supply is limited to certain industries and other similarly placed industries have to produce similar goods by consuming furnance oil or other equivalent alternate fuel, it is quite reasonable for the O.N.G.C. to stipulate indeed, it would be discriminato ry, were it not to stipulate that its prices would be based on the cost of alternate fuel which would have to be in curred by these industries otherwise and which is in fact being incurred by other industries engaged in the production of similar goods to which the O.N.G.C. is not making any supplies at all. Sri Sen urges that while public sector units and State instrumentalities should not be allowed to exploit the consumers, it is equally necessary to ensure that such units and instrumentalities are enabled to make reasonable profits and made good as commercial enterprises by charging prices which the "traffic can bear" so that they can also contribute substantially to national development. It is submitted that, as against the respondents who are receiving supplies at the rate of Rs. 1,000 per unit, there are 29 industries paying the Govern 174 ment fixed price of Rs. 1840 (since 1987), 12 other parties who have earlier signed contracts at the furnace oil equiva lent rate and 65 industries which are willing to sign con tracts at the aforesaid Government rates. It should not also be overlooked that, even if the cost plus basis were to be contemplated, the prices would require substantial revision considering the huge expenditure incurred by the Government of India in recent years in prospecting for oil and the need for heavy capital investment for meeting which the Govern ment has had to obtain huge loans from the World Bank and other organisations. In the context of this integrated activity, it is almost impossible to work out the costs in respect of any particular area or of the particular bye product with which we are here concerned. The cost plus basis was fixed by the award several years ago and that too in the context of supply to certain State undertakings which, in turn, supplied essential commodities like elec tricity and fertilisers. Subsequent enquiry commissions (such as the Damle award) do not price commodities on the basis of cost. The ONGC, if it is to function effectively and make reasonable profit on the supply of this commodity, should be allowed the latitude atleast to fix its own prin ciple of pricing. So long as such principle is a recognised one and is not per se unfair or unreasonable the court should not interfere. Else, Sri Sen submits, a controversy regarding fixation of price will be raging eternally as the industries would raise some objection or other to the price fixation, whatever it be, and the interests of the public will suffer if the ONGC is constrained to stick to the throw away prices fixed in outdated contracts until prices can be fixed on a basis agreeable to the consumer indus tries, as has indeed happened in this case during the past ten years. Sri Sen concluded by urging that the onus of showing that the price charged was unreasonable or arbitrary was on the respondents and they had done nothing to dis charge this onus, except saying that the prices have been stepped up from time to time and that the increase in prices has been steep. Rather they have, in their pleadings, sought to throw the onus on the ONGC to prove that the prices charged by it are fair and reasonable. Even this, says Sri Sen, the ONGC has done. The discussions in the judgment of the High Court and, to some extent, the discussions before us have touched several aspects of the principles to be kept in mind for price fixation of essential commodities basic to public need and, in doing so, have, in our opinion, travelled beyond the framework and scope of the questions that arises for consid eration in this case. It is necessary to remember that the writ petitioners are a few industrial houses which had entered into con 175 tracts with the ONGC for supply of natural or associated gas. These were ordinary commercial contracts entered into by private treaty between the ONGC and these respondents to sell and buy certain goods produced by the ONGC at the prices stipulated in the contracts. Looked at purely from the contractual angle, the ONGC was perfectly at liberty to stop the supply on the expiry of the relevant contract and refuse to supply further unless a fresh contract could be entered into agreeing upon a price for such supply. Assuming that the ONGC is a State instrumentality and the price demanded by it is susceptible to judicial review, the court may, where a contract has been entered into, consider the sustainability of the price agreed upon or where no contract has been entered into, injunct the ONGC from demanding a price for supply which is found unreasonable. But we doubt whether it is open to the Court to direct the ONGC to con tinue the supply indefinitely without a contract and without any price fixation. It is clear that, in giving directions as above, the Court was considerably weighed by its conclusion that the ONGC is a public utility undertaking which is bound to supply gas to all who demand such supply subject only to the availability of enough gas. Dr. Chitale, for the respond ents, strongly supported this viewpoint. He urged that it is well settled law that a public utility cannot arbitrarily discontinue its supply or services merely because the cus tomer is unwilling to pay the price asked for as unconscion able and unreasonable. He submitted that this, indeed, is not a modern rule of constitutional law but an ancient rule of public law. He referred in this context to the early decisions of the King 's Bench Division in Bolt vs Stennett, CI E.R. Revised p. 1572 followed in Allnutt vs Inglis, CIV E.R. Revised p. 206 as laying down the basic principle in this regard. This principle, he said, has also been applied by the American Courts in Ira Y. Munn vs People, 24 L.Ed. 77; United Fuel Gas Co. vs Railroad Commission, 73 L.Ed. 390; Los Angeles Gas & Electric Corporation vs Railroad Commission, ; ; Leo Nebbia vs People, 78 L.Ed. 940; Harold E. West vs Chesapeake & Potomac Telephone Co., ; and Federal Power Commission vs Hope Natural Gas Co., ; These decisions clearly lay down, according to him, that the price fixed must be reasonable and fair, that the price should be so fixed as to give the undertaking a reasonable return on the capital employed and that there cannot be any discrimination against industrial consumers. These principles, he argued, are applicable with greater force in the context of the Constitutional disci pline over State Instrumentalities under Articles 38 and 39 of the Constitution which mandate the State to direct their policy towards securing "that the 176 ownership and control of material resources of the community are so distributed as to subserve the common good. " As already stated, the ONGC does not dispute the propo sition that it is a State instrumentality and that its actions are subject to review under Articles 14 and 19 of the Constitution; it only refutes the suggestion that it has become a public utility undertaking with an obligation to supply gas to any consumer on reasonable conditions as to price etc. It is contended by Sri K. Parasaran and Sri B. Sen that the ONGC is not a 'public utility ' under a duty to supply gas to members of the public. It is argued that in English common law, the expression has a specific connota tion; it refers to an entity dealing in a commodity which is commonly used by the members of the public and under a duty, in terms of a statute, licence or franchise obliging it to supply the commodity to the public at large. Thus, for example, in England the Public Health Act, 1936, the Elec tricity Act, 1947 and the Gas Act, 1948 provide examples of a duty cast on suppliers of water, electricity or gas. So also, in India, the Indian Electricity Act spells out a duty on the part of the licensee to supply electricity to members of the public. There are also other public utility undertak ings providing for water, sewage connections, transport and the like which are under a statutory obligation to supply goods and services to members of the society at large, subject to the fulfilment of reasonable conditions pre scribed therefore. The supply of gas by the ONGC, it is urged, has not attained this "status" yet. As far as we have been able to see, there is no statuto ry definition of 'public utility ' in the context of any Indian enactment that may be relevant for our present pro pose. There is a definition of "public utility service" in section 2(n) of the which, inter alia, covers "any industry which supplies power, light or water to the public" and certain notified industries. It is arguable whether supply of natural gas is included in this definition for, though 'power ' connotes generally any form of energy available for doing work, it is normally related to such energy made available by mechanical or electrical means (vide, Webster Comprehensive, Vol. 2, p. 990). It is also a moot question whether that definition can be appro priate in the context with which we are concerned. Dr. Chitale cited profusely from American Jurisprudence (2nd Edition, Vol. 64) on the subject of public utilities. Some of these passages may be usefully quoted. At page 549, it discusses the definition and nature of a public utility. The passage runs thus: 177 1. Definition and nature A "public utility" is a business or service which is engaged in regularly supplying the public with some commodi ty or service of public consequence, such as electricity, gas, water, transportation, or telephone or telegraph serv ice. Publicly owned utilities are those owned by public corporations such as municipal public utility districts and public utility districts. Apart from statutes which define the public utilities which are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case, but there are certain considerations that are of aid in deter mining whether a specific organization or business is a public utility. As its name indicates, the term "public utility" implies a public use and service to the public, and indeed, the principal determinative characteristic of a public utility is that of service to, or readiness to serve, an indefinite public (or portion of the public as such) which has a legal right to demand and receive its services or commodities. " There must be a dedication or holding out, either express or implied, of produce or services to the public as a class. The term precludes the idea of service which is private in its nature and is not to be obtained by the public, although a public utility may perform acts in its private, as distinguished from the public, capacity, in which case it is subject to the same rules as any other private person so acting. Some courts, however, reject the notion that in order to be a public utility subject to governmental regulation the nature of the service must be such that all members of the public have an enforceable right to demand it, and declare that business to be a public utility which in fact serves such a substantial part of the public as to make its operations a matter of public concern. This view is in close accord with what has been termed the historic basis of classification of some businesses as public callings, that is, economic conditions, or the impor tance of the business to the public. While the terms "public service corporation" and "quasipublic corporation" are used to describe public utility corporations, and the term "public service commission" to describe the body regulating such utilities, some courts distinguish between a public sector corporation and a public utility on the basis that the latter is required to serve the 178 public generally, whereas the former may be required to serve members only. The mere fact that a corporation declares itself to be a public utility does not make it such. In determining whether or not a company is a public utility, the law looks at what is being done, not what it asserts it is doing. Nor will the legislative declaration that a certain business shall be deemed a public utility make it such if, in fact, the business as conducted is not impressed with a public use or carried on for the public benefit, since it is beyond the power of the state by legislative edict to make that a public utility which in fact is not, and to take private property for public use by its fiat that the property is being devoted to public use. Furthermore, a dedication of private property to public utility service will not be presumed from the fact that the product and service of the use of such property is the usual subject matter of utility service; neither does such presumption arise from the sale by private contract of such product and service to utility corporations for purposes of resale. Such dedication is never presumed without evidence of unequivocal intention. A business affected with a public interest is not necessarily a public utility or public service commission. The fact that a business is affected with a public interest means that it may be regulated for the public good but does not imply that is under a duty to service the public. " Black 's Law Dictionary (Fifth Edition) defines a "public utility" thus at p. 1108: "Public Utility: A privately owned and operated business whose services are so essential to the general public as to justify the grant of special franchises for the use of public property or of the right of eminent domain, in con sideration of which the owners must serve all persons who apply, without discrimination. It is always a virtual monop oly. A business or service which is engaged in regularly supply ing the public with some commodity or service which is of public consequence and need, such as electricity, gas, water, transportation or telephone or telegraph service. 179 Gulf States Utilities Co. vs State, Tex. App., 46 S.W. 2d 1018, 1021. Any agency, instrumentality, business, indus try or service which is used or conducted in such manner as to affect the community at large, that is, which is not limited or restricted to any particular class of the commu nity. The test for determining if a concern is a public utility is whether it has held itself out as ready, able and willing to serve the public. A term implies a public use of an article, product, or service, carrying with it the duty of the producer or manufacturer, or one attempting to fur nish the service, to serve the public and treat all persons alike, without discrimination. It is synonymous with "public use", and refers to persons or corporations charged with the duty to supply the public with the use of property or facil ities owned or furnished by them. Euder vs First Nat. Bank in St. Louis, C.C.A. Mo., , 992. To constitute a true "public utility", the devotion to public use must be of such character that the public generally, or that part of it which has been served and which has accepted the service, has the legal right to demand that that service shall be conducted, so long as it is continued, with reasonable efficiency under reasonable charges. The devotion to public use must be of such character that the product and service is available to the public generally and indiscriminately, or there must be the acceptance by the utility of public franchises or calling to its aid the police power of the State ' ' The Corpus Juris Secundum (Vol. 73, p 990) also carries like definitions. Once a concern is found to be a public utility, at least two consequences follow. One is a general duty to serve which is described in American Jurisprudence thus: "16. General duty to serve The primary duty of a public utility is to serve on reasona ble terms all those who desire the service it renders, and it may not choose to serve only the portion of the territory covered by its franchise which is presently profitable for it to serve. Upon the dedication of a public utility to a public use and in return for the grant to it of a public franchise, 180 the public utility is under a legal obligation to render adequate and reasonably efficient service impartially, without unjust discrimination, and at reasonable rates, to all members of the public to whom its public use and scope of operation extend who apply for such service and comply with the reasonable rules and regulations of the public utility. This obligation is one implied at common law and need not be expressed by statute or contract, or in the charter of the public utility. The fact that the franchises granted to the company do not expressly impose upon it the obligation to serve all persons in the locality does not relieve the company, nor does the fact that the person applying for gas is already supplied with gas by another company. The fact that a pipe laid by a water company along a street in the exercise of its franchise was laid under an agreement, with certain persons who paid the expenses, that they should have the exclusive use of water, and that the company should not tap the pipe without their consent unless it first repaid them for the pipe, does not relieve the company from its obligation to supply water, on reasonable terms, to all persons living on such street who may apply for it. A provision in an ordinance granting a franchise to an electric light company, that the city should not require the company to make "extensions" except upon certain condi tions does not affect the right of a resident in an estab lished service zone to invoke the aid of the courts to compel the company to connect his premises with its line. This duty to serve all applicants without discrimination cannot be evaded by a natural gas company on the ground that the gas pressure has fallen so low that existing customers cannot be adequately supplied, new applicants are entitled to share equally in such supply as can be furnished. Fur thermore, the obligation of a public utility, such as a gas, water, or electric company, to supply a given district is inclusive of the duty, under reasonable limitations, to carry the mains or lines of the utility to a point on the consumer 's premises where use can be made of the service. However, neither by common law nor by statute is a public utility required to serve all; the conduct prohibited on the part of a public utility is unjust discrimination, unfair rates or practices, or unreasonable rules. " The second constraint is in regard to the rates that can be charged by such an undertaking: 181 A public utility may, in the absence of a legislative pre scription or limitation of rates, fix and exact reasonable rates for services furnished, in which respect the reasona bleness of the rate is to be considered in relation to the value of the property used by the utility in the public service. Thus, in the absence of legislation, carriers are ordinarily entitled to establish such rates and to adopt such policy of ratemaking as they may deem best. They may voluntarily render service for less than they could be compelled to accept. The right of a public utility or carrier to set its own rates is subject to the limitation that such rates must be nondiscriminatory and reasonable. xxx xxx xxx This obligation to furnish service at a reasonable price is implied by law and is incurred by acceptance of the fran chise and privilege to serve the public. Furthermore, there is authority to the effect that a public utility must give a consumer the benefit of the most favourable rate which he is entitled to receive. " We do not think that ONGC satisfies the primary condi tions enunciated above for being a public utility undertak ing as it has not so far held itself out or undertaken or been obliged by any law to provide gas supply to the public in general or to any particular cross section of the public. The proviso to sec. 14(1)(e) of the Act which lays down that the setting up of industries to be run with the aid of gas was not to be undertaken by the ONGC without the Central Government 's approval also gives an indication that the supply of gas to various industries on a general basis was not in the immediate contemplation of the Act but was envis aged as a further expansion to be initiated with Central Government 's approval. Perhaps a stage in the developmental activities of the ONGC will soon come when such an obliga tion can be inferred but, at present, the O.N.G.C. supplies gas only to certain selected contractees. It does not supply gas to the public either in the sense that any individual member of the public or any identifiable cross section of the public is entitled to demand and receive such supply due to various limitations we shah now touch upon. The main activity of the ONGC is that of exploration and 182 prospecting for petroleum and petroleum products. So tar as gas, which is a bye product, is concerned the ONGC has not so far been able voluntarily or constrained statutorily to harness and utilise its production for consumption by the public. Even as per the information placed on record by the respondents about 3,000 million cubic metres of gas were burnt in 1985 86 due to the inability of the ONGC to harness it for industrial or domestic use. Such large scale utilisa tion will involve capital outlay to a considerable extent particularly for the laying of pipe lines to convey the gas to sites of its user. The quantity of gas which is put to such use at present is an insignificant part of the gas that is being produced and so far the Government does not appear to have called upon the ONGC to draw up or submit to the Government under section 23 of the Act any programme of sale of natural gas to the public generally or even to some catego ries of public consumers. There is no doubt that the expan sion of the oil sector in recent years, including the recent construction of the HBJ pipeline, will eventually require the ONGC to set up and devise a rational and equitable scheme of distribution and supply of gas to various types of consumers situate over various parts of India. But, as yet, the ONGC has not embarked on any such scheme. It has been supplying gas to certain consumers on the basis of individu al contracts and it is in regard to these consumers alone that the question of price has been raised before us. We do not, however, think that it is at all necessary for us to delve further into the above concept or express any final opinion as to whether the ONGC is a public utility or not because the claim of the respondents is for a contin uance of the present system followed by the ONGC of supply ing gas to select customers on the basis of contracts en tered into with them. They only want the price to be regu lated by the court; they do not challenge, for obvious reasons, the system of distribution thus far adopted by the ONGC. If the argument that the ONGC is a public utility is accepted, then the first consequence to follow will be that gas should be made available by it to all persons who need it for use. It cannot be supplied by the ONGC to only a few public sector undertakings like the GSEB and GSFC or only to a few industries like those of the respondents or only to a few municipalities like the Vadodara Municipality for domes tic supply, at its sweet will and pleasure. It would then be open to all undertakings, industries and domestic consumers in Bombay, Gujarat and perhaps elsewhere in the country to demand that steps should be taken for the supply of gas to them also. We are unable to agree with the observation of the High Court that, even if the ONGC is treated as a public utility, the respon 183 dents, merely because they had entered into temporary con tracts for supply of gas with the ONGC, could still insist on continued supply to themselves on "the first come, first served" basis, to the exclusion of later arrivals on the scene. If, as suggested by the respondents, the ONGC is to be treated as a public utility and the price of gas is bound to be on cost plus basis, it may be that quite a few other industries would like to avail themselves of such supply. They have perhaps kept out so far only because the supply price based on alternative fuel price is not acceptable to them. They are keeping out only because they are under the impression that the ONGC is entitled to supply gas to per sons with whom it has entered into commercial contracts and on the terms of supply envisaged in those contracts. The treatment of the ONGC as a public utility undertaking for the supply of gas will raise innumerable basic questions totally inconsistent with the present system of selective supply which the respondents want to be continued. It will transpose the area of controversy to a totally different and wider plane. We cannot say that the ONGC is a public utility undertaking and yet direct that it should supply gas to the respondents and a few other industries with which it has entered into contracts. The court would then be constrained to hold that the present system of supply is inconsistent with public law and the constitutional requirements of a public utility undertaking and direct the ONGC to completely overhaul its system of public distribution on sound lines qua types of consumers to be catered to, areas of supply to be covered, price for supply and all other matters. That is not the relief sought by the respondents. All that they want is a declaration that they are entitled to the supply of gas at a reasonable price. It is sufficient, for disposing of this claim, to deal with this aspect of the matter and the larger aspect of ONGC being a public utility undertaking should be left out of account. We, therefore, do not express any final opinion on the issue except to say, prima facie, that it cannot be placed on par with a public utility under taking. In this context, we should like to point out once again that the ONGC does not dispute that the price to be charged by it for gas supply should have some basis and not be arbitrary or unconscionable. Their stand before the High Court (vide para 29 of the judgment) and before us has been that the prices are fixed by them from time to time on a well recognised principle viz. on the basis of the alterna tive fuel cost which the consumers may have to incur had they not been in receipt of gas supply. Assuming this to be correct, is there any illegality in the procedure adopted by them? that is the question. The respondents contend, and the High Court has held, that there is. 184 According to them, a public sector undertaking must supply its goods at a price which will cover their cost and leave them a reasonable margin of profit and no more. Dr. Chitale says that this is the only reasonable way of price fixation and refers to the award in support of this proposition. He points out that this is the basis incorporated in several statutory instruments, such as the Sugarcane Price Control order or the Drug Prices Control order or other orders passed under the Essential Commodities Act. He cites the following decisions of this Court in. relation to the fixation of such prices: Premier Automobiles vs Union, ; ; Panipat Cooperative Sugar Mills vs Union, [1973] 2 SCR 860; Shree Meenakshi Mills vs Union, ; Saraswati Industrial Syndicate vs Union, ; ; Prag Ice and Oil Mills vs Union, [1978] 3 S.C.R. 293 and Union of India vs Cynamide India Ltd., [1987] 2 S.C.C. 720. He urges that, to allow the ONGC to sell gas at a higher price than this merely because, otherwise, but for the availability of gas, the consumers would nave to spend more for their sources of energy, will really amount to introducing an irrelevant element i the process of price fixation and result in allowing the ONGC to make unreasona ble profits at the expense of unhappy consumers. The ques tion for consideration is whether this argument is correct. Is the ONGC bound to adopt only the cost plus basis in fixing its prices or can it also invoke any other well known and reasonable, if commercial, formula in fixing its prices? We shall first consider the findings in the award. Dr. V.K.R.V. Rao was arbitrating on a dispute between the ONGC and the Gujarat State Government as to the price at which gas was to be supplied by the ONGC. Though the dispute arose as a result of the dissatisfaction of the GSEB and the GSFC with the prices charged by the ONGC, the terms of reference to Dr. Rao were very much wider. They read: "The point at issue is the price that should be charged by the ONGC for gas that may be supplied after taking into consideration the volume and pressure of gas supplied to any particular party and the distance to which it has to be carried. You may also indicate if ONGC should offer any differential rates in respect of gas supplied to: (a) Undertakings for the generation of power (b) Fertiliser plants (c) State projects 185 (d) Private sector industries (e) Domestic fuel" The contentions urged by the two parties arrayed before the arbitrator and set out in sections IV and V of the award also covered a very wide ground. The award starts with a discussion of certain general considerations and while doing so, dealing with a contention comparing the price fixation in Assam and Gujarat, the award says: "The Gujarat contention that in fixing the price of gas in Gujarat, note should be taken of the price fixed by Oil India for the sale of Assam gas to the Assam Electricity Board at 25 paise per cubic foot cannot be dismissed as lightly as the O.N.G.C. seem to have done. Nor can it be contended by Gujarat that if a mistake has been made once in one area, that therefore it should be extended to other areas. It must be added also that the price of gas in Assam and in Gujarat is not on all fours for the reasons that I shall mention later. All the same, one cannot ignore the relevance of the Assam gas price, even though the remedical action required is perhaps more on the Assam side than on the ONGC attitude in Gujarat. I shall have something to say on the question later on in this report, though it is not strictly within the terms of reference given to the arbitra tor. I am not prepared to accept the ONGC contention that because they are All India agency expected to function as a commercial undertaking in the public sector, they are entitled to take no account of the fact that the cost of power generation is high in Gujarat, that this has hampered the possible development of some industries for which Guja rat has natural resources and that public opinion in Gujarat has a natural expectation of a reduction in the cost of power production on account of the discovery of gas in their area. After all the ONGC is an enterprise in the public sector and is expected to take public interest into account and not be exclusively concerned with commercial considera tions that would be more appropriate to a private enter prise. Moreover, there, as in the United States, the gas industry is in the private sector, there is also governmen tal regulation through the Federal Power Authority in the public interest. I believe that Gujarat has a valid point in 186 urging that advantages that accrue to the coal bearing provinces by way of low cost in fuel or power generation should also apply to Gujarat because of the discovery of gas in its area and its protected use for power generation. I propose therefore to take into account the pit head price of Bengal coal and its thermal equivalence with Gujarat gas in determining my award on the price of gas. I must add that this will not be the primary basis for my award, though it will certainly be treated as a relevant consideration. At p. 16 the report deals with the contention that the price of gas should be based on the price of substitute products in the following words: "As regards the ONGC contention that the price of gas should be based on the price of substitute products and that this is the practice generally followed in the oil industry, I am not prepared to accept the ONGC constention. While the price of substitutes undoubtedly would determine the demand price for gas, the position becomes different when prices are sought to be fixed and not left to market forces; and prices have to be fixed because the ONGC is virtually a monopoly at least as far as Gujarat is concerned; there is no market price in the normally understood sense of the term as emerg ing from sales by competing sellers; the ONGC is a public sector enterprise, and considerations of public policy cannot be considered irrelevant in the fixation of prices. Above all it has always been the practice in India, when prices are fixed. to base it on the cost of production plus a reasonable profit and this has been what the Tariff Com mission has been doing all these yeas in regard to other commodities. Under the circumstances, while the price of substitutes is undoubtedly a relevant (factor?) in the fixation of the price of gas, I have no doubt that it cannot be treated as the primary factor under the Indian circum stances referred to earlier." Again, at p. 18, the basic formula is expounded as follows: "I have already indicated my thinking on the question of . . prices of substitute materials on the basis of thermal equivalence in the concluding para of the previous section. Gas pricing in relation to the prices of substitute materials 187 understandable in foreign countries, where gas has been deliberately pushed into the fuel market by pipe line compa nies which have constructed long and expensive pipe lines and sold gas at a price lower than that of alternative fuels in order to capture and retain the market. In fact, the price of gas in the initial stage was much less than that of competing alternative fuels and not on par with their prices. With the growing recognition of the special advan tages obtained by the use of gas in manufacturing operation where close control of heat and cleanliness of operation are essential and worth paying for or in commercial and residen tial cooking, water heating and space heating, gas prices have been steadily rising over the last few years. Thus while crude oil wholesale prices have moved downward since 1957, gas prices have recorded a steady rise throughout the post war period. At the same time, drilling of gas wells is increasing and so is the place of gas in world energy con sumption. It is therefore not correct to suggest that the oil companies were selling gas on the basis of the price and thermal equivalence of alternative fuels. Gas was sold at the price which it could fetch and not on the basis of either cost of production or parity with substitute fuels. As regard the price of gas in the field, Prof. Adleman has pointed out that it is not correct to expect any particular ceiling for this price. He adds "if the special advantage uses could generate enough effective demand, the field price of gas in the United States or elsewhere could conceivably equal or surpass the thermal equivalent of the crude oil; otherwise it will not". In actualfact, the principal use of gas is till not (now?) in its field of special advantages. There is validity therefore for his view that "Since gas costs roughly three times to deliver, per BTU as oil the price of gas in the producing area could not possibly equal the price of oil. Scarce resources are best used of this fuel expensive to transport, is used to the maximum, nearest its source of supply, whiles the transport cheap oil moves greater distances". Thermal equivalence with substitute fuels and a price based thereon could therefore only be a ceiling on the price of gas rather than a parity basis for its price fixation. Moreover, in the case of Gujarat, the substitute fuel comes from long distance and bears heavy frieght charges, while the gas is found within the State. It must also be remembered that unlike in the case of foreign oil companies, cost 188 data are more readily available in the case of ONGC, as it is a public sector enterprise and subject to the control of Parliament and the scrutiny of its Public Accounts Commit tee. All cost data have been made available to the Arbitra tor by the ONGC. Under the circumstances, it is my consid ered judgment that formula of fixing the price of gas on the basis of the thermal equivalence and price of substitute fuel or feedstock should not be accepted, though the price resulting from such a formula certainly is a relevant con sideration as indicating the ceiling below which the price of gas should be fixed by the Arbitrator. I would therefore reject the ONGC proposal that "the formula to be used for the price of gas should be based on the price of the avail able alternative fuels or feedstock. " The only other basic formula is the one advanced by the Gujarat Government, namely, "that the only rational approach to the pricing of gas is via the cost plus profits formula". And it is the cost plus profit formula that I propose to adopt as the primary base for determining my award on the price of gas in Gujarat. Having said this, I must hasten to add that this does not mean my acceptance either of the connotation that the Gujarat Government gives to this formula in terms of the content postulated for the cost of production and profit or the figures they have put forward for the price of gas on the basis of their interpre tation of the content of cost of production and profit. What I accept is the principle of cost of production plus reason able profit and not the interpretation that is sought to be given to this principle by the Gujarat Government". The second part of the issue referred to the arbitration was disposed of summarily by the award, in a few words: "Finally, on the question whether there should be any dif ferentiation between the prices to be charged for power generation, fertilisers, and other industries, I am not in favour of any such differentiation, as it would only intro duce an unnecessary complication in the pricing machinery and my award is primarily based on estimated cost of produc tion plus reasonable profit. If, however, in order to regu late supplies in adjustment to different intensities of demand from the different users of gas, some premium or 189 discount becomes necessary on the price suggested by me, this would not be inconsistent with my award provided the total receipts do not exceed the amount that would accrue from the application of my award on the price of gas. Dr. Chitale naturally placed considerable reliance on this award. He contended that the reasoning of the award is impeccable and that the considerations that impelled Dr. Rao to adopt the cost plus basis are more weighty in today 's context and in the background of the State 's duties under Articles 38 and 39(b) of the Constitution. There is no doubt that Dr. Rao made the cost plus method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (which we shall refer to as thermal equivalence basis). But at least two important aspects have to be kept in mind in assessing the applicabil ity of the same principle in the present context. In the first place, as explained earlier, Dr. Rao was concerned primarily with an issue raised by the public of Gujarat as against the ONGC. He was really adjudicating upon the price which the ONGC should charge to public sector undertaking catering to the essential needs of the State. In the con text, his objective was, understandably, to fix the price as low as possible. The consumers under consideration by him represented the public need of the State of Gujarat and, as against such public interest, the ONGC 's profit requirements paled into insignificance. He proceeded, more or less, on the footing that the ONGC was obliged to supply gas for meeting those essential purposes. Secondly, Dr. Rao also agrees that the thermal equivalence basis is a recognised method for fixation of price, that it has a relevance and that it has to be taken into account in determining the price for gas supply. We also wonder whether, in the present set up of the ONGC with a vast expansion of its exploratory activities, enough data are available to work out a price on the cost plus basis. Any such computation will have to provide adequately for future explorations, infructuous expenditure, expenditure on modern uptodate machinery and research and above all expenditure that will be necessary to reach the gas to the consumers. In these circumstances, the cost plus basis fixed by Shri Rao in the background of the real nature of the dispute before him three decades ago cannot be taken as conclusive in the present situation. Here we are dealing with a price to be fixed under a contract between the ONGC and one set of industries in the State who wish to make a change over from the furnace oil system to that of gas supply with a view to increase their own prof itability and gain an advantage, if possible, over other industries in the State. In this context, we think, ONGC is entitled to a 190 larger latitude and charge a price which the market can bear. The only restrictions is that, being a State instru mentality, it should not be a whimsical or capricious price but should be one based on relevant considerations and on some recognised basis. While the cost plus basis is a recognised basis for fixation of prices of essential commodities or for the services rendered by a public utility undertaking, it would not, in our view, be correct to treat it as the only permis sible basis in all situations. On behalf of the ONGC it has been pointed out that even in the fixation of prices of essential commodities like levy sugar, the concept of cost plus is not necessarily the only method of fixing the price for the commodity. In considering the question whether the price fixation in that case was based on proper principles and by following correct methods in accordance with section 3(3C) of the Essential Commodities Act, this Court observed in the Anakapallee case; , at p. 899: "While examining question No. 3 learned Solicitor General has reminded us that 'cost plus ' cannot always be the proper basis for price fixation. Even if there is no price control each unit will have to compete in the market and those units which are uneconomic and whose cost is unduly high will have to compete with others which are more efficient and the cost of which is much lower. It may be that uneconomic units may suffer losses but what they cannot achieve in the open market they cannot insist on where price has to be fixed by the government. The Sugar Enquiry Commission in its 1965 report expressed the view that 'cost plus ' basis for price fixation perpetuates inefficiency in the industry and is, therefore, against the longterm interest of the country. The Court quoted from a study prepared in collaboration with the Institute of Chartered Accountants of India. "Costs alone do not determine the prices. Cost is only one of the many complex factors which together determine prices. The only general principle that can be stated is that in the end there must be some margin in prices over total costs, if capital is to be unimpaired and production maximised by the utilisation of internal surpluses . . while the cost plus pricing method is the most common, it may be argued that it is not the best available method 191 because it ignores 'demand or fails to adequately reflect competition or is based upon a concept of cost which is not solely relevant for pricing decision in all cases. What is essential is not so much of current of past costs but fore cast of future cost with accuracy . . Generally pricing should be such as to increase production and sales and secure an adequate return on capital employed. " Again, in a somewhat different context in relation K, a State transport undertaking, this Court observed, in Venka tachalam vs Deputy Transport Commissioner; , " . . the special status of a Government owned transport undertaking is obvious . . Its functional motto is not more profits at any cost but service to citizens first and, in a far larger measure than private companies and individu als, although profitability is also a factor even in public utilities. (emphasis added) These passages indicate that cost plus is not a satis factory basis in all situations. The basis may need to be made more stringent in some situations and more broad based in others. May be the cost plus is an ideal basis where the commodity supplied is the product of a monopoly vital ' to human needs. In that context the price fixed should be minimum possible as the customer or consumer must have the commodity for his survival and cannot afford more than the minimum. The producer should not, therefore, be allowed to get back more than a minimum profit. Indeed, in certain situations, it may even be inequitable to fix varying prices on the basis of the cost of each individual manufacturer and thus encourage inefficiency; it may be necessary to base it uniformly for a whole industry on the cost of the most efficient manufacturer as has been done in the case of drugs (vide: Cynamide case, [1987] 2 S.C.C. 720. It was so vital that the goods should be available to the common man that the prices were statutorily fixed so low as to drive away inefficient producers and so as to make it possible only for the most efficient manufacturers to survive. Per contra, there can be situations where the need of the consumer is not so vital and the requirements of the economic scene are such that the needs of the producer should be given greater consideration. In such situations, the "plus" element in the cost plus basis (namely, the allowable profit margin, should not be confined to "a reasonable return on the capital" but should be allowed to have a much larger content depending on the circumstances. 192 The notion that the cost plus basis can be the only criterion for fixation of prices in the case of public enterprises stems basically from a concept that such enter prises should function either on a no profit no loss basis or on a minimum profit basis. This is not a correct ap proach. In the case of vital commodities or services, while private concerns must be allowed a minimial return on capi tal invested, public undertakings or utilities may even have to run at losses, if need be and even a minimal return may not be assured. In the case of less vital, but still basic, commodities, they may be required to cater to needs with a minimal profit margin for themselves. But given a favourable area of operation, "commercial profits" need not be either anathema or forbidden fruit even to public sector enter prises. A publication on "Public Enterprises" by the Indian Institute of Public Administration, produced before us elaborates on the above aspects. It also gives an interest ing analysis of pricing policies adopted in respect of various commodities. It is unnecessary to touch upon all the details. It is sufficient, for our present purposes, to say that the monograph points out, a propos such pricing policy, that several state undertakings are already earning profits and the general policy has been accepted that the maximum economic returns should be secured from all public enter prises, whether these are operated by the Central or State Governments directly or through corporation or companies and that the surplus of public enterprises will have to play an increasing part in financing economic development under the various National Plans. It proceeds to say (at p. 173): "A growing source of governmental revenue in many countries is the profits of public undertaking. In under developed countries public enterprises fostered on public revenues are expected to play a more positive role in financing the countries ' development than similar enterprises do in de veloped economies. In determining the price policies of these undertakings considerations of maximising revenue will not play as important a part as profits do in private enter prises, but within the limits set by the necessity to foster economic development, their price policies are designed to bring in some profits to the countries ' general revenues. Public enterprises in the under developed areas are to break ground in projects which are the core of development. If such projects are to be financed on an increasing scale, the price policies have to be so designed that significant surpluses are left with the projects 193 to be employed either for their own expansion or for financing the expansion of other projects. In other words, there should be an element of profit in the prices of their products or in the cost of their services to the public." The Krishna Menon Committee on State undertakings (November 1959), the booklet proceeds. to point out, enunci ated the following pricing policy for public enterprises: "We have stressed in these pages the importance of incentive and healthy competition and emphasised that concerns must be able to stand on their own legs for efficient and proper conduct of business . . The considerations that should govern prices appear to be the following. Consumer prices nave to be based upon general market prices and other fac tors as well. The decision as to what economy in cost has to be passed on to the consumer on the one hand or should benefit the taxpayer on the other and the likelihood of non availabilities and, therefore, of scarcities in the near future has also to be considered. The principle of 'what the traffic can bear ' has also to be taken into account. ' ' Dr. V.K.R.V. Rao has been quoted again as saying: "As regards profits, it should be pointed out that contrary to some popular notions on the subject, profits have an important place in a socialist society, the difference between the economic price and the social price would be what may be called the planned profit and this would largely correspond to the excise duties and sales tax and other indirect taxes that are imposed in a capitalist society. These planned profits being no more than a way of mobilising resources and making them available to the community for purposes both of investment and maintenance expenditure. Profits also have another important role to play in so far as they relate to the economic price itself. The economic price fixed at any particular moment of time is obviously based on the capital, technique and productivity of the given base period when this price is fixed; any improvement in productivity is bound to lead to a decrease in the cost production and in turn this would lead to the emergence of a surplus within the economic price itself and that would be a 194 surplus which will represent a measure of the nation 's increase in productivity this surplus would not be the result of the policies laid down at national level as in the case of difference between the economic price and the social price. On the contrary, it would represent the result of the motivations and efforts of a larger number of persons en gaged in productive activity. Hence the importance of ar ranging for proper incentive to stimulate the creation of this kind of surplus. That is the reason why in socialist societies now adays, individual enterprises are permitted to retain a larger share of such surpluses as they may create by an increase in productivity, this larger share to be used by them partly for increasing individual incomes of those engaged in the enterprises and partly for giving an opportu nity to the enterprises in question to build up the finan cial resources needed to following their own independent investment policies. Public enterprise must be carried on a profitmaking basis, not only in the sense that public enter prise must yield an economic price in the terms described in a previous section but must also get for the community sufficient resources for financing a part of the investment and maintenance expenditure of government. Increasingly, the share of the profits of public enterprises in financing the investment and maintenance expenditure of government must keep on increasing. It is not only the expenditure on the public sector as such that will indicate the march of the economy towards its socialist goal. Even more important is the increasing role that the public sector must play for finding the resources needed for meeting both the mainte nance and investment expenditure of government. This in volves a price and profit policy in regard to public enter prise which goes against accepted opinion so far in regard to public enterprise. The theory 'no profit, no loss ' in public enterprise is particularly inconsistent with a so cialist economy, and if pursued in a mixed economy it will hamper the evolution of the mixed economy into a socialist society. The sooner, therefore, this theory of 'no profit no loss ' in public enterprise is given up and the policy ac cepted of having a price and profit policy for public enter prise such as will make the State increasingly reliant on its own resources (as distinguished from taxing the personal incomes of its citizens), the quicker will be the evolution of a socialist society". 195 In another article on "The Public sector in India", quoted in "Issues in Public Enterprise" by Sri K.R. Gupta, Dr. Rao is quoted as saying (at p. 84): " . . the pricing policy should be such as to promote the growth of national income and the rate of this growth . .public enterprises must make profits and the larger the share of public enterprises in all enterprises, the greater is their need for making profits. Profits con stitute the surplus available for savings and investment on the one hand and contribution to national social welfare programme on the other; and if public enterprises do not make profits the national surplus available for stepping up the rate of investment and the increase of social welfare will suffer a corresponding reduction; . Hence the need for giving up the irrational belief that public enterprise should, by definition, be run on a no profit basis. " In the light of the foregoing discussion, we are of opinion that it would not be right to insist that the ONGC should fix oil prices only on cost plus basis. Indeed, its policy of pricing should be based on the several factors peculiar to the industry and its current situation and so long as such a policy is not irrational or whimsical, the court may not interfere. The question of fixation of a fair and reasonable price for goods placed on the market has come up for consideration of Parliament and Courts in different contexts. Price fixa tion, it is common ground, is generally a legislative func tion. But Parliament generally provides for interference only at a stage where in pursuance of social and economic objectives or to discharge duties under the Directive Prin ciples of State Policy, control has to be exercised over the distribution and consumption of the material resources of the community. Thus while Parliament has enacted the Essen tial Commodities Act, it has left it to the discretion of the Executive to take concrete steps for fixing the prices of essential commodities as and when necessity arises, by promulgating Control Orders in exercise of the powers vested in the Act. Various types of foodgrains, sugarcane and drugs have come under the purview of such control orders and the modalities of fixation of fair prices thereunder have also come up for consideration of the Courts. There has also been such fixation of price under the Industries (Development & Regulation) Act, 1951, vide: Premier Automobiles vs Union, In all these cases, the primary concern of 196 Government and Parliament has been that the articles in question should be available to the members of the consumer public at the minimum prices possible and, in that context, these legislations no doubt adopt the "cost plus reasonable return on investment" test in the fixation of prices. That, even in respect of such commodities, the "cost plus" method is not the only reasonable method has been recognised in judicial decisions. The cases on this topic have been re viewed and the limitations on judicial review of price fixations fully discussed recently by a Constitution Bench of this Court in M/s Shri Sitaram Sugar Company Ltd. & Another vs Union, JT 19901 SC 462. It is, however, not necessary here to enter into a discussion of this and the earlier cases because those cases were primarily concerned with the question whether the price fixation had been made in consonance with the requirements of the relevant legisla tion fixing prices of essential commodities in the interests of the general public and also because ONGC does not deny that, as a State instrumentality, its price fixation should be based on relevant material and should be fair and reason able. None of these decisions hold that the cost plus method is the only relevant method for fixation of prices. On the contrary, there are indications in some judgments to indi cate that not a minimum but a reasonable profit margin is permissible. Even in relation to a public utility undertak ing like the State Electricity Boards where the duty not to make undue profits by abusing its monopoly position is clear (vide: Jagadamba Paper Industries vs Haryana State Electric ity Board; , , this Court said, in Kerala State Electricity Board etc. vs M/s. S.N. Govinda Prabhu & Bros. and Ors. etc, "Now, a State Electricity Board created under the provisions of the Electricity Supply Act is an instrumentality of the State subject to the same constitutional and public law limitations as are applicable to the government including the principle of law which inhibits arbitrary action by the government (See Rohtas Industries vs Bihar State Electricity Board, ; It is a public utility monopoly undertaking which may not be driven by pure profit motive not that profit is to be shunned but that service and not profit should inform its actions. It is not the function of the Board to so manage its affairs as to earn the maximum profit; even as a private corporate body may be inspired to earn huge profits with a view to paying large dividends to its shareholders. But it does not follow that the Board may not and need not earn profits for the 197 purpose of performing its duties and discharging its obliga tions under the statute. It stands to common sense that the Board must manage its affairs on sound economic principles. Having ventured into the field of commerce, no public serv ice undertaking can afford to say it will ignore business principles which are an essential to public service under takings as to commercial ventures. (See Lord Scarman in Bromely vs Greater London Council, ; If the Board borrows sums either from the government or from other sources or by the issue of debentures and bonds, surely the Board must of necessity make provision year after year for the payment of interest on the loans taken by it and for the repayment of the capital amounts of the loans. If the Board is unable to pay interest in any year for want of sufficient revenue receipts, the Board must make provi sion for payment of such arrears of interest in succeeding years. The Board is not expected to run on a bare year to year survival basis. It must have its feet firmly planted on the earth. It must be able to pay the interest on the loans taken by it must be able to discharge its debts; it must be able to give efficient and economic service; it must be able to continue the due performance of its services by providing for depreciation etc.; it must provide for the expansion of its services, for no one can pretend the country is already well supplied with electricity. Sufficient surplus has to be generated for this purpose. That we take it is what the Board would necessarily do if it was an ordinary commercial undertaking properly and prudently managed on sound commer cial lines. Is the position any different because the Board is a public utility undertakings or because of the provi sions of the Electricity Supply Act? We do not think that either the character of Electricity Board as a Public Utili ty Undertaking or the provisions of the Electricity Supply Act preclude the Board from managing its affairs on sound commercial lines though not with a profit thirst. A plain reading of Section 59 (as amended in 1978) plain ly indicates that it is the mandate of Parliament that the Board should adjust its tariffs so that after meeting the various expenses properly required to be met a surplus is 198 left. The original negative approach of functioning so as not to suffer a loss is replaced by the positive approach of requiring a surplus to be created. Under the above provision, the Board is under a statutory obligation to carry on its operations and adjust its tariffs in such a way to ensure that the total revenues earned in any year of account shall, after meeting all expenses chargeable to revenue leave such surplus as the State Government may, from time to time, specify. The tariff fixation has, therefore, to be so made as to raise suffi cient revenue which will not merely avoid any net loss being incurred during the financial year but will ensure a profit being earned, the rate of minimum profit to be earned being such as may be specified by the State Government. Shri Potti, learned counsel for the consumers placed great reliance on the observations of this Court in Kerala State Electricity Board vs Indian Aluminium Co., [1976] 1 SCR 552; Bihar State Electricity Board vs Workmen, ; and P. Nalla Thampy Thera vs Union of India to con tend that the Electricity Board was barred from conducting its operations on commercial lines so as to earn a profit. We do not think that any of these observations is in con flict with what we have said. Pure profit motive, unjusti fiable according to us even in the case of a private trading concern, can never be the sole guiding factor in the case of a public enterprise. If profit is made not for profit 's sake but for the purpose of fulfilling, better and more exten sively, the obligation of the services expected of it cannot be said that the public enterprise acted beyond its authority. The observations in the first case which were refined to us merely emphasised the fact that the Electrici ty Board is not an ordinary trading corporation and that as a public utility 199 undertaking its emphasis should be on service and not prof it. In the second case, for example, the Court said that it is not expected to make any profit and proceeded to explain why it is not expected to make a profit by saying that it is expected to extend the supply of electricity to unserved areas without reference to considerations of loss. It is of interest that in the second case, dealing with the question whether interest cannot be taken into account in working out profits, the Court observed, (SCC p. 235, para 5): 'The facile assumption by the Tribunal that the interest should not be taken into account in working out the profits is not borne out by the provisions of the statute '. In the third case, the court appeared to take the view that the railway rate and fares should cover operational ex penses, interest on investment, depreciation and payment of public obligations. It was stated more than once that the total operational cost would include the interest on the capital outlay out of the national exchequer. While the court expressed the view that there was no justification to run a public utility monopoly service undertaking merely as a commercial venture with a view to make profits, the court did not rule out but refrained from expressing any opinion on the question whether a public utility monopoly service undertaking should ever be geared to earn profits to support the general revenue of the State. We are of the view that the failure of the government to specify the surplus which may be generated by the Board cannot prevent the Board from generating a surplus after meeting the expenses required to be met. Perhaps, the quan tum of surplus may not exceed what a prudent public service undertaking may be expected to generate without sacrificing the interests it is expected to serve and without being obsessed by the pure profit motive of the private enterpre neur. The Board may not allow its character as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house. Neither the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion that the Bard has shed its public utility character. When that happens the court may strike down the revision of tariffs as plainly 200 arbitrary. But not until then. Not merely because a surplus has been generated, a surplus which can by no means be said to be extravagant. The court will then refrain from touching the tariffs. After all, as has been said by this Court often enough "price fixation" is neither the forte nor the func tion of the court. " We are not called upon here, in the view we take, to decide whether the cost plus basis or the thermal equiva lence basis is more appropriate. All that we wish to say is that, having regard to the basis on which the claims of the respondents have proceeded thus far, our task is a very limited one. We cannot say, for reasons set out below, that the ONGC has acted arbitrarily in fixing the prices on the thermal equivalence basis; the fact that it has not done it on cost plus basis does not vitiate the price fixation. The only question we have to address ourselves to is as to whether the O.N.G.C. has fixed a price based on relevant materials and on some known principle. At the outset, one must notice that the price is not directly and specifically related to or based on any unreasonable margin of profit. There is nothing to indicate that the ONGC was prompted, in fixing its prices, on the one and only consideration of deriving maximum profits for itself. On the other hand, it appears to have been guided by the needs of the situation and the nature of the distribution system that is in opera tion. As we said earlier, the manufacture, distribution and consumption of gas has yet not attained the status of an essential commodity till recently. It is still at a stage where the goods are being distributed under private con tracts. Whether this is any longer justified and whether there should not be a greater amount of control over the modes of, as well as price for such, distribution is a larger question with which we are not now concerned. At present, we are in the penumbral region where the commodity is free to be distributed at the manufacturer 's choice, but yet where such manufacturer being a State instrumentality, has to conform to Articles 14 and 19 of the Constitution. At this stage of development of the industry, we think a much wider latitude is permissible in the fixation of prices than the imposition of a "no profit, no loss" basis or a "cost plus" basis on the producer. In fixing the prices, it is legitimate for the O.N.G.C. to take into account the fact that its supplies are restricted only to a few industries that have entered into contracts with it. Like industries, producing the same or similar commodities, are carrying on business with other sources of energy such as coal or fur nace oil and the supply of gas is intended to supplement that source of energy. The supply of 201 gas to a few chosen industries at a much lower rate than what the companies may have to pay for an alternative fuel may indeed lead to cries of discrimination as the O.N.G.C. is scarcely in a position to supply gas to all industries and replace furnace oil as a source of energy altogether. Also, it must be kept in mind that exploration of oil is capital intensive and money consuming and the ONGC would be well justified in supplying gas to voluntary contractors at a price which several parties are willing to accept and which will enable the ONGC to build up a surplus to meet its manifold requirements The surpluses, it should be remem bered, are not to fatten the coffers of a private individual but only to strengthen the backbone of the public enter prise. To fix its prices on the basis of alternative fuel cannot, therefore, be described, in the present situation, as irrational or arbitrary. Our attention has been drawn to a passage from Joan Mitchell on "Price Determination and Price Policy" where, dealing with the basis of fixation of gas price by negotiation between the British Gas Commission and companies producing North Sea gas, it is pointed out hat the price is set by the nearest alternative fuel, usually fuel oil. This was also the basis, it will be remembered, on which initially the GSEB and GSFC had agreed to receive supplies from the ONGC. Thus this is a basis of fixation of price that is recognised in this field. Fixation of price on this basis is, therefore, a logical and appropriate one in the circumstances We should once again like to emphasise that different considerations may perhaps have to prevail if the treatment of ONGC as a public utility is taken to its logical conclu sion but that is not the basis on which the present writ petitions can be decided. Even at present the ONGC is sup plying to public sector undertakings at a much lower price. That has not been challenged by those organisations and the differentiation has also been upheld, in principle, by the High Court, rightly in our opinion. Fortunately, with the discovery of more and more oil wells in various parts of the country the economy of the country is booming and gas supply may also become more plentifully available in course of time. The time will perhaps soon come for the evolution of proper schemes of distribution and price control. We are now concerned, however, with the price fixation regarding supply to a few parties who considered it all right to enter into contractual agreements for supply of gas to them on the basis of the price fixed by the ONGC. So far as the scheme of supply is concerned; the respondents also stand by the existing contract scheme as they want the supply to contin ue It is certainly not their prayer that the existing supply of gas, such as it is, should be considered a public utility and rationed to meet the needs of all industries and consumers in Bombay or Vadodara or 202 elsewhere. Nor is there any complaint today from any indus try not receiving gas supply that they are being discrimi nated against and that the supply to selective industries should stop. There is, therefore, no justification to strike down the scheme of supply on the basis of contracts. The only objection that survives, therefore, is that the price for the supply should be reasonable and fair. It should be based on principle, not caprice. We have pointed out that, though the ONGC has stepped up the prices considerably, it has claimed to have done so on a principle and the correct ness of this has not been challenged. The claim of the respondents only is that prices should not be fixed on that basis but should, instead, be fixed on the basis of "cost plus". For reasons indicated earlier, we do not think that the respondents are justified in challenging this basis of fixation. The basis on which the ONGC has fixed the prices is a known basis and, as pointed out by us, also a basis permissible at this stage of the industry where a certain amount of freedom is permitted to the organisation in sup plying the gas produced by it. The situation really is one where the choice is between making the limited supply of gas available to a few chosen individuals at rock bottom prices so that they can make huge profits and making the price higher but competitive so that it subserves the common good and does not benefit only a chosen few. The ONGC has rightly chosen the second alternative. We would, therefore, hold that the respondents can insist on a supply only if they agree to pay the prices fixed by the ONGC. They are also not entitled to demand supply as of right, without contracts. But, as they have in fact had the benefit of the supplies under interim orders of the Court, this question does not survive and all that we can declare is that the prices demanded by the ONGC are not unreasonable or capricious and are binding on the respondents. Having dealt with the principal issue, we may now refer to certain subsidiary matters touched upon in the course of arguments: (i) A point was made about the ONGC 's right to insist on a minimum offtake guarantee to the extent of 90%. This has been upheld by the High Court and there is no appeal (the crossappeals having been dismissed as time barred) by the respondents. There can, however, be no doubt that the High Court was right in its conclusion on this issue. If any authority regarding the rationale of such a clause is needed, it is to be found in the decision of this Court in Amalgamated Electricity Co. Ltd. vs Jalgaon Borough Munici pality; , 203 (ii) A statement was filed before us to show that if the prices had been determined on the basis of the thermal equivalence of coal, they would have been much smaller. This statement has been filed before us for the first time and its correctness would need verification. It is, however, unnecessary to go into this question. The acceptability of this argument may depend, inter alia on how far the coal basis is relevant for the industries located in Vadodara where the principal alternate fuel is fuel oil. It is possi ble that this is one alternative that may be available and it was open to the petitioners to have had discuss and mediations with the ONGC for alteration of the prices on that footing. The ONGC has fixed prices on the basis of the thermal equivalence of furnance oil which, by an large, was the source of energy tapped by the local industries. There being no irrationality in adopting this basis, it is not open to us to say that the basis of thermal equivalence of coal should be adopted rather than that of furnance oil, particularly in the absence of fuller material and discus sion. (iii) A point was made that the ONGC is charging differ ent prices to different industries. The answer of the ONGC is that, save in the case of certain public sector enter prises, their prices are fixed on the basis of the prices prevalent on the thermal equivalence of fuel oil basis as on the date the relevant contract is entered into. This has not been shown to be wrong. The only discrimination urged at the stage of the High Court was in regard to the disparities in prices between supply to public sector undertakings and private industries. Though the award, towards the end, suggested that there should be no such differentiation, it is now well settled that a favourable treatment of public sector organisations, particularly ones dealing in essential commodities or services, would not be discriminatory. Also, this differentiation, as already pointed out, has been upheld by the High Court, we think rightly. No tangible material has been brought to our notice which would support the plea of unfair discrimination. (iv) A point has been made that the ONGC had entered into a contract for a ten year period with the Amul dairy for supply of gas at Rs.741 per unit which demonstrates the unreasonableness of the prices charged to the respondents. We do not agree. We have already pointed out that the ONGC is supplying gas, to certain public sector undertakings at much lower rates and that this differentiation has been upheld. Though the Amul Dairy is a cooperative society it deals with a basic need of society and 204 stands on no different footing from Electricity Boards or Fertiliser Corporations or Municipal Corporations. The instance of the Amul Dairy cannot, therefore, be treated as an index of the unreasonableness of the price charged from the respondents, particularly when the basis of fixation has been explained and is an intelligible and rational one. (v) Reference has been made to the price of gas in Assam and U.S.A. So far as the former is concerned, the High Court has, rightly in our view, discarded the comparison. So far as the latter is concerned, the point made by the ONGC was that Dr. Rao had fixed the price of gas in India in 1967 at 15% below the then U.S. price and that on the same basis the price of Rs.2000 per unit today could not be said to be unreasonable as prices in U.S.A. have also shot up about thirty fold in the meantime. We find no effective reply to this argument. The High Court has just brushed it aside by reiterating that the well head prices alone would be the reasonable basis for fixation of price. (vi) The High Court in its judgment has observed: "if the ONGC were acting fairly and reasonably, there was nothing to prevent them from placing all their cards on the table of the court. They did not put the price structure that possibly be worked out on the lines similar or akin to those suggested by Dr. V.K.R.V. Rao in his award. Nor did they put forward any other reasonable criteria for price fixation. All throughout they harped on the thermal equiva lence and furnace oil equivalance and the prices in U.S.A. and the prices of crude, but did not allow the Court to have the bare glimpse of what could possibly be the well head price of gas, by making allowances for amortisation and all other conceivable factors, having their sway in the ultimate price fixation. This also is indicative of the unreasonable ness on their part and we would say that Mr. Singhvi was justified in complaining that the return filed by the ONGC in this group of petitions was far from being satisfactory and, therefore, was liable to be brandished as no real return at all" We think this criticism is not justified. The stand of the ONGC was that it had fixed the prices on the thermal equiva lence basis and this has not been controverted or found against. It was the 205 respondents ' case that the cost plus price would work out much cheaper and the onus was on them to prove it. We fail to see how the blame for not allowing the court to have a glimpse of what could possibly be the well head price of gas can be put at the doors of the ONGC. However, this aspect is irrelevant as the case throughout has proceeded on the assumption that the cost plus basis would yield lower fig ures and the question debated was whether the ONGC could discard this and adopt the thermal equivalence basis. (vii) Turning now to para 36 of the judgment of the High Court, we may observe that these directions do not survive in view of the conclusion we have reached that the prices demanded by ONGC are based on proper and relevant criteria. However, we may observe that directions (i) and (ii) in this paragraph virtually throw open the entire issue for fresh discussion. It may have been helpful if such a direction had been given before the hearing of the writ petitions but the exercises would not be futile. Having reached the conclusion that the cost plus was the only proper basis of fixation of price, the High Court should perhaps have directed the ONGC to charge prices on that basis and given a reasonable time to work out the said price and implement the direction. Instead, the High Court appears to have, by its directions in para 36, left the matter at large for it asks the ONGC to get the price fixed "according to the reasonable and ration al norms". We do not also see any justification for provid ing that the price fixation should be done in consultation with, or after giving an opportunity to the respondents. It is for the ONGC to fix the prices and there can be no re quirement of a prior consultation with the present respond ents or with prospective customers. In such cases of price fixation, as in the case of price fixations by Government (see Cynamide case, [1987] 2 SCC 720), the only remedy of aggrieved consumers can perhaps be to have some sort of post decisional reconsideration by the ONGC after heating the view points of those affected. But this question does not arise now in the view we have taken to the ONGC 's obli gations in this regard. We should also like to add that, now that the prices have been fixed by the Government since 30.1.1987 and gas has already been supplied to the respond ents till then on the basis of interim prices, the implemen tation of the directions contained in this paragraph would be a prolonged and unmeaningful exercise and it would have been much better to fix some ad hoc price, for this period, after heating both parties. In fact, Sri B. 206 Sen who appeared for the ONGC very fairly stated before us that, so far as this period was concerned, the ONGC was prepared to leave it to this Court to fix the price of supply at any figure that the Court might consider reasona ble. We also suggested to the respondents, keeping the price fixed by the order dated 30.3.1987 in mind, a figure which we thought was reasonable but the respondents were not agreeable to the course suggested. They put forward certain alternative proposals which were not acceptable to the ONGC. In these circumstances, we have been constrained to hear the appeals on merits. (viii) On behalf of the ONGC, it has been pointed out that a sum of Rs. 14.35 crores is outstanding for the period from December 1982 to August 1989 from eighteen concerns, even on the basis of the interim prices at which the ONGC has been supplying them gas under the orders of this Court, primarily due to shortfalls in the guaranteed off take and that four concerns, who have stopped taking supply of gas, are in arrears to the tune of about Rs. 12 lakhs. We need hardly say that the ONGC will be at liberty to take immediate steps to recover the charges due from the respondents in the light of this judgment. (ix) We wish to add that we are not called upon to, and do not, express any opinion regarding the notification dated 30.1.87 of the Government issued subsequently fixing the price at Rs. 1,400 plus. We do not know the circumstances or the statutory authority or the basis on which the said price fixation was made and that is totally outside the purview of these appeals. This concludes a discussion of all the points urged before us. For the reasons detailed above, we allow these appeals and uphold the prices charged by the ONGC for supply of gas to the various respondents. We, however, make no order regarding costs. R.S.S. Appeals allowed.

The appellant, Oil & Natural Gas Commission. is a statu tory corporation constituted by and under the Oil and Natu ral Gas Commission Act, 1959. In most of its oil fields situated in Gujarat, gas comes out along with crude oil as "free gas". The appellant had agreed to supply this gas to the Gujarat State Electricity Board (GSEB) and the Gujarat State Fertiliser Corporation (GSFC) at a price related to fuel oil price on the basis of thermal value equivalence, without any reference to the cost of production of gas as such. Public discontent over the alleged high price charged was expressed and eventually the dispute was referred to the sole arbitra tion of Dr. V.K.R.V. Rao who gave his award. Dr. Rao made the "cost plus" method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (thermal equivalence basis). In July 1967, the supply of gas to some of the indus tries in and around Vadodara city was started, on the basis of individual annual contracts. Aggrieved by the steady rise in the prices, the respondents Association of Natural Gas Consuming Industries and Others moved the Bombay High Court in March 1979 by way of a writ petition In the petition it was, inter alia, prayed that the ONGC be directed (i) to 158 continue to supply the gas to the respondents despite the contracts in their favour having lapsed; (ii) to discuss and negotiate a fair, reasonable and just price for supply of gas; (iii) to stop charging discriminatory prices for the supply of gas to the respondents in comparison with the price charged to public sector undertakings; and (iv) to restrict the minimum guaranteed quantity of offtake. The High Court passed an interim order directing the ONGC to continue the supply of gas to the respondents, at the existing rate of Rs.504 per unit which was later raised by the Court to Rs. 1000 per unit. The High Court held; (i) The Oil and Natural Gas Commission is a public Utility Undertaking and has a duty to supply gas to anyone who requires it so long as there is enough supply available; (ii) Price fixation is generally a legislative function. But the Oil and Natural Gas Commission being a State instrumentality, is bound to act reasonably in the matter of fixation of price; such price is bound to be determined by following any one of the modalities suggested in the judgment of the High Court; (iii) There was no dis crimination by the Oil and Natural Gas Commission between the public sector undertakings on the one hand and the respondents ' undertakings on the other in charging differen tial prices; and (iv) The clause regarding minimum guaran teed offtake was valid and enforceable. Before this Court. the appellant primarily challenged the finding of the High Court that the ONGC was a 'public utility undertaking ' which was bound to supply gas at the request of any member of the public at large. The appellant also contested the correctness of the High Court 's conclu sion that the price of gas must be determined on the basis of cost of production plus a reasonable return for the investment made. The appellant submitted that (i) the prices under the contracts entered into with the respondents had been determined on the basis of a wellknown principle. viz. the ruling prices for an alternate fuel and this could not be said to be either arbitrary or unreasonable particularly when a large number of industries were willing to take the supply of gas at the prices fixed on that basis; (ii) while public sector units and State instrumentalities ought not to be allowed to exploit the consumers. it was equally neces sary to ensure that such units and instrumentalities were enabled to make reasonable profits; (iii) in the context of the integrated activity of production of crude oil and gas. it was almost impossible to work out the cost in respect of any particular area or of a particular bye product; (iv) the cost plus basis was fixed by the Award several years ago and that too in the context of supply to certain State 159 undertakings which, in turn, supplied essential commodities like electricity and fertilizers; and (v) the onus of show ing that the prices charged were unreasonable or arbitrary was on the respondents and they had done nothing to dis charge this onus. On behalf of the respondents it was contended that a public utility undertaking could not arbitrarily discontinue its supply or services merely because the customer was unwilling to pay the price asked for as unconscionable and unreasonable. It was further contended that the price fixed must be reasonable and fair so as to give the undertaking a reasonable return on the capital employed and that there could not be any discrimination against industrial consum ers. According to the respondents. this was the only reason able way of price fixation and referred to the Award in support of this proposition The respondents further urged that to allow Oil and Natural Gas Commission to sell gas at a higher price than this merely because. otherwise. but for the availability of gas, the consumers would have to spend more for their sources of energy. will really amount to introduction an irrelevant element in the process of price fixation and result in allowing the Oil and Natural Gas Commission to make unreasonable profits at the expense of unhappy consumers. It was argued that these principles were applicable with greater force in the context of the consti tutional discipline over state instrumentalities under Article 38 & 39 of the Constitution. Bolt vs Stennett CJ E.R.__Revised p. 1572; Allnutt vs Inglis CIV E.R. Revised p. 206; Ira Y. Munn vs People, ; United Fuel Gas Co. vs Railroad Commission, 73L. Ed. 390; Los Angeles Gas & Electric Corporation vs Railroad Commission. ; ; Leo Nabbia vs People. 78 L.Ed. 940; Harold E. West vs Chesapeake & Potomac Telephone Com., ; ; Federal Power Commission vs Hope Natural Gas Co., ; ; premier Automobiles vs Union, ; ; Panipat Cooperative Sugar Mills vs Union, [1973] 2 S.C.R. 860; Shree Meenakshi Mills vs Union, ; Saraswati Industrial Syndicate vs Union, ; ; Prag Ice and Oil Mills vs Union, ; ; Union of India vs Cynamide India Ltd., [1987] 2 S.C.C. 720, relied upon. Allowing the appeals and upholding the prices charged by the Oil and Natural Gas Commission, this Court, HELD: (1) The Oil and Natural Gas Commission does not satisfy the primary conditions for being a public utility undertaking as it has not so far held itself out or under taken or been obliged by any law to 160 provide gas supply to the public in general or to any par ticular crosssection of the public. The proviso to Section 14(1)(e) of the Act which lays down that the setting up of industries to be run with the aid of gas was not to be undertaken by the Oil and Natural Gas Commission without the Central Government 's approval also gives an indication that the supply of gas to various industries on a general basis was not in the immediate contemplation of the Act but was envisaged as a future expansion to be initiated with Central Government 's approval. Perhaps a stage in the developmental activities of the Oil and Natural Gas Commission will soon come when such an obligation could be inferred but, at present, the Oil and Natural Gas Commission supplies gas only to certain selected contractees. [181E G] (2) It is however not necessary in this case to express any final opinion on the issue whether the ONGC was a public utility undertaking except to say, prima facie, that it could not be placed on par with a public utility undertak ing. All that the respondents wanted was a declaration that they were entitled to the supply of gas at a reasonable price. It was sufficient, for disposing of this claim, to deal with this aspect of the matter and the larger aspect of Oil and Natural Gas Commission being a public utility under taking could be left out of account. [183E F] (3) The treatment of the Oil and Natural Gas Commission as a public utility undertaking for the supply of gas will raise innumerable basic questions totally inconsistent with the present system of selective supply which the respondents want to be continued. It will transpose the area of contro versy to a totally different and wider plane. The Court would then be constrained to hold that the present system of supply was inconsistent with public law and the constitu tional requirements of a public utility undertaking. [183C D] (4) The main activity of the Oil and Natural Gas Commis sion is that of exploration and prospecting for petroleum and petroleum products. So far as gas, which is a bye product, is concerned, the Oil and Natural Gas Commission has not so far been able to voluntarily or constrained statutorily to harness and utilise its production for con sumption by the public. [181H; 182A] (5) There is no doubt that Dr. Rao made the cost plus method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (thermal equivalence basis). But, the cost plus basis fixed by Dr. Rao in the background of the real nature of the dispute before him three decades ago could not be taken as conclusive in the present 161 situation. Dr. Rao was concerned primarily with an issue raised by the public of Gujarat as against the Oil and Natural Gas Commission. He was really adjudicating upon the price which the Oil and Natural Gas Commission should charge to public sector undertakings catering to the essential needs of the State. In that context, his objective was, understandably, to fix the price as low as possible. The consumer under consideration by him represented the public need of the State of Gujarat and, as against such public interest, the Oil and Natural Gas Commission 's profit re quirements paled into insignificance. [189C; G; D E] (6) Here, the Court is dealing with a price to be fixed under a contract between the Oil and Natural Gas Commission and one set of industries in the State who wish to make a change over from the furnance oil system to that of gas supply with a view to increase their own profitability and gain an advantage, if possible, over other industries in the State. In this context, Oil and Natural Gas Commission is entitled to a larger latitude and charge a price which the market can bear. The only restriction is that, being a State instrumentality, it should not be a whimsical or capricious price but should be one based on relevant considerations and on some recognised basis. [189H; 190A] (7) Cost plus is not a satisfactory basis in all situa tions. May be the cost plus is an ideal basis where the commodity supplied is the product of a monopoly vital to human needs. In that context the price fixed should be minimum possible as the customer or consumer must have the commodity for his survival and cannot afford more than the minimum. Per Contra, there can be situations where the need of the consumer is not so vital and the requirements of the economic scene are such that the needs of the producer should be given greater consideration. In such situations, the "plus" element in the cost plus basis (namely, the allowable profit margin) should not be confined to "a rea sonable return on the capital" but should be allowed to have a much larger content depending on the circumstances. Given a favourable area of operation, commercial profits need not be either anathema or forbidden fruit even to public sector enterprises [191D E; G H] Anakapallee Case; , ; Venkatachalam vs Deputy Transport Commissioner; , , referred to. (8) It would not be right to insist that the Oil and Natural Gas Commission should fix oil prices only on cost plus basis. Indeed, its policy of pricing should be based on the several factors peculiar to the industries and its current situation. and so long as such a policy is not 162 irrational or whimsical, the court may not interfere. [195D] (9) Price fixation is generally a legislative function. But Parliament generally provides for interference only at a stage where in pursuance of social and economic objectives or to discharge duties under the Directive Principles of State Policy, control has to be exercised over the distribu tion and consumption of the material resources of the commu nity. [195F] M/s. Shri Sitaram Sugar Company Ltd. & Anr. vs Union, J.T. ; Jagadamba Paper Industries vs Har yana State Electricity Board; , ; Kerala State Electricity Board etc. vs M/s. S.N. Govinda Prabhu & Bros. & Ors. , , referred to. (10) It cannot be said that the Oil and Natural Gas Commission has acted arbitrarily in fixing the prices on the thermal equivalence basis; the fact that it has not done it on cost plus basis does not vitiate the price fixation. The only question to be considered is as to whether the Oil and Natural Gas Commission has fixed a price based on relevant materials and on some known principle. [200C] (11) The manufacture, distribution and consumption of gas has yet not attained the status of an essential commodi ty till recently. At present, the industry is in the penum bral region where the commodity is free to be distributed at the manufacturer 's choice, but yet where such manufacturer being a State instrumentality, has to conform to Articles 14 and 19 of the Constitution. At this stage of development of the industry a much wider latitude is permissible in the fixation of prices than the imposition of a "no profit, no loss" basis or a "cost plus" basis on the producer. [200E G] (12) It is now well settled that a favourable treatment of public sector organisations, particularly ones dealing in essential commodities or service, would not be discriminato ry. No tangible material has been brought to the Court 's notice which would support the plea of unfair discrimina tion. [203E F] (13) The High Court rightly upheld the Oil and Natural Gas Commission 's right to insist on a munimum off take guar antee. [202G] Amalgamated Electricity Co. Ltd. vs Jalgaon Borough Municipality, ; 163

16k+

ions Nos. 585, 599, 611, 622, 625, 565, 576 of 1954 and 48, 58, 415, 416 of 1955 and 10, 16, 37, 39 and 47 of 1956. 397 Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. G.S. Pathak, Rameshwar Nath and K. R. Chowdhry, for petitioners in Petitions Nos. 10, 37 and 47 of 1956. J.N. Bannerji and V. section Sawhney, for petitioners in Petition No. 622 of 1954. S.P. Sinha and K. R. Chowdhry, for petitioners in Petition No. 585 of 1954. B.B. Tawakley and K. P. Gupta, for petitioners in Petitions Nos. 565 and 576 of 1954. K.R. Chowdhry, for petitioners in Petitions Nos. 599 and 611 of 1954 and 58, 415 and 416 of 1955 and 16 and 39 of 1956. R.Patnaik and K. R. Chowdhry, for petitioners in Petition No. 48 of 1955. R.Patnaik, for petitioners in Petition No. 625 of 1954. K.L. Misra, Advocate General, U.P., K. B. Asthana and C. P. Lal, for the State of U.P. and the Cane Commissioner, U.P. in all the Petitions. C.K. Daphtary, Solicitor General of India, and Jagdish Chandra, for the Cane Growers ' Co operative Development Unions in Petitions Nos. 585 and 625 of 1954 and 10 and 47 of 1956. Jagdish Chandra, for the Cane Growers ' Co operative Development Unions in rest of the petitions except Petition No. 37 of 1956. D.N. Mukerji, for Daurala Sugar Mills (respondent No. 4) in Petitions Nos. 611 of 1954, 58, 415 and 416 of 1955. O.N. Srivastava, for Punjab Sugar Mills in Petitions Nos. 48 of 1955 and 47 of 1956. A.S. Chawla, for respondent No. 3 in Petition No. 10 of 1956. Ganpat Rai for respondent No. 9 in Petition No. 10 of 1956. 398 1956. April 24. The Judgment of the Court was delivered by BHAGWATI J. These Petitions under article 32 of the Constitution impugn the validity of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 (U.P. Act XXIV of 1953) hereinafter called the impugned Act and the notifications dated 27th September, 1954 and 9th November, 1955 issued by the U.P.Government thereunder. The petitioners are sugarcane growers in the several villages of the Districts of Meerut, Kheri, Gorakhpur and Deoria in the State of U.P. numbering 4,724 in the aggregate. Associated with them are the President, the Vice Presidents and the Secretary of an association which is styled "the Ganna Utpadak Sangh" which is a rival body to the Co operative Development Unions established and recognised under the impugned Act. The notification dated 27th September, 1954, issued in exercise of the powers conferred by sub section 1 (a) read with sub section 2(b) of section 16 of the impugned Act ordered that where not less than 3/4 of the cane growers of the area of operation of a Cane Growers Co operative Society are members of the Society, the occupier of the factory for which the area is assigned shall not purchase or enter into agreement to purchase cane grown by a cane grower except through such Cane Growers Co operative Society. The notification dated 9th November, 1955 was issued in exercise of the powers conferred by section 15 of the impugned Act and reserved or assigned to the sugar factories mentioned in column 2 of the Schedule annexed thereto the cane purchasing centers (with the authorities attached to them) specified against them in column 3 for the purpose of supply of sugarcane during the crushing season 1955 56 subject to the conditions and explanations given therein. The former relates to the agency of supply of sugarcane to the factories and the latter relates to the creation of zones for particular factories. All the Petitions except Nos. 0 of 1956 and 37 of 1956 impugn the former notification 399 but the grounds of attack against both are common. The impugned Act is challenged as ultra vires the powers of the State Legislature, the subject matter of the Act being within the exclusive field of Parliament and also as being repugnant to Act LXV of 1951 and Act X of 1955 passed by Parliament, and section 15 and section 16 (1) (a) and 2 (b) and the notifications issued thereunder are challenged as unconstitutional inasmuch as they infringe the fundamental rights guaranteed under article 14, article 19(1)(c), (f) and (g) and article 31 besides being in violation of article 301 of the Constitution. All these Petitions involve common questions of law and may be disposed of by one judgment. A short history of the legislation enacted by the Centre as well as the Province of U.P. in regard to sugar and sugarcane will be helpful for the determination of the questions arising in these Petitions. On 8th April, 1932, the Central Legislature passed the Sugar Industry (Protection) Act, 1932 (Act XIII of 1932) to provide for the fostering and development of Sugar Industry in India in pursuance of the policy of discriminating protection of industries with due regard to the well being of the community. As a result of the protection thus granted to the sugar industry, the number of sugar factories which was 31 prior thereto registered a rapid rise and by 1938 they were 139 in number. There was also a large expansion in the cultivation of sugarcane and millions of cultivators in the Province of U.P. took to growing sugarcane. In order to protect their interests and for the purpose of assuring to them a fair price for their produce, the Central Legislature enacted on 1st May, 1934 the (Act XV of 1934) to regulate the price at which sugarcane intended to be used in the manufacture of sugar might be purchased by or for factories. Sugarcane was grown in various Provinces and the declaration of controlled areas and the fixing of minimum price for the purchase of sugarcane intended for use in any factory in any controlled area was of necessity left to the Provincial Governments and the Provincial 400 Governments were also empowered to make rules for the purpose of carrying into effect the objects of the Act including, in particular, the Organisation of growers of sugarcane into Co operative Societies for the sale of sugarcane to factories. With the coming into operation of the Government of India Act, 1935, there was a distribution of legislative powers between the Dominion Legislature and the Provincial Legislatures and agriculture (Entry No. 20), trade and commerce within the Province (Entry No. 27) and production, supply and distribution of goods, development of industries subject to the provision in List 1 with respect to development of certain industries under Dominion control (Entry No. 29) were included in List 11, the Provincial Legislative List. The relevant provision in List 1 was contained in Entry No. 34: "Development of industries where development under Dominion control is declared to be in the public interest". As a result of this distribution of legislative powers, the entire subject matter of Act XV of 1934 fell within the Provincial Legislative List. It was felt that Act XV of 1934 was not sufficiently comprehensive for dealing with the problems of the sugar industry and it was found necessary to replace it by a new measure which would provide for the better Organisation of cane supplies to sugar factories. The Governments of U.P. and Bihar, therefore, decided in consultation with each other to introduce legislation on similar lines for both the Provinces which together accounted for nearly 85 per cent. of production of sugar in India. The U.P. Legislature accordingly enacted on 10th February, 1938 the U.P. Sugar Factories Control Act, 1938 (U.P. Act 1 of 1938) to provide for the licensing of the sugar factories and for regulating the supply of sugarcane intended for use in such factories and the price at which it may be purchased and for other incidental matters. This Act provided for (a) the licensing of sugar factories, (b) the regulation of the supply of sugarcane to factories, (c) the minimum price for sugarcane, (d) the establishment of Sugar Control Board and Advisory. Committee, and (e) a 401 tax on the sale of sugarcane intended for use in factories, and repealed Act XV of 1934. This Act was to remain in force initially until 30th June, 1947 but the period was extended to 30th June, 1950 by U.P. Act XIII of 1947 and to 30th June, 1952 by U.P. Act XXI of 1950. The Second World War intervened and an emergency was proclaimed by the Governor General under section 102 of the Government of India Act, 1935. The Dominion Legislature acquired the power to make laws for the Provinces with respect to any of the matters enumerated in the Provincial Legislative List. The result was in effect to make the Provincial Legislative List also a Concurrent Legislative List for the operation of the Dominion Legislature but if any provision of a Provincial law was repugnant to any provision of the Dominion law made in exercise of that power, the Dominion law was to prevail and the Provincial law was to be void to the extent of the repugnancy. The proclamation of emergency was to operate until revoked by a subsequent proclamation and laws made by the Dominion Legislature as above were to have effect until the expiration of a period of six months after the proclamation had ceased to operate. The Defence of India Act and the Rules made thereunder occupied the field, sugar was made a controlled commodity in the year 1942 and its production and distribution as well as the fixation of sugar prices were regulated by the Sugar Controller thereafter. The proclamation of emergency was revoked on 1st April, 1946 and the laws made by the Dominion Legislature in the field of the Provincial Legislative List were to cease to have effect after 30th September, 1946. On 26th March, 1946, the British Parliament enacted the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo. 6, Chapter 39). Section 2(1) (a) provided that notwithstanding anything in the Government of India Act, 1935, the Indian Legislature shall during the period mentioned in section 4 of the Act have power to make laws with respect to the following matters: "(a) trade and commerce (whether or not within 402 a Province) in, and the production, supply and distribution of, cotton and woollen textiles, paper (including newsprint), foodstuffs (including edible oil seeds and oils), petroleum and petroleum products, spare parts of mechanically propelled vehicles, coal, iron, steel and mica;. . " The period provided in section 4 was the period of one year beginning with the date on which the proclamation of emergency ceased to operate or, if the Governor General by a public notification directed, a period of 2 years beginning with that date. There was a proviso to that section that if and so often as a resolution approving the extension of the said period was passed by both Houses of Parliament, the same period shall be extended for a further period of 12 months from the date on which it would otherwise expire but it was not to continue in any case for more than 5 years from the date on which the proclamation of emergency ceased to operate. Acting under the power reserved to it under section 2(1)(a) aforesaid, the Central Legislature enacted on 19th November, 1946, the Essential Supplies (Temporary Powers) Act, 1946 (Act XXIV of 1946) to provide for the continuance during the limited period of powers to control production, supply and distribution of, and trade and commerce in, certain commodities. Section 1(3) of the Act provided that it shall cease to have effect on the expiration of the period mentioned in section 4 of the India (Central Government and Legislature) Act, 1946. In the absence of a notification by the Governor General, the Act remained operative until 31st March, 1947 only. The Governor General, however, issued a notification on 3rd March, 1947 continuing its force for a period of two years from the date of the cessation of emer gency. By virtue of this notification, the Act would have remained in force till 31st March, 1948. On 18th July, 1947, the Indian Independence Act was passed and India became a Dominion on 15th August, 1947. Under section 9 read with section 19(4) of the Indian Independence Act, 1947, the Governor General passed an order on 14th August, 1947 which substituted the 403 words "Dominion Legislature" for "Both Houses of Parliament" in the proviso to section 4 of India (Central Government and Legislature) Act, 1946 and also introduced a new section 4(a) by way of adaptation providing that the powers of the Dominion Legislature shall be exercised by the Constituent Assembly. On 25th February, 1948, the Constituent Assembly passed its first Resolution extending the operation of the Act for one year up to 31st March, 1949. On 3rd March, 1949, a second Resolution was passed by the Assembly extending the life of the Act by one year more up to 31st March, 1950. With the advent. of our Constitution on 26th January, 1950, Parliament was invested under article 369 with power for a period of 5 years from the commencement of the Constitution to make laws with respect to the following matters as if they were enumerated in the Concurrent List: "(a) trade and commerce within a State in, and the production, supply and distribution of foodstuffs (including edible oil seeds and oil) . . . . " The life of the Act was accordingly extended from time to time up to 26th January 1955 by Acts passed by Parliament. Act XXIV of 1946 defined an essential commodity to mean any of the following classes of commodities: "(1) Foodstuffs . . . . " Food crops were defined as including crops of sugarcane. Section 3 of the Act empowered the Central Government, so far as it appeared to it to be necessary or expedient for maintaining or increasing the supply of any essential commodity or for securing its equitable distribution and availability at fair prices to provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. On 7th October, 1950, the Central Government, in exercise of the powers conferred upon it by section 3 of the Act, promulgated the Sugar and Gur Control Order, 1950, inter alia empowering it to prohibit or to restrict the export of sugarcane from any area, to direct that no gur or sugar shall be 404 manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf and to prohibit or to restrict the despatch of gur or sugar from any State or any area therein. Power was also given to fix minimum price of sugarcane and no person was to sell or agree to sell sugarcane to a producer and no producer was to purchase or agree to purchase sugarcane at a price lower than that notified thereunder. This power of fixing the price of sugarcane was exercised by the Central Government from time to time by issuing notifications fixing the minimum prices to be paid by the producers of sugar by vacuum pan process or their agents for sugarcane purchased by them during the 1950 51 crushing season in various States including U.P. On 31st October, 1951, Parliament enacted the Industries (Development and RegulatiOn) Act, 1951 (Act LXV of 1951) to provide for the development and regulation of certain industries. By section 2 of the Act it was declared that it was expedient in the public interest that the Union should take under its control the industries specified in the First Schedule which included in item 8 thereof the industry engaged in the manufacture or production of sugar. The Province of Bihar which, along with U.P. contributed to nearly 85 per cent. of production of sugar in India had also on its Statute Book the Bihar Sugar Factories Control Act VII of 1937. On 10th April, 1938, a joint meeting of the U.P. and the Bihar Sugar Control Boards was held at which it was resolved that a Committee be appointed to enquire into the working of the sugarcane rules and labour conditions prevailing in the sugar factories in the two Provinces. The Governments of the U.P. and Bihar accepted this recommendation of the Sugar Control Boards and accordingly appointed the Khaitan Committee, (1) to examine the working of the sugarcane rules, (2) to look into the complaints of malpractices received from time to time in connection with the supply of sugarcane to the sugar factories, (3) to enquire into the labour conditions of the sugar factories, and (4) to suggest remedial measures for the shortcomings as 405 noted in (1), (2) and (3) above. Shibban Lal Saxena, the present President of the Ganna Utpadak Sangh and one of the petitioners before us was also a member of that Committee. That Committee submitted its Report in 1940 recommending inter alia abolition of the dual system of supply and creation of a strong co operative Organisation of the sugarcane growers themselves as also creation of a zonal system. The Indian Tariff Board had also, in the meanwhile, made its Report on the sugar industry in the year 1938 commending the advantages of a zonal system. There was further the report of the U. P. Sugar Industry Enquiry Committee, 1951 called the Swaminathan Committee, which also recommended the abolition of dual agencies of cane supplies to factories and commended the desirability of employing the agency of the Co operative Societies for the purpose. It also recommended that the U. P. Act I of 1938 should be amended in order to make this regulation possible. Act LXV of 1951 was brought into force with effect from 8th May, 1952. In view of the same, certain provisions of U. P. Act I of 1938 became inoperative. The U.P. Legislature, therefore, passed on 29th June, 1952 the U. P. Sugar Factories Control Amendment) Act) 1952, deleting those provisions and putting the amended Act permanently on the Statute Book. The U. P. Act I of 1938, as thus amended, continued in force till, as a result of the prior enactment of Act LXV of 1951 and the report of the Indian Tariff Board on the Sugar Industry as well as the reports of the Khaitan Committee and the Swaminathan Committee mentioned above, the U. P. Legislature enacted the impugned Act. The object of the enactment was stated to be as follows: "With the promul gation of the Industries (Development and Regulation) Act, 1951 with effect from 8th May, 1952, the regulation of the sugar industry has become exclusively a Central subject. The State Governments are now only concerned with the supply of sugarcane to the sugar factories. The Bill is being introduced in order to provide for a rational distribution of sugarcane to factories, for its development on organised 406 scientific lines, to protect the interests of the cane growers and of the industry and to put the new Act permanently on the Statute Book" (Vide Statement of objects and reasons published in the U. P. Gazette Extraordinary dated 15th July, 1953). This is the impugned Act the vires of which is challenged in these Petitions. In exercise of the rule making power conferred by section 28 of the Act, the U.P. Government made the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954. The U. P. Government also, in exercise of the powers conferred by section 16 of the Act, promulgated the U.P. Sugarcane Supply and Purchase Order, 1954, which came into effect from 19th September, 1954. All these related to the supply and purchase of sugarcane in U.P. Act LXV of 1951 was amended by Act XXVI of 1953 which, by adding Chapter III(b), invested the Central Government inter alia with power so far as it appeared to it necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry to provide by notified order for regulation of supply and distribution thereof and trade and commerce therein. On 1st April, 1955, Parliament enacted the (Act X of 1955) to provide in the interests of the general public for the control of production, supply and distribution of, and trade and commerce in, certain commodities. The essential commodity there was defined to mean any of the following classes of commodities: "(v) foodstuffs, including edible oilseeds, and oils; . . . . . . . . (xi) any other class of commodity which the Central Government may, by notified order declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 in List III in the Seventh Schedule to the Constitution;" Food crops were defined as inclusive of crops of sugar 407 cane. Section 3(1) empowered the Central Government, if it was of the opinion that it was necessary or expedient to do so for maintaining or increasing the supply of any essential commodity or for securing its equitable distribution and availability at fair prices, to provide by order for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Section 3(2) (b) inter alia provided for the making of such an order for bringing under cultivation any waste or arable land whether appurtenant to a building or not, for the growing thereon of foodcrops generally or of specified foodcrops. Section 16 of the Act repealed (a) the Essential Commodities Ordinance, 1955, and (b) any other law in force in any State immediately before the commencement of the Act in so far as such law controlled or authorised the control of the production, supply and distribution of, and trade and commerce in, any essential commodity. In exercise of the powers conferred by section 3 of the Act, the Central Government promulgated on 27th August, 1955 the Sugar Control Order, 1955 and the Sugarcane Control Order, 1955. The latter empowered the Central Government, after consultation with such authorities, bodies or associations as it may deem fit by notification in the official Gazette from time to time, to fix the price of sugarcane and direct payment thereof and also to regulate the movement of sugar cane. The power to regulate the movement of sugarcane comprised the power to prohibit or restrict or otherwise regulate the export of sugarcane from any area for supply to different factories and the power to direct that no gur (jaggery) or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in a licence issued in this behalf Clause 7 of this order provided that the Sugar and Gur Control Order, 1950, published by the Government of India in the Ministry of Food and Agriculture, S.R.O. 735 dated 7th October, 1950, and any order made by a State Government or other authority regulating or prohibiting the production, supply and distribution of sugarcane and trade or 408 commerce therein were thereby repealed except as respect to things done or omitted to be done under any such order before the commencement of the order. These are the respective Acts and Notifications passed by the Centre as well as the State of U. P. in regard to sugar and sugarcane. Learned counsel for the petitioners urged before us: (1) that the State of U. P. had no power to enact the impugned Act as the Act is with respect to the subject of industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest within the meaning of Entry 52 of List I and is, therefore, within the exclusive province of Parliament. The impugned Act is, therefore, ultra vires the powers of the State Legislature and is a colourable exercise of legislative power by the State; (2)the impugned Act is repugnant to Act LXV of 1951 and Act X of 1955 and in the event of the Court holding that the impugned Act was within the legislative competence of the State Legislature, it is void by reason of such repugnancy; (3)the impugned Act stands repealed to the extent that it has been repealed by section 16 of Act X of 1955 and by clause 7 of the Sugarcane Control Order, 1955, made in exercise of the powers conferred by section 3 of Act X of 1955; (4)the impugned Act infringes the fundamental right guaranteed by article 14 inasmuch as very wide powers are given to the Cane Commissioner which can be used in a discriminatory manner; (5)the impugned Act and the notification dated 27th September, 1954, violate the fundamental right guaranteed under article 19(1) (e) in that the Co operative Societies are not voluntary organisations but a cane grower is compelled to become a member of the Society before he can sell his sugarcane to a factory; (6)the impugned Act and the notifications infringe the fundamental right guaranteed by article 19(1)(f) and (g) and article 31 of the Constitution; (7) the impugned Act is void in that it confers 409 very wide powers on executive officials and is a piece of delegated legislation; and (8) the impugned Act is destructive of the freedom of trade and commerce and thus is violative of article 301 of the Constitution. (1): This contention relates to the legislative competence of the U.P. State Legislature to enact the impugned Act. It was contended that, even though the impugned Act purported to legislate in regard to sugarcane required for use in sugar factories, it was, in pith and substance, and in its true nature and effect legislation in regard to sugar industry which had been declared by Act LXV of 1951 to be an industry the control of which by the Union was expedient in the public interest and was, therefore, within the exclusive province of Parliament under Entry 52 of List I. The word 'industry ', it was contended, was a word of very wide import and included not only the process of manufacture or production but also all things which were necessarily incidental to it, viz., the raw materials for the industry as also the products of that industry and would, therefore, include within its connotation the production, supply and distribution of raw materials for that industry which meant sugarcane in relation to sugar industry. It was also contended that in so far as the impugned Act purported to legislate in regard to sugarcane which was a necessary ingredient in the production of sugar it was a colourable exercise of legislative power by the State, ostensibly operating in its own field within Entry 27 of List II but really trespassing upon the field of Entry 52 of List I. It was contended on behalf of the State on the other hand that. , after the advent of war and the proclamation of emergency under section 102 of the Government of India Act, 1935 and by the combined operation of the India (Central Government and Legislature) Act, 1946 and article 369 of the Constitution taken along with the resolutions of the Houses of Parliament extending the life of Act XXIV of 1946 up to 26th January, 1955 and the Third Constitution Amendment Act of 1954 amending Entry 33 of List 410 III, the Central Legislature was operating all along on what became in effect the Concurrent field even in regard to sugarcane, that the investing of the Central Government with power to legislate in this sphere of the Provincial List did not deprive the Provincial Legislature of such power and that both the Central Legislature as well as the State Legislatures had legislative competence to legislate in regard to these fields which were for the purpose of legislative competence translated into Concurrent fields and that, therefore, the U.P. State Legislature was competent to enact the impugned Act which would be valid within its own sphere except for repugnancy with any of the provisions of the Central Legislature covering the same field. The relevant Entries in the respective Lists of the Seventh Schedule to the Constitution are as follows: List I, Entry 52: Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. List II, Entry 24: Industries subject to the provisions of entry 52 of List 1. Entry 27: Production, supply and distribution of goods subject to the provisions of entry 33 of List III. List III, Entry 33: As it stood prior to its amendment: Trade and commerce in and production, supply and distribution of, the products of industries where the control of such industries by the Union is declared by Parliament by law to be expedient in the public interest. Entry 33 as amended by the Constitution Third Amendment Act, 1954: Trade and commerce in, and the production, supply and distribution of (a)the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b) foodstuffs, including edible oilseeds and oils; 411 (c) cattle fodder, including oilcakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and (e) raw jute. Production, supply and distribution of goods was no doubt within the exclusive sphere of the State Legislature but it was subject to the provisions of Entry 33 of List III which gave concurrent powers of legislation to the Union as well as the States in the matter of trade and commerce in, and the production, supply and distribution of, the products of industries where the control of such industries by the Union was declared by Parliament by law to be expedient in the public interest. The controlled industries were relegated to Entry 52 of List I which was the exclusive province of Parliament leaving the other industries within Entry 24 of List II which was the exclusive province of the State Legislature. The products of industries which were comprised in Entry 24 of List II were dealt with by the State Legislatures which had under Entry 27 of that List power to legislate in regard to the production, supply and distribution of goods, goods according to the definition contained in article 366(12) including all raw materials, commodities and articles. When, however it came to the products of the controlled industries comprised in Entry 52 of List 1, trade and commerce in. , and production, supply and distribution of, these goods became the subject matter of Entry 33 of List III and both Parliament and the State Legislatures had jurisdiction to legislate in regard thereto. The amendment of Entry 33 of List III by the Constitution. Third Amendment Act, 1954, only enlarged the scope of that Entry without in any manner whatever detracting from the legislative competence of Parliament and the State Legislatures to legislate in regard to the same. If the matters had stood there, the sugar industry being a controlled industry, legislation in regard to the same would have been in the exclusive province of Parliament and production, supply and distribution of the product of sugar industry, 412 viz., sugar as a finished product would have been within Entry 33 of List III: Sugarcane would certainly not have been comprised within Entry 33 of List III as it was not the product of sugar industry which was a controlled industry. It was only after the amendment of Entry 33 of List III by the Constitution Third Amendment Act, 1954 that foodstuffs including edible oilseeds and oils came to be included within that List and it was possible to legislate in. regard to sugarcane, having recourse to Entry 33 of List III. Save for that, sugarcane, being goods. fell directly within Entry 27 of List 11 and was within the exclusive jurisdiction ' of the State Legislatures. Production, supply and distribution of sugarcane being thus within the exclusive sphere of the State Legislatures, the U. P. State Legislature would be, without anything more, competent to legislate in regard to the same and the impugned Act would be intra vires the State Legislature. The argument, however, was that the word 'industry ' was a word of wide import and should be construed as including not only the process of manufacture or production but also activities antecedent thereto such as acquisition of raw materials and subsequent thereto such as disposal of the finished products of that industry. The process of acquiring raw materials was an integral part of the industrial process and was, therefore, included in the connotation of the word 'industry ' and when the Central Legislature was invested with the power to legislate in regard to sugar industry which was a controlled industry by Entry 52 of List. I, that legislative power included also the power to legislate in regard to the raw material of the sugar industry, that is sugarcane, and the production, supply and distribution of sugarcane was, by reason of its being the necessary ingredient in the process of manufacture or production of sugar, within the legislative competence of the Central Legislature. Each entry in the Lists which is a category or head of the subject matter of legislation must be construed not in a narrow or restricted sense but as widely as possible so as to extend to all ancillary 413 or subsidiary matters which can fairly and reasonably be said to be comprehended in it (Vide The United Provinces vs Mst. Atiqa Begum and Others(1), Thakur Jagannath Baksh Singh vs The United Provinces (2), and Megh Raj and Another vs Allah Rakhia and Others(3)), and the topic 'industries ' should, therefore, be construed to include the raw materials which are the necessary ingredients thereof and which form an integral part of the industrial process. Our attention was drawn in this connection to the definition of 'industry ' in section 2(j) of the (Act XIV of 1947): "Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, bandicraft, or industrial occupation or avocation of workmen" and also to the wide construction which was put upon the term 'industry ' in the Australian Insurance Staffs ' Federation vs The Accident Underwriters ' Association and Others(4) where it was construed to include "all forms of employment in which large number of persons are employed, the sudden cessation of whose work might prejudicially affect the orderly conduct of the ordinary operations of civil life". A similarly wide interpretation was put on the word 'industry ' by our Court in D. N. Banerji vs P. R. Mukherjee and Others(5) where the dispute was between a Municipality and its employees. These interpretations of the term 'industry ', however, do not help us because in defining the word 'industry ' in the , as also in putting the wide construction on the term industry ' in ; , as well as ; , they were concerned mainly with the question whether an industrial dispute arose between employers and employees. Whether a particular concern came within the definition of an 'employer ' was determined with respect to the criterion ultimately adopted (1) , 134. (2) , 119. (3) (4) [19231 ; , (5) ; 414 which was that the sudden cessation of such work might prejudicially affect the orderly conduct of the ordinary operations of civil life and the withdrawal of service would be detrimental to the industrial system of the community and might result in its dislocation. What we are concerned with here is not the wide construction to be put on the term 'in dustry ' as such but whether the raw materials of an industry which form an integral part of the process are within the topic of 'industry ' which forms the subject matter of Item 52 of List I as ancillary or subsidiary matters which can fairly or reasonably be said to be comprehended in that topic and whether the Central Legislature while legislating upon sugar industry could, acting within the sphere of Entry 52 of List 1, as well legislate upon sugarcane. If both the Central Legislature and the Provincial Legislatures were entitled to legislate in regard to this subject of production, supply and distribution of sugarcane, there would arise no question of legislative competence of the Provincial Legislature in the matter of having enacted the impugned Act. The conflict, if any, arose by reason of the interpretation which was sought to be put on the two Entries, Entry 52 of List I and Entry 27 of List II put in juxtaposition with each other. It was suggested that Item 52 of List I comprised not only legislation in regard to sugar industry but also in regard to sugarcane which was an essential ingredient of the industrial process of the manufacture or production of sugar and was, therefore, ancillary to it and was covered within the topic. If legislation with regard to sugarcane thus came within the exclusive province of the Central Legislature, the Provincial Legislature was not entitled to legislate upon the same by having resort to Entry 27 of List 11 and the impugned Act was, therefore, ultra vires the Provincial Legislature. There was an apparent conflict between the legislative powers of the Centre and of the Provinces in this respect which conflict could not have been intended and, therefore, a reconciliation was to be attempted by reading the two provisions together and by inter 415 preting and where necessary modifying the language of one by that of the other. Reliance was placed on the observations of the Judicial Committee in The Citizens Insurance Company of Canada vs William Parsons(1): "In these cases it is the duty of the Courts, however difficult it may be, to ascertain in what degree, and to what extent, authority to deal with matters falling within these classes of subjects exists in each legislature, and to define in the particular case before them the limits of their respective powers. It could not have been the intention that a conflict should exist; and, in order to prevent such a result, the two sections must be read together, and the language of one interpreted, and, where necessary, modified, by that of the other. In this way it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the sections, so as to reconcile the respective powers which they contain, and give effect to all of them. In performing this difficult duty, it will be a wise course for those on whom it is thrown, to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for the decision of the particular question in hand". and also at page 113: "It is enough for the decision of the present case to say that, in their view, its authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance in a single province. . " These observations were quoted with approval by Gwyer, C. J. in Re: The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (Central Provinces and Berar Act No. XI V of 1938) (2) and it was further held that the general power ought not to be construed as to make a nullity of a particular power conferred by the same Act and operating in the same field. The same duty of reconciling apparently conflicting provisions was reiterated in (1) [1881] L R. 7 A.C. 96,108. (2) , 39. 416 Governor General in Council vs The Province of Madras(1): "But it appears to them that it is right first to consider whether a fair reconciliation cannot be effected by giving to the language of the Federal Legislative List a meaning which, if less wide than it might in another context bear, is yet one that can properly be given to it, and equally giving to the language of the Provincial Legislative List a meaning which it can properly bear". Reliance was also placed on the observations of Gwyer, C. J. quoted in Subrahmanyan Chettiar vs Muthuswami Goundan(2): "As interpreted by the Judicial Committee, the British North America Act presents an exact analogy to the India Act, even to the overriding provisions in section 100(1) of the latter: "The rule of construction is that general language in the heads of section 92 yields to particular expressions in section 91, where the latter are unambiguous": per Lord Haldane in Great West Saddlery Co. vs The King(3). The principles laid down by the Judicial Committee in a long series of decisions for the interpretation of the two sections of the British North America Act may therefore be accepted as a guide for the interpretation of similar provisions in the Government of India Act." and it was contended that Entry 27 of List II should be construed in a general manner as applying to production, supply and distribution of goods in general and Entry 52 of List I should be construed as comprehending within its scope ancillary matters in relation to the controlled industries thus excluding production, supply and distribution of goods which would be thus comprised within it as ancillary matters from the sphere of Entry 27 of List II. If this con struction was adopted it would avoid the apparent conflict between the two Entries and would reconcile the powers of the Provincial Legislatures with those of the Central Legislature. It was, therefore, contended that the Legislation in regard to sugarcane (1) , 191. (2) , 201. (3) [1921] 2 A.G. 91, 116. 417 should be considered as ancillary to the legislation in regard to sugar industry which is a controlled industry and comprised within Entry 52 of List I and should be excluded from Entry 27 of List II which should be read as covering only those categories which did not fall within Entry 52 of List I even though on a wide construction of the words "production, supply and distribution of goods" they would be capable of covering the same. If this construction was put upon these two Entries, it would follow that the subject matter of the impugned Act was within the exclusive juris diction of Parliament being comprised in Entry 52 of List I and was ultra vires the U.P. State Legislature. The answer of the State of U.P. was two fold: (1) after the advent of the Second World War and all throughout up to 1955 when Act X of 1955 was enacted by Parliament, the Centre was operating upon the Concurrent field of legislation and that whatever legislation in regard to sugarcane was enacted by the Centre as part of its legislative activities in regard to sugar was not under Entry 52 of List I but was in exercise of its legislative powers under Concurrent jurisdiction, and (2) that the impugned Act merely confined itself to legislation in regard to sugarcane and did not purport to legislate in regard to sugar which was exclusively dealt with by the Centre. There was, therefore, no trespass upon the exclusive jurisdiction of the Centre and the impugned Act was within the legislative competence of the State Legislature. As has been noted above, the entire subject matter of Act XV of 1934 came within the Provincial Legislative List on a distribution of legislative powers effected under the Government of India Act, 1935 and the U.P. Legislature enacted the U.P. Act I of 1938 covering the same field and repealing Act XV of 1934. Entry 27 of List II related to production, supply and distribution of goods and development of industries except in regard to controlled industries, and, in so far as in 1938 sugar was not a controlled industry, the U.P. Legislature enacted provisions for the licensing of the sugar factories and for regulating the price and supply of sugarcane intended for use in 418 such factories. With the advent of War and the proclamation of emergency under section 102 of the Government of India Act, 1935, the Centre was invested with the power to make laws for the Provinces with respect to any of the matters enumerated in the Provincial Legislative List and the Central Legislature as well as the Provincial Legislatures were thus enabled to enact measures exercising concurrent jurisdiction in regard to the topics enumerated in the Provincial Legislative List. The emergency was about to come to an end on the 1st April, 1946 and the British Parliament, therefore, on 26th March, 1946, passed the India. (Central Government and Legislature) Act, 1946, under which, notwithstanding anything in the Government of India Act, 1935, the Central Legislature was, for the period specified in section 4 thereof, invested with the powers to make laws with respect to (a) trade and commerce in, and the production, supply and distribution of foodstuffs, edible oilseeds and oils and this provision in effect continued the power which had been vested in the Central Legislature during the emergency under section 102 of the Government of India Act, 1935. The period mentioned in section 4 of this Act was extended from time to time up to 31st March, 1950. It was in pursuance of these powers that the Central Legislature enacted Act XXIV of 1946 on 16th November, 1946. The essential commodities therein comprised inter alia foodstuffs which would include sugar as well as sugarcane and both sugar and sugarcane, therefore, came within the jurisdiction of the Centre. Act XXIV of 1946 was continued in force up to 31st March, 1950 under the terms of section 4 of India (Central Government and Legislature) Act, 1946 by the notification of the GovernorGeneral and the resolutions passed by both the Houses of Parliament but before the expiration of this extended period the Constitution was inaugurated and under article 369 Parliament was invested with the power to make laws inter alia with respect to trade and commerce within a State and production, supply and distribution of foodstuffs, edible oilseeds 419 and oils as if they were enumerated in the concurrent list and it was by virtue of this power that Act XXIV of 1946 was extended up to 26th January, 1955 by diverse pieces of legislation enacted by Parliament. Sugar and sugarcane thus continued within the jurisdiction of the Centre right up to 26th January, 1955. When Entry 33 of List III was amended by the Constitution Third Amendment Act, 1954, foodstuffs including edible oilseeds and oils were included therein and both Parliament and the State Legislatures acquired concurrent jurisdiction to legislate over sugar and sugarcane Tradeand commercein, and production, supply and distribution of, sugar and sugarcane thus could be dealt with by Parliament as well as by the State Legislatures and it was in exercise of this jurisdiction that Parliament enacted Act X of 1955. The list of essential commodities defined in section 2 of the Act comprised foodstuffs, including edible oilseeds and oils, cattlefodder, raw cotton and cotton seed and raw jute which were items (b), (c), (d) and (e) in Entry 33 of List III and the products of the controlled industries, coal, textiles, iron and steel, paper, petroleum and petroleum products and any other class of commodity which the Central Government may by notification or order declare to be an essential commodity for the purposes of the Act being a commodity with respect to which Parliament has power to make laws by virtue of Entry 33 of List III of the Seventh Schedule to the Constitution, which were amongst the products of the controlled industries specified in the First Schedule to Act LXV of 1951. It follows that Act X of 1955 was enacted by Parliament in exercise of the legislative powers conferred upon it by Entry 33 of List III and was an exercise of concurrent jurisdiction. It is clear, therefore, that all the Acts and the noti fications issued thereunder by the Centre in regard to sugar and sugarcane were enacted in exercise of the concurrent jurisdiction. The exercise of such concurrent jurisdiction would not deprive the Provincial Legislatures of similar powers which they had under the Provincial Legislative List and there would, there 420 fore, be no question of legislative incompetence qua the Provincial Legislatures in regard to similar pieces of legislation enacted by the latter. The Provincial Legislatures as well as the Central Legislature would be competent to enact such pieces of legislation and no question of legislative competence would arise. It also follows as a necessary corollary that, even though sugar industry was a controlled industry, none of these Acts enacted by the Centre was in exercise of its jurisdiction under Entry 52 of List 1. Industry in the wide sense of the term would be capable of comprising three different aspects: (1) raw materials which are an integral part of the in dustrial process, (2) the process of manufacture or production, and (3) the distribution of the products of the industry. The raw materials would be goods which would be comprised in Entry 27 of List II. The process of manufacture or production would be comprised in Entry 24 of List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List II except where they were the products of the controlled industries when they would fall within Entry 33 of List 111. This being the position, it cannot be said that the legislation which was enacted by the Centre in regard to sugar and sugarcane could fall within Entry 52 of List I. Before sugar industry became a controlled industry, both sugar and sugarcane fell within Entry 27 of List II but, after a declaration was made by Parliament in 1951 by Act LXV of 1951, sugar industry became a controlled industry and the product of that industry, viz., sugar was comprised in Entry 33 of List III taking it out of Entry 27 of List II. ' Even so, the Centre as well as the Provincial Legislatures had concurrent jurisdiction in regard to the same. In no event could the legislation in regard to sugar and sugarcane be thus included within Entry 52 of List 1. The pith and substance argument also cannot be imported here for the simple reason that, when both the Centre as well as the State Legislatures were operating in the concurrent field, 421 there was no question of any trespass upon the exclusive jurisdiction vested in the Centre under Entry 52 of List 1, the only question which survived being whether, putting both the pieces of legislation enacted by the Centre and the State Legislature together, there was any repugnancy, a contention which will be dealt with hereafter. A more effective answer is furnished by comparison of the terms of the U.P. Act I of 1938 with those of the impugned Act. Whereas the U.P. Act I of 1938 covered both sugarcane and sugar within its compass, the impugned Act was confined only to sugarcane, thus relegating sugar to the exclusive jurisdiction of the Centre thereby eliminating all argument with regard to the encroachment by the U.P. State Legisla ture on the field occupied by the Centre. The U.P. Act I of 1938 provided for the establishment of a Sugar Control Board, the Sugar Commissioner, the Sugar Commission and the Cane Commissioner. The impugned Act provided for the establishmentof a Sugarcane Board. The Sugar Commissionerwas named as such but his functions under rules 106and 107 were confined to getting information which would lead to the regulation of the supply and purchase of sugarcane required for use in sugar factories and had nothing to do with the production or the disposal of sugar produced in the factories. The Sugar Commission was not provided for but the Cane Commissioner was the authority invested with all the powers in regard to the supply and purchase of sugarcane. The Inspectors appointed under the U.P. Act I of 1938 had no doubt powers to examine records maintained at the factories showing the amount of sugarcane purchased and crushed but they were there with a view to check the production or manufacture of sugar whereas the Inspectors appointed under the impugned Act were, by rule 20, to confine their activities to the regulation of the supply and purchase of sugarcane without having anything to do with the further process of the manufacture or production of sugar. Chapter 3 of U.P. Act I of 1938, dealing with the construction and extension of sugar factories, licens 55 422 ing of factories for crushing sugarcane, fixing of the price of sugar, etc., was deleted from the impugned Act. The power of licensing new industrial undertakings was thereafter exercised by the Centre under Act LXV of 1951 as amended by Act XXVI of 1953, vide sections 1 1 (a), 12 and 13, and the power of fixation of price of sugar was exercised by the Centre under section 3 of Act XXIV of 1946 by issuing the Sugar Control Order, 1950. Even the power reserved to the State Government to fix minimum prices of sugarcane under Chapter V of U.P. Act I of 1938 was deleted from the impugned Act the same being exercised by the Centre under clause 3 of Sugar and Gur Control Order, 1950, issued by it in exercise of the powers conferred under section 3 of Act XXIV of 1946. The prices fixed by the Centre were adopted by the State Government and the only thing which the State Government required under rule 94 was that the occupier of a factory or the purchasing agent should cause to be put up at each purchasing centre a notice showing the minimum price of cane fixed by the Government meanig there by the centre. The State Government also incorporated these prices which were notified by the Centre from time to time in the forms of the agreements which were to be entered between the cane growers, the cane growers co operative societies, the factories and their purchasing agents for the supply and purchase of sugarcane as provided in the U.P. Sugarcane Supply and Purchase Order, 1954. The only provision which was retained by the State Government in the impugned Act for the protection of the sugarcane growers was that contained in section 17 which provided for the payment of price of sugarcane by the occupier of a factory to the sugarcane growers. It could be recovered from such occupier as if it were an arrear of land revenue. This comparison goes to show that the impugned Act merely confined itself to the regulation of the supply and purchase of sugarcane required for use in sugar factories and did not concern itself at all with the controlling or licensing of the sugar factories, with the production or manufacture. of sugar or with the 423 trade and commerce in, and the production, supply and distribution of, sugar. If that was so, there was no question whatever of its trenching upon the jurisdiction of the Centre in regard to sugar industry which was a controlled industry within Entry 52 of List I and the U.P. Legislature had jurisdiction to enact the law with regard to sugarcane and had legislative competence to enact the impugned Act. (2): It was next contended that the provisions of the impugned Act were repugnant to the provisions of Act LXV of 1951 and Act X of 1955 which were enacted by Parliament and, therefore, the law made by Parliament should prevail and the impugned Act should, to the extent of the repugnancy, be void. Before dealing with this contention it is necessary to clear the ground by defining the exact connotation of the term "repugnancy". Repugnancy falls to be considered when the law made by Parliament and the law made by the State Legislature occupy the same field because, if both these pieces of legislation deal with separate and distinct matters though of a cognate and allied character, repugnancy does not arise. So far as our Constitution is concerned, repugnancy is dealt with in article 254 which provides: "254. (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legisla ture of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2)Where a law made by the Legislature of a State specified in Part A or Part B of the First Schedule with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by 424 Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State". We are concerned here with the repugnancy, if any, arising by reason of both Parliament and the State Legislature having operated in the same field in respect of a matter enumerated in the Concurrent List, i.e., foodstuffs comprised in Entry 33 of List III and we are, therefore, not called upon to express any opinion on the controversy which was raised in regard to the exact scope and extent of article 254(1) in regard to "a law made by Parliament which Parliament is competent to enact", as to 'whether the legislative power of Parliament therein refers to List I) List III and the residuary power of legislation vested in Parliament under article 248 or is confined merely to the matters enumerated in the Concurrent List (Vide A.I.R. 1942 Cal. 587 contra, Per Sulaiman, J. in at p. 226). Nicholas in his Australian Constitution, 2nd ed., p. 303, refers to three tests of inconsistency or repugnancy: (1)There may be inconsistency in the actual terms of the competing statutes (R. vs Brisbane Licensing Court; , (2)Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive code (Clyde Engineering Co. Ltd. vs Cowburn, (3) Even in the absence of intention a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter (Victoria vs Common wealth; , ; Wenn 425 vs Attorney General (Vict.); , Isaacs, J. in Clyde Engineering Company, Limited vs Cowburn(1) laid down one test of inconsistency as conclusive: "If, however, a competent legislature expressly or implicitly evinces its intention to cover the whole field. , that is a conclusive test of inconsistency where another Legislature assumes to enter to any extent upon the same field". Dixon, J. elaborated this theme in Ex parte McLean(2): "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and section 109 applies. That this is so is settled, at least when the sanctions they impose are diverse. But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere co existence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter". To the same effect are the observations of Evatt, J. in Stock Motor Plough Ltd. vs Forsyth(3): "It is now established, therefore, that State and Federal laws may be inconsistent, although obedience to both laws is possible. There may even be incon (1) , 489. (2) , 483. (3) ; , 147. 426 sistency although each law imposes the very same duty of obedience. These conclusions have, in the main, been reached, by ascribing "inconsistency" to a State law, not because the Federal law directly invalidates or conflicts with it, but because the Federal law is said to "cover the field". This is a very ambiguous phrase, because subject matters of legislation bear little resemblance to geographical areas. It is no more than a cliche for expressing the fact that, by reason of the subject matter dealt with, and the method of dealing with it, and the nature and multiplicity of the regulations prescribed, the Federal authority has adopted a plan or scheme which will be hindered and obstructed if any additional regulations whatever are prescribed upon the subject by any other authority; if, in other words, the subject is either touched or trenched upon by State authority". The Calcutta High Court in G. P. Stewart vs B. K. Roy Chaudhury(1) bad occasion to consider the meaning of repugnancy and B. N. Rau, J. who delivered the judgment of the Court observed at page 632: "It is sometimes said that two laws cannot be said to be properly repugnant unless there is a direct conflict between them, as when one says 'do" and the other "don 't", there is no true repugnancy, according to this view, if it is possible to obey both the laws. For reasons which we shall set forth presently, we think that this is too narrow a test: there may well be cases of repugnancy where both laws say "don 't" but in different ways. For example, one law may say, "No person shall sell liquor by retail, that is, in quantities of less than five gallons at a time" and another law may say, "No person shall sell liquor by retail, that is, in quantities of less than ten gallons at a time". Here, it is obviously possible to obey both laws, by obeying the more stringent of the two, namely the second one; yet it is equally obvious that the two laws are repugnant, for to the extent to which a citizen is compelled to obey one of them, the other, though not actually disobeyed, is nullified". The learned Judge then discussed the various auth (1) A.I.R. 1939 Cal. 427 orities which laid down the test of repugnancy in Australia, Canada, and England and concluded at page 634: "The principle deducible from the English cases, as from the Canadian cases, seems therefore to be the same as that enunciated by Isaacs, J. in the Australian 44 hour case if the dominant law has expressly or impliedly evinced its intention to cover the whole field, then a subordinate law in the same field is repugnant and therefore inoperative. Whether and to what extent in a given case, the dominant law evinces such an intention must necessarily depend on the language of the particular law". Sulaiman, J. in Shyamakant Lal vs Rambhajan Singh(1) thus laid down the principle of construction in regard to repugnancy: "When the question is whether a Provincial legislation is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repugnant should be on the party attacking its validity. There ought to be a presumption in favour of its validity, and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other; and care should be taken to see whether the two do not really operate in different fields without encroachment. Further, repugnancy must exist in fact, and not depend merely on a possibility. Their Lordships can discover no adequate grounds for holding that there exists repugnancy between the two laws in districts of the Province of Ontario where the prohibitions of the Canadian Act are not and may never be in force: (Attorney General for Ontario vs Attorney General for the Dominion ) (2) ". In the instant case, there. is no question of any in consistency in the actual terms of the Acts enacted by Parliament and the impugned Act. The only questions that arise are whether Parliament and the State Legislature sought to exercise their powers over the same subject matter or whether the laws enacted (1) , 212. (2) , 369 70, 428 by Parliament were intended to be a complete exhaustive code or, in other words, expressly or impliedly evinced an intention to cover the whole field. It would be necessary, therefore, to compare the provisions of Act LXV of 1951 as amended by Act XXVI of 1953, Act X of 1955 and the Sugar Control Order, 1955 issued thereunder with those of the impugned Act and U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 passed thereunder. Act LXV of 1951 was an Act to provide for the development and regulation of certain industries the control of which by the Union was declared by the Act to be expedient in the public interest and it embraced the various industries mentioned in the First Schedule to the Act. The industry engaged in the manufacture or production of sugar was one of such industries and under the Act the Union acquired control over the same. The Act provided for the establishment and constitution of a Central Advisory Council for the purposes of advising it on matters concerning the development and regulation of the scheduled industries. It also provided for the establishment and constitution of Development Councils for any scheduled industry or group of scheduled industries. It further provided for the regulation of scheduled industries by registration of existing industrial undertakings and licensing of new industrial undertakings and causing investigations to be made in the scheduled industries or industrial undertakings. These provisions were evidently intended to control the scheduled industries and if the sugar industry was one of the scheduled industries the control there of involved the development and regulation of the sugar industry and the registration and the licensing as also investigation into the affairs of the undertakings which were engaged in the production or manufacture of sugar. It did not involve the regulation of the supply and purchase of sugarcane which, though it formed an integral part of the process of manufacture of sugar. was merely the raw material for the industry and as such not within the purview of the Act. If the, Act had remained as originally enacted the 429 provisions of the Act would not have been in any manner whatever repugnant to the provisions of U.P. Act I of 1938 because both the Acts covered different fields. Act XXVI of 1953, however, introduced certain amendments in the Act. the relevant amendment for our purpose being section 18 G which provided as follows: "18 G. Power to control supply,distribution, price, etc., of certain articles. (1) The Central Government, so far as it appears to it necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein. ". . . . . . . . . . ." Explanation. In this section, the expression 'article or class of articles ' relatable to any scheduled industry includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry". Sugar industry being one of the scheduled industries, it was contended for the petitioners that sugarcane was an article relatable to the sugar industry and was, therefore, within the scope of section 18 G and the Central Government was thus authorised by notified order to provide for regulating the supply and distribution thereof and trade and commerce therein. If that was so, it was next contended, the field of legislation in regard to sugarcane was covered by this provision of the Act and was taken away from the jurisdiction of the State Legislatures, the avowed in tention being to cover the whole field of such legislation. It was, however, urged on behalf of the State of U. P. that articles relatable to scheduled industry comprised only those finished products which were of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry and did not comprise the raw materials for 430 the scheduled industry. Reliance was placed in support of this contention on the terms of the explanation to section 18 G as also to sections 15 and 16 of the Act where the same words "any article or class of articles relatable to that industry" were used. In our opinion, the contention of the State is sound. The structure of the whole Act LXV of 1951 related to the development and regulation of the scheduled industries and all the provisions which were contained in the Act including those which were introduced therein by Act XXVI of 1953 were designed for effectuating that purpose. It is significant to note that, even in section 18 G, the regulation which was intended was that of the supply and distribution of the article or class of articles relatable to the scheduled industry and the production of those articles was not sought to be regulated at all. The raw materials would certainly be essential ingredients in the process of manufacture or production of the articles in the scheduled industry but would not be of the same nature or description as the article or class of articles manufactured or produced therein,. The whole object of enactment of section 18 G was to secure the equitable distribution and availability at fair prices of such articles which by rela tion thereof to the article or class of articles manu factured or produced in the scheduled industry would affect such manufacture or production or the supply and distribution thereof or trade and commerce therein. Not only were the article or class of articles relatable to the scheduled industry which were themselves manufactured or produced in this country sought to be controlled in this manner but also the articles or class of articles imported into India which were of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry, so that all these articles whether indigenous or imported would be controlled by the Central Government by regulating the supply and distribution thereof and trade and commerce therein with a view to develop and regulate and thus control the scheduled industries in the public interest. See 431 tion 15 of the Act provided that where the Central Government was of the opinion that, in respect of any scheduled industry or industrial undertaking there had been or was likely to be a substantial fall in the volume of production in respect of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertakings for which, having regard to the economic conditions prevailing, there was no justification, it may make or cause to be made full and complete investigations into the circumstances of the case. If, after making or causing to be made any such investigations, the Central Government was satisfied that action under section 16 was desirable it was to issue such directions to the industrial undertakings concerned as may be appropriate for regulating production of any article or class of articles of any industrial undertakings or fixing the standard of production, requiring the industrial undertakings to take such steps as are considered necessary to stimulate the development of the industry to which the undertakings relate, prohibiting the industrial undertakings from resorting to any act or practice which may reduce its production capacity and economic value and controlling the prices and regulating the distribution of any article or class of articles which has been the subject matter of investigation. If any article or class of articles relatable to that industry could thus be the subjectmatter of investigation and if appropriate directions in the manner indicated in section 16 could be given in relation thereto, it is obvious that it would not be within the province of the scheduled industry or industrial undertakings to take such steps in regard to the controlling of the prices or regulating the distribution of these articles or class of articles unless they were within the sphere of the scheduled industries or industrial undertakings. Raw materials for the manufacture or production of the article or class of articles in the scheduled industry would certainly not be within this sphere and they would not be able to control the prices or regulate the distribution thereof within the meaning of section 16. 432 These articles or class of articles relatable to the scheduled industry, therefore, were finished products and not raw materials for the manufacture or production of the articles or class of articles in the scheduled industry. They were finished products of a cognate character which would be manufactured or produced in the very process of manufacture or production in the course of carrying on that scheduled industry. The raw materials would certainly not be included within this category and sugarcane which is the raw material for the manufacture or production of sugar could, therefore, not be included in the category of the articles or class of articles relatable to the sugar industry. Section 18 G, therefore, did not cover the field of sugarcane and the Central Government was not empowered by the introduction of section 18 G by Act XXVI of 1953 to legislate in regard to sugarcane. The field of sugarcane was not covered by Act LXV of 1951 as amended by Act XXVI of 1953 and the legislative powers of the Provincial Legislatures in regard to sugarcane were not affected by it in any manner whatever. If the two fields were different and the Central legislation did not intend at all to cover that field, the field was clear for the operation of State legislation and there was no repugnancy at all between Act LXV of 1951 and the impugned Act. Even assuming that sugarcane was an article or class of articles relatable to the sugar industry within the meaning of section 18 G of Act LXV of 1951, it is to be noted that no order was issued by the Central Government in exercise of the powers vested in it under that section and no question of repugnancy could ever arise because, as has been noted above, repugnancy must exist in fact and not depend merely on a possibility. The possibility of an order under section 18 G being issued by the Central Government would not be enough. The existence of such an order would be the essential prerequisite before any repugnancy could ever arise. Act X of 1955 included within the definition of essential commodity food stuffs which we have seen above would include sugar as well as sugarcane. This 433 Act was enacted by Parliament in exercise of the concurrent legislative power under Entry 33 of List III as amended by the Constitution Third Amendment Act, 1954. Foodcrops were there defined as including crops of sugarcane and section 3(1) gave the Central Government powers to control the production, supply and distribution of essential commodities and trade and commerce therein for maintaining or increasing the supplies thereof or for securing their equitable distribution and availability at fair prices. Section 3(2)(b) empowered the Central Government to provide inter alia for bringing under cultivation any waste or arable land whether appurtenant to a building or not for growing thereon of foodcrops generally or specified foodcrops and section 3(2)(c) gave the Central Government power for controlling the price at which any essential commodity may be bought or sold. These provisions would certainly bring within the scope of Central legislation the regulation of the production of sugarcane as also the controlling of the price at which sugarcane may be bought or sold, and in addition to the Sugar Control Order, 1955 which was issued by the Central Government on 27th August, 1955, it also issued the Sugarcane Control Order, 1955, on the same date investing it with the power to fix the price of sugarcane and direct payment thereof as also the power to regulate the movement of sugarcane. Parliament Was well within its powers in legislating in regard to sugarcane and the Central Government was also well within its powers in issuing the Sugarcane Control Order, 1955 in the manner it did because all this was in exercise of the concurrent power of legislation under Entry 33 of List III. That, however, did not affect the legislative competence of the U. P. State Legislature to enact the law in regard to sugarcane and the only question which remained to be considered was whether there was any repugnancy between the provisions of the Central legislation and the U. P. State legislation in this behalf. As we have noted above, the U. P. State Government. did not at all provide for the fixation of minimum 434 prices for sugarcane nor did it provide for the regulation of movement of sugarcane as was done by the Central Government in clauses (3) and (4) of the Sugarcane Control Order, 1955. The impugned Act did not make any provision for the same and the only provision in regard to the price of sugarcane which was to be found in the U. P. Sugarcane Rules, 1954, was contained in Rule 94 which provided that a notice of suitable size in clear bold lines showing the minimum price of cane fixed by the Government and the rates at which the cane is being purchased by the centre was to be put up by an occupier of a factory or the purchasing agent as the case may be at each purchasing centre. The price of cane fixed by Government here only meant the price fixed by the appropriate Government which would be the Central Government, under clause 3 of the Sugarcane Control Order, 1955, because in fact the U. P. State Government never fixed the price of sugarcane to be purchased by the factories. Even the provisions in behalf of the agreements contained in clauses 3 and 4 of the U. P. Sugarcane Regulation of Supply and Parchase Order, 1954, provided that the price was to be the minimum price to be notified by the Government subject to such deductions, if any, as may be notified by the Government from time to time meaning thereby the Central Government, the State Government not having made any pro vision in that behalf at any time whatever. The provisions thus made by the Sugarcane Control Order, 1955, did not find their place either in the impugned Act or the Rules made thereunder or the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, and the provision contained in section 17 of the impugned Act in regard to the payment of sugarcane price and recovery thereof as if it was an arrear of land revenue did not find its place in the Sugarcane Control Order, 1955. These provisions, therefore, were mutually exclusive and did not impinge upon each other there being thus no trenching upon the field of one Legislature by the other. Our attention was drawn to the several provisions contained in the 435 Sugarcane Control Order, 1955 and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 and the agreements annexed thereto and it was pointed out that they differed in material particulars, the provisions of the latter being more stringent than those of the former. It is not necessary to refer to these provisions in any detail. Suffice it to say that none of these provisions do overlap, the Centre being silent with regard to some of the provisions which have been enacted by the State and the State being silent with regard to some of the Provisions which have been enacted by the Centre. There is no repug nancy whatever between these provisions and the impugned Act and the Rules framed thereunder as also the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 do not trench upon the field covered by Act X of 1955. There being no repugnancy at all, therefore. , no question arises of the operation of article 254(2) of the Constitution and no provision of the impugned Act and the Rules made thereunder is invalidated by any provision contained in Act LXV of 1951 as amended by Act XXVI of 1953 or Act X of 1955 and the Sugarcane Control Order, 1955 issued thereunder. (3): It was then contended that the impugned Act stands repealed to the extent that it has been repealed by section 16 of Act X of 1955 and clause 7 of the Sugarcane Control Order., 1955 made in exercise of the powers conferred by section 3 of Act X of 1955. Section 16 of Act X of 1955 reads as under: "16. (1) The following laws are hereby repealed: (a) the Essential Commodities Ordinance, 1955; (b) any other law in force in any State immediately before the commencement of this Act in so far as such law controls or authorises the control of the production, supply and distribution of, and trade and commerce in, any essential commodity". It is submitted that the impugned Act was "any other law" in force in the State of U. P. immediately before the commencement of Act X of 1955 and stood repealed in so far as it controlled or authorised the 436 control of production, supply and distribution of, and trade and commerce in, sugarcane which was comprised within foodstuffs an essential commodity under Act X of 1955. Clause 7 of the Sugarcane Control Order, 1955 made in exercise of the powers conferred by section 3 of the Act provided: "7. (1) The Sugar and Gur Control Order, 1950, published with the Government of India in the Ministry of Food and Agriculture S.R.O. No. 735, dated the 7th October, 1950, and any order made by a State Government or other authority regulating or prohibiting the production, supply and distribution of sugarcane and trade or commerce therein are hereby repealed, except as respect things done or omitted to be done under any such order before the commencement of this order". It is submitted that the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, made by the U.P. Government in exercise of the powers conferred by section 16 of the impugned Act is repealed in so far as it regulates or prohibits the production, supply and distribution of sugarcane or trade and commerce therein. These are provisions for the express repeal of the impugned Act and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, and if the contention of the petitioners in this behalf were accepted it would have the effect of nullifying the provisions of the impugned Act and also the impugned notifications which have been issued in exercise of the powers conferred by sections 15 and 16 of the Act. As regards section 16 of Act X of 1955, the validity and effect thereof depends upon the construction to be put on article 254(2) and the proviso thereto. Article 254(2) deals with repugnancy between the provisions of a law made by the State Legislature and those of an earlier law made by Parliament or an existing law with respect to one of the matters enumerated in the Concurrent List and provides that the law so made by the State Legislature shall, if it has been reserved for the consideration of the President and has received his assent, prevail in the State. A 437 proviso, however, has been attached thereto which says that "nothing in article 254(2) shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the State Legislature". Ordinarily Parliament would not have the power to repeal a law passed by the State Legislature even though it be a law with respect to one of the matters enumerated in the Concurrent List. Section 107 of the Government of India Act, 1935 did not contain any such power. As was observed by this Court in Zaverbhai Amaidas vs The State of Bombay(1), this provision contained in article 254(2) "is in substance, a reproduction of section 107 (2) of the Government of India Act, 1935, the concluding portion whereof being incorporated in a proviso with further additions. Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situation similar to that under section 107(2) of the Government of India Act, it was observed by Lord Watson in Attorney General for Ontario vs Attorney General for the Dominion(2), that though a law enacted by the Parliament of Canada and within its competence would override Provincial legislation covering 'he same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. That would appear to have been the position under section 107(2) of the Government of India Act with reference to the subjects mentioned in the Concurrent List. Now, by the proviso to. article 254(2) the Constitution has enlarged the powers of Parliament, and under that proviso, Parliament can do what the Central Legislature could not under section 107(2) of the Government of India Act, and enact a law addihg to, amending, varying or repealing a law of the State, when it relates to a matter mentioned in the Concurrent List. The position then is that under the Constitution Parliament can, acting under the proviso to article 254(2), repeal a State law". (1) [1955] 1 S.C.R. 799, 806. (2) , 57 438 it is argued for the state of U.P. that, under the proviso to article 254(2),the power to repeal a law passed by the State Legislature is incidental to enacting a law relating to the same matter as is dealt with in the State legislation, and that a statute which merely repeals a law passed by the State Legislature without enacting substantive provisions on the subject would not be within the proviso, as it could not have been the intention of the Constitution that in a topic within the concurrent sphere of legislation there should be a vacuum. There is considerable force in this contention, and there is much to be said for the view that a repeal simpliciter is not within the proviso. But it is unnecessary to base our decision on this point, as the petitioners must, in our opinion, fail on another ground. While the proviso to article 254(2) does confer on Parliament a power to repeal a law passed by the State Legislature, that power is, under the terms of the proviso, subject to certain limitations. It is limited to enacting a law with respect to the same matter adding to, amending, varying or repealing a "law so made by the State Legiisla ture". The law referred to here is the law mentioned in the body of article 254(2). It is a law made by the State Legislature with reference to a matter in the Concurrent List containing provisions repugnant to an earlier law made by Parliament and with the consent of the President. It is only such a law that could be altered, amended or repealed under the proviso. The impugned Act is not a law relating to any matter, which is the subject of an earlier legislation by Parliament. It is a substantive law covering a field not occupied by Parliament, and no question of its containing any provisions inconsistent with a law enacted by Parliament could therefore arise. To such a law, the proviso has no application and section 16 (1)(b) of Act X of 1955 and clause 7(1) of the Sugarcane Control Order, 1955 must, in this view, be held to be invalid. There is also a further objection to which clause 7 (1) of the Sugarcane Control Order, 1955 is open. The 439 power of repeal, if any, was vested in Parliament and Parliament alone could exercise it by enacting an appropriate provision in regard thereto. Parliament could not delegate this power of repeal to any executive authority. Such delegation, if made, would be void and the Central Government had no power, therefore, to repeal any order made by the State Government in exercise of the powers conferred upon it by section 16 of the impugned Act. The U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, could not, therefore, be validly repealed by the Central Government as was purported to be done by clause (7) of the Sugarcane Control Order, 1955, and that repeal was of no effect with the result that the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 stood unaffected thereby. The result, therefore, is that there was no repeal of the impugned Act or the U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 by section 16 of Act X of 1955 or by clause (7) of the Sugarcane Control Order, 1955 as contended by the petitioners. (4): It is pointed out that the Cane Commissioner declares the reserved or assigned areas for the factories, and also transfers particular areas from one factory to another. He is also in sole charge and management of Cane Growers Co operative Societies. It is contended that the powers thus conferred upon him are so wide that they are capable of being exercised in a discriminatory manner and therefore the impugned Act infringes the fundamental right guaranteed by article 14 of the Constitution. Section 15 of the Act provides: "15. (1) Without prejudice to any order made under clause (d) of sub section (2) of section 16 the Cane Commissioner may, after consulting the Factory and Canegrowers Co operative Society in the manner to be prescribed (a)reserve any area (hereinafter called the reserved area), and (b)assign any area (hereinafter called an assigned area), 440 for the purpose of the supply of cane to a factory in accordance with the provisions of section 16 during a particular crushing season and may likewise at any time cancel such order or alter the boundaries of an area so reserved or assigned. (2) Where any area has been declared as reserved area for a factory, the occupier of such factory shall, if so directed by the Cane Commissioner, purchase all the cane grown in that area, which is offered for sale to the factory. (3) Where any area has been declared as assigned area for a factory, the occupier of such factory shall purchase such quantity of cane grown in that area and offered for sale to the factory, as may be determined by the Cane Commissioner. (4) An appeal shall lie to the State Government against the order of the Cane Commissioner passed under sub section (1)". Rule 22 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954, made by the U.P. Government in exercise of the rule making power conferred by section 28 (2) of the Act however lays down the factors which are to be taken into consideration by the Cane Commissioner in reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory: (a) the distance of the area from the factory, (b) facilities for transport of cane from the area, (c) the quality of cane supplied from the area to the factory in previous years, (d) previous reservation and assignment orders, (e) the quantity of cane to be crushed in the factory, (f the arrangements made by the factory in previous years for payment of cess, cane price and commission, and (g) the views of the Canegroweria ' Co operative Society of the area. 441 Chapter 11 of the Rules provides for the management of the Canegrowers ' Co operative Societies by the Cane Commissioner and their supervision by him. Rule 63 of that chapter however provides "Rule 63. An appeal against an order of the Cane Commissioner under the provisions of this Chapter shall lie to the State Government within one month of the date of the communication of the order to the Society or management concerned". It will be thus seen that the powers given to the Cane Commissioner under section 15 are well defined and have got to be exercised within the limits prescribed after consulting the factories and the Canegrowers 'Co operative Societies (Vide section 15(1)) and any order made by the Cane Commissioner thereunder is liable to an appeal to the State Government at the instance of the party aggrieved (Vide section 15(4)). The same is the position in regard to the orders made by the Cane Commissioner in the course of his management and supervision of the Canegrowers ' Co opera tive Societies and any order made by him in regard thereto is subject to appeal to the State Government at the instance of the party aggrieved (Vide Rule 63). If this is the position, it cannot be urged that wide powers are conferred on the Cane Commissioner which can be used by him in a discriminatory manner so as to violate the fundamental right guaranteed under article 14. Any cane grower or a Canegrowers ' Cooperative Society or the occupier of a factory can, if aggrieved, take an appeal to the State Government against any order passed by the Cane Commissioner and such provision is a sufficient safeguard provided in the Act and the Rules against any arbitrary exercise of those powers by the Cane Commissioner and takes them out of the ban of article 14. (5): It is next contended that the impugned Act and the notification dated 27th September, 1954 violate the fundamental right guaranteed under article 19 (1) (c) which is the right to form associations or unions. It is urged that the Cane Growers Co 442 operative Societies are not voluntary organisations but a cane grower is compelled to become a member of the Society before he can sell his sugarcane to a factory. The right to form associations or unions is a positive right but in the positive right it is urged there is necessarily implied the negative aspect which means that a citizen has the right not to form associations or unions and cannot be compelled to become a member of an association or a union or a Cane growers ' Co operative Society before be can sell his goods to the owner of a factory. Reliance is placed in support of this contention on the following passage in the judgment of the Madras High Court in Indian Metal and Metallurgical Corporation V. Industrial Tribunal, Madras and Another(1): "In this case, however, we are concerned with a much narrower question, namely, whether an award made by the Industrial Tribunal appointed under the and published by the Government in accordance with the provisions of the Act can direct the management of an industry to continue to carry on any business against their will. If a citizen has got a right to carry on business, we think it follows that, he must be at liberty not to carry it on if he so chooses. A person can no more be compelled to carry on a business than a person can be compelled to acquire or hold property. . Mr. Bhasyam was really unable to convince us how any one can be compelled to carry on a business against his will and yet be said to enjoy a right to carry on a business". The following passage from Strong on 'American Con stitutional Law ', page 774, taken from the judgment of Mr. Justice Murphy in West Virginia State Board vs Barnette(2) is also relied upon "The freedom of thought and of religion as guaranteed by the Constitution against State action includes both the right to speak freely and the right to refrain from speaking at all, except in so far as essential operations of government. may require it for the (1) A.I.R. 1953 Mad. 98, 101. (2) , 646. 443 preservation of an orderly society, as in the case of compulsion to give evidence in court". It is urged that, if the right to carry on business carries with it by necessary implication a right not to carry on business, if the right to speak freely carries with it by necessary implication the right to refrain from speaking at all, the right to form associations or unions also carries with it by necessary implication the right not to form associations or unions. In the first place, assuming that the right to form an association implies a right not to form an association, it does not follow that the negative right must also be regarded as a fundamental right. The citizens of India have many rights which have not been given the sanctity of fundamental rights and there is nothing absurd or uncommon if the positive right alone is made a fundamental right. The whole fallacy in the argument urged on behalf of the petitioners lies in this that it ignores that there is no compulsion at all on any cane grower to become a member of the Canegrowers ' Co operative Society. The very definition of a cane grower given in the impugned Act talks of "a person who cultivates cane either by himself or by members of his family or by hired labour and who is not a member of the Canegrowers ' Co operative Society". The Sugarcane Board is to consist of inter alia 15 members to be appointed by the State Government of whom 5 are to be the representatives of canegrowers and the Canegrowers ' Co operative Societies. The occupier of a factory has to maintain a register of all such canegrowers and Canegrowers ' Co operative Societies as shall sell cane to that factory. The payment of commission on purchase of cane is to be made by the occupier of a factory in both cases. , whether the purchase is made through a Canegrowers ' Co operative Society or the purchase is made direct from the canegrowers. The U.P. Sugarcane Regulation of Supply and Purchase Order, 1954, made in exercise of the powers conferred by section 16 of the impugned Act also talks of cane growers as well as Canegrowers ' Co operative Societies and in 444 the case of reserved areas both the cane growers and the Canegrowers ' Co operative Societies are entitled within 14 days of the issue of an order reserving. an area for a factory to offer to supply cane grown in the reserved area to the occupier of the factory and Form B in Appendix II of that Order provides the form of agreement between the cane grower and the occupier of a factory. The cane grower as well as the Canegrowers ' Co operative Society are both within the ken of the impugned Act and it cannot be urged that the object of the Act is to promote Canegrowers 'Co operative Societies to the prejudice of the cane grower himself. The Canegrowers ' Co operative Societies are to be fostered if at all for furthering the interests of the cane growers and there is no conflict between the interests of the cane growers on the one hand and those of the Cane growers ' Co operative Societies on the other. Both are equally catered for by the impugned Act but it is only when the State Government feels that there are circumstances justifying the issue of an order under which the cane grown by a cane grower shall not be purchased except through a Canegrowers ' Co operative Society, the State Government, in exercise of the power reserved under section 16(2)(b) would issue an order accordingly. The impugned notification dated 27th September, 1954 specifies the circumstances under which such a prohibitory order can be made. If the membership of a particular Canegrowers ' Cooperative Society is not less than 75 per cent. of the total number of cane growers within the particular area, then and then only it is considered expedient and desirable that all the cane purchased by an occupier of a factory from that area should be purchased only through the agency of the particular Canegrowers ' Co operative Society. It is with a view to eliminate unhealthy competition between the cane growers on the one hand and the Canegrowers ' Cooperative Societies on the other and also to prevent malpractices indulged in by the occupier of a factory for the purpose of breaking up the Canegrowers ' 445 Co operative Society that such a provision is made and a notification issued prohibiting the occupier of a factory from making any purchases from the area except through the Canegrowers ' Co operative Society. It is a reasonable provision made for the benefit of the large number of persons forming the members of the Canegrowers ' Co operative Society and cannot be impugned as in any manner violative of any fundamental right of the petitioners. There is also another fallacy in their argument and it lies in ignoring that no canegrower is prevented from resigning his membership of a Canegrowers ' Co operative Society. These are voluntary organisations which a canegrower is entitled to join or not at his choice. If he has once joined it he is also entitled to resign his membership at his choice and the only obstacle to his right of resignation, as has been laid down in the bye laws of the Society, is the fact of his being indebted to the Society, or the fact of his being a surety for debt due by another member of the Society. Until these debts are discharged and also until the crushing season during which the Canegrowers ' Co operative Society has entered into an agreement with the occupier of a factory is over, a member of a Society cannot resign his membership. These restrictions do not fetter his right to resign his membership of the Society. If be became a member of the Society he is bound by the bye laws of the Society and can only resign his membership after fulfilling all the conditions which are laid down in the bye laws of the Society. The cane grower,, moreover, is not prevented absolutely from selling his sugarcane. The only person to whom he cannot sell his sugarcane is the owner of a factory but that does not prevent him from selling his sugarcane to any other person or for any other purpose, e.g. the manufacture or production of gur or rab or khandsari or any variety of product other than sugar. There may be of course difficulties in the matter of his being able to sell the same in 446 that manner but that does not mean that there is an absolute restriction on his power of disposal of his goods unless and until he becomes a member of a Canegrowers ' Co operative Society. He is at perfect liberty not to become a member of a Canegrowers ' Co operative Society if he chooses not to do so and no power on earth can compel him to become such a member. Just as he is not bound to become a member of a Canegrowers ' Co operative Society he is equally not bound to offer his sugarcane for sale to the occupier of a factory even if he happens to be a canegrower within the area reserved for that factory. His freedom in that behalf is absolutely unrestricted and we do not see how it can be urged that the provisions of the impugned Act and the notification dated 27th September, '1954 are violative of his fundamental right under article 19(1)(c) of the Constitu tion. (6): It is further contended that the impugned Act and the notifications infringe the fundamental right guaranteed under article 19(1) (f) and (g) and article 31 of the Constitution. We may refer in this context to the following passage from the judgment of this Court delivered by Mukherjea, J. (as he then was) in Messrs Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others (1): "Nobody can dispute that for ensuring equitable distribution of commodities considered essential to the community and their availability at fair prices, it is quite a reasonable thing to regulate sale of these commodities through licensed vendors to whom quotas are allotted in specified quantities and who are not permitted to sell them beyond the prices that are fixed by the controlling authorities. The power of granting or withholding licenses or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. So far no exception can be taken; but the mischief arises when the power con (1) ; , 811. 447 ferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. As has been held by this court in Chintaman vs The State of Madhya Pradesh, the phrase "reasonable restriction" connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under article 19 (1) (g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in reasonableness". The power which is given to the Cane Commissioner under section 15 of the Act for declaring reserved or assigned areas is well defined and guided by the considerations set out in Rule 22 of Chapter 6 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954 and is further conditioned that he has to consult the factory and the Canegrowers 'Co operative Society, ,and his orders made thereunder are subject to an appeal to the State Government at the instance of the party aggrieved. This cannot by any means be treated as an uncontrolled or an unfettered power without recourse to any higher authority in the event of his going wrong. The power is not absolute nor is it unguided and, therefore, does not fall within the mischief of article 19(1)(f) and (g) and the notification dated 9th November, 1955 cannot be impugned on that ground. The same is the position with regard to notification dated 27th September, 1954. The restriction which is imposed upon the cane growers in regard to sales of their sugarcane to the occupiers of factories in areas where the membership of the 448 Canegrowers ' Co operative Society is not less than 75 per cent. of the total cane growers within the area is a reasonable restriction in the public interest designed for safeguarding the interests of the large majority of growers of sugarcane in the area and works for the greatest good of the greatest number. That being so, it comes well within the protection of article 19(6) and the impugned notification cannot be challenged as violative of the fundamental right guaranteed under article 19(1)(f) and (g). If these impugned notifications are, therefore, intravires the State Legislature, they cannot be challenged also under article 31 as none of the petitioners is being deprived of his property, if any, save by authority of law. (7): It is next contended that the impugned Act is void in that it confers very wide powers on the executive officials and is a piece of delegated legislation. Our attention has not been drawn to any provisions of the impugned Act which would amount to a delegation of legislative power to any officials of the State Government. The only provisions alleged to contain such delegation of legislative power are those contained in section 15 and section 16(1)(b) read with section 16 (2) (b) of the impugned Act which we have dealt with above. They are certainly no piece of delegated legislation and the vires of the impugned Act is not affected thereby. (8): It is lastly contended that the impugned Act is destructive of freedom of trade and commerce and is thus violative of article 301 of the Constitution. Article 301 of the Constitution does not occur in Part III which deals with fundamental rights but it is urged that if a law was enacted in violation of the provisions of article 301 it will be no law at all and will certainly not avail the State Government. In effect this is an argument in furtherance of the contention in regard to article 19(1)(f) and (g) dealt with above but we shall deal with it separately as it has been urged as an independent ground of attack 449 against the constitutionality of the impugned Act and the notifications issued thereunder. It is urged that the impugned notifications are violative of the freedom of trade, commerce and intercourse embodied in article 301 of the Constitution. The petitioners are not free to sell their sugarcane to anybody other than the occupier of a factory or even to him except through the agency of a Canegrowers ' Co operative Society and are not at all entitled to sell their sugarcane to anyone outside the State. Assuming this is go, the short answer to this contention is furnished by the provisions of article 304 of the Constitution which provide: "304. Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law (a). . . . . . (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:. . . . " We may also refer in this context to the following passage from the judgment of their Lordships of the Privy Council in Commonwealth of Australia vs Bank of New South Wales(1) which was quoted with approval in the later Privy Council decision in Hughes and Vale Proprietary Ltd. vs State of New South Wales and Others(2): "Every case must be judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter State trade, commerce and intercourse thus prohibited and thus monopolized remained absolutely free". We have already stated in the earlier part of this judgment that the restrictions imposed by the alleged notifications are reasonable restrictions imposed on (1) , 311. (2) 450 the petitioners in the public interest. We are, therefore, of opinion that this contention also is of no avail to the petitioners. The result, therefore, is that the impugned Act and the notifications dated 27th September, 1954 and 9th November, 1955 issued thereunder were intravires the State Legislature and are binding on the petitioners. The Petitions must, therefore, stand dismissed. In regard to costs we feel that the proper order for costs should be that Petitions Nos. 625 of 1954, 48 of 1955 and 47 of 1956 in which the President, the VicePresident and the Secretary respectively of the anna Utpadak Sangh are amongst the petitioners and Petition No. 37 of 1956 in which Saraya Sugar Factory is the petitioner will stand dismissed with costs, one set between all the petitions and between all the Respondents in those petitions. The parties in the rest of the Petitions will bear and pay their own respective costs of those Petitions.

The petitioners challenged the constitutional validity of the U.P. Sugarcane (Regulation of Supply and Purchase) Act of 1953, and two notifications issued by the State Government on September 27, 1954 and November 9, 1955, the former under sub sec. 1(a) read with sub sec. 2(b) of section 16 of the impugned Act providing that where not less than three fourths of the canegrowers within the area of operation of a Canegrowers ' Co operative Society were members thereof, the occupier of the factory to which that area is assigned should not purchase or enter into an agreement to purchase cane except through that society and the latter under section 15 of the Act assigning to different sugarcane factories specified cane purchasing centers for supply to them of sugarcane for the crushing season of 1955 56. They contended that the impugned Act was ultra vires the 394 State Legislature, the subject matter of legislation being within the exclusive jurisdiction of Parliament, and repugnant to Act LXV of 1951 and Act X of 1955 passed by Parliament and that sections 15 and 16(1)(a) and (2)(b) and the two notifications infringed their fundamental rights under articles 14, 19(1)(c), (f) and (g) and 31 and violated the provisions of article 301 of the Constitution. Held, (1) that the impugned Act and the notifications issued thereunder were intra vires the State Legislature, did not infringe any fundamental rights of the petitioners nor violated the provisions of article 301 of the Constitution and the petitions must be dismissed; (2)that the Central Acts in respect of sugar and sugarcane and the notifications thereunder having been enacted and made by the Central Government in exercise of concurrent jurisdiction under Entry 33 of List III of the Seventh Schedule to the Constitution as amended by the Constitution (Third Amendment) Act of 1954, the State Legislature was not deprived of its jurisdiction thereunder and no question of legislative incompetence of the U.P. Legislature or its trespassing upon the exclusive jurisdiction of the centre in enacting the impugned Act could arise; (3) that the provisions of the impugned Act compared to those of the Central Acts clearly showed that the impugned Act was solely concerned with the regulation of the supply and purchase of sugarcane and in no way trenched upon the exclusive jurisdiction of the Centre with regard to sugar and the U.P. Legislature was, therefore, quite competent to enact it; (4) that no question of repugnancy under article 254 of the Constitution could arise where Parliamentary Legislation and State Legislation occupied different fields and dealt with separate and distinct matters even though of a cognate and allied character, and that where, as in the present case, there was no inconsistency in the actual terms of the acts enacted by Parliament and the State Legislature, the test of repugnancy would be whether Parliament and the State Legislature, in legislating under an entry in the Concurrent List, exercised their powers over the same subject matter or whether the laws enacted by Parliament were intended to be exhaustive so as to cover the entire field; (5) that the provisions of section 18 G of Act LXV of 1951 did not cover sugarcane nor indicate the intention of the Parliament to cover the entire field of such legislation; the expression "any article or class of articles relatable to any scheduled industry" used in sections 18 G, 15 and 16 of the Act did not refer to raw materials but only to finished products of the scheduled industries the supply and distribution of which section 18 G was intended to regulate, its whole object being the equitable distribution and availability of manufactured articles at fair prices and not to invest the Central Government with the power to legislate in regard to sugarcane; 395 (6) that even assuming that sugarcane was such an article and fell within the purview of section 18 G of the Act, no order having been issued by the Central Government thereunder, no question of repugnancy could arise, as repugnancy must exist as a fact and not as a mere possibility and the existence of such an order would be an essential pre requisite for it; (7) that as the provisions of Act X of 1955, and those ' of the impugned Act and the U.P. Sugarcane Regulation of Supply and Purchase Order, 1951, made thereunder, relating to sugarcane were mutually exclusive and did not impinge upon each other and the one legislature did not trench upon the field of the other, the Centre remaining silent where the State spoke and the State remaining silent where the Centre spoke, there could be no inconsistency between them and no provision of the impugned Act and the Rules made thereunder was invalidated by any of the provisions of Act LXV of 1951 as amended by Act XXVI of 1953 or Act X of 1955 and the Sugarcane Control Order, 1955, issued thereunder; Clyde Engineering Company, Limited vs Cowburn ([1926] , Ex Parte McLean ([1930] ; , Stock Motor Plough Ltd. vs Forsyth ([1932] ; , G. P. Stewart vs B.K. Boy Chaudhury (A.I.R. and Shyamakant Lal vs Rambhajan Singh ([1939] F.C.R. 188), referred to. (8) that the power of repeal conferred on Parliament by the proviso to article 254(2) of the Constitution was a limited power and could be exercised only by enacting a law relating to the matter dealt with by the state law and the state law must be one of the kind indicated in the body of article 254(2) itself, and as the impugned Act did not fall within that category the proviso did not apply and the impugned Act, the notifications made thereunder and the U. P. Sugarcane Regulation of Supply and Purchase Order, 1954, stood unrepealed by section 16(1)(b) of Act X of 1955 and cl. 7(1) of the Sugarcane Control Order, 1955 made thereunder; Zaverbhai Amaidas vs The State of Bombay ([1955] 1 S.C.R. 799), referred to. (9) that the power of repeal conferred by the proviso to article 254(2) could be exercised by Parliament alone and could not be delegated to an executive authority and, consequently, the Central Government acquired no power of repeal under cl. 7 of the Sugarcane Control Order, 1955; (10) that the contention that the impugned Act infringed the fundamental right guaranteed by article 14 inasmuch as very wide powers were given to the Cane Commissioner which could be used in a discriminatory manner was without any foundation since his powers under section 15 of the impugned Act were well defined and the Act and Rules framed thereunder gave the canegrowers or a Canegrowers ' Co operative Society or the occupier of a factory the right to appeal to the State Government against any order passed by him 396 and thus provided a sufficient safeguard against any arbitrary exercise of those powers; (11) that equally unfounded was the contention that the im pugned Act and the notification dated September 27, 1954, violated the fundamental right guaranteed by article 19(1)(c) of the Constitution. Although the right to form an association was a fundamental right, it did not necessarily follow that its negative, i.e. the right not to form an association must also be so, as all rights which an Indian citizen had were not fundamental rights. No canegrower was compelled to become a member of the Canegrowers ' Co operative Society or prevented from resigning therefrom or selling his crops elsewhere and, consequently, the impugned Act and the notification did not violate his fundamental right; (12) that the powers given to the Cane Commissioner by section 15 of the impugned Act to declare reserved or assigned areas were well defined and controlled by higher authorities and by no means absolute and unguided and were not, therefore, bit by article 19(1)(f) and (g) and the notification dated November 9, 1955, could not, therefore, be impugned on that ground; (13) that the restriction imposed by the notification dated September 27, 1954, on canegrowers in regard to sale of sugarcane to occupiers of factories in areas where the membership of the Canegrowers ' Co operative Society was not less than 75 per cent. of the total number of canegrowers was a reasonable restriction in the public interest, designed for the benefit of a large majority of canegrowers, and as such came within the protection of article 19(6) and did not violate article 19(1)(f) and (g) of the Constitution; (14) that the impugned notifications, being intra vires the State Legislature, could not also be challenged under article 31 as none of the petitioners was deprived of his property, if any, save by authority of law. Messrs Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others ([1954] S.C.R. 803), referred to. (15) Nor could it be contended that the impugned Act and the notifications contravened the provisions of article 301 of the Constitution in view of the provision of article 304(b) which made it permissible for the State Legislature to impose reasonable restrictions in the public interest. Commonwealth of Australia vs Bank of New South Wales ([1950] A.C. 235) and Hughes and Vale Proprietary Ltd. vs State of New South Wales and others ([1955] A.C. 241), referred to.

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Appeals Nos. 895 and 896 of 1968. Appeals under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated January 29, 1968 of the Bombay High Court in Election Petition No. 6 of 1967. R. Jethamalani and H. N. Hingorani and K. Hingorani, for the appellant (in C. A. No. 895 of 1968). C. K. Daphtary, A. K. Sen, K. section Cooper and K. Hingorani, for the appellant (in C. A. No. 896 of 1968). A. section R. Chari, Porus A. Mehta, section B. Naik, Kumar Mehta, R. Nagaratnam and K. Rajendra Chaudhuri, for respondent No. 1 (in both the appeals). The Judgment of the Court was delivered by Hidayatullah, C.J. In the last General Election to Parliament from the Bombay South Parliamentary constituency eight candidates had offered themselves. The answering respondent Mr. George Fernandez secured 1,47,841 votes as against his nearest rival Mr. S.K. Patil who secured 1,18,407 votes. The remaining candidates secured a few thousand votes between them. The result of the poll was declared on February 24, 1967. and Mr. George Fernandez was returned. An election petition was filed by Mr. Samant N. Balakrishna, an elector in the constituency. It challenged the election of Mr. Fernandez and was ostensibly in the interest of Mr. section K. Patil. The election petition was keenly contested and Mr. section K. Patil gave his full support to the petition. The election petition failed and it was dismissed with an order for costs against the election petitioner and Mr. section K. Patil. Two appeals have now been filed against the judgment of the Bombay High Court, one by the election petitioner and the other by Mr. section K. Patil. They have been heard together and this judgment will dispose of both of them. The petition was based on numerous grounds which were, set out in paragraph 2 of the petition. These grounds were shown separately in sub paragraphs A to J. Sub paragraphs A to D dealt with the invalidity of the election for non compliance with s, 62 of the Representation of the People Act and articles 326 and 327 of the Constitution. These concerned the secrecy of ballot (A), registering of some voters in two constituencies (B), omission of qualified voters from electoral rolls (C) and impersonation by persons for dead or absent voters (D). These, four grounds 609 were given up in the High Court itself and we need not say anything about them. Sub paragraphs E to J contained allegations of corrupt practices. The petition was accompanied by four annexures Nos. A to D which were extracts from newspapers on which the charge of corrupt practices was based. The grounds may now be noticed in detail. Sub paragraph E dealt with statements made at a meeting dated February 16, 1967 at Shivaji Park by Jagadguru Shankaracharya charging Mr. section K. Patil with complicity in arson of November 7, 1966 at New Delhi and attack on the residence of the Congress President with injuries caused to people. In these articles from the 'Maratha ' and the 'Blitz ' extracts of which were quoted and annexed as Annexure A, Mr. Patil was described as hypocrite, insincere and dishonest. Similar speeches by Mr. Madhu Limaye, (,another candidate of the S.S.P. by which party Mr. Fernandez was sponsored) were relied upon. The statements were "inspired by Mr. Fernandez" and "with his consent and for his benefit". It was said that they amounted to a corrupt practice under section 123(4) of the Representation of the People Act. In Sub paragraph F, a statement of Jagadguru Shankaracharya on cow slaughter was made the ground of attack. It was to the effect that Mr. section K. Patil only pretended to support the anti cow slaughter movement but had done nothing in furtherance of it. It was contended that the cow was used as a religious symbol and the speeches offended against the Election Law as stated in section 123 (3). These statements were also said to be inspired by Mr. Fernandez and were made with his consent and for his benefit. Sub paragraph G referred to speeches of Mr. Fernandez and his workers with his knowledge and consent. In those speeches Mr. Fernandez is said to have described Mr. section K. Patil as the enemy of Muslims and Christians who only professed to discourage slaughter of cows and he Was charged with interfering with the articles of faith of the Muslims and Christians and seeking expulsion of Muslims to Pakistan. This was said to offend against section 123(3A) of the Representation of the People Act. In Sub paragraph H it was alleged that the 'Maratha ' pub lished a false statement to the effect that Mr. section K. Patil had paid rupees 15 lacs to Mr. Jack Sequeira to undo the efforts of Maharashtrians for incorporation of Goa in Maharashtra. The extract from the 'Maratha ' of January 25, 1967 was annexed as exhibit B. The speech of Mr. H. R. Gokhale who published a similar statement, was also referred to. These were made the grounds of complaint under section 123 (4) of the Representation of the People Act. 610 In Sub paragraph 1 four issues of the 'Maratha ' of the 5th and 31st January, 1967 and 5th and 8th of February, 1967 were exhibited as exhibit C. It was stated in the first two that the Shiv Sena supported the Maharashtra traitor Sadoba Patil and that the Shiv Sena was really Sadoba Sena. A cartoon showing Mr. section K. Patil as Vishwamitra and the leader of Shiv Sena as Menka with the caption 'Sadoba denies that he has no connection with Shiv Sena like Vishwamitra Menka episode", was the third. The last of these articles was headed "harassment from Gondas of Sadoba Patil Shiv Sena in the service of Sadhshiv (section K. Patil)". These statements were said to be false and made by the 'Maratha ' in favour of respondents other than respondent No. 2 (Mr. section K. Patil) or at any rate on behalf of Mr. Fernandez. These were said to prejudice the minority communities and thus to offend section 123(4) of the Representation of the People Act. The statements were said to be made with the knowledge and consent of Mr. Fernandez and for his benefit. In Sub paragraph J three issues of 'Maratha ' of the 24th, 28th and 31st December 1966 were referred to. In the first it was stated that "Shri section K. Patil will go to Sonapur in the ensuing election. Fernandez says in his Articles Patil mortgaged India 's Freedom with America by entering into P. L. 480 agreement and Mr. Patil had no devotion, love, respect for this country at all." In the second Mr. Patil was described as Nagibkhan of Maharashtra. The third was a cartoon in which Shankaracharya was depicted as saying "Cow is my mother. Do not kill her" and Patil section K. as saying "Pig is my father". These extracts were annexed as exhibit D. Then followed a paragraph in which was said : "Similar false statements in relation to Respondent No. 2 's character and conduct were published in several issues of Maratha Daily" from December 12, 1966 to February 21, 1967 and 33 issues were mentioned by date. These were also said to be exhibit D. This was the original material on which the petition filed on April 7, 1967 was based. Mr. Fernandez filed his written statement on June 14, 1967 and Mr. section K. Patil on July 4, 1967. Later five amendments were asked for. By the first amendment, which was orally asked and allowed, reference to the 33 articles was altered and they were said to be contained in exhibit E instead of exhibit D. exhibit E was then introduced and gave the list of 33 articles in the 'Maratha ' and one article in the Blitz, and the extracts on which reliance was placed. On July 4, 1967 an application for amendment was made seeking to add two Sub paragraphs 2 K and 2 L. 2 K is not pressed now and need not be mentioned. By 2 L the petitioner asked for addition to the list of corrupt practices of a reference to an article dated November 5, 1966 in the Blitz. This article was written by Mr. Fernandez. 611 On September 12, 1967, an application was made for seven additions to paragraph 2J. Seven incidents were sought to be included. Of these four were ordered by the Court to be included in 2 J on September 15, 1967 as Sub sub paragraphs (i) to (iv) and three were rejected. In the first of the Sub sub paragraphs so, included, a speech at a public meeting at Shivaji Park by Mr. Fernandez on January 31, 1967 was pleaded in which Mr. Fernandez is said to have made a statement that even God could not defeat the second respondent (Mr. section K. Patil) because unlike the second respondent God was not dishonest. It was also alleged that Mr. section K. Patil won elections by "tampering with the ballot boxes or substituting the same". These statements were said to be made by Mr. Fernandez deliberately and maliciously and that he believed them to be false or did not believe them to be true. The report of the speech was quoted from the 'Maratha ' of February 1, 1967 and was included as part of exhibit E. In the second Sub sub paragraph a Press Conference at Bristol Grill Restaurant on February 9, 1967 addressed by Mr. Fernandez was referred to. At that Conference Mr. Fernandez charged Mr. section K. Patil with "unfair and unethical electioneering practices" and as illustrations of his methods mentioned the release of 70 dangerous characters from jail on parole and the suspension of externment orders against some and the allowing of some other externed persons to return, were alleged. It was also said that these persons were being used by Mr. Patil in his campaign. Extracts from the issues of the 'Maratha ' of the 10th and 11th February, 1967 were made part of annexure E. In the third Sub sub paragraph a public meeting at Sabu Siddik Chawl, of ' February 10, 1967 was referred to. At that meeting, it wag alleged, Mr. Fernandez described Mr. Patil as an "American Agent, Dada of Capitalists and Creator of Shiv Sena. " All these statements were said to be false and to reflect upon personal character and conduct of Mr. Patil and thus to be corrupt practices under section 123 (4) of the Representation of the People Act. the fourth paragraph a meeting of January 8, 1967 at Chowpati, presided over by Mr. Fernandez was referred to. Mr. Madhu Limaye was said to have addressed that meeting and referred to the incident of November 7, 1966. These statements were also, said to be false and to materially affect the prospects of Mr. Patil. In this Sub sub paragraph it was also alleged that Mr. P. K. Atrey, Editor and Proprietor of the 'Maratha, Jagadguru Shankaracharya and Mr. Madhu Limaye were agents of Mr. Fernandez and had made these statements in his interest and with his consent. The petitioner also asked for addition of three other grounds of corrupt practices, which the Court did not allow to be included. Paragraph 2 L to which we have referred was an article by Mr. Fernandez. It was captioned as a fight against political 612 thuggery" and included the following passage which was made the basis of the following charge : "These men (including the 2nd Respondent) from the hard core of the coterie which control the destinies of the nation, even decides who should be the Prime Minister and who should not be, hounds out the few honest Congressmen from Public life, props up the Aminchand Pyarelal and Chamanlal and supports them in all their misdeeds and puts a premium on dishonest businessmen and industrialists. " This allegation was said to suggest dishonesty in Mr. Patil. The other amendments which were disallowed referred to a speech at Dr. Vigas Street on February 27, 1967, a speech by Dr. Lohia at Chowpati on January 1, 1967 published in 'Andolan ' of January 9, 1967 and a Press Conference by Mr. Madhu Limaye at Bristol Grill Restaurant on December 10, 1966. Prior to the application for amendment certain events had happened to which it is necessary to refer. On April 7, 1967 the office objected that the originals of Exs. A, B, C and D ha not been filed. The remark of the office is as follows : "Exhibits A, B, C, D are mere repetitions of what is mentioned in the body of the petition. Is it not necessary to annex the original copies of the said newspaper?" Mr. Kanuga, one of the Advocates for the petitioner replied to the objection as follows : "We undertake to file the original issues and official translations later as the same is (sic) with the Chief translator, High Court, Bombay before the service of Writ of Summons". Till July 3, 1967 no effort seems to have been made to file the originals. On that date the 'Rozanama ' read as follows "Mr. Jethmalani applies for leave to amend the petition by pointing out that 'D ' in last sentence of paragraph 2 on page 12 of the petition be corrected and read as 'E ' and to annex reports in original P. C. leave to amend granted. " The issues were settled on the same day and particulars were asked for. On July 7, 1967 the 'Rozanaina ' read as follows "Mr. Gurushani tenders the original of the exhibits A (Coll) to Exhibit E (Coll) mentioned in para 2J of page 1 1 of the petition. " A chamber summons was taken out because the particulars were not supplied and on August 4, 1967 the particulars were furnish 613 ed. It was then on September 12, 1967 that the application for seven amendments was made, four of which were allowed and three were rejected. This was by an order dated September 15, 1967. Before dealing with this appeal it is necessary to clear the question of the amendments and whether they were properly allowed. This question consists of two parts; the first is one of fact as to what was exhibited with the petition as materials on which the petition was based. The case of the petitioner before us is that in support of 2J copies of relevant newspapers were filed with the petition. This is denied on behalf of the answering respondent. Mr. Daphtary 's contention is that if the originals of the 'Maratha ' had not been filed an objection would have been taken in the court and none was taken. Even witnesses were examined and cross exhibited with reference to the statements and the originals must have been in court. This, in our opinion, is not decisive. The first witness to be examined was the petitioner himself. Evidence commenced on August 25, 1967. The petitioner proved the copies of the newspapers and they were marked as exhibits. By that date the copies of the 'Maratha ' had already been filed and the petitioner in his evidence referred to all of them. The cross examination, therefore, also referred to these documents. Nothing much turns upon the want of objection because (as is well known) objection is not taken to some fatal defect in the case of the other side since the party, which can take the objection, wants to keep it in reserve. It is true that if the objection had been taken earlier and had been decided the petitioner would have had no case to prove on the new allegations and might not have led some evidence. But we cannot hold from this that any prejudice was caused to him. After all it was his responsibility to complete his allegations in the petition by inclusion of the copies of the 'Maratha ' and the other side cannot be held to have waived its objection since that objection was in fact raised and has been answered in the High Court. The Rozana mas clearly show that the copies of the 'Maratha ' were not filed with the election petition but much later and in fact beyond the period of limitation. Mr. Daphtary characterises the Rozanamas as inaccurate but the internal evidence in the case shows that the Rozanamas were correctly recorded. The petition quoted some of the offending statements in the newspapers and exhibited them as Exs. A to D. In the petition these 10 extracts are to be found in Sub paragraphs 2E, H, I and J. The change of Exs. D to E and the filing of E show that the extracts which were with the translator were referable to those extracts already mentioned in the petition and not those mentioned in the last paragraph of 2J. It will be noticed that 614 that paragraph refers to 33 numbers of the 'Maratha '. Extracts from those were furnished only on July 3, 1967 when exhibit E was separately filed and according to the Rozanama, the originals were filed on July 7, 1967. Mr. Kanuga could not have referred to all the 33 issues of the 'Maratha '. Only 10 extracts from the 'Maratha ' were in Exs. A to D and of these eight are included in the list of 33 numbers of the 'Maratha ' in the last paragraph of 2J. If they were already filed, Mr. Kanuga would have said so and not promised to file them later. He mentions in his note that they were with the translation department and would be filed later. If all the 33 issues of the 'Maratha ' were already filed there would be no occasion for the office objection and the reply of Mr. Kanuga could apply to two numbers only. They were the issues of 25th January and 5th February, 1967. The office noting shows that not a single original was filed with the petition. This appears to us to be correct. We are satisfied that 10 issues of the 'Maratha ' from which extracts were included in the petition in Exs. A to D were the only numbers which were before the translator. Mr. Kanuga 's remark applies to these 10 issues. The other issues which were mentioned in the last paragraph of 2J numbering 33 less 8 were neither in the translator 's office nor exhibited in the case. Hence the amendment of the second reference from D to E and the request to file original issues. It seems that when the petition was filed a list was hurriedly made of all the issues of the 'Maratha ' to which reference was likely and that list was included in the last portion of 2J. But no attempt was made either to specify the offending portions of the newspapers or to file the extracts or the original issues. All this was done after the period of limitation. No incorporation of the contents of the articles by reference can be allowed because if a newspaper is not exhibited and only the date is mentioned, it is necessary to point out the exact portion of the offending newspaper to which the petition refers. This was not done. We have to reach this conclusion first because once we hold that the issues of the 'Maratha ' or the extracts referred to in the petition were not filed, the plea as to what was the corrupt practice is limited to what was said in the body of the petition in paragraph 2J and whether it could be amended after the period of limitation was over. The attempt today is to tag on the new pleas to the old pleas and in a sense to make them grow out of the old pleas. Whether such an amendment is allowable under the Election Law is therefore necessary to decide. Mr. Daphtary arguing for the appellant contends that he was entitled to the amendment since this was no more than an amplification of the ground of corrupt practice as defined in section 123(4) and that the citation of instances or giving of additional parti 615 culars of which sufficient notice already existed in 2J as it originally stood, is permissible. According to him, under section 100 the petition has to show grounds and under section 83 there should be a concise statement of material facts in support of the ground and full particulars of any corrupt practice alleged. He submits that under section 86(5) particulars can be amended and amplified, new instances can be cited and it is an essence of the trial of an election petition that corrupt practices should be thoroughly investigated. He refers us to a large body of case law in support of his contention. On the other hand, Mr. Chari for Mr. Fernandez contends that there was no reference to the speeches by Mr. Fernandez in the petition. The cause of action was in relation to the publication in the 'Maratha ' and not in relation to any statement of Mr. Fernandez himself and that the amendment amounts to making out a new petition after the period of limitation. To decide between these rival contentions it is necessary to analyse the petition first. Paragraph 2J as it originally stood, read as follows : "The Petitioner says that false statements in relation to character and conduct of the Respondent No. 2 were made by the 1st Respondent and at the instance and connivance of the ' 1st. Respondent, Maratha published the following articles, as set out hereinafter. The petitioner says that the said allegations are false and have been made with a view to impair and affect the prospects of Respondent No. 2 's elections to Lok Sabha. Some of the extracts are : etc." (Emphasis added). Here three issues of the 'Maratha ' of 24th, 28th and 31st December, 1966 were referred to. Of the extracts, the last two make no reference to Mr. Fernandez. The first spoke thus "Maratha Dated 24 12 66. Pages 1 and 4. Shri section K. Patil will go to Sonapur in the ensuing election. Fernandez says in his Articles Patil mortgaged India 's Freedom with America by entering into P.L. 480 agreement and Mr. Patil had no devotion, love, respect for this country at all." Then followed this paragraph: "Similar false statements in relation to Respondent No. 2 character and conduct were published in Maratha Daily dated 12th December, 1966, 17th December, 23rd December, 24th December, 28th, 29th and 31st December issues, January issues dated 4, 5, 7th, 10th, 18th, 20th, 21st, 28th, 30th and 31st. February issues, 616 1st, 2nd, 3rd, 6th, 7th, 8th, 10th, 11th, 14th, 15th, 16th, 17th, 18th, 19th, 20th, 21st. . These reports in original are filed and true translation are marked exhibit D to the petition. " We have already held that the newspapers mentioned in the last paragraph were not filed with the petition but on July 7, 1967 after the period of limitation was over. The allegations thus were that Mr. Fernandez made the false statements and they were published in the 'Maratha ' at his instance and with his connivance. There is no mention of any speech at Shivaji Park, or at Sabu Siddik Chowk or at Dr. Vigas Street or the press inter view at Bristol Grill Restaurant. All these statements which are now referred to were said to be made by Mr. Fernandez himself. By the amendment a charge of corrupt practice was sought to be made for the first time in this form. In the original petition (Sub paragraph 2J) there was no averment that Mr. Fernandez believed these statements to be false or that he did not believe them to be true and this was also sought to be introduced by an amendment. It may, however, be mentioned that in an affidavit which accompanied the election petition this averment was expressly made and the appellants desire us to read the affidavit as supplementing the petition. By another application for amendment the petitioner sought to add a paragraph that the 'Maratha ', Jagadguru Shankaracharya and Mr. Madhu Limaye were agents of Mr. Fernandez within the Election Law. By yet another application reference to an article in the 'Blitz ' was 'Sought to be included as Sub paragraph 2L. At the conclusion of the arguments on this part of the case we announced our decision that the amendment relating to the speeches of Mr. Fernandez at Shivaji Park, Sabu Siddik Chowk and Dr. Vigas Street and his Press Conferences at Bristol Grill Restaurant and the article in the 'Blitz ' ought not to have been allowed but that the amendment relating to the agency of the 'Maratha ' etc. and that seeking to incorporate the averment about the lack of belief of Mr. Fernandez were proper. We reserved our reasons which we now proceed to give. The subject of the amendment of an election petition has been discussed from different angles in several cases of the High Courts and this Court. Each case, however, was decided on its own facts, that is to say, the kind of election petition that was filed, the kind of amendment that was sought, the stage at which the application for amendment was made and the state of the law at the time and so on. These cases do furnish some guidance but it is not to be thought that a particular case is intended to cover all situations. It is always advisable to look at the statute first to see alike what it authorises and what it prohibits. 617 Section 81 of the Representation of the People Act, 1951 enables a petitioner to call in question any election on one or more of the grounds specified in section 100(1) and section 101 of the Act. The petition must be made within 45 days from the date of election. Sections 100 and 101 enumerate the kind of charges which, if established, lead to the avoidance of the election of a returned candidate and the return of some other candidate. The first sub section of section 100** lays down the grounds for dec *"81. Presentation of petitions. (1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates. Explanation In this sub section, 'elector ' means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not. (2) (3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition." **"100. Grounds for declaring election to be void. (1) Subject to the provisions of sub section (2) if the High Court is of opinion (a) that on the date of his election a returned candidate was not qualified or was disqualified, to be chosen to fill the seat under the Constitution or this Act or the , or (b) that any corrupt practice has been committed by a returned candidate or his election agent or by any other person with the consent of a returned candidate or his election agent; or (c) that any nomination has been improperly rejected; or (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected. (i) by the improper acceptance of any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non compliance with the provisions of the Constitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void. (2) If in the opinion of the High Court, a returned candidate has been guilty by an agent, other than his election agent, of any corrupt practice but the High Court is satisfied : (a) that no such corrupt practice was committed at the election by the candidate or his election agent, and every such corrupt practice was committed contrary to the orders, and without the consent, of the candidate or his election agent; (c) that the candidate and his election agent took all reasonable means, for preventing the commission of corrupt practices at the election, and 618 learning an election to be void. These include corrupt practices committed by the candidate, his election agent and any person with the consent of the returned candidate or his election agent. The second sub section lays down an additional condition which must be satisfied before the election can be declared to be void even though the corrupt practice is committed by an agent other than the election agent. Section 101* sets forth the grounds on which a candidate other than the returned candidate may be declared to have been elected. Section 101 actually does not add to the grounds in section 1 00 and its mention in section 81 seems some what inappropriate. Sections 100 and 101 deal with the sub stantive law on the subject of elections. These two sections circumscribe the conditions which must be established before an election can be declared void or another candidate declared elected. The heads of substantive rights in section 100(1) are laid down in two separate parts : the first dealing with situations in which the election must be declared void on proof of certain facts, and the second in which the election can only be declared void if the result of the election in so far as it concerns the returned candidate, can be held to be materially affected on proof of some other facts. Without attempting critically to sort out the two classes we may now see what the conditions are. In the first part they are that the candidate lacked the necessary qualification or had incurred disqualification, that a corrupt practice was committed by the returned candidate, his election agent or any other person with the consent of a returned candidate or his election agent or that any nomination paper was improperly rejected. These are grounds on proof of which by evidence, the election can be set aside without any further evidence. The second part is conditioned that the result of the election, in so far as it concerns a returned candidate, was materially affected by the improper acceptance of a nomination or by a corrupt (d) that in all other respects the election was free from any corrupt practice on the part of the candidate or any of his agents, then the High Court may decide that the election of the returned candidate is not void." *"101. Grounds for which a candidate other than the returned candidate may be declared to have been elected. If any person who has lodged a petition has, in addition to calling in question the election of the returned candidate, claimed a declaration that he himself or any other candidate has been duly elected and the High Court is of opinion (a) that in fact the petitioner or such other candidate received a majority of the valid votes; or (b) that but for the votes obtained by the returned candidate by corrupt practices the petitioner or such other candidate would have obtained a majority of the valid votes, the High Court shall after declaring the election of the returned candidate to be void declare the petitioner or such other candidate, as the case may be, to have been duly elected." 619 practice committed in his interest by an agent other than an election agent or by the improper reception, refusal or rejection of votes or by any noncompliance with the provisions of the Constitution or of the Representation of the People Act or rules or orders made under it. This condition has to be established by some evidence direct or circumstantial. It is, therefore, clear that the substantive rights to make an election petition are defined in these sections and the exercise of the right to petition is limited to the grounds specifically mentioned. Pausing here, we may view a little more closely the provisions bearing upon corrupt practices in section 100. There are many kinds of corrupt practices. They are defined later in section 123, of the Act and we shall come to them later. But the corrupt practices are viewed separately according as to who commits them. The first class consists of corrupt practices committed by the candidate or his election agent or any other person with the consent of the candidate or his election agent. These, if established, avoid the election without any further condition being fulfilled. Then there is the corrupt practice committed by an agent other than an election agent. Here an additional fact has to be proved that the result of the election was materially affected. We may attempt to put the same matter in easily understandable language. The petitioner may prove a corrupt practice by the candidate himself or his election agent or someone with the consent of the candidate or his election agent, in which case he need not establish what the result of the election would have been without the corrupt practice. The expression "Any other person" in this part will include an agent other than an election agent. This is clear from a special provision later in the section about an agent other than an election agent. The law then is this : If the petitioner does not prove a corrupt practice by the candidate or his election agent or another person with the consent of the returned candidate or his election agent but relies on a corrupt practice committed by an agent other than an election agent, he must additionally prove how the corrupt practice affected the result of the poll. Unless he proves the consent to the commission of the corrupt practice on the part of the candidate or his election agent he must face the additional burden. The definition of agent in this context is to be taken from section 123 (Explanation) where it is provided that an agent "includes an election agent, a polling agent and any person who is held to have acted as an agent in connection with the election with the consent of the candidate. " In this explanation the mention of "an election agent" would appear to be unnecessary because an election agent is the alter ego of the candidate in the scheme of the Act and his acts are the acts of the candidate, consent or no consent on the part of the candidate. 620 Having now worked out the substantive rights to the making of the petition, we may now proceed to see what the corrupt practices are. Since we are concerned only with one such corrupt practice, we need not refer to all of them. For the purpose of these appeals it is sufficient if we refer to the fourth sub section of section 123. It reads : "123. The following shall be deemed to be corrupt practice for the purposes of the Act (4) The publication by a candidate or his agent or by any other person, with the consent of a candidate or his election agent, of any statement of fact which is false, and which he either believes to be false or does not believe to be true, in relation to the personal character or conduct of any candidate, or in relation to the candidature, or withdrawal, of any candidate, being a statement reasonably calculated to prejudice the prospects of that candidate 's election. This corrupt practice may be committed by (a) the candidate (b) his agent, that is to say (i) an election agent (ii) a polling agent (iii) any person who is held to have acted as an agent in connection with the election with the consent of the candidate. (c) by any other person with the consent of the candidate or his election agent. We are concerned in this appeal with (a) and (b) (iii) men tioned in our analysis. In the original petition the allegations were made on the basis of corrupt practices committed by a person alleged to have acted as an agent with Mr. Fernandezs consent. In the amendment application the allegation is that the candidate himself committed the corrupt practice under this subsection. As we pointed out earlier the difference between the original petition and the amendments will lie in the degree of proof necessary to avoid the election. If the corrupt practice is charged against an agent other than the election agent, a further burden must be discharged, namely, that the result of the election was 621 materially affected. If, however, the corrupt practice is charged against the candidate personally (there is no election agent involved here), this further proof is not required. Another difference arises in this way. In section 100 (1) (b) the word 'agent ' is not to be found. Therefore an agent other than an election agent will fall to be governed by the expression 'any other person '. To get the benefit of not having to prove the effect of the corrupt practice upon the election the consent of the candidate or his election agent to the alleged practice will have to be established. Again for the establishment of the corrupt practice under section 123 (4), from whatever quarter it may proceed, the election petitioner must establish (a) publication of a statement of fact, and (b) the statement is false or the person making it believes it to be false or does not believe it to be true, and (c) that the statement refers to the personal character and conduct of the candidate, and (d) is reasonably calculated to prejudice the candidate 's prospects. It appears, therefore, that it is a question of different burdens of proof as to whether the offending statement was made by the candidate himself or by an agent other than an election agent. Having dealt with the substantive law on the subject of election petitions we may now turn to the procedural provisions in the Representation of the People Act. Here we have to consider sections 81, 83 and 86 of the Act. The first provides the procedure for the presentation of election petitions. The proviso to sub section alone is material here. It provides that an election petition may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101. That as we have shown above creates the substantive right. Section 83* then provides that the *Section 83. (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies : (b) shall setforth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 for the verification of pleadings : (provided that where the petitioner alleges any corrupt practice, the petition shall also be accompained by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof. (2) Any y schedule or annexure to the petition shall also be singed by the peti tioner and verified in the same manner as the petition. L10Sup./69 5 622 election petition must contain a concise statement of the material facts on which the petitioner relies and further that he must also setforth fun particulars of any corrupt practice that the Petitioner alleges including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice. The section is mandatory and requires first a concise statement of material facts and then requires the fullest possible particulars. What is the difference between material facts and parti culars? The word 'material ' shows that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. The function of particulars is to present as full a picture of the cause of action with such further information in detail as to make the opposite party understand the case he will have to meet. There may be some overlapping between material facts and particulars but the two are quite distinct. Thus the material facts will mention that a statement of fact (which must be set out) was made and it must be alleged that it refers to the character and conduct of the candidate that it is false or which the returned candidate believes to be false or does not believe to be true and that it is calculated to prejudice the chances of the petitioner. In the particulars the name of the person making the statement, with the date, time and place will be mentioned. The material facts thus will show the ground of corrupt practice and the complete cause of action and the particulars will give the necessary information to present a full picture of the cause of action. In stating the material facts it will not do merely to quote the words of the section because then the efficacy of the words 'material facts ' will be lost. The fact which constitutes the corrupt practice must be stated and the fact must be correlated to one of the heads of corrupt practice. Just as a plaint without disclosing a proper cause of action cannot be said to be a good plaint, so also an election petition without the material facts relating to a corrupt practice is no election petition at all. A petition which merely cites the sections cannot be said to disclose a cause of action where the allegation is the making of a false statement. That statement must appear and the particulars must be full as to the person making the statement and the necessary information. Formerly the petition used to be in two parts. The material facts had to be included in the petition and the particulars in a schedule. It is inconceivable that a petition could be filed without the material facts and the schedule by merely citing the corrupt practice from the statute. Indeed the penalty of dismissal summarily was enjoined for petitions which did not comply with the requirement. Today the particulars need not be separately included in a schedule but the distinction remains. The entire and complete cause of action must be in the 623 petition in the shape of material facts,. the particulars being the further information to complete the picture. This distinction is brought out by the provisions of section 86 although the penalty of dismissal is taken away. Sub section (5) of that section provides (5) The High Court may, upon such terms as to costs and otherwise as it may deem fit, allow the particulars of any corrupt practice alleged in the petition to be amended or amplified in such manner as may in its opinion be necessary for ensuring a fair and effective trial of the petition, but shall not allow any amendment of the petition which will have the effect of introducing particulars of a corrupt practice not previously alleged in the petition. " The power of amendment is given in respect of particulars but there is a prohibition against an amendment "which will have the effect of introducing particulars if a corrupt practice not previously alleged in the petition. " One alleges the corrupt practice in the material facts and they must show a complete cause of action. If a petitioner has omitted to allege a corrupt practice, he cannot be permitted to give particulars of the corrupt practice. The argument that the latter part of the fifth sub section is directory only cannot stand in view of the contrast in the language of the two parts. The first part is enabling and the second part creates a positive bar. Therefore, if a corrupt practice is not alleged, the particulars cannot be supplied. There is however a difference of approach between the several corrupt practices. If for example the charge is bribery of voters and the particulars give a few instances, other instances can be added; if the charge is use of vehicles for free carriage of voters, the particulars of the cars employed may be amplified. But if the charge is that an agent did something, it cannot be amplified by giving particulars of acts on the part of the candidate or vice versa. In the scheme of election law they are separate corrupt practices which cannot be said to grow out of the material facts related to another person. Publication of false statements by an agent is one cause of action, publication of false statements, by the candidate is quite a different cause of action. Such a cause of action must be Alleged in the material facts before particulars may be given. One cannot under the cover of particulars of one corrupt practice give particulars of a new corrupt practice. They constitute different causes of action. Since a single corrupt practice committed by the candidate, by his election agent or by another person with the consent of the candidate or his election agent is fatal to the election, the case must be specifically pleaded and strictly proved. If it has not been pleaded as part of the material facts, particulars of such 624 corrupt practice cannot be supplied later on. The bar of the latter part of the fifth sub section to section 86 then operates. In the petition as 'originally filed the agency of Jagadguru Shankaracharya, Mr. Madhu Limaye and the Maratha (or Mr. Atrey) was the basis of the charge and the candidate Mr. Fernandez was left out. No allegation was personally made against him. The only allegations against him personally were contained in paragraph 2G. There it was said that Mr. Fernandez had made certain speeches to the effect that Mr. Patil was against the Muslims and Christians. No evidence was led and they were not even referred to at the hearing before us. The next reference in 2J is to statements of Mr. Fernandez. and published by the Maratha. These were specified and only three such statements were included. Since the gist of the election offence is the publication of false statements, the charge is brought home to the candidate through the publication by the Maratha. It is to be remembered that even the allegation that in doing so the Maratha acted as the agent of Mr. Fernandez, itself came by way of an amendment which we allowed as it completed the cause of action and is per missible. The bar of section 86(5) (latter part) does not apply to it and under Order VI rule 17 of the Code of Civil Procedure, which is applicable as far as may be, such an amendment can be made. Similarly the allegations that such statements were false or were believed to be false or were not believed to be true by the Maratha (i.e. Mr. Atrey) and that they were calculated to prejudice Mr. Patills chances and did so, were allowed by us to be added as completing the cause of action relating to a corrupt practice already alleged. But we declined to allow to stand the amendments which had the effect of introducing, new corrupt practices relating to the candidate himself which had not been earlier pleaded. This kind of amendment is prohibited under the law when the amendment is sought after the period of limitation. The learned Judge in the High Court did not keep the distinction between material facts and particulars in mind although the language of the statute is quite clear and makes a clear cut division between the two. He seems to have been persuaded to Such a course by a reading of the rulings of this Court and the High Courts. These same rulings were presented before us and we may now say a few words about them. The learned Judge in the High Court has relied upon Harish Chandra Bajpai vs Triloki Singh(1) and deduced the proposition that where the petition sets out the corrupt practice as a ground, instances of the corrupt practices may be added subsequently and even after the period of limitation of filing the petition is over. Following that case the learned Judge has allowed the (1) ; 625 amendments as corrupt practice under section 123 (4) was alleged in the original petition. We shall come to that case last of all. It seems to have played a great part in moulding opinion in India on the subject of amendment of pleadings in the Election Law. To begin with it must be realised that as is stated in Jagan, Nath vs Jaswant Singh and Others(1) the statutory requirements of the law of Election in India must be strictly observed. It is pointed out in that case that an election contest is not an action at law or a suit in equity but a purely statutory proceeding unknown to common law and that the court possesses no common law power. Although the power of amendment given in the Code of Civil Procedure can be invoked because section 87 makes the procedure applicable, as nearly as may be to the trial of election petitions, the Representation of the People Act itself enacts some rules, which override the Civil Procedure Code. General power of amendment or the power derived from the Code of Civil Pro cedure must be taken to be overborne in so far as the election law provides. In a large number of cases it has been laid down by the High Courts in India that the material facts, must make out a charge and it is only then that an amendment to amplify the charge can be allowed or new instances of commission of corrupt practice charged can be given. If no charge is made out in the, petition at all the addition of particulars cannot be allowed to include indirectly a new charge. This was laid down in Din Dayal vs Beni Prasad and Another (2), Balwan Singh vs Election Tribu nal, Kanpur and Others(3) by the Allahabad High Court, in T. L. Sasivarna Thevar vs V. Arunagiri and Others (4 ) by the Madras High Court and in Hari Vishnu Kamath vs Election Tri bunal, Jaipur and Another(5) by the Madhya Pradesh High Court. All these cases rely upon Harish Chandra Bajpai 's case (6) to which we have referred. Harish Chandra Bajpai 's case (6) was based on an English case Beat vs Smith (7 ). In that case it was held that under the Parliamentary Election Act of 1868 it was enough to allege generally in the petition that "the respondent by himself and other persons on his behalf was guilty of bribery, treating and undue influence before, during and after the election. " A summons was taken out calling upon the petitioner to deliver better particulars of "other persons". Willes, J. after consulting Martin, B and Blackburn, J. ordered better particulars. It was contended that the petition should be taken off the files since the particulars were lacking. Section 20 of that Act only provided that an election petition should be in such form and should state such matters as may be prescribed. Rule 2 prescribed that the petition should state (i) the right of the petitioner to petition and (ii) and should state the holding and result (1) (2) (3) 15 5E.L.R. 199. (4) (5) (7) L.R. 4 C.P. 115.(6) 11957] S.C.R. 370 626 of the election and then should briefly state such facts and grounds relied on to sustain the prayer. Rule 5 prescribed the form which required facts to be stated. Bovill, C.J., said that the form of the petition was proper and it was quite useless to state anything further. But in Bruce vs Odhams Press Ltd.(1) the Court of Appeal distinguished 'material facts ' from 'particulars ' as they occurred in Order XIX of the Rules of the Supreme Court of England. The words there were material facts and particulars and the distinction made by Scott, L.J. bears out the distinction we have made between 'material facts ' and 'Particulars ' as used in section 83 of our statute. The same view was also expressed in Phillips vs Phillips(2). The observations of Brett, L.J. in that case also bear out the distinction which we have made. It appears that this distinction was not brought to the, notice of this Court in Harish Chandra Bajpai(3) case. The rules on the subject of pleadings in the English statute considered in Beal 's case(4) were different. We have in our statute an insistence on a concise statement of material facts and the particulars of corrupt practice alleged. These expressions we have explained. However, it is not necessary to go into this question because even on the law as stated in Harish Chandra Bajpai 's(3) case the amendment allowed in this case cannot be upheld. We shall now notice Harish Chandra Bajpai 's(3) case a little more fully. In that case the material allegation was that the appellants "could in the furtherance of their election enlist the support of certain government servants" and that the appellant No. 1. had employed two persons in excess of the prescribed number for his election purposes. No list of corrupt practices was attached. Thereafter names were sought to be added. The amendment was allowed by the Tribunal after the period of limitation and the addition was treated as mere particulars. It was held by this Court that an election petition must specify "grounds or charges" and if that was done then the particulars of the grounds or charges could be amended and new instances given but go new ground or charge could be added after the period of limitation. The reason given was that the amendment "introducing a new charge" altered the character of the petition. Venkatarama Iyyar, J. emphasised over and over again that new instances could be given provided they 'related to a 'charge ' contained in the petition. The result of the discussion in the case was summarised by the learned Judge at page 392 as follows : "(1) Under section 83(3) the Tribunal has power to allow particulars in respect of illegal or corrupt prac (1) (2) (3) ; (4) L.R. 4 C.P. 115. 627 tices to be amended, provided the petition itself specifies the grounds or charges, and this power extends to permitting new instances to be given. (2) The Tribunal has power under O.Vl, r. 17 to order amendment of a petition, but that power cannot be exercised so as to permit new grounds or charges to be raised or to so alter its character, as to make it in substance a new petition, if a fresh petition on those allegations will then be barred. " What is meant by 'ground or charge ' was not stated. By "ground" may be meant the kind of corrupt practice which the petitioner alleges but the word "charge" means inclusion of some material facts to make out the ground. Applying the same test (although without stating it) the learned Judge pointed out that the charge made in the petition was that the appellants 'could ' in furtherance of their election enlist the support of certain government servants and it meant only an ability to enlist support but the 'charge ' which was sought to be levelled against the candidate later was that he had in fact enlisted the said support. The learned Judge observed at page 393 as follows : "the charge which the respondent sought to level against the appellants was that they moved in public so closely with high dignitaries as to create in the minds of the voters the impression that they were favoured by them. We are unable to read into the allegations in para 7 (c) as originally framed any clear and categorical statement of a charge under section 123(8), or indeed under any of the provisions of the Election law. " The allegation in the statement was described as worthless and further it was observed at page 395 as follows : "But even if we are to read 'could ' in para 7 (c) as meaning 'did ', it is difficult to extract out of it a charge under section 123(8). The allegation is not clear whether the Government servants were asked by the appellants to support their candidature, or whether they were asked to assist them in furtherance of their election prospects, and there is no allegation at all that the Government servants did, in fact, assist the appellants in the election. On these allegations, it is difficult to hold that the petition in fact raised a charge under section 123 (8). It is a long jump from the petition as originally laid to the present amendment, wherein for the first time it is asserted that certain Mukhiasno Mukhias are mentioned in the petition assisted the appellants in furtherance of their election prospects, and that thereby the corrupt practice mentioned 628 in section 123 (8) had been committed. The new matters introduced by the amendment so radically alter the character of the petition as originally framed as to make it practically a new petition, and it was not within the power of the Tribunal to allow an amendment of that kind., ' It would appear from this that to make out a complete charge the facts necessary must be included in relation to a 'ground ' as stated in the Act. Merely repeating the words of the statute is not sufficient. The petitioner must specify the ground i.e. to say the nature of the corrupt practice and the facts necessary to make out a charge. Although it has been said that the charge of corrupt practice is in the nature of quasi criminal charge, the trial of an election petition follows the procedure for the trial of a civil suit. The charge which is included in the petition must, therefore, specify the material facts of which the truth must be established. This is how the case was understood in numerous other cases, some of which we have already referred to. In particular see J. Devaiah vs Nagappa and Others(1) and Babulal Sharma vs Brijnarain Brajesh and Others(2). Three other cases of this Court were also cited. In Chandi Prasad Chokhani vs State of Bihar(3) it was held that the powers of amendment were extensive but they were controlled by the law laid down in the Representation of the People Act. It was again emphasised that a new ground or charge could not be made the ground of attack as that made a new petition. In Bhim Sen vs Gopali and Others(4) the scope of Harish Chandra Bajpai 's(5) case was considered and its narrow application was pointed out. Indeed in that case the observations in Harish Chandra Bajpai 's(5) case were not followed to the utter most limit. In Sheopat Singh vs Ram Pratap(6) the only allegation was that the appellant (Hariram) got published through him and others a statement but there was no allegation that Hariram believed the statement to be false or did not believe it to be true. It was held that in the absence of such averment it could not be held that there was an allegation of corrupt practice against Hariram. The publication with guilty knowledge was equated to a kind of mens rea and this was considered a necessary ingredient to be alleged in the petition. From our examination of all the cases that were cited before us we are satisfied that an election petition must set out a ground or charge. In other words, the kind of corrupt practice which was perpetrated together with material facts on which a charge (1) (2) 1958 Madhya Pradesh 175 (F.B.). (3) (4) (5) ; (6) ; 629 can be made out must be stated. It is obvious that merely repeating the words of the statute does not amount to a proper statement of facts and the section requires that material facts of corrupt practices must be stated. If the material facts of the corrupt practice are stated more or better particulars of the charge may be given later, but where the material facts themselves are missing it is impossible to think that the charge has been made or can be later amplified. This is tantamount to the making of a fresh petition. Reverting therefore to our own case we find that the allega tion in paragraph 2J was that Mr. Fernandez made some state ments and the 'Maratha ' published them. Extracts from the 'Maratha ' were filed as Exhibits. Since publication of a false statement is the gist of an election offence the charge was against the 'Maratha '. If it was intended that Mr. Fernandez should be held responsible for what he said then the allegation should have been what statement Mr. Fernandez made and how it offended the election law. In 2J itself only three statements were specified and two of them had nothing to do with Mr. Fernandez and the third was merely a news item which the 'Maratha ' had published. There was no reference to any statement by Mr. Fernandez himself throughout the petition as it was originally filed. In fact there was no charge against Mr. Fernandez which could have brought the case within section 101 (b) of the Act. The attempt was only to make out the case under section 100 (1) (d) against the 'Maratha ' (or Mr. Atrey) pleading Mr. Atrey as agent of Mr. Fernandez. That too was pleaded in the amendments. The result is that the case gets confined to that of a candidate responsible for the acts of his agent. In the argument before us Mr. Chari for Mr. Fernandez conceded the position that Mr. Atrey could be treated as the agent of Mr. Fernandez. We are therefore relieved of the trouble of determining whether Mr. Atrey could be held to be an agent or not. The trial Judge was also satisfied that Mr. Atrey could be held to have acted as the agent of Mr. Fernandez. The case as originally pleaded fell within section 100(1) (d) with the additional burden. Although Mr. Daphtary was content to prove that the consent of Mr. Fernandez was immaterial as the corrupt practice of his agent was equally fatal to the election and attempted to prove his case under section 100 (1) (d) of the Act, Mr. Jethamalani who took over the argument from him contended that the case fell to be governed by section 101 (b) that is to say, of any person who did the act with the consent of Mr. Fernandez. It is therefore necessary to pause here to decide, whether Mr. Atrey had the consent of Mr. Fernandez to the publications in his newspaper. The difference between Mr. Daphtary 's argument and that of Mr. Jethamalani lies in this. In the latter the consent of the 630 candidate must be proved to each corrupt practice alleged, in the former there is only need to prove that a person can be held to have acted as an agent with the consent of the candidate. An agent in this connection is ;not one who is an intermeddler but one acting with the consent, express or implied, of the candidate. According to Mr. Jethamalani when an agent works regularly for a candidate the consent to all his acts must be presumed and he contends that the court was wrong in requiring proof of prior consent to each publication. On the other hand, Mr. Chari 's case is that when Mr. Atrey acted as an agent and when he did not act as an agent, is a question to be considered in respect of each publication in the 'Maratha '. According to him it is not sufficient merely to say that Mr. Atrey was an agent because Mr. Atrey was also editor of the newspaper and in running his newspaper his activities were his own and not on behalf of Mr. Fernandez. Mr. Jethamalani relies strongly upon the case of Rama Krishna (C.A. No. 1949 of 1967 decided on April 23, 1968) and Inder Lall Yugal Kishore vs Lal Singh(1). Rama Krishna 's case was decided on its special facts. There the agent was one who had been employed regularly by Rama Krishna not only in the last election but also in two previous elections. Rama Krishna stated that the arrangements for his election were completely left in that agent 's hands. The agent had got printed some posters which had defamed the candidate and these posters were exposed on the walls. Rama Krishna admitted that he had seen these posters and also that he had paid for the posters when the bill was presented to him. In fact he included the amount in his return of election expenses. It was from these combined facts that the consent of Rama Krishna to the corrupt practice of. making false and defamatory statements was held proved. The case therefore is not one in which the person while acting in a different capacity makes a defamatory statement. In the case from Rajasthan the rule laid down was that the association of persons or a society or a political party or its permanent members, who set up a candidate, sponsor his cause, and work to promote his election, may be aptly called the agent for election purposes. In such cases where these persons commit a corrupt practice unless the exception in section 100(2) apply the returned candidate should be held guilty. We shall consider this question later. Before we deal with the matter further we wish to draw attention to yet another case of this Court reported in Kumara Nand vs Brijmohan Lal Sharma(2). In that case section 123(4) was analysed. It was held that the belief must be that of the candidate himself. The word "he" in the sub section where it occurs for the first time was held to mean the candidate. This Court observed as follows (1) A.T.R. (2) ; 631 "The sub section requires : (i) publication of any statement of fact by a candidate, (ii) that fact is false, (iii) the candidate believes it to be false or does not believe it to be true, (iv) the statement is in relation to the personal character or conduct of another candidate; and (v) the said statement is one being reasonably calculated to prejudice the prospects of the other candi date 's election. (See Sheopat Singh vs Ram Pratap(1) This case thus lays down that the person with whose belief the provision is concerned is ordinarily the candidate who, if we may say so, is responsible for the publi cation. The responsibility of the candidate for the publication arises if he publishes the thing himself. He is equally responsible for the publication if it is published by his agent. Thirdly he is also responsible where the thing is published by any other person but with the consent of the candidate or his election agent. In all three cases the responsibility is of the candidate and it is ordinarily the candidate 's belief that matters for this purpose. If the candidate either believes the statement to be false or does not believe it to be true he would be responsible under section 123(4). In the present case. the poem was not actually read by the appellant, but it was read in his presence at a meeting at which he was presiding by Avinash Chander. In these circumstances. the High Court was right in coming to the conclusion that the recitation of the poem by Avinash Chander at the meeting amounted to the publication of the false statement of fact contained in it by another person with the consent of the candidate, and in this case, even of his election agent who was also present at the meeting. , But the responsibility for such publication in the circumstances of this case is of the candidate and it is the candidate 's belief that matters and not the belief of the person who actually read it with the consent of the candidate. What would be the position in a case where the candidate had no knowledge at all of the publication before it was made need not be considered for that is not so here. It is not disputed in this case that the statement that the respondent was the greatest of all thieves, was false. It is also not seriously challenged that the appellant did not believe it to be true. The contention that Avinash Chander 's belief should have been proved must therefore fail. " From this case it follows that to prove a corrupt practice in an agent is not enough, the belief of the candidate himself must (1) ; 632 be investigated with a view to finding out whether he made a statement which he knew to be false or did not believe to be true. When we come to the facts of the case in hand we shall find that most of the statements were made by a newspaper editor in the normal course of running a newspaper. Some of the passages which are criticised before us were made as news items and some others were put in the editorial. It is to be remembered that the newspaper ran a special column called "George Femandez 's Election Front". No article or comment in that column has been brought before us as an illustration of the corrupt practice. A newspaper publishes news and expresses views and these are functions normal to a newspaper. If the same news appeared in more than one paper, it cannot be said that each editor acted as agent for Mr. Fernandez and by parity of reasoning a line must be drawn to separate the acts of Mr. Atrey in running his newspaper and in acting as an agent. Mr. Atrey was not a wholetime agent of Mr. Fernandez so that anything that he said or did would be treated as bearing upon the belief of Mr. Fernandez as to the truth of the statements made by Mr. Atrey. Therefore, every act of Mr. Atrey could not be attributed to Mr. Fernandez so as to make the latter liable. We have therefore to analyse these articles to find out which of them answers the test which we have propounded here. But the fact remains that the case was pleaded on the basis of corrupt practices on the part of an agent but by the amendment the candidate was sought to be charged with the corrupt practices personally. As there was no such charge or ground in the original petition and as the application for amendment was made long after the period of limitation was over the amendment could not be allowed. Accordingly we ruled out the amendments concerning the personal speeches of Mr. Fernandez and the article in the 'Blitz '. After we announced our conclusion about the amendments Mr. Daphtary with the permission of the Court left the case in the hands of Mr. Jethamalani and the argument to which we have already referred in brief was advanced by him. As pointed out already Mr. Jethamalani attempted to prove that the case would be governed by section 100 (1) (b) that is to say that the statements in the 'Maratha ' were published with the consent of Mr. Fernandez. Mr. Jethamalani deduced this from the course of events and argued that on proof of the corrupt practices committed by the 'Maratha ', Mr. Fernandez would be personally liable. He based himself on the following, facts. He pointed out that Mr. Fernandez had admitted that he desired that the newspapers should support his candidature and therefore must have been glad that the 'Maratha ' was Supporting him. and the articles in the 'Maratha ' were uniformly for the benefit of Mr. Fernandez. Sampurna Maharashtra Samiti was also supporting the candidature of Mr. Fernandez and the 'Maratha ' had made common cause with the Sampurna Maha 633 rashtra Samiti, the offices of both being situated in the same building which was also Mr. Atrey 's residence. Mr. Atrey was the editor of the 'Maratha ' and Chairman of the Sampurna Maharashtra Samiti. Mr. Atrey was also a candidate supported by the Sampuma Maharashtra Samiti. Mr. Fernandez and Mr. Atrey had a common platform and they supported each other in their respective constituencies. The 'Maratha ' carried a column "George Femandez 's Election Front" which was intended to 'be a propaganda column in favour of Mr. 'Fernandez. He contended that Mr. Fernandez could not be unaware of what Mr. Atrey was doing. He pointed out several statements of Mr. Fernandez in which he sometime unsuccessfully denied the knowledge of various facts. He contended lastly that Mr. 'Fernandez had social contacts with Mr. Atrey and could not possibly be unaware that Mr. Atrey was vociferously attacking Mr. Patil 's character and conduct. Mr. Jethamalani therefore argued that there was knowledge and acquiescence on the part of Mr. Fernandez and as there was no repudiation of what the 'Maratha ' published against Mr. Patil, Mr. Fernandez must be held responsible. The learned trial Judge in his judgment has given a summary of all these things at page 695 and it reads "To sum up, it is clear from the above discussion that respondent No. 1 is a prominent member of the SSP, that the SSP is ' a constituent unit of the SMS, that both Acharya Atrey and respondent No. 1 participated in the formation of the SMS that they both participated in the inauguration of the election campaign by the SMS, that the SMS, carried on election propaganda for candidates supported by it including respondent No. 1, that Acharya Atre was the president of the Bombay Unit of the SMS and was a prominent and a leading member thereof, that each of them addressed a meeting of the constituency of the other to carry on election propaganda for the other, that Acharya Atre through the columns of his newspaper Maratha carried on intensive and vigorous campaign for success of candidates supported by the SMS including respondent No. 1, that Acharya Atre started a special feature in Maratha under the heading "George Fernandez Election Front". These factors amongst others show that Acharya Atre had authority to canvass for respondent No. 1, that be made a common cause with respondent No. 1, for promoting 'his election, that to the knowledge of respondent No. 1 and for the purpose of promoting his election, he (Atre) canvassed and did various things as tended to promote his election. This in law is sufficient to make Acharya Atre an agent of respondent No. 1, as that term is understood under the election law. " 634 Mr. Jethamalani contended in further support that there was a clear similarity in the statements and utterances of Mr. Fernandez and Mr. Atrey. He inferred a high probability of concept between them. In this connection he referred in particular to the speech of Mr. Fernandez at Shivaji Park and the conduct of Shanbhag, one of his workers, in following up what Mr. Fernandez had said. We shall refer to this last part later on which a considerable part of the time of the Court was spent, although we had ruled out the amendment with regard to the speech at Shivaji Park. Mr. Jethamalani referred to the following cases among others in support of his contention that consent in such circumstances may be assumed : Nani Gopal Swami vs Abdul Hamid Choudhury and Another(1), Adams and Others vs Hon. E.F. Leveson Gower (2) Christie vs Grieve(3) and W. F. Spencer; John Blundell vs Charles Harrison(4). There is no doubt that consent need not be directly proved and a consistent course of conduct in the canvass of the candidate may raise a presumption of consent. But there are cases and cases. Even if all this is accepted we are of opinion that consent cannot be inferred. The evidence proves only that Mr. Atrey was a supporter and that perhaps established agency of Mr. Atrey. It may be that evidence is to be found supporting the fact that Mr. Atrey acted as agent of Mr. Femandez with his consent. That however does not trouble us 'because Mr. Chari admitted that Mr. Atrey can be treated as an agent of Mr. Fernandez. It is however a very wide jump from this to say that Mr. Fernandez had consented to each publication ;as it came or ever generally consented to the publication of items defaming the character and conduct of Mr. Patil. That consent must be specific. If the matter was left entirely in the hands of Mr. Atrey who acted solely as agent of Mr. Fernandez something might be said as was done in Rama Krishna 's case(5) by this Court. Otherwise there must be some reasonable evidence from which an inference can be made of the meeting of the minds as to these, publications or at least a tacit approval of the general conduct of the agent. If we were not to keep this distinction in mind there would be no difference between section 100(1)(b) and 100(1)(d) in so far as an agent is concerned. We have shown above that a corrupt act per se is enough under section 100 (1) (b) while under section 100 (1) (d) the act must directly affect the result of the election in so far as the returned candidate is concerned. Section 100(1) (b) makes no mention of an agent while section 100 (1) ( (d) specifically does. There must ' be some reason why this is so. The reason is this that an agent cannot make the candidate responsible unless the candidate has consented or the act of the (1) (2) 1 O 'Malley and Hardcastle 218. (3) 1 O 'Malley and Hardcastle 251. (4) 3 O 'Malley and Hardcastle 148. (5) C.A. No. 1949 of 1967 decided on April 23,1968. 635 agent has materially affected the election of the returned candidate. In the case of any person (and he may be an agent) if he does the act with the consent of the returned candidate there is no need to prove the effect on the election. Therefore, either Mr. Jethamalani must prove that there was consent and that would mean a reasonable inference from facts that Mr. Fernandez consented to the acts of Mr. Atrey or he must prove that the result of the election was seriously affected. If every act of an agent must be presumed to be with the consent of the candidate there would be no room for application of the extra condition laid down by section 1 00 ( 1 ) (d), because whenever agency is proved either directly or circumstantially, the finding about consent under section 1 00 ( 1 ) (b) will have to follow. We are clearly of opinion that Mr. Jethamalani 's argument that section 100 (1) (b) applies can only succeed if he establishes consent on the part of Mr. Fernandez. We have already pointed out that Mr. Atrey was also the editor of a newspaper which, as Mr. Patil has himself admitted, was always attacking him. Mr. Atrey had opened a column in his newspaper to support Mr. Ferandez 's candidature. Although nine articles appeared in the column between December 3, 1966 to February 2, 1967, not a single false statement from this column has been brought to our notice. There was not even a suggestion that Mr. Fernandez wrote any article for the 'Maratha ' or communicated any fact. It is also significant that although Mr. Atrey addressed meetings in the constituency of Mr. Fernandez, not a single false statement of Mr. Atrey was proved from his speeches on those occasions. The petitioner himself attended one such meeting on February 4,1967, but he does not allege that there was any attack on his personal character or conduct. The learned trial Judge has also commented on this fact. We think that regard being had to the activities of Mr. Atrey as editor and his own personal hostility to Mr. Patil on the issue of Sampuma Maharashtra Samiti, we cannot attribute every act of Mr. Atrey to Mr. Fernandez. Mr. Chari is right in his contention that Mr. Atrey 's field of agency was limited to what he said as the agent of Mr. Fernandez and did not embrace the field in which he was acting as editor of his newspaper. It is also to be noticed that Mr. Atrey did not publish any article of Mr. Fernandez, nor did he publish any propaganda material. The meeting at Shivaji Park about which we shall say some thing presently, was not held in Mr. Fernandez 's constituency. The similarity of ideas or even of words cannot be pressed into service to show consent. There was a stated policy of Sampuma Maharashtra Samiti which wanted to, join in Maharashtra all the areas which had not so far been joined and statements in that 636 behalf must have been made not only by Mr. Atrey but by several other persons. Since Mr. Atrey was not appointed as agent we cannot go by the similarity of language alone. It is also very significant that not a single speech of Mr. Fernandez was relied upon and only one speech of Mr. Fernandez namely, that at Shivaji Park was brought into arguments before us came by an amendment which we disallowed. The best proof would have been his own speech or some propaganda material such as leaflets or pamphlets etc. but none was produced. The 'Maratha ' was an independent newspaper not under the control of the Sampurna Maharashtra Samiti or the S.S.P. which was sponsoring Mr. Fernandez or Mr. Fernandez himself. Further we have ruled out news items which it is the function of the newspaper to publish. A news item without any further proof of what had actually happened through witnesses is of no value. It is at best a secondhand secondary evidence. It is well known that reporters collect information and pass if on to the editor who edits the news item and then publishes it. In this process the truth might get perverted or garbled. Such news items cannot be said to prove themselves although they may be taken. into account with other evidence if the other evidence is forcible. In the present case the only attempt to prove a speech of Mr. Fernandez was made in connection with the Shivaji Park meeting. Similarly the editorials state the policy of the newspaper and its comment upon the events. Many of the news items were published in other papers also. For example Free Press Journal, the Blitz and writers like Welles Hengens had also published similar statements. If they could not be regarded as agents of Mr. Fernandez we do not see any reason to hold that the 'Maratha ' or Mr. Atrey can safely be regarded as agent of Mr. Fernandez when acting for the newspaper so as to prove his consent to the publication of the defamatory matter. We are therefore of opinion that consent cannot reasonably be inferred to the publications in the 'Maratha '. We are supported in our approach to the problem by a large body of case law to which our attention was drawn by Mr. Chari. We may refer to a few cases here : Biswanath Upadhaya vs Haralal Das and Others(1), Abdul Majeed vs Bhargavan (Krishnan) & otherS(2), Rustom Satin vs Dr. Sampoornanand and Others(3), Sarla Devi Pathak vs Birendra Singh & OtherS(4), Krishna Kumar vs Krishna Gopal(5), Lalsing Keshrising Rehvar vs Vallabhdas Shankerlal Thekdi and Others(6), Badri Narain Singh and Others vs Kamdeo Prasad Singh and Another (7) and Sarat Chandra Rabba vs Khagendranath Nath and others(8). It is not necessary to (1) (2) A.I.R. 1963 Kerala 18. (3) (4) (5) A.I.R. (6) A.I.R. 1967 Gujarat 62. (7) A.I.R. 1961 Patna 41. (8) ; 637 refer to these cases in detail except to point out that the Rajasthan case dissents from the case from Assam on which Mr. Jehamalani relied. The principle of law is settled that consent may be inferred from circumstantial evidence but the circumstances must point unerringly to the conclusion and must not admit of any other explanation. Although the trial of an election petition is made in accordance with the Code of Civil Procedure, it has been laid down that a corrupt practice must be proved in the same way as a criminal charge is proved. In other words, the election petitioner must exclude every hypothesis except that of guilt on the part of the returned candidate. or his election agent. Since we. have held that Mr. Atrey 's activities must be viewed in two compartments, one connected with Mr. Fernandez and the other connected with the newspaper we have to find out whether there is an irresistible, inference of guilt on the part of Mr. Fernandez. Some of the English cases cited by Mr. Jethamalani are not a safeguide because in England a distinction is made between "illegal practices" and "corrupt practices". Cases dealing with "illegal practices" in which the candidate is held responsible for the acts of his agent are not a proper guide. It is to be noticed that making of a false statement is regarded as "illegal practice" and not a "corrupt practice" and the tests are different for a corrupt practice. In India all corrupt practices stand on the same footing. The only difference made is that when consent is proved on the part of the candidate or his elec tion agent to the commission of corrupt practice, that itself is sufficient. When a corrupt practice is committed by an agent and there is no such consent then the petitioner must go further and prove that the result of the election in so far as the returned candidate is concerned was materially affected. In Bayley vs Edmunds, Byron and Marshall(1), strongly relied upon by Mr. Daphtary the publication in the newspaper was not held to be a corrupt practice but the paragraph taken from a newspaper and printed as a leaflet was held to be a corrupt practice. That is not the case here. Mr. Patil 's own attitude during the election and after is significant. During the election he did not once protest that Mr. Fernandez was spreading false propaganda, not even when Mr. Fernandez charged his workers with hooliganism. Even after the election Mr. Patil did not attribute anything to Mr. Fernandez. He even said that the Bombay election was conducted with propriety. Even at the filing of the election petition he did not think of Mr. Fernandez but concentrated on the 'Maratha '. Mr. Daphtary sought to strengthen the inference about con sent from the inter connection of events with the comments in the 'Maratha '. He refers to the news item appearing in the (1) L10Sup./69 6 638 'Times of India ' of February 10, 1967 in which the letting loose of bad characters was alleged to be commented upon by Mr. Fernandez. He connected this with the activities of Shanbhag who wrote to the Election Commission and then pointed out that the 'Maratha ' came out with it. But if the 'Times of India cannot be regarded as the agent no more can the 'Maratha '. A newspaper reporting a meeting does so as part of its own activity and there can be no inference of consent. What was necessary was to plead and prove that Mr. Fernandez said this and this. Then the newspaper reports could be taken in support but not independently. Here the plea was not taken at all and the evidence was not direct but indirect. Mr. Jethamalani referred to some similarity in the reaction of the 'Maratha ' and Mr. Fernandez to the events. The Babu bhai Chinai incident was said to be a fake by both the 'Maratha ' and Mr. Fernandez, the Sayawadi meeting (not pleaded) was said to be followed by similar statements in the 'Maratha ', the Bristol Grill Conference was reported in the 'Maratha '. All this shows that the rival party believed in certain facts but it does not show that the 'Maratha ' was publishing these articles with Mr. Fernandez 's consent. In fact this argument has been wrongly allowed. Before this there was not so much insistence upon consent as thereafter. Now it may be stated that mere knowledge is not enough. Consent cannot be inferred from knowledge alone. Mr. Jetha malani relied upon the Taunton case(1) where Blackburn. J. said that one must see how much was being done for the candidate and the candidate then must take the good with the bad. There is difficulty in accepting this contention. Formerly the Indian Election Law mentioned 'knowledge and connivance ' but now it insists on consent. Since reference to the earlier phrase has been dropped it is reasonable to think that the law requires some concrete, proof, direct or circumstantial of consent, and not merely of knowledge and connivance. It is significant that the drafters of the election petition use the phrase 'knowledge and connivance ' and it is reasonable to think that they consulted the old Act and moulded the case round 'knowledge and connivance ' and thought that was sufficient. We cannot infer from an appraisal of the evidence of Mr. Fernandez that he had consented. His denial is there and may be not accurate but the burden was to be discharged by the election petitioner to establish consent. If Mr. Fernandez suppressed some other facts or denied them, there can be no inference that (1) 1 O 'Malley and Hardcastle 181, 185. 639 his denial about knowledge of the articles in the 'Maratha ' was also false. M. Fernandez denied flatly that he saw the articles explaining that there was no time to read newspapers, a fact which has the support of Mr. Patil who also said that he had no time to read even cuttings placed by his secretary for his perusal. We may say here that we are not impressed by the testimony of Mr. Fernandez and we are constrained to say the same about Mr. Patil. We cannot on an appraisal of all the materials and the arguments of Mr. Daphtary reach the conclusion that Mr. Fernandez was responsible for all that Mr. Atrey did in his newspaper or that his consent can be inferred in each case. The most important argument was based on the meeting at Shivaji Park on January 31, 1967 where Mr. Fernandez spoke. As the subject of the charge in the original petition did not refer to this speech and we disallowed the amendment, Mr. Jethamalani attempted to reach the same result by using the speech as evidence of consent to the publication of the report in the 'Maratha '. Here we may say at once that the speech could not be proved because it was not pleaded. Much time was consumed to take us through the evidence of witnesses who gave the exact words of Mr. Fernandez. Mr. Fernandez was alleged to have said that Mr. Patil was not honest and won elections by changing ballot boxes. Mr. Fernandez did not admit having made the speech. Four witnesses Tanksale, Bhide, Khambata and Bendre who alleged that they were present at the meeting deposed to this fact. We have looked, into their evidence and are thoroughly dissatisfied with it. Ramkumar, a reporter was also cited. He covered the meeting for the 'Indian Express ' but his newspaper had not published this part and Ramkumar was examined to prove that it was deleted by Rao the Chief Reporter. The evidence of Ramkumar was so discrepant with that of Rao that the trial Judge could not rely on it and we are of the same opinion. The fact that in exhibit 56 Mr. Fernandez had spoken of the 'ways and means ' of winning elections of Mr. Patil cannot be held to be proof nor the activities of Shanbhag in arranging for a watch of the ballot boxes. Every candidate is afraid that the ballot boxes may be tampered with and there is no inference possible that because Mr. Fernandez or Shanbhag 'his worker took precautions, Mr. Fernandez must have made a particular speech. It was said that Randive in his evidence admitted that Mr. Fernandez made such comments. We do not agree. His version was different. There is reason to think that there was an attempt to suborn witnesses and make them support this part of the case or to keep away from the witness box. One such attempt was made on Randive. We are not impressed by the witnesses who came to disprove the petitioners case but that does not improve it either. It seems that attempts were being made to enlist support for such a contention and the evidence shows that the wit 640 nesses were not free from influence. It is not necessary to go into the evidence on the other side such as that of Dattu Pradhan and Prafulla Baxi. They do not impress us either. We are, accordingly not satisfied that Mr. Fernandez made any such comment. If he did that would be a ground of the very first importance to an election petition. It is a little surprising that it was alleged so late and appears to be an after thought and intended to put into the mouth of Mr. Fernandez one of the statements of the 'Maratha '. Consent to the making of the statement in the 'Maratha ' had, therefore, to be proved and there is no such proof. For the same reasons we cannot regard Jagadguru Shankara charya or Mr. Madhhu Limaye as the agents of Mr. Fernandez. The evidence regarding their agency itself is nonexistent and there is no material on which consent can be presumed or inferred. The result of the foregoing discussion is that this case will have to be judged of under section 1 00 ( 1 ) (d) and not under section 100 (1) (b). In the arguments before us Mr. Chari conceded that some of the articles contain false statements regarding the character and conduct of Mr. Patil. He mentioned in this connection five articles. It is, not, therefore, necessary to examine, each of the 16 articles separately. If the conditions required by section 100, (1) (d) read with section 123 (4) are satisfied, a corrupt practice avoiding the election will be established. The first condition is that the candidate 's belief in the falsity of the statements must be established That was laid down by this Court in Kumara Nand vs Brijmohan Lal Sharma(1). The second condition is that the result of the election in so far as Mr. Fernandez is concerned must be shown to be materially affected. Thus we have not only to see (a) that the statement was made by an agent, (b) that it was false etc., (c) that it related to the personal character and conduct of Mr. Patil, (d) that it was reasonably calculated to harm his chances but also (e) that it in fact materially affected the result of the election in so far as Mr. Fernandez was concerned. Of these (a) and (c) are admitted and (b) is admitted by Mr. Fernandez because he said that he did not believe that there was any truth in these statements. The question next is whether they were calculated to affect the prospects of Mr. Patil. Here there can be no two opinions. These articles cast violent aspersions and were false as admitted by Mr. Fernandez himself. The course of conduct shows a deliberate attempt to lower his character and so they must be held to be calculated to harm him in his election. So far the appellants are on firm ground. Even if all these findings are in favour of the appellants, we cannot declare the election to be void under section 100(1) (d) (ii) unless we reach the further conclusion that the result of the election in so (1) ; 641 far as Mr. Fernandez was concerned had been materially affected. The section speaks of the returned candidate when it should have really spoken of the candidate who was defamed or generally about the result. However it be worded, the intention is clear. The condition is a prerequisite. Mr. Jethamalani argued that the words "materially affected" refer to the general result and not how the voting would have gone in the absence of the corrupt practice. According to him section 94 of the Act bars disclosure of votes and to attempt to prove how the voting pattern would have changed, would involve a violation of section 94. According to him the court can give a finding by looking to the nature of the attacks made, the frequency and extent of publicity, the medium of circulation and the kind of issue that was raised before the voters. He contends that to tell the Maharashtrians that Mr. Patil paid a bribe to the voters of Goa to keep it centrally administered, to call Mr. Patil a Najibkhan of Maharashtra i.e. a traitor, to dub him as the creator of Shiv Sena which terrorized the minorities, to describe him as a goonda and leader of goondas who organised attacks on voters, to charge him with the responsibility of attack on Parliament and the Congress President 's residence and to describe him as dishonest to the extent of switching ballot boxes, is, to materially affect the result of the voting. According to him these circumstances furnish a _good basis for the finding that the result of the election was positively affected and nothing more is needed. According to Mr. Jethamalani the capacity of Mr. Atrey when making these violent attacks was irrelevant as he was acting in support of the canvass of Mr. Fernandez. Mr. Jethamalani further submits that different false state ments were intended to reach different kind of voters. The Maharashtrians were affected by the Goa and border issues, the minorities by the Shiv Sena allegations, the law abiding citizens by the allegations about goondaism. Thus there must have been a land slide in so far as Mr. Patil was concerned and there must have been corresponding gain to Mr. Fernandez. He relies upon Hackney case(1) where Grove, J. made the following observations at pages 81 and 82 "I have turned the matter over in my mind, and I cannot see, assuming that argument to express the meaning of that section, how the tribunal can by possibility say what would or might have taken place under different circumstances. It seems to me to be a problem which the human mind has not yet been able to solve, namely, if things had been different at a certain period, what would have been the result of the concatenation of events upon that supposed change of circum (1) 2 O ' Malley and Hardcastle 's Election Reports 77. 642 stances. I am unable at all events to express an opinion upon what would have been the result, that is to say, who would have been elected provided certain matters had been complied with here which were not complied with. It was contended that I might hear evidence on both sides as to how an elector thought he would have voted at such election. That might possibly induce a person not sitting judicially to form some sort of vague guess, out that would be far short of evidence, which ought to satisfy the mind of a judge of what any individual who might express that opinion would really do under what might have been entirely changed circumstances. But, besides that, one of the principles of the Ballot Act is that voting should be secret, and voters are not to be compelled to disclose how they voted except upon a scrutiny after a vote has been declared invalid. Notwithstanding that, I am asked here, assum ing the construction for which Mr. Bowen contends to be correct, to ascertain how either the 41,000 electors of this Borough, or any number of them, might have wished to vote had they had the opportunity of doing so, and what in that event would have been the result of the election. It seems to me that such an inquiry would not only have been entirely contrary to the spirit of the Act, but also that it would be a simple impossibility. I should, therefore, say that even if the wording of the Act, taking it literally and grammatically, required me to put sucha construction upon it, it would lead to such a manifest absurdity (using now the judicial term which has generally been used with reference to the construction of statutes) that unless I were in some way imperatively obliged, and unless the Act could by no possibility admit of any other construction, I should not put a construction upon it which really reduced the matter to a practical impossibility. Such a construction would practically render it necessary, in the case of any miscarriage at an election, however great the miscarriage might be (if, that is to say, only a very small number of persons had voted, and all the rest of tile Borough had been entirely unable to vote) that the judge should then enquire as to how the election would have gone. As I ventured to remark in the course of the argument, where a miscarriage of this sort took place it would be virtually placing the election not in the hands of the constituency, but in the hands of the election _judge, who is not to exercise a judgment as to who is to be the member, but who is only to see whether the election has been properly conducted according to law." 643 Justice Grove then gave the meaning of the provision at page 85 as follows : "If I look to the whole, and to the sense of it as a whole, it seems to me that the object of the Legislature in this provision is to say this an election is not to be upset for an informality or for a triviality, it is not to be upset because the clerk of one. of the polling stations was five minutes too late, or because some of the polling papers were not delivered in a proper manner, or were not marked in a proper way. The objection must be something substantial, something calculated really to affect the result of the election. I think that is a way of viewing it which is consistent with the terms of the section. So far as it seems to me, the reasonable and fair meaning of the section is to prevent an election from becoming void by trifling objections on the ground of an informality, because the judge has to look to the substance of the case to see whether the informality is of such a nature as to be fairly calculated in a reasonable mind to produce a substantial effect upon the election." Mr. Jethamalani invites us to apply the same test and in the light of his facts to say that the result of the election in so far as Mr. Fernandez is concerned was materially affected. On the other hand, Mr. Chari relies upon the facts that there was a difference of 30,000 votes between the two rivals and as many as 38,565 votes were cast in favour of the remaining candidates. He says that Mr. Patil had contested the earlier elections from the same constituency and the votes then obtained by him were not more in faithless. He says it is impossible to say how much Mr. Patil lost or Mr. Fernandez gained by reason of the false statements and whether the affected voters did not give their votes to the other candidates. He argues that the best test would be to see what Mr. Patil 's reactions were on hearing of his defeat. In this connection he referred to exhibit 120 in which Mr. Patil commented on the elections in Bombay being orderly. In exhibit 128 he said that the voters of Bombay had rejected him and that he has disappointed his supporters and they must pardon him, and that he must have been punished for some sin committed by him. Mr. Chari says that never for a moment did Mr. Patil attribute his defeat to false propaganda by Mr. Fernandez or his supporters, which if it had been a fact Mr. Patil would have lost no time in mentioning. All this shows that Mr. Patil maintained his position in this constituency. Mr. Fernandez had earlier announced that be would organise support for himself from those who had voted in the past for his rivals , or had refrained from voting and this Mr. Fernandez was successful in achieving. Mr. Chari relies upon the rulings of this Court where it has been laid down how the 644 burden of proving the affect on the election must be discharged. He referred to the case reported in Vashist Narain Sharma V. Dev Chandra(1) and Surendra Nath Khosla vs Dilip Singh(2) and the later rulings of this Court in which Vashist Narain 's(1) case has been followed and applied. In our opinion the matter cannot be considered on possibility. Vashist Narain 's(1) case insists on proof. If the margin of votes were small something might be made of the points mentioned by Mr. Jethamalani. But the margin is large and the number of votes earned by the remaining candidates also sufficiently huge. There is no room, therefore, for a reasonable judicial guess. The law requires proof. How far that proof should go or what it should contain is not provided by the Legislature. In Vashist 's(1) case and in Inayatullah vs Diwanchand Mahajan, (3) the provision was held to prescribe an impossible burden. The law has however remained as before. We are bound by the rulings of this Court and must say that the burden has not been successfully discharged. We cannot overlook the rulings of this Court and follow the English ruling cited to us. To conclude and summarize our findings : We are satisfied that Mr. Atrey as the Editor of the 'Maratha ' published false statements relating to the character and conduct of Mr. Patil, calculated to harm the prospects of Mr. Patil 's election, that Mr. Atrey was the agent of Mr. Fernandez under the election law, but there is nothing to prove that he did so with the consent of Mr. Fernandez, nor can such consent be implied because in making the statements Mr. Atrey was acting as the editor of his own newspaper the 'Maratha ' and not acting for Mr. Fernandez. We are further satisfied that the petitioner has failed to establish in the manner laid down in this Court, that the result of the election was materially affected in so far as Mr. Fernandez was concerned. We are also satisfied that if the petitioner had pleaded corrupt practices against Mr. Fernandez personally (which he did not) the result might have been different. The election petition was it considered and left out the most vital charges but for that the petitioner must thank himself. In the result the appeals failed and as already announced earlier they are dismissed with costs. V.P.S. Appeal dismissed. (1) ; (2) (3) , 235 236.

Under section 81 of the Representation of the People Act, 1951, an election can be challenged by means of an election petition filed within 45 days of the date of election, on the grounds specified in section 100(1). Section 100 (1) (b) and (d) (ii) deal with corrupt practices, and section 123 sets out what shall be deemed to be corrupt practices. To establish the corrupt practice under section 123(4) the election petitioner must prove : (a) the publication of a statement of fact by (i) a candidate, or (ii) his agent, or (iii) any other person with the consent of the candidate or his election agent; (b) that the statement is false or the candidate believes it to be false or does not believe it to be true; (c) that the statement refers to the personal character and conduct of another candidate; and (d) that it is reasonably calculated to prejudice that other candidate 's prospects of election. Under the Explanation to the section, the word 'agent ' includes an election agent, a polling agent or any person who is held to have acted as an agent in connection with the election with the consent of the candidate. If the corrupt practice is committed by the returned candidate or his election agent, under section 100(1) (b), the election is avoided without any further condition being, fulfilled, but if the petitioner relies on a corrupt practice committed by any other agent other than an election agent the petitioner must prove that it was committed with the consent of the returned candidate or his election agent as required by section 100(1) (b), or, that the corrupt practice which was committed in the interests of the returned candidate materially affected the result of the election in so far as it concerned the returned candidate. [617 A B; 618 B D] Section 83 requires that the petition must contain a concise statement of the material facts on which the petitioner relies and the fullest possible particular of the corrupt practice alleged. 'Material facts ' and 'particulars ' may overlap but the word 'material ' shows that the ground of corrupt practice and the facts necessary to formulate a complete cause of action must be stated. The function of the Particulars is to present as full a picture of the cause of action as to make the opposite party understand the case he will have to meet. Under section 86(5), if a corrupt practice. is alleged in the petition the particulars of such corrupt practice may be amended or amplified for ensuring a fair and effective dial, that is, more and better particulars of the charge may be given later, even after the period of limitation; but if a corrupt practice is not previously alleged in the petition, an amendment which will have the effect of introducing parti 604 culars of such a corrupt practice will not be permitted, after the period of 'limitation, because, it would be tantamount to the making of a fresh petition. Merely repeating the words of the statute does not amount to a proper statement of material facts where the allegation of corrupt practice is the making of a false statement. The false statement must appear in the petition. if the corrupt practice is the publication of an article in a newspaper no incorporation of the contents by reference can be allowed, for, if a newspaper is not exhibited and only the date is mentioned, the material fact, namely, the exact offending portion of the newspaper, would not have been stated. If the charge is that an agent did something, it cannot be amplified by giving particulars of acts on the part of the candidate or vice versa, because, in the scheme of: election law, publication of false statements by an agent is one cause of action and publication of false statements by a candidate is quite a different cause of action. They are separate corrupt practices which cannot be said to grow out of the material facts related to another person. Since a single corrupt practice committed by the candidate or by his election agent, or by any other person with the consent of the candidate or his election agent is fatal to the election, the case must be specifically pleaded and strictly proved; if not, such corrupt practice cannot be alleged later on after the period of limitation [619 C H; 621 B D; 622 A D, F G; 623 E H; 629 A B] In the present case, the election of the first respondent to Parliament from Bombay South Parliamentary constituency, was challenged by the appellant (an elector in the constituency) on the ground that corrupt practices were committed. The result of the poll was declared on February 24, 1967. The first respondent secured 1,47,841 votes and his nearest rival, the second respondent, secured 1,18,407 votes. The petition was filed on April 7, 1967. The corrupt practice alleged was that the first respondent made some speeches, and that the first respondent and two others, with the consent and for the benefit of the first respondent, made false statements, casting aspersions on the character and conduct of the second respondent, and that those and other false statements were published as news items in the daily newspaper 'Maratha '. Extracts from the newspapers were annexed. It was also stated that similar false statements were published in some other issues of the newspaper but no attempt Was made either to specify the offending portions of the newspapers or to file the extracts or the original issues, but only the dates were given. There was also no averment that the first respondent believed the statements to be false or did not believe them to be true. After the period of limitation, the originals of all the issues of the newspapers were filed and after the examination of the election petitioner as a witness, applications for amendment were made. The High Court allowed the following amendments : (a) Speeches attributed to the first respondent and a speech said to have been made at a meeting, when the first respondent presided, casting aspersions on the second respondent, to be included among the list of corrupt practices. Reports of those speeches appeared in the issues of the 'Maratha ' which were filed later. (b) An article in the 'Blitz, written by the first respondent defamatory of the second respondent also to be included in the list of corrupt practices. (c) An averment that the editor of the newspaper 'Maratha ' and the first respondent believed the statements to be false or that they did not believe them to be true. And (d) an averment that the editor of the newspaper and the two others were the agents of the first respondent. The High Court however, dismissed the election petition. [614 E F; 616 B] In appeal to this Court, on the questions : (1) Whether all or any of the amendments should be allowed; (2) Whether the editor of the 'Maratha ' and the two others committed corrupt practices under section 100 605 (1) (b) by publishing the statements about the second respondent with the consent of the first respondent and (3) Whether the result of the election in so far as it concerned the first respondent was materially affected by the publication as required by section 100(1) (d) (ii), HELD: (1) The amendments relating to the speeches of, the first respondent and his article in the Blitz should not be allowed; but the amendments relating to the agency of the editor of the 'Maratha ' and the two others, and that seeking to incorporate the averment about the lack of belief of the editor of 'Maratha and the first respondent should be allowed. [616 E G] In the petition as originally filed, the agency of the editor of 'Maratha, and the two others was the basis of the charge and the first respondent was left out. Only one allegation was made personally against the first respondent namely that he made some speeches but that was not relied upon and no evidence regarding it was adduced. The other allegation in the original petition was that he made some statements, and that the 'Maratha ' published them; and the extracts from the 'Maratha were filed as exhibits. Since publication of a false statement is the gist of the election offence the charge was against the 'Maratha, and its editor. If it was intended that the first respondent should be held responsible then the allegation should have been what statement he made and how it offended the election law. 'Mere was however no reference to any statement by the first respondent himself throughout the petition as it was originally filed and in fact there was no charge against him. During the election the second respondent did not once protest that the first respondent was spreading false propaganda and even after election he did not attribute anything to the first respondent. Therefore, the amendments which had the effect of introducing new corrupt practices relating to the candidate himself which had not been pleaded earlier should not be allowed, as that kind of amendment, sought after the period of limitation, is prohibited under the law. But the allegation that in publishing the statements in the 'Maratha ' its editor acted as the agent of the first respondent, that the statements were false or were believed to be false by the first respondent and the editor, and that they were calculated to prejudice the second respondent 's chances and did so prejudice, should be allowed. They are merely particulars to be added for completing the cause of action relating to a current practice already alleged. The result is that the 'case is confined to that of a candidate sought to be made responsible for the acts of his agent other than an election agent. [620 G; 624 A F; 632 A B] Jagan Nath vs Jaswant Singh, , Bhim Sen vs Gopali, , Chandi Prasad Chokani vs State of Bihar, , Sheopat Singh vs Ram Pratap, ; and Kumara Nand vs Brij Mohan, [1967]1 2 S.C.R. 127, followed. Harish Chandra Bajpai vs Triloki Singh, ; , explained. Din Dayal vs Beni Prasad, , Balwant Singh, ;vs Election Tribunal, , Sasivarna Thevar vs Arunagiri, , Hari Vishnu Kamath vs Election Tribunal, , Devaiah vs Nagappa, A.I.R. 1965 Mys. 102, Babulal Sharma vs Brijnarain Brajesh, A.I.R. 1958 M.P. 175 (F.B.), Beal vs Smith L. R. 1 5; Bruce vs Odhams Press Ltd. and Phillips vs Phillips, , referred to. (2) Regard however being had to the activities of the editor of 'Maratha ' as editor and his own personal hostility to the second respon L10Sup./69 4 606 dent, every act of the editor could not be attributed to the first respondent. The editor 's field of agency must be limited to what he said as the agent of the first respondent and would not embrace the field in which he as acting as editor of his newspaper unless the first respondent 's con sent to the corrupt practices was established. [636 E F; 638 B C] Consent need not be directly proved and could be inferred from circumstantial evidence, such as a consistent course of conduct of the candidate. But the circumstances must point unerringly to the conclusion and must not admit of any other explanation. Although an election petition is tried in accordance with the Civil Procedure Code, a corrupt pra ctice must be proved in the same way as a criminal,charge is proved. English cases dealing with illegal practices in which the candidate is held :responsible for the acts of his agent, are not a proper guide, because English law, unlike Indian law, makes a distinction between 'illegal practices ' and 'corrupt practices '. Fourth the consent of the candidate must 'be specific and must be proved for each corrupt practice. If every act of an agent is presumed to be with the consent of the candidate there would be no room for the application of the extra condition laid down by section 100(1)(d), namely, the material effect on the result of the election, be ,cause, whenever agency is proved either directly or circumstantially, the finding about consent under section 100(1) (b) will hive, to follow. [637 A H] In the present case, though the newspaper ran a special column as an ,election front of the first respondent, no article or comment in that column was relied on for proving a corrupt practice. It was not even suggested that the first respondent wrote any article for the 'Maratha. The statements which were relied on as corrupt practices we 're made by the editor of the newspaper in the normal course of running a newspaper, as news items or in the editorial. They stated the policy of the newspaper and its comments upon the events. Many of the news items ,appeared. in more than one paper. If it could not be said that the editors of each of those papers acted as an agent for the first respondent there is no reason for, holding that the editor of 'Maratha ' alone acted as such agent. It was not as if the matter was left entirely in the hands of the ,editor who acted as a whole time agent or solely as the agent of the first respondent, nor is it a case of some persons setting up the first respondent as a candidate and sponsoring his cause. The editor did not publish any propaganda material such as leaflets or pamphlets. Therefore, though the editor was a supporter and agent of the first respondent, it could not be said that the first respondent consented to each publication as it appeared or even generally consented to the publication of items defaming the character and conduct of the second respondent. The first respondent denied knowledge of the. articles. From his false suppression of some other facts and denial of others, it could not be said that his denial of knowledge of the articles in the 'Maratha ' was also false. But even if he had knowledge, it would not be sufficient, because, the law requires some concrete proof, direct or circumstantial, of consent, and not merely 'of knowledge or connivance. Further, no such inference regarding the first respondent 's consent could be drawn from the comments and speeches attributed to the first respondent by the 'Maratha ' and other newspapers or from any similarity of ideas or language, because, news items when published are garbled versions and cannot be regarded as proof of what actually happened or was said without other acceptable evidence through prom witnesses. [629 B H; 630 A B: 632 F H; 633 A D; 634 A H; A G; 636 AD; 638 A G; 639 A B] As regards the other two persons, even evidence regarding their agency was non existent and there was no material on which the first respondent 's consent to their statements could be presumed or inferred. [640 A B] 607 Therefore, since the consent of the candidate to the corrupt Practice was not proved the case will have to be judged under section 100 (1) (d) (ii) and not under section 100(1)(b). [640 D] Rama Krishna 's case, C.A. No. 1949/67 dated 234 68, Inder Loll Yugal Kishore vs Lal Singh, A.I.R. 1961 Raj. 122, Gopal Swami vs Abdul Hamid Chowdhury, A.I.R. 1959 Assam 200, Adams vs Hon. E. F. Leveson Gower, 1 O 'Malley & Hardcastle 218, Christie vs Grieve, 1 O 'Malley & Hardcastle 251, Spencer, John Blundell vs Charles Harrison, 3 O 'Mally & Hardcastle 148, Biswanath Upadhava vs Haralal Das, A.I.R. 1958 Assam 97, Abdul Majeed vs, Bhargavan, A.I.R. 1963 Kerala 18, Rustom Satin vs Dr. Sampoornanand , Sarala Devi Pathak T. Birendra Singh, , Krishna Kumar vs Krishna Gopal, A.I.R. 1964 Raj. 21, Lai Singh vs Vallabhdas, A.I.R. 1967 Guj. 62, Badri Narain vs Kantdeo Prasad, A.I.R. 1961 Pat. 41, Sarat Chandra vs Khagendranath, ; and Taunton 's case, I O 'Malley & Hardcastle 181, 185, referred to. Bayley vs Edmunds, Byron & Marshall , distinguished. (3) To bring a case under section 100(1) (d) (ii) it is not sufficient to prove that a person acted as an agent with the consent of the candidate. The petitioner will have to establish that the conditions required by section 100(1).(d)(ii) and section 123(4) are satisfied, that is : (a) that a false statement was made by an agent, (b) that the first respondent did not believe, the statement to be true or believed it to be false; (c) that it related to the personal character and conduct of the second respondent; (d) that it was reasonably calculated to harm the chances of the second respondent; and (e) that it in fact materially affected the result of the election in so far as the first respondent was concerned. Conditions (a), (b) and (c). were admitted by the first respondent and, since the articles cast violent aspersions on the second respondent and showed a deliberate attempt to lower his character, condition (d) was also satisfied. But as condition (e) was not satisfied, the election petition should be dismissed. [640 D H] Even after considering the nature of attacks made on the second respondent, the frequency and extent of publicity, the medium of circulation and the kinds of issues raised before the voters, it could not be said, in the circumstances of this case, that the result of the. election in so far as the first respondent was concerned was materially affected. The matter could not be decided on possibilities or on a reasonable judicial guess, because, the law requires proof, and though section 100(1) (d) casts a difficult burden on the election petitioner, that burden must be successfully discharged by him. [641 B D; 644 B D] There was a large difference (about 30,000) between the votes received by the two rival candidates, namely the first and second respondents, and as many as 38,565 votes were cast in favour of the remaining candidates and it is impossible to say how much the second respondent lost or first respondent gained by reason of the false statements. After the election the second respondent never for a moment attributed his defeat to the false propangada of the first respondent or his supporters and even said that the election was conducted with propriety. [64 3 E H; 644 D F] Vashist Narain Sarma vs Dev Chandra, ; , Surendra Nath Khosla vs Dalip Singh, and Inayatullah vs Diwanchand Mahajan, , 235, 236, followed. Hackney 's case, 2 O 'Malley and Hardcastle, 77, referred to. 608

16k+

tition Nos. 355, 360, 863, 994 & 3624 of 1981. (Under article 32 of the Constitution of India) Petitioner in person in WP. No. 350/81 R.K Garg, A.R. Gupta, Brij Bhushan, Miss Renu Gupta and S.K Jain for the Petitioner in W.P. 360/81. 957 Soli J. Sorabjee, Harish Salve, S.K Dholakia & Mrs. Ranjana Anand for the Petitioners in W.P. 863/81. Soli J. Sorabjee, Harish Salve, P.H. Parekh, R. Karanjawala. K.K. Lahiri & R. Swamy for the Petitioner in W.P. 994/81. R.S. Sodhi for the Petitioner in WP 3624/81. L.N. Sinha, Attorney General in WPs. 355 & 360/81. K Parasaran, Sol. General in WPs. 863 & 994/81. K. section Gurumoorthi & Miss A. Subhashini for the Respondents. U.N. Banerjee for the intervener Mr. K.B. Kastia V.J. Francis for the intervener All India L.I.C., Employees Federation. The following Judgments were delivered BHAGWATI, J. These writ petitions raise a common question of law relating to the constitutional validity of the Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 (hereinafter referred to as the ordinance) and the (hereinafter referred to as the Act). The principal ground on which the constitutional validity of the ordinance and the Act is challenged is that they are violative of the equality clause contained in Article 14 of the Constitution. There is also one other ground on which the ordinance is assailed as constitutionally invalid and it is that the President had no power under Article 123 of the Constitution to issue the ordinance and the ordinance is therefore ultra vires and void. We shall first deal with the latter ground since it can be disposed of briefly, but before we do so, it would be convenient to refer to the relevant provisions of the Act. It is not necessary to make any specific reference to the provisions of the ordinance since the provisions of the Act are substantially a reproduction of the provisions of the ordinance. On 12th January 1981, both Houses of Parliament not being in session, the President issued the ordinance in exercise of the power conferred upon him under Article 123 of the Constitution. The ordinance was later replaced by the Act which received the assent of the President on 27th March 1981, but which was brought 958 into force with retrospective effect from 12th January 1981 being the date of promulgation of the ordinance. The Act is a brief piece of legislation with only a few sections but the ascertainment of their true meaning and legal effect has given rise to considerable controversy between the parties and hence it is necessary to examine the provisions of the Act in some detail. The long title of the Act describes it as an Act "to provide for certain immunities to holders of Special Bearer Bonds 1991 and for certain exemptions from direct taxes in relation to such Bonds and for matters connected therewith" and the provisions enacted in the Act are proceeded by a Preamble which indicates the object and purpose of the Act in the following words: Whereas for effective economic and social planning it is necessary to canalise for productive purposes black money which has become a serious threat to the national economy; And whereas with a view to such canalisation the Central Government has decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991, of the face value of ten thousand rupees and redemption value, after ten years, of twelve thousand rupees; And whereas it is expedient to provide for certain immunities and exemptions to render it possible for persons in possession of black money to invest the same in the said Bonds; Sections 3 and 4 are extremely material since on their true interpretation depends to a large extent the determination of the question relating to the constitutional validity of the Act and they may be reproduced as follows: 3. (1) Notwithstanding anything contained in any other law for the time being in force: (a) no person who has subscribed to or has otherwise acquired Special Bearer Bonds shall be required to disclose, for any purpose whatsoever, the nature and source of acquisition of such Bonds; (b) no inquiry or investigation shall be commenced against any person under any such law on the ground that 959 such person has subscribed to or has otherwise acquired Special Bearer Bonds; and (c) the fact that a person has subscribed to or has other wise acquired Special Bearer Bonds shall not be taken into account and shall be inadmissible as evidence in any proceedings relating to any offence or the imposition of any penalty under any such law. (2) Nothing in sub section (1) shall apply in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Prevention of Corruption Act, 1947 or any offence which is punishable under any other law and which is similar to an offence punishable under either of those Chapters or under that Act or for the purpose of enforcement of any civil liability. Explanation : For the purposes of this sub section "civil liability" does not include liability by way of tax under any law for the time being in force. Without prejudice to the generality of the provisions of section 3, the subscription to, or acquisition of, Special Bearer Bonds by any person shall not be taken into account for the purpose of any proceedings under the Income tax Act, 1961 (hereinafter referred to as the Income tax Act), the (hereinafter referred to as the ), or the (hereinafter referred to as the ) and, in particular, no person who has subscribed to, or has otherwise acquired, the said Bonds shall be entitled (a) to claim any set off or relief in any assessment, reassessment appeal, reference or other proceeding under the Income tax Act or t reopen any assessment or reassessment made under that Act on the ground that he has subscribed to or has otherwise acquired the said Bonds; (b) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset which is includible in his net wealth for any assessment year under the has been converted into the said Bonds: or 960 (c) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset held by him or any sum credited in his books of account or other wise held by him represents the consideration received by him for the transfer of the said Bonds. We shall analyse the provisions of these two sections when we deal with the arguments advanced on behalf of the parties and that will largely decide the fate of the challenge against the constitutional validity of the Act, but in the meanwhile we may proceed to summarise the remaining provisions of the Act. Section S amends the Income tax Act 1961 by providing that the definition of "capital asset" in section 2 clause (14) shall not include that Special Bearer Bonds issued under the Act so that any profit arising on sale of the Special Bearer Bonds would not be liable to capital gains tax and it also excludes from the computation of the total income of the assessee, premium on redemption of the Special Bearer Bonds by introducing a new sub clause in section 10 clause (15). Section 5 sub section (I) of the Wealth Tax Act 1957 is also amended by section 6 so as to exclude the Special Bearer Bonds from the net wealth of the assessee liable to wealth tax. Section 7, by amending section S sub section (I) of the exempts gifts of Special Bearer Bonds from the incidence of gift tax. Section 8 confers powers on the Central Government to make order removing any difficulty which may arise in giving effect to the provisions of the Act and section 9 sub section (1) repeals the ordinance, but since the Act is brought into force with effect from the date of promulgation of the ordinance, sub section (2) of section 9 provides that notwithstanding the repeal of the ordinance, anything done or any action taken under the ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act. Having set out the provision of the Act and be it noted again that the provisions of the ordinance were substantially in the same terms as the provisions of the Act we may now proceed to consider the challenge against the constitutional validity of the ordinance on the ground that the President had no power to issue the ordinance under Article 123 of the Constitution. There were two limbs of the argument under this head of challenge; one was that since the ordinance had the effect of amending the tax laws, it was outside the competence of the President under Article 123 and the other was that the subject matter of the ordinance was in the nature 961 of a Money Bill which could be introduced only in the House of the A People and passed according to the procedure provided in Articles 109 and 110 and the President had therefore no power under Article 123 to issue the Ordinance by passing the special procedure provided in article 109 and 1 10 for the passing of a Money Bill. There is, as we shall presently point out, no force in either of these two contentions, but we may point out straightaway that both these contentions are 1 academic, since the Act has been brought into force with effect from the date of promulgation of the Ordinance and sub section (2) of section 9 provides that anything done or any action taken under the Ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act and the validity of anything done or any action taken under the Ordinance is therefore required to be judged not with reference to the Ordinance under which it was done or taken, but with reference to the Act which was, by reason of its retrospective enactment, in force right from the date of promulgation of the Ordinance and under which the thing or action was deemed to have been done or taken. It is in these circumstances wholly unnecessary to consider the constitutional validity of the Ordinance, because even if the Ordinance be unconstitutional, the validity of anything done or any action taken under the Ordinance, could still be justified with reference to the provisions of the Act. This would seem to be clear on first principle as a matter of pure construction and no authority is needed in support of it, but if any were needed, it may be found in the decision of this Court in Gujarat Pottery Works vs B.P. Sood, Controller of Mining Leases for India and Ors. There the question was whether the Mining Leases (Modification of Terms) Rules, 1956 (hereinafter referred to as the 1956 Rules) made under Mines and Minerals (Regulation and Development) Act, 1948 (referred to shortly as 1948 Act) were void as being inconsistent with the provisions of the 1948 Act and if they were void, they could be said to be continued by reason of section 29 of the (hereinafter called the 1957 Act). This Court sitting in a Constitution Bench held that the 1956 Rules were not inconsistent with the provisions of the 1948 Act and were therefore valid, but proceeded to observe that even if the 1956 rules were void as being inconsistent with the provisions of the 1949 Act, they must by reason of section 29 of the 1957 Act be deemed to have been made under that Act and 962 their validity and continuity must therefore be determined with reference to the provisions of the 1957 Act and not the provisions of the 1948 Act and since there was no inconsistency between the 1956 Rules and the provisions of the ]957 Act, the 1956 Rules could not be faulted as being outside the power of the Central Government. Raghubar Dayal, J. speaking on behalf of the Court articulated the reason for taking this view in the following words: "Even if the rules were not consistent with the provisions of the 1948 Act and were therefore void, we do not agree that they could not have continued after the enforcement of the 1957 Act. Section 29 reads: 'All rules made or purporting to have been made under the Mines and Minerals (Regulation and Development) Act, 1948, shall, in so far as they relate to matters for which provision is made in this Act and are not inconsistent therewith, be deemed to have been made under this Act as if this Act had been in force on the date on which such rules were made and shall continue in force unless and until they are superseded by any rules made under this Act. ' The effect of this section is that the rules which were made or purported to have been made under the 1948 Act in respect of matters for which rules could be made under the 1957 Act would be deemed to have been made under the 1957 Act as if that Act had been in force on the date on which such rules were made and would continue in force. The Act of 1957 in a way is deemed to have been in force when the modification rules were framed in 1956. The 1956 rules would be deemed to be framed under the 1957 Act and therefore their validity and continuity depends on the provisions of the 1957 Act and not of the 1948 Act. " In this connection we may refer to the case reported as Abdul Majid vs P.R. Nayak, A.I.R. 1951 Bom. 440. In that case section 58 of Act XXXI of 1950 repealed Ordinance No. XXVII of 1949 and provided as follows: 'The repeal by this Act by the Administration of Evacuee Property Ordinance 1949 (XXVII of 1949) shall not affect the previous operation thereof, and subject thereto, anything done or any action taken in the exercise of any power conferred by or under that 963 Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the day on which such thing was done or action was taken. ' Section 58 was construed thus: 'The language used in section 58 is both striking and significant. It does not merely provide that the orders passed under the Ordinance shall be deemed to be order passed under the Act, but it provides that the orders passed under the Ordinance shall be deemed to be orders under this Act as if this Act were in force on the day on which certain things were done or action taken. Therefore the object of this section is, as it were, to antedate this Act so as to bring it into force on the day on which a particular order was passed which is being challenged. In other words, the validity of an order is to be judged not with reference to the Ordinance under which it was passed, but with reference to the Act subsequently passed by Parliament. ' The rules have not been challenged to be ultra vires the 1957 Act in the instant case. " The same process of reasoning which appealed to this Court in upholding the validity of the 1956 Rules must apply equally in the present case and the validity of anything done or any action taken under the Ordinance must be judged with reference to the provisions of the Act and not of the Ordinance. It would therefore be academic for us to consider whether the Ordinance was within the Ordinance making power of the President under Article 123 and ordinarily we would have resisted the temptation of pronouncing on this issue because it is a self restraining rule of prudence adopted by this Court that "the court will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied. " But since considerable argument was advanced before us in regard to this issue we do not think it would be right on our part to refuse to express our view upon it. The Ordinance was issued by the President under Article 123 which is the solitary Article in chapter III headed "Legislative Powers of the President. " This Article provides inter alia as follows: 964 123 (1) If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require. (2) An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance: (a) shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions: and (b) may be withdrawn at any time by the President. (3) If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void. It will be noticed that under this Article legislature power is conferred on the President exercisable when both Houses of Parliament are not in session. It is possible that when neither House of Parliament is in session, a situation may be arise which needs to be dealt with immediately and for which there is no adequate provision in the existing law and emergent legislation may be necessary to enable the executive to cope with the situation. What is to be done and how is the problem to be solved in such a case ? Both Houses of Parliament being in recess, no legislation can be immediately undertaken and if the legislation is postponed until the House of Parliament meet damage may be caused to public weal. Article 123 therefore confers powers on the President to promulgate a law by issuing an Ordinance to enable the executive to deal with the emergent situation which might well include a situation created by a law being declared void by a Court of law. "Grave public inconvenience would be caused", points out Mr. Seervai in his famous book on Constitutional Law, if on a statute like the Sales tax Act being declared void, "no machinery existed whereby a valid law could 965 be promulgated to take the place of the law declared void '. The President is thus given legislative power to issue an Ordinance and since under our constitutional scheme as authoritatively expounded by this Court in Shamsher and Anr. vs State of Punjab, the President cannot act except in accordance with the aid and advice of his Council of Ministers, it is really the executive which is invested with this legislative power. Now at first blush it might appear rather unusual and that was the main thrust of the criticism of Mr. R.K Garg on this point that the power to make laws should have been entrusted by the founding fathers of the Constitution to the executive, because according to the traditional outfit of a democratic political structure, the legislative power must belong exclusively to the ejected representatives of the people aud vesting it in the executive, though responsible to the legislature, would be undemocratic, as it might enable the executive to abuse this power by securing the passage of an ordinary bill without risking a debate in the legislature But if we closely analyse this provision and consider it in all its aspects, it does not appear to be so starting, though we may point out even if it were, the Court would have to accept it as the expression of the collective will of the founding fathers. It may be noted, and this was pointed out forcibly by Dr. Ambedkar while replying to the criticism against the introduction of Article 123 in the Constituent Assembly that the legislative power conferred on the President under this Article is not a parallel power of legislation. It is a power exercisable only when both Houses of Parliament are not in session and it has been conferred ex necessitate in order to enable the executive to meet an emergent situation. Moreover, the law made by the President by issuing an Ordinance is of strictly limited duration. It ceases to operate at the expiration of six weeks from the reassembly of Parliament or if before the expiration of this period, resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions. This also affords the clearest indication that the President is invested with this legislative power only in order to enable the executive to tide over an emergent situation which may arise whilst the Houses of Parliament are not in session. Further more, this power to promulgate an Ordinance conferred on the President is co extensive with the power of Parliament to make laws and the President cannot issue an Ordinance which Parliament cannot enact into a law. It will therefore be seen that legislative power has been conferred on 966 the executive by the constitution makers for a necessary purpose and it is hedged in by limitations and conditions. The conferment of such power may appear to be undemocratic but it is not so, because the executive is clearly answerable to the legislature and if the President, on the aid and advice of the executive, promulgates an Ordinance in misuse or abuse of this power, the legislature cannot only pass a resolution disapproving the Ordinance but can also pass a vote of no confidence in the executive. There is in the theory of constitutional law complete control of the legislature over the executive, because if the executive misbehaves or forfeits the confidence of the legislature, it can be thrown out by the legislature. Of course this safeguard against misuse or abuse of power by the executive would dwindle in efficacy and value according as if the legislative control over the executive diminishes and the executive begins to dominate the legislature. But nonetheless it is a safeguard which protects the vesting of the legislative power in the President from the charge of being an undemocratic provision. We might profitably quote here the words of one of us (Chandrachud, J, as he then was) in the State of Rajasthan vs Union of India where, repelling the contention of the petitioner that the interpretation which the Union of India was inviting the Court to place on Article 356 would impair the future of democracy by enabling the Central Government to supersede a duly elected State Government and to dissolve its legislature without prior approval of Parliament, the learned Judge said ". there may be situations in which it is imperative to act expeditiously and recourse to the parliamentary process may, by reason of the delay involved, impair rather than strengthen the functioning of democracy. The constitution has therefore provided safety valves to meet extraordinary situations. They have an imperious garb and a repressive content but they are designed to save, not destroy democracy. The fault, if any, is not in the meeting of the Constitution but in the working of it. " These words provide a complete answer to the criticism of Mr. R.K. Garg. Now once it is accepted that the President has legislative power under Article 123 to promulgate an Ordinance and this legis 967 lative power is co extensive with the power of the Parliament to make laws, it is difficult to see how any limitation can be read into this legislative power of the President so as to make it ineffective to alter or amend tax laws. If Parliament can by enacting legislation alter or amend tax laws, equally can the President do so by issuing an Ordinance under Article 123. There have been, in fact, numerous instances where the President has issued an Ordinance replacing with retrospective effect a tax law declared void by the High Court or this Court. Even offences have been created by Ordinance issued by the President under Article 123 and such offences committed during the life of the Ordinance have been held to be punishable despite the expiry of the Ordinance. Vide: State of Punjab vs Mohar Singh. lt may also be noted that Clause (2) of Article 123 provides in terms clear and explicit that an Ordinance promulgated under that Article shall have the same force and effect as an Act of Parliament. That there is no qualitative difference between an Ordinance issued by the President and an Act passed by Parliament is also emphasized by clause (2) of Article 367 which provides that any reference in the Constitution to Acts or laws made by Parliament shall be construed as including a reference to an Ordinance made by the President. We do not therefore think there is any substance in the contention of the petitioner that the President has no power under Article 123 to issue an Ordinance amending or altering the tax laws and that the Ordinance was therefore outside the legislative power of the President under that Article. That takes us to the principal question arising in the writ petitions namely, whether the provisions of the Act are violative of Article 14 of the Constitution. The true scope and ambit of Article 14 has been the subject matter of discussion in numerous decisions of this Court and the propositions applicable to cases arising under that Article have been repeated so many times during the last thirty years that they now sound platitudinous. The latest and most complete exposition of the propositions relating to the applicability of Article 14 as emerging from "the avalanche of cases which have flooded this Court" since the commencement of the Constitution is to be found in the Judgment of one of us (Chandrachud, J. as he then was) in Re: Special Courts Bill. It not only contains a lucid statement of the propositions arising under Article 14, but being a decision given by a Bench of seven Judges of this 968 Court, it is binding upon us. That decision sets out several propositions delineating the true scope and ambit of Article 14 but not all of them are relevant for our purpose and hence we shall refer only to those which have a direct bearing on the issue before us. They clearly recognise that classification can be made for the purpose of legislation but lay down that: 1. The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act. The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense above mentioned. It is clear that Article 14 does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. What is necessary in order to pass the test of permissible classification under Article 14 is that the classification must not be "arbitrary, artificial or evasive" but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the legislature. The question to which we must therefore address ourselves is whether the classification made by the Act in the present case 969 satisfies the aforesaid test or it is arbitrary and irrational and hence A violative of the equal protection clause in Article 14. Now while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrine or straight jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislature judgement in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey vs Dond where Frankfurter, J. said in his inimitable style: "In the utilities, tax and economic regulation cases, there are good reasons for judicial self restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts 970 have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events self limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. " The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry" that exact wisdom and nice adaption of remedy are not always possible and that "judgment is largely a prophecy based on meagre and uninterpreted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture vs Central Reig Refining Company, be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. 971 With these prefatory observations, we may now proceed to examine the constitutional validity of the Act. The Preamble of the Act which "affords useful light as to what the statute intends to reach" or in other words "affords a clue the scope of the statute" makes it clear that the Act is intended to canalise for productive purposes black money which has become a serious threat to the national economy. It is an undisputed fact that there is considerable amount of black money in circulation which is unaccounted or concealed and therefore outside the disclosed trading channels. It is largely the product of black market transactions and evasion of tax. Indeed, as pointed out by the Direct Taxes Enquiry Committee headed by Mr. Wanchoo, retired Chief Justice of India "tax evasion and black money are closely and inextricably interlinked. " The abundance of black money has in fact given rise to a parallel economy operating simultaneously and competing with the official economy. This parallel economy has over the years grown in size and dimension and even on a conservative estimate, the amount of black money circulation runs into some thousand crores. The menace of black money has now reached such staggering proportions that it is causing havoc to the economy of the country and poses a serious challenge to the fulfilment of our objectives of distributive justice and setting up of an egalitarian society. There are several causes responsible for the generation of black money and they have been analysed in the Report of the Wanchoo Committee. Some of the principal causes may be summarised as follows: (1) high rates of taxation under the direct tax laws: they breed tax evasion and generate black money; (2) economy of shortages and consequent controls and licences leading to corruption for issuing licences and permits and turning blind eye to the violation of controls; (3) donations of black money encouraged by political parties to meet election expenses and for augmenting party funds and also for personal purposes; (4) Corrupt business practices such as payments of secret commission, bribes, money, pugree etc. which need keeping on hand money in black; (5) ineffective administration and enforcement of tax laws by the authorities and (6) deterioration in moral standards so that tax evasion is no longer regarded as immoral and unethical and does not carry any social stigma. These causes need to be eliminated if we want to eradicate the evil of black money. But whether any steps are taken or not for removing these causes with a view to preventing future generation of black money, the fact remains that today there is considerable amount of black money, unaccounted and concealed? in the hands of a few persons 972 and it is causing incalculable damage to the economy of the country. The first casualty cf this evil of black money is the revenue because it loses the tax which should otherwise have come to the exchequer. The generation of black money through tax evasion throws a greater burden on the honest tax payer and leads to economic equality and concentration of wealth in the hands of the unscrupulous few in the country. In addition, since black money is in a way 'cheap ' money because it has not suffered reduction by way of taxation, there is a natural tendency among those who possess it to use it for lavish expenditure and conspicuous consumption. The existence of black money is to a large extent responsible for inflationary pressures, shortages, rise in prices and economically unhealthy speculation in commodities. It also leads to leakage of foreign exchange, making our balance of payments rather distorted and unreal and tends to defeat the economic policies of the Government by making their implementation ineffective, particularly in the field of credit and investment. Moreover, since black money has necessarily to be suppressed in order to escape detection, it results in immobilisation of investible funds which would otherwise be available to further the economic growth of the nation and in turn, foster the welfare of the common man. It is therefore no exaggeration to say that black money is a cancerous growth in the country 's economy which if not checked in time is certain to lead to chaos and ruination. There can be no doubt that urgent measures are therefore required to be adopted for preventing further generation of black money as also for unearthing existing black money so that it can be canalised for productive purposes with a view to effective economic and social planning. Now this problem of black money corroding the economy of the country is not a new or recent problem. It has been there almost since the Second World War and it has been continuously engaging the attention of the Government. The Government has adopted various measures in the past with a view to curbing the generation of black money and bringing it out in the open so that it may become available for strengthening the economy. For instance, the Government introduced several changes in the administrative set up of the tax department from time to time with a view to strengthening the administrative machinery for checking tax evasion. The Government also amended section 37 of the Indian Income Tax Act 1922 with a view to conferring power on the tax authorities to carry out searches and seizures and this power was elaborated and made more 973 effectual when the Income Tax Act 1961 came to be enacted. Quite apart from these legal and administrative measures taken for the purpose of curbing evasion of tax, certain steps were also taken to tackle the black money built up out of past evasions. In 1946, just at the close of the Second World War, high denomination notes were demonetised so as to bring within the net of taxation black money earned during the War. This was followed by the enactment of the Taxation of Income Investigation Commission Act 1947. Then came the Voluntary Disclosure Scheme of 1951, popularly known as Tyagi Scheme, to facilitate the disclosure of suppressed income by affording certain immunities from the penal provisions. This scheme was however not successful because it helped to unearth only Rs. 70.20 crores of black money. Thereafter, nearly a decade and a half later, a second scheme of voluntary disclosure was introduced by section 68 of the Finance Act 1965. This scheme, popularly known as the sixty forty scheme, enabled the tax evaders to disclose suppressed income by paying 60% of the concealed income as tax and bringing the balance of 40% into their books. This scheme was a little more successful than the earlier one, but it could help to net only about Rs. 52.1 l crores of black money. Closely following on the heels of this scheme came another scheme under section 24 of the Finance (No. 2) .Act 1965 popularly known as the 'Block Scheme ' according to which tax was payable at rates applicable to the block of concealed income disclosed and not at a fiat rate as under the sixty forty scheme. This scheme received a slightly better response and the income disclosed under it amounted to about Rs. 145 crores. Then came the Taxation Laws (Amendment and Miscellaneous Provisions) Ordinance 1965 followed by an Act in identical terms, which provided for exemption from tax in certain cases of undisclosed income invested in National Defence Gold Bonds 1980. We shall have occasion to consider the broad scheme of this Act a little later, but for the time being as we may point out that the scheme as envisaged in this Act was very closely similar to the scheme under the impugned Act. Subsequent to this Act followed the Report of the Wanchoo Committee and as a result of the recommendations made in this Report certain penal provisions contained in the Income Tax Act 1961 were made more severe and rigorous. Then came the Voluntary Disclosure of Income and Wealth Ordinance 1975 which was followed by an Act in the same terms. This legislation introduced a scheme of voluntary disclosure of income and wealth and provided certain immunities and exemptions. The record before us does not show as to what was the concealed income and wealth disclosed pursuant to this scheme. But it is an indisputable fact 974 that the adoption of these stringent legal and administrative measures as also the introduction of these different voluntary disclosure schemes did not have any appreciable effect and despite all these efforts made by the Government, the problem of black money continues unabated and has assumed serious dimensions. It may be possible to say and that was the criticism of Mr. R.K. Garg that the enforcement machinery of the tax department is not as effective as it should be and no serious effort has been made to eliminate the other causes of generation of black money, but whatever may be the failures of the political and administrative machinery and we are not here concerned to inquire into that question nor are we competent to express any opinion upon it the fact remains that there is considerable amount of black money in the hands of persons which is causing havoc to the economy of the country and seriously prejudicing mobilisation of resources for social and economical reconstruction of the nation. It was to combat this menacing problem of black money and to unearth black money lying secreted and outside the ordinary trade channels that the Act was enacted by Parliament. It was realised that all efforts to detect black money and to uncover it had failed and the problem of black money was an obstinate economic issue which was defying solution and the impugned legislation providing for issue of Special Bearer Bonds was therefore enacted with a view to mopping up black money and bringing it out in the open, so that, instead of remaining concealed and idle, such money may become available for augmenting the resources of the state and being utilised for productive purposes so as to promote effective social and economic planning. This was the object for which the Act was enacted and it is with reference to this object that we have to determine whether any impermissible differentiation is made by the Act so as to involve violation of Article 14. We may now turn to examine the provisions of the act. Section 3 sub section (1) provides certain immunities to a person who subscribed to or otherwise acquired Special Bearer Bonds, Clause (a) protects such a person from being required to disclose, for any purpose whatsoever, the nature and source of acquisition of the Special Bearer Bonds. Clause (b) prohibits the commencement of any inquiry or investigation against a person on the ground of his having subscribed to or otherwise acquired the Special Bearer Bonds. And clause (c) provides that the fact of subscription to or acquisition of Special Bearer Bonds shall not be taken into account 975 and shall be inadmissible in evidence in any proceedings relating to any offence or the imposition of any penalty. It will be seen that the immunities granted under section 3, sub section (1) are very limited in scope. They do not protect the holder of Special Bearer Bonds from any inquiry or investigation into concealed income which could have been made if he had not subscribed to or acquired Special Bearer Bonds. There is no immunity from taxation given to the black money which may be invested in Special Bearer Bonds. That money remains subject to tax with all consequential penalties, if it can be discovered independently of the fact of subscription to or acquisition of Special Bearer Bonds. The only protection given by section 3, sub section 1 is that the fact of subscription to or acquisition of Special Bearer Bonds shall be ignored altogether and shall not be relied upon as evidence showing possession of undisclosed money. This provision relegates the Revenue to the position as if Special Bearer Bonds had not been purchased at all. If without taking into account the fact of subscription to or acquisition of Special Bearer Bonds and totally ignoring it as if it were non existent, any inquiry or investigation into concealed income could be carried out and such income detected and unearthed, it would be open to the Revenue to do so and it would be no answer for the assessee to say that this money has been invested by him in Special Bearer Bonds and it is therefore exempt from tax or that he is on that account not liable to prosecution and penalty for concealment of such income. This is the main difference between the impugned Act and the . Under the latter Act, where gold is acquired by a person out of his undisclosed income, which is the same thing as black money, and such gold is tendered by him as subscription for the National Defence Gold Bonds, 1980, the income invested in such gold is exempted from tax, but where Special Bearer Bonds are purchased out of undisclosed income under the impugned Act, the income invested in the Special Bearer Bonds is not exempt from tax and if independently of the fact of purchase of the Special Bearer Bonds and ignoring them altogether, such income can be detected, it would be subject to tax. The entire machinery of the taxation Laws for inquiry and investigation into concealed income is thus left untouched and no protection is granted to a person in respect of his concealed income merely because he has invested such income in Special Bearer Bonds. It is therefore incorrect to say that as soon as any person purchases Special Bearer Bonds, he is immunised against the processes of taxation laws. Here there is no amnesty granted in respect of any 976 part of the concealed income even though it be invested in Special Bearer Bonds. The whole object of the impugned Act is to induce those having black money to convert it into 'white money ' by making it available to the State for productive purposes, without granting in return any immunity in respect of such black money, if it could be detected through the ordinary processes of taxation laws without taking into account the fact of purchase of Special Bearer Bonds. Now it is true and this was one of the arguments advanced on behalf of the petitioner that if black money were not invested in Special Bearer Bonds but were Lying in cash, it could be seized by the tax authorities by carrying out search and seizure in accordance with the provisions of the tax laws and this opportunity to detect and unearth black money would be lost, if such black money were invested in Special Bearer Bonds, because even if Special Bearer Bonds were seized, they cannot be relied upon as evidence of possession of black money. But this argument of the petitioner that the detection and discovery of black money would thus thwarted by the conversion of black money into Special Bearer Bonds is highly theoretical and does not take into account the practical realities of the situation. If it had been possible to detect and discover a substantial part of the black money in circulation by carrying out searches and seizures, there would have been no need to enact the impugned Act. It is precisely because, inspite of considerable efforts made by the tax authorities including carrying out of searches and seizures, the bulk of black money remained secreted and could not be unearthed, that the impugned Act had to be enacted. Moreover, actual seizure of black money by carrying out searches is not the only method available to tax administration for detecting and discovering black money. There are other methods also by which concealment of income can be detected and these are commonly employed by the tax authorities in making assessment of income or wealth. Close and searching scrutiny of the books of account may reveal that accounts are not properly maintained, unexplained cash credits may provide evidence of concealment and so too unaccounted for investments or lavish expenditure; information derived from external sources may indicate that income has been concealed by resorting to stratagems like suppression of sales or understatement of consideration; and existence of assets in the names of near relatives may give a lead showing investment of undisclosed income. All these methods and many others would still remain available to the tax authorities for detecting undisclosed income and bringing it to tax despite investment in Special Bearer Bonds. The taxable income of the holder of Special Bearer Bonds 977 would not stand reduced by the amount invested in the purchase of Special Bearer Bonds and it would be open to the Revenue to assess such taxable income in the same manner in which it would do in any other case, employing the same methods and techniques of inquiry and investigation for determining the true taxable income. The only inhibition on the Revenue would be that it would not be entitled to call upon the assessee to disclose for the purpose of assessment, the nature and source of acquisition of the Special Bearer Bonds and in making the assessment, the investment in the Special Bearer Bonds would have to be left wholly out of account and the Revenue would not be entitled to rely upon it as evidence of possession of undisclosed money. This is the only limited immunity granted under section 3 sub section (1) and even this limited immunity is cut down by the provision enacted in subsection (2) of section 3. This sub section says that the immunity granted under sub section (1) shall not be available in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code or the Prevention of Corruption Act 1947 or any other similar law. If therefore an inquiry or investigation is sought to be made against a public servant in respect of an offence under Chapter IX of the Indian Penal Code or the Prevention of Corruption Act 1947 alleged to have been committed by him, the acquisition or possession of Special Bearer Bonds could be a ground for instituting, such inquiry or investigation and it could also be an admissible piece of evidence in a prosecution in respect of such offence. The same would be the position in relation to an inquiry, investigation or prosecution in respect of an offence under Chapter XVlI of the Indian Penal Code. The acquisition or possession of Special Bearer Bonds would not therefore afford any protection to a public servant against a charge of corruption or to a person committing any offence against property. Equally this immunity would not be available where what is sought to be enforced is a civil liability other than liability by way of tax. It will thus be seen that the immunity granted in respect of subscription to or acquisition of Special Bearer Bonds is a severely restricted immunity and this is the bare minimum immunity necessary in order to induce holders of black money to bring it out in the open and invest it in Special Bearer Bonds. It is also necessary to note the further restrictions provided in section 4 which are calculated to pre empt any possible abuse of the immunity granted in respect of subscription to or acquisition of Special Bearer Bonds, This section in its opening part affirms in 978 unmistakable terms that subscription to or acquisition of Special Bearer Bonds shall not be taken into account in any proceeding under the Income tax Act 1961 or the or the . If any investment in Special Bearer Bonds has been made by the assessee, it is to be ignored in making assessment on him under any of the above mentioned three tax laws, the assessment is to be made as if no Special Bearer Bonds had been purchased at all The process of computation of taxable income and assessment of tax on it remains unaffected and is not in any way deflected or thwarted by the investment in Special Bearer Bonds. The position remains the same as it would have been if there were no investment in Special Bearer Bonds. We have already discussed the full implications of this proposition in the preceding paragraph while dealing with section 3 and it is not necessary to say anything more about it. Then, proceeding further, after enacting this provision in the opening part, section 4 branches off into three different clauses, Clause (a) provides that no person who has subscribed to or otherwise acquired Special Bearer Bonds shall be entitled to claim any set off or relief in any proceeding under the Income tax Act 1961 or to reopen any assessment or reassessment made under that Act on the ground that he has subscribed to or otherwise acquired such Bonds. The holder of Special Bearer Bonds is thus precluded from claiming any advantage by way of set off or relief or reopening of assessment on the ground of having invested undisclosed money in purchase of Special Bearer Bonds. Clause (b) enacts another prohibition with a view to preventing abuse of the immunity granted in respect of Special Bearer Bonds and says that no person who has subscribed to or otherwise acquired Special Bearer Bonds shall be entitled to claim, in relation to any period before the date of maturity of such Bonds, that any asset which is includible in his net wealth for any assessment year under the has been converted into such Bonds. The object of this provision is to preclude an assessee who is sought to be taxed on his net wealth under the wealth tax Act from escaping assessment to tax on any asset forming part of his net wealth by claiming that he has invested it in purchase of Special Bearer Bonds. The investment in Special Bearer Bonds would not grant immunity from assessment to wealth lax to any asset which is found by the taxing authorities, otherwise than by relying on the fact of acquisition of Special Bearer Bonds, to belong to the assessee and hence forming part of his net wealth . The asset would be subjected to wealth tax despite the investment in Special Bearer Bonds. Then follows clause (c) 979 which is extremely important and which effectively counters the possibility of serious abuse to which the issue of Special Bearer Bonds might otherwise have lent itself. It provides that no person who has subscribed to or otherwise acquired Special Bearer Bonds shall be entitled to claim, in relation to any period before the date of maturity of such Bonds, that any asset held by him or any sum credited in his books of account or otherwise held by him represents the consideration received by him for the transfer of such Bonds. This provision precludes a person from explaining away the existence of any asset held by him or any sum credited in his books of account or otherwise held by him by claiming that it represents the sale proceeds of Special Bearer Bonds held by him. If at any time before the date of maturity of the Special Bearer Bonds held by an assessee, it is found that any asset is held by him or any sum is credited in his books of accounts or is otherwise held by him and he is required to explain the nature and source of acquisition of such asset or sums of money, he cannot be heard to say by way of explanation that such asset or sum of money represents the consideration received by him for transfer of the Special Bearer Bonds, even if that be factually correct. This explanation, though true being statutorily excluded, it would be impossible for the assessee to offer any other explanation for the acquisition of such asset or sum of money, because any such explanation which might be given by him would be untrue and in the absence of any satisfactory explanation in regard to the nature and source of acquisition of such asset or sum of money, the Revenue would be entitled to infer that such asset has been acquired out of undisclosed income or that such sum of money represents concealed income and hence the value of such asset or such sum of money, as the case may be, should be treated as undisclosed income liable to be included in the taxable income of the assessee. Vide sections 69, 69A and 69B of the Income tax Act, 1961. It is obvious that this provision is calculated to act as a strong deterrent against negotiability of Special Bearer Bonds for disclosed or 'white ' money. No holder of Special Bearer Bonds would dare to transfer his Bonds to another person against receipt of disclosed or 'white ' money, because he will not be able to account for the consideration received by him, the true explanation being statutorily unavailable to him, and such consideration would inevitably be liable to be regarded as his concealed income and would be subjected to tax and penalties. Moreover, it is difficult to see why anyone should want to invest disclosed or 'white ' money in the acquisition of Special Bearer Bonds. Ordinarily a person would 980 go in for Special Bearer Bonds only for the purpose of converting his undisclosed money into 'white ' money and it would be quite unusual bordering almost on freakishness for anyone to acquire Special Bearer Bonds with disclosed or 'white money ' when he can get only 2% simple interest on the investment in Special Bearer Bonds, while outside he can easily get anything between 15% to 40% yield by openly dealing with his disclosed or 'white ' money. The transferability of Special Bearer Bonds against disclosed or 'white ' money is thus, from a practical point of view, completely excluded. The question may still arise whether Special Bearer Bonds would not pass from hand to hand against undisclosed or black money. Would they not be freely negotiable against payment of undisclosed or black money ? Now it may be conceded that a purchaser of Special Bearer Bonds would undoubtedly be interested in acquiring such Bonds by making payment of 'black ' money, because he would thereby convert his undisclosed or 'black money ' into 'white ' money. But it is difficult to understand why a holder of Special Bearer Bonds should ever be interested in selling such Bonds against receipt of 'black money '. Obviously he would have acquired such Bonds for the purpose of converting his 'black money ' into 'white ' in order to avoid the risk of being found in possession of 'black money ' and if that be so, it is inexplicable as to why he should again want to convert his 'white money ' into 'black ' by selling such Bonds against receipt of 'black money '. The immunity granted under the provisions of the Act, limited as it is extends only to the person who is for the time being the holder of Special Bearer Bonds and the person who has transferred the Special Bearer Bonds for black money has no immunity at all and all the provisions of tax laws are available against him for determining his true income or wealth and therefore no one who has purchased Special Bearer Bonds with a view to earning security against discovery of unaccounted money in his hands would ordinarily barter away that security by again receiving black money for the Special Bearer Bonds. Furthermore, even if special bearer bonds are transferred against receipt of black money, it will not have the effect of legalising more black money into white, because the black money of the seller which had become white on his subscribing to or acquiring special bearer bonds would again be converted into black money and the black money paid by the purchaser by way of consideration would become white by reason of being converted into Special Bearer Bonds. The petitioners however expressed an apprehension that special bearer bonds would fetch a much higher value in the black market than that originally subscribed and this would 981 enable a larger amount of black money to be legalised into white than what was originally invested in subscription to special bearer bonds. We do not think this apprehension is well founded. It is true that once the date for original subscription to special bearer bonds has expired, the only way in which special bearer bonds could thereafter be acquired would be by going in the open market and the number of special bearer bonds in the market being necessarily limited, they may fetch a higher value in black money from a person who is anxious to convert his black money into white. If the demand outreaches the limited supply, the price of special bearer bonds in the black market may exceed the amount originally invested in subscription to special bearer bonds. But even so, the black money paid by the purchaser for acquisition of special bearer bonds would not in its entirety be converted into white, it would change its colour from black to white only to the extent of the amount originally subscribed for the special bearer bonds or at the most, if we also take into account interest on such amount, to the extent of the face value of the special bearer bonds, because whatever be the amount he might have paid in black money for acquisition of the special bearer bonds, the holder of the special bearer bonds will get only the amount representing the face value on maturity of the special bearer bonds. It will thus be seen that howsoever special bearer bonds may be transferred and for whatever consideration, only a limited amount of black money, namely, the amount originally subscribed for the special bearer bonds or at the most the amount representing the face value of the special bearer bonds would be legalised into white money and the supposedly free negotiability of special bearer bonds would not have the effect of legalising more black money into white or encouraging further generation of black money. There was also one other abuse, said the petitioners, to which special bearer bonds might lend themselves and it was that if Special Bearer Bonds are sold and the sale proceeds are utilised in meeting expenditure, the assessee would not be precluded by section 4 clause (c) from explaining the source of the expenditure to be the sale consideration of the special bearer bonds and hence by resorting to this strategy, white money can be accumulated as capital while expenditure is met out of black money received by way of consideration for sale of special bearer bonds. We do not think there is any scope for such abuse; the apprehension expressed by the petitioners is more imaginary than real. It may be noted that in order to sustain his explanation, the assessee would have to prove to 982 the satisfaction of the tax department that he had special bearer bonds and that he sold them for a certain amount. Now if he has received black money by way of consideration, it is difficult to see how he would ever be able to establish that he sold special bearer bonds for that particular amount of black money. Would he be so fool hardy as to admit that he received the consideration in black money and even if he does, would he ever be able to prove it? Who would believe him even if he makes such an admission ? And when he has bought special bearer bonds for the purpose of converting his black money into white, why should he again reconvert it into black by selling special bearer bonds for black money ? The entire postulate of the argument of the petitioners is theoretical and has no basis in reality. No assessee would ever admit that he incurred expenditure out of black money received as consideration for sale of special bearer bonds because it would be impossible for him to establish receipt of black money from the purchase and if he is unable to do so, the amount of the expenditure would, by reason of section 69C of the Income tax Act, 1961, be deemed to be his concealed income liable to tax. Even if we assume that in some rare and exceptional case the assessee may be able to establish that he sold special bearer bonds against receipt of black money, the purchaser would straightaway run into difficulties because the evidence furnished by the assessee would, in such a case, clearly establish that the purchaser had black money and he paid it to the assessee by way of consideration and he would in that event be rendered liable to tax and penalty in respect of such black money. This would show the utter improbability bordering almost on impossibility, of special bearer bonds being subjected to any such abuse as is apprehended by the petitioners. It was then urged on behalf of the petitioners that section clause (c) operates only in relation to a period before the date of maturity of special bearer bonds and after the date of maturity, the holder of special bearer bonds can sell such bonds, and, without running any risk, disclose the consideration received by him as his white money, because section 4 clause (c) being out of the way, he can account for the possession of such money by showing that he has received it as consideration for sale of special bearer bonds and so far as the purchaser is concerned, if he has paid the consideration out of his black money, he can claim the immunity granted under section 3 sub section (1) and his black money would be converted into white. Thus the black money Of the seller which had been converted into white on his subscribing 983 to or otherwise acquiring special bearer bonds would remain white and in addition, the black money of the purchaser would also be converted into white by reason of his purchase of special bearer bonds. This argument plausible though it may seem. is in our opinion, fallacious and cannot be sustained. It is a highly debatable issue whether, under the provisions of the Act, special bearer bonds are at all intended to be transferable after the date of maturity, for the postulate of the legislation clearly seems to be that on the date of maturity, special bearer bonds will be encashed. It is indeed difficult to believe that anyone holding special bearer bonds would keep them uncashed without earning any interest from and after the date of maturity, when they can be immediately encashed and the amount received can be invested yielding interest ranging between 18 per cent to 40 per cent. Moreover, special bearer bonds would cease to be exempt from wealth tax from and after the date of maturity and they would therefore be includible in the net wealth of the holder for the purpose of wealth tax and if that be so, how would it benefit the holder to keep them as part of his net wealth and pay wealth tax upon it without earning any interest ? It is therefore extremely unlikely that Special Bearer Bonds would remain uncashed after the date of maturity and it would be equally improbable that anyone should want to purchase Special Bearer Bonds after the date of maturity when they do not yield any interest but are still includible in the net wealth for the purpose of liability to wealth tax. But let us assume for the purpose of argument that in a given case special bearer bonds are not encashed on the date of maturity and they are lawfully transferred after the date of maturity for a consideration paid by the purchaser. There are two alternatives: the consideration may be paid by the purchaser in white money or in black money. If the purchaser pays the consideration in white money, no question of conversion of further black money into white arises. rt would be a straight open transaction to which no exception can be taken. But let us consider what consequences would ensue if he pays in black money. The seller would obviously be interested in showing the consideration as his white money and there may be no difficulty so far as he ii concerned, because he would be able to explain the possession of such money by claiming that he has received it by way of consideration for sale of special bearer bonds. Section 4 clause (c) will not stand in the way of his offering that explanation. But so far as the purchaser is concerned, he will run into serious difficulties. Even if the immunity under section 3 sub section (l) were available to him after the date of maturity, he will still be in trouble, because the disclosure made by 984 the seller would be the clearest evidence showing that the purchaser had black money which he paid by way of consideration to the seller, and this evidence, being independent of the fact of acquisition of special bearer bonds by the purchaser, would be admissible and the purchaser would be liable to tax and penalty on the amount of black money paid by him as consideration. We fail to see how transfer of special bearer bonds after the date of maturity, even if legally permissible, can be utilised for the purpose of legalising black money into white. But we may point out that if at any time after the date of maturity or even before, it is found that there is some loophole in the provisions of the Act or that special bearer bonds are utilised for any dishonest or nefarious purpose or are being perverted to any improper use, the legislature can always step in and amend the Act or pass other appropriate legislation with a view to preventing such abuse. It must be remembered that every legislation is an experiment in achieving certain desired ends and trial and error method is inherent in every such experiment. Therefore, when experience shows that the legislation as framed has proved inadequate to achieve its purpose of mitigating an evil or there are cracks and loopholes in it which are being taken advantage of by the resourcefulness and ingenuity of those minded to benefit themselves at the cost of the State or the others, the legislature can and most certainly would intervene and change the law. But the law cannot be condemned as invalid on the ground that after a period of ten years it may lend itself to some possible abuse. We may now proceed to consider the constitutional validity of the Act in the light of the above discussion as regards the scope and effect of its various provisions. It is obvious that the Act makes a classification between holders of black money and the rest and provides for issue of special bearer bonds with a view to inducing persons belonging to the former class to invest their unaccounted money in purchase of special bearer bonds, so that such money which is today Lying idle outside the regular economy of the country is canalised into productive purposes. The object of the Act being to unearth black money for being utilised for productive purposes with a view to effective social and economic planning, there has necessarily to be a classification between persons possessing black money and others and such classification cannot be regarded as arbitrary or irrational. It is of course true and this must be pointed out here since it was faintly touched upon in the course of the arguments that there is no legal bar enacted in the Act against 985 investment of white money in subscription to or acquisition of special bearer bonds. But the provisions of the Act properly construed are such that no one would even think of investing white money in special bearer bonds and from a practical point of view, they do operate as a bar against acquisition, whether by original subscription or by purchase, of special bearer bonds with white money. We do not see why anyone should want to invest his white money in subscribing to or acquiring special bearer bonds which yield only 2 per cent simple interest per annum and which are not encashable for a period of not less than ten years. It is true that special bearer bonds can be sold before the date of maturity but who would pay white money for them and even if in some rare and exceptional case, a purchaser could be found who would pay the consideration in white money, no one will dare to sell special bearer bonds for white money, because of the disincentive provided in section 4 cl. The investment of white money in special bearer bonds is accordingly, as a practical measure, completely ruled out and the provisions of the Act are intended to operate only qua persons in possession of black money. There is a practical and real classification made between persons having black money and persons not having such money and this de facto classification is clearly based on intelligible differentia having rational relation with the object of the Act. The petitioners disputed the validity of this proposition and contended that the classification made by the Act is discriminatory in that it excludes persons with white money from taking advantage of the provisions of the Act by subscribing to or acquiring special bearer bonds. But this contention is totally unfounded and we cannot accept the same. The validity of a classification has to be judged with reference to the object of the legislation and if that is done, there can be no doubt that the classification made by the Act is rational and intelligible and the operation of the provisions of the Act is rightly confined to persons in possession of black money. It was then contended that the Act is unconstitutional as it offends against morality by according to dishonest assesses who have evaded payment of tax, immunities and exemptions which are denied to honest tax payers. Those who have broken the law and deprived the State of its legitimate dues are given benefits and concessions placing them at an advantage over those who have observed the law and paid the taxes due from them and this, according to the petitioners is clearly immoral and unwarranted by the Constitution. We do not think this contention can be sustained. It is necessary 986 to remember that we are concerned here only with the constitutional validity of the Act and not with its morality. Of course, when we say this we do not wish to suggest that morality can in no case have relevance to the constitutional validity of a legislation. There may be cases where the provisions of a statute may be so reeking with immorality that the legislation can be readily condemned as arbitrary or irrational and hence violative of Article 14. But the test in every such case would be not whether the provisions of the statute offend against morality but whether they are arbitrary and irrational having regard to all the facts and circumstances of the case. Immorality by itself is not a ground of constitutional challenge and it obviously cannot be, because morality is essentially a subjective value, except in so far as it may be reflected in any provision of the Constitution or may have crystalised into some well accepted norm of special behaviour. Now there can be no doubt that under the provisions of the Act certain immunities and exemptions are granted with a view to inducing tax evaders to invest their undisclosed money in special bearer bonds and to that extent they are given benefits and concessions which are denied to those who honestly pay their taxes. Those who are honest and who observe the law are mulcted in paying the taxes legitimately due from them while those who have broken the law and evaded payment of taxes are allowed by the provisions of the Act to convert their black money into 'white ' without payment of any tax or penalty. The provisions of the Act may thus seem to be putting premium on dishonesty and they may, not, without some justification, be accused of being tinged with some immorality, but howsoever regrettable or unfortunate it may be, they had to be enacted by the legislature in order to bring out black money in the open and canalise it for productive purposes. Notwithstanding stringent laws imposing severe penalties and vigorous steps taken by the tax administration to detect black money and despite various voluntary disclosure schemes introduced by the government from time to time, it had not been possible to unearth black money and the menace of black money had over the years assumed alarming proportions causing havoc to the economy of the country and the legislature was therefore constrained to enact the Act with a view to mopping up black money so that instead of remaining idle, such money could be utilised for productive purposes The problem of black money was an obstinate economic problem which had been defying the Government for quite some time and it was in order to resolve this problem that, other efforts having failed. the legislature decided to enact the Act, even though the 987 effect of its provisions might be to confer certain undeserved advantages on tax evaders in possession of black money. The legislature had obviously only two alternatives; either to allow the black money to remain idle and unproductive or to induce those in possession of it to bring it out in the open for being utilised for productive purposes. The first alternative would have left no choice to the government but to resort to deficit financing or to impose a heavy dose of taxation. The former would have resulted in inflationary pressures affecting the vulnerable sections of the society while the latter would have increased the burden on the honest tax payer and perhaps led to greater tax evasion. The legislature therefore decided to adopt the second alternative of coaxing persons in possession of black money to disclose it and make it available to the government for augment in, its resources for productive purposes and with that end in view, enacted the Act providing for issue of special bearer bonds. It may be pointed out that the idea of issuing special bearer bonds for the purpose of unearthing black money was not a brain wave which originated for the first time in the mind of the legislature in the year 1981. The suggestion for issue of special bearer bonds was made as far back as 1950 by some of the members of the provisional Parliament, notably those belonging to the opposition and the government was repeatedly asked why it was not issuing special bearer bonds in order to absorb the liquidity and thereby control the inflationary pressures in the country. Though the majority of the members of the Wanchoo Committee expressed themselves against the issue of special bearer bonds, Shri Chitale a member of that Committee wrote a dissenting note in which he suggested that special bearer bonds should be issued. We may point out that the majority members of the Wanchoo Committee were against issue of special bearer bonds for the purpose of mopping up black money, because they apprehended certain abuses to which special bearer bonds might be subjected, but as we have already pointed out while discussing the true meaning and legal effect of the provisions of the Act, we do not think that there is any scope for such abuses, for the legislature has, while enacting the provisions of the Act, taken care to see that such abuses are reduced to the minimum, if not eliminated altogether. It is true that certain immunities and exemptions are granted to persons investing their unaccounted money in purchase of special bearer bonds but that is an inducement which has to be offered for unearthing black money. Those who have successfully evaded taxation and concealed their income or wealth despite the stringent tax 988 laws and the efforts of the tax department are likely to disclose their unaccounted money without some inducement by way of immunities and exceptions and it must necessarily be left to the legislature to decide what immunities and exemptions would be sufficient for the purpose. It would be outside the province of the court to consider if any particular immunity or exemption is necessary or not for the purpose of inducing disclosure of black money. That would depend upon diverse fiscal and economic considerations based on practical necessity and administrative expediency and would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the court not to hazard an opinion where even economists may differ. The court must while examining the constitutional validity of a legislation of this kind, "be resilient, not rigid, forward looking, not static, liberal, not verbal" and the court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn vs Illinois(l) namely, "that courts do not substitute their social and economic beliefs for the judgment of legislative bodies". The court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The court should constantly remind itself of what the Supreme Court of the United States said in Metropolis Theater Co. vs City of Chicago,(2)"The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. " It is true that one or the other of the immunities or exemptions granted under the provisions of the Act may be taken advantage of by resourceful persons by adopting ingenious methods and devices with a view to avoiding or saving tax. But that cannot be helped because 989 human ingenuity is so great when it comes to tax avoidance that it would be almost impossible to frame tax legislation which cannot be abused. Moreover, as already pointed out above, the trial and error method is inherent in every legislative effort to deal with an obstinate social or economic issue and if it is found that any immunity or exemption granted under the Act is being utilised for tax evasion or avoidance not intended by the legislature, the Act can always be amended and the abuse terminated. We are accordingly of the view that none of the provisions of the Act is violative of Article 14 and its constitutional validity must be upheld. These were the reasons for which we passed our order dated 2nd September, 1981 rejecting the challenge against the constitutional validity of the ordinance and the Act and dismissing the writ petitions. Since these writ petitions are in the nature of public interest litigation, we directed that there should be no order as to costs. GUPTA, J. I was unable to share the view taken by the majority in disposing of these writ petitions on September 2, 1981 that "neither the Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 nor the is violative of article 14 of the Constitution", and I made the following order on the same day: "I have come to the conclusion that the Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 and the violate article 14 of the Constitution and are there fore invalid. I would allow the writ petitions with costs. I shall give my reasons later. " Here briefly are my reasons. These five writ petitions question the constitutional validity of the Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 and . The ordinance which was promulgated by the President on January 1 2, 1981 was repealed and replaced by the Act. The Act received the President 's assent on March 27. Section I 990 (3) of the Act says that it shall be deemed to have come into force on January 12, 1981. The Provisions of the ordinance and the Act are similar except that section 4 (c) of the Act is worded slightly differently from the corresponding provision of the ordinance but the difference is not material and I shall hereinafter refer to the provisions of the Act only. As the long title of the Act shows, it is "An Act to provide for certain immunities to holders of Special Bearer Bonds, 1991 and for certain exemptions from the direct taxes in relation to such Bonds and for matters connected therewith. " The purpose for which the Act was passed as appearing from the preamble is: "Whereas for effective economic and social planning it is necessary to canalise for productive purposes black money which has become a serious threat to the national economy: And whereas with a view to such canalisation the Central Government has decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991 of the face value of ten thousand rupees and redemption value, after ten years, of twelve thousand rupees; And whereas it is expedient to provide for certain immunities and exemptions to render it possible for per sons in possession of black money to invest the same in the said Bonds ;" The preamble thus takes note of the fact that black money has become a serious threat to national economy and says that to make economic and social planning effective it is necessary to canalise this black money for productive purposes. The Act does not attempt to define black money. The Direct Taxes Enquiry Committee set up by the Government of India in 1970 with Shri K.N. Wanchoo, retired Chief Justice of the Supreme Court of India, as Chairman explains what the term black money means in its final report submitted in December, 1971: "It [black money] is, as its name suggests, 'tainted ' money money which is not clean or which has a stigma attached to it. Black is a colour which is generally associated with evil. While it symbolises something which 991 violates moral, social or legal norms, it also suggests a veil of secrecy shrouding it. The term 'black money ' consequently has both these implications. It not only stands for money earned by violating legal provisions even social conscience but also suggests that such money is kept secret and not accounted for. Today the term 'black money ' is generally used to denote unaccounted money or concealed income and/or undisclosed wealth, as well as money involved in transactions wholly or partly suppressed. " The Act contains nine sections. The sections that are relevant for the present purpose are set out below. Immuni 3. (1) Notwithstanding anything contained ties other law for the time being in force, (a) no person who has subscribed to or has otherwise acquired special Bearer Bonds shall be required to disclose, for any purpose whatsoever, the nature and source of acquisition of such Bonds; (b) no inquiry or investigation shall be commenced against any person under any such law on the ground that such person has subscribed to or has other wise acquired Special Bearer Bonds; and (c) the fact that a person has subscribed to or has otherwise acquired Special Bearer Bonds shall not be taken into account and shall be inadmissible as evidence in any proceedings relating to any offence or the imposition of any penalty under any such law. (2) x x x x 992 Acquisition.4. Without prejudice to the generality of etc., of the provisions of section 3, the Bonds not to subscription to, or acquisition of, be taken into Special Bearer Bonds by any person account for shall not be taken into account for the certain proc purpose of any proceeding under the eedings. Income tax Act, 1961 (hereinafter referred to as the Income tax Act), the (hereinafter referred to as the ) or the Gift tax Act, 1958 (hereinafter referred to as the ) and, in particular, no person who has subscribed to, or has otherwise acquired, the said Bonds shall be entitled (a) to claim any set off or relief in any assessment, re assessment, appeal, reference or other proceeding under the Income tax Act or to reopen any, assessment or re assessment made under that Act on the ground that he has subscribed to or has otherwise acquired the said Bonds: (b) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset which is includible in his net wealth for any assessment year under the has been converted into the said Bonds; or (c) to claim, in relation to any period before the date or maturity of the said Bonds, that any asset held by him or any sum credited in his books of account or otherwise held by him represents the consideration received by him for the transfer of the said Bonds. Amendment 5. In the Income tax Act, (a) in section of Act 43 2, in clause (14), after sub clause Act of 1961 (iv), the following sub clause shall be inserted, namely: "(v) Special Bearer Bonds, 1991 issued by the Central Government," 993 (b) in section 10, in clause (15), after sub cluase (ia), the following sub clause shall be inserted, namely: (ib) premium on the redemption of Special Bearer Bonds, 1991 :" . Amendment 6. In section of 5 of the , of Act 27 in sub section (1), after clause (xvia), of 1957. the following clause shall be inserted, namely : (xvib) Special Bearer Bonds, 1991 ;" . Amendment 7. In section 5 of the , in of Act 18 sub section (1), after clause (iiia), of 1958 the following clause shall be inserted, namely: (iiib) "of property in the form of Special Bearer Bonds, 1991.". " The marginal notes against sections 5, 6, and 7 indicate that these sections are amendments respectively of the Income tax Act of 1961, of 1957 and Gift tax Act of 1958. Section 5 excludes Special Bearer Bonds, 1991 from the capital asset of an assessee and exempts the premium payable on the redemption of the Bonds from income tax. Section 6 exempts the Bonds from wealth tax. Section 7 exempts from gift tax property in the form of these Bonds. The Act has been challenged mainly on the ground that it infringes article 14 of the Constitution. article 14 forbids class legislation but permits classification. Permissible classification, it is well established, must satisfy two conditions which Das J. enunciated in the State of West Bengal vs Anwar Ali Sarkar(l) as follows: "(1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and, 994 (2) that the differentia must have rational relation. to the object sought to be achieved by the Act. " The immunities provided by the impugned Act are clearly for the benefit of those who have acquired the Bonds with black money. Clauses (a), (b) and (c) of Section 3 (1) provide for these immunities "notwithstanding anything contained in any other law for the time being in force. " Clause (a) states that no holder of Special Bearer Bonds shall be required to disclose for any purpose the nature and source of acquisition of the Bonds. Clause (b) forbids commencement of any enquiry or investigation under any law against a person on the ground that he has subscribed to or otherwise acquired the Bonds. Under clause (c) the fact that a person has subscribed to or otherwise acquired Special Bearer Bonds shall be inadmissible in evidence and cannot be taken into account in any proceeding relating to any offence or the imposition of any penalty under any law. None of these immunities is required by a person who has paid 'white ' money, that is, money that has been accounted for, to acquire Bonds. To a person who has disclosed the source of acquisition of the Bonds, these immunities are of no use. Section 4 makes it clear that the immunities conferred by the Act are of use only to those who have acquired the Bonds with unaccounted money. Section 4 states that the fact that one has subscribed to or otherwise acquired the Bonds shall not be taken into account in any proceeding under the Income tax Act, 1961, the and the Gift tax Act, 1958 and goes on to provide specifically that no one shall be entitled to: (a) any manner of relief under the Income tax Act on the ground that he has acquired the Bonds; or (b) claim that any asset belonging to him which formed part of his net wealth in any period before the maturity of the Bonds, has been converted into such Bonds; or (c) claim that any asset held by him or any sum of money credited in his books of account or otherwise held by him in the aforesaid period is the consideration received by him for the transfer of the Bonds. Mr. Salve appearing for the petitioners in writ petitions Nos. 863 and 994 of 1981 contended that section 4(c) did not constitute an 995 absolute bar to the assessee seeking to prove that the said sum or asset represents the sale price of Special Bearer Bonds; on behalf of the Union of India it was asserted that this was an absolute bar. In view of the conclusion I have reached, I do not propose to decide the point and I shall proceed on the basis that it is an absolute bar. It is apparent from clauses (a) to (c) of section 4 that the rights they deny affect only those who have disclosed their source of acquisition of the Bonds. Those in whose case the source of acquisition has not been detected are not affected by the prohibition contained in section 4. The impugned Act denies to those who have acquired the Bonds not with black money any relief under the Income tax Act or the or any benefit in any other way claimed by on the ground that they are holders of Special Bearer Bonds, and the relief and the benefit denied to them have been made available to those who have acquired the Bonds with black money by ignoring the source of acquisition in their case. The Act thus distinguishes between two classes of holders of Special Bearer Bonds: tax evaders and honest tax payers. Has this classification a rational relation to the object of the Act ? The object, as already noticed, is to canalise black money for productive purposes to make economic and social planning effective. If the exemptions and immunities conferred by the Act are sufficiently attractive to induce tax evaders to acquire Special Bearer Bonds, they will remain as attractive even if all these benefits were granted to those who will pay 'white ' money for the Bonds. Denial of these benefits to those who have acquired the Bonds with money which has been accounted for does not in any way further the object of canalisation of black money for productive purposes. The discrimination in favour of black money therefore seems to be obvious. It was however argued that no one would be inclined to invest 'white ' money for Special Bearer Bonds which carry only 2 per cent annual interest. I do not think this is a consideration which could justify the discrimination. Apart from that, a return of 2 per cent simple interest per annum is not a correct measure of the actual advantages conferred by the Act. Taking into account the income tax and the wealth tax savings if one did not have to pay any tax on the amount with which Special Bearer Bonds were acquired purchasers of the Bonds with black money did not and the tax free premium on the Bonds, the actual return would be many times more than 2 per cent simple interest per annum. It must therefore be held that 996 the basis on which the holders of Special Bearer Bonds have been classified to give certain advantages to one class and deny them to the other, has no rational nexus with the object of the Act. The matter has another aspect. The classification of holders of Special Bearer Bonds into tax payers and tax evaders does disclose a basis. Would it be an acceptable argument to say that this basis has a relation to the object of the Act because the black money invested in Special Bearer Bonds by tax evaders could be utilised for productive purposes for ten years and that both the conditions of a valid classification were thus satisfied ? I am afraid not. In State of West Bengal vs Anwar Ali Sarkar, (supra) Das J. points out: "The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short while the Article [article 14] forbids class legislation in sense of making improper discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liability proposed to be imposed, it does not forbid classification for the purpose of legislation. " In Anwar Ali Sarkar 's case the constitutional validity of the West Bengal Special Courts Act (X of 1950) constituting special courts and empowering the state government to refer 'cases ' 'offences ' or 'classes of cases ' or 'classes of offences ' to such courts was in question. The object of the West Bengal Act was to provide for the speedier trial of certain offences. Das J. Observes further: "To achieve this object, offences or cases have to be classified upon the basis of some differentia which will distinguish those offences or cases from others and which will have a reasonable relation to the recited object of the Act. The differentia and the object being, as I have said, different elements, it follows that the object by itself cannot be the basis of the classification of offences or the cases, for in the absence of any special circumstances which may distinguish one offence or one class of offences or one class 997 of cases from another offence, or class of offences or class of cases, speedier trial is desirable in the disposal of all offences or classes of offences or classes of cases. ' ' If the differentia, that is, the basis of classification, and the object of the Act are distinct things, it follows that it is not enough that the differentia should have a nexus with the object, but it should also be intelligible. The presence of some characteristics in one class which are not found in another is the difference between the two classes, but a further requirement is that this differentia must be intelligible. If the basis of classification is on the face of it arbitrary in the sense that it is palpably unreasonable, I do not think it is possible to call the differentia intelligible. The following passage from the judgment of Bose J. in Anwar Ali Sarkar 's case illustrates the point: "I can conceive of cases where there is the utmost good faith/and where the classification is scientific and rational and yet which would offend this law. Let us take an imaginary case in which a State legislature considers that all accused persons whose skull measurements are below a certain standard, or who cannot pass a given series of intelligence tests, shall be tried summarily whatever the offence on the ground that the less complicated the trial the fairer it is to their sub standard of intelligence. Here is classification. It is scientific and systematic. The intention and motive are good. There is no question of favouritism, and yet I can hardly believe that such a law would be allowed to stand. But what would be the true basis of the decision ? Surely simply this that the Judges would not consider that fair and proper." The scope of article 14 was further elaborated in some of the later decisions of this Court. This is what Bhagwati, J. speaking for himself and Chandrachud and Krishna Iyer JJ, in E.P. Royappa vs State of Tamil Nadu and another(l) says: "We cannot countenance any attempt to truncate its all embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic 998 concept with many aspects and dimensions and it cannot be "cribed, cabbined and confined" within traditional and doctrinaire limits. From a positivistic points of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of article 14. " Bhagwati J. reiterates in Maneka Gandhi vs Union of India(l) what he had said in Royappa 's case and adds: "The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence . " To pass the test of reasonableness if it was enough that there should be a differentia which should have some connection with the object of the Act, then these observations made in Maneka Gandhi and Royappa would be so much wasted eloquence. The decisions of this Court insist that the differentia must be intelligible and the nexus rational, and the observations quoted above would seem to be appropriate only if we attach some significance to the words 'intelligible ' and 'rational '. The question however remains: when is one justified in describing something as arbitrary or unreasonable ? Terms like 'reasonable ', 'just ' or 'fair ' derive their significance from the existing social conditions. W. Friedmann in his "Legal Theory" (5th Ed. page 80) points out that expressions like "a reasonable and fair price" or a "fair and equitable" restitution means nothing, except in conjunction with the social conditions of the time". Brandeis J. in his opinion in Quaker City Cab Co. vs Commonwealth of Pennsylvania(2) explains when a classification shall be reasonable: 'We call that action reasonable which an informed, intelligent, just minded, civilized men could rationally favour. " Bose J. in Anwar Ali Sarkar 's case says much the same 999 thing in holing that the West Bengal Special Courts Act of 1950 offends article 14: "We find men accused of heinous crimes called upon to answer for their lives and liberties. We find them picked out from their fellows, and however much the new procedure may give them a few crumbs of advantage, in the bulk they are deprived of substantial and valuable privileges of defence which others, similarly charged, are able to claim. It matters not to me, nor indeed to them and their families and their friends, whether this be done in good faith, whether it be done for the convenience of government, whether the process can be scientifically classified and labelled, or whether it is an experiment in speedier trials made for the good of society at large. It matters not how lofty and laudable the motives are. The question with which I charge myself is, can fair minded, reasonable, unbiased and resolute men, who are not swayed by emotion or prejudice, regard this with equanimity and call it reasonable, just and fair, regard it as that equal treatment and protection in the defence of liberties which is expected of a sovereign democratic republic in the conditions which obtain in India today ?" Keeping in mind these observations on what is reasonable, is the basis on which the holders of Special Bearer Bonds have been classified into two groups, honest tax payers and tax evaders, intelligible ? What is arbitrary and offends article 14, cannot be called intelligible. It is clear from the provisions of the Act set out earlier that the advantages which the tax evaders derive from the immunities provided by the Act are not available to those who have acquired the Bonds with 'white ' money. The Act promises anonymity and security for tax evaders. No question can be asked as to the nature and source of acquisition or possession of the Bonds. The Bonds can be transferred freely, and the apprehension expressed by the petitioners cannot he said to be baseless that passing from hand to hand the Bonds are likely to operate as parallel currency and be used for any kind of transaction. From a reading of the preamble of the Act it does not seem that the object of the Act was only to enable the Central Government to have some use for 10 years of the black money which is said to have "become a serious threat 1000 to the national economy". As I read the preamble the purpose of the Act is to unearth black money and use it for productive purposes for effective economic and social planning. If that be the object of the Act, it is difficult to see how its provisions help to achieve the intended purpose. The Act discloses a scheme which enables tax evaders to convert black money into white after 10 years and in the meantime use the Bonds as parallel currency initiating a chain of black money investments There is no provision in the Act requiring that on maturity of the Bonds their holders would have to disclose their identity, which means that if after 10 years black money which had taken the shape of Special Bearer Bonds goes under ground again and retain its colour, there is nothing to prevent it. There is nothing in the scheme to halt generation of black money which threatens the national economy. Some people by successful evasion manoeuvres are able to throw the burden of taxation of their own shoulders which means a greater burden on the honest tax payers and this leads to economic imbalance. On the effect of giving concessions to such unscrupulous tax evaders in preference to the honest tax payers, Mr. R.K. Garg appearing in person and Mr. Salve both repeated what the Direct Taxes Enquiry Committee 's final report says: "Resorting to such a measure would only shake the confidence of the honest tax payers in the capacity of the Government to deal with the law breakers and would invite contempt for its enforcement machinery. " The petitioners submitted further that measures like the Special Bearer Bonds scheme would tempt more people to evade taxes and instead of serving a legitimate public interest would grievously damage it. It has been pointed out that there have been voluntary disclosure schemes in the past. That is so, but none of them is quite like the scheme in question which not only exempts the unaccounted money in the shape of Special Bearer Bonds from all taxes but provides also for a tax free premium on it. According to the petitioners, if the earlier schemes have been conciliatory, the present scheme amounts to capitulation to black money. I asked the Attorney General if it was his case that all attempts to unearth black money had failed and the present scheme was the only course open. His answer was that was not his case The affidavit filed on behalf of the Union of India also does not make such a case. Clearly, the impugned Act puts a premium on dishonesty without even a justi 1001 fication of necessity that the situation in the country left no option. The Act has been criticised as immoral and unethical. Any law that rewards law breakers and tax dodgers is bound to invite such criticism. Should the court concern itself with questions of morality and ethics in considering the constitutional validity of an Act ? of course no law can be struck down only on the ground that it is unethical. However as Friedmann in his "Legal Theory" (page 43) says: "There cannot be and there never has been a complete separation of law and morality. Historical and ideological differences concern the extent to which the norlns of the social order are absorbed into the general order. " It has been held by this Court in Royappa and Maneka Gandhi that the principle of reasonableness is an essential element of equality. The concept of reasonableness does not exclude notions of morality and ethics. I do not see how it can be disputed that in the circumstances of a given case considerations of morality and ethics may have a bearing on the reasonableness of the law in question. Having regard to the provisions of the impugned Act which I have discussed above and the object of the Act to which I have referred, is it possible to say that it is reasonable to classify the E holders of Special Bearer Bonds into honest tax payers and tax evaders for the purpose of conferring benefits on the tax evaders and denying them to those who have honestly paid their taxes, especially when a measure appeasing the tax evaders to the extent the scheme in question does is not claimed as unavoidable ? The informed, fair minded, civilized man on whose judgment both Brandeis J. and Bose J. rely, would he have found the basis of the classification intelligible ? The questions answer themselves, the arbitrary character of the differentiation is so obvious. I do not think it is possible to take the rhetoric of Royappa and Maneka Gandhi seriously and find that the Act passes the test of reasonableness. What I have said above on the Special Bearer Bonds scheme should not be read as an expression of opinion on the wisdom of the government policy that the scheme is not the best in circumstances. My conclusion is based not on what the policy of the government is but on what the equality elause in article 14 requires. 1002 Having held that the Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 and the are invalid on the ground that they infringe article 14 of the Constitution, I do not find it necessary to consider whether Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 is outside the ordinance making power of the President under article 123 of the Constitution. N.V.K. Petitions dismissed.

The Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 was promulgated on January 12,1981. It was repealed and replaced by the . The Act received the Presidential assent on March 27,1981. Section 1(3) of the Act stated that the Act was deemed to have come into force on January 12, 1981. The provisions of the ordinance and the Act were similar except section 4(2) of the Act which was worded slightly differently from the corresponding provision of The ordinance. The Act provided for certain immunities to holders of Special Bearer Bonds, 1981, and for certain exemptions from direct taxes in relation to such Bonds and for matters connected therewith. The object and purpose for which the Act was passed was to canalise for productive purposes black money, which had become a serious threat to the national economy and to provide for certain immunities and exemptions to render it possible for persons in possession of black money to invest the same in the said Bonds. Section 3 of the Act provided for certain immunities to a person who had subscribed to or otherwise acquired Special Bearer Bonds. Clause (a) protected such a person from being required to disclose for any purpose whatsoever the I nature and source of acquisition of the Special Bearer Bonds. Clause (b) prohibited the commencement of any inquiry or investigate on against a person on the 948 ground of his having subscribed to or otherwise acquired the Special Bearer Bonds. Clause (c) provided that the fact of subscription to or acquisition of Special Bearer Bonds shall not be taken into account and shall be inadmissible in evidence in any proceedings relating to any offence or the imposition of any penalty. Sub section (2) of section (3) provided that the immunity granted under sub section (1) shall not be available in relation to prosecution for any offence punishable under Chapter 9 or Chapter 17 of the Indian Penal Code or the Prevention of Corruption Act, 1957 or other similar law. Section 4 provided that without prejudice to the provisions of section 3 subscription to, or acquisition of Special Bearer Bonds by any person shall not be taken into account for the purpose of any proceedings under the Income tax Act, 1961, the or the and that no person who has subscribed to or has otherwise acquired the said Bonds shall be entitled to (a) claim any set off under the Income tax Act or to reopen any assessment or reassessment made under that Act on the ground that he has subscribed to or has otherwise acquired the said Bonds; (b) that any asset which is includible in his net wealth for any assessment year under the has been converted into such bonds, and (c) that any asset held by him represents the consideration received for the transfer of such Bonds. In their writ petitions to this Court assailing the constitutional validity of the ordinance and the Act it was contended on behalf of the petitioners that: (I) since the ordinance had the effect of amending the tax laws it was outside the competence of the President under Article 123, that the subject matter of the ordinance was in the nature of a Money Bill which could be introduced only in the House of the People and passed according to the procedure provided in Articles 109 and 110, the President had no power under Article 123 to issue the ordinance by passing the special procedure provided in Articles 109 and 110 for the passing of a Money Bill and (2) that the provisions of the Act were violative of Article 14 of the Constitution. It was also contended: (a) that Special Bearer Bonds would fetch a much higher value in the black market than that originally subscribed and this would enable a larger amount of black money to be legalised into white than what was originally invested in subscription to special bearer bonds, (b) an abuse which special bearer bonds might lend themselves to was that if special bearer bonds are sold and the sale proceeds are utilised in meeting expenditure, the assessee would not be precluded by section 4 clause (c) from explaining the source of the expenditure to be the sale consideration of special bearer bonds and by resorting to this strategy, white money can be accumulated as capital while expenditure is met out of black money received by way of consideration for sale of special bearer bonds, (c) Section 4 clause (c) operates only in relation to a period before the date of maturity of special bearer bonds and after the date of maturity the holder of special bearer bonds can sell such bonds, and, without running any risk disclose the consideration received by him as his white money, because section 4 clause (c) being out of the way, he can account for the possession of such money by showing that he has received it as consideration for sale of special bearer bonds and so far as the purchaser is concerned. if he has Paid the consideration out of his black money, he can claim 949 the immunity granted under section 3 sub section (1) and his black money would be converted into white, (d) the Act is unconstitutional as it offends against morality by according to dishonest assessees who have evaded payment of tax. immunities and exemptions which are denied to honest tax payers. Those who have broken the law and deprived the State of its legitimate dues are given benefits and concessions placing Them at an advantage over those who have observed the law and paid the taxes due from them and this is clearly immoral and unwarranted by the Constitution. Dismissing the petitions, ^ HELD : [Per majority Chandrachud, C. J., Bhagwati, Fazal Ali & Amarendra Nath Sen, J.J.] [Gupta, J, dissenting] None of the provisions of The Special Bearer Bonds (Immunities and Exemption) Act, 1981 is violative of Article 14 and its constitutional validity must be upheld. [989 B] l(i). There is no substance in The contention that the President has no power under Article 123 to issue an ordinance amending or altering the tax laws and that the ordinance was outside the legislative power of the President under that Article. [967 E] l(ii). Under Article 123 legislative power is conferred on the President exercisable when both Houses of Parliament are not in session. It is possible that when neither House of Parliament is in session, a situation may arise which needs to be dealt with immediately and for which there is no adequate provision in the existing law and emergent legislation may be necessary to enable the executive to cope with the situation. Article 123, therefore, confers powers on the President to promulgate a law by issuing an ordinance to enable the executive to deal with the emergent situation which might well include a situation created by a law being declared void by a Court of law. The legislative power conferred on the President under the Article is not a parallel power of legislation. This power is the clearest indication that the President is invested with this legislative power only in order to enable the executive to tide over an emergent situation which may arise whilst The Houses of Parliament are not in session. The conferment of such power may appear to be undemocratic but it is not so, because The executive is clearly answerable to the legislature and if the President, on the aid and advice of the executive, promulgates an ordinance in misuse or abuse of this power, the legislature can not only pass a resolution disapproving the ordinance but can also pass a vote of no confidence in the executive There is in the theory of Constitutional Law complete control of the legislature over the executive, because if the executive misbehaves or forfeits the confidence of the legislature, it can be thrown out by the legislature. [954 E G, 965 G 966 B] 1(iii). If parliament can by enacting legislation after or amend tax laws, equally can the President do so by issuing an ordinance under Article 123. There have been numerous instances where the President has issued an ordinance replacing with retrospective effect a tax law declared void by the High Court or 950 this Court. Even offences have been created by ordinance issued by the President under Article 123 and such offences committed during the life of the ordinance have been held to be punishable despite the expiry of the ordinance. [967 B C] State of Punjab vs Mohar Singh ; , referred to. Certain well established principles have been evolved by Courts as rules of guidance in discharge of their constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. The presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of Legislation. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. [969 A G] Morey vs Dond, ; , referred to. 2(ii). The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry" that exact wisdom and nice adoption of remedy are not f; always possible and that "judgment is largely a prophecy based on meagre and uninterpreted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. [970 C.D] Secretary of Agriculture vs Central Reig Refining Company, 94 Lawyers ' Edition 381. referred to. 2(iii). The court must adjudge the constitutionality of legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provision. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues. [970 G H] 3(i). It is clear that Article 14 does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. What is necessary in order to pass the test of permissible classification under Article 14 is that the classification must not be arbitrary, artificial or evasive but must be based on some real and substantial distinction bearing 951 a just and reasonable relation to the object sought to be achieved by the legislature. 3(ii). The validity of a classification has to be judged with reference to the object of the legislation and if that is done, there can be no doubt that the classification made by the Act is rational and intelligible and the operation of the provisions of the Act is rightly confined to persons in possession of black money. The Preamble of the Act makes it clear that the Act is intended to canalise for productive purposes black money which has become a serious threat to the national economy. It is an undisputed fact that there is considerable amount of black money in circulation which is unaccounted or concealed and therefore outside the disclosed trading channels. It is largely the product of black market transactions and evasion of tax. The abundance of black money has in fact given rise to a parallel economy operating simultaneously and competing with the official economy. This parallel economy has over the years grown in size and dimension and even on a conservative estimate, the amount of black money in circulation runs into some thousand crores. The menace of black money has reached such staggering proportions that it is causing havoc to the economy of the country and poses a serious challenge to the fulfillment of objectives of distributive justice and setting up of an egalitarian society. 4(ii). The first casualty of the evil of black money is the Revenue because it loses the tax which should otherwise have come to the exchequer. The generation of black money through tax evasion throws a greater burden on the honest tax payer and leads to economic inequality and concentration of wealth in the hands of the unscrupulous few in the country. It also leads to leakage of foreign exchange, making balance of payments rather distorted and unreal and tends to defeat the economic policies of the Government by making their implementation ineffective, particularly in the field of credit and investment. Urgent measures were required to be adopted for preventing further generation of black money as also for unearthing existing black money so that it can be canalised for productive purposes with a view to effective economic and social planning. 4(iii). The Government introduced several changes in the administrative set up of the tax department from time to time with a view to strengthening the administrative machinery for checking tax evasion. The Government also amended section 37 of the Indian Income Tax Act, 1922 with a view to conferring power on the tax authorities to carry out searches and seizures and this power was elaborated and made more effectual under the Income Tax Act, 1961. The Voluntary Disclosure Scheme of 1951 was made to facilitate the disclosure of suppressed income by affording certain immunities from penal provisions, Nearly a decade and a half later a second scheme of voluntary disclosure was introduced by section 68 of the Finance Act, 1965, popularly known as the sixty forty scheme which was a little more successful. Closely following on the heels of this scheme came another under section 24 of the Finance (No. Scheme ' according to which tax was payable at rates applicable to the block of concealed income disclosed and not at a flat rate as under the sixty forty scheme. Then came the Taxation Laws (Amendment and Miscellaneous Provisions) ordinance 1965 followed by an Act which provided for exemption from 952 tax in certain cases of undisclosed income invested in National Defence Gold Bonds 1980. Later on, the Voluntary Disclosure of Income and Wealth ordinance 1975 which was followed by an Act introduced a scheme of voluntary disclosure of income and wealth and provided certain immunities and exemptions. All these legal and administrative measures were introduced by the Government and did not have any appreciable effect with regard to the problem of black money which continued unabated 4 (iv). All efforts to detect black money and to uncover it having failed and the problem of black money being an obstinate economic issue which was defying solution, the impugned legislation providing for issue of Special Bearer Bonds was enacted with a view to mopping up black money and bringing it out in the open, so that, instead of remaining concealed such money may become available for augmenting the resources of the State and being utilised for productive purposes so as to promote effective social and economic planning. This was the object for which the Act was enacted and it is with reference to this object that it is to be determined whether any impermissible differentiation is made in the Act. 4 (v). The whole object of the impugned Act is to induce those having black money to convert it into white money by making it available to the State for productive purposes, without granting in return any immunity in respect of such black money if it could be detected through the ordinary processes of taxation laws without taking into account the fact of purchase of Special Bearer Bonds. 4 (vi). The acquisition or possession of Special Bearer Bonds would not therefore afford any protection to a public servant against a charge of corruption or to a person committing any offence against property. Equally this immunity would not be available where what is sought to be enforced is a civil liability other than liability by way of tax. The immunity granted in respect of subscription to or acquisition of Special Bearer Bonds is a severely restricted immunity and this is the bare minimum immunity necessary in order to induce holders of black money to bring it out in the open and invest it in Special Bearer Bonds 5. Section 4(c) is calculated to act as a strong deterrent against negotiability of Special Bearer Bonds for disclosed or 'white ' money. The immunily granted under the provisions of the Act, limited as it is, extends only to the person who is for the time being the holder of Special Bearer Bonds and the person who has transferred the Special Bearer Bonds for black money has no immunity at all and all the provisions of tax laws are available against him for determining his true income or wealth and therefore no one who has purchased Special Bearer Bonds with a view to earning security against discovery of unaccounted money in his hands would ordinarily barter away that security by again receiving black money for the Special Bearer Bonds. Even if special bearer bonds are transferred against receipt of black money it will not have the effect of legalising more black money into white because the black money of the seller which had become white on his subscribing to or acquiring special bearer bonds would again be converted into black money and the black money paid by the 953 purchaser by way of consideration would become white by reason of being converted into special bearer bonds. No assessee would ever admit that he incurred expenditure out of black money received as consideration for sale of special bearer bonds because it would be impossible for him to establish receipt of black money from the purchaser and if he is unable to do so, the amount of the expenditure, would by reason of section 69C of the Income tax Act, 1961 be deemed to be his concealed income liable to tax. Even if it is assumed that in some rare and exceptional cases the assessee may be able to establish that he sold special bearer bonds against receipt of black money the purchaser would straight away run into difficulties because the evidence furnished by the assessee would in such a case clearly establish that the purchaser had black money and he paid it to the assessee by way of consideration and he would in that event be rendered liable to tax and penalty in respect of such black money. Howsoever special bearer bonds may be transferred and for whatever consideration only a limited amount of black money namely The amount originally subscribed for the special bearer bonds or at the most the amount representing the face value of the special bearer bonds would be legalised into white money and the supposedly free negotiability of special bearer bonds would not have the effect of legalising more black money into while or encouraging further generation of black money. When experience shows that the legislation as framed has proved inadequate to achieve its purpose of mitigating an evil or there are cracks and loopholes in it which are being taken advantage of by the resourcefulness and ingenuity of those minded to benefit themselves at the cost of the State or the others, the legislature can and most certainly would intervene and change The law. But the law cannot be condemned as invalid on the ground That after a period of ten years it may lend itself to some possible abuse. It is obvious that the Act makes a classification between holders of black money and the rest and provides for issue of special bearer bonds with a view to inducing persons belonging to the former class to invest their unaccounted money in purchase of special bearer bonds, so that such money which is today Lying idle outside the regular economy of the country is canalised into productive purposes. The object of the Act being to unearth black money for being utilised for productive purposes with a view to effective social and economic planning, there has necessarily to be a classification between persons possessing black money and others and such classification cannot be regarded as arbitrary or irrational. The validity of a classification has to be judged with reference to The object of the legislation and if that is done, there can be no doubt that the classification made by the Act is rational and intelligible and the operation of the provisions of the Act is rightly confined to persons in possession of black money. The legislature had obviously only two alternatives: either to allow the black money to remain idle and unproductive or to induce those in possession 954 of it to bring it out in the open for being utilised for productive purposes. The first alternative would have left no choice to the government but to resort to deficit financing or lo impose a heavy dose of taxation. The former would have resulted in inflationary pressures affecting the vulnerable sections of the society while the latter would have increased the burden on the honest tax payer and perhaps led to greater tax evasion. The legislature therefore decided to adopt the second alternative of coaxing persons in possession of black money to disclose it and make it available to the government for augmenting its resources for productive purposes and with that end in view enacted the Act providing for issue of special bearer bonds. It would be outside the province of the court to consider if any particular immunity or exemption is necessary or not for the purpose of inducing disclosure of black money. That would depend upon diverse Fiscal and economic considerations based on practical necessity and administrative expediency and would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the court not to hazard an opinion where even economists may differ. The court must while examining the constitutional validity of a legislation "be resilient, not rigid, forward looking, not static, liberal, not verbal" and the court must always bear in mind the constitutional proposition "that courts do not substitute their social and economic beliefs for the judgment of legislative bodies". The court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. [ Per A.C. Gupta, J. dissenting ] 1. The Special Bearer Bonds (Immunities and Exemptions) ordinance, 1981 and the are invalid on the ground that they infringe Article 14 of the Constitution. [1002 A] 2 The Act puts a premium on dishonesty without even a justification of necessity that the situation in the country left no option. [1000 H 1001 A] 3. The basis on which the holders of Special Bearer Bonds have been classified to give certain advantage to one class and deny them to the other, has no rational nexus with the object of the Act. [996 A] 4 (i). Article 14 forbids class legislation but permits classification Permissible classification, it is well established, must satisfy two conditions viz. (i) li that The classification must be founded on an intelligible differential which distinguishes those that are grouped together from others and: (2) that the 955 differential must have a rational relation to the object sought to be achieved by A the Act. [993 G 994 A] 4 (ii). The differential that is the basis of classification and the object of the Act are distinct things, it is not enough that the differential should have a nexus with the object, but it should also be intelligible. The presence of some characteristics in one class which are not found in another is the difference between the two classes, but a further requirement is that this differential must be intelligible. If the basis of classification is on the face of it arbitrary in the sense that it is palpably unreasonable it is not possible to call the differential intelligible. [997 B C] The State of West Bengal vs Anwar Ali Sarkar, ; ; E. P. Royappa vs State of Tamil Nadu and another; , and Maneka Gandhi vs Union of India, [1978] 2 SCR 621, referred to. The preamble of the Act takes note of the fact that black money has become a serious threat to national economy and says that to make economic and social planning effective it is necessary to canalise this black money for productive purposes. The Act however does not define black money. [990 F] 6. The immunities provided by the impugned Act are clearly for the benefit of those who have acquired the Bonds with black money. Clauses (a), (b) and (c) of section 3(1) provide for these immunities "notwithstanding anything contained in any other law for the time being in force". None of These immunities is required by a person who has paid 'white ' money, that is, money that has been accounted for to acquire the Bonds. To a person who has disclosed the source of acquisition of the Bonds, These immunities are of no use. Section 4 makes it clear that the immunities conferred by the Act are of use only to those who have acquired the Bonds with unaccounted money. [994 B D] 7. The impugned Act denies to those who have acquired the bonds not with black money any relief under the Income tax Act or the or any benefit in any other way claimed on the ground that they are holders of Special Bearer Bonds, and the relief and the benefit denied to them have been made available to those who have acquired the Bonds with black money by ignoring the source of acquisition in their case. [995 C D] 8. The Act distinguishes between two classes of holders of Special Bearer Bonds; tax evaders and honest tax payers. The object is to canalise black money for productive purposes to make economic and social planning effective. If the exemptions and immunities conferred by the Act are sufficiently attractive to induce tax evader to acquire Special Bearer Bonds, they will remain as attractive even if all these benefits were granted to those who will pay white money for the Bonds. Denial of these benefits to those who have acquired the Bonds with money which has been accounted for does not in any way further the object of canalisation of black money for productive purposes. The discrimination in favour of black money therefore seems to be obvious. [995 E F] 9. Terms like 'reasonable ', 'just ' or 'fair ' derive their significance from the existing social conditions. Expressions like a 'reasonable and fair price ' or 'fair 956 and equitable restitution ' means nothing, except in conjunction with the social conditions of the time. That action is called 'reasonable ' which an informed, intelligent, just minded civilised Man could rationally favour. [998 F G] Quaker City Cab Co. vs Commonwealth of Pennsylvania ; , referred to. What is arbitrary and offends Article 14 cannot be called intelligible. It is clear from the provisions of the Act that the advantage which the tax evaders derive from the immunities provided by the Act are not available to those who have acquired the Bonds with 'white money ' The Act promises anonymity and security for tax evaders. No question can be asked as to the nature and source of acquisition or possession of the Bonds. The Bonds can be transferred freely and passing of the Bonds from hand to hand is likely to operate as parallel currency and be used for any kind of transaction. [999 F G] 11. The Act discloses a scheme which enables tax evaders to convert black money into white after 10 years and in the meantime use the Bonds as parallel currency initiating a chain of black money investments. There is no provision in the Act requiring that on maturity of the Bonds their holders would have to disclose their identity, which means that if after 10 years black money which had taken the shape of Special Bearer Bonds goes underground again and retain its colour, there is nothing to prevent it. There is nothing in the scheme to halt generation of black money which threatens the national economy. Some people by successful evasion manoeuvres are able to throw the burden of taxation off their own shoulders which means a greater burden on the honest tax payers and this leads to economic imbalance. [1000 B D] 12. Any law that rewards law breakers and tax dodgers is bound to invite criticism. No law can be struck down only on the ground that it is unethical. However, there cannot be and there never has been a complete separation of law and morality. Historical and ideological differences concern the extent to which the norms of the social order are absorbed into the legal order. The principle of reasonableness is an essential element of equality. The concept of reasonableness does not exclude notions of morality and ethics. It cannot be disputed that in the circumstances of a given case considerations of morality and ethics may have a bearing on the reasonableness of the law in question. [1001 B D]

16k+

iminal Appeal No. 42 of 1953. Appeal by Special Leave from the Judgment and Order dated the 5th February, 1953, of the High Court of Judicature at Bombay in Criminal Appeal No. 1149 of 1952 arising out of the Judgment and Order dated the 22nd April, 1952, of the Court of the Presidency Magistrate 19th Court, Bombay, in Case No. 933/P of 1951. B. M. Mistry, J. B. Dadachanji, Rajinder Narain and R. D. Chadda for the appellant. M. C. Setalvad, Attorney General for India (R. Ganapathy Iyer and P. G. Gokhale, with him) for the respondent. February 19, April 28, September 23, and September 24. [The present Criminal Appeal (No. 42 of 1953) came up for hearing in the first instance before a Bench of Hon 'ble Judges composed of Bhagwati, Jagannadhadas and Venkatarama Ayyar JJ. who delivered the following Judgments dated 19th February, 1954]. BHAGWATI J. This is an appeal by special leave from a judgment of the High Court of Judicature at Bombay reversing the order of acquittal passed in favour of the appellant by the Court of the Presidency Court, Bombay, and convicting him of an offence under section 66(b) of the Bombay Prohibition Act, 1949, and sentencing him to one month 's ' rigorous imprisonment and a fine of Rs. 500. The appellant, who was the Officiating Regional Transport Officer, Bombay Region, was on the 29th May, 195 1, at about 9.30 P.m., proceeding in his jeep car towards the Colaba Bus Stand when he knocked down three persons, Mrs. Savitribai Motwani, her husband and Miss Parvatibai Abhichandani. The police arrested the appellant and took him to the police station. From the police station he was taken to St. George 's Hospital in order to be examined by the doctor for alleged consumption of liquor. The doctor found his breath smelling of alcohol. He however found the conjunctiva were congested, the pupils were semi dilated and reacting to light. The speech was coherent and he could behave himself and walk along a straight line. The doctor was therefore of opinion that he did not seem to be under the influence of alcohol though he had taken alcohol in some form or the other. The appellant was put up before the Presidency Magistrate for his trial under two offences, one under section 338 of the Indian Penal Code on three counts for causing grievous hurt to the three injured persons by doing a rash and negligent act, i.e., driving his motor car in a rash and negligent manner, and the other under section 66 (b) of the Bombay Prohibition Act. The appellant cross examined the doctor and suggested that he had taken a medicinal preparation, B. G. Phos, and also stated in answer to the Magistrate on the 20th December, 1951, that he had not consumed any liquor but had taken medicinal preparation containing a small percentage of alcohol. He also filed a written statement on the 13th March, 1952, setting out in detail the whole history of his case. He stated there that owing to his ill health he had been recommended to take tonics, specially those containing vitamin B Complex and Phosphates and had regularly taken tonics, such as Wampole 's Phospho Lecitin, B. G. Phos, and Huxley 's Nerve Vigour. He further stated that on the night in question he had at about 9 or 9.15 P.m. after dinner 616 taken a dose of B. G. Phos and was proceeding in his jeep car for a drive via Cuffee Parade and Marine Drive when the accident took place. He produced his driving licence and registration certificate and a copy of the agenda of the Regional Transport Authority 's meeting to be held next day and a carton of B. G. Phos on which it was stated that it contained 17 per cent alcohol according to its formula. The learned Presidency Magistrate acquitted the appellant of both these offences. In regard to the offence under section 66(b) of the Bombay Prohibition Act he observed that the evidence did not go to show conclusively that the appellant had consumed alcohol without a permit, that there were certain medicinal preparations which were allowed to be used by law and there was no satisfactory evidence to show that the appellant had not consumed those tonics but only liquor for which he ought to have a permit. The respondent, the State of Bombay, took two appeals before the High Court against each of these two cases. The High Court confirmed the acquittal in regard to the charge under section 338 of the Indian Penal Code but reversed the order acquitting him of the charge under section 66(b) of the Bombay Prohibition Act. The High Court followed a decision of its own Division Bench in Rangarao Bala Mane vs State(1) where it had been held that "Once it is proved by the prosecution that a person has drunk or consumed liquor without a permit, it is for that person to show that the liquor drunk by him was not prohibited liquor, but was alcohol or liquor which he is permitted by law to take, e.g., medicated alcohol. The prosecution is not to discharge the burden of the accused, and if in answer to a charge of drinking liquor without a permit the accused suggests that the liquor which was drunk by him was not liquor in a prohibited form or was alcohol in a medicated form, he must show it. " The High Court observed that the Magistrate had misdirected himself on a point of law and it was therefore open to it to examine the evidence and come to its own conclusion whether the appellant had shown that he had (1) 617 taken B. G. Phos that night after dinner and that the alcoholic smell which was still found in his mouth as late as 11.30 P.m. when he was examined by the doctor" ' was the smell of the alcoholic con tents of B. G. Phos. It came to the conclusion that the appellant had failed to prove the existence of circumstances from which the Court could come to the conclusion that the liquor which was consumed by the appellant was not prohibited liquor but liquor which was excepted by the Bombay Prohibition Act from its operation and set aside the order of acquittal passed by the learned Presidency Magistrate in his favour convicting him of the offence and sentencing him as above. It was contended on behalf of the appellant before us that the Bombay Prohibition Act, 1949, was impugned after the advent of the Constitution and this Court by its decision in The State of Bombay and Another vs F.N.Balsara(1) inter alia declared the provisions of clause (b) of section 13 to be invalid so far as it affects the consumption or use of liquid medicinal and toilet preparations containing alcohol, that the effect of that declaration was to lift the consumption or use of liquid medicinal and toilet preparations containing alcohol from the prohibition enacted in section 13(b) and that section 66(b) was inoperative and unenforceable so far as such medicinal and toilet preparations containing alcohol were Concerned. It was therefore incumbent on the prosecution, if a charge under section 66(b) was framed against an accused, to prove that the accused had consumed or used an intoxicant in contravention of the provisions of the Act, which provision so far as section 13(b) was concerned was to be read as prohibiting the consumption or use of liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol, which were the only categories of validly prohibited liquor. On this interpretation of the effect of the judgment in The State of Bombay and Another vs P. N. Balsara (supra) there was no question whatever of the applicability of section 105 or of section 106 of the (1) ; 618 Evidence Act as was sought to be done by the High Court. It was further ' urged that even if an onus was cast on the accused to prove that he had consumed a liquid medicinal or toilet preparation containing alcohol that onus was lighter in burden than the onus on the prosecution and the moment the accused indicated his defence the onus again shifted on the prosecution to negative such defence. It was urged on the other hand on behalf of the respondent that the effect of the declaration in The State of Bombay and Another vs F. N. Balsara (supra) was to graft an exception or a proviso to section 13(b) and that the onus and the burden of proving the existence of circumstances bringing his case within the exception or proviso lay on the accused and the Court was to presume the absence of such circumstances. (Vide section 105 of the Evidence Act). It was further urged that the prosecution could not possibly prove that no form of liquid medicinal or toilet preparation containing alcohol was taken by the accused, that the fact of the consumption of such medicinal or toilet preparation containing alcohol was especially within the knowledge of the accused and that therefore the burden of proving such fact was upon him, and that once the prosecution had discharged the onus which lay upon it to prove that the accused had consumed liquor it would be for the accused to show that the liquor which was taken by him was a liquid medicinal or toilet preparation containing alcohol. (Vide section 106 of the Evidence Act). The relevant provisions of the Bombay Prohibition Act, 1949, may be here set out. The Act was passed inter alia to amend and consolidate the law relating to the promotion and enforcement of and carrying into effect the policy of prohibition in the Province of Bombay. Section 2(22) defined 'an "intoxicant" to mean any liquor. . . . Section 2(24) defined "liquor" to include (a) spirits of wine, methylated spirits, wine, beer, toddy and all liquids consisting of or containing alcohol. Chapter III enacted the prohibitions and section 13(b) provided: No person shall. . . . (b) consume or use 619 liquor Section 66(b) is the penal section and provided: "Whoever in contravention of the provisions of this Act, or of any rule, regulation or order made, or of any licence, permit, pass or authorisation issued, thereunder (b) consumes, uses, possesses or transports any intoxicant or hemp shall, on conviction, be punished. " It may be noted that the Act as it stood before the amendment by Bombay Act XXVI of 1952 which came into operation on the 22nd October, 1952, enacted in section 103 the only presumption as to the commission of offences in certain cases which cases had nothing to do with the question before us. This Court in The State of Bombay and Another vs F. N. Balsara (supra) held that the definition of liquor contained in section 2(24) was not ultra vires inasmuch as the word liquor as understood in India at the time of the Government of India Act, 1935, covered not only those alcoholic liquids which are generally used as beverages and produce intoxication but also all liquids containing alcohol. It however considered the restrictions imposed by sections 12 and 13 of, the Act on the possession, sale, use and consumption of liquor not reasonable restrictions on the fundamental right guaranteed by article 19(1) (b) of the Constitution to "acquire, hold and dispose of property" so far as medicinal and toilet preparations containing alcohol were concerned and declared the said sections invalid so far as they prohibited the possession, sale, use and consumption of these articles. The sections were however not wholly declared void on this ground as the earlier categories mentioned in the definition of liquor, viz., spirits of wine, methylated spirits, wine, beer and toddy, were distinctly separable items which were easily severable from the last category, viz., all liquids containing alcohol, and the restrictions on the possession, sale, use and consumption of these earlier categories were not unreasonable restrictions. It therefore declared section 13(b) invalid to the extent of the inconsistency, i.e., so far as it affected the 620 consumption or use of liquid medicinal and toilet preparations containing alcohol. The question that falls to be determined is what was the effect of this declaration The effect of the declaration of a statute as un constitutional has been thus set out by Cooley on Constitutional Limitations, Vol. I, page 382. "Where a Statute is adjudged to be unconstitutional, it is as if it had never been. Rights cannot be built up under it; contracts which depend upon it for their consideration are void; it constitutes a protection to no one who has acted under it and no one can be punished for having refused obedience to it before the decision was made. And what is true of an Act void in toto is true also as to any part of an Act which is found to be unconstitutional and which consequently has to be regarded as having never at any time been Possessed of any legal force. . See also the dictum of Field J. in Norton vs Shelby County(1): "An unconstitutional Act is not law, it confers no rights, it imposes no duties, it affords no protection, it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed. " To the same effect are the passages from Rottschaefer on Constitutional Law, at page 34: "The legal status of a legislative provision in so far as its application involves violation of constitutional provisions, must however be determined in the light of the theory on which Courts ignore it as law in the decision of cases in which its application produces unconstitutional results. That theory implies that the legislative provision never had legal force as applied to cases within that class. " Willoughby on Constitution of the United States, Second Edition, Vol. 1, page 10: "The Court does not annul or repeal the statute if it finds it in conflict with the Constitution. It simply refuses to recognise it, and determines the rights of the (1) ; , 621 parties just as if such statute had no application. The Court may give its reasons for ignoring or disregarding the statute, but the decision affects the parties only, and there is no judgment against the statute. The opinion or reasons of the Court may operate as a precedent for the determination of other similar cases, but it does not strike the statute from the statute book; it does not repeal the statute. The parties to that suit are concluded by the judgment, but no one else is bound. A new litigant may bring a new suit, based on the very same statute, and the former decision can be relied on only as a precedent " "It simply refuses to recognise it and determines the rights of the parties just as if such statute had no application " And Willis on Constitutional Law, at page 89 " A judicial declaration of the unconstitutionality of a statute neither annuls nor repeals the statute but has the effect of ignoring or disregarding it so far as the determination of the rights of private parties is concerned. The courts generally say that the effect of an unconstitutional statute is nothing. It is as though it had never been passed The declaration was a judicial pronouncement and. even though under article 141 of the Constitution the law declared by this Court is binding on all the Courts within the territory of India and is to be the law of the land the effect of that declaration was not to enact a statutory provision or to alter or amend section 13(b) of the Act. No exception or proviso was also grafted in terms on section 13(b). The only effect of the declaration was that the prohibition enacted in section 13(b) was to be enforceable in regard to the consumption or use of validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol. The prohibition which was enacted in section 13(b) against the consumption or use of liquor could in the light of the declaration made by this Court only refer to the consumption or use of validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, today and all non medicinal and 80 622 non toilet liquid preparations consisting of or containing alcohol, and that was the only prohibition which could be enforced under section 13(b) and the penal section 66(b). The consumption or use of liquid medicinal or toilet preparations. containing alcohol could not be validly prohibited and any person consuming or using such medicinal or toilet preparations containing alcohol could not be hauled up for having contravened the provisions of the Act. No offence could be committed by the consumption of liquid medicinal or toilet preparations containing alcohol and the provision enacted in section 13(b) read in the light of the definitions of intoxicant and liquor contained in sections 2 (22) and 2(24) of the Act in so far as it prohibited the consumption or use of liquor including liquid medicinal or toilet preparations containing alcohol was rendered inoperative and unenforceable by the declaration to the extent of the inconsistency and liquid medicinal or toilet preparations containing alcohol were lifted out of the category of validly prohibited liquor. Whatever may be the implications or the consequences of the unconstitutionality of section 13(b) to the extent of the inconsistency in other respects, here was the State enforcing the penal provisions of section 66(b) and encroaching upon the liberties of the subject. Penal statutes should be strictly construed and the, State could only penals the consumption or use of validly prohibited liquor which only could constitute an offence under section 66(b). The consumption or use of any intoxicant meaning any liquor in contravention of the provisions of this Act was to be punished and unless and until the prosecution proved that the accused had consumed or used liquor in contravention of the enforceable provi sions of the Act the accused could not be held guilty and punished under section 66(b). The accused could be held guilty only if he had contravened the enforceable provisions of the Act and for the purpose of the present enquiry the only provision of the Act which he could be charged with having contravened was section 13(b), the prohibition contained in which was by reason of the declaration made by this Court enforceable only in regard to the consumption or use of Validly prohibited liquor, i.e., spirits of wine. , methylated spirits, 623 wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol. It was strenuously urged before us on behalf of the respondent that the declaration in effect, though not in terms, enacted an exception or proviso to section 13(b) and that therefore the onus lay upon the appellant to prove the existence of circumstances bringing his case within the exception or proviso. (Vide section 105 of the Evidence Act.) It cannot be disputed that no exception or proviso was in terms enacted by this declaration. It had the effect of rendering the prohibition of consumption or use of liquid medicinal and toilet preparations containing alcohol as having never at any time been possessed of any legal force and so not to be enforceable wherever any accused person was charged with having contravened the provisions of section 13(b) of the Act. The effect of the declaration on the provisions of section 13(b) could be worked out in any of the following modes: No person shall consume or use spirits of wine, methylated spirits, wine, beer, toddy and all liquids consisting of or containing alcohol as are not or which are not or other than or save or except or provided they are not or but shall not include liquid medicinal or toilet preparations containing alcohol or all non medicinal and non toilet liquid preparations consisting of or containing alcohol. When these several interpretations were possible in regard to the effect of the declaration on the provisions of section 13(b), where would be the justification for interpreting the effect of the declaration to be that of grafting an exception o r proviso on section 13(b) so as to attract the operation of the provisions of section 105 of the Evidence Act? It is clear that where several interpretations are possible, the Court should adopt an interpretation favourable to the accused, rather than one which casts an extra or special burden upon him, which if at all should be done by clear and unequivocal provision in that behalf rather than in this indirect manner. (See also In re Kanakasabai Pillai(1) ). It would be more in consonance with the principles of (1) A.I.R. 1940 Mad. 1. 624 criminal jurisprudence to interpret the effect of this declaration to be that the prohibition enacted in section 13(b) where it came to be enforced against any accused person after the declaration should be enforceable as regards the consumption or use of validly prohibited liquor, ?I.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol, as above stated. If this is the effect of the declaration made by this Court there is no room for holding that the only duty of the prosecution was to prove that the accused had taken liquor in some form or the other and that the burden lay on the accused to prove that be had taken a liquid medicinal or toilet preparation containing alcohol. When an accused person is charged with having committed an offence it is for the prosecution to prove all the ingredients of the offence with which he has been charged and the ingredients of the offence under section 13(b) as stated above were that he had consumed or used liquor validly prohibited, i.e. spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol. There was no presumption enacted in the Act as it stood which would throw the burden of proof on the accused to show that he had consumed or used liquid medicinal or toilet preparation containing alcohol. There was no exception or proviso enacted either in terms or in effect in section 13(b) which attracted the operation of section 105 of the Evidence Act and cast upon the accused the burden of proving the existence of circumstances bringing his case within such exception or proviso. The mere circumstance that the fact in regard to his consumption or use of liquid medicinal or toilet preparation containing alcohol was specially within the knowledge of the accused also could not shift the burden of proving the ingredients of the offence from the prosecution to the accused, because it is a cardinal principle of criminal jurisprudence as administered in this country that it is for the prosecution and prosecution alone to prove all the ingredients of the offence with which the 625 accused has been charged. The accused is not bound to open his lips or to enter upon his defence unless and until the prosecution has discharged the burden which lies upon it and satisfactorily proved the guilt of the accused. Section 106 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Attygalle vs The King(1), also In re Kanakasabai Pillai(2)). It is for the prosecution to prove that he has committed the offence and that burden is not in any manner whatsoever displaced by section 106 of the Evidence Act. The High Court in arriving at its decision in Rangarao Bala Mane vs State (supra) above referred to was impressed with the circumstance that the prosecution could not possibly prove that no form of medicated alcohol was taken by the accused, that there were evidently numerous forms of medicated alcohol and that it was impossible for the prosecution on the very face of things to exclude all those forms. The difficulty was illustrated by the High Court in the manner following: "For instance, if the prosecution were to lead evidence to show that the accused had not taken medicated alcohol in the form of B. G. Phos, the accused would contend that he had taken it in some other form. If the prosecution were to lead evidence that the accused had not taken it in the form of Winedex, the accused would say that he had taken it in the form of Waterbury 's Compound or Hall 's Wine. These are only two instances to show how, it is impossible for the prosecution to exclude all forms of medicated alcohol. " It therefore came to the conclusion that once the prosecution had discharged the onus which was upon it to prove that the accused person had consumed liquor, it would be for the accused to show that the liquor which was taken by him was liquor in the form of medicated alcohol, in other words, not prohibited liquor. The difficulty thus envisaged by the High Court was, in my opinion, imaginary. Where an accused (1) A.I.R. 1936 P.C. 169. (2) A.I.R. 1940 Madras 1. 626 person is suspected of having committed the prohibition offence, it would be for the police to investigate the offence and while investigating the offence, it would be for the police to find out whether the accused has consumed liquor which falls within 'the enforceable prohibition enacted in section 13(b). As there are a number of preparations which come within the category of liquid medicinal and toilet preparations consisting of or containing alcohol, there are a number of preparations which come within the category of non medicinal or non toilet liquid preparations consisting of or containing alcohol and it would be really for the police investigating the alleged offence to find out which out of the latter category of preparations the accused had consumed and bring him to book for the same. The circumstance that the accused person was smelling of alcohol and that he had consumed liquor in some form or the other would not be an unequivocal circumstance pointing to the guilt of the accused. The smell of alcohol could as well be the result of his having consumed medicinal or toilet preparations consisting of or containing alcohol as his having consumed validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol. To hold the accused guilty under these circumstances would be to convict him merely because he was smelling of alcohol and depriving him of the benefit of doubt which an accused person is always entitled to in the event of the facts and circumstances being consistent either with his guilt or his innocence. To adopt the reasoning which appealed to the High Court would further be tantamount to laying down that once an accused person was shown to have consumed liquor in some form or the other the presumption was that he had consumed validly prohibited liquor and the onus would be upon him to rebut that presumption by showing that lie had consumed medicinal or toilet preparation containing alcohol. The difficulty in the way of the prosecution proving its case need not deflect the Court from arriving at a correct conclusion. If these difficulties are genuinely 627 felt it would be for the Legislature to step in and amend the law. It would not be the function of the Court to read something in the provisions of the law ' which is not there or to find out a way of obviating the difficulties in enforcing the law howsoever meritorious the intentions of the Legislature might be. If these difficulties were felt in the matter of enforcing the policy of prohibition by the State of Bombay the only remedy was to effect the necessary amendments when the Bombay Act XXVI of 1952 was enacted on the 22nd October, 1952, after this Court made the declara tion in The State of Bombay and Another vs F. N. Balsara (supra). In my opinion it was not enough for the prosecution in the present case merely to prove that the appellant had taken alcohol in some form or the other. The prosecution ought to have proved that the appellant had in contravention of the provisions of the Act med an intoxicant meaning any liquor which consumer regard to the declaration made by this Court having could only be validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations con sisting of or containing alcohol. The evidence of the doctor only went to show that the appellant had consumed alcohol in some form or the other. That was not enough and I have therefore come to the conclusion that the prosecution failed to prove that the appellant had committed the offence with which he was charged. In view of the conclusion reached above it is un necessary to go into the interesting question which was canvassed before us at some length as to the burden of proof on the prosecution as well as the defence in a criminal trial having regard to the provisions of section 105 of the Evidence Act as also the applicability in India of the principles enunciated in Woolmington vs The Director of Public Prosecutions(1). I would therefore allow the appeal, and quash the conviction and sentence passed upon the appellant by the High Court. (1) ; , 628 JAGANNADHADAS J. I have had the benefit of the judgments of both my learned brothers. perusing But, with great regret, I feel unable to agree with the view taken by my learned brother Justice Bhagwati. Two questions of law have been raised in this case, viz., (1) on whom does the burden of proof lie to make out that the "liquor" consumed by the appellant was or was not medicinal or toilet preparations though contain ing alcohol, and (2) what is the nature and quantum of proof required if the burden is upon the appellant. The answer to question No. 1 depends upon the effect of the decision of this Court in The State, of Bombay and Another vs F. N. Balsara (supra) which, while holding that the definition of liquor in sub section (24) of section 2 of the Bombay Prohibition Act, 1949 (Act XXV of 1949) is valid, has declared that clause (b) of section 13 in so far as it affects the consumption or use of medicinal or toilet preparations containing alcohol, is invalid. My learned brother Justice Bhagwati, while holding that the effect of the declaration was not to alter and amend section 13(b) of the Act, is of the opinion that in the light thereof the prohibition under section 13(b) is to be understood to relate (so far as is relevant for the present purpose) to consumption or use of "non medicinal or non toilet liquid preparation containing alcohol" and that, therefore, the burden lies on the prosecution to make out all the ingredients of the prohibition so understood with the negative thereof On the other hand, my learned brother Justice Venkatarama Ayyar is of the opinion that the effect of the decision in The State of Bombay and Another vs F. N. Balsara (Supra) is not to amend or alter section 13(b) but only to render it partly unenforceable, and hence to provide a defence to the accused, on the ground of unconstitutionality in so far as that section is sought to be applied to medicinal or toilet preparations containing alcohol and that, therefore, the burden of making out the facts required for this plea is on the accused. I agree that no legislative function can be attributed to a judicial decision and that the decision in The State of Bombay and Another vs F. N. Balsara (supra) does not, 629 proprio vigore amend the Act. The effect of a judicial declaration of the unconstitutionality of a statute has been stated at page 10 of Vol. I of Willoughby on the Constitution of the United States, Second Edition, as follows: "The Court does not annul or repeal the statute if it finds it in conflict with the Constitution. It simply refuses to recognize it, and determines the rights of the parties just as if such statute had no application. The Court may give its reasons for ignoring or disregarding the statute, but the decision affects the parties only, and there is no judgment against the statute. The opinion or reasons for the court may operate as a precedent for the determination of other similar cases, but it does not strike the statute from the statute book; it does not repeal. . . the statute. The parties to that suit are concluded by the judgment, but no one else is bound. A new litigant may bring a new suit, based on the very same statute, and the former decision. . can be relied on only as a precedent. " This and other similar passages from other treatises relate, however, to cases where the entire legislation is unconstitutional from the very commencement of the Act, a situation which falls within the scope of article 13(2) of our Constitution. They do not directly cover a situation which falls within article 13(1). In the present case, though the decision in The State of Bombay and Another vs F. N. Balsara (Supra) does not by itself bring about a change in the Act, the declarations made therein are founded on article 13(1) and it is with the effect thereof we are concerned. The question is what is the effect of article 13(1) on a pre existing valid statute, which in respect of a severable part there. of violates fundamental rights. Under article 13(1) such part is "void" from the date of the commencement of the Constitution, while the other part continues to be valid. Two views of the result brought about by this voidness are possible, viz., (1) the said severable part becomes unenforceable, while it remains part of the Act, or (2) the said part goes out of the Act and the Act stands appropriately amended pro tanto. The first is the view which appears to have been adopted 81 630 by my learned brother, Justice Venkatarama Ayyar, an the basis of certain American decisions. I feel inclined to agree with it. This aspect, however, was not fully presented by either side and was only suggested from the Bench in the course of arguments. We have not had the benefit of all the relevant material being placed before us by the learned advocates on either side. The second view was the basis of the arguments before us. It is, therefore, necessary and desirable to deal with this case on that assumption. The question, then, for consideration is what is the notional amendment which must be imported into the Act consistently with the decision in The State of Bombay and Another vs F. N. Balsara (supra). The relevant portions thereof are as follows: (1) The definition of "liquor" in the Act to its full extent continues to be valid, (2) section 13(b) of the Act in so far as it relates to liquid toilet or medicinal preparations containing alcohol is invalid, and (3) this portion of the content of section 13(b) is severable. The argument of the appellant 's learned counsel is that the essence of the valid prohibition under section 13(b) now is the consumption or use of liquor other than liquid medicinal or toilet preparations containing alcohol. Ha urges, therefore, that section 13(b) must be taken to stand amended accordingly. The argument, if I understood it a right, was that the word "liquor" stands amended as "prohibited liquor" or that it must be understood with this limited connotation. I am unable to see how this can be done. The definition of the word "liquor" with its inclusive content remaining intact and valid, that content has to be imported wholesale into the meaning of the word "liquor" in section 13(b) and it appears to me that it is not permissible to read it or understand it in a different sense. So to read it or understand it would be to import a new definition of "prohibited liquor" into the Act and to make the consumption or use of "prohibited liquor", the offence. What, however, the Balsara decision has done is not to authorise the importation of a new definition and the rewriting of section 13(b). It keeps section 13(b) intact 631 but treats the consumption or use of liquid toilet or medicinal preparations containing alcohol as severable and takes such consumption or use out of the ambit of the section itself as the prohibition thereof is un constitutional. This can be done and only done, in my opinion, by grafting an appropriate exception or proviso into section 13(b). My learned brother, Justice Bhagwati, has in his, judgment suggested that, if it is a question of treating section 13(b) as amended,. the amendment can be made in one of many modes and that there is no reason to choose between them and that it is not fair to an accused person to read it in a manner throwing the burden on him, when a more favourable mode is open. The various modes of amendment are indicated in the following suggested reading of section 13(b). "No person shall consume or use spirits of wine, methylated spirits, wine, beer, toddy and all liquids consisting of or containing 'A ' alcohol as are not or which are not or other than or save or except or provided they are not or but shall include liquid medicinal or toilet preparations containing alcohol, or all non medicinal and non toilet liquid 'B ' preparations consisting of or containing alcohol." (The underlinings and markings are mine). Now, if the relevant portion of the section is recast in the manner above indicated, in any of the alternative modes in the portion marked 'A ' above, I have no doubt that every one of these modes is only an exception or a proviso which falls within the specific terms of section 105 of the Evidence Act, i.e., an exception or proviso "in the law defining the offence. " If, on the other hand, the section is treated as amended by incorporating the portion marked 'B ' omitting the portion marked 'A ', it appears to me, with great respect, that it is to alter the very content of the word ' "liquor" in the section, for which I can find no legal justification. What the decision in The State of Bombay 632 and Another vs F. N. Balsara (supra) authorises is, as I have already explained above, to keep the word "liquor" intact with its full content and sever from the provision taken as alcohol (not merely from the word "liquor") medicinal or toilet preparations. I feel accordingly confirmed in the view that I have taken, viz., that this can only be done by engrafting an exception or a proviso. As regards the other view suggested by my learned brother Justice Bhagwati, that without importing any alteration or amendment in the section itself, the same is to be understood as having reference to what maybe called "prohibited liquor", understanding that word with reference to the decision in The State of Bombay and Another vs F. N. Balsara (supra), here again, with great respect, I feel difficulty in imputing into a specific statutory provision a meaning different from what its plain words, in the light of the definition, indicate. The decision in The State Of Bombay and Another vs F. N. Balsara (supra), if it does not bring about an amendment in the provision does not also provide any mere aid to interpretation. The question is not done of insisting on a merely technical view of the matter. I feel unable to impute to the decision in The State of Bombay and Another vs F. N. Balsara (supra), taken with article 13(1), the effect of rendering section 13(b) unworkable, which certainly was not intended. In this view, therefore, (and on the basis put forward by learned counsel on both sides), the effect of article 13(1) on section 13(b) of the Act in the light of the decision in The State of Bombay and Another vs F. N. Balsara (supra) is that it stands amended pro tanto by means of an appropriate exception or proviso. It follows that section 105 of the Evidence Act would in terms apply to such a situation. Thus in either view of the effect ' of article 13(1) of the Constitution on section 13(b) of the Bombay Act in the light of the judgment in The State of Bombay and Another vs F. N. Balsara (supra) the opinion expressed by the learned Judges of the Bombay High Court that the burden of proof in a case like this lies on the accused is correct. 633 As regards the second question that has been raised namely as to the nature and quantum of the evidence required to discharge this burden of proof, considerable arguments have been advanced before us. Our attention has been drawn to the existence of conflicting decisions in the High Courts on this topic. On the one side there is the decision of the Full Bench of the Allahabad High Court in Prabhoo vs Emperor(1) and on the other, there is a later Special Bench decision of the Bombay High Court in Government of Bombay vs Sakur(2). In my opinion it is unnecessary for us to resolve that conflict in this case, since, on either view, the finding of the appellate Court that the burden has not been discharged on the available material seems to me to be correct. In particular it is to be noticed that the appellant put forward a specific defence in Paragraph 8 of the written statement filed by him into Court in answer to the charge. In support of this defence he has given no proof of any circumstances, which must be within his knowledge, to render the defence reasonably probable even if be may not have been able to prove the same strictly to the hilt. I am, therefore, of the opinion that the conviction of the appellant under section 66(b) of the Bombay Prohibition Act, 1949, is correct. But in the circumstances, it is not necessary to send him back to jail. I would, therefore, reduce the sentence of imprisonment to the period already undergone. In the result, the appeal has to be dismissed subject to this modification. VENKATARAMA AYYAR J. I regret that I am unable to agree with the view taken by my learned brother, Bhagwati J. The facts giving rise to this appeal have been stated in his Judgment which I have had the advantage of reading and it is unnecessary to restate them. The point for decision shortly is whether in a prosecution under section 66(b) of the Bombay Prohibition Act, XXV of 1949, for contravention of section 13(b), the prosecution has to establish not merely that liquor had been taken in some form but that further what was taken was not a medicinal preparation. The (1) I.L.R. 1941 All. (2) 48 Bom. L. R. 746; A.I.R. 1947 Bom. 634 learned Judges of the Bombay High Court held following an earlier decision of that Court in Rangrao Bala Mane vs State (supra) that once the prosecution had established that the accused had taken alcohol in some form it was for him to establish that he had taken a medicinal preparation, both on the ground that it was in the nature of an exception which it was for the party pleading it to establish under section 105 of the Evidence Act and that it was a matter specially within his knowledge and that therefore the burden of proving it lay on him under section 106 of the Evidence ' Act. The appellant challenges the correctness of this deci sion and contends that it is opposed to the decision of this Court in The State of Bombay and Another vs F. N. Balsara (supra). It will be convenient first to refer to the statutory provisions bearing on the question and ascertain what the position is thereunder, and then consider how it is affected by the decision of this Court in The State Of Bombay and Another vs F. N. Balsara (supra). The relevant provisions of the Bombay Prohibition Act are sections 2(24), 13(b) and 66(b). Section 2(24) defines "liquor" as including all liquids consisting of or containing alcohol. Section 13(b) enacts that no person shall use or consume liquor and a contravention of this provision is made punishable under section 66(b). As medicinal preparations containing alcohol are liquor as defined in section 2(24) the consumption thereof will be an offence punishable under the Act and it will be no answer to a prosecution for contravention of section 13(b) that what was consumed was a medicinal preparation and a question of the kind now presented to us therefore could not possibly arise under the Act prior to the Constitution. I may next consider the effect of the decision of this Court in The State of Bombay and Another vs F. N. Balsara (supra) on the legal position under the Act. It was there held inter alia that section 13(b) in so far as it prohibited the consumption of medicinal preparations was an unreasonable restriction on the rights of an owner to hold and enjoy property and was therefore void as being repugnant to article 19 (1) (f) of the 635 Constitution. The appellant contends that the effect of this declaration was to remove medicinal preparations from out of the purview of section 13(b); that ' that section should therefore be read as if it had been amended to the effect that no person shall use or consume liquor other than medicinal preparations or toilets; that in that view no question of the accused having to rely on an exception arose and no question of the burden being thrown on him under section 105; and that as the offence itself consisted in consuming a liquor which was not a medicinal preparation, the burden would lie on the prosecution to establish that what was consumed was a prohibited liquor. On the other hand, the respondent contends that the definition of liquor in section 2(24) includes not only beverages but also medicinal preparations, that the extended definition would apply to section 13(b) as well, that the immunity of medicinal preparations containing alcohol from the operation of the section by reason of the decision in The, State of Bombay and Another vs F. N. Balsara (supra) must in consequence be treated as an exception to it and that the 'section should be read as containing a saving in favour of those preparations, in the nature of an exception or proviso, the burden of establishing which under section 105 of the Evidence Act would be on the accused. I agree with the appellant that section 105 has no application. We are not here concerned with any exception, general or special, under the Penal Code or any other law defining the offence. The exception or proviso, if it may be so called, arises as a result of the decision of this Court and not under any statute and section 105 cannot therefore in terms apply. At the same time it is difficult to see how the decision in The State of Bombay and Another vs F. N. Balsara (Supra) can be considered to effect an amendment of section 13(b) so as to exclude medicinal preparations from out of its ambit. The rival contentions which have been presented to us on the effect of the decision in The State of Bombay and Another vs F. N. Balsara (supra) proceed both of them on the basis that ' section 13(b) has in some manner been amended by it; according to the appellant, the 636 section must be taken to have been amended by excluding medicinal preparations from the word " liquor" according to the respondent, by inserting an exception or proviso to the section in favour of such preparations. That, however, is not the correct position. Decisions of Court do not amend or add to a statute. That is a purely legislative function. They merely interpret the law and declare whether it is valid or not and the result of a declaration that it is not valid is that no effect could be given to it in a Court of law. If therefore section 13(b) cannot be construed as itself amended or modified by reason of the decision in The State of Bombay and Another vs F. N. Balsara (supra), there is no reason to hold that medicinal preparations containing alcohol, which fell within its scope before, have gone out of it after that decision. This argument therefore does not furnish any ground for throwing the burden on the prosecution under section 13( b) to establish not merely that what was consumed was liquor but that it was not a medicinal preparation. The question of burden of proof must therefore be decided not on the basis of a suppositions amendment of the section or addition of an exception or proviso to it but on the language of the section as it stands and with reference to Well established principles of law. Under that section it is an offence to use or consume liquor and that under the definition in section 2(24) includes medicinal preparations containing alcohol. One of the points raised in The State of Bombay and Another vs F. N. Balsara (supra) was that the State Legislature which was competent to legislate on into xicating liquor could not under that head of legislation enact a law in respect of medicinal preparations containing alcohol because the words "intoxicating liquor" meant beverages and not medicines but this contention was negatived by this Court on the ground that the words "intoxicating liquor" had acquired an extended sense as including medicinal preparations containing alcohol and that the Legislature was competent while enacting a law with reference to intoxicating liquors to legislate on medicinal preparations 637 containing alcohol. The definition of "liquor" in section 2(24) in its extended sense having thus been held to be valid, it follows that unless there is something in the particular provision to the contrary, the word "liquor" must wherever it occurs in the statute include medicinal preparations and that is the meaning which it must bear in section 13(b). In The State of Bombay and Another vs F. N. Balsara (supra), it is on the footing that medicinal preparations are included in section 13 that the entire discussion on its validity with reference to article 19(1) (f) proceeds. We therefore start with this that under section 13(b), the Legislature has made it an offence to take alcohol in any form, whether as beverages or as medicinal preparations. That being the position and it having been decided that the section in so far as it relates to medicinal preparations is void as repugnant to article 19(1) (f), the question as to who should prove whether what was consumed was alcohol or medicinal preparation containing alcohol appears to me to admit of a simple answer. There is a strong presumption in favour of the constitutionality of a statute and it is for those who assail it as unconstitutional to establish it. The contention of the appellant is, when analyzed, that section 13(b) is bad in so far as it hits medicinal preparations containing alcohol as it contravenes article 19(1) (f) of the Constitution, and the decision of this Court in The State of Bombay and Another vs F. N. Balsara (supra) is relied on as supporting it. But before the appellant can bring himself within that decision, he must establish that what he consumed was a medicinal preparation. The plea of unconstitutionality is not established unless all the elements necessary to sustain such a plea are established ; and as observed by this Court in Rao Shiv Bahadur Singh vs The State of Vindhya Pradesh(1), "the burden of making out facts requisite for the constitutional invalidity of the convictions" is on the appellant. He has therefore to make out as a fact that what he consumed was a medicinal preparation and as a matter of law, that section 13(b) is bad in so far as it prohibits it. The decision of this Court concludes the (1) ; ,1202. 82 638 question in his favour so 'far as the second point is concerned. But the burden of establishing the first point, that in fact what he consumed was a medicinal preparation, still remains on him. It was argued for the appellant that this Court had declared that section 13(b) was void under article 13(1) of the Constitution in so far as it related to medicinal preparations; that that meant that it was to that extent a nullity and that it should in consequence be read as if it did not include medicinal preparations. The question is, what is the legal effect of a statute being declared unconstitutional. The answer to it depends on two considerations, firstly, does the constitutional prohibition which has been infringed affect the competence of the Legislature to enact the law or does it merely operate as a check on the exercise of a power which is within its competence; and secondly, if it is merely a check, whether it is enacted for the benefit of individuals or whether it is imposed for the benefit of the general public on grounds of public policy. If the statute is beyond the competence of the Legislature, as for example, when a State enacts a law which is within the exclusive competence of the Union, it would be a nullity. That would also be the position when a limitation is imposed on the legislative power in the interests of the public, as, for instance, the provisions in Chapter XIII of the Constitution relating to inter State trade and commerce. But when the law is within the com petence of the Legislature and the unconstitutionality arises by reason of its repugnancy to provisions enacted for the benefit of individuals, it is not a nullity but is merely unenforceable. Such an unconstitutionality can be waived and in that case the law becomes enforceable. In America this principle is well setted. (Vide Cooley on Constitutional Limitations, Volume 1, pages 368 to 371; Willis on Constitutional Law, at pages 524, 531, 542 and 558; Rottschaefer on Constitutional Law, at pages 28 and 29 30). In Shepard vs Barron(1), it was observed that "provisions of a constitutional nature, intended for the protection of the property owner, may be waived by him. " In Pierce vs Somerset Railway(2), (1) ; ; (2) I71 U.S. 64I ; ; 639 the position was thus stated: "A person may by his acts or omission to act waive a right which he might otherwise have under the Constitution of the United States, as well as under a statute." In Pierce Oil Corporation vs Phoenix Refining Co.(1), where a statute was impugned on the ground that it imposed unreasonable restrictions on the rights of a corporation to carry on business and thereby violated the rights guaranteed under the Fourteenth Amendment, the Court observed "There is nothing in the nature of such a constitutional right as is here asserted to prevent its being waived or the right to claim it barred, as other rights may be, by deliberate election or by conduct inconsistent with the assertion of such a right." The position must be the same under our Constitution when a law contravenes a prescription intended for the benefit of individuals. The rights guaranteed under article 19(1) (f) are enacted for the benefit of owners of properties and when a law is found to infringe that provision, it is open to. any person whose rights have been infringed to waive it and when there is waiver there is no legal impediment to the enforcement of the law. It would be otherwise if the statute was a nullity; in which case it can neither be waived nor enforced. If then the law is merely unenforceable and can take effect when waived it cannot be treated as non est and as effaced out of the statute book. It is scarcely necessary to add that the question of waiver is relevant to the present controversy not as bearing on any issue of fact arising for determination in this case but as showing the nature of the right declared under article 19(1) (f) and the effect in law of a statute contravening it. Another point of distinction noticed by American jurists between unconstitutionality arising by reason of lack of legislative competence and that arising by reason of a check imposed on a competent Legislature may also be mentioned. While a statute passed by a Legislature which had no competence cannot acquire validity when the Legislature subsequently acquires competence, a statute which was within the competence of the Legislature at the time of its enactment but (1) 259 U S 125; ; 640 which infringes a constitutional prohibition could be enforced proprio vigore when once the prohibition is removed. The law is thus stated in Willoughby on the Constitution of the United States, Volume 1, at page 11: "The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature,, and, if thus tested it is beyond the legislative power, it is not rendered valid, without re enactment, if later, by constitutional amendment, the necessary legislative power is granted. However, it has been held that where an act is within the general legislative power of the enacting body, but is rendered unconstitutional by reason of some adventitious circumstance, as for example, when a State legislature is prevented from regulating a matter by reason of the fact that the Federal Congress has already legislated upon that matter, or, by reason of its silence, is to be construed as indicating that there should be no regulation, the act does not need to be re enacted in order to be enforced, if this cause of its unconstitutionality is removed. " The authority cited in support of this observation is the decision in Wilkerson vs Rahrer(1). There the State of Kansas enacted a law in 1889 forbidding the sale of intoxicating liquors in the state. Though it was valid with reference to intra state sales, it was unconstitutional in so far as it related to inter State sales. In 1890 the Congress passed a legislation conferring authority on the States to enact prohibition laws with reference to inter State trade. A prosecution having been instituted under the 1889 Act in respect of sales effected after the Congress legislation of 1890, one of the contentions urged was that as the State law was unconstitutional when it was enacted it was void and it could not be enforced even though the bar had been removed by the Congress legislation of 1890. In repelling this contention the Court observed: " This is not the case of a law enacted in the unauthorized exercise of a power exclusively confided to Congress, but of a law which it was competent for (1) ; ; 35 L. Ed.572. 641 the State to pass, but which could not operate upon articles occupying a certain situation until the passage of the Act of Congress. That Act in terms removed the obstacle, and we perceive no adequate ground for adjudging that a re enactment of the State law was required before it could have the effect upon imported which it had always had upon domestic property. " The position is thus stated by Cooley in his work on Constitutional Law, at page 201 : " A court 's decision merely decides the case that is then under adjudication, and a finding of unconstitu tionality does not destroy the statute but. merely involves a refusal to enforce it. " Rottschaefer, after referring to the conflict of authorities on the point in the States refers to the decision in Wilkerson V. Rahrer(1), as embodying the better view. This question again, it may be noted, does not arise as such for determination in this case and is material only as showing that an infringement of a constitutional ' prohibition which does not affect the competence of a Legislature but is merely a check on its exercise does not render the law a nullity. In view of the principles discussed above, the use of the word "void" in article 13(1) is not decisive on the question as to the precise effect of a law being repugnant to article 19(1) (f). Reference may be made in this connection to the statement of the law in Corpus Juris, Volume 67, page 263 et seq., to which counsel for the respondent invited our attention. It is there pointed out that the word "void" in statutes and decisions might mean either that is "absolutely void" or "relatively void" ; that "that is 'absolutely void which the law or the nature of things forbids to be enforced at all, and that is relatively void ' which the law condemns as a wrong to individuals and refuses to enforce as against them"; that what is absolutely void is incapable of confirmation and ratification; and that what is relatively void could be waived. The true scope of article 13(1) was considered by this Court in Kesavan Madhava Menon vs State Of (I) ; ; 642 Bombay(1). There the point for determination was whether the Constitution was retrospective in its operation. In the course of his judgment Das J. observed: "It should further be seen that article 13(1) does not in terms make the existing laws which are inconsistent with the fundamental rights void ab initio or for all purposes. On the contrary, it provides that all existing laws, in so far as they are inconsistent with the fundamental rights, shall be void to the extent of their inconsistency. They are not void for all purposes but they are void only to the extent they come into conflict with the fundamental rights. . . Article 13(1) cannot be read as obliterating the entire operation of the inconsistent laws, or to wipe them out altogether from the statute book. . . . The effect of article 13(1) is quite different from the effect of the expiry of a temporary statute or the repeal of a statute by a subsequent statute. As already explained, article 13(1) only has the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise of fundamental rights on and after the date of commencement of the Constitution. " It is true that the question which the Court was considering there was different from the one which we have now to decide in this appeal. But those observations embody a principle which is applicable to the present case as well. In effect, "void" in article 13(1) was construed as meaning, in the language of American jurists, "relatively void. Therefore both on the ground that a judicial determination does not operate as an amendment of the statute and, on the ground that a declaration that the impugned law is void under article 13(1) as repugnant to article 19(1) (f) merely renders it unenforceable, I am of the opinion that the decision in The State of Bombay and Another vs F. N. Balsara (supra) cannot be held to remove medicinal preparations from out of the purview of section 13(b). I therefore agree with the learned Judges (1) ; 643 of the Bombay High Court, though not for the reasons given by them, that the burden of establishing that. what was consumed was a medicinal preparation lies on the appellant. It was next contended that even if the burden lay on the appellant,to prove that he had taken a medicinal preparation, he must be held on the evidence to have discharged it because the doctor who examined him at 11 30 P.m., on the day of the occurrence stated in his evidence that he was coherent in his speech and could walk along a straight line, that the smelling of alcohol could be caused by oxidation and that the condition of the conjunctive in the eyes could result from street dust. It was argued that if the prosecution evidence did not exclude the possibility of the defence being true, then notwithstanding section 105 of the Evidence Act the burden which lay on the posecution of establishing the offence had not been discharged and reliance was placed on the decision in Woolmington vs Director of Public Prosecutions(1), and on Indian authorities wherein it was followed: Emperor vs U.Damapala(2); Parbhoo vs Emperor(1). In opposition to these authorities counsel for the respondent relied on the decision in Government of Bombay vs Sakur(4). The question is whether if the burden lay upon the appellant the conclusion of the learned Judges that it had not been discharged is on the evidence a reasonable one. If it is, this Court cannot interfere with it in an appeal under article 136. It must be noted that the appellant himself led no evidence in support of the plea. If at least the evidence which the prosecution adduced disclosed facts which would lend support to the defence, it might then have been open to the appellant to rely on them without himself having to adduce independent evidence but none such were elicited. The learned Judges in the Court below have approached the case from the correct standpoint and have discussed the entire evidence with a view to find whether on that the (1) ; (2) I.L.R. 14 Rang. (3) I.L.R. 194i All. (4) A.I.R. 1947 Bom. 38; 48 Bom. L.R. 616. 644 defence was reasonably probable. They held that the giving of coherent answers or walking in a straight line would only show that the appellant was not drunk at that time but would not show that he had not consumed liquor. They also remarked that the appellant could have informed both the sub inspector and the doctor who examined him that he had taken medicine in which case the police might have been in a position to find out whether there was a medicine bottle at his residence at that time. If the learned Judges were right in their view that the burden lay on the appellant, their finding that it had not been discharged is not one which is open to attack. It was also contended that the trial magistrate having acquitted the appellant, the presumption of innocence which the law raises in favour of the accused became reinforced and that there were no compelling reasons for the appellate Court to have reversed the order of acquittal. But the judgment of the trial Court was based on the view that the burden was on the prosecution to establish that the accused had not taken a medicinal preparation and when the learned Judges differed from that view, they had to review the evidence afresh and decide whether the appellant had discharged the burden and their finding on the question is not vitiated by any misdirection. In the result the conviction of the appellant under section 66(b) of the Bombay Prohibition Act must be confirmed. As regards the sentence of one month 's imprisonment passed on him, it appears that he has already served 22 days out of it. The justice of the case does not require that he should be again sent to jail. I would, therefore, reduce the sentence of imprisonment to the period already undergone. Subject to this modification, I am of the opinion that this appeal should be dismissed. By THE Court Having regard to the judgments of the majority, the appeal will be dismissed subject to the modification that the sentence imposed upon the appellant will be reduced to that already undergone. Bail bond will be cancelled. Appeal dismissed and sentence reduced. 645 [There was an application for review of the aforesaid Judgments under article 137 of the Constitution and the Hon 'ble Judges of the original Bench (Bhagwati, Jagannadhadas and Venkatarama Ayyar JJ.) passed the following order dated 28th April, 1954, referring the case for the opinion of the Constitution Bench.] The Order of the Court was pronounced by BHAGWATI J. We grant the review and reopen the case to enable us to obtain the opinion of a larger Bench on the constitutional question raised in the judgments previously delivered by us. Under proviso to article 145 of the Constitution, we refer the following question for the opinion of the Constitution Bench of the Court. "What is the effect of the declaration in The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act, 1949, is void, under article 13(1) of the Constitution, in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, on the ground that it infringes article 19(1) (f) of the Constitution?" On receipt of the opinion the case will be taken up for further consideration. [In pursuance of the above reference under the proviso to article 145(3) of the Constitution their Lordships of the Constitution Bench (Mehr Chand Mahajan C. J., Mukherjea, section R. Das, Vivian Bose and Ghulam Hasan JJ.) gave the following Opinion dated 23rd September, 1954.] MEHR CHAND MAHAJAN C.J. (Mukherjea, Vivian Bose and Ghulam Hasan JJ. concurring) A Bench of this Court hearing an appeal under the provisions of Chapter IV of the Constitution has referred, under article 145(3) of the Constitution, for the opinion of the Constitution Bench the following point: "What is the effect of the declaration in The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act, 1949, is void, under article 13(1) of the Constitution, in so far as it affects the consumption or use of liquid (1) 83 646 medicinal or toilet preparations containing alcohol, on ,the ground that it infringes article 19(1) (f) of the Constitution?" The facts giving rise to the reference are these: Shri Pesikaka, the appellant in the case, was at the relevant period, officiating Regional Transport Officer, Bombay Region. On the 29th May, 1951, at about 9 30 P.m., while proceeding in his jeep towards Colaba Bus Stand, he knocked down three persons. He was arrested by the police and taken to the police station and then to St. George 's Hospital. The doctor, found his breath smelling of alcohol, conjunctiva congested, pupils semi dilated and reacting to light, and speech coherent. He could behave himself and walk along a straight line. In the opinion of the doctor the appellant did not seem to be under the influence of alcohol, though he had taken alcohol in some form or other. On these facts. the appellant was prosecuted for having committed offences under section 338, Indian Penal Code (rash driving), as well as under section 66(b) of the Bombay Prohibition Act. In defence it was suggested that he had taken a medicinal preparation, B.G. Phos, and had not consumed any liquor, and that on the night in q question he had taken at about 9 or 9 15 p.m. after dinner a dose of B. G. Phos which contained 17 per cent. of alcohol according to its formula. The learned Presidency Magistrate acquitted the appellant on the finding that the prosecution had failed to establish his guilt under either of the sections under which he was charged. With regard. to the offence under section 66(b) of the Bombay Prohibition Act, it was observed that there were certain medicinal preparations which were allowed to be used by law, and there was no satisfactory evidence to show that the appellant had not consumed those tonics but only liquor for which he ought to have a permit. The State of Bombay appealed against the acquittal order to the High Court. The High Court confirmed the acquittal in regard to the charge under section 338, Indian Penal Code, but reversed the order acquitting him of the charge under section 66(b) of the Bombay Prohibition Act followed a decision of its own ' Division 647 Bench in Rangrao Bala Mane vs The State (supra) where it had been held that once it was proved by the prosecution that a person had drunk or consumed liquor without a permit, it was for that person to show that the liquor drunk by him was not prohibited liquor, but was alcohol or liquor which he was permitted by law to take, e.g., medicated alcohol. On this view of the law, on the merits of the case it was held that the appellant had failed to prove the existence of circum stances from which the Court could come to the conclusion that the liquor which was consumed by the appellant was not prohibited liquor but liquor which was excepted by the Bombay Prohibition Act from its operation. In the result the appellant was sentenced to one month 's rigorous imprisonment and a fine. of Rs. 500. Against this order an appeal was admitted in this Court by special leave and was heard by a Bench of the Court consisting of Bhagwati, Jagannadhadas and Venkatarama Ayyar JJ. on the 19th February, 1954. The learned Judges could not reach an una nimous decision and expressed different and divergent opinions. Bhagwati J. wanted to allow the appeal and quash the conviction. He was of the opinion that the onus rested on the prosecution to prove that the liquor consumed by the appellant was prohibited liquor under section 13(b) of the Act and that the prosecution had failed to prove this. This, in the opinion of the learned Judge, was the consequence of the declaration of unconstitutionality of a portion of section 13(b) by this Court in The State of Bombay and Another vs F. N. Balsara (supra). Venkatarama Ayyar dissented from this view. He was of the opinion that the decision in The State of Bombay and Another vs F. N. Balsara (supra) could not be held to have the effect of taking out medicinal preparations from the purview of section 13(b) and that its effect was merely to render that part of the section unenforceable and that the onus rested on the accused to establish the plea of unconstitutionality, and it could not be held established unless all the elements necessary to sustain such a plea were proved and the accused had therefore to make out as a fact that what he had 648 consumed was a medicinal 'preparation. On the merits of the case it was held that the accused had failed to discharge the burden that rested on him. In the result the conviction of the appellant by the High Court was upheld. Jagannadhadas J. agreed in the result reached by Venkatarama Ayyar J. but on different grounds. lie was of the opinion that the only way to give full effect to the judgment in The, State Bombay and Another vs F. N. Balsara (supra) was to engraft an appropriate exception or proviso upon section 13(b) in the light of that decision. He considered that The State of Bombay and Another vs F., N. Balsara (supra) did not import a new definition or re write section 13(b). It kept the section intact but treated the consumption of liquid or medicinal preparations containing alcohol as beyond its ambit and thus engrafted an exception or proviso on to section 13(b). On this view of the effect of Balsara 's decision it was held that the onus rested on the accused to establish that his case fell within the exception and he had failed to discharge that onus. In accordance with the opinion of the majority the conviction of the appellant, under section 66(b) of the Bombay Prohibition Act was confirmed and the appeal was dismissed but the sentence was reduced to that already undergone. On a petition for review being presented, the learned Judges granted the review on the 26th April, 1954, and reopened the case, to enable them to obtain the opinion of the Constitution Bench of this Court on the constitutional question formulated and mentioned above. For a proper appreciation of the question referred to us, it is necessary to set out what this Court decided In The State of Bombay and Another vs F. N. Balsara (supra). In that case the constitutional validity of the Bombay Prohibition Act (XXV of 1949) was challenged on different grounds. This attack substantially failed and the Act was maintained as it was passed, with the exception of 'a few provisions that were declared invalid. Inter alia, clause (b) of section 13 so far as it affected the consumption or use of such medicinal and toilet preparations containing alcohol was held invalid. 640 Section 2(24) of the Act defined a "liquor" to include spirits of wine, methylated spirits, wine, beer, toddy and all liquids consisting of or containing alcohol. Section 13(b) prohibits the use or consumption of liquor without a permit. Section 66(b) which is the penal section provides that "whoever in contravention of the provisions of this Act consumes, uses any intoxicant shall, on conviction, be punished. " The appellant was charged under section 66(b) of the Act for having used or consumed liquor the use of which was prohibited by section 13(b). In The State of Bombay and Another vs F. N. Balsara (supra), the part of the section that brought all liquids containing alcohol within its ambit was declared invalid and the section therefore, though it stood intact as enacted in respect of prohibited liquor up to the date of the coming into force of the Constitution and qua non citizens subsequently, a part of it was declared invalid, and so far as it concerned citizens, qua them that part of the section ceased to have legal effect. The problem now raised is; what is the effect of this partial declaration of the invalidity of section 13(b) on the case of a citizen prosecuted under section 66(b) for committing a breach of the provisions of the section after the coming into force of the Constitution. Our opinion on this question is that the effect of the declaration in The State of Bombay and Another vs F. N. Balsara (supra), that clause (b) of section 13 of the Bombay Prohibition Act is void under article 13(1) of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, is to render part of section 13(b) of the Bombay Prohibition Act, inoperative, ineffective and ineffectual and thus unenforceable. The part of the section which has been declared void has no legal force so far as citizens are concerned and it cannot be recognized as valid law for determining the rights of citizens. In other words, the ambit of the section stands narrowed down so far as its enforceability against citizens is concerned and no notice can be taken of the part of the section struck down in a prosecution for contravention of the provisions of that section, with 650 the consequence that in prosecutions against citizens of India under section 13(b), the offence of contravention of the section can only be proved if it is established that they have used or consumed liquor or an intoxicant which is prohibited by that part of the section which has been declared valid and enforceable and without reference to its unenforceable part. No notice at all should be taken of that other part as it has no relevance in such an enquiry, having no legal effect. In a criminal case unless the prosecution proves a contravention of a provision that is legally enforceable and valid, it cannot succeed. No onus is cast on the accused to prove that his case falls under that part of the section which has been held unenforceable. The High Court was in error in placing the onus on the accused to prove that he had consumed alcohol that could be consumed without a permit merely on proof that he was smelling of alcohol. In our judgment, that was not the correct approach to the question. The bare circumstance that a citizen accused of an offence under section 66(b) is smelling of alcohol is compatible both with his innocence as well as his guilt. It is a neutral circumstance. The smell of alcohol may be due to the fact that the accused had contravened the enforceable part of section 13(b) of the Prohibition Act. It may well be due also to the tact that he had taken alcohol which fell under the unenforceable and inoperative part of the section. That being so, it is the duty of the prosecution to prove that the alcohol of which he was smelling was such that it came within the category of prohibited alcohols and the onus was not discharged or shifted by merely proving a smell of alcohol. The onus thus cast on the prosecution may be light or heavy according to the circumstances of each case. The intensity of the smell itself may be such that it may negative its being of a permissible variety. Export evidence may prove that consumption in small doses of medicinal or other preparations permitted cannot produce the smell or a state of body or mind amounting to drunkenness. Be that as it may, the question is one of fact to be decided according to the circumstance of each case. It is open to the accused to prove in defence that what he 651 consumed was not prohibited alcohol, but failure of the defence to prove it cannot lead to his conviction unless it is established to the satisfaction of the Judge by the prosecution that the case comes within the enforceable part of section 13(b), contravention of which alone is made an offence under the provisions of section 66 of the Bombay Prohibition Act. Our reasons for this opinion are these. The meaning to be given to the expression "void" in article 13(1) is no longer res integra. It stands concluded by the majority decision in Kesava Madhava Menon vs The State of Bombay(,). The minority view there was that the word "void" had the same meaning as " repeal" and therefore a statute which came into clash with fundamental rights stood obliterated from the statute book altogether, and that such a statute was void ab initio. The majority however held that the word "void" in article 13(1), so far as existing laws were concerned, could not be held to obliterate them from the statute book, and could not make such laws void altogether, because in its opinion, article 13 had not been given any retrospective effect. The majority however held that after the coming into force of the Constitution the effect of article 13(1) on such repug nant laws was that it nullified them, and made them ineffectual and nugatory and devoid of any legal force or binding effect. It was further pointed out in one of the judgments representing the majority view, that the American rule that if a statute is repugnant to the Constitution the statute is void from its birth, has no application to cases concerning obligations incurred or rights accrued in accordance with an existing law that was constitutional in its inception, but that if any law was made after the 26th January, 1950, which was repugnant to the Constitution, then the same rule shall have to be followed in India as followed in America. The result therefore of this pronouncement is that the part of the section of an existing law which is un constitutional is not law, and is null and void. For determining the rights and obligations of citizens the part declared void should be notionally taken to be (I) (1951] S.C.R, 228. 652 obliterated. from the section for all intents and purposes, though it may remain written on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to 26th January, 1950, and also for the determination of rights of persons who have not been given fundamental rights by the Constitution. Thus, in this situation, there is no scope for introducing terms like "relatively void" coined by American Judges in construing a Constitution which is not drawn up in similar language and the implications of which are not quite familiar in this country. We are also not able to endorse the opinion expressed by our learned brother, Venkatarama Ayyar, that a declaration of unconstitutionality brought about by lack of legislative power stands on a different footing from a declaration of unconstitutionality brought about by reason of abridgement of fundamental rights. We think that it is not a correct proposition that constitutional provisions in Part III of our Constitution merely operate as a check on the exercise of legislative power. It is axiomatic that when the lawmaking power of a State is restricted by a written fundamental law, then any law enacted and opposed to the fundamental law is in excess of the legislative authority and is thus a nullity. Both these declarations of unconstitutionality go to the root of the power itself and there is no real distinction between them. They represent but two aspects of want of legislative power. The legislative power of Parliament and the State Legislatures as conferred by articles 245 and 246 of the Constitution stands curtailed by the fundamental rights chapter of Constitution. A mere reference to the provisions of article 13(2) and articles 245 and 246 is sufficient to indicate that there is no competency in Parliament or a State Legislature to make a law which comes info clash with Part III of the Constitution after the coming into force of the Constitution. Article 13(2) is in these terms : "The State shall not make any law which takes away or abridges; the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. " 653 This is a clear and unequivocal mandate of the funda mental law prohibiting the State from making any laws which come into conflict with Part III of the Constitution. The authority thus conferred by articles 245 and 246 to make laws subject wise in the different Legislatures is qualified by the declaration made in article 13(2). That power can only be exercised subject to the prohibition contained in article 13(2). On the construction of article 13(2) there was no divergence of opinion between the majority and the minority in Kesava Madhava Menon vs The State of Bombay (supra). It was only on the construction of article 13(1) that the difference arose because it was felt that that article could not retrospectively invalidate laws which when made were constitutional according to the Constitution then in force. Again, we are not able to subscribe to the view that in a criminal prosecution it is open to an accused person to waive his constitutional right and get convicted. A reference. to Cooley 's Constitutional Limitations, Vol. I, p. 371, makes the proposition clear. Therein the learned professor says that a party may consent to waive rights of property, but the trial and punishment for public offences are not within the province of individual consent or agreement. In our opinion, the doctrine of waiver enunciated by some American Judges in construing the American Constitution cannot be introduced in our Constitution without a fuller discussion of the matter. No inference in deciding the case should have been raised on the basis of such a theory. The learned Attorney General when questioned about the doctrine did not seem to be very enthusiastic about it. Without finally expressing an opinion on this question we are not for the moment convinced that this theory has any relevancy in construing the fundamental rights conferred by Part III of our Constitution. We think that the rights described as fundamental rights are a necessary consequence of the declaration in the preamble that the people of India have solemnly resolved to constitute India into a sovereign democratic republic and to secure to all its citizens justice, social, economic and political; 84 654 liberty of thought, expression, belief, faith and worship; equality of status and of opportunity. These fundamental rights have not been put in the Constitution merely for individual benefit, though ultimately they come into operation in considering individual rights. They have been put there as a matter of public policy and the doctrine of waiver can have no application to provisions of law which have been enacted as a matter of constitutional policy. Reference to some of the articles, inter alia, articles 15(1), 20, 21 makes the proposition quite plain. A citizen cannot get discrimination by telling the State "You can discriminate", or get convicted by waiving the protection given under articles 20 and 21. The learned Attorney General contended that the correct approach to the question was that there being a strong Presumption in favour of the constitutionality, of a statute, it is for those who assail it as unconstitutional to establish it, and therefore it was for the appellant to establish that the statute was. unconstitutional, and that unless he proved facts requisite for the constitutional invalidity of the conviction he could not succeed. We cannot agree that that is a correct way of judging criminal cases. The constitutional invalidity of a part of section 13(b) of the Bombay Prohibition Act having been declared by this Court, that part of the section ceased to have any legal effect in judging cases of citizens and had to be regarded as null and void in determining whether a citizen was guilty of an offence. Article 141 of the Constitution declares that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. In view of this clear enactment there is no scope in India for the application of the American doctrine enunciated by Willoughby ("The Constitution of the United States" Vol. I, P. 10), wherein the learned author states, "the declaration by a court of unconstitutionality of a statute which is in conflict with the Constitution affects the parties only and there is no judgment against the statute; that the opinion or reasons of the court may operate as a precedent for the determination of other similar cases, but it does 655 not strike the statute from the statute book; the parties to that suit are concluded by the judgment, but no one else is bound; a new litigant may bring a new suit, based on the very same statute, and the former decision cannot be pleaded as an estoppel, but can be relied on only as a precedent. " Once a statute is declared void under article 13(1) or 13(2) by this Court, that declaration has the force of law, and the statute so declared void is no longer law qua persons whose fundamental rights are thus infringed. In America there is no similar statutory provision and that being so, the doctrine enunciated by the learned author can have no application here. In this country once a law has been struck down as unconstitutional law by a Court, no notice can be taken of that law by any Court, and in every case an accused person need not start proving that the law is unconstitutional. The Court is not empowered to look at that part of the law which has been declared as void, and therefore there is no onus resting on the accused person to prove that the law that has already been declared unconstitutional is unconstitutional in that particular case as well. The Court has to take notice only of what the law of the land is, and convict the accused only if he contravenes the law of the land. Our learned brother, Jagannadhadas J., took the view that the only appropriate way of giving effect to the judgment in The State of Bombay and Another vs F. N. Balsara (supra) was by engrafting an exception or proviso to section 13(b) in the light of that decision and that the onus of proving the exception was on the accused person. This, in our judgment, is again not a true approach to the question. As pointed out by the learned Judge himself, the Court has no power to re write the section. It has to be kept intact. The Court therefore has no power to engraft an exception or a proviso on section 13(b) of the Bombay Prohibition Act. Apart from this circumstance it seems plain that unless there is a power to make a law inconsistent with the provisions of Part III of the Constitution, there can be no power to engraft an exception of the nature suggested by our brother. An exception or proviso 656 can only be engrafted for the purpose of excluding from the substantive part of the section certain matters which but for the proviso would be within it. But when there is no power to enact at all what is proposed to be embodied in the exception, there is no power to enact an exception by enacting a law which the Legislature is not competent to make. The State has no power to make a law abridging fundamental rights and therefore there is no power to engraft an exception by taking something out of a law which cannot be enacted. It is therefore difficult to treat what was declared void in The State of Bombay and Another vs F. N. Balsara (supra) as an exception to section 13(b) of the Bombay Prohibition Act and apply the rule enunciated in sec tion 105 of the Evidence Act to the case of the appellant. The only correct approach to the subject is to ignore the part of the section declared void by this Court in The State of Bombay and Another vs F. N. Balsara (supra) and see if the prosecution has succeeded in bringing the offence home to the accused on the part of the section that remains good law. With the observations made above the opinion in this case is returned to the Bench which originally heard the appeal. DAS J. I respectfully beg to differ from the opinion of the majority of this Court just delivered by my Lord the Chief Justice. It is, therefore, incumbent on me to formulate my answer to the question referred to this Constitution Bench and state shortly the reasons in support thereof. It is necessary at the outset to refer to the relevant statutory provisions bearing on the question. The appellant before us was prosecuted on a charge under section 13 read with section 66(b) of the Bombay Prohibition Act, 1949 (Act XXV of 1949). The relevant part of section 66(b) of the Act which is the penal section reads as follows: "66. Whoever in contravention of the provisions of this Act (a). . . . . (b)consumes, uses, possesses or transports any intoxicant or hemp, 657 (c). . . . . . . (d). . . . . . . shall, on conviction, be punished. . . " By section 2 (22) "intoxicant" is defined as meaning "any liquor, intoxicating drug, opium or a any Other substance which the State Government may, by notification in the Official Gazette, declare to be an intoxicant. " Read in the light of this definition consumption, use, etc., of "liquor" is within the mischief of this section. Further, it will be noticed that what is made punishable is not consumption, use, etc. of liquor simpliciter but consumption, use, etc., of liquor "in contravention of the provisions of this Act. " The prosecution, as the charge shows, relied on section 13 as being the provision of the Act in contravention of which the consumption, use, etc., was alleged to have been made by the appellant who was the accused person. That section is to be found in Chapter III beaded "Prohibitions". So far as it is material for our purpose, it runs thus: "13. No person shall (b) consume or use liquor; or (c) By section 2 (24) "liquor" is defined as including "(a) spirits of wine; denatured spirits, wine, beer, toddy and all liquids consisting of or containing alcohol; and (b) any other intoxicating substance which the State Government may, by notification in the Official Gazette, declare to be liquor for the purposes of this Act. " Therefore the prohibition of section 13(b)extends to the consumption or use of each and everyone of the above enumerated items which are included in the definition of "liquor". It follows that whoever consumes or uses any of these enumerated substances contravenes the provisions of section 13(b) and consumption or use of any of these substances in contravention of this provision is an offence punishable under section 66(b). 658 The Bombay Prohibition Act containing the above ,provisions came into force on the 20th May, 1949. It is conceded on all hands that it was a perfectly valid piece of legislation enacted well within its legislative competency by the then Bombay Legislative Assembly. Then came the Constitution of India on the 26th January, 1950. Article 19(1)(f) gives to all citizens the fundamental right to acquire, hold and dispose of property. By sub article(5) however,it is provided that nothing in clause(f) shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of the right conferred by sub clause (f) either in the interests of the general public or for the protection of the interests of any Scheduled Tribe. The Bombay Prohibition Act, 1949, was an existing law. By virtue of sub article (5) the right conferred by sub clause (f) cannot affect the operation of the Act in so far as it imposes reasonable restrictions of the kind mentioned in that sub article. If, however, this existing law imposes restrictions which are unreasonable then it becomes inconsistent with the right guaranteed to the citizens by article 19(1)(f) and consequently under article 13(1) "shall, to the extent of such inconsistency, be void". It is beyond all dispute that it is for the Court to judge whether the restrictions imposed by any existing law or any Part thereof on the fundamental rights of citizens are reasonable or unreasonable in the interest of the general public or for the protection of the interests of any Scheduled Tribe. If the Court holds that the restrictions are unreasonable then the Act or the part thereof which imposes such unreasonable restrictions comes into conflict and becomes inconsistent with the fundamental right con ferred on the citizens by article 19(1)(f) and is by article 13(1). rendered void, not in toto or for all purposes or for all persons but "to the extent of such inconsistency", i.e., to the extent it is inconsistent with the exercise of that fundamental right by the citizens. This is plainly the position, as I see it. Shortly after the commencement of the Constitution the validity of the Bombay Prohibition Act was 659 challenged in its entirety. One F. N. Balsara, claiming to be an Indian citizen prayed to the High Court, at Bombay, infer alia, for a writ of mandamus against the State of Bombay and the Prohibition Commissioner ordering them (i) to forbear from enforcing against him the provisions of the Prohibition Act and (ii) to allow him to exercise his right to possess, consume and use certain articles, namely, whisky, brandy, wine, beer, medicated wine, eau de cologne, lavender water and medicinal preparations containing alcohol. The High Court, agreeing with some of the petitioner 's contentions and disagreeing with others, declared some of the provisions of the Act to be invalid and the rest to be valid. Both the State of Bombay and the petitioner, Balsara, appealed to this Court after obtaining a certificate from the High Court under article 132(1) of the Constitution. The judgment of this Court in those appeals was pronounced on the 25th May, 1951. See The State of Bombay and Another vs F. N. Balsara (supra). So far as it is material for our present purpose this Court held (1) that under entry 31 of List II of the Seventh Schedule to the Government of India Act, 1935, the Provincial Legislatures had the power to make laws with respect to "intoxicating liquors, that is to say, the 'production, manufacture, possession, transport, purchase and sale of intoxicating liquors" and there was, therefore, no legislative incompetency in the Bombay Legislature to enact the Bombay Prohibition Act, 1949; (2) that the word "liquor" as understood in India at the time of the Government of India Act, 1935, covered not only those alcoholic liquids which are generally used as beverages and produce intoxication, but also liquids containing alcohol and, therefore, the definition of "liquor" contained in section 2(24) of the Act was not ultra vires, and (3) that the restrictions imposed by sections 12 and 13 of the Act on the possession, sale, use and consumption of liquor were not reasonable restrictions on the fundamental right guaranteed by article 19(1)(f), so far as medicinal and toilet preparations containing 660 alcohol were concerned and that the said sections were invalid so far as they prohibited the possession, sale, use. and consumption of these articles, but that those sections were not wholly void on this ground as the earlier categories mentioned in the definition of liquor, namely, spirits of wine, methylated spirit, wine, beer and toddy were distinctly separable items which were easily severable from the last category, namely, all liquors containing alcohol and further that the last category of "all liquids consisting of or containing alcohol" were again capable of being split up in several sub categories, e.g., liquid medicinal and toilet preparations containing alcohol and the restrictions on the possession, sale, use and consumption of the earlier categories and all liquids containing alcohol other than medicinal and toilet preparations were not unreasonable. In the result this Court declared certain provisions of the Act invalid. Amongst the provisions declared invalid was section 13(b), but it was so declared only "so far as it affects the consumption or use of such medicinal and toilet preparations containing alcohol." This declaration, no doubt, was made pursuant to article 13(1) of the Constitution. The very foundation of this declaration was that the prohibition imposed by this section against the consumption or use of liquid medicinal or toilet preparations was an unreasonable restriction on the exercise of the fundamental right of citizens to acquire, hold and dispose of property which in that case was liquid medicinal or toilet preparations containing alcohol ' The law thus declared by this Court is, by virtue of article 141 of the Constitution, binding on all Courts within the territory of India. The offence with which the appellant was charged was alleged to have been committed on the 29th May, 1951, that is to say, four days after this Court pronounced its judgment in The State of Bombay and Another vs F. N. Balsara (supra). On the 22nd April, 1952, the learned Presidency Magistrate acquitted the appellant of that charge with the following remark: "The evidence also does not go to show conclusively that the accused had consumed alcohol without a permit There are. certain medicinal preparations which are 661 allowed to be used by law and there must be satisfactory evidence to show that the accused has not consumed those tonics but only liquor for which he ought to have a permit. " The State appealed to the High Court against this order of acquittal. The High Court following its own earlier decision in Rangrao Bala, Mane vs State (supra) reversed the order of the Presidency Magistrate. The appellant came up to this Court in appeal after having obtained special leave from this Court. The appeal came up for hearing before a Division Bench of this Court consisting of Bhagwati, Jagannadhadas and Venkatarama Ayyar JJ. Bhagwati J. clearly and, if I may respectfully say so, correctly accepted the position that the declaration made by this Court in The State of Bombay and Another vs F. N. Balsara (supra) "was a judicial pronouncement and that even though under article 141 of the Constitution the law declared by this Court was binding on all Courts in India and is to be the law of the land the effect of that declaration was not to enact a statutory provision or to alter or amend section 13(b) of the Act." Having accepted this position the learned Judge logically and, again I say with respect, correctly repelled the argu ment that the result of the decision in The State of Bombay and Another vs F. N. Balsara (supra) was to introduce, not in terms but in effect, an exception or proviso to section 13(b) and that consequently the onus lay on the appellant to prove the existence of circumstances bringing his case within the exception or proviso as laid down in section 105 of the Evidence Act. The learned Judge, however, observed: "The only effect of the declaration was that the prohibition enacted in section 13(b) was to be enforce. able in regard to the consumption or use of validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and 85 662 non toilet liquid preparations consisting of or containing alcohol. The prohibition which was enacted in section 13(b) against the consumption or use of liquor could in the light of the declaration made by this Court only refer to the consumption or use of validly prohibited liquor, i.e., spirits of wine, methylated spirits, wine, beer, toddy and all non medicinal and non toilet liquid preparations consisting of or containing alcohol, and that was the only prohibition which could be enforced under the section 13(b) and the penal section 66(b). " The learned Judge proceeded to illustrate how the effect of the declaration could be worked out: "The effect of the declaration on the provisions of section 13(b) could be worked out in any of the following modes: No person shall consume or use spirits of wine, methylated spirits, wine, beer, toddy and all liquids consisting of or containing alcohol as are not or which are not or other than or save or except or provided they are not or but shall not include liquid medicinal or toilet preparations containing alcohol or all non medicinal and non toilet liquid preparations consisting of or containing alcohol. When these several interpretations were possible in regard to the effect of the declaration on the provisions of section,13(b), where would be the justification for interpreting the effect of the declaration to be that of grafting an exception or proviso on section 13(b) so as to attract the operation of the provisions of section 105 of the Evidence Act9 It is clear that where several interpretations are possible, the Court should adopt an interpretation favourable to the accused, rather than one which casts an extra or special burden upon him, which if at all should be done by clear and unequivocal provision in that behalf rather than in this indirect manner. (See also In re Kanakasabai Pillai)(1). " With the utmost respect to the learned Judge, the modes of working out the effect of the declaration indicated by him clearly involve the acceptance of one or other of the different forms of amendment of the section, although according to his views expressed (1) A.I. R. 1940 Mad. I. 663 earlier in his judgment the effect of the declaration was not to alter or amend section 13(b) of the Act. Venkatarama Ayyar J., however, took the view that as the Court had no legislative function and as judicial decisions did not amend or add to a statute but merely interpreted the law and declared whether it was valid or not, the result of a judicial declaration that a statute or any part thereof was not valid was only that no effect could be given to it in a Court of law but that it did not mean that the statute or the part thereof declared void had gone out of the statute book after the Court 's decision. He also held that section 105 of the Evidence Act would not in terms apply as article 19(1)(f) could not be said to form an exception to section 13(b). He rested his decision on the ground that the inclusive definition of "liquor" adopted in section 2(24) of the Act having been held to be within entry 31 in List II of the Seventh Schedule to the Government of India Act, 1935, and, therefore, valid, that meaning should be its connotation in section 13(b) as well and that under the section so read the offence would be established as soon as consumption or use of "liquor" so defined was established and that the plea that what was consumed was medicinal preparation containing alcohol was really a plea that the section, in so far as it prohibits consumption or use of liquid medicinal or toilet preparations containing alcohol, infringed the citizens ' fundamental right under article 19(1)(f) and was, therefore, unconstitutional as declared by this Court. His view was that it was for those who pleaded unconstitutionality to establish all the elements which would go to establish that plea. Jagannadhadas J. felt inclined to agree with the view of Venkatarama Ayyar J. but as that aspect of the matter had not been fully argued he passed on to the argument canvassed before them, namely, that the part of the section declared invalid went out of the Act and the Act stood appropriately amended pro tanto. This, according to the learned Judge, involved, that the word "liquor" stood amended as "prohibited liquor" or that it was to be understood with this limited connotation. This argument he could not accept. His view was that what the decision in The, State of Bombay and Another vs 664 F. N. Balsara (supra) had done was not to authorise ,the importation of a new definition or to rewrite the section but, leaving the section intact, to treat the consumption or use of liquid medicinal or toilet preparations containing alcohol as taken out of the ambit of the section itself as the prohibition thereof was unconstitutional. This, according to the learned Judge, could only be done by grafting an appropriate exception or proviso into section 13(b). The result of the hearing before that Bench was that Bhagwati J. held that the appeal should be allowed but Jagannadhadas and Venkatarama Ayyar JJ. were for dismissing the appeal. An application for review was, however, made on the ground that the judgments of the learned Judges involved a decision on constitutional matters which that Bench had no jurisdiction to decide but which could only be dealt with by a Constitution Bench. By an order made on the 26th April, 1954, under the proviso to sub article (3) of article 145 that Bench accordingly referred the following question for the opinion of the Constitution Bench, namely: "What is the effect of the declaration in The State of Bombay and Another vs F. N. Balsara (supra) that clause (b) of section 13 of the Bombay Prohibition Act, 1949, is void, under article 13(1) of the Constitution, in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, on the ground that it infringes article 19(1)(f) of the Constitution?" The effect of a judicial declaration of a statute as unconstitutional has been stated by Field J. in Norton vs Shelby County(1) to be that the statute is no law and that, in legal contemplation, it is to be treated as inoperative as though it had never been passed. Cooley, in his Constitutional Limitations, Volume 1, page 382, has adopted this dictum of Field J. and expressed the view that where a statute is adjudged to be unconstitutional it is as if it had never been. I am unable to accept the proposition so widely stated. Even American text book writers have felt that the statement of (1) ; ; 665 Field J. needs to be somewhat qualified. (See, Willoughby on the Constitution of the United States, Volume 1, page 11 and Willis on Constitutional Law, page 890). The dictum, it will be observed, related to a statute which was made after the commencement of the Constitution and which was in violation of the provisions of the Constitution. It cannot obviously apply to a case where a statute which was enacted before the commencement of the Constitution is declared to have become unconstitutional and void. In such a situation it cannot be said that the judicial declaration means that such a statute is void for all purposes including past transactions that took place before the commencement of the Constitution. The Bombay Act was an existing law and the declaration in The State of Bombay and Another vs F. N. Balsara (supra) cannot and does not affect anything done under the Act prior to the commencement of the Constitution. It will be further noticed that the decision in The State of Bombay and Another vs F. N. Balsara (supra) does not declare the entire Act or even the entire section 13(b) to be void. It only declares void a part of section 13(b), that is to say only that part of it which prohibits a citizen from consuming or using only liquid medicinal or toilet preparations containing alcohol. The section, in its entirety, is still enforceable against all noncitizens. Even as against citizens the prohibition of the section with respect to the consumption or use of the earlier categories of liquor, namely, "spirits of wine, denatured spirits, wine, beer, toddy" ' is fully operative. Moreover, even the prohibition against consumption or use of the last category of liquor, namely, "all liquids consisting of or containing alcohol" remains operative even as against citizens except in so far as it prohibits them from consuming or using liquid medicinal or toilet preparations containing alcohol. In such a situation the passages from Cooley on Constitutional Limitations and the dictum of Field J. can have no application. This is put beyond controversy by the decision of this Court in Keshava Madhava Menon vs The State of Bombay (supra). The Bombay Act being an existing law, the declaration made by 666 this Court in The State of Bombay and Another vs F. N. Balsara (supra) must be taken to have been made under article 13(1). The article does not in terms make the existing laws which are inconsistent with the fundamental rights void ab initio or for all purposes. The declaration in The State of Bombay and Another vs F. N. Balsara (supra), as I understand it, is that the prohibition contained in section 13(b) against the consumption or use of one particular variety of liquid Consisting of or containing alcohol, namely, liquid medicinal or toilet preparations containing alcohol imposes an unreasonable restriction on the exercise of a citizen 's fundamental right under article 19(1) (f) and is, therefore, unconstitutional and as such void to that extent. The result of it is that the prohibi tion of that part of section 13(b) will be ineffective against and inapplicable to a citizen who consumes or uses liquid medicinal or toilet preparations containing alcohol. No part of the section is obliterated or scratched out from the statute book or in any way altered or amended, for that is not the function of the Court. The judicial declaration that a art of the section is unconstitutional and void only nullifies that offending Part in the sense that it renders that part ineffective against and inapplicable to a citizen who consumes or uses liquid medicinal or toilet preparations containing alcohol in exercise of his fundamental right. In other words, when a citizen is charged with an offence under section 66(b) read with section 13(b) he will be entitled to say "I am a citizen of India. I have consumed or used liquid medicinal or toilet preparations containing alcohol. I am entitled to do so under article 19(1) (f). The Supreme Court has in The State, of Bombay and Another vs F. N. Balsara (supra) declared the law, namely, that in such cir cumstances the prohibition of section 13(b) is void as against me with respect to such consumption or use of liquid medicinal or toilet preparations containing alcohol " This plea, if substantiated, will be a complete answer to the charge. In short, the judicial declaration serves to provide a defence to a citizen who has consumed or used liquid medicinal or toilet preparations 667 containing alcohol. Test the matter in this way. Suppose after the declaration a person is charged with an offence under section 66(b) read with section 13(b) and in such a case the prosecution proves that the accused has taken alcohol in some form or other, as is the evidence of the doctor in the present case. What is to happen if nothing further is proved by either party ? Surely, in such a situation a conviction must follow. If the accused person desires to avail himself of the benefit of the declaration in The State of Bombay and Another vs F. N. Balsara (supra), surely he must prove first of all that he is a citizen. The onus of this clearly lies on the accused. The next question is whether that is the only onus that lies on the accused. To my mind he has to allege and prove not only that he is a citizen but that he has consumed or used liquid medicinal or toilet preparations containing alcohol and it is only on such proof that he can claim the benefit of the declaration of law made in The State of Bombay and Another vs F. N. Balsara (supra) and establish his defence. The very basis of that declaration is that a citizen has the fundamental right to consume or use liquid medicinal or toilet preparations containing alcohol and section 13(b) in so far as it prohibits such consumption or use imposes an unreasonable restriction on his fundamental right under article 19(1) (f). In other words, the on us is on him to establish the situation or circumstances in which that part of the section which has been declared to be void should not be applicable to him. If he establishes the fact that he is a citizen and that he has consumed or used such liquid, then the declaration in The State of Bombay and Another vs F. N. Balsara (supra) will establish the law, namely, that the prohibition of section 13(b) and the penalty under section 66(b) are not applicable to him being inconsistent with his fundamental right. To say that after the judicial pronouncement the section should be read qua a citizen as if liquid medicinal or toilet preparations are not there or that the ambit of the offence has narrowed down to a prohibition against the consumption or use of only the earlier categories of liquor set forth in the definition is, to my mind, 868 tantamount to saying, covertly if not openly , that the judicial pronouncement has to that extent amended the section. To say that after the declaration the offence has become limited to the consumption or use of prohibited liquor is to alter or amend the definition of liquor although it has been held to be valid. I repeat that it is not within the competence of a Court to alter or amend a statute and that the effect of the declaration made by this Court in The State of Bombay and Another vs F. N. Balsara (supra) is not to lift or take away or add anything out of or to the section at all. What it does is to declare, as a matter of law, that in a certain situation, namely, when liquid medicinal or toilet preparations containing alcohol are consumed or used, a certain part of section 13(b), that is to say, that part of it which prohibits the consumption or use of liquid medicinal or toilet preparations containing alcohol, shall be void qua a particular class of persons, namely, citizens. In other words, the declaration in The State Of Bombay and Another vs F. N. Balsara (supra) serves to provide a defence only to a citizen who has consumed or used liquid medicinal or toilet preparations. It is for the accused person, who seeks to ward off the applicability of the section to him by having resort to the declaration made in The State of Bombay and Another vs F. N. Balsara (supra), to establish the situations or circumstances on which that declaration is founded. In short a person who challenges the validity of the section on the ground of its unconstitutionality has the advantage of the declaration as a matter of law but the facts on which that declaration is based have nevertheless to be established in each particular case where the declaration is sought to be availed of. I answer the question referred to us accordingly. It has been strenuously urged before us, as before the Division Bench, that such a view as to the effect of this Court 's declaration will run counter to the well established principle of criminal jurisprudence that the onus of establishing the charge is always on the prosecution, for it will throw the burden of proof on the accused person. This argument has considerably impressed Bhagwati J. and has also weighed with my 669 learned colleagues on the present Bench. It is, however, not unusual in certain classes of cases or in certain circumstances to throw the onus of proof of a defence on the accused person. Section 105 of the Evidence Act is an instance in point. Section 114, ill. (a) of the same Act is another provision to which reference may be made. Section 103 of this very Bombay Prohibition Act raises a very strong presumption of guilt and throws the burden on the accused to prove his innocence in certain cases. Take section 96 of the Indian, Penal Code which says " Nothing is an offence which is done in the exercise of the right of private defence. " Nobody will contend that this section requires the prosecution to prove that the acts constituting the offence charged against the accused were not done in the exercise of the right of private defence. It is obvious that this section serves to provide the accused person with a defence and if the accused person can prove that he did the acts complained of in defence of his person or property and if the acts were reasonable in the circumstances of the case he establishes his defence. It is not necessary to multiply instances. It seems to me that the declaration in The State of Bombay and Another vs F. N. Balsara (supra) gives a citizen who has consumed or used liquid medicinal or toilet preparations containing alcohol a defence to a charge under section 66(b) read with section 13(b) of the Bombay Prohibition Act, but it is for the accused person to prove the facts on which that declaration of law is founded. I see no hardship whatever in this, for the requisite facts are within his special knowledge. To adopt the contrary view will be to ignore the sound principle well established in law that a judicial declaration of invalidity does not repeal, alter or amend a statute. As I hold that the declaration does not operate as an amendment of the section, I must logically hold, 'with respect to the view of Jagannadhadas J. that the declaration cannot be treated as having grafted an exception or proviso to section 13(b). 86 670 In coming to the conclusion that I have, I have in a large measure found myself in agreement with the views of Venkatarama Ayyar J. on that part of the ' case. 1, however, desire to guard myself against being understood to agree with the rest of the observations to be found in his judgment, particularly those relating to waiver of unconstitutionality, the fundamental rights being a mere check on legislative power or the effect of the declaration under article 13(1) being "relatively void. " On those topics prefer to express no opinion on this occasion. BY THE COURT. The reference is answered in accordance with the opinion of the majority. [After the opinion of the Constitution Bench the following Order, dated 24th September, 1954, was pronounced by a Bench composed of Bhagwati, Jagannadhadas and Venkatarama Ayyar JJ. who had originally heard the appeal.] The Order of the Court was pronounced by BHAGWATI J. We have received the opinion expressed by the Constitution Bench. According to that opinion, which is expressed in the majority judgment, the onus lay on the prosecution to prove that the alcohol of which the accused was smelling was such that it came within the category of prohibited alcohols. We have heard the learned Attorney General on the question whether that onus has been discharged and he has frankly conceded that on the material placed before us it cannot be urged that that onus has been discharged by the prosecution. The result, therefore, is that the conviction of the appellant will be quashed and the fine, if paid, will be refunded. Conviction set aside.

Held (Per MEHR CHAND MAHAJAN C. J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ., section R. DAS J. dissenting) that the effect of the declaration in the case of The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act (XXV of 1949) is void under article 13(1) of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, is to render part of section 13(b) of the Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable. In view of the constitutional invalidity of a part of section 13(b) of the Bombay Prohibition Act having been declared void by the Supreme Court, that part of the section ceased to have legal effect in judging cases of citizens and must be regarded as null and void in determining whether a citizen was guilty of an offence. The clear enactment of article 141 of the Constitution leaves no scope in India for the application of the American doctrine that "the declaration by a court of unconstitutionality of a statute which is in conflict with the Constitution affects the parties only and there is no judgment against the statute and it does not strike the statute from the statute book. " In India, on the other hand, once a law has been struck down as unconstitutional by the Supreme Court, no notice can be taken of it by any Court because after it is declared as unconstitutional it is no longer law and is null and void. The bare circumstance that a citizen accused of an offence under section 66(b) of the Bombay Prohibition Act is smelling of alcohol is compatible both with his innocence as well as his guilt. The smell of alcohol may be due to the fact that the accused had contravened the enforceable part of section 13(b) of the Bombay Prohibition Act or it may well be due to the fact that he had taken alcohol which fell under the unenforceable and inoperative part of the section. Therefore the onus was laid on the prosecution to prove that the (I) ; 79 614 alcohol of which he was smelling came under the category of prohibited alcohol within the meaning of the enforceable part of section 13(b). Per section R. DAS J. : The declaration in the case of The State of Bombay and Another vs F. N. Balsara gives a citizen who has consumed or used liquid medicinal or toilet preparations a defence to a charge under section 66(b) read with section 13(b) of the Bombay Prohibition Act and it is for the accused person to prove the facts on which that declaration of law is based. The State of Bombay and Another vs F. N. Balsara ([1951] S.C.R. 682) explained. Kesava Madhava Menon vs The State of Bombay ([1951] S.C.R. 228) followed. rangarao Bala Maize vs The State ([19511 54 Bom. L. R. 325), In re Kanakasabai Pillai (A.I.R. 1940 Mad. 1) and Norton vs Shelby County ; referred to.

16k+

Appeals Nos. 519 to 521 of 1958. Appeal by special leave from the decision dated January 4,1955, of the Labour Appellate Tribunal of India, Calcutta, in Appeals Nos. 69152 and Cal. 70/52. AND Civil Appeal No. 521 of 1958. Appeal by special leave from the decision dated January 4, 1955, of the Labour Appellate Tribunal of India, Calcutta in Appeal No. Cal 70/52. Ram Lal Anand and Naunit Lal, for the appellant in C.A. No. 519 of 58. H. N. Sanyal, Additional Solicitor General of India, Ram Lal Anand and Naunit Lal, for the appellants in C.A. No. 520/58 and respondents in C.A. NO. 521 of 58. M. C. Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General, M. K. Ramamurthi, Syed Mahummud, B. K. Garg, Miss. A. B. Varma and Janardan Sharma, for respondent No. 1 in C.A. Nos. 519 and 520 of 58 and appellant in C.A. No. 521 of 58. Hardyal Hardy and M. B. Krishna Pillai, for respondent No. 2 in C.As, Nos. 519 & 520 of 58. September 24. The judgment of Sinha and Gajendragadkar, JJ., was delivered by Gajendragadkar, J. Subba Rao, J., delivered a separate judgment. J.GAJENDRAGADKAR J. These three appeals arise out of an industrial dispute between the Punjab National Bank, Ltd. (hereinafter called the Bank) and two sets of its employees represented by the. All India Punjab National Bank Employees ' Federation (hereinafter called the Federation) and the U.P. Bank Employees ' Union hereinafter called the Union) respectively. 811 On July 2, 1951, this dispute was referred by the Central Government for adjudication to the industrial tribunal of which Mr. A. N. Sen, a retired Judge of,, the Calcutta High Court, was the sole member. It raised two issues. The first was whether the 150 workmen mentioned in Sch. 11 attached to the reference had been wrongfully dismissed by the Bank, and the second had reference to the claim for reinstatement and payment of wages and allowances from the date of dismissal to the date of reinstatement. The reference thus made has gone through a long and protracted career and the final decision of the dispute would be reached after we dispose of the present appeals. In order to appreciate the points raised for our decision in these appeals it is necessary to indicate briefly at the outset the salient points of controversy between the parties, the findings made by the original tribunal, the conclusions reached by the Labour Appellate Tribunal in its interlocutory and final judgments and the decision of this Court in the appeal which had been brought before it by the Bank against the interlocutory judgment of the Labour Appellate Tribunal. The 150 employees, whose dismissal has given rise to the present dispute are spread over several branches of the Bank. 52 of them work at its head office in Delhi, 15 in Bombay, 73 in East Punjab and 10 in U.P. 140 workmen in the first three areas are represented by the Federation while the last 10 in U.P. are represented by the Union. All of these employees took part in strike which, according to the Bank, were illegal. The strikes in which the two respective groups of workmen took part were, however, for different reasons. The strike in which the Federation took part was the result of the suspension by the Bank of its typist Sabharwal employed in the Delhi Branch of the Bank on April 17, 1951. It appears that Sabharwal, who was the Secretary of the Punjab National Bank Employees ' Union, Delhi, had applied for leave for seven days on April 3, 1951, but his application was rejected; even so he absented himself from duty and went to Bombay. As soon as he resumed his duties on 812 April 14, 1951, he was supplied with a written chargesheet for absence without leave which he refused to accept. It was then sent to him by registered post, and on April 17 he was suspended. This suspension was followed by an immediate pen down strike at the head office of the Delhi Branch subsequent to which the Bank suspended 60 other employees. This led to a general strike in Delhi and many other branches and it commenced at different dates from April 18 to 20, 1951. On April 21 22, 1951, the Bank issued notices calling upon all striking members of the staff to report for duty by 10 a. m. on April 24, 1951, and it warned them that if they did not comply with the notice it would be taken that they had voluntarily ceased to be its employees and their services would be deemed to have terminated from that date. This was followed by another notice on April 24 which announced that the strikers who had failed to report for duty as aforesaid had ceased to be the employees of the Bank from April 24, 1951. An option was, however, given to the strikers who were still willing to rejoin duty to apply in that behalf and explain their action in staying away. It is common ground that the 140 employees represented by the Federation who had taken part in the strike were dismissed by the Bank for absence due to the strike. That is the genesis of the dispute between the Bank and the Federation in relation to the 140 employees of the Bank. The strike in which the remaining 10 employees of the Bank from the U.P. branches are concerned commenced on April 23, 1951. This strike was in pursuance of the strike notice served by the Union on the Bank on April 22, 1951. This pen down strike was a part of the general strike which affected not only the Bank but also the Allahabad Bank and other banks in the U.P. region. The Regional Labour Commissioner of the U.P. Government who intervened suggested that the general strike should be called off and recommended that some of the demands made by the strikers should be referred to the industrial tribunal for adjudication; in accordance with this request, on April 30, 1951, the strike committee decided to call off the strike and 813 Advised workmen to join duty from May Is 1951. This advice, however, did not reach all the branches in time with the result that some of the employees of the Bank offered to resume work on May 3,1951. The other banks in the U.P. region took back their employees who rejoined on May 3, but the Bank refused to take back its employees on the ground that they ' had not offered to rejoin on or before the date fixed; and so it proceeded to dismiss them. The dismissal of the said 10 employees is also the subject matter of the present reference. That is bow the reference is concerned with the dismissal of 150 employees of the Bank in all. The strikes in question which affected the head office and the large number of branches of the Bank operating in more than one State and a very large number of its employees caused public concern, and so the Prime Minister and the Labour Department of the Central Government thought it necessary to intervene; and a conference was arranged at New Delhi between the officers of the Government and the Bank. To this conference the representatives of the Federation or the Union were, however, not invited. This conference led to an agreement as a result of which the Bank undertook to reinstate all its employees who had taken part in the strikes except those to whose reinstatement it had " positive objections". This, however, was subject to the reservation that the number of such employees was not to exceed 150 and that their case, , would be referred by the Central Government for adjudication by a tribunal. This agreement was the result of several meetings between the representatives of the Bank and the Labour Department of the Central Government and it was reached on or about May 9, 1951. Thereafter the head office of the Bank sent a circular letter to all its branches calling for names of the employees who according to the branch managers could not be considered for reinstatement. The list of such employees received by the head office from the respective managers of its branches was examined by the head office and the Bank then compiled the 103 814 list of 150 workmen whom it was not prepared to reinstate. This list was in due course communicated by the Bank to the Central Government; and in pursuance of the agreement aforesaid the Central Government referred the dispute in respect of the said 150 workmen for adjudication before the tribunal by its notification issued on July 2, 1951. Before the tribunal the case for the Federation and the Union was that the refusal of the Bank to take back the 150 workmen in question was a part of the concerted and deliberate plan adopted by the management of the Bank for victimising the President, the Vice President, the General Secretary and Secretaries and Treasurer of the Federation and of the working committees of the different trade unions of workers and the members of the strike committees, and it showed that the sole object of the Bank in refusing to take back those employees was to teach a lesson to the Federation and the Union and to penalise all active trade union workers who supported the cause of the employees. On the other hand, the Bank contended that the strikes in which the 150 employees had participated were illegal and had been resorted to not with a view to obtain relief for the employees but with a view to paralyse the business of the Bank and to scare away its customers. The Bank further alleged that the said 150 employees were guilty of " unpardonable acts of violence, intimidation, coercion and victimisation. " The tribunal gave two interim awards by which it directed the Bank to make some payments to the 150 employees by way of allowance pending the final disposal of the dispute. On February 2, 1952, the tribunal pronounced its final award. It held that the strikes were illegal and that the ' Bank was entitled to dismiss the employees solely on the ground that the said employees had participated in an illegal strike. On this view the tribunal did not think it necessary to allow evidence to be given on the question as to whether some of the strikers were guilty of specific subversive or violent acts. It also did not allow 815 evidence to be led by workmen in support of their plea that their dismissal was the result of victimisation. It decided the dispute on the sole ground, that the strikes were illegal and participation in illegal strikes justified the dismissal of the employees. Even so the tribunal made an order directing the Bank to pay certain amounts to the said employees on compassionate grounds. The direction issued by the tribunal for the payment of the said amount was challenged by the Bank by its appeal (No. 25 of 1952) before the Labour Appellate Tribunal (hereinafter called the appellate tribunal), whereas the decision of the tribunal that the 150 employees were not entitled to reinstatement was challenged by the two sets of employees by two different appeals (Nos. 69 and 70 of 1952). The appellate tribunal recorded its interlocutary decision on September 22, 1952. As a result of this decision the dispute was set down for further hearing on the points indicated by it. It was urged by the Bank before the appellate tribunal as a preliminary objection that the appeals preferred by the employees were incompetent. This objection was overruled. The appellate tribunal then proceeded to consider two questions of law, (1) whether an employer has the right to dismiss a workman for his absence from duty by reason of his mere participation in an illegal strike, and (2) if he has, can the tribunal scrutinise the exercise of that right and grant relief to such a workman when it comes to the conclusion that the right has been exercised capriciously or by unfair labour practice. The appellate tribunal held that the strike started by the Federation was illegal under section 23 (b) read with section 24 (1) of the (14 of 1947) (herein after called the Act). It appears that on February 21, 1950, an industrial dispute between the Bank and the Federation had been referred to the arbitration of Mr. Campbell Puri, and whilst the proceedings in the said reference were pending before the tribunal the strike was commenced on or about April 17, 1951. That is why the strike was illegal. The appellate tribunal, however, held that, even if mere participation 816 in an illegal strike by workmen is assumed to give the employer certain rights against the striking workmen, the employer can waive these rights, that is to say, rafrain from exercising those rights against the workmen. According to the appellate tribunal such waiver or relinquishment can be inferred from conduct, and it thought that the conduct of the Bank evidenced by the agreement which it reached with the Central Government on or about May 9, 1951, unambi guously proved that it had waived or relinquished its rights to take any penal action against its employees merely for their participation in the illegal strike. In other words, the effect of the findings of the appellate tribunal was that, though the strike was illegal, by its conduct the Bank had precluded itself from exercising its alleged right to dismiss its employees for their participation in such an illegal strike. The appellate tribunal also considered the general question of law as to whether participation in an illegal strike can be said to deserve dismissal of the striking workmen. It took the view that an illegal strike absolves the liability of the employer to pay to its employees wages during the period of absence of the striking workmen, but that it cannot be stated as a general proposition that participation in an illegal strike would by itself necessarily involve the penalty of dismissal. The Bank attempted to justify the dismissal in the present case by urging that the 150 employees were guilty of violent or subversive acts but the appellate tribunal held that it was not open to the Bank at that stage to plead in justification of their dismissal any such acts of violence or subversive acts. " There is abundant authority ", observed the appellate, tribunal, " for the proposition that an employer can justify before the tribunal a dismissal only on the ground on which he purported to dismiss him and not a ground different from it ". That is why in the end the appellate tribunal held that the dismissals were wrongful. The appellate tribunal had no doubt that mere participation by a workman in an illegal strike or his absence due to such participation does not entitle an employer to dismiss him and that it is 817 open to a tribunal to order reinstatement in a proper case. Having reached this conclusion the appellate tribunal observed that "though in the case of wrongful dismissals the normal rule is that the employees wrongfully dismissed should be reinstated, it would nevertheless be necessary to consider the question of reinstatement in the case of each individual employee in the light of requirements of social justice and fair play for which the employee claims and industrial peace and discipline which the employer emphasizes. " In order to decide the cases of the several employees from this twofold point of view the appellate tribunal thought it was necessary to allow the parties to lead additional evidence on relevant points. The employees wanted to lead evidence in support of their case of victimisation and they were allowed to do so by the appellate tribunal. The Bank wanted to lead evidence on five points. The appellate tribunal held that evidence on items (3) and (5) would be irrelevant and it thought that item (4) was too vague. That is why 'the Bank was allowed to lead evidence only in respect of item (2) and some heads mentioned in item (1). In the result opportunity was given to the parties to lead evidence on the following points: (1) victimisation, (2) past service records of the 150 employees, (3) conduct of those 150 employees or any of them during the strike confined to acts of violence, intimidating loyal workers and acts subversive of the credit of the Bank, (4) employment which any of those 150 persons got after this dismissal, the period during which they were in employment and the wages or emoluments they received. The appellate tribunal then directed the Bank to file a statement within a month giving particulars of the acts confined to the matters on which the Bank was allowed to lead evidence in respect of each one of the 150 employees after supplying a copy of the same, one to the Federation and one to the Union. In the meanwhile the appellate tribunal directed the Bank to make interim payments to the employees as indicated in its order. This interlocutary judgment was challenged by the Bank before this Court by its appeal under article 136 818 of the Constitution. On behalf of the Bank it was urged that the conclusion of the appellate tribunal that the Bank had condoned the illegal strike by its workmen was unjustified and that it was open to the Bank to rely upon the illegal strike as justifying the dismissal of the said workmen. The case of the Bank thus was that the order passed by the appellate tribunal setting down the dispute for further enquiry was illegal and should be set aside. The judgment of this Court delivered by Patanjali Sastri, C. J., shows that this Court thought it unnecessary to express any opinion on the question of condonation or waiver of the illegal strike because, in its opinion, even if there was no such condonation or waiver and even if it was open to the Bank to rely upon the illegal strike as a valid ground for dismissing its employees, there was no doubt that the order of dismissal was illegal having regard to the provisions of section 33 of the Act. The said section furnished a short answer to the Bank 's contention that the appellate tribunal had no jurisdiction to order reinstatement of the 150 workmen. In other words, just as the strike of the employees was illegal so was the order of dismissal passed by the Bank illegal and for a similar reason. section 23(b) of the Act made the strike illegal while section 33 of the Act made the dismissal also illegal. In the result the appeal preferred by the Bank was dismissed; and it was held that there was no substance in the plea of the Bank that the appellate tribunal had no jurisdiction to direct reinstatement of the employees. This judgment was pronounced on April 10, 1953. The proceedings before the appellate tribunal were subsequently resumed and they terminated on January 4, 1955, when the appellate tribunal directed the reinstatement of the 136 employees and passed incidental orders about the payment of their wages. It refused to reinstate the remaining 14 employees but passed orders in regard to payment of compensation even in their cases. Before the appellate tribunal four general points were sought to be raised at this subsequent hearing. The first was in regard to the invalidity of the reference itself. The second was in regard to 819 the ultra vires character of the relevant provisions of the Act. Both these contentions were not allowed to be raised by the appellate tribunal and they have not been urged before us either. The third contention ' raised was that both the strikes were not bona fide and so the striking workmen were not entitled to reinstatement; and the last contention was that the pen down strike was illegal and participation in it should be considered as a circumstance disqualifying the strikers from reinstatement. The appellate tribunal has held that the strikes in question were bona fide and that mere participation in the pen down strike cannot be treated as a valid ground for refusing reinstatement to the strikers. It considered the evidence led by the parties in regard to the character of the strike, and it held that the definite instruction issued to the employees was to continue occupation of their seats till the police intervened and threatened to arrest and so it was not prepared to accept the employees ' case that the pen down strikers "vacated their seats on the mere asking by the management" According to the finding, the persons who took part in the pen down strike not only ceased to work but continued to occupy their seats. The appellate tribunal also found that the pen down strikers were quiet and peaceful, that no slogans were shouted, no attempt at violence or coercion was made and that they simply occupied their seats without doing any work. It was conceded before the appellate tribunal that pen down strike falls within the definition of strike prescribed by section 2(q) of the Act; but it was urged that the act of not vacating their seats when asked by the management to do so introduced an element of illegality and made the strikers liable in a civil court for trespass. The appellate tribunal was not impressed with this argument but it held that even if the striking workmen are assumed to have made themselves liable for civil trespass that itself would not be sufficient ground for refusing reinstatement. It appears that the Bank relied upon several documents to show that the employees were guilty of subversive actions during the course of the strike. The 820 appellate tribunal was not satisfied that these documents were genuine and could be effectively pressed into service by the Bank in support of its case. It was also urged by the Bank that during the course of the strike posters and circulars were issued which were clearly subversive of the credit of the Bank and it was contended that employees who were guilty of issuing such posters and circulars did not deserve reinstatement. The appellate tribunal examined these documents and held that three of them amounted to sub versive acts. They are Exs. 255(a), 255(c) and 302. In regard to exhibit 302 the findings recorded by the appellate tribunal in two places of its decision are somewhat inconsistent; but the operative portion of the decision shows that the appellate tribunal was inclined to hold that exhibit 302 was also objectionable and that it amounted to a subversive act. The rest of the documents no doubt used strong and intemperate language but the appellate tribunal was not prepared to treat them as constituting subversive activity. On this finding a question which arose before the appellate tribunal was : Who should be held responsible for the offending documents ? The appellate tribunal was not prepared to hold all the 150 employees responsible for them. In this connection it considered the statement made by H. N. Puri in this evidence and it field that since Puri had admitted that he consulted 11 specified persons in preparing Exs. 255(a) and 255(c) as well as other documents they must share the responsibility for the said documents along with Puri. Similarly the appellate tribunal held that the persons who were shown to have been responsible for exhibit 302 must be treated on the same basis. It was as a result of this finding that the appellate tribunal refused to direct reinstatement of 14 employees. In regard to the remaining 136 employees the appellate tribunal held that it would not be right to impute the responsibility for the publication of the three subversive documents to them merely because they were members of the working committee or were otherwise active leaders of the Union. The appellate tribunal the considered the voluminous evidence led by the parties in respect 821 of each one of the 150 employees, and it held that in regard to the 136 employees no case had been made out by the Bank for refusing them reinstatement. It is clear from the decision of the appellate tribunal that it was not at all satisfied with a substantial part ,of the documentary evidence adduced by, the Bank. It held that the affidavits filed by the Bank were sometimes prepared en masse and the deponents simply put their signatures on them. In most of the affidavits there were blank spaces for the name, parentage and age of the deponents and they have been subsequently filled up in ink. Some of them, though sworn at different places, used identical language; while in some others material additions and alterations have been made which do not bear the initials either of the deponents or of the oath commissioner. It appeared to the appellate tribunal that some of the statements made by the witnesses of the Bank showed that their affidavits had been prepared by the Bank 's lawyers and they simply put their signatures thereon and affirmed them before the oath commissioner. Indeed the appellate tribunal apparently thought that there was some force in the contention raised by the employees that some of the documents produced by the Bank had been manufactured or tampered with long after the strike was over, It has noticed the argument urged by the Bank that even if it was so the Bank cannot be condemned for the act or acts of its branch managers in that behalf. This argument did not appeal to, the appellate tribunal. Thus the decision of the appellate tribunal substantially upheld the case made by the employees in that it directed the rein statement of the 136 out of the 150 ' employees and ordered payment of compensation to the remaining 14 whose reinstatement was not granted. This decision has given rise to the three present appeals before us. Civil Appeal No. 519 of 1958 has been filed by the Bank against the order of reinstatement in respect of 126 employees represented by the Federation. Similarly Civil Appeal No. 520 of 1958 has been filed by the Bank against the order directing 104 822 the reinstatement of 10 employees represented by the Union; and Civil Appeal No. 521 of 1958 has been filed by the Federation on behalf of the 14 employees the claim for whose reinstatement has been rejected. In regard to the first two appeals preferred by the Bank special leave was granted to the Bank on February 21, 1958, limited to grounds (b), (c), (d), (f) and (g) set out in paragraph 162 of its petitions. These grounds are: (b) Whether employees, who have been propagating against the stability and solvency of the Bank by propaganda oral as well as written through open letters, posters, leaflets and hand bills amongst the customers and constituents of the Bank and the public at large before, during and after an illegal strike are entitled to an order of reinstatement ? (c) Whether after the declaration of an illegal strike, forcible occupation of the seats and refusal to vacate them, when ordered to do so by the Management, does not constitute as act of criminal trespass, it having been held by the appellate tribunal that the employees formed a large riotous assembly in and outside the premises of the Bank and delivered fiery and provocative speeches to accompaniment of scurrilous slogans directed against the institution and its high officers with a view to render impossible the business of the institution, are entitled to an order of reinstatement ? (d) Whether a 'pen down ' strike of such a character does not contravene the provisions of the law of the land and is exempted under the Trade Unions Act or the ? (f ) Whether employees, who, notwithstanding the fact that they resorted to an illegal strike and were guilty of rioting, had been invited by the Management to come back and resume work and who spurned at this offer and in so many words treated it with contempt and whose places had, therefore, to be replaced by fresh recruits are entitled to an order that those fresh recruits be dismissed and replaced by the strikers ? 23 (g) Whether it is open to the employees of a concern to raise with their Employers a question as to whether the Employers should employ in their service employees of a concern other than their own and whether such a question constitutes an 'industrial dispute ' within the meaning of the ? It may be mentioned that the Bank 's petitions had raised several other grounds in paragraph 162 but leave has not been granted to the Bank to raise any of them. Almost a month and a half after limited leave was thus granted to the Bank the Federation filed its petition for special leave on April 4, 1955, and it applied for condonation of delay made in presenting the petition. On April 9, 1956, this Court granted the employees ' application for condonation of delay and gave special leave to them to prefer their appeal. This leave has not been limited to any particular grounds. Broadly stated these are the relevant facts which give rise to the three present appeals. Before dealing with the merits of these appeals we must consider two preliminary objections raised by the learned Attorney General on behalf of the employees. He has claimed that if these objections are upheld the Bank 's appeals would have to be dismissed and the employees ' appeal allowed without considering the merits of the orders under appeal. In pressing these objections he urged that the questions raised were of considerable importance, and, though he conceded that some aspects of the matter were covered by the previous decisions of this Court, he requested us to examine the whole question afresh once more. We would accordingly deal with these contentions at some length. The first contention is that as a result of the decision of this Court in the appeal preferred by the Bank against the interlocutary judgment of the appellate tribunal, the whole of the enquiry held by the said tribunal pursuant to the said interlocutary judgment is invalid and infructuous. This Court has held that the dismissal of the 150 employees is illegal having 824 regard to the provisions of section 33 of the Act; if the dismissal is illegal it is void and inoperative and as such it cannot be said to have terminated the relationship of master and servant between the Bank and its employees. Despite the said order of dismissal the employees continued to be in the employment of the, Bank and are entitled to reinstatement without any further enquiry. That, it is said, is the effect of the Bank 's failure to comply with the provisions of section 33. It is next contended that the Bank does not dispute the fact that it had held no enquiry into the alleged misconduct of its employees before it passed the impugned: orders of dismissal against them. It is well established that even where an employer is justified in terminating the services of his employees he is bound to give them a charge sheet and hold a proper enquiry at which they would have, a chance to meet the said charge sheet. This requirement is universally treated as,consistent with natural justice and fairplay and since the Bank has not complied with it the impugned orders of dismissal are wholly invalid for this additional reason; and the result again would be that the said orders are inoperative and void and the employees are entitled to reinstatement as a matter of course. In support of this argument reliance has been placed on the decision of the Privy Council in the case of The High Commissioner for India and High Commissioner for Pakistan and I.M. Lall (1). This decision holds that the order of dismissal passed against a person who is a member of the Civil Service of the Crown in India without complying with the mandatory relevant provisions of section 240 of the Government of India Act, 1935, is void and inoperative, and that the Civil Servant against whom such an order is passed is entitled to a declaration that he remained a member of the Indian Civil Service at the date of the institution of the suit in which he challenged the validity of the impugned order. Similarly in Khem Chand vs The Union of India(2), this Court has held that an order of dismissal passed against a public servant specified in article 311(a)with out complying with the mandatory (1) 75 1. A. 225. (2) ; 825 provisions of article 311 (2) is void and that the public servant sought to be dismissed by such an invalid order continued to be a member of the service at the date of the institution of the suit. It is in the light of these decisions that the learned Attorney General asks us to hold that the relationship between the Bank and its employees remains wholly unaffected by the ' orders of dismissal passed by the Bank against them; and so, as soon as the orders are held to be void nothing more remains to be done but to make a declaration about the the continuance of the relationship of master and servant between the parties and to direct reinstatement. Thus presented the argument no doubt appears prima facie to be attractive; but in our opinion, a careful examination of the relevant sections of the Act shows that it is not valid. The three sections of the Act which are relevant are sections 33, 33A and 10. Let us first consider section 33. This section has undergone several changes but we are concerned with it as it stood in 1951. It provides inter alia that during the pendency of any proceedings before a tribunal in respect of any industrial dispute no employer shall discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute save with the express permission in writing of the tribunal. It is clear that in cases to which this section applies a ban has been imposed on the power of the employer to dismiss his employees save with the express permission in writing of the ,tribunal. The object of the Legislature in enacting this section is obvious. By imposing the ban section 33 attempts to provide for the continuance and termination of the pending proceedings in a peaceful atmosphere undisturbed by any causes of friction between the employer and his employees. In substance it. insists upon the maintenance of the status quo pending the disposal of the industrial dispute between the parties; nevertheless it recognises that occasions may arise when the employer may be justified in discharging or punishing by dismissal his employees; and so it allows the employer to take such action subject to the condition that before doing so he must obtain the 826 express permission in writing of the tribunal. It is true that the ban is imposed in terms which are mandatory and section 31(1) makes the contravention of the provisions of section 33 an offence punishable as prescribed therein. But the question which calls for our decision is: What is the effect of such contravention on the decision of the industrial dispute arising from it ? Where an application is made by the employer for the requisite permission under section 33 the jurisdiction of the tribunal in dealing with such an application is limited. It has to consider whether a prima facie case has been made out by the employer for the dismissal of the employee in question. If the employer has held a proper enquiry into the alleged misconduct of the employee, and if it does not appear that the proposed dismissal of the employee amounts to victimisation or an unfair labour practice, the tribunal has to limit its enquiry only to the question as to whether a prima facie case has been made out or not. In these proceedings it is not open to the tribunal to consider whether the order proposed to be passed by the employer is proper or adequate or whether it errs on the side of excessive severity; nor can the tribunal grant permission, subject to certain conditions, which it may deem to be fair. It has merely to consider the prima facie aspect of the matter and either grant the permission or refuse it according as it holds that a prima facie case is or is not made out by the employer. But it is significant that even if the requisite permission is granted to the employer under section 33 that would not be the end of the matter. It is not as if the permission granted under section 33 validates the order of dismissal. It merely removes the ban; and so the validity of the order of dismissal still can be, and often is, challenged by the union by raising an industrial dispute in that behalf. The effect of compliance with the provisions of section 33 is thus substantially different from the effect of compliance with section 240 of the Government of India Act, 1935, or article 311(2) of the Constitution. In the latter classes of cases, an order of dismissal passed after duly complying with the 827 relevant statutory provisions is final and its validity or propriety is no longer open to dispute; but in the case of section 33 the removal of the ban merely enables the employer to make an order of dismissal and thus avoid incurring the penalty imposed by section 31(1). But if an industrial dispute is raised on such a dismissal, the, order of dismissal passed even with the requiste permission obtained under section 33 has to face the scrutiny of the tribunal. The decisions of this Court show that this position is well established. In Atherton West & Co. Ltd. vs Suti Mills Mazdoor Union (1) this Court was dealing with the provisions of cl. 23 of the relevant U. P. Government notification which is similar to the provisions of section 33 of the Act. " The enquiry to be conducted by the Regional Conciliation Officer under the said clause ", observed Bhagwati, J., " was not an enquiry into an industrial dispute as to the non employment of workmen who was sought to be discharged or dismissed which industrial dispute would only arise after an employer, his agent or manager discharged or dismissed the workman in accordance with the written permission obtained from the officer concerned. The only effect of obtaining permission from the officer concerned was to remove the ban imposed on the employer. But the order of dismissal passed after obtaining the requisite permission can still become the subject matter of an industrial dispute under section 2(k) of the Act and the workman who has been dismissed would be entitled to have the industrial dispute referred to the appropriate authority. " In The Automobile Products of India, Ltd. vs Rukmaji Bala & Ors. (2), this Court was dealing with a similar problem posed by the provisions of section 22 of Act 48 of 1950, and section 33 of the Act. Dealing with the effect of these sections this Court held that the object of section 33 was to protect the workmen against the victimisation by the employer and to ensure the termination of the proceedings in connection with the industrial disputes in a peaceful atmosphere. That being so, all that the tribunal, exercising its jurisdiction under section 33, is (1) ; , (2) ; 828 required to do is to grant or withhold the permission, that is to say, either to lift or to maintain the ban. This section does not confer any power on the tribunal 'to adjudicate upon any other dispute or to impose conditions as a prerequisite for granting the permission asked for by the employer. The same view has been ,expressed in Lakshmi Devi Sugar Mills Ltd. vs Pt. Ram Sarup (1). In cases where an industrial dispute is raised on the ground of dismissal and it is referred to the tribunal for adjudication, the tribunal naturally wants to know whether the impugned dismissal was preceded by a proper enquiry or not. Where such a proper enquiry has been held in accordance with the provisions of the relevant standing orders and it does not appear that the employer was guilty of victimisation or any unfair labour practice, that tribunal is generally reluctant to interfere with the impugned order. The limits of the tribunal 's jurisdiction in dealing with such industrial disputes have been recently considered by this Court in the Indian Iron & Steel Co. Ltd. vs Their Workmen (2 ) and it has been held that the powers of the tribunal to interfere with cases of dismissal are not unlimited because the tribunal does not act as a court of appeal and substitute its own judgment for that of the management. In this judgment this Court has indicated the classes of cases in which the tribunal would be justified in interfering with the impugned order of dismissal. It would and should interfere when there is want of good faith, when there is victimisation or unfair labour practice, when the management has been guilty of a basic error or violation of the principle of natural justice, or when, on the materials, the finding of the management is completely baseless or perverse. The same view has been again expressed by this Court in O. McKenzie & Co., Ltd., and Its Workmen (3). There is another principle which has to be borne in mind when the tribunal deals with an industrial dispute arising from the dismissal of an employee. We have already pointed out that before an employer can (1) ; (2) ; (3) 829 dismiss his employee he has to hold a proper enquiry into the alleged misconduct of the employee and that such an enquiry must always begin with the supply of a specific charge sheet to the employee. In Lakshmi Devi Sugar Mills, Ltd. (1), it has been held by this Court that in dealing with the merits of the dismissal of an employee the employer would be confined to the ' charge sheet given by him to his employee when an enquiry was held into his conduct. It would not be open to the employer to add any further charges against the employee and the case would have to be considered on the original charge sheet as it was framed. It is significant that in the case of Lakshmi Devi Sugar Mills, Ltd. (1), this Court was apparently inclined to take the view that the additional acts of insubordination on which the appellant mills wanted to rely would have justified the employee 's dismissal; but even so it was not allowed to raise that plea because the said plea had not been included in the original charge sheet. It, therefore, follows that where a proper enquiry has been held by the employer and findings are recorded against the employee that the principles laid down by this Court in the case of Indian Iron & Steel Co. Ltd. (2)would be applicable; and in applying the said principles the employer would be confined to the grounds set out by him in his charge sheet against the employee. This position is not disputed before us. Indeed the learned Attorney General contends that the principles applicable to the decision of an industrial dispute arising from the dismissal of an employee to which we have just referred serve to emphasise the obligatory character of the limitation imposed on the employer by section 33 of the Act and by the requirements of natural justice that every dismissal must be preceded by a proper enquiry. Where the ban imposed by section 33 of the Act has been defied and/or where a proper enquiry has not been held at all the action of the employer in dismissing his employee must be treated as void and inoperative. Such a case (1) ; (2) ; , 105 830 stands outside the principles which we have discussed, so far. That in brief is the main contention raised by the employees. This contention is, however, untenable in view of the decisions of this Court where the provisions of section 33A have been construed and considered, and so we must now turn to section 33A. This section was inserted in the Act in 1950. Before it was enacted the only remedy available to the employees against the breach of section 33 was to raise an industrial dispute in that behalf and to move the appropriate Government for its reference to the adjudication of a tribunal under section 10 of the Act. The trade union movement in the country complained that the remedy of asking for a reference under section 10 involved delay and left the redress of the grievance of the employees entirely in the discretion of the appropriate Government; because even in cases of contravention of section 33 the appropriate Government was not bound to refer the dispute under section 10. That is why section 33A was enacted for making a special provision for adjudication as to whether section 33 has been contravened. This section enables an employee aggrieved by such contravention to make a complaint in writing 'in the prescribed manner to the tribunal and it adds that on, receipt of such complaint the tribunal shall adjudicate upon it as if it is a dispute referred to it in accordance with the provisions of the Act. It also requires the tribunal to submit its award to the appropriate Government and the provisions of the Act shall then apply to the said award. It would thus be noticed that by this section an employee aggrieved by a wrongful order of dismissal passed against him in contravention of section 33 is given a right to move the tribunal in redress of his grievance without having to take recourse to section 10 of the Act. After this section was thus enacted the scope of the enquiry contemplated by it became the subject matter of controversy between the employers and the employees. This Court bad occasion to deal with this controversy in the case of the Automobile Products of India Ltd. (1). Das, J., as he then was, who delivered (1) ; 831 the judgment of the Court construed section 33A of the Act and the corresponding section 23 of Act 48 of 1950, which applied to the Labour Appellate Tribunal then in existence, and observed that " the scheme of the section clearly indicates that the authority to whom the complaint is made is to decide both the issues, viz., (1) the effect of contravention, and (2) the merits of the act or order of the employer ". " The provision in the section that the complaint shall be dealt with by the tribunal as if it were a dispute referred to or pending before it quite clearly indicates ", said the learned Judge, "that the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to go into the merits of the complaint and grant appropriate reliefs (p. 1253) ". It was urged before this Court that in holding an enquiry under section 33A the tribunal 's duty was only to find out whether there had been a contravention of section 33, and if it found that there was Such a contravention to make a declaration to that effect. The argument was that no further question can or should be considered in such as enquiry. This contention was, however, rejected. The same question was raised before this Court in Equitable Coal Co. Ltd. vs Algu Singh (1) and following the previous decision of this Court in the case of the Automobile Products of India Ltd. (2) it was held that in an enquiry under section 23 two questions fall to be considered: Is the fact of contravention of the provisions of section 22 proved ? If yes, is the order passed by the employer against the employee justified on the merits ? Thus there can be no doubt that in an enquiry under section 33A the employee would not succeed in obtaining an order of reinstatement merely by proving contravention of section 33 by the employer. After such contra vention is proved it would still be open to the employer to justify the impugned dismissal on the merits. That is a part of the dispute which the tribunal has to consider because the complaint made by the employee is treated as an industrial dispute and all the relevant (1) A.I.R. 1958 S.C. 761. (2) ; 832 aspects of the said dispute fall to be considered under 3. Therefore, we cannot accede to the argument that the enquiry under section 33A is confined only to the determination of the question as to whether the alleged contravention by the employer of the provisions of section 33 has been proved or not. In the present case the impugned orders of dismissal have given rise to an industrial dispute which has been referred to the tribunal by the appropriate Government under section 10. There can be no doubt that if under a complaint filed under section 33A a tribunal has to deal not only with the question of contravention but also with the merits of the order of dismissal, the position cannot be any different when a reference is made to the tribunal like the present under section 10. What is true about the scope of enquiry under section 33A is a fortiori true in the case of an enquiry under section 10. What is referred to the tribunal under section 10 is the industrial dispute between the Bank and its employees. The alleged contravention by the Bank of section 33 is no doubt one of the points which the tribunal has to decide; but the decision on this question does not conclude the enquiry. The tribunal would have also to consider whether the impugned orders of dismissal are otherwise justified; and whether, in the light o the relevant circumstances of the case, an order of reinstatement should or should not be passed. It is only after all these aspects have been considered by the tribunal that it can adequately deal with the industrial dispute referred to it and make an appropriate award. In this connection it would be relevant to remember that in dealing with industrial disputes arising out of dismissal of employees the tribunal undoubtedly has jurisdiction to direct reinstatement in proper cases. The question about the jurisdiction of an industrial tribunal to direct reinstatement was raised as early as 1949, before the Federal Coort in Western India Automobile Association vs Industrial Tribunal, Bombay (1). In this case the Federal Court considered the larger question about the powers of industrial tribunals in (1) 833 all its aspects and rejected the argument of the employer that to invest the tribunal with jurisdiction to order re employment amounts to giving it authority to make a contract between two persons when one of them is unwilling to enter into a contract of employment at all. " This argument ", observed Mahajan, J., as he then was, "overlooks the fact that when dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases. In each of those cases, although the employer may be unwilling to do so, there will be jurisdiction in the tribunal to direct the employment or non employment of the person by the employer ". The learned Judge also added that " the disputes of this character being covered by the definition of the expression 'industrial disputes, ' there appears no logical ground to exclude an award of reinstatement from the jurisdiction of the industrial tribunal." Since this judgment was pronounced the authority of the industrial tribunals to direct reinstatement in appropriate cases has never been questioned. In exercising its jurisdiction to direct reinstatement of dismissed employees industrial tribunals have indicated certain general considerations for their own guidance. In the case of a wrongful dismissal the normal rule adopted in industrial adjudication is that reinstatement should be ordered. "But", observed the Full Bench of the Labour Appellate Tribunal in Buckingham & Carnatic Mills Ltd., And Their Workmen (1), " in so ordering the tribunal is expected to be inspired by a sense of fair play towards the employee on the one hand and considerations of discipline in the concern on the other. The past record of the employee, the nature of his alleged present lapse and the ground on which the order of the management is set aside are also relevant factors for consideration. " It is obvious that no hard and fast rule can be laid down in dealing with this problem. Each case must be considered on its own merits, and, in reaching the (1) [1951] 11 L.L.J.314. 834 final decision an attempt must be made to reconcile the conflicting claims made by the employee and the employer. The employee is entitled to security of service and should be protected against wrongful dismissals, and so the normal rule would be reinstatement in such cases. Nevertheless in unusual or exceptional cases the tribunal may have to consider whether, in the interest of the industry itself, it would be desirable or expedient not to direct reinstatement. As in many other matters arising before the industrial courts for their decision this question also has to be decided after balancing the relevant factors and without adopting any legalistic or doctrinaire approach. No such considerations can be relevant in cases where in civil courts the validity of dismissals is challenged on the ground of non compliance with section 240 of the Government of India Act, 1935 or article 311(2) of the Constitution. There is one more point which still remains to be considered and that is the effect of the Bank 's default it not holding an enquiry in the present case. If the Bank has not held any enquiry it cannot obviously contend before the tribunal that it has bona fide exercised the managerial functions and authority in passing the orders of dismissal and that the tribunal should be slow to interfere with the said orders. It is true as we have already pointed out that if the employer holds a proper enquiry, makes a finding in respect of the alleged misconduct of the employee and then passes an order of dismissal the tribunal would be glow to interfere with such an order and would exercise its jurisdiction within the limits prescribed by this Court in The case of Indian Iron & Steel Co. Ltd. (1). But it follows that if no enquiry has in fact been held by the employer; the issue about the merits of the impugned order of dismissal is at large before the tribunal and, on the evidence adduced before it, the tribunal has to decide for itself whether the misconduct alleged is 'roved, and if yes, what would be proper order to make. In such a case the point about the exercise of managerial functions does not arise at (3) ; , 835 all. This answers the argument which Mr. Sanyal has raised before us in his appeal. Mr. Sanyal, however, seeks to derive support to his argument from the decision of the Labour Appellate Tribunal in The Madras Electric Tramways (1904) Ltd. Madras And Their Workers (1). In that case the order of reinstatement passed by the tribunal was reversed in appeal by the appellate tribunal which observed that in dealing with cases of dismissal where the management had acted bona fide and with knowledge and experience of the problems which confronted in the daily work of the concern it should be considered to be well qualified to judge what sentence would be appropriate, and the sentence imposed by the management should normally stand subject to the qualification that it must not be unduly severe. It is obvious that in that case the management had held a proper enquiry and the question which arose for decision was what are the limits of the jurisdiction of the tribunal in dealing with an industrial dispute arising from an order of dismissal passed by an employer after holding a proper enquiry. The principles applicable to such a case have been already considered by us; but they can have no application to the present case where the employer has held no enquiry at all. Therefore, this decision on which Mr. Sanyal relies is irrelevant. The position then is that the effect of the double default committed by the employer is not to limit the enquiry to the decision of the sole question as to the commission of the said default, and so, despite the said default the subsequent enquiry held by the appellate tribunal pursuant to its interlocutory judgment was proper and legal. The two preliminary objections raised by the learned Attorney_General must, therefore, fail. Let us now deal with the two appeals filed by the Bank (Civil Appeals Nos. 519 and 520 of 1958). We have already indicated that in dealing with these appeals we have to bear in mind the limitations imposed by the nature of the limited leave granted to (1) 836 the Bank; it is only the grounds specifically covered by the leave which fall to be considered, and even these grounds will necessarily have to be dealt with in the light of the findings already recorded by the appellate tribunal which are no longer open to challenge. The subsequent enquiry held by the appellate tribunal was limited to the question as to whether the Bank was able to prove any specific circumstances which disentitled the employees from claiming reinstatement. In other words, the object of the said enquiry was to ascertain the nature of the "positive objections" which the Bank had against each one of them. The rest of the matters in dispute between the parties are concluded by the other findings which have become final. Considered in the light of these limitations the grounds on which leave has been granted to the Bank must first be examined. A bare perusal of the said grounds would show that some of them are vague and they are urged on assumptions of fact which run counter to the findings recorded by the appellate tribunal. That is why when those appeals were urged before us, Mr. Anand and Mr. Sanyal have recast their contentions within the frame, work of the grounds in respect of which leave has been granted and have urged the following points before us: (1) that participation in a pen down strike is itself an activity of such a subversive character that it disqualifies the employees who took part in it from claiming the relief of reinstatement, (2) that the publication and circulation of subversive documents was the result of a concerted plan and represent a collective activity of all the strikers and as such all the employees before us should be held responsible for it and on this ground reinstatement should be refused to them, (3) that the finding recorded by the appellate tribunal that only 14 persons were directly and actively concerned with the preparation and publication of the subversive documents is opposed to the weight of evidence and is perverse, (4) that the appellate tribunal erred in law in not taking into account the fact that after the 150 employees were dismissed the Bank has engaged fresh hands and the order of reinstatement would, therefore, be unjust and 837 unfair, and (5) that the appellate tribunal was also in error in not taking into account the fact that some of the employees have in the meanwhile taken employment elsewhere. It is these five grounds which we are asked to consider by the Bank in its present appeals. Before dealing with these contentions we would like to make one general observation. Though not in the, same form, in substance these contentions were raised before the appellate tribunal in support of the plea that the dismissed employees should not be reinstated. As we have already emphasized whether or not reinstatement should be ordered in cases of wrongful or illegal dismissals is normally a question of fact and in deciding it several relevant factors have to be borne in mind. If the appellate tribunal applied its mind to those relevant factors and came to the conclusion that 14 employees did not deserve to be reinstated while the remaining 136 did, we would be reluctant to interfere with the said order under article 136 unless it is shown that the order suffers from an error which raises a general or substantial question of law. The first contention raised by the Bank is in regard to the conduct of the employees in entering upon a pen down strike and its effect on their claim for reinstatement. The finding of the tribunal on this point is that the persons who took part in the pen down strike not only ceased to work but continued to occupy their seats. A tumultuous crowd had gathered outside the premises of the Bank and some persons in the crowd were shouting slogans in support of the strike. The strikers had been definitely instructed to stick to their seats until the police intervened and threatened arrest or until orders of discharge or suspension were served on them. There has been some argument before us as to the number of persons who actually took part in this kind of pen down strike. For the Bank Mr. Anand has urged that the finding, of the appellate tribunal suggests that most of the strikers took part in this strike; and in any event, according to him, at least 52 persons took part in it. He has filed in this Court a list of these 52 employees. On the other hand, 106 838 the learned Attorney General has contended that on the findings recorded by the appellate tribunal not more than 10 persons can be said to have taken part in it. In dealing with the present contention of the Bank we are prepared to assume that most of the strikers participated in the pen down or sit down strike as generally found by the tribunal. Is this pen down strike a strike within section 2(q) of the Act or not? section 2(q) defines a strike as meaning a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment. It was conceded before the appellate tribunal that a pen down strike falls within this definition, and this position is not seriously disputed before us either. On a plain and grammatical construction of this definition it would be difficult to exclude a strike where workmen enter the premises of their employment and refuse to take their tools in hand and start their usual work. Refusal under common understanding to continue to work is a strike and if in pursuance of such common understanding the employees entered the premises of the Bank and refused to take their pens in their hands that would no doubt be a strike under section 2(q). The main grievance of the Bank is that these employees not only sat in their places and refus ed to work but they would not vacate their seats when they were asked to do so by their superior officers. Such conduct may introduce an element of insubordination but that is a different matter. In our opinion, therefore, the pen down strike in which the employees participated in the present case cannot be said to be outside section 2(q) of the Act. It was, however, urged that the entry of the strikers in the premises of the Bank amounted to civil trespass. The argument is that by virtue of their employment the employees had a licence to enter the premises of the Bank but this licence is subject to the condition that the employees are willing to carry out their obligation of the contract and do their allotted work during the, 839 office hours. If the employees had decided not to work they were not entitled to the licence in question and so their entry into the Bank itself constituted a civil trespass. On their hand, the employees contend that during the continuance of their employment they are entitled to enter the premises of the Bank and having thus entered they were also entitled to exercise their right of going on strike. They entered the premises as employees of the Bank and having taken their seats they exercised their right of striking work. If the Bank had suspended the employees it would have been another matter; but so long as the relationship of master and servant continued the employees could not be said to have committed civil trespass when they entered the premises at the time. In support of its case the Bank has relied on the proposition that " even if a person has a right of entry on the land of another for a specific purpose he commits a trespass if he enters for any other purpose or under any other claim or title apart from that under which he might lawfully enter. As an illustration of this proposition it is stated that if a person having a licence for entry on land enters the land not by virtue of the said licence but in order to contest the licensor 's title, he commits a trespass " (1). " But this proposition is subject to the exception that if a person enters for a lawful purpose he is not a trespasser unless the case is one to which the doctrine of trespass ab initio applies " (2). So the decision of this technical point would depend on whether or not the employees are given a limited or conditional licence to enter the premises and that if they have decided to go on strike the said conditional or limited licence is no longer available to them. We do not think it necessary to consider this academic question in the present proceedings because, in our opinion, the appellate tribunal was obviously right in holding that even if civil trespass was involved in the conduct of the employees that by itself cannot justify the rejection of their claim for reinstatement. Incidentally we may add that even (1) Salmond on Torts, 12th Ed., p. 158. (2) Salmond on Torts, 12th Ed., p. 159. 840 in America " the simple act of trespassing upon the employer 's property is no bar to reinstatement nor is the act which at most a civil tort " (1). Does the conduct of the strikers as found by the appellate tribunal constitute criminal trespass unders. 441 of the Indian Penal Code?That is the next point which calls for decision. It is argued that the conduct of the employees amountsto criminal trespass which is an offence and as suchthose who committed criminal trespass would not be entitled to reinstatement. According to the Bank the employees committed the criminal trespass inasmuch as they either entered unlawfully or having lawfully entered continued to remain there unlawfully with intent thereby to insult or annoy their superior officers. It would be noticed that there are two essential ingredients which must be established before criminal trespass can be proved against the employees. Even if we assume that the employ ees ' entry in the premises was unlawful or that their continuance in the premises became unlawful, it is difficult to appreciate the argument that the said entry was made with intent to insult or annoy the superior officers. The sole intention of the strikers obviously was to put pressure on the Bank to concede their demands. Even if the strikers might have known that the strike may annoy or insult the Bank 's officers it is difficult to, hold that such knowledge would necessarily lead to the inference of the requisite intention. In every case where the impugned entry causes annoyance or insult it cannot be said to be actuated by the intention to cause the said result. The distinction between knowledge and intention is quite clear, and that distinction must be borne in mind in deciding whether or not in the present case the strikers were actuated by the requisite intention. The said intention has always to be gathered from the circumstances of the case and it may be that the necessary or inevitable consequence of the impugned act may be one relevant circumstance. But it is impossible to accede to the argument that the likely consequence of the act and its possible knowledge (1) Ludwig Teller 's "Labor Disputes and Collective Bargaining" Vol. 11, p.855 841 must necessarily import a corresponding intention. We think it is unnecessary to elaborate this point; we would only like to add that the decision of the Patna High Court, in T. H. Bird vs King Emperor (1) on which reliance was placed by the Bank is wholly inconsistent with the contention raised by it. Thus our conclusion is that the Bank has failed to prove that the conduct of the strikers as found by the appellate tribunal amounted to criminal trespass under s.441 of the Code. In resisting the employees ' claim for reinstatement on the ground that participation in a pendown strike creates a bar against such a claim the Bank has strongly relied on the decision of the Supreme Court of America in National Labor Relations Board vs Fansteel Metallurgical Corporation(2). Both Mr. Anand and Mr. Sanyal have contended that this decision is an authority for the proposition that participation in pen down strikes necessarily disqualifies the strikers from claiming reinstatement. It is, therefore, necessary to examine this case carefully. In this case, the National Labor Relations Board bad directed the reinstatement of participants in a sit down strike whom, upon their refusal to leave the employer 's plant, the employer declared to be discharged. The Board had held that despite the illegal strike and the consequent order of discharge the status of the employees continued by virtue of the definition of the term " employee " in section 2, sub section (3) of the National Labor Relations Act. It had also taken the view that it had jurisdiction to direct reinstatement of the said employees under section 10(c) of the said act with a view to effectuate the policies of the Act. Both these conclusions were reversed by the Supreme Court by a majority judgment. According to the majority view, when the Congress enacted the National Labor Relations Act it " did not intend to compel employers to retain persons in their employ regardless of their unlawful conduct, to invest those who go on strike with an immunity from discharge for acts of trespass or violence against the employer 's property, which they (1) (1934) I.L.R. XIII Pat. (2) ; 306 U.S. 238; 842 would not have enjoyed had they remained at work. " It was also held that " the Congress was intent upon ,.protection of employees ' right to self organisation and to the selection of representatives of their own choosing for collective bargaining without restraint or coercion. " On the facts the conclusion of the majority was that the strike was illegal in its inception and prosecution. This was really not the exercise of the right to strike to which the Act referred. It was an illegal seizure of the building in order to prevent their use by the employer in a lawful manner, and thus by acts of force and violence compel the employer to submit. The conclusion, therfore, was that to provide for the reinstatement or re employment of employees guilty of the acts which even according to the Board had been committed would not only not effectuate any policy of the Act but would directly tend to make abortive its plan for peaceable procedure. Mr. Justice Reed, who delivered a dissenting judgment thought that both labour and management had erred grievously in their respective conduct and so it would not be unreasonable to restore both to their former status. That is why he was not prepared to reverse the order of reinstatement passed by the Board. The Bank naturally relies upon the majority decision in support of its contention that its employees who participated in the pen down strike are not entitled to reinstatement. In considering the question as to whether the principle underlying the majority decision should be, applied to a pen down strike in India it is necessary to remember that the pen down strike properly so called is recognised as a strike under section 2(q) of the Act and so it would not be safe to extend the principles of American decisions bearing on this question without a careful scrutiny of the relevant provisions of the American statute and the facts on which the said decisions are based. Let us then consider the facts on which the majority decision was based. It appears that an acrimonious dispute had been going on between the Corporation and its employees for some time before February 17,1937 when the pen down strike commenced. The Corporation was not prepared to recognise the 843 outside union and had employed a labor spy to engage in espionage within the union and continued the employment of the said spy. It also appears that the, super intendant of the Corporation when requested to meet the deputation of the union required that the deputation should consist only of employees of five years ' standing. Subsequently the superintendent ' refused to confer with the committee in which the outside Organisation had been included; and as a punitive measure he required the president of the union to work in a room adjoining his office with the purpose of keeping him away from the other workers. It was in this background of bitter relationship that the strike commenced. In the afternoon of February 17 the union committee decided upon a sit down strike by taking over and holding two of the respondent 's key buildings. These were then occupied by about 95 employees, as a result of which work in the plant stopped. In the evening the superintendent accompanied by police officials went to each of the building and demanded that the men leave. They, however, refused whereupon the respondent 's counsel who had accompanied the superintendent announced in loud tone that all the men in the plant were discharged for the seizure and detention of the buildings. Even so the men continued to occupy the buildings until February 26. Their fellow members brought them food, blankets, stoves, cigarettes and other supplies. Meanwhile on February 18, the respondent obtained from the state court an injunction requiring the men to surrender the premises. The men refused to obey the order and a writ of attachment for contempt was served on them on February 19. When the men refused to submit a pitched battle ensued and the men successfully resisted the attempt by the sheriff to evict and arrest them. Efforts at mediation failed. Ultimately on February 26, the sheriff with An increased force of deputies made a further attempt and this time, after another battle, the men were ousted and placed under arrest. They were subsequently prosecuted and most of them were fined and given jail sentence for violating 844 the injunctions. A bare statement of these facts would clearly bring out the true character of the strike with which the Supreme Court was dealing. It was not merely an illegal but violent strike, ; it was a strike which began with the wrongful seizure of the employer 's property and his exclusion from it; a strike accompanied by violence which led to pitched battles between the strikers and the sheriff 's men; a strike continued by the strikers even after they were formally discharged from the employment and against an order of injunction by a competent court. It is difficult to accede to the argument that the majority decision in that case can be extended to the facts before us. As Teller has observed " the strike in question can be more accurately defined as a strike in the traditional sense to which is added the element of trespass of the strikers upon the property of the employer ". (1) Therefore, in our opinion, this decision does not assist the Bank in support of its case that mere participation in the illegal strike in the present case can by itself defeat the claim of the employees for reinstatement. In this connection we may point out that, according to Teller the Fansteel decision marks " what is hoped to be an end of an unfortunate chapter in the history of American labor activity"; he has added that " there is danger, however, in viewing the sitdown strike solely as the reflection of lawless labour leadership. The causes of its emergence are deeper. Indeed labour has contended that capital and labor share equal responsibility for its rise and development. No analysis of a sit down strike can claim a broad view of the subject, says labor, without a full measure of consideration of the infamous Mohawk Valley methods used by Remington Rand to break strikes, nor to the facts elicited in the recent Rand Bergoff trial under the Byrnes Act. . The anarchy of law which resulted from unlawful employer utilisation of instruments of violence and chicanery in disregard of law needed the sit down (1) Ludwig Teller 's "Labour Disputes and Collective Bargaining", Vol 1, p. 311, section 106. 845 strike as an effective counterpoise " ; and so the author significantly concludes that " it is no coincidence that statistics show a precipitate drop in the prevalence of sit down strikes immediately upon validation by the United States Supreme Court of the National Labor Relations Act. " It is in the light of this background that the Supreme Court had been( called upon to decide the question of reinstating employees in the Fansteel case (1). The history of the trade union legislation in England shows that the trade union movement had to wage a long and bitter struggle to secure recognition for the workmen 's right to organise themselves into unions and to exercise their right of collective bargaining if necessary by the use of the weapon of strikes. In America a similar struggle took place, and, as we have just pointed out, it was marked by violence on the part of both capital and labour, because the employer 's theory of " hire and fire " offered relentless resistence to the workmen 's claim to form unions and to resort to strikes for trade union purposes. In Williams Truax vs Michael Corrigan(2) Mr. Justice Brandeis, in his dissenting judgment, has given a, very illuminating account of the history and progress of the trade union movement in the United States, in England and the Colonies. " Practically every change in the law ", observed Mr. Justice Brandeis, " governing the relation of the employer and the employees must abridge in some respect the liberty or property of one of the parties, if liberty and property is measured by the standard of the law theretofore prevailing. If such changes are made by acts of the Legislature we call the modification an exercise of the police power, and although the change may involve an interference with existing liberty or property of individuals, the statue will not be declared a violation of the due process clause unless the court finds that interference is arbitrary or unreasonable, or that, considered as a means, the measure has no real or substantial relation of cause to a permissible end". (1) ; 306 U.S. 238; (2) 66 Law. Edn. 311 ; 107 846 In that case the validity of the prohibition of Ariz. Civil Code 1913, cl. 1464 against the interference ,.by injunction between employers and employees in cases growing out of a dispute concerning terms or conditions of employment was challenged; and the challenge was upheld by a majority of the learned judges who took the view that the said provision was contrary to the 14th Amendment of the Constitution. Holmes, Pitney, Clarke and Brandeis, JJ., however, dissented. The main decision in that case is not of direct assistance in the present appeals. No doubt Mr. Anand has attempted to contend that the acts of which the strikers were held guilty in that case are similar to the acts alleged against the employees in the present appeals; but this argument would be relevant only if it is shown by the Bank that the specific subversive acts alleged have been committed by the specific individual employees. To that point we will refer later on. Incidentally the present decision is of some importance because the dissenting opinion delivered by Mr. Justice Brandeis has been subsequently treated as an authoritative exposition of the problem of trade unionism and the history of its growth and development. Fortunately, as the Indian , (16 of 1926), the (20 of 1946), and the (14 of 1947) show, our Legislature has very wisely benefitted by the experiences of other countries in the matter of the development of trade union movement, and has made progressive, just and fair provisions governing the important problem of industrial relationships, the formation of trade unions, and the settlement of industrial disputes, It can be justly claimed that though we have witnessed capital labour conflicts in our country, on the whole neither party has departed from the pursuit of peaceful methods, and both parties submit their disputes to be resolved in accordance with the provisions of the Act. In dealing with industrial disputes like the present, we must, therefore, primarily consider the relevant statutory provisions and the material Indian decisions, 847 Thus considered the conclusion is inevitable that the pen down strike is a strike within section 2(q) and so per se it cannot be treated as illegal; it has been found to be illegal in this case because it was commenced in contravention of section 23(b) of the Act; but, as has been held by this Court in M/s. Burn & Co. Ltd. vs Their Workmen (1) mere participation in such an illegal strike cannot necessarily involve the rejection of the striker 's claim for reinstatement. As we have already indicated, on the findings of the appellate tribunal nothing more than such participation has been proved against the employees whose reinstatement has been ordered; and so, unless the said finding is reversed, the first contention raised by the Bank must fail. It has been strenuously urged before us that in the case of a Bank which is a credit institution a pen down strike, if continued for a long period, is likely to affect prejudicially the credit of the Bank. It is also pointed out that, even in regard to industrial concerns, if strikers entered the premises of the factory and sit around the plant in large numbers, in the heat of the moment unfortunate and ugly incidents are likely to happen, and so such pen down or sit down strikes should be positively discouraged. We are prepared to concede that in the surcharged atmosphere which generally accompanies strikes and when passions are aroused, a large scale and continuous pen down strike may lead to untoward consequences. But, on the other hand, even in the case of such a strike, the employer is not without a remedy. He may bar the entry of the strikers within the premises by adopting effective and legitimate methods in that behalf as in fact the Bank did in the present case from April 23. He may call upon the employees to vacate, and, on their refusal to do so, take due steps to suspend them from employment, proceed to hold proper enquires according to the standing orders, and pass proper orders against them subject to the relevant provisions of the Act. If the Bank had been properly advised to adopt such a course, many of the difficulties which it had to face in the present proceedings would not (1) A.I.R. 1959 S.C. 529. 848 probably have arisen. Therefore, we do not think that the general hypothetical consideration that pendown strikes may in some cases lead to rowdy demonstrations or result in disturbances or violence or shake the credit of the Bank would justify the conclusion that even if the strikers are peaceful and non violent and have done nothing more than occupying their seats during office hours, their participation in the strike would by itself disqualify them from claiming reinstatement. Let us then consider the second contention raised by the Bank. It is urged on behalf of the Bank that it is really unnecessary to examine which particular employee was directly associated with the preparation and circulation of the subversive circular or posters. The offensive posters and circulars had been drafted, printed and circulated in pursuance of the common object of the strikers, and each one of them must, therefore, share the responsibility for the said act. It is really an argument based on the theory of conspiracy which makes all conspirators liable for the act of any one of them. This argument is countered by the employees with the contention that the activities of the Union do not fall to be considered in the present enquiry. It is the acts of individual strikers who have been dismissed that have given rise to the dispute and the enquiry must be confined to that dispute alone. The learned Attorney General seriously asked us to bear in mind that the application of the doctrine of conspiracy to the decision of the present dispute may have far reaching consequences on the future of the trade union movement itself, and he suggested that since the Union and its activities were not the subject matter of the present enquiry we need not consider the argument of conspiracy at all. Besides, according to him, if the theory of conspiracy was upheld it would mean that if any office bearers of the Union were guilty of any subversive acts the whole membership of the Union would be constructively responsible and that is plainly unreasonable. In this connection he also referred us to sections 17, 18 and 19 of the Indian 849 (16 of 1926). We have indicated this argument at this place by anticipation. In fact this argument has been raised by the employees in their appeal but we thought it would be convenient to deal with both these aspects of the matter in one place. Now the answer to both these technical and academic contentions is the same. In industrial adjudication tribunals should be slow to adopt any doctrinaire or legalistic approach. They should as far as is reasonably possible avoid the temptation of formulating general principles and laying down general rules which purport to cover all cases. Let us recall the nature of the enquiry which the appellate tribunal had directed as a result of its interlocutary judgment. This enquiry is confined to the question as to whether in ' regard to the case of each one of the dismissed employees, the Bank has shown any positive circumstances as a result of which reinstatement, which is the normal rule, should not be directed. Thus considered we do not think it necessary to deal with the academic points raised by both the parties before us. The third argument urged by the bank is in regard to the finding of the tribunal that only 14 employees named by it are responsible for the subversive posters and hand bills. It is urged that this finding is perverse. We are not impressed by this argument. There is no doubt that the three posters Exs. 255 (a), 255 (c) and 302, to which strong exception has been taken by the Bank are subversive of the credit of the Bank. They make imputations about the honesty of the management of the Bank and in terms suggest improper use of the funds of the Bank for personal purposes. It is also true that a large number of other documents issued by the Union before and during the strike have used exaggerated, and unduly militant intemperate, language, and in our opinion the appellate tribunal was justified in expressing its disapproval of the use of such language; but the appellate tribunal thought that none of these documents could really be taken to be subversive of the credit of the Bank and with that conclusion we are in full agreement. Therefore the only question which we have to consider is whether 850 the view taken by the appellate tribunal that 14 persons were actively concerned with these offensive documents can be successfully challenged by the Bank before us. In making its finding on this point the appellate tribunal has substantially relied on the statement made by H. L. Puri. He was asked whether the drafts of the letters issued by him had been approved at the meeting of the working committee or on his individual responsibility and he replied that they were never written on individual responsibility but were based on consultation with the members of the working committee. Then he was asked whether he could name the persons whom he consulted in drafting the poster dated July 5, 1949 (exhibit 222). In reply to this he enumerated the names of 9 persons and added the word " so on. " It appears that the appellate tribunal asked him several questions on the same topic and the effect of his admissions clearly was to show that most of the documents were issued by the secretary or the president after he had consulted the persons named by Puri. In this connection Puri gave the names of the office bearers of the Federation at Delhi. It was in the light of these admissions that the appellate tribunal came to the conclusion that 14 persons named by him can be safely taken to have been actively associated with the drafting and the publication of the subversive documents. Mr. Anand contends that the list of office bearers separately supplied by Puri includes a much larger number of active workers of the Union and on the evidence of Puri all these active workers should have been held responsible for the said documents. In this connection he has relied on the affidavit filed by Amar Singh on behalf of the Bank. We do not think that this argument is wellfounded. It is significant that though the appellate tribunal had directed the Bank by its interlocutary judgment to file a statement giving particulars of the acts alleged against each one of the employees no such statement was filed. Besides it is fairly conceded before us by Mr. Anand that most 851 of the employees who made affidavits in the subsequent enquiry were not asked any general question about their alleged subversive activities and no particular question was put to them in regard to the relevant subversive documents. The judgment of the appellate tribunal shows that it first considered the general points and the evidence relied upon by the parties in that behalf; and then it exhaustively dealt with the whole of the evidence bearing on the case of each individual employees. We are satisfied that the Bank is not justified in contending that in excluding 136 employees from the responsibility of direct participation in the drafting and publication of the subversive circulars and hand bills the appellate tribunal has ignored any important evidence. The argument that the said finding is opposed to the weight of evidence and as such perverse must therefore be rejected. Then Mr. Anand has invited us to consider some individual cases. According to him the case against Joshi had not been properly considered by the appellate tribunal. It does appear that Joshi admitted that he had taken part in the drafting of documents P. 272, 274, 279, 280 and 286; but none of these documents has been found to be subversive and so it is idle to contend that Joshi 's connection with any of the three subversive documents is established. So there is no substance in the argument that Joshi 's case should be reconsidered. Then our attention has been drawn to the cases of five other employees Narain Das, Chuni Lal, Som Datt, Trilok Chand and Charan Singh. ' In regard to these persons the appellate tribunal has found that the Bank had failed to prove any subversive acts against them, and that undoubtedly is a question of fact and the finding of the appellate tribunal cannot be reopened. But Mr. Anand has attempted to challenge the correctness of this finding on the ground that it is entirely inconsistent with one material document on the record. This document is the report made by Dina Nath on April 24 in which the incidents that took place on April 23 and 24 have been set out and the names of persons who took prominent part in the said incidents 852 have been enumerated. This list includes the names of the five persons in question. Dina Nath had, however, died at the date of the enquiry and so he could not give evidence. Jagan Nath, who was then the Superintendent of Police, proved this report. Mr. Anand 's grievance 'is that though the evidence of Jagan Nath had been accepted by the appellate tribunal in a part of its judgment it has failed to consider his testimony in dealing with the cases of these five persons. In our opinion this argument is entirely misconceived. It is not correct to say that the appellate tribunal has accepted the whole of Jagan Nath 's evidence in any part of its judgment; while dealing with the question about the conduct of the crowd the appellate tribunal considered the evidence of Rajinder Nath, Mehta, Ram Pratap and Amar Singh and held that part of their evidence which was corroborated by Jagan Nath and also partially by Puri must be believed; that is all. Besides, the evidence of Jagan Nath itself does not carry the Bank 's case any further against the five persons. No doubt, while proving the report of Dina Nath, Jagan Nath first stated that the facts narrated therein were correct; but in crossexamination when he was asked about some details mentioned in the report he added that the report was written by Dina Nath and he could not say anything about it. Further he also admitted that during the course of his visit and stay at the Bank when the strike was going on he only knew three persons who took part in the activity which was described by Dina Nath in his reports Thus the evidence of Jagan Nath does not show that he clearly knew any of the five employees and the same comment obviously falls to be made about Dina Nath himself who made the report. Therefore it is not accurate to say that the conclusion of the appellate tribunal in regard to these, five cases suffers from any infirmity on which it can be successfully challenged before us; besides the Bank apparently relied upon other evidence against these five persons, and not the report of Dina Nath, and that evidence has been disbelieved, 853 Mr. Anand has then urged that in directing reinstatement of 136 employees the appellate tribunal failed to consider the fact that in the meanwhile the Bank has employed additional hands and it would be unfair to the Bank to direct that these dismissed employees should be taken back. The reinstatement order would lead to complications and the Bank may have to face the claims of those who have been employed in the meanwhile. Mr. Anand wanted to prove that the Bank had employed a large number of hands in the meanwhile by referring to the statement made by the Union in the bulletin and posters issued during the strike. These statements seem to indicate that the Union complained that pending the strike the Bank was employing new hands. But if the Bank wanted to urge this plea seriously it should have proved the relevant facts, e.g., how many employees have been appointed and on what terms. These are matters within the special knowledge of the Bank and they could have been proved very easily. The Bank did not choose to prove these facts. Indeed it does not appear that this plea was urged as a separate plea against the order of reinstatement before the appellate tribunal. In any case, in the absence of satisfactory materials it would be difficult to deal with this plea on the merits. Besides, if the Bank has failed to establish its specific case against any of the 136 employees, there is no reason why the normal rule should not prevail and the employees should not get the relief of reinstatement. The mere fact that the Bank may have employed some other persons in the meanwhile would not necessarily defeat such a claim for reinstatement. As has been held by this Court in the National Transport and General Co. Ltd. vs The Workmen (1), however much the court may sympathise with the employer 's difficulty caused by the fact that after the wrongful dismissals in question he had engaged fresh hands, the court cannot " overlook the claims of the employees who, on the findings of the tribunals below, had been wrongly dismissed. " In the case of such wrongful (1)Civil Appeal No. 312 of 1956 Decided by this Court on January 22, 1957. 108 854 dismissal the normal rule would be that the employees thus wrongfully dismissed must be reinstated. " The hardship in question ", observed this Court, " has been brought about by the precipitate action of the appellants themselves who dismissed their workmen without holding the usual enquiries after framing a proper charge against them. If they had proceeded in the usual way and given a full and fair opportunity to the workmen to place their case before the enquiring authority, the result may not have been so bard. " These observations are equally applicable to the conduct of the Bank in the present appeals. The last argument urged by Mr. Anand is that a large number of employees who are clamouring for reinstatement have secured employment on a fairly permanent basis and so it is unnecessary that they should be forced on the Bank. This argument cannot be entertained because it has not been urged before the appellate tribunal, and though it was sought to be raised before us, Mr. Anand fairly conceded that in the absence of any material it would not be possible for him to press this point. Indeed it is the first two general points which were seriously pressed before us by Mr. Anand and Mr. Sanyal on behalf of the Bank. Mr. Anand no doubt raised three additional subsidiary points in Civil Appeal No. 519 of 1958, in which he appeared, but as we have pointed out there is no substance in any one of them. In Civil Appeal No. 520 of 1958, in which Mr. Sanyal appeared for the Bank he did not challenge the findings recorded by the appellate tribunal in respect of the 10 employees concerned in the said appeal. In the result both the appeals preferred by the Bank fail and are dismissed with costs.

The employees of the appellant Bank commenced pen down strikes, which were followed by a general strike, pending arbitration of an industrial dispute between them. The Government of India intervened and as the result of an agreement that followed the Bank reinstated all the employees except 150, against whom it had positive objections, and the Government referred their cases under section 10 of the Industrial Disputes Act, 1047, to the Industrial Tribunal for adjudication. The two issues before the Industrial Tribunal were whether the 150 employees had been wrongly dismissed and what wages and allowances would the 807 employees be entitled to on reinstatement. The case of the employees was that the Bank wanted to penalise the active trade union workers by the said dismissals while the Bank maintained that the employees were guilty of participation in illegal strikes intended to paralyse its business and scare away its customers. The Industrial Tribunal did not hear evidence and, by its final award, held that, the strikes being illegal, the Bank was, on that ground alone, justified in dismissing the employees. Even so, it directed the Bank to make certain payments to the employees on compassionate grounds. The Bank as well as the employees appealed. The Labour Appellate Tribunal held that even though the strikes were illegal under section 23(b) read with section 24(1) of the , the Bank had, by entering into the agreement with the Government of India, waived its right to take penal action against the employees for joining the illegal strikes and that, therefore, an enquiry should be held on additional evidence to decide the disputes on merits. Against this interlocutory order the Bank appealed to this Court and it was held by this Court that while the strikes were no doubt illegal under section 23(b) of the Act, the orders of dismissal passed by the Bank were no less so under section 33 of the Act, and it dismissed the appeal. The Appellate Tribunal, thereafter, heard the cases on merits, directed the reinstatement of 136 of the said employees, but refused to reinstate the rest whom it found guilty of issuing posters and circulars subversive of the credit of the Bank. Both the parties appealed to this Court. Preliminary objections were raised on behalf of the said employees that, (1) in view of the decision of this Court dismissing the Bank 's appeal against the said interlocutory order the subsequent inquiry by the Tribunal and the orders of dismissal must be held to be void and, (2) no charges having been admittedly framed nor any proper enquiry held by the Bank against the employees, the orders of dismissal were wholly invalid. It was urged, inter alia, on behalf of the Bank in the appeals that participation in a pen down strike by itself amounted to misconduct sufficient to disentitle an employee to reinstatement and that the entire body of strikers, being collectively responsible for the publication of the subversive documents in question, the dismissed employees could by no means escape liability. Held (per curiam), that the preliminary objections must be negatived and the decision of the Appellate Tribunal affirmed with this modification that, in view of its inconsistent findings, the appeal of one of the employees must be allowed. Per Sinha and Gajendragadkar, JJ. The purpose the Legislature had in view in enacting section 33 of the , was to maintain the status quo by placing a ban on any action by the employer pending adjudication. But the jurisdiction conferred on the Industrial Tribunal by section 33 of the Act was a limited one. Where a proper enquiry had been held and no victimisation or unfair labour practice had been 808 resorted to, the Tribunal in granting permission had only to satisfy itself that there was a Prima facie case against the employee and not to consider the propriety or adequacy of the ,proposed action. But to such permission, when granted, the Tribunal could attach no conditions; it can either grant or refuse it. The effect of such permission was only to remove the ban imposed by section 33 of the Act. It could neither validate a dismissal nor prevent it from being challenged in an industrial dispute; but in such a dispute, when raised, the employer could justify its action only on such grounds as were specified in the original charge sheet and no others. There was substantial difference between non compliance with section 33 of the Act and that with article 311(2) of the Constitu tion. Compliance with section 33 only avoided the penalty under section 31(1) of the Act, while compliance with article 311(2) of the Constitution made the order of dismissal final. Atherton West & Co. Ltd. V. Suti Mills Mazdoor Union, ; , The Automobile Products of India Ltd. vs Rukmaji Bala; , , Lakshmi Devi Sugar Mills Ltd. vs Pt. Ram Sarup, ; , Indian lron and Steel Co. Ltd. vs Their Workmen, ; and McKenzie & Co. Ltd. vs Its Workmen, referred to. It was not, therefore, correct to contend that non compliance with section 33 of the Act could render the orders of dismissal wholly void or take away the jurisdiction of the Tribunal to hold the enquiry. Nor could the failure to hold a proper enquiry have that effect. Under section 33A of the Act, as construed by this Court, the jurisdiction of the Tribunal was not limited to an enquiry as to the contravention of section 33 of the Act. Even if such contravention was proved, the employer could still justify the impugned dismissal on merits and there was no difference in this regard between a reference under section 10 of the Act and a dispute raised under section 33A of the Act. The Automobile Products of India Ltd. vs Rukmaji Bala, ; and Equitable Coal Co.Ltd. vs Algu Singh, A.I.R. 1958 S C. 761, referred to. Although there can be no doubt that in proper cases the Industrial Tribunal has the power to direct reinstatement in disputes arising out of dismissal of employees, it is not possible to Jay down any hard and fast rule to be applied to such cases. In coming to its decision, the Industrial Tribunal has to reconcile the conflicting claims of the employer and the employee, the latter 's right to protection against wrongful dismissal, and in such a case the normal rule is reinstatement, and the interest and safety of the industry itself. Its approach to such a problem cannot, therefore, be legalistic or doctrinaire or as is permissible 809 in a civil court deciding the validity of dismissals under section 240 of the Government of India Act, 1935, or article 311(2) of the Constitution. Western India Automobile Association vs Industrial Tribunal, Bombay, and Buckingham & Carnatic Mills Ltd. vs Their Workmen, , referred to. If no enquiry is held by the employer before it passes an order of dismissal, the propriety of such dismissal can be adjudged by the Tribunal on evidence and no employer can be allowed to object to it on the ground that it interferes with the exercise of its managerial function. The Madras Electric Tramways, (1904) Ltd. Madras vs Their Workers, , distinguished and held inapplicable. The propriety of reinstatement in a case of wrongful or illegal dismissal is normally a question of fact and where the Industrial Tribunal on a proper consideration of the relevant factors refuses to pass such an order this Court would be reluctant, in absence of any general or substantial question of law, to interfere under article 136 of the Constitution. A pen down strike falls within the definition of a strike contained in section 2(q) of the Industrial Disputes Art, 1947, and is not Per se illegal. Even if it might involve an element of civil trespass as in the present case, that cannot disentitle an employee to reinstatement. M/s. Burn & Co. Ltd. vs Their Workmen, A.I.R. 1959 S.C. 529, referred to. It is not safe to extend principles of American decisions to such a strike without a careful scrutiny of the relevant provisions of the American Statute and the facts on which the said decisions are based. National Labour Relations Board vs Fansteel Metallurgical Corporation, 306 U.S. 238, considered and held inapplicable. William Truax vs Michael Corrigan, , referred to. Since in the instant case, the peaceful and non violent conduct of the strikers, as found by the Appellate Tribunal, could not amount to criminal trespass within, the meaning of section 441 of the Indian Penal Code, mere participation in the pen down strike did not disentitle them to reinstatement. T. H. Bird vs King emperor, (1934) L.R. XIII Pat. 268, held inapplicable. The mere fact that the employer had engaged new hands during the strike, was not sufficient to defeat the claim to reinstatement of such employees as were subsequently found to have been wrongfully dismissed. National Transport and General Co. Ltd. vs The Workmen, C.A. NO. 312 of 1956, decided on January 22, 1957, referred to. 810 But where, as in the instant case, the Appellate Tribunal took a common sense view of the matter of evidence and held certain office bearers and leaders of the union liable for subversive acts and refused to extend such liability to the entire body of strikers on theoretical and academic grounds, no principles of natural justice could be said to have been contravened by it.

16k+

87 of 1959. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. M. P. Amin, Dara P. Mehta, P. M. Amin; section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra for the petitioners. A. V. Viswanatha Sastri, R. Ganapathy Iyer, P. Kesava Pillai and T. M. Sen, for the respondents. H. N. Sanyal, Additional Solicitor General of India, B. Sen and R. H. Dhebar, for the Intervener. 541 1960. November, 21. The, Judgment of P. B. Gajendragadkar, A. K. Sarkar, K. Subba Rao and J. R. Mudholkar, JJ., was delivered by P. B. Gajendragadkar J., K. N. Wanchoo, J., delivered a separate judgment. GAJENDRAGADKAR, J. This is a petition filed under article 32 of the Constitution in which the validity of the Orissa Mining Areas Development Fund Act,( , 1952 (XXVII of 1952), is challenged. The first petitioner is a public limited company which has its registered office at Bombay. A large majority of its shareholders are citizens of India; some of them are themselves companies incorporated under the Indian Companies Act. Petitioners Nos. 2 to 7 are the Directors of Petitioner No. 1, the second petitioner being the Chairman of its Board of Directors. These petitioners are all citizens of India. At all material times the first petitioner carried on and still carries on the business of producing and selling coal excavated from its collieries at Rampur in the State 'of Orissa. Two leases have been executed in its favour; the first was executed on October 17, 1941, by the Governor of Orissa whereby all that piece or parcel of land in the registration district of Sambalpur admeasuring about 3341.79 acres has been demised for a period of 30 years commencing from September 1, 1939, in consideration of the rent reserved thereby and subject to the covenants and conditions prescribed thereunder; and the second is a surface lease executed in its favour by Mr. Mohan Brijraj Singh Dee on April 19, 1951, in relation to a land admeasuring approximately 211.94 acres for a like period of 30 years commencing from February 4, 1939, in consideration of the rent and subject to the terms and conditions prescribed by it. Pursuant to section 5 of the Orissa Estates Abolition Act, 1951, all the right, title and interest of the Zamindar of Rampur in the lands demised to the first petitioner under the second lease vested in respondents, the State of Orissa. Since then the first petitioner has duly paid the rent reserved by the said lease to the appropriate authorities appointed by respondent 1, 69 542 and has observed and performed all the conditions and covenants of the said lease. In exercise of its rights under the said two leases the first petitioner entered upon the lands demised and has been carrying on the business of excavating and producing coal at its collieries at Rampur. In December, 1952, the Legislature of the State of Orissa passed the impugned Act; and it received the assent of the Governor of Orissa on December 10, 1952. It was, however, not reserved for the consideration of the President of India nor has it received his assent. In pursuance of the rule making power conferred on it by the impugned Act respondent 1 has purported to make rules called the Orissa Mining Areas Development Act Rules, 1955; these rules have been duly notified in the State Gazette on January 25, 1955. Subsequently, the Administrator, respondent 2, appointed under the impugned Act issued a notification on June 24, 1958, whereby the first petitioner 's Rampur colliery has been notified for the purpose of liability for the payment of cess under the impugned Act. The area of this colliery has been determined at 3341.79 acres. In its appeal filed under rule 3 before the Director of Mines the first petitioner objected to the issue of the said notification, inter alia, on the ground that the impugned Act and the rules framed under it were ultra vires and invalid; no action has, however, been taken on the said appeal presumably because the authority concerned could not enter tain or deal with the objections about the vires of the Act and the rules. Thereafter on March 26, 1959, the Assistant Administrative Officer, respondent 3, called upon the first petitioner to submit monthly returns for the assessment of the cess. The first petitioner then represented that it had filed an appeal setting forth its objections against the notification, and added that until the said appeal was disposed of no returns would be filed by it. In spite of this representation respondent 3, by his letter of May 6, 1959, called upon the 543 first petitioner to submit monthly returns in the prescribed form and issued the warning that failing compliance the first petitioner would be prosecuted under section 9 of the impugned Act. A similiar demand was made and a similar warning issued by respondent 3 by his letter dated June 6, 1959. It is under these circumstances that the present petition has been filed. The petitioners contend that the impugned Act and ' the rules made thereunder are ultra vires the powers of the Legislature of the State of Orissa, or in any event they are repugnant to the provisions of an existing law. According to the petition the cess levied under the impugned Act is not a fee but is in reality and in substance a levy in the nature of a duty of excise on the coal produced at the first petitioner 's Rampur colliery, and as such is beyond the legislative competence of the Orissa Legislature. Alternatively it is urged that even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948. The petitioners further allege that even if the said levy is held to be a fee it would be similarly ultra vires having regard to Entry 52 in List I read with Central Act LXV of 1951. According to the petitioners the impugned Act is really relatable to Entry 24 in List III, and since it is repugnant with Central Act XXXII of 1947 relatable to the same Entry and covering the same field the impugned Act is invalid to the extent of the said repugnancy under article 254. On these allegations the petitioners have applied for a writ of mandamus or a writ in the nature of the said writ or any other writ, order or direction prohibiting the respondents from enforcing any of the provisions of the impugned Act against the first petitioner; a similar writ or order is claimed against respondent 3 in respect of the letters addressed by him to the 1st petitioner on March 3, 1959 and June 6, 1959. This petition is resisted by respondent 1 on several grounds. It is urged on its behalf that the levy 544 imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II and its validity is not affected either by Entry 54 read with Act LIII of 1948 or by 'Entry 52 read with Act LXV of 1951. In the alternative it is contended that if the said levy is held to be a tax and not a fee, it would be a tax relatable to Entry 50 in List II, and as such the legislative competence of the State Legislature to impose the same cannot be successfully challenged. Respondent 1 disputes the petitioner 's contention that the impugned Act is relatable to Entry 24 in List III; and so, according to it, no question of repugnancy with the Central Act XXXII of 1947 arises. After this appeal was fully argued before us Mr. Amin suggested and Mr. Sastri did not object that we should hear the learned Attorney General on the question as to whether even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948. Accordingly we directed that a notice on this point should be served on the learned Attorney General and the case should be set down for hearing on that point again. For the learned Attorney General the learned Additional Solicitor General appeared before us in response to this notice and we have had the benefit of hearing his arguments on the point in question. The first question which falls for consideration is whether the levy imposed by the impugned Act amounts to a fee relatable to Entry 23 read with Entry 66 in List II. Before we deal with this question it is necessary to consider the difference between the concept of tax and that of a fee. The neat and terse definition of tax which has been given by Latham, C. J., in Matthews vs Chicory Marketing Board (1) is often cited as a classic on this subject. "A tax", said Latham, C. J., "is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment for services rendered". In bringing out the essential features of a tax this defini (1) ; , 276. 545 tion also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money. by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become, a part of the consolidated fund. It is earmarked and set apart for the purpose of services for which it is levied. There is, however, an element of compulsion in the imposition of both tax and fee. When the Legislature decides to render a specific service to any area or to any class of persons, it is not open to the said area or to the said class of persons to plead that they do not want the service and therefore they should be exempted from the payment of the cess. Though there is an element of quid pro quo between the tax payer and the public authority there is no option to the tax payer in the matter of receiving the service determined by public authority. In regard to fees there is, and must always be, co relation between the fee collected and the service intended to be rendered. Cases may arise where under the guise of levying a fee Legislature may attempt to impose a tax; and in the case of such a colourable exercise of legislative power courts would have to scrutinise the scheme of the levy very carefully and determine whether in fact there is a co relation between the service and the levy, or whether the levy is either not co related with service or is levied to such an 546 excessive extent as to be a presence of a fee and not a fee in reality. In other words, whether or not a particular cess levied by a statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case. The distinction between a tax and a fee is, however, important, and it is recognised by the Constitution. Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes; but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy fees in respect of any of the matters covered in the said List excluding of course the fees taken in any Court. The question about the distinction between a tax and a fee has been considered by this Court in three decisions in 1954. In The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1) the vires of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 195 1), came to be examined. Amongst the sections challenged was section 76(1). Under this section every religious institution had to pay to the Government annual contribution not exceeding 5% of its income for the services rendered to it by the said Government; and the argument was that the contribution thus exacted was not a fee but a tax and as such outside the competence of the State Legislature. In dealing with this argument Mukherjee, J., as he then was, cited the definition of tax given by Latham, C.J., in the case of Matthews (2), and has elaborately considered the distinction between a tax and a fee. The learned judge examined the scheme of the Act and observed that "the material fact which negatives the theory of fees in the present case is that the money raised by the levy of the contribution is not earmarked or specified for defraying the expense that the Government has to incur in performing the services. All the collections go to the consolidated fund of the State and all the expenses have to be met not out of those collections but out of the general revenues by a proper method of appropriation as is done in the (1) ; (2) ; 547 case of other Government expenses". The learned judge no doubt added that the said circumstance was not conclusive and pointed out that in fact there was a total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution. That is why section 76(1) was struck down as ultra vires. The same point arose before this Court in respect of the Orissa Hindu Religious Endowments Act, 1939, as amended by amending Act 11 of 1952 in Mahant Sri Jagannath Ramanuj Das vs The, State of Orissa (1). Mukherjea, J., who again spoke for the Court, upheld the validity of section 49 which imposed the liability to pay the specified contribution on every Mutt or temple having an annual income exceeding Rs. 250 for services rendered by the State Government. The scheme of the impugned Act was examined and it was noticed that the collections made under it are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes. They go to constitute a fund which is contemplated by section 50 of the Act, and this fund to which the Provincial Government contributes both by way of loan and grant is specifically set apart for the rendering of services involved in carrying out the provisions of the Act. The same view was taken by this Court in regard to section 58 of the Bombay Public Trust Act, 1950 (Act XXIX of 1950) which imposed a similar contribution for a similar purpose in Ratilal Panachand Gandhi vs The State of Bombay (2). It would thus be seen that the tests which have to be applied in determining the character of any impugned levy have been laid down by this Court in these three decisions; and it is in the light of these tests that we have to consider the merits of the rival contentions raised before us in the present petition. On behalf of the petitioners Mr. Amin has relied on three other decisions which may be briefly considered. In P. P. Kutti Keya vs The State of Madras (3), the Madras High Court was called upon to consider, inter (1) ; (2) [1954] S.C.R. 1055. (3) A.I.R. 1954 Mad. 621. 548 alia, the validity of section 11 of the Madras Commercial Crops Markets Act 20 of 1933 and Rules 28(1) and 28(3) framed thereunder. Section 11(1) levied a fee on the sales of commercial crops within the notified area and section 12 provided that the amounts collected by the Market Committee shall be constituted into a Market Fund which would be utilised for acquiring a site for the market, constructing a building, maintaining the market and meeting the expenses of the Market Committee. The argument that these provisions amounted to services rendered to the notified area and thus made the levy a fee and not a tax was not accepted by the Court. Venkatarama Aiyar, J., took the view that the funds raised from the merchants for a construction of a market in substance amounted to an exaction of a tax. Whether or not the construction of a market amounted to a service to the notified area it is unnecessary for us to consider. Besides, as we have already pointed out we have now three decisions of this Court which have authoritatively dealt with this matter, and it is in the light of the said decisions that the present question has to be considered. In Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co. (1), the Privy Council had to deal with the validity of forest protection impost levied by the relevant section of the Forest Act R. section B. C. 1936. The lands in question were statutorily exempted from taxation, and it was urged against the validity of the impost that the levy of the said impost was not a service charge but a tax; and since it contravened the exemption from taxation granted to the land it was invalid. This plea was upheld by the Privy Council. The Privy Council did consider two circumstances which were relevant; the first that the levy was on a defined class of interested individuals, and the second that the fund raised did not fall into the general mass of the proceeds of taxation but was applicable for a special and limited purpose. It was conceded that these considerations were relevant but the Privy Council thought that the weight to be attached to them should not be exagge (1) 540 rated. In appreciating the weight of the said relevant circumstances the Privy Council was impressed by the fact that the lands in question formed an important part of the national wealth of the Province and their proper administration, including in particular protection against fire, is a matter of high public concern ' as well as one of particular interest to individuals. In other words, the effect of the impugned provision was, that the expenses of what was the public service of the greatest importance for the Province as a whole had been divided between the general body of tax. payers and those individuals who had a special interest in having their property protected. It would thus appear that this decision proceeded on the basis that what was claimed to be a special service to the lands in question was in reality an item in public service itself, and so the element of quid pro quo was absent. It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from pub lic service, and in essence is directly a part of it, diffe rent considerations may arise. In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve. Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequences. That is the true test in determining the character of the levy. In Parton. vs Milk Board (Victoria)(1), the validity of the levy imposed on dairymen and owners of milk depots by section 30 of the Milk Board Act of 1933 as amended by subsequent Acts of 1936 1939 was (1) ; 70 550 challenged, and it was held by Dixon, J., that the levy of the said contribution amounted to the imposition of a duty of excise. This decision was substantially based on the ground that the statutory board "performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense" that is to say the element of quid pro quo was absent qua the persons on whom the levy had been imposed. Therefore none of the decisions on which Mr. Amin has relied can assist his case. Let us now examine the scheme of the impugned Act. As the preamble shows it has been passed because it was thought expedient to constitute mining areas and a Mining Areas Development Fund in the State of Orissa. It consists of 11 sections. Section 3 of the Act provides for the constitution of a mining area whenever it appears to the State Government that it is necessary and expedient to provide amenities like communications, water supply and electricity for the better development of any area in the State of Orissa wherein any mine is situated, or to provide for the welfare of the residents or to workers in any such areas within which persons employed in a mine or a group of mines reside or work. Under this section the State Government has to define the limits of the area. and is given the power to include within such area any local area contiguous to the same or to exclude from such area any local area comprised therein; that is the effect of section 3(1). Section 3(2) empowers the owner or a lessee of a mine or his duly constituted representative in the said area to file objections in respect of any notification issued under section 3(1) within the period specified, and the State Government is required to take the said objection into consideration. After considering objections received the State Government is authorised to issue a notification constituting a mining area under section 3(3). Section 4 deals with the imposition and collection of cess. The rate of the levy authorised shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth. Section 5 provides for the constitution of the Orissa Mining Areas Development 551 Fund. This fund vests in the State Government and has to be administered by such officer or officers as may be appointed by the State Government in that, behalf Section 5(2) requires that there shall be paid to the credit of the said fund the proceeds of the cess recovered under section 4 for each mining area during the quarter after deducting expenses, if any, for collection and recovery. Section 5(3) contemplates that to the credit of the said fund shall be placed all collections of cess under section 5(2) as well as amounts from State Government and the local authorities and public subscriptions specifically given for any of the purposes of the fund. Section 5(4) deals with the topic of the appli cation of the said fund. The fund has to be utilised to meet expenditure incurred in connection with such measures which in the opinion of the State Government are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of the mining areas, and to meet the welfare of the labour and other persons residing or working in the mining areas. Section 5(5) lays down that without prejudice to the generality of the foregoing provisions the fund may be utilised to defray any of the purposes specified in cls. (a) to (e). Under section 5(6) the State Government is given the power to decide whether any particular expenditure is or is not debitable to the fund and their decision is made final; and section 5(7) imposes on the State Government an obligation to publish annually in the gazette a report of the activities financed from the fund together with an estimate of receipts and expenditure of the fund and a statement of account. Section 6 prescribes the mode of constituting an advisory committee. It has to consist of such number of members and chosen in such manner as may be prescribed, provided however that each committee shall include representatives of mine owners and workmen employed in mining industry. The names of the members of the committee are required to be published in the gazette. Section 7 deals with the appointment and functions of the statutory authorities to carry out the purpose of the Act, while section 8 confers on the State Government power to 552 make rules. Section 9 prescribes penalties and provides for prosecutions; and section 10 gives protection to the specified authorities or officers in respect of anything done or intended to be done by them in good faith in pursuance of the Act or any rules or order made thereunder. Section 11, which is the last section confers on the State Government the power to do anything which may appear to them to be necessary for 'the purpose of removing difficulties in giving effect to the provisions of the Act. The scheme of the Act thus clearly shows that it has been passed for the purpose of the development of mining areas in the State. The basis for the operation of the Act is the constitution of a mining area, and it is in regard to mining areas thus constituted that the provisions of the Act come into play. It is not difficult to appreciate the intention of the State Legislature evidenced by this Act. Orissa is an underdeveloped State in the Union of India though it has a lot of mineral wealth of great potential value. Un fortunately its mineral wealth is located generally in areas sparsely populated with bad communications. Inevitably the exploitation of the minerals is handicapped by lack of communications, and the difficulty experienced in keeping the labour force sufficiently healthy and in congenial surroundings. The mineral development of the State, therefore, requires that provision should be made for improving the communications by constructing good roads and by providing means of transport such as tramways; supply of water and electricity would also help. It would also be necessary to provide for amenities of sanitation and education to the labour force in order to attract workmen to the area. Before the Act was passed it appears that the mine owners tried to put up small length roads and tramways for their own individual purpose, but that obviously could not be as effective as roads constructed by the State and tramway service provided by it. It is on a consideration of these factors that the State Legislature decided to take an active part in unsystematic development of its mineral areas which would help the mine owners in moving their 553 minerals quickly through the shortest route and would attract labour to assist the excavation of the minerals. Thus there can be no doubt that the primary and the principal object of the Act is to develop ' the mineral areas in the State and to assist more efficient and extended exploitation of its mineral wealth. The constitution of the advisory committee as prescribed by section 4 emphasises the fact that the policy of the Act would be to carry out with the assistance of the mine owners and their workmen. Thus after a mining area is notified an advisory committee is constituted in respect of it, and the task of carrying out the objects of the Act is left to the care of the said advisory committee subject to the provisions of the Act. Even before an area is notified the mine owners are allowed an opportunity to put forward their objections. These features of the Act are also relevant in determining the question as to whether the Act is intended to render service to the specified area and to the class of persons who are subjected to the levy of the cess. Section 5 shows that the cess levied does not become a part of the consolidated fund and is not subject to an appropriation in that behalf; it goes into the special fund earmarked for carrying out the purpose of the Act, and thus its existence establishes a correlation between the cess and the purpose for which it is levied. It was probably felt that some additions should be made to the special fund, and so section 5(3) contemplates that grants from the State Government and local authorities and public subscriptions may be collected for enriching the said fund. Every year a report of the activities financed by the fund has to be published together with an estimate of receipt and expenditure and a statement of accounts. It would thus be clear that the administration of the fund would be subject to public scrutiny and persons who are called upon to pay the levy would have an opportunity to see whether the cess collected from them has been properly utilised for the purposes for which it is intended to be used. It is not alleged by the petitioners 554 that the levy imposed is unduly or unreasonably excessive so as to make the imposition a colourable exercise of legislative power. Indeed the fact that the accounts have to be published from year to year affords an indication to the contrary. Thus the scheme of the Act shows that the cess is levied against the class of persons owning mines in the notified area and it is levied to enable the State Government to render specific services to the said class by developing the notified mineral area. There is an element of quid pro quo in the scheme, the cess collected is constituted into a specific fund and it has not become a part of the consolidated fund, its application is regulated by a statute and is confined to its purposes, and there is a definite co relation between the impost and the purpose of the Act which is to render service to the notified area. These features of the Act impress upon the levy the character of a fee as distinct from a tax. It is, however, urged that the cess levied by section 4(2) is in substance and reality a duty of excise. As we have already noticed section 4(2) provides that the rate of such levy shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth; in other words it is the value of the minerals produced which is the basis for calculating the cess payable by mine owners, and that precisely is the nature in which duty of excise is levied under Entry 84 in List I. The said Entry empowers Parliament to impose duties of excise, inter alia, on goods manufactured or produced in India. When minerals are produced from mines and a duty of excise is intended to be imposed on them it would be normally imposed at the pit 's mouth, and that is precisely what the impugned Act purports to do. It is also contended that the rate prescribed by section 4(2) indicates that it operates not as a mere fee but as a duty of excise. This argument must be carefully examined before the character of the cess is finally determined. It is not disputed that under Entry 23 in List II read with Entry 66 in the said List the State Legislature can levy a fee in respect of mines and mineral development. Entry 23 reads thus: "Regu lation of Mines and mineral development subject to 555 the provisions of List I with respect to regulation and development under the control of the Union". We will deal with the condition imposed by the latter part of this Entry later. For the present it is enough to state that regulation of mines and mineral development is within the competence of the State Legislature. Entry 66 provides that fees in respect of any of the matters in the said List can be imposed by the State Legislature subject of course to the exception of fees taken in any Court. The argument is that though the State Legislature is competent to levy a fee in respect of mines and mineral development, if the statute passed by a State Legislature in substance and in effect imposes a duty of excise it is travelling outside its jurisdiction and is trespassing on the legislative powers of Parliament. This argument is based on two considerations. The first relates to the form in which the levy is imposed, and the second relates to the extent of the levy authorised. The extent of the levy authorised would always depend upon the nature of the services intended to be rendered and the financial obligations incurred thereby. If the services intended to be rendered to the notified mineral areas require that a fairly large cess should be collected and co relation can be definitely established between the proposed services and the impost levied, then it would be unreasonable to suggest that because the rate of the levy is high it is not a fee but a duty of excise. In the present case, if the development of the mining areas involves con siderable expenditure which necessitates the levy of the prescribed rate it only means that the services being rendered to the mining areas are very valuable and the rate payer in substance is compensating the State for the services rendered by it to him. It is significant that the petitioners do not seriously suggest that the services intended to be rendered are a cloak and not genuine, or that the taxes levied have no relation to the said services, or that they are unreasonable and excessive. Therefore, in our opinion, the extent of the rate allowed to be imposed by section 4(2) cannot by itself alter the character of the levy from a 556 fee into that of a duty of excise. If the co relation between the levy and the services was not genuine or real, or if the levy was disproportionately higher than the requirements of the services intended to be rendered it would have been another matter. Then as to the form in which the impost is levied, it is difficult to appreciate how the method adopted by the Legislature in recovering the impost can alter its character. The character of the levy must be determined in the light of the tests to which we have already referred. The method in which the fee is recovered is a matter of convenience, and by itself it cannot fix upon the levy the character of the duty of excise. This question has often been considered in the past, and it has always been held that though the method in which an impost is levied may be relevant in determining its character its significance and effect cannot be exaggerated. In Balla Ram vs The Province of East Punjab (1) the Federal Court had to consider the character of the tax levied by section 3 of the Punjab Urban Immoveable Property 'tax Act XVII of 1940. Section 3 provided as follows: "There shall be charged, levied and paid an annual to tax on buildings and lands situated in the rating areas shown in the schedule to this Act at such rate not exceeding twenty per centum of the annual value of such buildings and lands as the Provincial Government may by notification in official gazette direct in respect of each such rating area". The argument urged before the Federal Court was that the tax imposed by the said section was in reality a tax on income within the meaning of Item 54 in List I of the Seventh Schedule to the Constitution Act of 1935, and as such it was not covered by Item 42 in List II of the said Schedule. This argument was rejected on the ground that the tax levied by the Act was in pith and substance a tax on lands and buildings covered by Item 42. It would be noticed that the basis of the tax was the annual value of the building which is the basis used in the Indian Income tax Act for determining income from property; and so, the attack against the section was based on (1) 557 the ground that it had adopted the same basis for leaving the impost as the Income tax Act and the said basis determined its character whatever may be the appearance in which the impost was purported to be levied. In repelling this argument Fazl Ali, J. observed that the crucial question to be answered was whether merely because the Income tax Act has adopted the annual value as the standard for determining the income it must necessarily follow that if the same standard is employed as a measure for any other tax that tax becomes a tax on income. The learned judge then proceeded to add that if the answer to this question is to be given in the affirmative then certain taxes which cannot possibly be described as income tax must be held to be so. In other words, the effect of this decision is that the adoption of the standard used in Income tax Act for getting at the income by any other act for levying the tax authorised by it would not be enough to convert the said. tax into an income tax. During the course of this judgment Fazl Ali, J. also noticed with approval a similar view taken by the Bombay High Court in Sir Byramjee Jeejeebhoy vs The Province of Bombay (1). This decision has been expressly approved by the Privy Council in Governor General in Council vs Province of Madras (2). Consistently with the decision of the Federal Court their Lordships expressed the opinion that "a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods and not on sales or the proceeds of the sale of goods. The two taxes, the one levied on the manufacturer in respect of his goods and the other on the vendor in respect of his sales may in one sense overlap, but in law there is no overlapping; the taxes are separate and distinct imposts. If in, fact they overlap that may be because the taxing authority imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article (1) I.L.R. (2) (1945) L.R. 72 I.A. 91. 71 558 leaves the factory or workshop for the first time on the occasion of its sale". In that case the question was whether the tax authorised by the Madras General Sales Tax Act, 1939, was a tax on the sale of goods or was a duty of excise, and the Privy Council held it was the former and not the latter. Therefore, in our opinion, the mere fact that the levy imposed by the impugned Act has adopted the method of determining the rate of the levy by reference to the minerals produced by the mines would not by itself make the levy a duty of excise. The method thus adopted may be relevant in considering the character of the impost but its effect must be weighed along with and in the light of the other relevant circumstances. In this connection it is always necessary to bear in mind that where an impugned statute passed by a State Legislature is relatable to an Entry in List II it is not permissible to challenge its vires only on the ground that the method adopted by it for the recovery of the impost can be and is generally adopted in levying a duty of excise. Thus considered the conclusion is inevitable that the cess levied by the impugned Act is neither a tax nor a duty of excise but is a fee. The next question which arises is, even if the cess is a fee and as such may be relatable to Entries 23 and 66 in List II its validity is still open to challenge because the legislative competence of the State Legislature under Entry 23 is subject to the provisions of List I with respect to regulation and development under the control of the Union; and that takes us to Entry 54 in List I. This Entry reads thus: "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". The effect of reading the two Entries together is clear. The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to 559 the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of (,he State Legislature itself. This position is not in dispute. It is urged by Mr. Amin that the field covered by the impugned Act has already been covered by the Mines and Minerals (Regulation and Development) Act, 1948, (LIII of 1948) and he contends that in view of the declaration made by section 2 of this Act the impugned Act is ultra vires. This Central Act was passed to provide for the regulation of mines and oil fields and for the development of minerals. It may be stated at this stage that by Act LXVII of 1957 which has been subsequently passed by Parliament, Act LIII of 1948 has now been limited only to oil fields. We are, however, concerned with the operation of the said Act in 1952, and at that time it applied to mines as well as oil fields. Section 2 of the Act contains a declaration as to the expediency and control by the Central Government. It reads thus: "It is hereby declared that it is expedient in the public interest that the Central Government should take under its control the regulation of mines and oil fields and the development of minerals to the extent hereinafter provided". It is common ground that at the relevant time this Act applied to coal mines. Section 4 of the Act provides that no mining lease shall be granted after the commencement of this Act otherwise than in accordance with the rules made under this Act. Section 5 empowers the Central Government to make rules by notification for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area. Sections 4 and 5 thus 560 purport to prescribe necessary conditions in accordance with which mining leases have to be executed. This part of the Act has no relevance to our present purpose. Section 6 of the Act, however, empowers the Central Government to make rules by notification in the official gazette for the conservation and development of minerals. Section 6(2) lays down several matters in respect of which rules can be framed by the Central Government. This power is, however, without prejudice to the generality of powers conferred on the Central Government by section 6(1). Amongst the matters covered by section 6(2) is the levy and collection of royalties, fees or taxes in respect of minerals mined, quarried, excavated or collected. It is true that no rules have in fact been framed by the Central Government in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union. In such a case the test must be whether the legislative declaration covers the field 561 or not. Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948. It still remains to consider whether section 2 of the said Act amounts in law to a declaration by Parliament as required by article 54. When the said Act was passed in 1948 the legislative powers of the Central and the Provincial Legislatures were governed by the relevant Entries in the Seventh Schedule to the Constitution Act of 1935. Entry 36 in List I corresponds to the present Entry 54 in List I. It reads thus: "Regulation of Mines and Oil Fields and mineral development to the extent to which such regulation and development under Dominion control is declared by Dominion law to be expedient in public interest". It would be notic ed that the declaration required by Entry 36 is a declaration by Dominion law. Reverting then to section 2 of the said Act it is clear that the declaration contained in the said section is put in the passive voice; but in the context there would be no difficulty in holding that the said declaration by necessary implication has been made by Dominion law. It is a declaration contained in a section passed by the Dominion Legislature ' and so it is obvious that it is a declaration by a Dominion law; but the question is: Can this declaration by a Dominion law be regarded constitutionally as declaration by Parliament which is required by Entry 54 in List I. It has been urged before us by the learned Additional Solicitor General and Mr. Amin that in dealing with this question we should bear in mind two general considerations. The Central Act has been continued under article 372(1) of the Constitution as an existing law, and the effect of the said constitutional provision must be that the continuance of the existing law would be as effective and to the same extent after the Constitution came into force as before. It is urged that after the said Act was passed and before the Con stitution came into force no Provincial Legislature could have validly made a law in respect of the field covered by the said Act, and it would be commonsense to assume that the effect of the continuance of the 562 said law under article 372(1) cannot be any different. In other words, if no Provincial Legislature could have trespassed on the field covered by the said Act before the Constitution, the position would and must be the same even after the Constitution came into force. It is also contended that for the purpose of bringing the provision of existing laws into accord with the provisions of the Constitution the President was given power to make by order appropriate adaptations and modifications of such laws, and the object of making such adaptations obviously was to make the continuance of the existing laws fully effective. It is in the light of these two general considerations, so the. argument runs, must the point in question be considered. The relevant clause in the Adaptation of Laws Order, 1950, on which reliance has been placed in support of this argument is el. 16 in the Supplementary Part of the said Order. This clause provides that subject to the provisions of this Order any reference by whatever form of words in any existing law to any authority competent at the date of the passing of that law to exercise any powers or authorities, or to discharge any functions, in any part of India shall, where a corresponding new authority has been constituted by or under the Constitution, have effect until duly repealed or amended as if it were a reference to that new authority. The petitioners contend that as a result of this clause the declaration made by the Dominion Legislature in section 2 of the Central Act must now be held to be the declaration made by Parliament. Is this contention justified on a fair and reasonable construction of the clause? That is the crux of the problem. In considering this question it would be relevant to recall the scheme of the Adaptation of Laws Order, 1950. It consists of Three Parts. Part 1 deals with the adaptation of Central Laws and indicates the adaptation made therein; Part 11 deals with the adaptation of Provincial Laws and follows the same pattern; and Part III is a Supplementary Part which contains provisions in the nature of supplementary provisions. A perusal of the clauses contained in Part 563 I would show that though some adaptation was made in Act LIII of 1948 it was not thought necessary to make an adaptation in section 2 of the said Act whereby the declaration implied in the said section has been expressly adapted into a declaration by Parliament. Now, the effect of el. 16 in substance is to equate an authority competent at the date of the passing of the existing law to exercise any powers or authorities, or to discharge any functions with a corresponding new authority which has been constituted by or under the Constitution. Reference to the authority in the con. text would suggest cases like reference to the Governor General eo nomine, or Central Government which respectively would be equated with the President or the Union Government. Prima facie the reference to authority would not include reference to a Legislature; in this connection it may be relevant to point out that article 372(1) refers to a competent Legislature as distinguished from other competent authorities. That is the first difficulty in holding that el. 16 refers to the Dominion Legislature and purports to equate it with the Parliament. It is clear that for the application of this clause it is necessary that a reference should have been made to the authority by some words whatever may be their form. In other words it is only where the existing law refers expressly to some authority that this clause can be invoked. It is difficult to construe the first part of this clause to include authorities to which no reference is made by any words in terms, but to which such reference may be implied; and quite clearly the Dominion Legislature is not expressly referred to in section 2. In construing the present clause we think it would be straining the language of the clause to hold that an authority to which no reference is made by words in any part of the existing law could claim the benefit of this clause. Besides, there is no doubt that when the clause refers to any authority competent to exercise any powers or authorities, or to discharge any functions, it refers to the powers, authorities or functions attributable to the existing law itself; that is to say, authorities 564 which are competent to exercise powers or to discharge functions under the existing laws are intended to be equated with corresponding new authorities. It is impossible to hold that the Dominion Legislature is an authority which was competent to exercise any power or to discharge any function under the existing law. Competence to exercise power to discharge functions to which the clause refers must inevitably be related to the existing law and not to the Constitution Act of 1935 which would be necessary if Dominion Legislature was to be included as an authority under this clause. The Constitution Act of 1935 had been repealed by the Constitution and it was not, and could not obviously be, the object of the Adaptation of Laws Order to make any adaptation in regard to the said Act. Therefore, the competence of the Dominion Legislature which flowed from the relevant provisions of the Constitution Act of 1935 is wholly outside this clause. We have carefully considered the arguments urged before us by the learned Additional Solicitor General and Mr. Amin but we are unable to hold that cl. 16 can be pressed into service for the purpose of supporting the conclusion that the declaration by the Dominion Legislature implied in section 2 of Act LIII of 1948 can, by virtue of cl. 16, be held to be a declaration by Parliament within the meaning of the relevant Entries in the Constitution. If that be the true position then the alternative challenge to the vires of the Act based on el. 16 of the Adaptation of Laws Order must fail. There is another possible argument which may prima facie lead to the same conclusion. Let us assume that the result of reading article 372 and cl. 16 of the Adaptation of Laws Order is that under section 2 of Act LIII of 1948 there is a declaration by Parliament as suggested by the petitioners and the learned Additional Solicitor General. Would that meet the requirements of Entry 54 in List I of the Seventh Schedule? It is difficult to answer this question in the affirmative because the relevant provisions of the Constitution are prospective and the declaration by Parliament specified by Entry 54 must be declaration made by 565 Parliament subsequent to the date when the Constitution came into force. Unless a declaration is made by Parliament after the Constitution came into force it will not satisfy the requirements of Entry 54, and that inevitably would mean that the impugned Act is validly enacted under Entry 23 in List II of the Seventh Schedule. If that be the true position then it would follow that even on the assumption that el. 16 of the Adaptation of Laws Order and article 372 can be construed as suggested by the petitioners the impugned Act would be valid. Faced with this difficulty, both the learned Additional Solicitor General and Mr. Amin argued that cl. 21 of the said Order may be of some assistance. Clause 21 reads thus: "Any Court, Tribunal, or authority required or empowered to enforce any law in force in the territory of India immediately before the appointed day shall, notwithstanding that this Order makes no provision or insufficient provision for the adaptation of the law for the purpose of bringing it into accord with the provisions of the Constitution, construe the law with all such adaptations as are necessary for the said purpose". Assuming that this clause is valid we do not see how it is relevant in the present case. All that this clause purports to do is to empower the Court to construe the law with such adaptations as may be necessary for the purpose of bringing it in accord with the provisions of the Constitution. There is no occasion to make any adaptation in construing Act LIII of 1948 for bringing it into accord with the provisions of the Constitution at all. The said Act has been continued under article 372(1) and there is no constitutional defect in the said Act for the avoidance of which any adaptation is necessary. In fact what the petitioners seek to do is to read in section 2 of the said Act the declaration by Parliament required by Entry 54 so as to make the impugned Act ultra vires. Quite clearly cl. 21 cannot be pressed into service for such a purpose. Therefore, we reach this position that the field covered by Act LIII of 1948 is substantially the same as the field covered by the 72 566 impugned Act but the declaration made by section 2 of the said Act does not constitutionally amount to the requisite declaration by Parliament, and so the limitation imposed by Entry 54 does not come into operation in the present case. Act LIII of 1948 continues in operation under article 372; with this modification that so far as the State of Orissa is concerned it is the impugned Act that governs and not the Central Act. Article 372(1) in fact provides for the continuance of the existing law until it is altered, repealed or amended by a competent Legislature or other competent authority. In the absence of the requisite parliamentary declaration the legislative competence of the Orissa Legislature under Entry 23 read with Entry 66 is not impaired, and so the said Legislature is competent either to repeal, alter or amend the existing law which is the Central Act LIII of 1948; in effect, after the impugned Act was passed, so far as Orissa is concerned the Central Act must be deemed to be repealed. This position is fully consistent with the provisions of article 372. The result is that the material words used in cls. 16 and 21 being unambiguous and explicit, it is difficult to give effect to the two general considerations on which reliance has been placed by the petitioners. Incidentally the present case discloses that in regard to the requisite parliamentary declaration prescribed by Entry 54 in List I in its application to the pre Constitution Acts under corresponding Entry 36 in List I of the Constitution Act of 1935, there is a lacuna which has not been covered by any clauses of the Adaptation of Laws Order; that, however, is a matter for Parliament to consider. There is one more point which is yet to be considered. Mr. Amin contends that Entry 23 in List II is subject to the provisions in List I with respect to regulation and development under the control of the Union, and according to him Entry 52 in List I is one of such provisions. In this connection he relies on the said Entry which deals with industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest, and Industries (Development and Regulation) Act, 1951 (LXV 567 of 1951). This Act has been passed to provide for the development and regulation of certain industries one of which undoubtedly is coal mining industry. Section 2 of this Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. This declaration is a declaration made by Parliament, and if the provisions of the Act read with the said declaration covered the same field as is covered by the impugned Act, it would undoubtedly affect the vires of the impugned Act; but in dealing with this question it is important to bear in mind the doctrine of pith and substance. We have already noticed that in pith and substance the impugned Act is concerned with the development of the mining areas notified under it. The Central Act, on the other hand, deals more directly with the control of all industries including of course the industry of coal. Chapter II of this Act provides for the constitution of the Central Advisory Council and Development Councils, chapter III deals with the regulation of scheduled industries, chapter IIIA provides for the direct management or control of industrial undertakings by Central Government in certain cases, and chapter IIIB is concerned with the topic of control of supply, distribution, price, etc, of certain articles. The last chapter deals with miscellaneous incidental matters. The functions of the Development Councils constituted under this Act prescribed by section 6(4) bring out the real purpose and object of the Act. It is to increase the efficiency or productivity in the scheduled industry or group of scheduled industries, to improve or develop the service that such industry or group of industries renders or could render to the community, or to enable such industry or group of industries to render such service more economically. Section 9 authorises the imposition of cess on scheduled industries in certain cases. Section 9(4) provides that the Central Government may hand over the proceeds of the cess to the Development Council there specified and that the Development Council shall utilise the said proceeds to achieve the objects mentioned in cls. (a) to (d). These 568 objects include the promotion of scientific and industrial research, of improvements in design and quality, and the provision for the training of technicians and labour in such industry or group of industries. It would thus be seen that the object of the Act is to regulate the scheduled industries with a view to improvement and development of the service that they may render to the society, and thus assist the solution of the larger problem of national economy. It is difficult to hold that the field covered by the declaration made by section 2 of this Act, considered in the light of its several provisions, is the same as the field covered by the impugned Act. That being so, it cannot be said that as a result of Entry 52 read with Act LXV of 1951 the vires of the impugned Act can be successfully challenged. Our conclusion, therefore, is that the impugned Act is relatable to Entries 23 and 66 in List II of the Seventh Schedule, and its validity is not impaired or affected by Entries 52 and 54 in List I read with Act LXV of 1951 and Act LIII of 1948 respectively. In view of this conclusion it is unnecessary to consider whether the impugned Act can be justified under Entry 50 in List II, or whether it is relatable to Entry 24 in List III and as such suffexs from the vice of repugnancy with the Central Act XXXII of 1947. The result is the petition fails and is dismissed with costs. WANCHOO, J. I have read the judgment just delivered by my learned brother Gajendragadkar J. and regret that I have not been able to persuade myself that the cess levied in this case on all extracted minerals from any mine in any mining area at a rate not exceeding five per centum of the value of the minerals at the pit 's mouth by the Orissa State Legislature under section 4 of the Orissa Mining Areas Development Fund Act, No. XXVII of 1952, (hereinafter called the Act) is a fee properly so called and not a duty of ex cise. The facts are all set out in the judgment just delivered and I need not repeat them. The scheme of the Act, as appears from section 3 thereof is to give power to the State Government, whenever it 569 thinks it necessary and expedient to provide amenities, like communications, water supply and electricity for the better development of any area in the State where , in any mine is situated or to provide for the welfare of residents or workers in any such area within. which persons employed in a mine or a group of mines reside or work, to constitute such an area to be a mining area for the purposes of the Act, to define the limits of the area, to include within such area any local area contiguous to the same and defined in the notification and to exclude from such area any local area comprised therein and defined in the notification. A notification under section 3 is made, after hearing objections from owners or lessees of mines. After such an area is con stituted under section 3, a cess is imposed under section 4 on all extracted minerals from any mine in any such area at the rate not exceeding five per centum of the value of the minerals at the pit 's mouth. The cess so collected is credited to a fund called the Orissa Mining Area Development Fund created under section 5 of the Act, besides other amounts with which we are not concerned in this case. The Fund is to be applied to meet expenditure incurred in connection with such measures, which in the opinion of the State Government, are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of mining areas and to meet the welfare of labour and other persons residing or working in the mining areas. Then come other provisions for working out the above provisions including section 8, which gives power to the State Government to frame rules to carry. into effect the purposes of the Act. The Rules were framed under the Act in January, 1955. The constitutional competence of the Orissa State Legislature to levy the cess under the Act is attacked on two main grounds. In the first place, it is urged that the cess is in pith and substance a duty of excise under item 84 of List I of the Seventh Schedule and therefore the levy of such a cess is beyond the competence of the Orissa State Legislature. In the second place, it is urged that even if the cess is a fee, in view 570 of the two Acts of the Central Legislature and Parliament, namely, The Mines and Minerals (Regulation and Development) Act, No. LIII of 1948 and The Industries (Development and Regulation) Act, No. LXV of 1951, the Orissa Legislature was not competent to pass the Act. The petition has been opposed on behalf of the State of Orissa and the main contentions urged on its behalf are that the cess is a fee properly so called and not a duty of excise and therefore the Orissa State Legislature was competent to levy it and the two Central Acts do not affect that competence. In the alternative it has been urged that even if the cess is a tax the State Legislature was competent to levy it under item 50 of List If of the Seventh Schedule. The first question therefore that falls for consideration is whether the cess in this ' ease is a tax or a fee. Difference between a tax properly so called and a fee properly so called came up for consideration before this Court in three cases in 1954 and was considered at length. In the first of them, namely, The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt it was pointed out that "though levying of fees is only a particular form of the exercise of the taxing power of the State, our Constitution has placed fees under a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself". It was also pointed that "the essence of a tax is compulsion, that is to say, it is imposed under statutory power without the taxpayer 's consent and the payment is enforced by law. The second characteristic of a tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when (1) ; 571 collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the tax payer and the public authority. Another feature of taxation is that as it is a part of the common burden, quantum of imposition upon the tax payer depends generally upon his capacity to pay. " As to fees, it was pointed out that "a 'fee ' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. " Finally, it was pointed out that "the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. . . Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. " The consequence of these principles was that "if, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision be co related to the expenses incurred by Government in rendering the services. . . If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax." Having laid down these principles, that case then considered the vires of section 76 of the Madras Hindu Religious and Charitable Endowments Act, No. XIX of 1951, and it was pointed out that the material fact which negatived the theory of fees in that case was that the money raised by levy of the contribution was not ear marked or specified for defraying the expenses 572 that the Government had to incur in performing the services. All the collections went to the consolidated fund of the State and all the expenses had to be met not out of those collections but out of the general revenues by a proper method of appropriation as was done in the case of other government expenses. That in itself might not be conclusive, but in, that case there was total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution under the provision of section 76 and in those circumstances the theory of return or counter payment or quid pro quo could not have any possible application to that case. Consequently, the contribution levied under section 76 was held to be a tax and not a fee. In the second case of Mahant Sri Jagannath Ramanuj Das vs The State of Orissa (1), a similar imposition by the Orissa Legislature came up for consideration. After referring to the earlier case, it was pointed out that "two elements are thus. essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly. But this by itself is not enough to make the imposition a fee, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State to be spent for general public purposes." The Orissa imposition was held to be a fee because the collections made were not merged in the general public revenue and were meant for the purpose of meeting the expenses of the Commissioner and his office which was the machinery set up for due administration of the affairs of the religious institution. They went to constitute a fund which was contemplated by section 50 of the Orissa Act and this fund was specifically set apart for rendering services involved in carrying out the provisions of the Act. The third case, namely, Ratilal Panachand Gandhi (1) ; 573 vs The State of Bombay (1) came from Bombay. 58 of the Bombay Act, No. XXIX of 1950, provided for an imposition in proportion to the gross annual income of the trust. This imposition was levied for the purpose of due administration of the trust property and for defraying the expenses incurred in connection with the same. After referring to the two earlier cases, the Court went on to say that "taxis a common burden and the only return which the taxpayer gets is participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus in fees there is always an element of quid pro quo which is absent in a tax. . But in order that the collections made by the Government can rank as fees, there must be co relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services. " It was then pointed out that the contributions, which were collected under section 58, were to be credited in the Public Trusts Administration Fund as constituted under section 57. This fund was to be applied exclusively for the payment of charges for expenses incidental to the regulation of public trusts and for carrying into effect the provisions of the Act. The imposition therefore was in that case held to be a fee. These decisions clearly bring out the difference between a tax and a fee and generally speaking there is always an element of quid pro quo in a fee and the amount raised through a fee is co related to the expenses necessary for rendering the services which are the basis of quid pro quo. Further, the amount collected as a fee does not go to augment the general revenues of the State and many a time a special fund is created in which fees are credited though this is not absolutely necessary. But as I read these deci sions, they cannot be held to lay down that 'What is in pith and substance a tax can become a fee merely (1) [1954] S.C.R. 1055. 574 because a fund is created in which collections are credited and some services may be rendered to the persons from whom collections are made. If that were so, it will be possible to convert many taxes not otherwise leviable into fees by the device of creating a special fund and attaching some service to be rendered through that fund to the persons from whom collections are made. I am therefore of opinion that one must first look at the pith and substance of the levy, and if in its pith and substance it is not essentially different from a tax it cannot be converted into a fee by creating a special fund in which the collections are credited and attaching some services to be rendered through that fund. Let me then look at the pith and substance of the cess, which has been imposed in this case. The cess consists of a levy not exceeding five per centum of the value of the minerals at the pit 's mouth on all extracted minerals. Prima facie such a levy is nothing more nor less than a duty of excise. Item 84 of List I gives power to levy duties of excise exclusively to the Union and is in these terms : "Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry. " This item gives power to Parliament to impose duties of excise on all goods manufactured. or produced in India with certain exceptions mentioned therein. Taking this particular case, coal is produced from the mine and would clearly be covered by the words " other goods produced in India" and a duty of excise can be levied on it. What then exactly is meant by a duty of excise? Reference in this connection may be made to Governor General in Council vs Province of Madras (1). In that case the point arose whether the sales tax imposed by the Madras Legislature was a duty of excise. The Privy Council pointed out that (1) (1945) L.R. 72 I.A. 91. 575 "in a Federal constitution in which there is a division of legislative powers between Central and Provincial legislatures, it appears to be inevitable that controversy should arise whether one or other legislature is not exceeding its own, and encroaching on the other 's, constitutional legislative power, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax but its real nature, its 'pith and substance ' as it has sometimes been said which must determine into what category it falls. " The Privy Council went on to consider what a duty of excise was and said that "it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods. Though sometimes a duty of excise may be imposed on first sales, a duty of excise and a tax on the sale of goods were separate and distinct imposts and in law do not overlap." The Privy Council approved of the decisions of the Federal Court in re The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (1) and The Province of Madras vs Messrs. Boddu Paidanna and Sons (2). It seems to have been urged that because in some cases a duty of excise may be levied on the occasion of the first sale and a sales tax may also be levied on the same occasion, there is really no difference between the two. It is however clear that a duty of excise is primarily a tax on goods manufactured or produced; it is not a tax on the sale of goods, though the taxing authority may as a matter of concession to the producer not charge the tax immediately the goods are produced and may postpone it, to make it easy for the producer to pay the tax, till the first sale is made by him; nevertheless the charge is still on the goods and is therefore a duty of excise. On the other hand, a sales tax can only be levied when a sale is made and there is nothing to prevent its levy on the first sale. The two concepts (1) (2) (1948) F.C.R. go. 576 are however different and, as the Privy Council pointed out, a sales tax and a duty of excise are separate and distinct imposts and in law do not overlap. The pith and substance of a duty of excise is that it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. Let me therefore see what the Orissa Legislature has done in the present case. It has levied a cess at a rate not exceeding five per centum on the value of minerals at the pit 's mouth on all extracted minerals. All the extracted minerals are nothing other than goods produced and the cess is levied on the goods produced at a rate not exceeding five per centum of the value at the pit 's mouth. The cess therefore in the present case cannot be anything other than a duty of excise. The pith and substance of the cess in this case falls fairly and squarely within entry 84 of List I and is therefore a duty of excise, which cannot be levied by the Orissa State Legislature. I may in this connection refer to the cesses levied by the Central Legislature and Parliament by Act XXXII of 1947 and by the Act No. LXV of of Act XXXII of 1947 lays down that there shall be levied and collected as a cess for the purposes of that Act a duty of excise on all coal and coke dispatched from collieries at such rate not less than four annas and not more than eight annas per ton as may from time to time be fixed by the Central Government by notification in the Official Gazette. This is obviously a tax on the goods produced, the basis of the tax being so much per ton. Again sec. 9 of Act LXV of 1951 lays down that there may be levied and collected as a cess for the purposes of that Act on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order a duty of excise at a rate not exceeding two annas per centum of the value of the goods. This again is clearly a tax on goods produced or manufactured and is in the nature of a duty of excise, the basis of the tax being so much of the value of the goods. If these two taxes are duties of excise, 577 I fail to see any difference in pith and substance between these two taxes and the cess levied under the Act. It is however urged that the method employed in the Act for realising the cess is only a method of quantification of the fee and merely because of this quantification, the pith and substance of the impost does not change from a fee to a duty of excise. Reference in this connection was made to three cases of quantification. In Sir Byramjee Jeejeebhoy vs The Province of Bombay (1), a question arose with respect to a tax imposed on urban immovable property, whether it was a tax on lands and buildings. The challenge to the tax was on the ground that it was tax on income or capital value within items 54 and 55 of List I of the Seventh Schedule of the Government of India Act and could not therefore be imposed by the Bombay Legislature. It was held that the tax was a tax on lands and buildings within the meaning of item 42 of List II of the same Schedule and that the basis of the tax, which was the annual value, would not convert it into a tax on income or capital value. The High Court considered the pith and substance of the said Act and came to the conclusion that every tax on annual value was not necessarily a tax on income and it was held that the mode of assessment of a tax did not determine its character and one has to look to the essential character of the tax to decide whether it was a tax on income or on lands and buildings. Looking to the pith and substance of the tax it was held in that case that it was a tax on lands and buildings. That decision was in the circumstances of that case right because the intention of the legislature was not to tax the income of any one; the essential character of the tax in that case was to tax the lands and buildings and the annual value of the lands and buildings was only taken as a mode of levying the tax. In the present case, however, the very mode of the levy of the cess is nothing other than the levy of a duty of excise and therefore the principle of quantification for purposes of a fee cannot be extended to (1) I.L.R. 578 such an extent as to convert what is in pith and substance a tax into a fee on that basis. The next case to which reference was made is Municipal Corporation, Ahmedabad vs Patel Gordhandas Hargovandas (1). In that case the Ahmedabad Bo. rough Municipality had levied a rate on open lands and the basis of the levy was one per centum of the capital value of the land. It was urged that this amounted to a capital levy within entry 54 of List I; but the court repelled that contention and held that the levy was in pith and substance a tax on lands, which came within entry 42 of List II of the Seventh Schedule to the Government of India Act. A distinction was made between a tax on land which is levied on the basis of its capital value and a tax which is on capital treating it as an asset itself. This decision also, if I may say so with respect, is correct, for the basic idea was to tax lands and some method had to be found for doing so and the method evolved, though it might look like a capital levy, was in pith and substance not so. But the theory of quantification which is the basis of these two cases cannot be stretched so far as to turn levies which are in pith and substance taxes into fees, by the process of attaching certain services and creating a fund. The third case is Ralla Ram vs The Province of East Punjab (2). That was a case of a tax on lands and buildings and annual value was the basis on which the tax was levied. The Federal Court rightly pointed out that the pith and substance of the levy had to be seen and on that view it was not income tax but a tax on lands and buildings and the method adopted was merely a method of quantification. The Federal Court also pointed out that "where there is an apparent conflict between an Act of the Federal Legislature and an Act of the Provincial Legislature, we must try to ascertain the pith and substance or the true nature and character of the conflicting provisions and that before an Act is declared ultra vires, there should be an attempt to reconcile the two conflicting jurisdictions, and, only if such a reconciliation should prove (1) I.L.R. (2) 579 impossible, the impugned Act should be declared invalid. " It may also be pointed out that in all these three cases, one source of income of an individual or one item out of the total capital of an individual was the basis of calculation while income tax or capital levy is generally on the total income or the total capital of a person. That aspect must have gone into the decision that the method employed was merely a mode for imposing a tax on lands and buildings. In the present case, however, I see no difference between the method of imposing a duty of excise and the method employed in the Act for imposing a cess a matter which will be clear from the cesses imposed under the two Central Acts already referred to (No. XXXII of 1947 and No. LXV of 1951). It is not as if there could be no method of imposing a fee properly so called in this case except the one employed. Two methods readily suggest themselves. A lump sum annual fee could be levied on each mine even on a graded scale depending on the size of the mine as evidenced by its share capital. Or a similar graded fee could be levied on each mine depending on its size determined by the number of men employed therein. Where therefore the result of quantification is to bring a particular impost entirely within the ambit of a tax it would not be right to say that such an impost is still a fee, because certain services have to be rendered and a fund has been created in which collections of the impost are credited. If this were permissible many taxes not otherwise leviable would be converted into fees by the simple device of creating a special fund and attaching certain services to be rendered from the amount in that fund. That would in my opinion be a colourable exercise of the power of legislation, as explained in K. C. Gajapati Narayan Deo vs The State of Orissa (1). Let me illustrate how taxes can be turned into fees on the so called basis of quantification with the help of the device of creating a fund and attaching certain services to be rendered out of monies in the fund. Take the case of income tax under item 82 of List I of the Seventh Schedule, which is exclusively reserved (1) ; 580 for the Union. Suppose that some State Legislature wants to impose a tax on income other than agricultural income in the garb of fees. All that it has to do is then to create a special fund out of the amounts collected and to attach rendering of certain services to the fund. All that would be necessary would be to define the services to be rendered so widely that the amount required for the purpose would be practically limitless. In that case there would be no difficulty in levying any amount of tax on income, for the amount collected would always be insufficient for the large number of services to be rendered. What has to be done is to find out a number of items in Lists II and III of the Seventh Schedule in respect of which fees can be levied by the State Legislature. These fees can be levied on a total basis for a large number of services under various entries of Lists II and III. A fund can be created, say, for rendering services of various kinds to residents of one district. In order to meet the expenses of tendering such services, suppose, the legislature imposes a tax on every one in the district at 10 per centum of the net total income (other than agricultural income); the amount so collected is put in a separate fund and ear marked for such special services to be rendered to the residents of that district. Can it be said that such a levy is a fee justified under various entries of Lists II and III, and not a tax on income, on the ground that this is merely a mode of quantification? As an instance, take, item 6 of List II, "Public health and sanitation, hospitals and dispensaries"; item 9, "Relief of the disabled and unemployable"; item II, Education; item 12, Libraries, museums and similar institutions"; item 13, communications, that is to say, roads, bridges and other means of communications; item 17, "Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power"; and item ', 25, "Gas and gas works"; item 23 of List III, "Social security and social insurance, employment and unemployment"; item 24, "Welfare of labour including conditions of work, provident funds, employers ' liability workmen 's compensation, invalidity and old age 581 pensions and maternity benefits"; item 25, "Vocational and technical training of labour"; and item 38, "Electricity". Assume that a fund is created for rendering, these services to the residents of a district. The State Legislature is entitled to impose fees for rendering these services to the residents of the district; the costs of these services would obviously be limitless and in order to meet these costs, the State legislature levies a consolidated fee for all these purposes at 10 per centum of the total net income on the residents of the district (excluding his agricultural income) as a measure of quantification of the fee. Can it be said in the circumstances that such a levy would not be Income tax, simply because a fund is created to be used in the district where collections are made and these services have to be rendered out of the fund so created to the residents of that district and to no others? The answer can only be one, viz., that the nature of the impost is to be seen in its pith and substance; and if in pith and substance it is income tax within item 82 of List I of the Seventh Schedule it will still remain income tax in spite of the creation of a fund and the attaching of certain services to the monies in that fund to be rendered in a particular area. Such an impost can never be justified as a consolidated fee on the ground that it is merely a method of quantification. Compare what has been done in this case. Sec. 3 of the Act which refers to the services to be rendered mentions communications, that is,, roads, bridges and other means of communication (barring those given in List I), water supply and electricity, for the better development of the area. These three items themselves would mean expenditure of such large amounts that anything could be charged as a fee to meet the costs, particularly in an undeveloped State like Orissa. Further, the section goes on to mention provision for the welfare of residents or workers in any such area, which would include such things as social security and social insurance, provident funds, employer 's liability, workmen 's compensation, invalidity and old age pensions and maternity benefits and may be even employment and unemployment. Again large funds would 74 582 be required for these purposes. Therefore, the services enumerated in section 3 being so large and requiring such large sums, any amount can be levied as a fee and in the name of quantification any tax, even though it may be in List I, can be imposed; and that is exactly what has been done, namely, what is really a duty of excise has been imposed as a fee for these purposes which fall under items 13 and 17 of List II and 23, 24 and 38 of List III. There can be no doubt in the circumstances that the levy of a cess as a fee in this case is a colourable piece of legislation. I do not say that the Orissa State Legislature did this deliberately. The motive of the legislature in such cases is irrelevant and it is the effect of the legislation that has to be seen. Looking at that, the cess in this case is in pith and substance nothing other than a duty of excise under item 84 of List I and therefore the State legislature was incompetent to levy it as a fee. The next contention on behalf of the State of Orissa is that if the cess is not justified as a fee, it is a tax under item 50 of List II of the Seventh Schedule. Item 50 provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. This raises a question as to what are taxes on mineral rights. Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise. If taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes on mineral rights and duties of excise under item 84 of List I. A comparison of Lists I and II of the Seventh Schedule shows that the same tax is not put in both the Lists. Therefore, taxes on mineral rights must be different from duties of excise which are taxes on minerals produced. The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines. The usual method of working them is for the owner of the mine to grant mining leases to those who have got the capital to work the mines. There should 583 therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted. Thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that. Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted would be duties of excise. It is said that, there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub leases there would be no way of levying tax on mineral right, ,. It is enough to say that these cases also, rare though they are, present no difficulty. Take the case of taxes on annual value of buildings. Where there is a lease of the building, the annual value is determined by the lease money; but there are many cases where owners themselves live in buildings. In such cases also taxes on buildings are levied on the annual value worked out according to certain rules. There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which, for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else. There can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced. Therefore the present case is not a tax on mineral rights; it is a tax on the minerals actually produced and can be no different in pith and substance from a tax on goods produced which comes under Item 84 of List I, as duty of excise. The present levy therefore under section 4 of the Act cannot be justified as a tax on mineral rights. In the view I have taken, it is not necessary to consider the other point, raised on behalf of the petitioners, namely, that even if it is a fee, in view of the two Central Acts (mentioned earlier) the, Orissa Legislature was not competent to pass the Act. I would 584 therefore allow the petition, and declare that the Orissa Mining Areas Development Fund Act, 1952, is beyond the constitutional competence of the Orissa Legislature to pass it. The whole Act must be struck down because there will be very little left in the Act if section 4 falls as it must. The legislature would never have passed the Act without section 4. By COURT. In accordance with the majority Judgment of the Court, the Writ Petition is dismissed with costs.

The petitioners challenged the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952, which by section 3 empowered the State Government to constitute mining areas for the purpose of providing them with certain amenities after hearing objections from the lessees, by section 4 to impose and collect a cess not exceeding 5% of the valuation of the minerals at the pit 's mouth and by section 5 created a fund to which the cess was to be credited. The petitioners ' case, inter alia, was that the impugned Act and the rules made thereunder were ultra vires the powers of the State Legislature, the cess levied thereunder was not a fee but a duty of excise on coal within Entry 84 of List I of the Seventh Schedule to the Constitution and repugnant to Coal Mines Labour Welfare Fund Act, 1947 (Act XXXII of 1947), and, alternatively, even supposing it was a fee relatable to Entries 23 and 66 of List II, it was hit by Entry 54 of List I read with the Mines and Minerals (Regulation and Development) Act 1948 (Act LIII of 1948), or by Entry 52 of List I read with the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951). It was urged on behalf of the State, inter alia, that the cess was a fee and not a duty of excise and the competence of the State Legislature to levy it was not affected by the Central Acts. Held (per Gajendragadkar, Sarkar, Subba Rao and Mudholkar, JJ.), that the cess imposed by the Act was a fee relatable to Entries 23 and 66 of List II of the Seventh Schedule to the Constitution and the Constitutional validity of the impugned Act was beyond question. Although there can be no generic difference between a tax and a fee since both are compulsory exactions of money by public authorities, there is this distinction between them that whereas a tax is imposed for public purposes and requires no consideration to support it, a fee is levied essentially for services rendered and there must be an element of quid pro quo between the person 538 who pays it and the public authority that imposes it. While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose. Whether a cess is one or the other would naturally depend on the facts of each case. If in the guise of a fee, the Legislature imposes a tax, it is for the Court on a scrutiny of the scheme of the levy, to determine its real character. The distinction is recognised by the Constitution which while empowering the appropriate Legislatures to levy taxes under the Entries in the three lists refers to their power to levy fees in respect of any such matters, except the fees taken in court, and tests have been laid down by this Court for determining the character of an impugned levy. Matthews vs Chicory Marketing Board, ; , The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; , Mahant Sri Jagannath Ramanuj Das & Any. vs The State of Orissa, ; , and Ratilal Panachand Gandhi vs The State of Bombay, [1954] S.C.R. 1055, referred to. P. P. Kutti Keva & Ors. vs The State of Madras, A.I.R. , Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co., and Parton & Any. vs Mils Board (Victoria), (1949) 80 C.L.R. 229, considered and held inapplicable. In determining whether a levy is a fee the true test must be whether its primary and essential purpose is to render specific services to a specified area or class, it being of no consequence that the State may ultimately and indirectly be benefited by it. So judged, the scheme of the impugned Act leaves no manner of doubt that the levy authorised by it is a fee and not a tax. The amount of the levy must depend on the extent of the services sought to be rendered and if they are proportionate, it would be unreasonable to say that since the impost is high it must be a duty of excise. The rate specified by section 4(2) of the Act, therefore, cannot by itself alter the character of the levy and constitute a trespass by the State Legislature on the legislative powers of the Parliament under Entry 84 of the List I. Nor can the method prescribed by the Legislature for re covering the levy by itself alter its character. The method is a matter of convenience and, though relevant, has to be tested in the light of other relevant circumstances. It is not permissible to challenge the vires of a statute relatable to an Entry in List II solely on the ground that the method adopted for the recovery of the impost can and generally is adopted in levying a duty of excise. Ralla Ram vs The Province of East Punjab, , Byramjee Jeejeebhoy vs The Province of Bombay & Anr. I.L.R. 539 and Governor General in Council vs Province of Madras, (1945) 'L.R. 72 I.A. 91, considered. The limitation imposed by the latter part of Entry 23 of List II is a limitation on the legislative competence of the State ' Legislature itself and the test whether a statute passed by the State Legislature thereunder was ultra vires would be whether the requisite declaration under Entry 54, List I, has been made by Parliament by law covering the same field or not; it is not necessary in order to make the declaration effective that rules should also be made and enforced. Although by operation of article 372 of the Constitution Act LIII of 1948 was an existing Act substantially covering the same field as covered by the impugned Act, there was no adaptation of section 2 of that Act whereby a declaration implied by it could be said to have been adapted to a declaration by Parliament. Clause 16 of the Adaptation of Laws Order, 1950, properly construed, cannot be held to refer to the Dominion Legislature and equate it with the Parliament. It can be resorted to only where the existing law expressly refers to some authority that can be equated with the corresponding new authorities. Since the Dominion Legislature was not so referred to, its competence under the Constitution Act of 1935, repealed by the Constitution of India, was clearly outside the clause. Nor can Cl. 21 of the order be of any help to the petitioners. Consequently, in the absence of the requisite Parliamentary declaration, the competence of the Orissa State Legislature under Entry 23 read with Entry 66 of the List II was not impaired and the impugned Act must be deemed to have repeal ed the Central Act, so far as that State was concerned. This case incidentally discloses that in regard to the requisite Parliamentary declaration prescribed by Entry 54 in List I in its application to the pre constitution Acts under corresponding Entry 36 in List I of the Constitution Act of 1935, there is a lacuna which has not been covered by any clauses of the Adaptation of Laws Order, 1950. Nor was the impugned Act ultra vires the State Legislature by operation of Entry 52 of List I read with section 2 of the Industries (Development and Regulation) Act, 1951 (LXV of 1951). That Act, in pith and substance, deals more directly with the control of certain specified industries including the coal industry, while the impugned Act is concerned with the development of the mining areas notified under it. The field covered by the two Acts was not, therefore, the same. per Wanchoo, J. In order to determine whether a levy is a tax or a fee, what has to be considered is the pith and sub stance of the levy. Where the levy in pith and substance is not essentially different from a tax, it cannot be converted into a fee by crediting it to a special fund and attaching certain services to it. 540 The Commissioner, Hindu Religious Endowments, Madras, vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; , Mahant Sri Jaannath Ramanuj Das vs The State of Orissa, ; and Ratilal Panachand Gandhi vs The State of Bombay, [1954] S.C.R. 1055, discussed. A duty of excise in pith and substance is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is different and distinct from a sales tax and in law they do not overlap. Governor General in Council vs Province of Madras, 72 I.A. 91, referred to. What the impugned Act did was to provide for the levying of the cess on the goods produced at a rate not exceeding five per centum of the value at the pit 's mouth. The cess was, therefore, in pith and substance a duty of excise falling within Entry 84 of List I, which the State legislature could not levy. It was not correct to say that the method employed by the impugned Act for realising the cess was a mere method of quantification and did not affect its character which was that of a fee. In the present case the very mode of the levy of the cess is nothing other than the levy of a duty of excise, and, therefore, the principle of quantification for purposes of a fee could not be so extended as to convert what was in pith and substance a tax into a fee. Sri Byramjee Jeejeebhoy vs The Province of Bombay, I.L.R. , Municipal Corporation, Ahmedabad vs Patel Gor dhandas Hargovandas, I.L.R. and Ralla Ram vs The Province of East Punjab, , considered. K. C. Gajapati Narayan Deo vs The State of Orissa, ; , referred to. The cess levied under section 4 of the Act could not be justified as a tax on mineral rights under Entry 50 of List II of the Seventh Schedule and the impugned Act was in effect a colourable piece of legislation.

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Civil Appeal No. 2269 of 1980 etc. From the Judgment and order dated 30.7.80 of the High Court of Bombay in Appeal No. 252/1980 etc. K. Parasaran Sol. , N.C. Talukdar, Dr. Y.S. Chitale, K.K Venugopal, Suraj Udai Singh, Dalveer Bhandari, C.V. Subba Rao, R.N. Poddar, M.S. Ganesh, Ravi Naghmave, T. Shrinivasamoorthi, K.S. John, Vithalbhai B. Patel, R.P. Kapur, Bhaskar Gupta, R.K Chaudhary, A. T. Patra and Parveen Kumar for the Appellants Petitioners. N.A. Palkhivala, J.C. Bhatt, Soli J. Sorabjee, Ashok Desai, D.B. Engineer, B.H. Antia, Ravinder Narain, O.C. Mathur. Talat Ansari, Mrs. A.K Verma, Ashok Sagar, Miss Rainu Walia, Sukumaran, D.N. Mishra and A.N. Haskar for the Respondents. J: On May 9, 1983 we made an order setting forth the legal position in respect of various aspects of the levy of excise duty under the , both before its amendment by the Central Excises and Salt (Amendment) Act. 1973 (Act XXII of 1973) and after such amendment. We record now the reasons for that order. At the outset, we may state that it is not possible in this judgment to deal with the numerous individual appeals, writ petitions, special leave petitions and transferred cases before us on the particular facts of each, and we propose to consider the points arising therein from a general perspective. The relates to central duties of excise and to salt. Sub section (1) of s.3 provides that duties of excise shall be levied and collected on all excisable goods, other than salt, which are produced or manufactured in India, at the rates set forth in the First Schedule. We are not concerned with the provision relating to salt. Sub section (2) empowers the Central Government to fix, for the purpose of levying the duties, tariff values of the articles enumerated in the First Schedule as chargeable with duty ad valorem. Before its amendment by Act XXII of 1973 s.4 read as follows: "4. Determination of value for the purposes of duty. Where, under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists, or (b) where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or 356 producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, or if such article is not sold or is not capable of being sold at such place, at any other place nearest thereto. Explanation In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. " It seems that with the increase in the ad valorem levies in the Central Excise Tariff the operation of s.4 presented certain practical difficulties, some of which were prominently brought out in the judgment of this Court in A. K. Roy & Anr, vs Voltas Limited. Among other observations the Court appears to have said that the real value of an article for the purposes of the excise levy would include only the manufacturing cost plus the manufacturing profit. In order to overcome the various difficulties, Parliament enacted Act XXII of 1973 which substituted a new s.4 for the original Provision with effect from October 1, 1975. The new section 4 provides: "4. Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section be deemed to be (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale: Provided that (i) where in accordance with the normal practice of the wholesale trade in such goods, such goods are sold 357 by the assessee at different prices to different classes of buyers (not being related persons) each such price, shall, subject to the existence of the other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers; (ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force, or at a price, being the maximum fixed under any such law, then, notwithstanding anything contained in cl. (iii) of this proviso the price or the maximum price, as the case may be, so fixed shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii)where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail; (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. (2) Where, in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal, to the place of delivery shall be excluded from such price. 358 (3) The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub section (2) of Section 3. (4) or the purposes of this section. (a) "assessee" means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) "place of removal" means (i) a factory or any other place or premises of production or manufacture of the excisable goods; or (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed; (c) "related person" means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub distributor of such distributor. Explanation. In this clause "holding company", "a subsidiary company" and "relative" have the same meanings as in the ; (d) "value", in relation to any excisable goods. (i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. 359 Explanation. In this sub clause "packing" means the wrapper, container, bobbin, pirn, spool, reel or warp beam or any other thing in which or on which the excisable goods are wrapped. contained or wound; (ii) does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale; (e) "wholesale trade" means sales to dealers, industrial consumers, Government local authorities and other buyers, who or which purchase their requirements otherwise than in retail. " In the cases before us there has been considerable debate on the true meaning and scope of s.4 before and after its amendment. The points raised are not without difficulty, but we have had the advantage of hearing counsel of eminence on both sides, and we are grateful to them for the considerable assistance they have given us throughout the hearing of these cases. The central issue between the parties is whether the value of an article for the purposes of the excise levy must be determined by reference exclusively to the manufacturing cost and the manufacturing profit of the manufacturer or should be represented by the entire wholesale price charged by the manufacturer. The wholesale price actually charged by the manufacturer consists of not merely his manufacturing cost and his manufacturing profit but includes, in addition, a whole range of expenses and an element of profit (conveniently referred to as "post manufacturing expenses" and "post manufacturing profit") arising between the completion of the manufacturing process and the point of sale by the manufacturer. Mr. N.A. Palkhivala, learned counsel for the assessees, has propounded three principles which, he contends, form the essential characteristics of a duty of excise. Firstly, he says, excise is a tax on 360 manufacture or production and not on anything else. Secondly, uniformity of incidence is a basic characteristic of excise. And thirdly, the exclusion of post manufacturing expenses and post manufacturing profits is necessarily involved in the first principle and helps to achieve the second. Learned counsel urges that where excise duty is levied on an ad valorem basis the value on which such duty is levied is a "conceptual value", and that the conceptual nature is borne out by the circumstance that the identity of the manufacturer and the identity of the goods as well as the actual wholesale price charged by the manufacturer are not the determining factors. It is urged that the old s.4 (a) clearly indicates that a conceptual value forms the basis of the levy, and that the actual wholesale price charged by the particular assessee cannot be the basis of the excise levy. It is said that the criterion adopted in clause (a) succeeds in producing uniform taxation, whether the assessees are manufacturers who sell their goods in wholesale, semi wholesale or in retail, whether they have a vast selling and marketing net work or have none, whether they sell at depots and branches or sell at the factory gate, and whether they load the ex factory price with post manufacturing expenses and profits or do not do so. Because the value of the article rests on a conceptual base, it is urged, the result of the assessment under s.4 (a) cannot be different from the result of an assessment under s 4 (b). The contention is that the principle of uniformity of taxation requires the exclusion of post manufacturing expenses and profits, a factor which would vary from one manufacturer to another. It is pointed out that such exclusion is necessary to create a direct and immediate nexus between the levy and the manufacturing activity, and to bring about a uniformity in the incidence of the levy. Learned counsel contends that the position is the same under the new s.4 which, he says, must needs be so because of the fundamental nature of the principles propounded earlier. Referring to the actual language of the new s.4 (1) (a), it is pointed out that the expression "normal price" therein means "normal for the purposes of excise", that is to say, that the price must exclude post manufacturing expenses and post manufacturing profit and must not be loaded with any extraneous element. It is conceded, however, that under the new s.4 (1) (a) there is no attempt to preserve uniformity as regards the amount of duty between one manufacturer and another, but it is urged that the basis on which the value is determined is constituted by the same conceptual criterion, that post manufacturing expenses and post manufacturing profit must be excluded. Considerable emphasis has been laid on the submission that as excise duty is a tax on the manufacture or 361 production of goods it must be a tax intimately linked with the manufacture or production of the excisable article and, therefore, it can be imposed only on the assessable value determined with reference to the excisable article at the stage of completed manufacture and to no point beyond. To preserve this intimate link or nexus between the nature of the tax and the assessment of the tax, it is urged that all extraneous elements included in the "value" in the nature of post manufacturing expenses and post manufacturing profits have to be off loaded. It is pointed out that factors such as volume, quantity and weight, which enter into the measure of the tax, are intimately linked with the manufacturing activity, and that the power of Parliament under Entry 84 of List I of the Seventh Schedule to the Constitution to legislate in respect of "value" is restricted by the conceptual need to link the basis for determining the measure of the tax with the very nature of the tax. Shri K. Parasaran, the learned Solicitor General of India (when these cases were heard), and now the Attorney General of India) has strongly contended that the value of an excisable article for the purposes of the levy must be taken at the price charged by the manufacturer on a wholesale transaction, the computation being made strictly in terms of the express provisions of the statute and, he says, there is no warrant for confining the value to the assessee 's manufacturing cost plus manufacturing profit. According to him, although excise is a levy on the manufacture of goods, it is open to Parliament to adopt any basis for determining the value of an excisable article, that the measure for assessing the levy need not correspond completely to the nature of the levy, and no fault can be found with the measure so long as it bears a nexus with the charge. Besides this fundamental issue, there are other points of dispute, principally in respect of the connotation of the expression "related person" in the new s.4 as well as the nature of the deductions which can be claimed by the assessee as post manufacturing expenses and post manufacturing profit from the price for the purpose of determining the "value". The submissions made by learned counsel for the parties in support of their respective contentions cover a wide area, and several questions of a fundamental nature have been raised. We consider it necessary to deal with them because they enter into and determine the conclusions reached by us. 362 We think it appropriate that at the very beginning we should briefly indicate the concept of a duty of excise. Both Entry 45 of List I of the Seventh Schedule to the Government of India Act, 1935, under which the original was enacted, and Entry 84 of List I of the Seventh Schedule to the Constitution under which the Amendment Act of 1973 was enacted, refer to "Duties of excise on. .goods manufactured or produced in India". A duty of excise, according to the Federal Court in The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 is a duty ordinarily levied on the manufacturer or producer in respect of the manufacture or production of the commodity taxed. A distinction was drawn between the nature of the tax and the point at which it was collected, and Gwyer C.J. observed that theoretically "there can be no reason why an excise duty should not be imposed even on the retail sale of an article, if the taxing Act so provides. Subject always to the legislative competence of the taxing authority, a duty on home produced goods will obviously be imposed at the stage which the authority find to be most convenient and the most lucrative, wherever it may be; but that is a matter of the machinery of collection, and does not affect the essential nature of the tax. The ultimate incidence of an excise duty, a typical indirect tax, must always be on the consumer, who pays as he consumes or expends; and it continues to be an excise duty, that is, a duty on home produced or home manufactured goods, no matter at what stage it is collected" (emphasis supplied). The position was explained further in The Province of Madras vs Messers. Boddu Paidanna and Sons where the Federal Court observed: "There is in theory nothing to prevent the Central Legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed, or given away. A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Indian Excise Acts) when the commodity leaves the factory for the first time, and also because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, 363 for example, been destroyed in the factory itself. It is the fact of manufacture which attracts the duty, even though it may be collected later. " The observations show that while the nature of an excise is indicated by the fact that is imposed in respect of the manufacture or production of an article, the point at which it is collected is not determined by the point of time when its manufacture is completed but will rest on considerations of administrative convenience, and that generally it is collected when the article leaves the factory for the first time. In other words, the circumstance that the article becomes the object of assessment when it is sold by the manufacturer does not detract from its true nature, that it is a levy on the fact of manufacture. In a subsequent case, Governor General in Council vs Province of Madras, the Privy Council referred to both in The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (supra) and The Province of Madras vs Messers. Boddu Paidanna and Sons (supra) and affirmed that when excise was levied on a manufacturer at the point of the first sale by him "that may be because the taxation authority imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time on the occasion of its sale. But that method of collecting the tax is an accident of administration; it is not of the essence of the duty of excise, which is attracted by the manufacture itself." This Court had occasion to consider a similar question in R.C. Jall vs Union of India. In that case, the Central Government was authorised by an ordinance to levy and collect as a cess on coal and coke despatched from collieries in British India duty of excise at a specified rate. Rule 3 made under Ordinance empowered the Government to impose a duty of excise on coal and coke when such coal and coke was despatched by rail from the collieries of the coke plants, and the duty was to be collected by the Railway Administration by means of a surcharge on freight either from the consignor or consignee. It was contended by the assessee that the excise duty could not legally be levied on the consignee who had nothing to do with the manufacture or production of coal. The Court remarked: "The argument confuses the incidence of taxation with the machinery provided for the collection thereof," 364 and reference was made to In re. the Central Provinces and Berar Act No. XIV of 1938 (supra), The Province of Madras vs Boddu Paidanna and Sons (supra) and Governer General in Council vs Province of Madras (supra). This Court then summarised the law as follows: "Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience. " Other cases followed where the nature of excise duty was reaffirmed in the terms set out earlier, and reference may be made to In Re. The Bill To Amend section 20 of the , and section 3 of the , Union of India vs Delhi Cloth & General Mills, M/s Guruswamy & Co. Etc. vs State of Mysore & Ors. and South Bihar Sugar Mills Ltd. etc. vs Union of India & Ors. We think we have shown sufficiently that while the levy is on the manufacture or production of goods, the stage of collection need not in point of time synchronize with the completion of the manufacturing process. While the levy in our country has the status of a constitutional concept, the point of collection is located where the statute declares it will be. We shall return to this later when it is necessary to consider a submission in regard to the effect of transactions to or through "related persons". We move on now to a different dimension, to the conceptual consideration of the measure of the tax. section 3 of the provides for the levy of the duty of excise. It creates 365 the charge, and defines the nature of the charge. That it is a levy on excisable goods, produced or manufactured in India, is mentioned in terms in the section itself. Section 4 of the Act provides the measure by reference to which the charge is to be levied. The duty of excise is chargeable with reference to the value of the excisable goods, and the value is defined in express terms by that section. It has long been recognised that the measure employed for assessing a tax must not be confused with the nature of the tax. In Ralla Ram vs Province of East Punjab the Federal Court held that a tax on buildings under section 3 of the Punjab Urban Immovable Property Tax Act, 1940 measured by a percentage of the annual value of such buildings remained a tax on buildings under that Act even though the measure of annual value of a building was also adopted as a standard for determining income from property under the Income Tax Act. It was pointed out that although the same standard was adopted as a measure for the two levies, the levies remained separate and distinct imposts by virtue of their nature. In other words, the measure adopted could not be identified with the nature of the tax. The distinction was observed by a Special Bench of the Patna High Court in Atma Ram Budhia vs State of Bihar where a tax on passengers and goods was assessed as a rate on the fares and freights payable by the owners of the motor vehicles. Atma Ram Budiha (supra) was referred to with approval by this Court in M/s Sainik Motors, Jodhpur and Others vs The State of Rajasthan. This Court in that case repelled the contention that the levy was a tax upon income and not upon passengers and goods. It pointed out that "though the measure of the tax is furnished by the fares and freights it does not cease to be a tax on passengers and goods". The point was considered by this Court again in D.C. Gouse and Co. etc. vs State of Kerala & Anr. where reference was made to the measure adopted for the purpose of the levy of tax on buildings under the Kerala Building Tax Act. The Court examined the different modes available to the Legislature for measuring the levy, and upheld the action of the Legislature in linking the levy with the annual value of the building and prescribing a uniform formula for determining its capital value and for calculating the tax. In the course of its judgment, the Court cited with approval a passage from Seervai 's Constitutional Law of India. 366 "Another principle for reconciling apparently conflicting tax entries follows from the fact that a tax has two elements: the person, thing of activity on which the tax is imposed, and the amount of the tax. The amount may be measured in may ways; but decided cases establish a clear distinction between the subject matter of a tax and the standard by which the amount of tax is measured. These two elements are described as the subject of a tax and the measure of a tax. " It is, therefore, clear that the levy of a tax is defined by its nature, while the measure of the tax may be assessed by its own standard. It is true that the standard adopted as the measure of the levy may indicate the nature of the tax but it does not necessarily determine it. The relationship was aptly expressed by the Privy council in Re. A Reference under the Government of Ireland Act, 1920 and Sect. 3 of the Finance Act (Northern Ireland), 1934 when it said: ". It is the essential characteristic of the particular tax charged that is to be regarded, and the nature of the machinery often complicated by which the tax is to be assessed is not of assistance, except in so far as it may throw light on the general character of the tax. " The case was referred to by a Constitution Bench of this Court in R.R. Engineering Co. vs Zila Parishad, Bareilly & Anr., where the relationship was succinctly described thus: "It may be, and is often so, that the tax on circumstances and property is levied on the basis of income which the assessee receives from his profession, trade, calling or property. That is, however, not conclusive on the nature of the tax. It is only as a matter of convenience that income is adopted as a yardstick or measure for assessing the tax. As pointed out in Re. a Reference under Govt. of Ireland Act (supra), the measure of the tax is not a true test of the nature of the tax. Therefore, while determining the nature of a tax, though the standard on which the tax is levied may be a relevant consideration, it is not a conclusive consideration. " 367 The principle was reaffirmed by this Court in The Hingir Rampur Coal Co., Ltd. and Others vs The State of Orissa and Others where the form in which the levy was imposed was held to be and impermissible test for defining in itself the character of the levy. It was observed: ". .the mere fact that the levy imposed by the impugned Act had adopted the method of determining the rate of the levy by reference to the minerals produced by the mines would not by itself make the levy a duty of excise. The method thus adopted may be relevant in considering the character of the impost but its effect must be weighed along with and in the light of the other relevant circumstances. " It is apparent, therefore, that when enacting a measure to serve as a standard for assessing the levy the Legislature need not contour it along lines which spell out the character of the levy itself. Viewed from this standpoint, it is not possible to accept the contention that because the levy of excise is a levy on goods manufactured or produced the value of an excisable article must be limited to the manufacturing cost plus the manufacturing profit. We are of opinion that a broader based standard of reference may be adopted for the purpose of determining the measure of the levy. Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy. In our opinion, the original s.4 and the new s.4 of the satisfy this test. S.4 envisages a method of collecting tax at the point of the first sale effected by the manufacturer. Under the old s.4 (a), the value of the excisable article was deemed to be the wholesale cash price for which an article of the like kind and quality was sold, or was capable of being sold, at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market did not exist for such article at such place, then delivery was envisaged at the nearest place where such market existed. Sec.4 (b) declared that where such price was not ascertainable, the value would be deemed to be the price to be the price at which an article of the 368 like kind and quality was sold or was capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, and if such article was not sold or was not capable of being sold at such place, at any other place nearest thereto. Then there was an explanation which declared that no abatement or deduction would be allowed except in respect of trade discount and the duty payable at the time of the removal of the article from the factory. The wholesale price was envisaged as a cash price in order to make it a uniform standard, because it was then a price freed from the burden of an increase on account of credit or other advantage allowed to a buyer, a factor which may vary from transaction to transaction and from buyer to buyer. The essential distinction between cl. (a) and cl. (b) of s.4 appears to lie in this, that cl. (a) is invoked when the wholesale cash price is ascertainable and cl. (b) when the wholesale cash price cannot be ascertained. As we have said, it was open to the Legislature to specify the measure for assessing the levy. The Legislature has done so. In both the old s.4 and the new s.4, the price charged by the manufacturer on a sale by him represents the measure. Price and sale are related concepts, and price has a definite connotation. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with the terms of s.4. A contention was raised for some of the assessees, that the measure was to be found by reading s.3 with s.4, thus drawing the ingredients of s.3 into the exercise. We are unable to agree. We are concerned with s.3(1), and we find nothing there which clothes the provision with a dual character, a charging provision as well as a provision defining the measure of the charge. At this stage, it would be advantageous to refer to certain decisions which have some bearing on the proper construction of cl. (a) and cl. (b) of the old s.4. In Vacuum Oil Company vs Secretary of State for India in Council the Privy Council had to construe the scope of s.30 of the which contained cls. (a) and (b) substantially comparable with the two clauses of the old s.4 of the Central 369 Excises and Salt Act. The appellants in this case manufactured different grades of lubricating oil in the United States. Large quantities of lubricating oil of particular manufacture and mark were imported into India through the port of Bombay and sold by the appellants directly to consumers. A dispute arose as to the provisions under which duty under the was attracted. Section 30 of that Act provided that for the purposes of the duty the real value should be deemed to be "(a) the wholesale cash price, less trade discount, for which goods of the like kind and quality are sold or are capable of being sold, at the time and place of importation. . or (b) where such price is not ascertainable, the cost at which goods of the like and quality could be delivered at such place,. ." The government contended that the real value of the appellants ' oil was its "wholesale cash price" referred to in s.30(a) a price ascertainable, without difficulty. The appellants replied that in view of the unique character of their oil and of the invariable course of business pursued by them in relation to its sale, a "wholesale cash price" for that oil had never existed and was not ascertainable and that therefore its real value must be determined in accordance with s.30(b) of the Act. The Privy council observed that there was no other oil in Bombay which could be said to be "of the like kind and quality" as the oil imported by the appellants and therefore the relevant "wholesale cash price" for the appellants, if there be such price, was to be found in the actual sales of those oils in Bombay by the appellants themselves provided that such sales had taken place. It was noted that large stocks of oil were imported at Bombay and all contracts for sale were made with reference to stocks. The oils were disposed of directly to consumers and never to dealers. The appellants themselves discharged all the functions of retailers of their oil as so sold. Besides, the selling price to consumers was about 70 per cent above the entry price, the difference representing the appellant 's retailing profit and the expenses incurred by them in respect of matters subsequent to importation. The quantities of oil purchased by individual consumers were in some cases very large indeed. The Privy council took the view that in no sense could the price charged to consumers for the oils imported by the appellants be regarded as "a wholesale case price", and that therefore the case did not fall within s.30(a) but must be regarded as attracting s.30 (b). On the other side of the line is Ford Motor Company of India Ltd. vs Secretary of State for India in Council, in which the 370 Privy Council had to consider the scope of section 30 of the Indian again. The appellants imported Ford motor vehicles into India from Canada and sold them to authorised dealers or distributors. They possessed a monopoly in India as regards the supply of such vehicles. The appellants issued from time to time a price list and the terms of business were that the retail price to be charged by the distributors to the public was that stated in the price list current at the time of arrival of the vehicles in India, and the price payable by the distributors to the appellants was the same price less a discount of 20 per cent. The Collector of Customs assessed customs duty on a consignment of 256 Ford motor cars under section 30 (a). The appellants contended that for the motor cars in question no wholesale cash price was ascertainable and the duty should have been assessed under section 30 (b). The Privy Council approached the case from the stand point that if a wholesale price satisfying the description contained in section 30 (a) was ascertainable, the goods could not be dealt with under section 30 (b), and in this connection they referred to the expression "ascertainable" as importing more than could be satisfied by the result of a mere estimate. The Privy Council held that the appellant 's price to the distributors was a wholesale price within the meaning of section 30 (a) because it was a cash price, and only discount had been deducted, and the sum payable by the distributor had been deduced to a price referable to a car in the condition in which it arrived in Bombay. It was contended for the appellants that "goods of the like kind and quality" in cl. (a) was a phrase which suggested other goods than that under assessment and therefore, the price fetched by the goods, themselves must be disregarded or should be considered only to see what price other similar goods would have realised. It was urged that since that test was not satisfied cl.(a) could not be invoked. The Privy Council rejected the contention, observing that the application of cl.(a) did not depend upon any hypothesis to the effect that at the time and place of importation an indefinite amount of further goods added to the available supply had effect upon the wholesale price. And what is important, the Privy Council further observed: "But if there is an actual price for the goods themselves at the time and place of importation, and if it is a "wholesale cash price, less trade discount" the clause is not inapplicable for want of sales of other goods. The clause can be applied distributively to each of the motor cars in this consignment, and even if they are regarded collectively the clause is not defeated. A particular car may be sold at a price which, having regard to other transactions in such cars, or to other circumstances, 371 is too high or too low. In that sense, the actual price in a particular instance does not necessarily or finally establish a wholesale price to satisfy cl. (a), whether the particular car or cars sold be part of the shipment in question or not. But the goods under assessment may under cl. (a) be considered as members of their own class even although at the time and place of importation there are no other members. The price obtained for them may correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation. " These two cases illustrate the fundamental distinction between provisions such as the two clauses of section 4 of the . Great reliance has been placed by the assessees on two important decisions of this Court in support of the contention that only the manufacturing cost and the manufacturing profit can be taken into account for assessing the "value" of an excisable article. The first case is A.K. Roy vs Voltas Ltd. (supra). The assessee manufactured air conditioners and water coolers, and sold those article from its head office at Bombay and at branch officers in different towns in the country directly to consumers at list prices. The sales so effected amounted to about 90% to 95% of its production. It also sold the articles to wholesale dealers on terms which required them to sell the products at list prices, and that the assessee would sell them the articles at the listed price less 22% discount. The assessee contended before the excise authorities that the list price minus 22% discount allowed to the wholesale dealers would constitute the "wholesale cash price" for ascertaining the real value of the articles. The contention was accepted by the excise authorities, and assessments were made on that basis. Subsequently, the Superintendent of Central Excise began to assess the duty on the basis of the retail price and not the wholesale cash price. The case was taken by writ petition to the High Court, which held that the duty fell to be assessed under the old s.4(a) of the on the basis of the wholesale cash price payable by the wholesale dealers, and not under s.4(b) on the basis of the price of retail sales effected directly to the consumers. The case was brought in appeal to this Court. The Court observed that for the purposes of s.4(a), it was not necessary for a wholesale market to exist in the physical sense of the term where articles of a like kind or quality are or could be sold. A wholesale market, it was observed, could also mean "the potentiality of the articles being 372 sold on a wholesale basis". What was necessary was that the articles could be sold wholesale to traders. It was observed further that the application of s.4(a) of the Act did not depend upon any hypothesis to the effect that at the time and place of sale any further articles of the like kind and quality should have been sold. If there was an actual price for the goods themselves at the time and place of sale and if that was a 'wholesale cash price ', the clause was not inapplicable for want of sale of other goods of a like kind and quality. Later follow the words which have brought on the present controversy: "Excise is a tax on the production and manufacture of goods (see Union of India vs Delhi Cloth and General Mills (supra). Section 4 of the Act therefore provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the manufacturing cost and the manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post manufacturing cost and the profit arising from post manufacturing operation, namely selling profit. " Those observations were made when the Court was examining the meaning of the expression "wholesale cash price". What the Court intended to say was that the entire cost of the article to the manufacturer (which would include various items of expense composing the value of the article) plus his profit on the manufactured article (which would have to take into account the deduction of 22% allowed as discount) would constitute the real value had to be arrived at after off loading the discount of 22%, which in fact represented the wholesale dealer 's profit. A careful reading of the judgment will show that there was no issue inviting the Court 's decision on the point now raised in these cases by the assessees. The other case is Atic Industries Ltd. vs H.H. Dove, Asstt. Collector of Central Excise and Ors. The appellant, Atic Industries Ltd., was a manufacturer of dye stuffs. It sold its products to two wholesale buyers, 70% of its total production to one and 30% to the other. The price charged was a uniform price described as the "basic selling price" less a trade discount of 18%. The wholesale dealers in turn resold the dyestuffs to distributors and also directly to 373 large consumers, including textile mills. The large consumers paid the basic selling price, while the distributors paid a higher price but subject to a trade discount. The distributors sold the product to consumers. The question arose as to how the value of the dyestuffs manufactured by the appellants should be determined under s.4. The appellants contended that the value should be the price at which the appellants sold in wholesale to the two wholesale buyers, less a uniform trade discount of 18%. The excise authorities took the view that the value should be the price at which the wholesale buyers had sold the dye stuffs to the distributors without taking into account the discount given to the distributors. Before this Court, the excise authorities pressed the same contention, urging that s.4 (a) did not provide that in every case the wholesale price charged by the manufacturer should be taken into consideration and not the wholesale price charged by the wholesale buyers who sold the product also in wholesale to the next buyers. One of us (Bhagwati J.) spoke for the Court in that case, and delivered a closely enunciated and lucid exposition of the true legal position. It was explained: "The value of the goods for the purpose of excise must take into account only the manufacturing cost and the manufacturing profit and it must not be loaded with post manufacturing cost or profit arising from post manufacturing operation. The price charged by the manufacturer for sale of the goods in wholesale would, therefore, represent the real value of the goods for the purpose of assessment of excise duty. If the price charged by the whole sale dealer who purchases the goods from the manufacturer and sells them in wholesale to another dealer were taken as the value of the goods, it would include not only the manufacturing cost and the manufacturing profit of the manufacturer but also the wholesale dealer 's selling cost and selling profit and that would be wholly incompatible with the nature of excise. It may be noted that wholesale market in a particular type of goods may be in several tiers and the goods may reach the consumer after a series of wholesale transactions. In fact the more common and less expensive the goods, there would be greater possibility of more than one tier of wholesale transactions. For instance, in a textile trade, a manufacturer may sell his entire production to a single wholesale dealer and the latter may in his turn sell the goods purchased by him from the manufacturer to different wholesale dealers at 374 State level, and they may in their turn sell the goods to wholesale dealers at the district level and from the wholesale dealers at the district level the goods may pass by sale to wholesale dealers at the city level and then, ultimately from the wholesale dealers at the city level, the goods may reach the consumers. The only relevant price for assessment of value of the goods for the purpose of excise in such a case would be the wholesale cash price which the manufacturer from sale to the first wholesale dealer, that is, when the goods first enter the stream of trade. Once the goods have entered the stream of trade and are on their onward journey to the consumer, whether along a short or a long course depending on the nature of the goods and the conditions of the trade, excise is not concerned with what happens subsequently to the goods. It is the first immediate contact between the manufacturer and the trade that is made decisive for determining the wholesale cash price which is to be the measure of the value of the goods for the purpose of excise. The second or subsequent price, even though on wholesale basis, is not material. If excise were levied on the basis of second or subsequent wholesale price, it would load the price with a post manufacturing element, namely, selling cost and selling profit of the wholesale dealer. That would be plainly contrary to the true nature of excise as explained in the Voltas ' case (supra). Secondly, this would also violate the concept of the factory gate sale which is the basis of determination of value of the goods for the purpose of excise. There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise. That would be the wholesale cash price for which the goods are sold at the factory gate within the meaning of s.4 (a). The price received by the wholesale dealer who purchases the goods from the manufacturer and in his turn sells the same in wholesale to other dealers would be irrelevant to the determination 375 of the value and the goods would not be chargeable to excise on that basis. " This case also does not support the case of the assessees. When it refers to post manufacturing expenses and post manufacturing profit arising from post manufacturing operations, it clearly intends to refer not to the expenses and profits pertaining to the sale transactions effected by the manufacturer but to those pertaining to the subsequent sale transactions effected by the wholesale buyers in favour of other dealers. Having explained the true scope of Voltas Ltd. (supra) and Atic Ltd. (supra), we may now proceed directly to the consideration of certain aspects of the provisions of the old s.4. There has been serious argument on the question whether s.4 (a) provides for the value of the assessee 's excisable article being determined on the basis of the wholesale cash price charged or chargeable for articles of the like kind and quality sold by manufacturers generally or on the basis of the wholesale cash price of articles of the like and quality sold by the assessee. At first blush, it would seem that the former construction should be accepted, and indeed some support can be derived for that view from the observations of the Privy Council in Vacuum Oil Co. (supra), where the "wholesale cash price" mentioned in s.30 (a) of the , was construed to mean "that price current for staple articles. the amount of which, if not a subject of daily publication in the press, is easily ascertainable in appropriate trade circles". But this general observation can be of no help to the assessees, because since then, he courts have proceeded to make the position amply clear. The problem presented itself again to the Privy Council in Ford Motor Co. of India Ltd. (supra), and while taking note of what it had said in the earlier case, the Privy Council laid down that where the excisable goods constituted a class of their own and it was not possible to say that other manufacturers produced goods of that kind and quality, the goods under assessment could be considered as members of their own class for the purpose of s.30 (a) even although at the time and place of importation there were no other members. The price obtained for them, it was said, would correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation. Then in Voltas Ltd. (supra), this Court observed that the application of s.4 (a) of the did not depend upon any hypothesis to the effect that at the time and place of sale, any further articles of like kind and quality should have been sold. If there was 376 an actual price for the goods themselves at the time and place of sale and if that was a "wholesale cash price", the clause was not inapplicable for want of sale of other goods of a like kind and quality. It seems to us that the more practical way of looking at the problem is that there are very few cases indeed where two manufacturers produce an article of the like kind and quality. An instance has been supplied by learned counsel for the assessees, and we are referred to the case of a factory which manufactures identical electric bulbs for supply to a number of companies who sell them in the market under their own distinctive trade names. While such examples are possible, we are inclined to accept the statement of the learned Solicitor General that goods manufactured by different manufacturers generally differ in both kind and quality. Further, the manufacturing and other costs would vary from one manufacturer to another, depending on the efficiency of manufacturing techniques and management methods employed. Other important considerations are certainty and convenience in the administration of the levy from the view point of both the assessee and the Revenue. There is the further consideration that the wholesale cash price charged by the assessee must be ascertained on the basis that the sale to the wholesale dealer is at arm 's length. We are, therefore, of the view that we should prefer the construction suggested by the Revenue that s.4 (a) applies to the goods manufactured by the assessee himself. We may also point out that this conclusion is in accord with the general intent expressed in the new s.4 (1) (a), and as we shall show presently it is the case of both the assessees and the Revenue that in enacting the new s.4 in supersession of the old section, no material departure was intended from the basic scheme for determining the value of the excisable article. Accordingly, we hold that pursuant to the old s.4 (a) the value of an excisable article for the purpose of the excise levy should be taken to be the price at which the excisable article is sold by the assessee to a buyer at arm 's length in the course of wholesale trade at the time and place of removal. Where, however, the excisable article is not sold by the assessee in wholesale trade but, for example, is consumed by the assessee in his own industry the case is one where under the old s.4 (a) the value must be determined as the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal. Where the excisable article or an article of the like kind and quality is not sold in wholesale trade at the place of removal, that is, 377 at the factory gate, but is sold in the wholesale trade at a place outside the factory gate, the value should be determined as the price at which the excisable article is sold in the wholesale trade at such place, after deducting therefrom the cost of transportation of the excisable article from the factory gate to such place. The claim to other deductions will be dealt with later. Finally, where the wholesale price of the excisable article or an article of the like kind and quality is not ascertainable, then pursuant to the old s.4 (b) the value of the excisable article shall be the price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the assessee at the time and place of removal or if the excisable article is not sold or is not capable of being sold at such place, then the price at which it is sold or is capable of being sold by the assessee at any other place nearest thereto. In every case the fundamental criterion for computing the value of an excisable article is the price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by determining such value. As we have noted, Parliament amended the General Excises and Salt Act by Act XXII of 1973. In particular, Parliament introduced a new s.4 which totally superseded the old section, and embodied a much more comprehensive and clearly enunciated scheme for the determination of the real value of an excisable article. Clause (a) of the new s.4 speaks of the "value" being the "normal price, that is to say, the price at which such goods are ordinarily sold to a buyer in the course of wholesale trade for delivery at the time and place of removal where the buyer is not a related person and the price is the sole consideration for the sale. " Where the normal price of such good is not ascertainable for the reason that such goods are not sold or for any other reason, the new s.4 (1) (b) provides that the nearest ascertainable equivalent thereof determined in such manner as may be prescribed shall be the value of the excisable goods for the purpose of charging the excise duty. It will be noticed that the basic scheme for determination of the price in the new s.4 is characterised by the same dichotomy as that observable in the old s.4. It was not the intention of Parliament, when enacting the new s.4 to create a scheme materially different 378 from that embodied in the superseded s.4. The object and purpose remained the same, and so did the central principle at the heart of the scheme. The new scheme was merely more comprehensive and the language employed more precise and definite. As in the old s.4, the terms in which the value was defined remained the price charged by the assesseee in the course of wholesale trade for delivery at the time and place of removal. Under the new s.4 the phrase "place of removal" was defined by s.4 (b) not merely as "the factory or any other place or premises of production or manufacture of the excisable goods" from where such goods are removed but was extended to "a warehouse or any place or premises wherein the excisable goods have been permitted to be deposited without payment of duty" and from where such goods are removed. The judicial construction of the provisions of the old s.4 had already declared that the price envisaged under clauses (a) and (b) of that section was the price charged by the manufacturer in a transaction at arms length. After referring to several cases, some of which have already been mentioned here earlier, this Court pointed out in Voltas Limited (supra) that "the wholesale cash has to be ascertained only on the basis of transactions at arms length. If there is a special or favoured buyer to whom a specially low price is charged because of extra commercial considerations, e.g., because he is a relative of the manufacturer, the price charged for those sales would not be the "wholesale cash price" for levying excise under s.4 (a) of the Act. A sole distributor might or might not be a favoured buyer according as terms of the agreement with him are fair and reasonable and were arrived at on purely commercial basis. " That was also the view taken in Atic Industries Ltd. (supra). The new s.4 makes express provision in that behalf. Under the new s.4 also, it is necessary to take the price charged by the manufacturer as one which is un effected by any concessional or manipulative considerations, and therefore the "normal price" mentioned in the new s.4 (1) (a) speaks of a price "where the buyer is not the related person and the price is the sole consideration for the sale. " The expression "related person" has been specifically defined in the new s.4 (4) (c), and transactions in which a "related person" is involved are covered by the third proviso of s.4 (1) (a). Both learned counsel for the assessees and the learned Solicitor General for the Revenue are agreed that in enacting the new s.4 Parliament did not intend to bring into existence a scheme of valuation different from that embodied in the old s.4 379 Reference was made in that connection to the Statement of Objects and Reasons. The difference, however, lies in this that while learned counsel for the assessee attempted to show by reference to the old s.4 that the legislative intent was to confine the value of an excisable article to the manufacturing cost and manufacturing profit and that therefore the same limitations should be read into the new s.4, the learned Solicitor General approached the problem from the other end and contended that since on a plain reading of the new s.4 the price actually charged by the assessee was the true criterion and was not limited to the manufacturing cost and manufacturing profit it is that construction which should be put also on the old s.4. We have earlier indicated our inability to accept the proposition that the old s.4 defined the value of an excisable article in terms of the manufacturing cost and manufacturing profit exclusively. We find from an examination of the provisions of the new s.4 that a similar conclusion must follow. The normal price mentioned in the new s.4 (1) (a) is the price at which the goods are ordinarily sold by the assessee in the course of wholesale trade. It is the wholesale price charged by him. It is a price which may vary, according to the first proviso to the new s.4 (a) with different classes of buyers. It may also be, according to the second proviso to the new s.4 (1) (a) the price fixed as the wholesale price under any law or the maximum price where the law fixes a maximum. The price may also be a different price if the case falls within the third proviso to the new s 4 (1) (a). In that event it will be the price charged by a related person in the course of wholesale trade. Clearly, it is not possible to conceive of the price under the new s.4 (1) (a) being confined to the manufacturing cost and the manufacturing profit. Moreover, it is reasonable to suppose that the central principle for the determination of the value of the excisable article should be the same, whether the case falls under cl. (a) or cl (b) of the old s.4 or under the new s.4 (1). When regard is had to the provision of cl. (b) in each case, it is not possible to limit the price to its components representing the manufacturing cost and manufacturing profit. We have examined the principles of an excise levy and have considered the statutory construction of the Act, before and after its amendment, in view of the three propositions formulated, on behalf of the assessees, as principle constituting the essential characteristics of a duty of excise. It is apparent that the first proposition, that excise is a tax on the manufacture or production of goods, and not on anything else, is indisputable and is supported by a catena of cases beginning with The Central Provinces and Berar Sales of Motor 380 Spirit and Lubricants Taxation Act. 1938 (supra). As regards the second proposition, that uniformity of incidence is a basic characteristic of excise, we are inclined to think that the accuracy of the proposition depends on the level at which the statute rests it. We shall discuss that presently. As to the third proposition, that the exclusion of post manufacturing expenses and post manufacturing profit is necessarily involved in the first principle does not inevitably follow. The exclusion of post manufacturing expenses and post manufacturing of profits is a matter pertaining to the ascertainment of the "value" of the excisable article, and not to the nature of the excise duty, and as we have explained, the standard adopted by the Legislature for determining the "value ' may possess a broader base than that on which the charging provision proceeds. The acceptance of the further statement contained in the formulation of the third proposition, that the exclusion of post manufacturing expenses and post manufacturing profits helps to achieve uniformity of incidence in the levy of excise duty, depends on what is the point at which such uniformity of incidence is contemplated. It is not necessarily involved at the stage of sale of the article by the manufacturer because we find for example that under the amended s.3 (3) of the , different tariff values may be fixed not only (a) for different classes of descriptions of the same excisable goods, but also (b) for excisable goods of the same class or description (i) produced or manufactured by different classes of producers or manufacturers, or (ii) sold to different classes of buyers. That the "value" of excisable goods determined under the new s.4 (a) may also vary according to certain circumstances is evident from the three clauses of the proviso to that clause. Clause (i) recognises that in the normal practice of wholesale trade the same class of goods may be sold by the assessee at different prices to different classes of buyers; in that event, each such price shall, subject to the other conditions of cl. (a), be deemed to be the normal price of such goods in relation to each class of buyers. Clause (ii) provides that where the goods are sold in wholesale at a price fixed under any law or at a price being the maximum, fixed under any such law, then the price or the maximum price, as the case may be, so fixed, shall in relation to the goods be deemed to be the normal price thereof. Under cl. (iii), where the goods are sold in the course of wholesale trade by the assessee to or through a related person, the normal price shall be the price at which the goods are sold by the related person in the course of wholesale trade at the time of removal to dealers (not being related persons) or where such goods are not sold to such dealers, 381 to dealers (being related persons) who sell such goods in retail. The verity of the three principles propounded by learned counsel for the assessees has been, as indeed it had to be, examined in the context of the Act before and after its amendment. For the case of the assessees is that the amendment has made no material change in the basic scheme of the levy and the provisions for determining the value of the excisable article. Learned counsel for the assessees has contended that the old section 4 (a) expresses the conceptual nature of the "value" of an excisable article because neither the identity of the manufacturer nor the identity of the goods sought to be charged nor the actual wholesale price charged by the manufacturer is the determining factor. We have come to the conclusion after carefully weighing the matter that on a true construction of its provisions in the context of the statutory scheme the old s (a) should be considered as applicable to the circumstances of the particular assessee himself and not of manufacturers generally. As regards the second element, namely, the identity of the goods sought to be charged, that also, to our mind, is a determining factor because the statute speaks of "an article of the like kind and quality". The third element, namely, the actual wholesale price charged by the manufacturer is likewise a determining factor in view of our conclusion that the identity of the manufacturer is material in the application of the old section 4 (a). Learned counsel for the assessees urged that the expression "normal price" in the new section 4 (1) (a) means the price normal for the purposes of the excise duty and that, it is said, means the manufacturing cost plus the manufacturing profit. It is urged that the normal price for the purposes of the levy must be a price not loaded with extraneous elements, extraneous to the nature of the impost. It is pointed out that in order to bring the operation of the statute within the purpose intended by the Legislature the courts are justified is doing "some violence to the words" and support is taken from Luke vs I.R.C., and the principle adopted by this Court in Commissioner of Income Tax, Central, Calcutta vs National Taj Traders and in KP. Varghese vs Income Tax Officer, Ernakulam and Another. A somewhat similar approach had already been adopted by this Court in Commissioner of Income Tax, 382 (Central), Calcutta vs B.N. Bhattachargee and Another. Learned counsel also referred to Commissioner of Wealth Tax, Bihar and Orissa vs Kripashankar Dayashankar Worah and R.B Jodha Mal Kuthiala vs Commissioner of Income Tax. Punjab. Jammu & Kashmir and Himachal Pradesh. When the new section 4 (1) (a) is read as a whole, the meaning of the expression "normal price" becomes plainly evident. It will be noticed the expression "normal price ' is followed by the phrase "that is to say". The phrase "that is to say" says Stroud 's Judicial Dictionary (Fourth Edition, Vol. 5 p. 2753)" is the commencement of an ancillary clause which explains the meaning of the principal clause. It bas the following properties: (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the principal clause is general in terms it may restrict it," and reference has been made to Stuckeley vs Butler and Harrington v Pole. Therefore, the phrase "normal price" is defined by the words in section 4 (1) (a) which follow. It is 'the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal where the buyer is not a related person and the price is the sole consideration for the sale," Learned counsel for the assessees contended that the new section 4 (1) (a) also levies excise on the basis of a conceptual value which must exclude post manufacturing profit and in support of that submission he has adduced a number of reasons. It is said that the essential principle of excise dictates the exclusion of post manufacturing expenses and profit. That, it is pointed out, is also suggested by the principle of uniformity of incidence, for it is only by such exclusion that uniform criterion can be applied to all manufacturers, those who have selling and marketing organisations and who load the ex factory wholesale price to recoup themselves the costs of the selling organisation and of equalised freight and those who do not load their wholesale price with such post manufacturing expenses. Reliance is placed on the legislative history, it being contended that the new section 4. should be interpreted on the same basis as the old section 4. Reference is made to the Statement of Objects and Reasons of Act XXIII of 1973 to show that no change 383 of substance in the basis of the charge or levy was intended by the amendment of section 4. It is said that the phrase "that is to say" in the new section 4 (1) (a) indicates that the conceptual criterion for determining the value is substantially the same as it was in the old section 4. Then, it is pointed out, section 4 (1) (b) enacts that "where the normal price is not ascertainable, the nearest ascertainable equivalent thereof" has to be determined. As a consequence, it is urged that where sales are made on ex depots post manufacturing expenses and post manufacturing profit must be deducted. The same principle should apply in the construction of the new section 4 (1) (a). By adopting the same principle for cases falling under section 4 (1) (a) and section 4 (1) (b) it is possible it is said, to reach uniformity of incidence in both classes of cases. It is pointed out, that the value of the goods must be the same for the purposes of the levy, whether the goods are sold ex factory or ex depot. It is urged that although the new section 4 (4) (d) (ii) permits two types of deductions of taxes and discount, it does not prohibit deductions other shall the two permitted. Finally, if the wholesale p. ice can be adjusted upward by the department making additions thereto, it can be adjusted, downward, at the instance of the assessee, to make it conform to the conceptual criterion of the value on which excise can be levied. The essential content of the reasons stated by learned counsel proceeds on the assumption that a conceptual value governs the assessment of the levy. We have already examined the validity of the three principles underlying the concept, and we have indicated the extent to which they cannot be accepted. We have observed that . the old s 4 as well as the new section 4 determine the value on the basis price charged or chargeable by the particular assessee, and the price is charged or is chargeable in respect of the article manufactured by him. The value of the excisable article is determined in that context. When that is so, the fundamental basis on which the argument has been raised on behalf of the assessees cannot survive. We may add that whether any further deductions can be claimed beyond those already mentioned in the statute will depend on the nature of those claims in the case of a particular assessee. Our attention has been drawn to the observation of this Court in Chotabhai Jethabhai Patel and Co. vs The Union Of India and Another that "a duty of excise is a tax levy on home produced goods of a specified class or description, the duty being calculated according 384 to the quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in then". Clearly, when the Court referred to the calculation of the duty according to the quantity or value of the goods, it referred disjunctively to the nature of the levy, and it is the nature of the levy 13 not the value for assessing the levy, which it had in mind when it pointed to the goods having been produced or manufactured, and observed that the nature of the levy is not related to or dependent on any commercial transaction. The following observation of Gwyer, C.J. in The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (supra) was also placed before us: "In my opinion the power to make laws with respect to duties of excise given by the Constitution Act to the Federal Legislature is to be construed as a power to impose duties of excise upon the manufacturer or producer of the excisable articles, or at least at the stage of, or in connection with, manufacture or production, and extends no further. " The learned Chief Justice was referring in this statement to the power to make a law respect of a duty of excise. He construed it as a power to impose the duty upon the manufacturer or producer, and explained that the levy related to the manufacture or production and to no further stage. It was the nature of the levy which was adverted to by the learned Chief Justice, namely, that it was a levy on goods manufactured or produced. It will be remembered that the question before the Federal Court in that case whether the levy in question was a levy of excise or a levy of sales tax. A levy of excise turns on the manufacture or production of the excisable article, while a levy of sales tax by its nature, arises at a stage beyond, namely, the sale of the article. The task before the Court was to identify the nature of the levy. It was not concerned with the assessment of the value of the article for the purpose of the levy. This brings to a close in these cases the question whether the value of an article for the purpose of the excise levy must be confined to the manufacturing cost and the manufacturing profit in respect of the article. In our judgment, the question has to be answered in the negative. 385 The next question for consideration is whether the provisions in the new section 4 in respect of transactions ' effected by the assessee to or through "a related person" are invalid. The new section 4 (1) (a) provides that the value shall be deemed to be the normal price, and the normal price is defined as the price at which the goods are ordinarily sold by the assessee in the course of wholesale trade where the buyer is not a "related person" and the price is the sole consideration for the sale. The third proviso to the new section 4 (1) (a) provides that where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through a related person, the normal price of the goods sold by the assessee to or through such related person shall be deemed to be the price at which they are ordinarily sold by the related person in the course of wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail. The new section 4 (4) (c) defines the expression "related person" as follows: "(c) 'related person ' means a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub distributor of such distributor. Explanation : In this clause 'holding company ', 'subsidiary company ' and 'relative ' have the same meanings as in the (1 of 1956). " Learned counsel for the assessees contends that the provisions regarding related persons are wholly unnecessary because to counter act evasion or avoidance any artificially arranged price between the manufacturer and his wholesale buyer can be rejected in any case under section 4, and we are referred to the observations of this Court in Voltas Limited (supra) and Atic Industries Ltd. (supra). It is true, we think, that the new section 4 (1) contains inherently within it the power to determine the true value of the excisable article, after taking into account any concession shown to a special or favoured buyer because of extra commercial considerations, in order that the price be ascertained only on the basis that it is a transaction at arms length. That requirement is emphasised by the provision in the new section 4 (1) (a) that the price should be the sole consideration for the sale. In every 386 such case, it will be for the Revenue to determine on the evidence before it whether the transaction is one where extra commercial considerations have entered and, if so, what should be the price to be taken as the value of the excisable article for the purpose of excise duty. Nonetheless, it was open to Parliament to incorporate provisions in the section declaring that certain specified categories of transactions fall within the tainted class, in which case an irrebuttable presumption will arise that transactions belonging to those categories are transactions which cannot be dealt with under the usual meaning of the expression "normal price" set forth in the new section 4 (1) (a). They are cases where it will not be necessary for the Revenue to examine the entire gamut of evidence in order to determine whether the transaction is one prompted by extra commercial considerations. It will be open to the Revenue on being satisfied that the third proviso to the new section 4 (l) (a) read with the definition of "related person" in section 4 (4) (c) is attracted, to proceed to determine the "value in accordance with the terms of the third proviso. It is urged on behalf of the assessee that the provisions are, whimsical and arbitrary, and cannot be said to be reasonably calculated to deal with the issue of evasion or avoidance of excise. It is said that the assessment on the manufacturer by reference to the sale price charged by his distributor is "wholly incompatible with the nature of excise", and we are referred to Atic Industries Ltd. (supra). Now, is a well known legislative practice to enact provisions in certain limited case where an assessee may be taxed in respect of the income or property truly belonging to another. They are cases where the Legislature intervenes to prevent the circumvention of the tax obligation by tax payers seeking to avoid or reduce their tax liability through modes resulting in the income or property arising to another. The provisions of the law may indeed be so enacted that the actual existence of such motive may be wholly immaterial, and what has been done by the assessee may even, proceed from wholly bona fide intention. With the aid of legal fiction, the Legislature fastens the liability on the assessee. When the legislature employs such a device, and the liability is attached without qualification, it is reasonable to infer that an irrebuttable presumption has been created by law. Such provisions have been held to be within the legislative competence of the Legislature and as falling within its power of taxation, and reference may be made to Balaji vs Income Tax Officer, Special Investigation Circle, 387 Navnitlal C. Javeri vs K.K Sen, Appellate Assistant Commissioner of Income Tax, 'D ' Range, Bombay and Punjab Distilling Industries Ltd. vs Commissioner of Income Tax, Punjab. It is contended for the assessees that the definition of the expression "related person" is so arbitrary that it includes within that expression a distributor of the assessee. It is urged that the provision falls outside the ambit of Entry 84 of List I of the Seventh Schedule to the Constitution inasmuch as it is wholly inconsistent with the levy of excise, and if it is attempted to seek support for the provision from the residuary Entry 97 of List l as a non descript tax the attempt must fail because there is no charging section in the empowering the levy of such non descript tax nor any machinery provision in the Act for collection such a tax. The charging provision and the machinery provisions of the Act, it is pointed out, deal exclusively with excise duty and not with any other tax. The validity of the provisions is assailed also on the ground that it violates Articles 14 and 19 of the Constitution. The challenge made on behalf of the assessees is powerful and far reaching. But it seems to us unnecessary to enter into that question because we are satisfied that the provision in the definition of "related person" relating to a distributor can be legitimately read down and its validity thus upheld. In our opinion, the definition of related person should he so read that the words "a relative and a distributor of the assessee" should be understood to mean a distributor who is a relative of the assessee. It will be noticed that the Explanation provides that the expression "relative" has the same meaning as in the . As regards the other provisions of the definition of "related person", that is to say, "a person who is so associated with the assessee that they have interest directly or indirectly, in the business of each other and includes a holding company, a subsidiary company. ", we think that the provision shows a sufficiently restricted basis for employing the legal fiction. Here again, regard must be had to the Explanation which provides that the expression "holding company and subsidiary" have the same meanings as in the . Reference in this connection may be made to Tata Engineering and Locomotive Co. Ltd. vs State of Bihar and others where the principle was approved by this Court that the corporate veil could be lifted where 388 the companies shared the relationship of a holding company and a subsidiary company, and to Juggi Lal Kamlapat vs Commissioner Of Income Tax, U.P., where this Court held that the veil of corporate entity could be lifted to pay regard to the economic realities behind the legal facade, for example, where the corporate entity was used for tax evasion or to circumvent tax obligation. At one stage, it was urged for the assessees that by making provision in the respecting transactions to or through a "related person", Parliament was very close to making the levy a sales tax. The contention cannot be accepted and we need merely refer to the position delineated earlier and set forth in the series of cases beginning with The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (supra) See also Jullundur Rubber Goods Manufacturers ' Association vs Union of India & Anr, From what has gone before, we consider that the true position under the as amended by Act XXII of 1973 can be set forth as follows . (i) The price at which the excisable goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal as defined in sub section (4) (b) of section 4 is the basis for determination of excisable value provided, of course, the buyer is not a related person within the meaning of sub section (4) (c) of section 4 and the price is the sole consideration for the sale. This proposition is subject to the terms of three provisos to sub section (1) (a) of section 4. (ii) There the price of excisable goods in the course of wholesale trade for delivery at the time and place of removal cannot be ascertained for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in the manner prescribed by the Central Excises (Valuation) Rules. 1975 should be taken as representing the excisable value of the goods; 389 (iii) Where wholesale price of any excisable goods for delivery at the place of removal is not known and the value thereof is determined with reference to the wholesale Price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery should be excluded from such price; (iv) Of course, these principles cannot apply where the tariff value has been fixed in respect of any excisable goods under sub section (2) of section 3; (v) On a proper interpretation of the definition of 'related person ' in sub section (4) (c) of section 4, the words "a relative and a distributor of the assessee" do not refer to any distributor but they are limited only to a distributor who is a relative of the assessee with in the meaning of the . So read, the definition of 'relates person ' is not unduly wide and does not suffer from any constitutional infirmity. It is within the legislative competence of Parliament. It is only when an assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through such a related person that the price at which the goods are ordinarily sold by the related person in the course of wholesale trade at the time of removal to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons who sell such goods in retail is liable to be taken as the excisable value of the goods proviso under (iii) to sub section (1) (a) of section 4. We now proceed to the question whether any post manufacturing expenses are deductible from the price when determining the "value" of the excisable article. The old section 4 provided by the Explanation there to that in determining the price of any article under that section no abatement or deduction would be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. The new section 4 provides by subs.(2) that where the price of excisable goods for delivery at the place 390 of removal is not known and the value is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery has to be excluded from such price. The new section 4 also contains sub section (4) (d) (ii) which declares that the expression "value" in relation to any excisable goods, does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale. Now these are clear provisions expressly a providing for deduction, from the price, of certain items of expenditure. But learned counsel for the assessees contend that besides the heads so specified a proper construction of the section does not prohibit the deduction of other categories of post manufacturing expenses. It is also urged that although the new section 4(4) (d) (i) declares that in computing the "value" of an excisable article, the cost of packing shall be included, the provision should be construed as confined to primary packing and as not extending to secondary packing. The head under which the claim to deduction is made are detailed below : (1) Storage charges. (2) Freight or other transport charges, whether specific or equalised. (3) Outward handling charges, whether specific or equalised. (4) Interest on inventories (stocks carried by the manufacturer after clearance). (5) Charges for other services after delivery to the buyer. (6) Insurance after the goods have left the factory gate. (7) Packing charges. (8) Marketing and Selling organisation expenses, including advertisement and Publicity expenses. At the outset, we must make it clear that the contentions in this regard on behalf of the assessees proceeds on two broad bases. 391 The first is that to determine the value of an excisable article, all expenses must be excluded which do not enter into the formula of manufacturing cost plus manufacturing profit. This follows from the principal plank of the assessees ' case that the "value" must be confined to the manufacturing cost, and the manufacturing profit. For, it is said, that if the deductions claimed are allowed, the price would be brought down to the conceptual value. All post manufacturing expenses are claimed from that perspective and within that context. The other basis on which the claim proceeds, is that the price at the factory gate and the price at a depot outside the factory gate are identical. We shall now examine the claim. It is apparent that for the purpose of determining the "value", broadly speaking both the old section 4(a) and the now s 4(1) (a) speak of the price for sale in the course of wholesale trade of an article for delivery at the time and place of removal namely, the factory gate where the price contemplated under the old section 4(a) or under the new section 4(1)(a) is not ascertainable, the price is determined under the old section 4(b) or the new section 4 (1) (b). Now, the price of an article is related to its value (using this term in a general sense), and into that value have poured several components, including those which have enriched its value and given to the article its marketability in the trade. Therefore, the expenses incurred on account of the several factors which have contributed to its value upto the date of sale, which apparently would be the date of delivery, are liable to be included. Consequently where the sale is effected at the factory gate, expenses incurred by the assessee up to the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely after sales service and marketing and selling organisation expenses including advertisement expenses cannot be deducted. It will be noted that advertisement expenses, marketing and selling organisation expenses and after sales service promote the marketability of the article and enter into its value in the trade. Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold. The cost of transportation will include the cost of insurance on the 392 freight for transportation of the goods from the factory gate to the place or places of delivery. Where freight is averaged and the averaged freight is included in the wholesale cash price so that the wholesale cash price at any place or places outside the factory gate is the same as the wholesale cash price at the factory gate, the averaged freight included in such wholesale cash price has to be deducted in order to arrive at the real wholesale cash price at the factory gate and Do excise duty can be charged on it. The case in respect of the cost of packing is somewhat complex. The new section 4(4)(d)(i) has made express provision for including the cost of packing in the determination of "value" for the purpose of excise duty. Inasmuch as the case of the parties is that the new section 4 substantially reflects the position obtaining under the unamended Act. We shall proceed on the basis that the position in regard to the cost of packing is the same under the Act, both before and after the amendment of the Act section 4(4) (d) (i) reads: "(4) For the purposes of this section (d) "value", in relation to any excisable goods, (i) where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. Explanation. In this sub clause "packing" means the wrapper, container, bobbin, pirn, spool, reel or sarp beam or any other thing in which or on which the excisable goods are wrapped, contained or wound. " It is relevant to note that the packing, of which the cost is included is the packing of which the goods are wrapped, contained or wound when the goods are delivered at the time of removal. In other words, it is the packing in which it is ordinarily sold in the course of wholesale trade to the wholesale buyer. The degree of packing in which the excisable article is contained will vary from one class of articles to another. From the particulars detailed before us by the assessees, it is apparent that the cost of primary packing, that is to say, the 'packing in which the article is contained and in which 393 it is made marketable for the ordinary consumer, for example a tube of toothpaste or a bottle of tablets in a cardboard carton, or biscuits in a paper wrapper or in a tin container, must be regarded as falling within section 4(4) (d)(i). That is indeed conceded by learned counsel for the assessee. It is the cost of secondary packing which has raised serious dispute. Secondary packing which different grades. There is the secondary packing which consists of larger cartons in which a standard number of primary cartons in the sense mentioned earlier) are packed. The large cartons may be packed in to even larger cartons for facilitating the easier transport of the goods by the wholesale dealer. Is all the packing, no matter to what degree, in which the wholesale dealer takes delivery of the goods to be considered for including the cost thereof in the "value" ? Or does the law require a line to be drawn somewhere? We must remember that while packing is necessary to make the excisable article marketable, the statutory provision calls for strict construction because the levy is sought to be extended beyond the manufactured article itself. It seems to us that the degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market it the factory gate is the degree of packing whose cost can be included in the "value" of the article for the purpose of the excise levy. To that extent, the cost of secondary packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate. If any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price. We have also been referred to section 2(f) of the Act which defines the expression "manufacture", and it is urged that the degree of packing to be considered for the purpose of including its cost in the "value" of an excisable article should be spelled out from that definition. We are unable to accept the suggestion. The expression "manufacture" is related to the taxable event and refers to a process which enters into the character of the article, while "packing" has been defined by section 4 (4) (d) (i) in relation to the "value" of the article. That, we think, is the position in regard to the cost of packing under the Act, both before a its amendment and after. 394 We have considered the claim to deductions under the specific heads enumerated by the assessees, and our judgment is confined to those items. No other head of expenses has been placed before us for our opinion. Learned counsel for the parties have drawn our attention to a number of decisions rendered by different High Courts on some of the points raised before us. We have examined those cases, but we think it unnecessary to refer to them as they do not add to the considerations we have kept before us in arriving at our conclusions. These are the reasons for our order of May 9,1983, and they explain the scope within which that order must be construed as well as the basis on which it was made. The individual appeals, writ petitions, special leave petitions and transferred cases will be listed now for appropriate orders in the light of this judgment on October 31, 1983.

Sub sec. (1) of sec. 3 of the provided that duties of excise shall be levied and collected on all excisable goods, other than salt which were produced or manufactured in India at the rates set forth in the First Schedule. Sub sec. (2) of sec. 3 empowered the Central Government to fix, for the purpose of levying the duties, tariff values of the articles enumerated in the First Schedule as chargeable with duty ad valorem. Section 4 of the Act provided that the value of an article for the purposes of duty shall be (a) the wholesale cash price for which an article of the like kind and quality was sold or was capable of being sold at the time removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production or (b) where such price was not ascertainable, the price at which an article of the like kind and quality was sold or was capable of being sold at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production. With the increase in the ad valorem levies in the Central Excise Tariff the operation of sec. 4 presented certain practical difficulties; some of which were prominently brought out in the judgment of this court in A.K. Roy and Anr. vs Voltas Ltd, [1973] 2 S.C.R. 1089. In that case, the Court inter alia said that 348 the real value of an article for the purposes of the excise levy would include only the manufacturing cost plus manufacturing profits. In order to overcome various difficulties, the original sec. 4 of the Act was substituted by a new sec. 4 by Act 22 of 1973. The new sec. 4 provided that the value of an article for the purposes of duty shall, subject to the other provisions of this section, be deemed to be the normal price thereof that is to say, the price at which such goods were ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer was not a related person and the price was the sole consideration for the sale and where the normal price of such goods was not ascertainable for the reason that such goods were not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. Clauses (c) and (d) of sub sec. (4) of sec. 4 defined "related person" and "value" respectively. The Central issue which arose between the Revenue and the assessees in these appeals was whether the value of an article for the purposes of the excise levy must be determined by reference exclusively to the manufacturing cost and the manufacturing profit of the manufacturer as contended by the assessees or should be represented by the entire wholesale price charged by the manufacturer which consisted of not merely his manufacturing cost and his manufacturing profit but included "post manufacturing expenses" and "post manufacturing profit" arising between the completion of the manufacturing process and the point of sale by the manufacturer. The other points of dispute were principally in respect of the connotation of the expression 'related person ' in the new s.4 as well as the nature of the deductions which could be claimed by the assessee as post manufacturing expenses and post manufacturing profit from the price for the purpose of determining the "value". HELD: The question whether the value of an article for the purpose of the excise levy must be confined to the manufacturing cost and the manufacturing profit in respect of the article has to be answered in the negative. While the levy of excise duty is on the manufacture or production of goods, the stage of collection need not in point of time synchronize with the completion of the manufacturing process. While the levy in this country has the status of a constitutional concept, the point of collection is located where the statute declares it will be. [384 H, 364 F G] The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, ; The Province of Madras vs Messers Boddu Paidanna and Sons, , 101; Governor General in Council vs Province of Madras, ; R.C. Jall vs Union of India, [1962] Suppl. 3 S.C.R. 436; In Re. The Bill To Amend section 20 of the , and section 3 of the ; , ; Union of India vs Delhi Cloth & General Mills, [1963] Suppl. 1 S.C.R. 586; M/S Guruswamy & Co. Etc. vs State of Mysore & Ors. ,[1967] 1 S.C.R. 548; and South Bihar Sugar Mills Ltd. etc. vs Union of India & Ors. ,[1968] 3 S.C.R. referred to. The levy of a tax is defined by its nature, while the measure of the tax may be assessed by its own standard. It is true that the standard adopted as the 349 measure of the levy may indicate the nature of the tax but it does not necessarily determine it. When enacting a measure to serve as a standard for assessing the levy the legislature need not contour it along lines which spell out the character of the levy itself. A broader based standard of reference may be adopted for the purpose of determining the measure of the levy. Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy. The original section 4 and the new section 4 of the satisfy this test. [366 C; 367 D F] Ralla Ram vs The Province of East Punjab, [1948] F.C.R. 207; Atma Ram Budhia vs State of Bihar, A.I.R. 1952 Patna 359; M/s Sainik Motors, Jodhpur and Ors. vs The State of Rajasthan, ; ; D.C. Gouse and Co. etc. vs The State of Kerala & Anr. ; , ; Searvai 's Constitutional Law of India, Second Edition. 2 at page 1258; Re. A Reference under the Government of Ireland Act, 1920 and Sec. 3 of the Finance Act (Northern Ireland), ; R.R. Engineering Co. vs aila Parished, Bareilly & Anr., ; ; and The Hingir Rampur Coal Co., Ltd. and Ors. vs The State of Orissa and Ors., ; referred to. It was open to the legislature to specify the measure for assessing the levy. The legislature has done so. In both the old section 4 and the new section 4 the price charged by the manufacturer on a sale by him represents the measure. Price and sale are related concepts, and price has a definite connotation. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with the terms of section 4. [368 D E] On a true construction of its provisions in the context of the statutory scheme the old section (4) (a) should be considered as applicable to the circumstances of the particular assessee himself and not of manufacturers generally.[381 C D] Pursuant to the old section 4 (a) the value of an excisable article for the purpose of the excise levy should be taken to be the price at which the excisable article is sold by the assessee to a buyer at arm 's length in the course of wholesale trade at the time and place of removal. Where, however, the excisable article is not sold by the assessee in wholesale trade but, for example, is consumed by the assessee in his own industry the case is one where under the old section 4 (a) the value must be determined as the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal. [376 F H] Where the excisable article or an article of the like kind and quality is not sold in wholesale trade at the place of removal, that is, at the factory gate, but is sold in the wholesale trade at a place out side the factory gate, the value should be determined as the price at which the excisable article is sold in the wholesale trade at such place, after deducting therefrom the cost of transportation of the excisable article from the factory gate to such place. [376 H; 77 A B] 350 Where the wholesale price of the excisable article or an article of the like kind and quality is not ascertainable, then pursuant to the old section 4 (b) the value of the excisable article shall be the price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the assessee at the time and place of removal or if the excisable article is not sold or is not capable of being sold at such place, then the price at which it is sold or is capable of being sold by the assessee at any other place nearest thereto. [377 B C] In every case the fundamental criterion for computing the value of an excisable article is the price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the manufacturer and it is not the bare manufacturing cost and manufacturing profit which constitutes the basis for determining such value. [377 D] Vacuum Oil Company vs Secretary of State for India in Council L.R. 59 I.A. 258; Ford Motor Company of India Ltd. vs Secretary of State for India in Council, L.R. 65 I.A. 32; and Atic Industries Ltd. vs H.H. Dave, Asst Collector of Central Excise and Ors. ,[1975] 3 S.C.R. 563, referred to. The basic scheme for determination of the price in the new section 4 is characterised by the same dichotomy as that observable in the old section 4. It was not the intention of Parliament, when enacting the new section 4 to create a scheme materially different from that embodied in the superseded section 4. The object and purpose remained the same, and so did the central principle at the heart of the scheme. The new scheme was merely more comprehensive and the language employed more precise and definite. As in the old section 4, the terms in which the value was defined remained the price charged by the assessee in the course of wholesale trade for delivery at the time and place of removal. [377 H; 378 A B] It is not possible to conceive of the price under the new section 4 (1) (a) being confined to the manufacturing cost and the manufacturing profit. Moreover, it is reasonable to suppose that the central principle for the determination of the value of the excisable article should be the same, whether the case falls under cl. (a) or cl. (b) of the old section 4 or under the new section 4 (1). When regard is had to the provision of cl. (b) in each case, it is not possible to limit the price to its components representing the manufacturing cost and manufacturing profit. [379 E G] The contention that the provisions regarding related persons are wholly unnecessary because to counter act evasion of tax any artificially arranged price between the manufacturer and his wholesale buyer can be rejected in any case under section 4 is not acceptable. The new section 4 (1) contains inherently within it the power to determine the true value of the excisable article, after taking into account any concession shown to a special or favoured buyer because of extra commercial consideration, in order that the price be ascertained only on the basis that it is a transaction at arm 's length. That requirement is emphasised by the provision in the news. 4 (1) (a) that the price should be the sole consideration for the sale. In every such case, it will 351 be for the Revenue to determine on the evidence before it whether the transaction is one where extra commercial considerations have entered and, if so, what should be the price to be taken as the value of the excisable article for the purpose of excise duty. Nonetheless it was open to Parliament to incorporate provisions in the section declaring that certain specified categories of transactions fall within the tainted class, in which case an irrebuttable presumption will arise that transactions belonging to those categories are transactions which cannot be dealt with under the usual meaning of the expression "normal price" set forth in the new section 4 (1) (a). They are cases where it will not be necessary for the Revenue to examine the entire gamut of evidence in order to determine whether the transaction is one prompted by extra commercial considerations. It will be open to the Revenue, on being satisfied that the third provision to the new section 4 (1) (a) read with the definition of "related person" in section 4 (4) (c) is attracted, to proceed to determine the "value" in accordance with the terms of the third proviso. [385 F H; 386 A D] The argument that the assessment on the manufacturer by reference to the sale price charged by his distributor is "wholly incompatible with the nature of excise" has no force. It is a well known legislative practice to enact provisions in certain limited cases where an assessee may be taxed in respect of the income or property truly belonging to another. They are cases where the Legislature intervenes to prevent the circumvention of the tax obligation by tax payers seeking to avoid or reduce their tax liability through modes resulting in the income or property arising to another. The provisions of the law may be so enacted that the actual existence of such motive may be wholly immaterial, even if what has been done by the assessee may proceed from wholly bona fide intention. With the aid of a legal fiction, the Legislature fastens the liability on the assessee. When the Legislature employs such a device, and the liability is attached without qualification, it is reasonable to infer that an irrebuttable presumption has been created by law. Such provisions have been held to be within the legislative competence of the Legislature and as falling within its power of taxation. [386 D H] Balaji vs Income Tax Officer, Special Investigation Circle, ; Navnitlal C. Javeri vs K.K.Sen, Appellate Assistant Commissioner of Income tax. 'D ' Range; , ; Bombay and Punjab Distilling Industries Ltd. vs Commissioner of Income Tax, Punjab, [1965] 3 S.C.R. 1, referred to. The argument that the definition of the expression "related person" is so arbitrary that it includes within it a distributor of the assessee is also without much force. The provision in the definition of "related person" relating to a distributor can be legitimately read down and its validity upheld. The definition of related person should be so read that the words "a relative and a distributor of the assessee" should be understood to mean a distributor who is a relative of the assessee. The Explanation to section 4 (4) (c) provides that the expression "relative" has the same meaning as in the . The definition of "related person ', as being "a person who is so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company . ," shows a sufficiently restricted basis for employing the legal fiction. Here again, 352 regard must be had to the Explanation which provides that the expression "holding company and subsidiary" have the same meanings as in the . It is well settled that in a suitable case the court can lift the corporate veil where the companies share the relationship of a holding company and a subsidiary company and also to pay regard to the economic realities behind the legal facade, [387 B H; 388 A] Tata Engineering and Locomotive Co. Ltd. vs State of Bihar and Others. ; ; Juggi Lal Kamlapat vs Commissioner of Income Tax, U.P. , referred to. The true position under the as amended by Act XXII of 1973 is as follows: (i) The price at which the excisable goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal as defined in subsection (4) (b) of section 4 is the basis for determination of excisable value provided, of course, the buyer is not a related person within the meaning of sub section (4) (c) of section 4 and the price is the sole consideration for the sale. The proposition is subject to the terms of the three provisos to sub section (1) (a) of section 4. [388 D F] (ii) Where the price of excisable goods in the course of wholesale trade for delivery at the time and place of removal cannot be ascertained for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in the manner prescribed by the Central Excise (Valuation) Rules, 1975 should be taken as representing the excisable value of the goods; [388 G H] (iii)Where wholesale price of any excisable goods for delivery at the place of removal is not known and the value thereof is determined with reference to the wholesale price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery should be excluded from such price; [389 A B] (iv) Of course, these principles cannot apply where the tariff value has been fixed in respect of any excisable goods under sub section (2) of section 3; [389 C] (v) On a proper interpretation of the definition of 'related person ' in sub section (4) (c) of section 4 the words "a relative and a distributor of the assessee" do not refer to any distributor but they are limited only to a distributor who is a relative of the 353 assessee within the meaning of the . So read, the definition of 'related person ' is not unduly wide and does not suffer from any constitutional infirmity. It is within the legislative competence of Parliament. It is only when an assessee so arranges that the goods are generally not sold by him in the course of wholesale trade except to or through such a related person that the price at which the goods are ordinarily sold by the related person in the course of wholesale trade at the time of removal to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons) who sell such goods in retail is liable to be taken as the excisable value of the goods under proviso (iii) to sub section (1) (a) of section 4. [389 D F] For the purpose of determining the "value", broadly speaking both old section 4 (a) and the new section 4 (1) (a) speak of the price for sale in the course of wholesale trade of an article for delivery at the time and place of removal, namely, the factory gate. Where the price contemplated under the old section 4 (a) or under new section 4 (1) (a) is not ascertainable, the price is determined under the old section 4 (b) or the new section 4 (1) (b). Now, the price of an article is related to its value (using this term in a general sense), and into that value have poured several components, including those which have enriched its value and given to the article its marketability in the trade. Therefore, the expenses incurred on account of the several factors which have contributed to its value upto the date of sale, which apparently would be the date of delivery, are liable to be included. Consequently, where the sale is effected at the factory gate, expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely after sales service and marketing and selling organisation expenses including advertisement expenses marketing and selling organisation expenses and after sales service promote the marketability of the article and enter into its value in the trade. Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. [391 C H] The assessee will be entitled to a deduction on account of the cost of transportation of the exciseable article from the factory gate to the place or places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery. [391 H; 392 A] Where freight is averaged and the averaged freight is included in the wholesale cash price so that the wholesale cash price at any place or places outside the factory gate is the same as the wholesale cash price at the factory gate, the averaged freight included in such wholesale cash price has to be deducted in order to arrive at the real wholesale cash price at the factory gate and no excise duty can be charged on it. [392 A B] 354 The new section 4 (4) (d) (i) has made express provision for including the cost of packing in the determination of "value" for the purpose of excise duty. The packing, of which the cost is included, is the packing in which the goods are wrapped, contained or wound when the goods are delivered at the time of removal. The cost of primary packing, that is to say, the packing in which the article is contained and in which it is made marketable for the ordinary consumer, must be regarded as falling within section 4 (4) (d) (i). There is secondary packing which consists of larger cartons in which a standard number of primary cartons (in the sense mentioned earlier) are packed. The large cartons may be packed into even larger cartons for facilitating the easier transport of the goods by the wholesale dealer. Is all the packing, no matter to what degree, in which the wholesale dealer takes delivery of the goods to be considered for including the cost thereof in the "value" ? Or does the law require a line to be drawn somewhere ? One must remember that while packing is necessary to make the excisable article, marketable, the statutory provision calls for strict construction because the levy is sought to be extended beyond the manufactured article itself. If seems to us that the degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is the degree of packing whose cost can be included in the "value" of the article for the purpose of the excise levy. To that extent, the cost of secondary packing cannot be deducted from the wholesale cash price of the excisable article at the factory gate. [392 C; 392 G H; 393 A E] If any special secondary packing is provided by the assessee at the instance of a whole sale buyer which is not generally provided as a normal feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price. [393 F]

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mpt notices does not absolve the officers of their misconduct. The State Govern ment is directed to proceed with the disciplinary proceed ings for taking appropriate action. [1000B] & ORIGINAL JURISDICTION: Writ Petition (CRL.) No. 517 of 1989 etc. (Under Article 32 of the Constitution of India). J. Sorabjee, Attorney General, Ashok H. Desai, Addl. Solicitor General, R.K. Garg, G. Ramaswamy, F.S. Nariman, Dr. L.M. Singhvi, G.A. Shah, T.U. Mehta, V.M. Tarkunde, B.K. Mehta S.S. Ray, A.K. Gupta, S.K. Dhingra, T.C. Sharma, Kishan Dutt, R.J. Trivedi, Manoj Swarup, M.N. Shroff, Sudarsh Menon, Sushil Kumar Jain, Bahl Singh Malik, Gopala Subramanium, Ms. Binu Tamta, Shahid Rizi. D.K. Singh, T. Ray, Pramod Swarup, Praveen Swarup, 955 P.H. Parekh, Sunil Dogra, C.L. Sahu, G.L. Gupta, Brij Bhu shan, N.S. Das Bahl, Mrs. H. Wahi, Harish Javeri and section Ganesh. T.C. Sharma for the appearing parties. The Judgment of the Court was delivered by K.N. SINGH, J. On 25th September, 1989, a horrendus incident took place in the town of Nadiad, District Kheda in the State of Gujarat, which exhibited the berserk behaviour of Police undermining the dignity and independence of judi ciary. S.R. Sharma, Inspector of Police, with 25 years of service posted at the Police Station, Nadiad, arrested, assaulted and handcuffed N.L. Patel, Chief Judicial Magis trate, Nadiad and tied him with a thick rope like an animal and made a public exhibition of it by sending him in the same condition to the Hospital for medical examination on an alleged charge of having consumed liquor in breach of the prohibition law enforced in the State of Gujarat. The In spector S.R. Sharma got the Chief Judicial Magistrate photo graphed in handcuffs with rope tied around his body along with the constables which were published in the news papers all over the country. This led to tremors in the Bench and the Bar throughout the whole country. The incident undermined the dignity of courts in the country, Judicial Officers, Judges and Magistrates all over the country were in a state of shock, they felt insecure and humiliated and it appeared that instead of Rule of Law there was Police Raj in Gujarat. A number of Bar Associations passed Resolutions and went on strike. The Delhi Judicial Service Association, the All India Judges Association, Bar Council of Uttar Pradesh, Judicial Service of Gujarat and many others approached the Apex Court by means of telegrams and petitions under Article 32 of the Constitution of India for Saving the dignity and honour of the judiciary. On 29.9.1989, this Court took cognizance of the matter by issuing notices to the State of Gujarat and other Police Officers. The Court appealed to the Members of the Bar and Judiciary to resume work to avoid inconvenience to the litigant public. Subsequently, a number of petitions were filed under Article 32 of the Constitution of India for taking action against the Police Officers and also for quashing the criminal proceedings initiated by the Police against N.L. Patel, Chief Judicial Magistrate. A number of Bar Associations, Bar Councils and individuals appeared as interveners condemning the action of the police and urging the Court for taking action against the Police Officers. 956 In Petition No. 5 18 of 1989 alongwith Contempt Petition No. 6 of 1989 filed by the President, All India Judges Association, notices for contempt were issued by this Court on 4.10.1989 to seven Police Officials, D.K. Dhagal, D.S.P., A.M. Waghela, Dy. S.P., S.R. Sharma, Police Inspector, Kuldeep Singh Lowchab, Police Inspector (Crime), K.H. Sadia, Sub Inspector of Police, Valjibhai Kalabhai, Head Constable and Pratap Singh, Constable. N.L. Patel, CJM, Nadiad also filed an application in W.P. No. 517 of 1989 with a prayer to quash the two FIRs lodged against him, to direct the trial of the complaint filed by him as State case and to award compensation. On 13.2.1990 notices from contempt were issued to. K. Dadabhoy, exhibit D.G.P., Gujarat, Dr. Bhavsar, Senior Medical Officer of Govt. Hospital Nadiad and M.B. Savant, Mamlatdar, Nadiad. The Court during the proceedings also issued notices to R. Bala Krishnan, Additional Chief Secretary (Home), Government of Gujarat and S.S. Subhalkar, District Judge, Nadiad to show cause why action be not taken against them in view of the Report of Justice Sahai. N.L. Patel was posted as Chief Judicial Magistrate at Nadiad in October, 1988. He soon found that the local Police was not cooperating with the courts in effecting service of summons, warrants an notices on accused persons, as a result of which the trials of cases were delayed. He made complaint against the local Police to the District Superintendent of Police and forwarded a copy of the same to the Director General of Police but nothing concrete happened. On account of these complaints S.R. Sharma, Police Inspector Nadiad was annoyed with the Chief Judicial Magistrate, he withdrew constables posted in the CJM Court. In April, 1989 Patel filed two complaints with the Police against Sharma and other Police Officials, Nadiad for delaying the process of the court. On 25 July, 1989 Patel directed the Police to register a criminal case against 14 persons who had caused obstruction in judicial proceedings but subsequently since they tendered unqualified apology, the CJM directed the Police Inspector to drop the cases against those persons. Sharma reacted strongly to Patel 's direction and he made complaint against the CJM to the Registrar of the High Court through District Superintendent of Police. These facts show that there was hostility between the Police of Nadiad and the CJM. On 25.9. 1989, S.R. Sharma met Patel, CJM in his Chambers to discuss the case of one Jitu Sport where the Police had failed to submit charge sheet within 90 days. During discussion Sharma invited the CJM to visit the Police Station to see the papers and further his visit would mollify the sentiments of the Police Officials. It is al leged that at 957 8.35 p.m. Sharma sent a Police Jeep at Patel 's residence, and on that vehicle Patel went to the Police Station. What actual happened at the Police Station is a matter of serious dispute between the parties. According to the CJM, he ar rived in the Chamber of Sharma in the Police Station, he was forced to consume liquor and on his refusal he was assault ed, handcuffed and tied with rope by Sharma, Police Inspec tor, Sadia Sub Inspector, Valjibhai Kalajibhai, Head Consta ble and Pratap Singh, Constable. It is further alleged that Patal was sent to Hospital for Medical examination under handcuffs where he was made to sit on a bench in the varanda exposing him to the public gaze. Sharma, Police Inspector and other Police Officers have disputed these allegations. According to Sharma, Patel entered his chamber at the Police Station at 8.45 p.m. on 25.9. 1989 in a drunken state, shouting and abusing him, he caught hold of Sharma and slapped him, since he was violent he was arrested, hand cuffed and sent to Hospital for medical examination. Patel himself wanted to be photographed while he was handcuffed and tied with ropes, a photographer was arranged to take his photograph which was published in the newspapers. Since, there was serious dispute between the parties with regard to the entire incident, the Court appointed Justice R.M. Sahai senior puisne Judge of the Allahabad High Court (as he then was) to inquire into the incident and to submit report to the Court. Justice Sahai was appointed to hold the inquiry on behalf of this Court and not under the provisions of the Commission of Inquiry Act. Justice Sahai visited Nadiad and held sittings there. The learned Commis sioner/Judge invited affidavits/statements, and examined witnesses including S.R. Sharma the Police Inspector, D.K. Dhagal, D.S.P. and other Police Officers, lawyers, N.L. Patel, CJM, and Doctors and other witnesses. Justice Sahai afforded full opportunity to all the concerned persons including the State Government, Police Officers and lawyers to lead evidence and to cross examine witnesses. He submit ted a detailed Report dated 28.11.1989 to this Court on 1.12.1989. On receipt of the Report this Court directed copies to be delivered to concerned parties and permitted the parties and the contemners to file their objections, if any, before this Court. The objections were filed by the Police Officers and the contemners disputing the findings recorded by the Commissioner, On 12.12.1989, when the matter came up for final dispos al the Court issued notices to the Attorney General and Advocate General of the State of Gujarat. On 10.1.1990 the Court directed the State of Gujarat to file affidavit stat ing as to what action it had taken or pro 958 posed to take against the officers in the light of the Report of Justice Sahai. The Court further issued notices to R. Bala Krishnan, Additional Chief Secretary (Home), Govern ment of Gujarat, K. Dadabhoy, Director General of Police, S.S. Sudhalkar, District Judge, to show cause as to why action should not be taken against them in view of the Report of Justice Sahai. The State Government was further directed to explain as to why action against D.K. Dhagal, DSP, S.R. Sharma, Police Inspector and other police officers had not been taken. On 13.2. 1990 a notice for contempt of this Court was issued to K. Dadabhoy on the same date in view of the findings recorded by Justice Sahai, notices for contempt of court were issued to Dr. Bhavsar and M.B. Sa vant, Mamlatdar, Nadiad also. in his affidavit, S.R. Sharma, Police Inspector has raised a number of objections to the findings recorded by the Commissioner. The objections are technical in nature, chal lenging the authority and jurisdiction of the Commissioner in collecting evidence and recording findings against him. Sharma has further stated in his objections that the Commis sioner acted as if he was sitting in judgment over the case. Other Police Officers have also raised similar objections. We find no merit in the objections raised on behalf of Sharma, Police Inspector and other contemners. The Commis sioner had been appointed by this Court to hold inquiry and submit his report to the Court. Justice Sahai was acting on behalf of this Court and he had full authority to record evidence and cross examine witnesses and to collect evidence on behalf of this Court. Since, the main incident of Chief Judicial Magistrate 's arrest, assault, handcuffing and roping was connected with several other incidents which led to the confrontation between the Magistracy and local po lice, the learned Commissioner was justified in recording his findings on the background and genesis of the entire episode. The Police Inspector Sharma raised a grievance that he was denied opportunity of cross examination of Patel, CJM and he was not permitted to produce Dr. Jhala as a witness, Sharma 's application for the recall of CJM for further cross examination and for permission to produce Dr. Jhala, retired Deputy Director, Medical and Health Services, Guja rat, was rejected by a well reasoned order of the Commis sioner dated 9.11.1989. We have gone through the order and we find that the Commissioner has given good reasons for rejecting the recall of CJM for further cross examination, as he had been crossexamined by the counsel appearing on behalf of the Police officials including Sharma. The Police Officers and the State Government and CJM were represented by counsel before the Commissioner and every opportunity was afforded to them for cross examining the witnesses. 959 Dr. Jhala 's evidence was not necessary, the Commissioner rightly refused Sharma 's prayer. On behalf of the contemners it was urged that in the absence of any independent testimony the Commission was not justified in accepting interested version of the incident as given by the CJM with regard to his visit to the Police Station and the incident which took place inside the Police Station. There was oath against oath and in the absence of any independent testimony the Commission was not justified in accepting the sole interested testimony of Patel, CJM. We find no merit in this objection. The learned Commissioner has considered the evidence as well as the circumstances in support of his findings that Patel had been invited by Sharma to visit the Police Station and he had sent a Police jeep on which Patel went to the Police Station. This fact is supported by independent witnesses as discussed by the Commissioner. If Patel had gone on the invitation of Sharma on Police jeep and not in the manner as alleged by Sharma, Patel could not be drunk and there appears no reason as to why he would have assaulted Sharma as alleged by the Police. The circumstances as pointed out by the Commissioner fully justify the findings recorded against the Police Officers. It is settled law that even in a criminal trial, accused is convicted on circumstantial evidence in the absence of an eye witness, Learned Commissioner acted judicially in a fair and objective manner in holding the inquiry, he afforded opportunity to the affected Police Officers and other per sons and submitted his Report based on good reasons in respect of his findings which are amply supported by the material on record. The Commissioner did a commendable job in a record time. After hearing arguments at length and on perusal of the statements recorded by the Commissioner and the documentary evidence submitted by the parties, and a careful scrutiny of the affidavits and objections filed in this Court, we find no valid ground to reject the well reasoned findings recorded by the learned Commissioner. The Commissioner 's Report runs into 140 pages, which is on record. The contemners and other respondents have failed to place any convincing material before the Court to take a different view. We accordingly accept the same. After hearing learned counsel for the parties and on perusal of the affidavits, objections, applications and the Report of the Commissioner, we hold that the following facts and circumstances are fully proved: (1) N.L. Patel, Chief Judicial Magistrate found that the Police of 960 Nadiad was not effective in service of summons and it had adopted an attitude of indifference to court orders. He tried to obtain the assistance of the District Superintend ent of Police in February, 1989 and addressed a letter to the Director General ' of Police but no response came from the Police Authorities, even though the Government had reminded D.K. Dhagal, D.S.P., Kheda to do the needful. Patel, the CJM filed two complaints against Police Officers of Nadiad Police Station and the Inspectors, and forwarded it to the District Superintendent of Police on 19th and 24th July, 1989 for taking action against them. Sharma, the Police Inspector who had by then been posted at Nadiad reacted to the CJM 's conduct by withdrawing constables working in the courts of Magistrates on the alleged pretext of utilising their services for service of summons. This led to confrontation between the local Police and the Magistracy commenced. (2) On 25th July, 1989, the CJM had directed the regis tration of a case against 14 accused persons for misbeha viour and causing obstruction in the judicial proceedings. Since the accused persons had later expressed regret and tendered unqualified apology to the court, the CJM sent a letter to the Police Inspector, Sharma to drop proceedings. Sharma went out of his way, to send a complaint to the High Court through the D.S.P. saying that Patel was functioning in an illegal manner in the judicial discharge of his du ties. The action of Sharma, Police Inspector was highly irresponsible and Dhagal, D.S.P. should not have acted in a casual manner in forwarding Sharma 's letter to the Registrar of the High Court directly. (3) Remand period of Jitu Sport was to expire on 27th September, 1989, the CJM directed the Police Inspector to produce complete papers before the expiry of the period of remand but he applied for the extension of the judicial remand. The CJM directed the Police Inspector to produce papers on 22.9.1989, Sharma did not appear before the CJM as directed, on the contrary he interpolated the order, sent to him indicating that he was required to appear before the CJM on 23.9.1989, which was admittedly a holiday. (4) On 25th September, 1989, Sharma met the CJM in his Chamber and as a pretext requested him to come to the Police Station to see the papers which could not be brought to the Court, as that could satisfy him that the Police was doing the needful for complying with the orders of the Court. Sharma pleaded with CJM that his visit to Police Station will remove the feeling of confrontation between the Police and Magistracy. The CJM agreed to visit the Police Station and 961 Sharma offered to send police jeep to CJM 's house for bring ing him to the Police Station. (5) On 25.9.89 after the Court hours the CJM went to the officers ' club where he remained in the company of Sudhal kar, District Judge and Pande, Civil Judge till 8,30 p.m. Thereafter, he went to his residence. A Police jeep came to his residence at about 8.40 p.m. in the Officers Colony, he went on that Police jeep to the Police Station situated at a distance of about 2 kms. Patel had not consumed liquor before he went to the Police Station. (6) The Police version that Patel had consumed liquor before coming to the Police Station and that he assaulted the Police Inspector Sharma and misbehaved with him at the Police Station is a cooked up story. Patel did not go to the Police Station on foot as alleged by Sharma, instead, he went to the Police Station in a Police jeep on Sharma 's invitation. Patel was handcuffed and tied with rope, and he received injuries at the Police Station, he was assaulted and forced to consume liquor after he was tied to the chair on which he was sitting, Police Inspector Sharma, Sub In spector Sadia, Head Constable Valjibhai Kalabhai and Consta ble Pratap Singh took active part in this episode. They actively participated in the assualt on Patel and in forcing liquor in his mouth. They acted in collusion with Sharma to humiliate and teach a lesson to Patel. (7) On the direction of Sharma, Police Inspector, Patel was handcuffed at the Police Station and he was further tied up with a thick rope by the Police Inspector, Sharma, Sadia, Sub Inspector, Valjibhai Kalabhai, Head Constable and Pratap Singh, Constable. This was deliberately done in defiance of Police Regulations and Circulars issued by the Gujarat Government and the law declared by this Court in Prern Shankar Shukla vs Delhi Administration. , ; Patel had not committed any offence nor he was violent and yet he was handcuffed and tied up with rope without there being any justification for the same. There were seven police personnel present at the Police Station and most of them were fully armed while Patel was empty handed, there was absolutely no chance of Patel escaping from the custody or making any attempt to commit suicide or attacking the Police Officers and yet he was handcuffed and tied up with a thick rope like an animal with a view to humiliate and teach him a lesson. For this wanton act there was absolutely no justification and pleas raised by Sharma that Patel was violent or that he would have escaped from the custody are figment of imagination made for the purpose of the case. 962 (8) The panchnama showing the drunken state of Patel prepared on the dictation of Sharma, Police Inspector, and signed by Sharma as well as by two panches, M.B. Savant, Mamlatdar and P.D. Barot, Fire Brigade Officer, Nadiad, did not represent the correct facts, instead, it was manufac tured for the purpose of preparing a false case against CJM PateI, justifying his arrest and detention. (9) On examination at the Civil Hospital Patel 's body was found to have a number of injuries. The injury on the left eye was very clear which appeared to have been caused by external force. His body had bruises and abrasions which could be caused by fists and blows. While in the casualty ward of the Civil Hospital, Patel requested the Doctors to contact the District Judge and inform him about the inci dent. Dr. Parashar tried ' to ring up the District Judge but he was prevented from doing so by Sharma and other Police Officers who were present there. Dr. Parashar and Dr. Bhav sar found the speech of Patel normal, gait steady, he was neither violent, nor he misbehaved. His blood was taken for chemical examination but the Forms used were not according to the rules and the blood was not taken in accordance with procedure prescribed by the Rules and the Circulars issued by the Director of Medical Services, Gujarat. The chemical examination of the blood sample taken in the Civil Hospital was not correctly done. The blood sample was analysed by a teenager who was not a testing officer within the Bombay Prohibition Act and necessary precautions at the time of analysis were not taken. The phial in which the blood sample had been sent to the Chemical Examiner did not contain the seal on phial and the seal was not fully legible. The Chemi cal Examiner who submitted the report holding that the blood sample of Patel contained alcohol on the basis of the calcu lation made by him in the report clearly admitted before the Commission that he had never determined the quantity of liquor by making calculation in any other case and Patel 's case was his first case. (10) When Patel was taken to Civil Hospital handcuffed and tied with thick rope he was deliberately made to sit outside in the Varanda on bench for half an hour in public gaze, to enable the public to have a full view of the CJM in that condition. A Press photographer was brought on the scene and the Policemen posed with Patel for the press photograph. The photographs were taken by the Press Reporter without any objection by the Police, although a belated justification was pleaded by the Police that Patel desired to have himself photographed in that condition. This plea is totally false. The photographs taken by the Press Reporter were published in `Jan Satta ' and 'Lokmat ' on 26th 963 September. 1989 showing Patel handcuffing and tied with rope and the Policemen standing beside him. This was deliberately arranged by Sharma to show to the public that Police weilded real power and if the CJM took confrontation with Police he will not be spared. (11) At the initial stage, one case was registered against Patel by the Police under the Bombay Prohibition Act. Two Advocates Kantawala and Brahmbhatt met Sharma at 11.30 p.m. for securing Patel 's release on bail, as offences under the Prohibition Act were bailable. The lawyers re quested Sharma to allow them to meet the CJM who was in the police lock up but Sharma did not allow them to do so. With a view to frustrate lawyers ' attempt to get Patel released on bail. Sharma registered another case against Patel under Sections 332 and 506 of Indian Penal Code as offence under Section 332 is non bailable. (12) D.K. Dhagal, the then District Superintendent of Police, Kheda exhibited total indifference to CJM 's com plaint regarding the unsatisfactory state of affairs in the matter of execution of court processes. Dhagal identified himself with Sharma, Police Inspector who appeared to be his favourite. Instead of taking corrective measures in the service of processes, he became party along with Sharma in forwarding his complaint to the High Court against Patel 's order in a judicial matter. The incident which took place in the night of 25/26 September 1989, had the blessing of Dhagal. He did not take any immediate action in the matter instead he created an alibi for himself alleging that he had gone to Lasundara and then to Balasinor Police Station and stayed there in a Government Rest House. The register at the Rest House indicating the entry regarding his stay was manipulated subsequently by making interpolation. On the direction of Additional Chief Secretary (Home) Dhagal sub mitted his report on 27.9. 1989 but in that report he did not make any reference of handcuffing and roping of the CJM although it was a matter of common knowledge and there was a great resentment among the judicial officers and the local public. Dhagal 's complicity in the sordid episode is further fortified by the fact that he permitted Sharma, the main culprit of the entire episode to carry on investigation against Patel in the case registered against him by Sharma and also in the case registered by Patel against Sharma. (13) Police Inspector Sharma had pre planned the entire incident and he had even arranged witnesses in advance for preparing false case against N.L. Patel, CJM, as M.B. Sa vant, Mamlatdar in the 964 Police Station, immediately on the arrival of PateI, CJM, and they acted in complicity with Sharma in preparing the panchnama which falsely stated that Patel was drunk. M.B. Sawant and P.D. Barot both were hand in glove with Sharma to flasely implicate Patel in Prohibition Case. Learned Commissioner has adversely commented upon the conduct of various officers including K. Dadabhoy, the then Director General of Police, Gujarat, Kuldip Singh Lowchab, CID Inspector, Dr. Bhavsar, Senior Medical Officer, Nadiad, M.B. Savant, Mamlatdar, P.D. Barot, Fire Brigade Officer and A.N. Patel, Chemical. Examiner, Nadiad. After considering the material on record, we agree with the view taken by the Commissioner that ,their conduct was not above board as expected from responsible officers. We do not consider it necessary to burden the judgment by referring to the details of the findings as the same are contained in the Commis sioner 's Report. Mr. Nariman contended on behalf of the Po1ice Officers that the findings recorded by the Commission cannot be taken into account as those findings are hit by Article 20(3) of the Constitution. Inspector Sharma and other Police Officers against whom criminal cases have been registered were com pelled to be witnesses against themselves by filing affida vits and by subjecting them to cross examination before the Commissioner. Any finding recorded on the basis of their evidence is violative of Article 20(3) of the Constitution. Article 20(3) of the Constitution declares that no person accused of any offence shall be compelled to be a witness against himself. In order to avail the protection of Article 20(3) three conditions must be satisfied. Firstly, the person must be accused of an offence. Secondly, the element of compulsion to be a witness should be there and thirdly it must be against himself. All the three ingredients must necessarily exist before protection of Article 20(3.) is available. If any of these ingredients do not exist, Article 20(3) cannot be invoked see: Balkishan Devidayal vs State of Maharashtra., ; In the instant case this Court had issued notices for contempt to Sharma, Police Inspector and other contemners. Mere issue of notice or pendency of contempt proceedings do not attract article 20(3) of the Constitution as the contemners against whom notices were issued were not accused of any offence. A criminal contempt is punishable by the superior courts by fine or imprisonment, but it has many characteristics which distin guishes it from ordinary offence. An offence under the criminal jurisdiction is tried by a Magistrate or a Judge and the procedure of trial is regulated by the ' Code of Criminal Procedure, 1973 which provides as elaborate 965 procedure for flaming of charges, recording of evidence, crossexamination, argument and the judgment. But ' charge of contempt is tried on summary process without any fixed procedure as the court is free to evolve its own procedure consistent with fair play and natural justice. In contempt proceedings unlike the trial for a criminal offence no oral evidence is ordinarily recorded and the usual practice is to give evidence by affidavits. Under the English Law a crimi nal offence is tried by criminal courts with the aid of Jury but a criminal contempt is tried by courts summarily without the aid and assistance of Jury. Ordinarily, process of trial for contempt is summary. A summary form of trial is held in the case of civil contempt and also in the case of criminal contempt where the act is committed in the actual view of the court or by an officer of justice. The summary procedure is applicable by immemorial usage when criminal contempt was committed out of court by a stranger. The practice of pro ceeding summarily for the punishment of contempt out of court has been the subject of comment and protest, but the practice is founded upon immemorial usage, it has, since the eighteenth century, been generally assumed. We do not con sider it necessary to refer to decisions from English Courts which have been discussed in detail in the History of Con tempt of Court by Fox JC 1927. Proceedings for contempt of Court are not taken in the exercise of original criminal jurisdiction. Proceedings for contempt of Court are of a peculiar nature; though it may be that in certain aspects they are quasi criminal, but in any view they are not exer cised as part of the original criminal jurisdiction of the Court, as was held in re: Tushar Kanti Ghosh and Another. AIR 1935 Calcutta 419. The High Court held that since the proceedings for contempt of Court do not fall within the original criminal jurisdiction of the Court no leave could be granted for appeal to Privy Council under Clause 41 of the Letters Patent of that Court. In Sukhdev Singh Sodhi vs The Chief Justice and Judges of the PEPSU High Court, ; Sukhdev Singh Sodhi approached this Court for transfer of contempt proceedings from PEPSU High Court to any other High Court under Section 527 of the Criminal Procedure Code, 1898. This Court. re jected the application holding that Section 527 of the Criminal Procedure Code did not apply to the contempt pro ceedings as the contempt jurisdiction is a special jurisdic tion which is inherent in all courts of record and the Cr. P.C. excludes such a special jurisdiction from the Code. The Court further held that notwithstanding the provisions contained in the Contempt of Courts Act, 1926 making an offence of contempt, punishable, the Act does not confer any jurisdiction or create the offence, it merely limits the 966 amount of the punishment which could be awarded and it removes a certain doubt. The jurisdiction to initiate the proceedings and take seisin of the contempt is inherent in a court of record and the procedures of the Criminal Procedure Code do not apply to contempt proceedings. Section 5 of the Code of Criminal Procedure lays down that nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. The power to take proceedings for the contempt of Court is an inherent power of a Court of record, the Criminal Procedure Code does not apply to such proceedings. Since, the contempt proceedings are not in the nature of criminal proceedings for an of fence, the pendency of contempt proceedings cannot be re garded as criminal proceedings merely because it may end in imposing punishment on the contemner. A contemner is not in the position of an accused, it is open to the Court to cross examine the contemner and even if the contemner is found to be guilty of contempt, the Court may accept apology and discharge the notice of contempt, whereas tendering of apology is no defence to the trial of a criminal offence. This peculiar feature distinguishes contempt proceedings from criminal proceedings. In a criminal trial where a person is accused of an offence there is a public prosecutor who prosecutes the case on behalf of the prsecution against the accused but in contempt proceedings the court is both the accuser as well as the judge of the accusation as ob served by Hidayatullah, CJ in Debabrata Bandopadhyaya 's, case AIR 1969 SC I89. Contempt proceeding is sui generis, it has peculiar features which are not found in criminal pro ceedings. In this view the contemners do not stand in the position of a person accused of an offence" merely on ac count of issue of notice of contempt by this Court and the Commission which was acting on behalf of this Court had full authority to reord the testimony of the contemners. Commis sion issued notice and directed Sharma, Police Inspector and other Police Officials to place their version of the inci dent before it and there was no element of compulsion. In this view there has been no violation of Article 20(3) of the Constitution and Commission 's findings are not vitiated. Mr. F.S. Nariman contended that this Court has no jurisdiction or power to indict the Police Officers even if they are found to be guilty as their conduct does not amount to contempt of this Court. He urged that Article 129 and 215 demarcate the respective areas of jurisdiction of the Su preme Court and the High Courts respectively. 967 This COurt 's Jurisdiction under Article 129 is confined to the contempt of itself only and it has no jurisdiction to intict a person for contempt of an inferior court subordi nate to the High Court. The Parliament in exercise of its legislative power under Entry 77 of List 1 read with Entry 14 of List III has enacted Contempt of. Courts Act 1971 (hereinafter referred to as the 'Act ') and that Act does not confer any jurisdiction on this Court for taking action for contempt of subordinate courts. Instead the original juris diction of High Courts in respect of contempt of subordinate courts is specificially preserved by Sections 11 and 15(2) of the Act. The Supreme Court has only appellate powers under Section 19 of the Act read with Articles 134(1)(c) and 136 of the Constitution. The Constitutional and statutory provisions confer exclusive power on the High Court for taking action with regard to contempt of inferior or subor dinate court, and the Supreme Court has no jurisdiction in the matter. Shri Nariman further urged that in our country there is no court of universal jurisdiction, and the juris diction of all courts including Supreme Court is limited and this Court can not enlarge its jurisdiction. Shri Soli J. Sorabji learned Attorney General (as he then was) urged that power to punish contempt is a special jurisdiction which is inherent in a court of record. A superior court of record has inherent power to punish for contempt of itself and it necessarily includes and carries with it the power to punish for contempt committed in respect of subordinate or inferior courts. A superior court of record having power to correct the order of inferior court has power to protect that court by punishing those who interfere with the due administration of justice of the court. Articles 129 and 2 15 do not confer any additional jurisdiction on the Supreme Court and the High Court. The constitutional provisions as well as the legislative enactment "The Contempt of Courts Act" recognise and preserve the existing contempt jurisdiction and power of the court of record for punishing for contempt of subordi nate or inferior courts. The Act has not affected or re stricted the suo moto inherent power of the Supreme Court being a court of record which has received constitutional sanction under Article 129. Mr. Sorabji further urged that even otherwise the Act does not restrict or affect the suo moto exercise of power by the Supreme Court as a court of record in view of Section 15(1) of the Act. The Supreme Court as the Apex Court is the protector and guardian of justice throughout the land, therefore, it has a right and also a duty to protect the courts whose orders and judgments are amenable to correction, form commission of contempt against them. This right and duty of the Apex Court is not abrogated merely because the High Court also has this right and duty of protection of the subordinate courts. The juris dictions are concurrent and not exclusive or antagonistic. 968 The rival contentions raise the basic question whether the Supreme Court has inherent jurisdiction or power to punish for contempt of subordinate or inferior courts under Article 129 of the Constitution and whether the inherent jurisdiction and power of this Court is restricted by the Act. The answer to the first question depends upon the nature and the scope of the power of this Court as a court of record, in the background of the original and appellate jurisdiction exercised by this Court under the various provisions of the Constitution. It is necessary to have a look at the constitutional provisions relating to the origi nal and appellate jurisdiction of this Court. Article 124 lays down that there shall be a Supreme Court of India consisting of Chief Justice of India.and other Judges. Article 32 confers original jurisdiction on this Court for enforcement of fundamental rights of the citizens. This jurisdiction can be invoked by an aggrieved person even without exhausting his remedy before other courts. Article 129 provides that the Supreme Court shall be a court of record and shall have all the powers of such a court includ ing the power to punish for contempt of itself. Article 13 1 confers original jurisdiction on the Supreme Court in cer tain matters. Article 132 confers appellate jurisdiction on this Court against any judgment, decree or final order of the High Courts in India. Articles 133, 134 and 134A confer appellate jurisdiction in the Supreme Court in appeals from High Courts in regard to civil and criminal matters respec tively on certificate to be issued by the High Court. Arti cle 136 provides for special leave to appeal before the Supreme Court, notwithstanding the provisions of Articles 132, 133, 134 and 134A. Article 136 vests this Court with wide powers to grant special leave to appeal from any judg ment, decree determination sentence or order in any cause or matter passed or made by any court or tribunal in the terri tory of India except a court or Tribunal constituted by or under any law relating to the Armed Forces. The Court 's appellate power under Article 136 is plenary, it may enter tain any appeal by granting special leave against any order made by any Magistrate. Tribunal or any other subordinate court. The width and amplitude of the power is not affected by the practice and procedure followed by this Court in insisting that before invoking the jurisdiction of this Court under Article 136 of the Constitution, the aggrieved party must exhaust remedy available under the law before the appellate authority or the High Court. Self imposed restric tions by this Court do not divest it of its wide powers to entertain any appeal, against any order or judgment passed by any court or Tribunal in the country without exhausting alternative remedy before the appellate authority or the High Court. The power of this Court under Article 136 is unaffected by Article 132, 133, 134 and 134(A) in view of the expression 969 "notwithstanding anything in this Chapter" occurring in Article 136. This Court considered the scope and amplitude of plenary power under Article 136 of the Constitution in Durga Shankar Mehta vs Thakur Raghuraj Singh & Ors., [1955] 1 SCR 267. Mukherjee, J. speaking for the Court observed: "The powers given by Article 136 of the Con stitution however are in the nature of special or residuary powers which are exercisable outside the purview of ordinary law, in cases where the needs of justice demand interference by the Supreme Court of the land. The article itself is worded in the widest terms possible. It vests in the Supreme Court a plenary juris diction in the matter of entertaining and hearing appeals, by granting of special leave, against any kind of judgment or order made by a court or Tribunal in any cause or matter and the powers could be exercised in spite of the specific provisions for appeal contained in the Constitution or other laws. The Constitu tion for the best of reasons did not choose to fetter or circumscribe the powers exercisable under this Article in any way. " In Arunachalam v.P.S.R. Sadhanantham & Anr., ; this Court entertained an appeal under Article 136 of the Constitution of India by special leave at the in stance of a complainant against the judgment and the order of acquittal in a murder case and on appraisal of evidence, it set aside the order of acquittal. Objections raised on behalf of the accused relating to the maintainability of the special leave petition under Article 136 of the Constitu tion, was rejected. Chinnappa Reddy, J. speaking for the Court held as under: "Article 136 of the Constitution of India invests the Supreme Court with a plentitude of plenary, appellate power over all courts and Tribunals in India. The power is plenary in the sense that there are no words in Article 136 itself qualifying that power. But, the very nature of the power has led the court to set limits to itself within which to exercise such power. It is now the well established practice of this Court to permit the invoca tion of the power under ArtiCle 136 only in very exceptional circumstances, as when a question of law of general public importance arises or a decision shocks the conscience of the Court. But, within the restrictions im posed by itself, this Court has the 970 undoubted power to interfere even with find ings of fact, making no distinction between judgments of acquittal and conviction, if the High Court, in arriving at those findings, has acted "perversely or otherwise improperly". " With regard to the competence of a private party, distin guished from the State, to invoke the jurisdiction of this Court under Article 136 of the Constitution, the Court observed: "Appellate power vested in the Supreme Court under Article136 of the Constitution is not to be confused with ordinary appellate power exercised by appellate courts and appellate tribunals under specific statutes. As we said earlier, it is a plenary power, exercisable outside the purview of ordinary law ' to meet the pressing demands of justice (vide Durga Shankar Mehta vs Thakur Raghuraj Singh,). Article 136 of the Constitution neither con fers on anyone the right to invoke the juris diction of the Supreme Court nor inhibits anyone from invoking the Court 's jurisdiction. The power is vested in the Supreme Court but the right to invoke the Court 's jurisdiction is vested in no one. The exercise of the power of the Supreme Court is not circumscribed by any limitation as to who may invoke it. " There is therefore no room for any doubt that this Court has wide power to interfere and correct the Judgment and orders passed by any court or Tribunal in the country. In addition to the appellate power, the Court has special residuary power to entertain appeal against any order of any court in the country. The plenary jurisdiction of this Court to grant leave and hear appeals against any order of a court or Tribunal, confers power of judicial superintendence over all the courts and Tribunals in the territory of India including subordinate courts of Magistrate and District Judge. This Court has, therefore, supervisory jurisdiction over all courts in India. Article 129 provides that the Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Article 215 contains similar provision in respect of High Court. Both the Supreme Court as well as High Courts are courts of record having powers to punish for contempt in cluding the power to punish for contempt of itself. The Constitution does not define "Court of Record". This expres sion is well recognised in jurisdical world. In Jowitt 's Dictionary of English Law, "Court of Record" is defined as: 971 "A court whereof the acts and judicial pro ceedings are enrolled for a perpetual memorial and testimony, and which has power to fine and imprison for contempt of its authority. " In Wharton 's Law Lexicon, Court of Record is defined as: "Courts are either of record where their acts and judicial proceedings are enrolled for a perpetual memorial and testimony and they have power to fine and imprison; or not of record being courts of inferior dignity, and in a less proper sense the King 's Courts and these are not entrusted by law with any power to fine or imprison the subject of the realm, unless by the express provision of some Act of Parliament. These proceedings are not enrolled or recorded. " In Words and Phrases (Permanent Edition) Vol. 10 page 429, "Court of Record" is defined as under: "Court of Record is a court where acts and judicial proceedings are enrolled in parchment for a perpetual memorial and testimony, which rolls are called the "record" of the court, and are of such high and supereminent authori ty that their truth is not to be questioned. " Halsbury 's Laws of England Vol. 10 page 319, states: "Another manner of division is into courts of record and courts not of record. Certain Courts are expressly declared by statute to be courts of record. In the case of courts not expressly declared to be courts of record, the answer to the question whether a court is a court of record seems to depend in general upon whether it has power to fine or imprison, by statute or otherwise, for contempt of itself or other substantive offences; if it has such power, it seems that it is a court of record. . proceedings of a Court of record preserved in its archives are called records, and are conclusive evidence of that which is recorded therein." In England a superior court of record has been exercised power to indict a person for the contempt of its authority and also for the contempt of its subordinate and inferior courts in a summary manner 972 without the aid and assistance of Jury. This power was conceded as a necessary attribute of a superior court of record under Anglo Saxon System of Jurisprudence. The con cept of inherent power of the superior court of record to indict a person by summary procedure was considered in detail in Rex vs Almon, ; commonly known as Aimon 's case. In that case King 's Bench initiated proceedings for contempt against John Almon, a book seller for publishing a libel on the Chief Justice, Lord Mansfied. On behalf of the contemner objection was taken to the summary procedure followed by the Court. After lengthy arguments judgment was prepared by Chief Justice Wilmot holding that a libel on a Judge was punishable by the process of attachment without the intervention of a Jury, as the summary form of procedure was founded upon immemorial usage. The judgment prepared with great learning and erudition could not be delivered as the proceedings were dropped following the change of Govern ment. After long interval Wilmot 's judgment was published in 1802. The judgment proceeded on the assumption that the superior Common Law Courts did have the power to indict a person for contempt of court, by following a summary proce dure on the principle that this power was 'a necessary incident to every court of justice '. Undelivered judgment of Wilmot, J. has been subject of great controversy in England ' and Sir John Fox has severely criticised Almon 's case, in his celebrated book "The History of Contempt of Court ', The Form of Trial and Mode of Punishment: In spite of serious criticism of the judgment of Wilmot, J. the opinion ex pressed by him has all along been followed by the English and Commonwealth Courts. In Rainy vs The Justices of Seirra Leone, 8 Moors PC 47 at 54 on an application for leave to appeal against the order of the Court of Seirra Leone for contempt of court, the Privy Council upheld the order on the ground that the court of Seirra Leone being a Court of Record was the sole and exclusive judge of what amounted to contempt of court. In India, the courts have followed the English practice in holding that a court of record has power of summarily punishing contempt of itself as well as of subordinate courts. In Surendra Nath Banerjee vs The Chief Justice and Judges of the High Court at Fort William in Bengal, ILR to Calcutta 109 the High Court of Calcutta in 1883 convicted Surendra Nath Banerjee, who was Editor and Proprietor of Weekly newspaper for contempt of court and sentenced him to imprisonment for two months for publishing libel reflecting upon a Judge in his judicial capacity. On appeal the Privy Council upheld the order of the High Court and observed that the High Courts in Indian Presidencies were superior courts of record, and the powers of the High 973 Court as superior courts in India are the same as in Eng land. The Privy Council further held that by common law every court of record was the sole and exclusive judge of what amounts to a contempt of court. In Sukhdev Singh Sodhi 's case this Court considered the origin, history and development of the concept of inherent jurisdiction of a court of record in India. The Court after considering Privy Council and High Courts decisions held that the High Court being a court of record has inherent power to punish for contempt of subordinate courts. The Court further held that even after the codification of the law of contempt in India the High Court 's jurisdiction as a court of record to initi ate proceedings and take seisin of the matter remained uneffected by the Contempt of Courts Act, 1926. Mr. Nariman contended that even if the Supreme Court is a court of record, it has no power to take action for the contempt of a Chief Judicial Magistrate 's court as neither the Constitution nor any statutory provision confer any such jurisdiction or power on this Court. He further urged that so far as the High Court is concerned, it has power of judicial and administrative superintendence over the subor dinate courts and further Section 15 of the Act expressly confers power of the High Court to take action for the contempt of subordinate courts. This Court being a court of record has limited jurisdiction to take action for contempt of itself under Article 129 of the Constitution, it has no jurisdiction to indict a person for the contempt of subordi nate or inferior courts. The question whether in the absence of any express provision a Court of Record has inherent power in respect of contempt of subordinate or inferior courts, has been consid ered by English and Indian Courts. We would briefly refer to some of those decisions. In the leading case of Rex vs Parke, at 442. Wills, J. observed: "This Court exercises a vigilant watch over the proceedings of inferior courts and suc cessfully prevents them from usurping powers which they do not possess, or otherwise acting contrary to law. It would seem almost a natu ral corollary that it should possess correla tive powers of guarding them against unlawful attacks and interferences with their independ ence on the part of others." In King vs Davies, Wills, J. further held that the Kings Bench being a court of record must protect the inferior courts 974 from unauthorised interference, and this could only be secured by action of the Kings Bench as the inferior courts have no power to protect themselves and for that purpose this power is vested in superior court of record. Since the Kings Bench is the custos morum of the kingdom it must apply to it with the necessary adaptations to the altered circumstances of the present day to uphold the independence of the judiciary. The principle laid down in Rex vs Davies, was followed in King vs Editor of the Daily Mail, where it was held that the High Court as a court of record has inherent jurisdiction to punish for contempt of a court martial which was an inferior court. Avory, J. observed: "The result of that judgment (Rex vs Davies ) is to show that wherever this Court has power to correct an inferior court, it also has power to protect that court by punishing those who interfere with Due administration of ,justice in their court." In Attorney General vs B.B.C., ; 1 the House of Lords proceeded on the assumption that a court of record possesses protective jurisdiction to indict a person for interference with the administration of justice in the inferior courts but it refused to indict as it held that this protection is available to a court exercising judicial power of the State and not to a Tribunal even though the same may be inferior to the court of record. These authori ties show that in England the power of the High Court to deal with the contempt of inferior court was based not so much on its historical foundation but on the High Court 's inherent jurisdiction being a court of record having juris diction to correct the orders of those courts. In India prior to the enactment of the Contempt of Courts Act, 1926, High Court 's jurisdiction in respect of contempt of subordinate and inferior courts was regulated by the principles of Common Law of England. The High Courts in the absence of statutory provision exercised power of con tempt to protect the subordinate courts on the premise of inherent power of a Court of Record. Madras High Court in the case of Venkat Rao, held that it being a court of record had the power to deal with the contempt of subordinate courts. The Bombay High Court in Mohandas Karam Chand Gandhi 's, [1920] 22 Bombay Law Reporter 368 case held that the High Court possessed the same powers to punish the contempt of subordinate courts as the Court of the King 's Bench Division had by virtue of the Common Law of England. Similar view was expressed by the 975 Allahabad High Court in Abdul Hassan Jauhar 's, case AIR 1926 Allahabad 623 and Shantha Nand Gir vs Basudevanand., AIR 1930 Allahabad 225 (FB). In Abdul Hassan Jauhar 's case (supra) a Full Bench of the Allahabad High Court after considering the question in detail held: "The High Court as a court of record and as the protector of public justice through out its jurisdiction has power to deal with con tempts ' directed against the administration of justice, whether those contempts are committed in face of the court or outside it, and inde pendently or whether the particular court is sitting or not sitting, and whether those contempts relate to proceedings directly concerning itself or whether they relate to proceedings concerning an inferior court, and in the latter case whether those proceedings might or might not at some stage come before the High Court. " Similar view was taken by the Nagpur and Lahore High Courts in Mr. Hirabai vs Mangal Chand, AIR 1935 Nagpur 16; Harki shan Lal vs Emperor, AIR 1937 Lahore 197 and the Oudh Chief Court took the same view in Mohammad Yusuf vs Imtiaz Ahmad Khan., AIR 1939 Oudh 13 1. But, the Calcutta High Court took a contrary view in Legal Remembrancer vs Motilal Ghosh, ILR holding that there was no such inherent power with the High Court. Judicial conflict with regard to High Court 's power with regard to the contempt of subordinate court was set at rest by the Contempt of Courts Act 1926. The Act resolved the doubt by recognising to the power of High Courts in regard to contempt of subordinate courts, by enacting Section 2 which expressly stated that the High Courts will continue to have jurisdiction and power with regard to contempt of subordinate courts as they exercised with regard to their own contempt. Thus the Act reiterated and recognised the High Court 's power as a court of record for taking action for contempt of courts subordinate to them. The only excep tion to this power, was made in subsection (3) of Section 2 which provided that no High Court shall take cognizance of a contempt alleged to have been committed in respect of a court subordinate to it where such contempt is an offence punishable under the Indian Penal Code. Section 3 of the Act restricted the punishment which could be passed by the High Court. Since doubt was raised whether the High Court as a court of record could punish contempt of itself and of courts subordinate to it if contempt was committed outside its territorial jurisdiction, the Parliament enacted the Con 976 tempt of Courts Act 1952 removing the doubt. Section 3 of the 1952 Act again reiterated and reaffirmed the power, authority and jurisdiction of the High Court in respect of contempt of courts subordinate to it, as it existed prior to the enactment. It provided that every High Court shall have and exercise the same jurisdiction, power and authority, in accordance with the same procedure and prac tice in respect of contempt of courts subordinate to it as it has and exercise in respect of contempt of itself. Sec tion 5 further expanded the jurisdiction of the High Court for indicting a person in respect of contempt committed outside the local limits of its jurisdiction. The Parliamen tary legislation did not confer any new or fresh power or jurisdiction on the High Courts in respect of contempt of courts subordinate to it, instead it reaffirmed the inherent power of a Court of Record, having same jurisdiction, power and authority as it has been exercising prior to the enact ments. The effect of these statutory provisions was consid ered by this Court in Sukhdev Singh Sodhi 's case, and the Court held that contempt jurisdiction was a special one inherent in the very nature of a court of record and that jurisdiction and power remained unaffected even after the enactment of 1926 Act as it did not confer any new jurisdic tion or create any offence, it merely limited the amount of punishment which could be awarded to a contemner. The juris diction of the High Court to initiate proceedings or taking action for contempt of its subordinate courts remained as it was prior to the 1926 Act. In R.L. Kapur vs State of Tamil Nadu, ; the Court again emphasised that in view of Article 215 of the Constitution, the High Court as a court of record possesses inherent power and jurisdiction, which is a special one, not arising or derived from Contempt of Courts Act and the provisions of Section 3 of 1926 Act, do not affect that power or confer a new power or jurisdic tion. The Court further held that in view of Article 215 of the Constitution, no law made by a Legislature could take away the Jurisdiction conferred on the High Court nor it could confer it afresh by virtue of its own authority. The English and the Indian authorities are based on the basic foundation of inherent power of a Court of Record, having jurisdiction to correct the judicial orders of subor dinate courts. The Kings Bench in England and High Courts in India being superior Court of Record and having judicial power to correct orders of subordinate courts enjoyed the inherent power of contempt to protect the subordinate courts. The Supreme Court being a Court of Record under Article 129 and having wide power of judicial supervision over all the courts in the country, must possess and exer cise similar jurisdiction and power as the High Courts had prior to Contempt Legislation in 1926. Inherent 977 powers of a superior Court of Record have remained unaffect ed even after Codification of Contempt Law. The was enacted to define and limit the powers of courts in punishing contempts of courts and to regulate their procedure in relation thereto. Section 2 of the Act defines contempt of court including criminal contempt. Sections 5, 6, 7, 8, and 9 specify matters which do not amount to contempt and the defence which may be taken. Section 10 which relates to the power of High Court to punish for contempt of subordinate courts. Section 10 like Section 2 of 1926 Act and Section 3 of 1952 Act reiterates and reaffirms the jurisdiction and power of a High Court in respect of its own contempt and of subordinate courts. The Act does not confer any new jurisdiction instead it reaf firms the High Courts power and jurisdiction for taking action for the contempt of itself as well as of its subordi nate courts. We have scanned the provisions of the 1971 Act, but we find no provision therein curtailing the Supreme Court 's power with regard to contempt of subordinate courts, Section 15 on the other hand expressly refers to this Court 's power for taking action for contempt of subordinate courts. Mr. Nariman contended that under Section 15 Parlia ment has exclusively conferred power on the High Court to punish for the contempt of subordinate courts. The legisla tive intent being clear, this Court has no power under its inherent jurisdiction or as a court of record under Article 129 of the Constitution with regard to contempt of subordi nate courts. Section 15 of the Act reads as under: "15. Cognizance of criminal contempt in other cases (1) In the case of a criminal contempt, other than a contempt referred to in Section 14, the Supreme Court or the High Court may take action on its own motion or a motion made by (a) the Advocate General, or (b) any other person, with the con sent in writing of the Advocate General (or) (c) in relation to the High Court for the Union Territory of Delhi, such Law Officer as the Central Government may by notification in the official Gazette, specify in this behalf or any other person, with the consent in writing of such Law Officer. (2) In the case of any criminal contempt of subordinate 978 court, the High Court may take action on a reference made to it by the subordinate Court or on a motion made by the Advocate General or, in, relation to a Union Territory, by such Law Officer as the Central Government may, by notification in the official Gazette, specify in this behalf. (3) Every motion or reference made under this section shall specify the contempt of which the person charged is alleged to be guilty. Explanation In this section, the expression "Advocate General" means (a) in relation to the Supreme Court, the Attorney General or the Solicitor General; (b) in relation to the High Court, the Advocate General of the State or any of the States for which the High Court has been established; (c) in relation to the Court of a Judicial Commissioner, such Law Officer as the Central Government may, by notification in the official Gazette, specify in this behalf. Under sub section (1) the Supreme Court and High Court both have power to take cognizance of criminal contempt and it provides three modes for taking cognizance. The Supreme Court and the High Court both may take cognizance on its own motion or on the motion made by the Advocate General or any other person with the consent in writing of the Advocate General. Sub section (2) provides that in case of any crimi nal contempt of subordinate court, the High Court may take action on a reference made to it by the subordinate court or on a motion made by the Advocate General, and in, relation to a Union Territory, on a motion made by any officer as may be specified by the Government. Thus Section 15 prescribes modes for taking cognizance of criminal contempt by the High Court and Supreme Court, it is not a substantive provision conferring power or jurisdiction on the High Court or on the Supreme Court for taking action for the contempt of its subordinate courts. The whole object of prescribing proce dural modes of taking cognizance in Section 15 is to safe guard the valuable time of the ' High Court and the Supreme Court being wasted by frivolous complaints of contempt of court. Section 15(2) does not restrict the power of the High Court to take cognizance of the 979 contempt of itself or of a subordinate court on its own motion although apparently the Section does not say so. In S.K. Sarkar, Member, Board of Revenue, U.P. Lucknow vs Vinay Chandra Misra, ; this Court held that Section 15 prescribed procedure for taking cognizance and it does not affect the High Court 's suo moto power to take cogni zance and punish for contempt of subordinate courts. Mr. Nariman urged that under Entry 77 of List I of the VIIth Schedule the Parliament has legislative competence to make law curtailing the jurisdiction of Supreme Court. He further urged that Section 15 curtails the inherent power of this Court with regard to contempt of subordinate courts. Entry 77 of List 1 states: "Constitution, organisation, jurisdiction and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practise before the Supreme Court." This Entry. read with Article 246 confers power on the Parliament to enact law with respect to the constitution, organisation, jurisdiction and powers of the Supreme Court including the contempt of this court. The Parliament is thus competent to enact a law relating to the powers of Supreme Court with regard to 'contempt of itself ' such a law may prescribe procedure to be followed and it may also prescribe the maximum punishment which could be awarded and it may provide for appeal and for other matters. But the Central Legisla ture has no legislative competence to abridge or extinguish the jurisdiction or power conferred on this Court under Article 129 of the Constitution. The Parliament 's power to legislate in relation to law of contempt relating to Supreme Court is limited, therefore the Act does not impinge upon this Court 's power with regard to the contempt of subordi nate courts under Article 129 of the Constitution. Article 129 declares the Supreme Court a court of record and it further provides that the Supreme Court shall have all the powers of such a court including the power to punish for contempt of itself (emphasis supplied). The expression used in Article 129 is not restrictive instead it is exten sive in nature. If the Framers of the Constitution intended that the Supreme Court shall have power to punish for con ' tempt of itself only, there was no necessity for inserting the expression "including the power to punish for contempt of itself '. The Article confers power on the Supreme Court to punish for contempt of itself and in addition, it confers some additional power relating to contempt as would appear from the expression '*including". The expression "including" has been interpreted by courts, to extend and widen the 980 scope of power. The plain language of Article clearly indi cates that this Court as a court of record has power to punish for contempt of itself and also something else which could fall within the inherent jurisdiction of a court of record. In interpreting the Constitution, it is not permis sible to adopt a construction which would render any expres sion superfluous or redundant. The courts ought not accept any such construction. While construing Article 129, it is not permissible to ignore the significance and impact of the inclusive power conferred on the Supreme Court. Since, the Supreme Court is designed by the Constitution as a court of record and as the Founding Fathers were aware that a superi or court of record had inherent power to indict a person for the contempt of itself as well as of courts inferior to it, the expression "including" was deliberately inserted in the Article. Article 129 recognised the existing inherent power of a court of record in its full plenitude including the power to punish for the contempt of inferior courts. If Article 129 is susceptible to two interpretations, we would prefer to accept the interpretation which would preserve the inherent jurisdiction of this Court being the superior court of record, to safeguard and protect the subordinate judici ary, which forms the very back bone of administration of justice. The subordinate courts administer justice at the grass root level, their protection is necessary to preserve the confidence of people in the efficacy of Courts and to ensure unsullied flow of justice at its base level. Disputing the inherent power of this Court with regard to the contempt of subordinate courts, Mr. Nariman contended that inherent powers are always preserved, but they do not authorise a court to invest itself with jurisdiction when that jurisdiction is not conferred by law. He urged that the status of an appellate court like High Court, does not enable the High Court to claim original jurisdiction not vested by law. Similarly, the Supreme Court having appellate jurisdiction under Section 19 of the , cannot invest itself with original jurisdiction for contempt of subordinate courts. He placed reliance on the decision of this Court in Raja Soap Factory & Ors. vs S.P. Shantharaj & Ors., ; We are unable to accept the contention. In Raja Soap Factory 's case (supra), High Court had entertained an original suit and issued injunction under the although under the Act the suit was required to be instituted in the District Court. In appeal before this Court, order of the High Court was sought to be justified on the ground of High Court 's power of transfer under Section 24 read with its inherent power under Section 151 of the Code of Civil Proce dure. This Court rejected the submission on the ground that exercise 981 of jurisdiction under Section 24 of Code of Civil Procedure was conditioned by lawful institution of the proceeding in a subordinate court of competent jurisdiction, and transfer thereof to the High Court. The Court observed that power to try and dispose of proceedings, after transfer from a court lawfully seized of it, does not involve a power to entertain a proceeding which is not otherwise within the cognizance of the High Court. Referring to the claim of inherent powers under Section 151 to justify entertainment of the suit grant of injunction order, the Court observed that the inherent power could be exercised where there is a proceeding lawful ly before the High Court, it does not, however, authorise the High Court to invest itself with jurisdiction where it is not conferred by law. The facts and circumstances as available in the Raja Soap Factory 's case, were quite dif ferent and the view expressed in that case do not have any bearing on the inherent power of this Court. In Rata Soap Factory 's case there was no issue before the Court regarding the inherent power of a superior court of record instead the entire case related to the interpretation of the statutory provisions conferring jurisdiction on the High Court. Where jurisdiction is conferred on a court by a statute, the extent of jurisdiction is limited to the extent prescribed under the statute But there is no such limitation on a superior court of record in matters relating to the exercise of constitutional powers. No doubt this Court has appellate jurisdiction under Section 19 of the Act, but that does not divest it of its inherent power under Article 129 of the Constitution The conferment of appellate power on the court by a statute does not and cannot affect the width and ampli tude of inherent powers of this Court under Article 129 of the Constitution. We have already discussed a number of decisions holding that the High Court being a court of record has inherent power in respect of contempt of itself as well as of its subordinate courts even in the absence of any express provi sion in any Act. A fortiori the Supreme Court being the Apex Court of the country and superior court of record should possess the same inherent jurisdiction and power for taking action for contempt of itself, as well as, for the contempt of subordinate and inferior courts. It was contended that since High Court has power of superintendence over the subordinate courts under Article 227 of the Constitution, therefore, High Court has power to punish for the contempt of subordinate courts. Since the Supreme Court has no super visory jurisdiction over the High Court or other subordinate courts, it does not possess powers which High Courts have under Article 215. This submission is misconceived. Article 227 confers supervisory jurisdiction on the High Court and in exercise of that 982 power High Court may correct judicial orders of subordinate courts, in addition to that, the High Court has administra tive control over the subordinate courts. Supreme Court 's power to correct judicial orders of the subordinate courts under Article 136 is much wider and more effective than that contained under Article 227. Absence of administrative power of superintendence, over the High Court and subordinate court does not affect this Court 's wide power of judicial superintendence of all courts in India. Once there is power of judicial superintendence, all the Courts whose orders are amenable to correction by this Court would be subordinate courts and therefore this Court also possesses similar inherent power as the High Court has under Article 215 with regard to the contempt of subordinate courts. The jurisdic tion and power of a superior Court of Record 'to punish contempt of subordinate courts was not founded on the court 's administrative power of superintendence, instead the inherent jurisdiction was conceded to superior Court of Record on the premise of its judicial power to correct the errors of subordinate Courts. Mr. Nariman urged that assumption of contempt jurisdic tion with regard to contempt of subordinate and inferior courts on the interpretation of Article 129 of the Constitu tion is foreclosed by the decisions of Federal Court, he placed reliance on the decisions of Federal Court in K.L. Gauba vs The Hon 'ble the Chief Justice and Judges of the High Court of Judicature at Lahore & Anr., AIR 1942 FC 1 and Purshottam Lal Jaitly vs The King Emperor., He urged that this Court being successor to Federal Court was bound by the decisions of the Federal Court under Arti cle 374(2) of the Constitution. Mr. Sorabji, learned Attor ney General seriously contested the proposition, he contend ed that there is a marked difference between the Federal Court and this Court, former being established by a statute with limited jurisdiction while this Court is the Apex constitutional court with unlimited jurisdiction, therefore, the Federal Court decisions are not binding on this Court. He urged that Article 374(2) does not bind this Court with the decisions of the Federal Court, instead it provides for meeting particular situation during transitory period. In the alternative learned Attorney General urged that the aforesaid two decisions of Federal Court in Gauba 's case and Jaitly 's case do not affect the jurisdiction and power of this Court with regard to contempt of subordinate and infe rior courts as the Federal Court had no occasion to inter pret any provision like Article 129 of the Constitution in the aforesaid decisions. Article 374 made provision for the continuance of Federal Court Judges as the Judges of the Supreme Court on the commencement of the Constitution and it also made 983 provisions for transfer of the proceedings pending in the Federal Court to the Supreme Court. Clause (2) of Article 374 is as under: "All suits, appeals and proceedings, civil or criminal, pending in the Federal Court at the commencement of this Constitution shall stand removed to the Supreme Court, and the Supreme Court shall have jurisdiction to hear and determine the same, and the judgments and orders of the Federal Court delivered or made before the commencement of this Constitution shall have the same force and effect as if they had been delivered or made by the Supreme Court. " On the promulgation of the Constitution, Federal Court ceased to exist and the Supreme Court was set up and with a view to meet the changed situation, provisions had to be made with regard to the matters pending before the Federal Court. Article 374(2) made provision for two things, firstly it directed the transfer of all suits, appeals and proceed ings, civil or criminal pending before the Federal Court to the Supreme Court. Secondly, it provided that any orders and judgments delivered or made by the Federal Court before the commencement of the Constitution shall have the same force and effect as if those orders or judgments had been deliv ered or made by the Supreme Court. This was necessary for the continuance of the proceedings before the Supreme Court. The Federal Court may have passed interlocutory orders, it may have delivered judgments in the matters pending before it and in order to maintain the continuance of validity of orders or judgments of Federal Court a legal fiction was created stating that those judgments and orders shall be treated as of Supreme Court. Article 374(2) is in the nature of transitory provision to meet the exigency of the situa tion on the abolition of the Federal Court and setting of the Supreme Court. There is no provision in the aforesaid Article to the effect that the decisions of the Federal Court shall be binding on the Supreme Court. Similar view was taken by the Allahabad High Court in Om Prakash Gupta vs The United Provinces, AIR 195 1 Allahabad 205 para 43 and Bombay High Court in State of Bombay vs Gajanan Mahadev Badley., AIR 1954 Bombay 352 para 14. The decisions of Federal Court and the Privy Council made before the com mencement of the Constitution are entitled to great respect but those decisions are not binding on this Court and it is always open to this Court to take a different view. In The State of Bihar vs Abdul Majid, ; at 795 and Shrinivas Krishnarao Kango vs Narayan Devji Kango and Ors. ; at 24 and 25. Federal 984 Court decisions were not followed by this Court. There is, therefore, no merit in the contention that this Court is bound by the decisions of the Federal Court. But even otherwise the decisions of Federal Court in K.L. Gauba 's case and Purshottam Lal Jaitly 's case have no bearing on the interpretation of Article 129 of the Consti tution. In K.L. Gauba 's case the facts were that K.L. Gauba, an Advocate of Lahore High Court was involved in litigation of various kinds including a case connected with his insol vency. A Special Bench of the High Court of Lahore was constituted to decide his matters. His objection against the sitting of a particular Judge on the Special Bench, was rejected. His application for the grant of certificate under Section 205 of the Government of India Act to file appeal against the order of the High Court before the Federal Court was refused. Gauba filed a petition before the Federal Court for the issue of direction for the transfer of his case to Federal Court from High Court. The Federal Court held that appeal against the order of the High Court refusing to grant certificate was not maintainable. Gauba argued that the High Court was guilty of contempt of Federal Court as it had deliberately and maliciously deprived the Federal Court 's jurisdiction to hear the appeal against its orders. Gwyer, CJ. rejected the contention in the following words: "We have had occasion more than once to con strue the provisions of Section 205, and we repeat what we have already said, that no appeal lies to this Court in the absence of the certificate prescribed by that Section: a certificate is the necessary condition prece dent to every appeal. We cannot question the refusal of a High Court to grant a certificate or investigate the reasons which have prompted the refusal; we cannot even inquire what those reasons were, if the High Court has given none. The matter is one exclusively for the High Court; and, as this Court observed in an earlier case, it is not for us to speculate whether Parliament omitted per incuriam to give a right of appeal against the refusal to grant a certificate or trusted the High Courts to act with reasonableness and impartiality: at page 16. The jurisdiction of the Court being thus limited by the statute in this way, how could it be extended by a High Court acting even perversely or maliciously in withholding the certificate. " In Purshottam Lal Jaitly 's case an application purporting to 985 invoke extraordinary original jurisdiction of the Federal Court under Section 2 10(2) of the Government of India Act, 1935 was made with a prayer that the Federal Court should itself deal directly with an alleged contempt of a Civil Court, subordinate to the High Court. By a short order the Court rejected the application placing reliance on its decision in K.L. Gauba 's case. The Court observed as under: "The expression "any contempt of court" in that provision must be held to mean "any act amounting to contempt of this Court". This was the view expressed in Gauba 's case and we have been shown no reason for departing from that view. Under the Indian Law the High Courts have power to deal with contempt of any Court subordinate to them as well as with contempt of the High Courts. It could not have been intended to confer on the Federal Court a concurrent jurisdiction in such matters. The wider construction may conceivably lead to conflicting judgments and to other anomalous con sequences. " In the case of K.L. Gauba the Federal Court found itself helpless in the matter as the Government of India Act, 1935 did not confer any power on it to entertain an appeal against the order of High Court refusing to grant certifi cate. The decision has no bearing on the question which we are concerned. In Purshottam Lal Jaitly 's case the decision turned on the interpretation of Section 210(2) of the 1935 Act. Section 2 10 made provisions for the enforcement of decrees and orders of Federal Court. Sub section (2) provid ed that Federal Court shall have power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents or the investiga tion or "punishment of any contempt of court", which any High Court has power to make as respects the territory within its jurisdiction, and further the Federal Court shall have power to award costs and its orders shall be enforce able by all courts. While interpreting Section 2 10(2) the Federal Court held that it had no power to deal with con tempt of any court subordinate to High Court and it further observed that the wider constructions may lead to conflict ing judgments and to other anomalous consequences. It is not necessary for us to consider the correctness of the opinion expressed by the Federal Court, as in our view the Federal Court was a court of limited jurisdiction, it was not the Apex Court like this Court as against the judgment, order and decree of the Federal Court appeals lay to the Privy Council. The Federal Court exercised limited jurisdiction as conferred on it by the 1935 Act. The question regarding the inherent power of the 986 Superior Court of Record in respect of the Contempt of Subordinate court was neither raised nor discussed in afore said decisions. The Federal Court observed that if the High Court and the Federal Court both have concurrent jurisdic tion in contempt matters it could lead to conflicting judg ments and anomalous consequences, that may be so under the Government of India Act as the High Court and the Federal Court did not have concurrent jurisdiction, but under the Constitution, High Court and the Supreme Court both have concurrent jurisdiction in several matters, yet no anomalous consequences follow. While considering the decision of Federal Court, it is necessary to bear in mind that the Federal Court did not possess wide powers as this Court has under the Constitu tion. There are marked differences in the constitution and jurisdiction and the amplitude of powers exercised by the two courts. In addition to civil and criminal appellate jurisdiction, this Court has wide powers under Article 136 over all the courts and Tribunals in the country. The Feder al Court had no such power, instead it had appellate power but that too could be exercised only on a certificate issued by the High Court. The Federal Court was a court of record under Section 203 but it did not possess any plenary or residuary appellate power over all the courts functioning in the territory of India like the power conferred on this Court under Article 136 of the Constitution, therefore, the Federal Court had no judicial control or superintendence over subordinate courts. Advent of freedom, and promulgation of Constitution have made drastic changes in the administration of justice neces sitating new judicial approach. The Constitution has as signed a new role to the Constitutional Courts to ensure rule of law in the country. These changes have brought new perseptions. In interpreting Constitution, we must have regard to the social, economic and political changes, need of the community and the independence of judiciary. The court cannot be a helpless spectator, bound by precedents of colonial days which have lost relevance. Time has come to have a fresh look to the old precedents and to lay down law with the changed perceptions keeping in view the provisions of the Constitution. "Law", to use the words of Lord Coler idge, "grows; and though the principles of law remain un changed, yet their application is to be changed with the changing circumstances of the time. " The considerations which weighed with the Federal Court in rendering its deci sion in Guaba 's and Jaitley 's case are no more relevant in the context of the constitutional provisions. 987 Since this Court has power of judicial superintendence and control over all the courts and Tribunals functioning in the entire territory of the country, it has a corresponding duty to protect and safeguard the interest of inferior courts to ensure the flow of the stream of justice in the courts without any interference or attack from any quarter. The subordinate and inferior courts do not have adequate power under the law to protect themselves, therefore, it is necessary that this court should protect them. Under the constitutional scheme this court has a special role, in the administration of justice and the powers conferred on it under Articles 32, 136, 14 1 and 142 form part of basic structure of the Constitution. The amplitude of the power of this Court under these Articles of the Constitution cannot be curtailed by law made by Central or State Legislature. If the contention raised on behalf of the contemners is accept ed, the courts all over India will have no protection from this Court. No doubt High Courts have power to persist for the contempt of subordinate courts but that does not affect or abridge the inherent power of this court under Article 129. The Supreme Court and the High Court both exercise concurrent jurisdiction under the constitutional scheme in matters relating to fundamental rights under Article 32 and 226 of the Constitution, therefore this Court 's jurisdiction and power to take action for contempt of subordinate courts would not be inconsistent to any constitutional scheme. There may be occasions then attack on Judges and Magistrate of subordinate courts may have wide repercussions through out the country, in that situation it may not be possible for a High Court to contain the same, as a result of which the administration of justice in the country may be paraly sed, in that situation the Apex Court must intervene to ensure smooth functioning of courts. The Apex Court is duty bound to take effective steps within the constitutional provisions to ensure a free and fair administration of justice through out the country, for that purpose it must wield the requisite power to take action for contempt of subordinate courts. Ordinarily, the High Court would protect the subordinate court from any onslaught on their independ ence, but in exceptional cases, extra ordinary situation may prevail affecting the administration of public justice or where the entire judiciary is affected, this Court may directly take cognizance of contempt of subordinate courts. We would like to strike a note of caution that this Court will sparingly excercise its inherent power in taking cogni zance of the contempt of subordinate courts, as ordinarily matters relating to contempt of subordinate courts must be dealt with by the High Courts. The instant case is of excep tional nature, as the incident created a situation where functioning of the subordinate courts all over the country was adversely affected, and the administration of justice was paralysed, 988 therefore, this Court took cognizance of the matter. Mr. Nariman contended that in our country there is no court of universal jurisdiction, as the jurisdiction of all courts including the Supreme Court is limited. Article 129 as well as the do not confer,any express power to this Court with regard to contempt of the subordinate courts, this Court cannot by construing Article 129 assume jurisdiction in the matter which is not entrusted to it by law. He placed reliance on the observations of this Court in Naresh Shridhar Mirajkar & Ors. vs State of Maha rashtra & Ors. ; , at 77 1. We have carefully considered the decision but we find nothing therein to support the contention of Mr. Nariman. It is true that courts constituted under a law enacted by the Parliament or the State Legislature have limited jurisdiction and they cannot assume jurisdiction in a matter, not expressly as signed to them, but that is not so in the case of a superior court of record constituted by the Constitution. Such a court does not have a limited jurisdiction instead it has power to determine its own jurisdiction. No matter is beyond the jurisdiction of a superior court of record unless it is expressly shown to be so, under the provisions of the Con stitution. In the absence of any express provision in the Constitution the Apex court being a court of record has jurisdiction in every matter and if there be any doubt, the Court has power to determine its jurisdiction. If such determination is made by High Court, the same would be subject to appeal to this Court, but if the jurisdiction is determined by this Court it would be final. Halsbury 's Laws of England Vol. 10 Para 7 13, states: "Prima facie no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so, while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court. " The above principle of law was approved by this Court in Special Reference No. I of 1964 ; at 499 in holding that the, High Court being a superior court of record was entitled to determine its own jurisdiction in granting interim bail to a person against whom warrant of arrest had been issued by the Speaker of a State Legisla ture. In Mirajkar 's case (supra) this Court again reiterated the principles that a superior court of record unlike a court of limited jurisdiction is entitled to determine about its own jurisdiction. In Ganga Bishan vs Jai Narain, the Court emphasised that the 989 Constitution has left it to the judicial discretion of Supreme Court to decide for itself the scope and limits of its jurisdiction in order to render substantial justice in matters coming before it. We therefore hold that this Court being the Apex Court and a superior court of record has power to determine its jurisdiction under Article 129 of the Constitution, and as discussed earlier it has jurisdiction to initiate or entertain proceedings for contempt of subor dinate courts. This view does not run counter to any provi sion of the Constitution. Constitutional hurdles over, now we would revert back to the incident which has given rise to these proceedings. The genesis of the unprecedented attack on the subordinate judiciary arose out of confrontational attitude of the local police against the Magistracy in Kheda. The Chief Judicial Magistrate is head of the Magistracy in the District. Under the provisions of Chapter XII of the Code of Criminal Proce dure, 1973, he exercises control and supervision over the investigating officer. He is an immediate officer on the spot at the lower rung of the administration of justice of the country to ensure that the Police which is the law enforcing machinery acts according to law m investigation of crimes without indulging into excesses and causing harass ment to citizens. The main objective of Police is to appre hend offenders, to investigate crimes and to prosecute them before the courts and also to prevent commission of crime and above all to ensure law and order to protect the citi zens life and property. The law enjoins the Police to be scrupulously fair to the offender and the Magistracy is to ensure fair investigation and fair trial to an offender. The purpose and object of Magistracy and Police are complemen tary to each other. It is unfortunate, that these objectives have remained unfulfilled even after 40 years of our Consti tution. Aberrations of Police officers and Police excesses in dealing with the law and order situation have been the subject of adverse comments from this court as well as from other courts but it has failed to have any corrective effect on it. The Police has power to arrest a person even without obtaining a warrant of arrest from a court. The amplitude of this power casts an obligation on the Police to take maximum care in exercising that power. The Police must bear in mind, as held by this Court that if a person is arrested for a crime, his constitutional and fundamental rights must not be violated. See: Sunil Batra vs Delhi Administration & Ors. , ; In Prem Shankar Shukla 's (supra) case 526, this Court considered the question of placing a prisoner under handcuff by the Police. The Court declared that no prisoner shall be handcuffed or lettered routinely or merely for the convenience of custody or escort. The Court empha sised that the Police did not enjoy any unrestricted or unlimited 990 power to handcuff an arrested person. If having regard to the circumstances including the conduct, behaviour and character of a prisoner, there is reasonable apprehension of prisoner 's escape from custody or disturbance of peace by violence, the Police may put the prisoner under handcuff. If a prisoner is handcuffed without there being any justifica tion, it would violate prisoner 's fundamental rights under Articles 14 and 19 of the Constitution. To be consistent with Articles 14 and 19 handcuffs must be the last refuge as there are other ways for ensuring security of a prisoner. In Prem Shankar Shukla 's case, Krishna Iyer, J. observed: "If today freedom of the ferlorn person fails to the police somewhere tomorrow the freedom of many may fall else where with none to whimper unless the court process invigilates and polices the police before it is too late." The prophetic words of Krishna Iyer, J. have come true as the facts of the present case would show. In the instant case, Patel, CJM, was assaulted, arrested and handcuffed by Police Inspector Sharma and other Police Officers. The Police Officers were not content with this, they tied him with a thick rope round his arms and body as if N.L. Patel was a wild animal. As discussed earlier, he was taken in that condition to the hospital for medical examination where he was made to sit in varanda exposing him to the public gaze, providing opportunity to the members of the public to see that the Police had the power and privi lege to apprehend and deal with a Chief Judicial Magistrate according to its sweet will. What was the purpose of unusual behaviour of the police, was it to secure safety and securi ty of N.L. Patel, or was it done to prevent escape or any violent activity on his part justifying the placing of handcuffs and ropes on the body of N.L. Patel. The Commis sion has recorded detailed findings that the object was to wreck vengeance and to humiliate the CJM who had been polic ing the police by this judicial orders. We agree with the findings recorded by the Commission that there was no justi fication for this extraordinary and unusual behaviour of Police Inspector Sharma and other Police Officers although they made an attempt to justify their unprecedented, dehuma nising behaviour on the ground that Patel was drunk, and he was behaving in violent manner and if he had not been hand cuffed or tied with ropes, he could have snatched Sharma 's revolver and killed him. We are 991 amazed at the reasons given by Sharma justifying the hand cuffs and ropes on the body of N.L. Patel. Patel was un armed, he was at the Police Station in a room, there were at least seven police officials present in the room who were fully armed, yet, there was apprehension about Patel 's escape or violent behaviour justifying handcuffs and roping. The justification given by them is flimsy and preposterous. S.R. Sharma acted in utter disregard of this Court 's direc tion in Prem Shankar Shukla 's case. His explanation that he was not aware of the decision of this Court is a mere pre tence as the Commissioner has recorded findings that Gujarat Government had issued Circular letter to the Police incorpo rating the guide lines laid down by this Court in Prem Shanker Shukla 's case with regard to the handcuffing of prisoner. What constitutes contempt of court? The Common Law definition of contempt of Court is: 'An act or omission calculated to interfere with the due administration of justice. ' (Bowen L.J. in Helmore vs Smith, [1886] 35 Ch. D. 436 at 455. The contempt of court as defined by the includes civil and criminal contempt. Criminal contempt as defined by the Act: 'Means the publica tion whether by words, spoken or written, or by signs, or by visible representations, or otherwise of any matter or the doing of any other act whatsoever which scandalizes or tends to scandalize, or lowers or tends to lower the authority of, any court; or prejudices, or interferes or tends or to interfere with, the due course of any judicial proceeding; or interferes, or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner. The definition of criminal contempt is wide enough to include any act by a person which would tend to interfere with the administration of justice or which would lower the authority of court. The public have a vital stake in effective and orderly administration of justice. The Court has the duty of protecting the interest of the commu nity in the due administration of justice and, so, it is entrusted with the power to commit for contempt of court, not to protect the dignity of the Court against insult or injury, but, to protect and vindicate the right of the public so that the administration of justice is not pervert ed, prejudiced, obstructed or interfered with. "It is a mode of vindicating the majesty of law, in its active manifesta tion against obstruction and outrage." (Frank Furter, J. in Offutt vs U.S.) ; The object and purpose of punishing contempt for interference with the administration of justice is not to safeguard or protect the dignity of the Judge or 992 the Magistrate, but the purpose is to preserve the authority of the courts to ensure an ordered life in society. In AttOrney General vs Times Newspapers, at p. 302 the necessity for the law of contempt was summarised by Lord Morris as: "In an ordered community courts are estab lished for the pacific settlement of disputes and for the maintenance of law and order. In the general interests of the community it is imperative that the authority of the courts should not be imperilled and that recourse to them should not be subject to unjustifiable interference. When such unjustifiable inter ference is suppressed it is not because those charged with the responsibilities of adminis tering justice are concerned for their own dignity: it is because the very structure of ordered life is at risk if the recognised courts of the land are so flouted and their authority wanes and is supplanted." The Chief Judicial Magistrate is head of the Magistracy in the District who administers justice to ensure, protect and safeguard the rights of citizens. The subordinate courts at the district level cater to the need of the masses in administering justice at the base level. By and large the majority of the people get their disputes adjudicated in subordinate courts, it is, in the general interest of the community that the authority of subordinate.courts is pro tected. If the CJM is led into trap by unscrupulous Police Officers and if he is assaulted, handcuffed and roped, the public is bound to lose faith in courts, which would be destrictive of basic structure of an ordered society. If this is permitted Rule of Law shall be supplanted by Police Raj. Viewed in this perspective the incident is not a case of physical assault on an individual judicial officer, instead it is an onslaught on the institution of the judici ary itself. The incident is a clear interference with the administration of justice, lowering its judicial authority. Its effect was not confined to one District or State, it had a tendency to affect the entire judiciary in the country. The incident highlights a dangerous trend that if the Police is annoyed with the orders of a presiding officer of a court, he would be arrested on flimsy manufactured charges, to humiliate him publicly as has been done in the instant case. The conduct of Police Officers in assaulting and humiliate the CJM brought the authority and administration of justice into disrespect, affecting the public confidence in the institution of justice. "The summary power of punish ment for contempt has been conferred on the courts to keep a blaze of glory around them, to deter people from attempting to render 993 them contemptible in the eyes of the public. These powers are necessary to keep the course of justice free, as it is of great importance to society." (Oswald on Contempt of Court). The power to punish contempt is vested in the Judges not for their personal protection only, but for the protec tion of public justice, whose interest, requires that decen cy and decorum is preserved in Courts of Justice. Those who have to discharge duty in a Court of Justice are protected by the law, and shielded in the discharge of their duties, any deliberate interference with the discharge of such duties either in court or outside the court by attacking the presiding officers of the court, would amount to criminal contempt and the courts must take serious cognizance of such conduct. It takes us to the question against which of ' the con temners contempt is made out. On behalf of the petitioners it was urged that the Police Officers ' conduct amounts to criminal contempt as their action lowered the authority of the Chief Judicial Magistrate and it further caused inter ference with the administration of justice. Mr. Soli Sorab jee, learned Attorney General contended that all those who abetted and helped the Police Officers ' in their conduct and design are also guilty of contempt of court. On behalf of the contemners it was urged that the incident which took place in the Police Station does not make out any contempt of court. The Chief Judicial Magistrate had consumed liquor and in druken state he went to the Police Station and slapped the Police Inspector, Sharma, thereby he committed offence under the Bombay Prohibition Act as well as under Section 332, 504 and 506 of the Indian Penal Code. Criminal cases have been registered against N.L. Patel, CJM and after investigation charge sheets have been submitted to the court. In this context, it was urged that no action could be taken against the contemners as the facts in issue in the present proceedings are the same as involved in the criminal prosecutions pending against N.L. PateI, CJM. The question raised on behalf of the contemners need not detain us long. Proceedings for contempt of court are different than those taken for the prosecution of a person for an offence under the criminal jurisdiction. Contempt proceedings are peculiar in nature although in certain aspects they are quasicriminal in nature but they do not form part of criminal jurisdiction of the court. Criminal prosecution pending against the CJM or against the contemners has no bearing on the contempt proceedings initiated by this Court as the present proceed ings are not for the purpose of punishing the contemners for the offence of wrongful detention and assault on N.L. Patel, Chief Judicial Magistrate, instead these proceedings have been taken to protect the interest of the public in the 994 due administration of justice and to preserve the confidence of people in Courts. We, accordingly, reject the contemner 's objection. We have already recorded findings that Sharma, Police Inspector, Nadiad had preplanned the entire scheme, he deliberately invited Patel to visit Police Station where he was forced to consume liquor and on his refusal he was assaulted, arrested, handcuffed and tied with rope S.R. Sharma, K.H. Sadia, Sub Inspector, Valjibhai Kalajibhai, Head Constable and Pratap Singh, Constable, all took active part in this shameful episode with a view to malign and denigrade the CJM on accout of his judicial orders against the Police. We, therefore, hold S.R. Sharma, Police Inspec tor, K.H. Sadia, Sub Inspector, Valujibhai Kalajibhai Head Constable and Pratap Singh, Constable guilty of contempt of court. M.B. Savant, Mamlatdar had been summoned by Sharma, Police Inspector, to the Police Station in advance for purposes of being witness to the Panchnama drawn up by Sharma describing drunken condition of Patel, CJM. The document was false and deliberately prepared to make out a Case against Patel, CJM. M.B. Sawant was in complicity with Sharma, he actively participated in the preparation of the document to malign and humiliate the CJM and to prepare a false case against him, he is also, therefore, guilty of contempt of court. As regards D.K. Dhagal, the then District Superintendent of Police, Kheda, we have already recorded findings that he was hand in glove with Sharma, Police Inspector. The circum stances pointed out by the Commission and as discussed earlier, show that though D.K. Dhagal, had not personally participated in the shameful episode but his Conduct, act and omission establish his complicity in the incident. It is difficult to believe or imagine that a Police Inspector would arrest, humiliate, assault and handcuff a CJM and the Police Chief in the District would be indifferent, or a mute spectator. The circumstances unequivocally show that Sharma was acting under the protective cover of Dhagal as he did not take any immediate action in the matter instead he created an alibi for himself by interpolating the entries in the register at the Government Rest House, Balasinor. In his report submitted to the Addl. Chief Secretary (Home) on 27.9.1989, Dhagal did not even remotely mention the hand cuffing and roping of CJM. It is unfortunate that Dhagal as the district Superintendent of Police did not discharge his duty like a responsible Police Officer instead he identi fied himself with Sharma, Police Inspector and actively abetted the commission of onslaught on the CJM. We, accord ingly, hold D.K. Dhagal, the then D.S.P. Kheda guilty of contempt of court. 995 This takes us to the petition filed by N.L. Patel for quashing the criminal cases initiated against him on the basis of two First Information Reports made by Police In spector S.R. Sharma. As noticed earlier Sharma, Police Inspector, had registered two FIRs on 25.9.1989 against N.L. Patel for the offences under Section 85(1)(3) read with Section 66(1)(b) and also under Section 110 of Bombay Prohi bition Act on the allegations that Patel had consumed liquor without permit or pass and under the influence of alcohol entered into Sharma 's chamber and behaved in an indecent manner. The FIR further alleged that Patel caught hold of PoliCe Inspector Sharma and slapped him. The second FIR was lodged by Sharma against Patel for offences under Sections 332,353, 186 and 506 of the Indian Penal Code on the same allegations as contained in the earlier FIR. During the pendency of the contempt proceedings before this Court, the Police continued the investigation and submitted charge sheet in both the cases against N.L. Patel and at present Criminal Cases Nos. 1998/90 and 1999/90 are pending in the Court of Chief Judicial Magistrate, Nadiad. These proceed ings are sought to be quashed. On behalf of the State and the Police Officers, it was urged that since charge sheets have already been submitted to the Court, Patel will have full opportunity to defend himself before the court where witnesses would be examined and cross examined, therefore, this Court should not inter fere with the proceedings. The gravamen of the charge in the two cases registered against N.L. Patel is that he had consumed liquor without a pass or permit and under the influence of liquor, he entered the chamber of Police In spector Sharma at the Police Station and assaulted him. The Police over powered and arrested him and a panchnama was prepared and he was taken to the Hospital for medical exami nation, and the report of medical examination indicates that he had consumed liquor. These very facts have been inquired into by the Commissioner and found to be false. We have recorded findings that Police Inspector Sharma and other Police Officers manipulated records and manufactured the case against N.L. Patel with a view to humiliate and teach him a lesson as the Police was annoyed with his judicial orders. We have already recorded findings holding S.R. Sharma, Police Inspector, Sadia, Sub Inspector, Valjibhai Kalabhai, Head Constable, Pratap Singh, Constable, M.B. Savant, Mamlatdar, and D.K. Dhagal, D.S.P. guilty of con tempt of court. These very persons are specified as witness es in the two charge sheets. The Commission 's as well as our findings clearly demonstrate that the allegations contained in the two FIRs are false. If Police is permitted to prose cute Patel on those allegations merely on the basis 996 that charge sheets have been submitted by it, it would amount to gross abuse of the process of the Court. In the circumstances, proceedings against N.L. Patel are liable to be quashed. Learned counsel, appearing on behalf of the State of Gujarat and the Police Officers, urged that in the present proceedings this Court has no jurisdiction or power to quash the criminal proceedings pending against N.L. Patel, CJM. Elaborating his contention, learned counsel submitted that once a criminal case is registered against a person the law requires that the court should allow the case to proceed to its ' normal conclusion and there should be no interference with the process of trial. He further urged that this Court has no power to quash a trial pending before the criminal court either under the Code of Criminal Procedure or under the Constitution, therefore, the criminal proceedings pend ing against Patel should be permitted to continue. Learned Attorney General submitted that since this Court has taken cognizance of the contempt matter arising out of the inci dent which is the subject matter of trial before the crimi nal court, this Court has ample power under Article 142 of the Constitution to pass any order necessary to do justice and to prevent abuse of process of the court. The learned Attorney General elaborated that there is no limitation on the power of this Court under Article 142 in quashing a criminal proceeding pending before a subordinate court. Before we proceed to consider the width and amplitude of this Court 's power under Article 142 of the Constitution it is necessary to remind ourselves that though there is no provision like Section 482 of the Criminal Procedure Code conferring express power on this Court to quash or set aside any criminal proceedings pending before a criminal court to prevent abuse of process of the court, but this Court has power to quash any such proceedings in exercise of its plenary and residuary power under Article 136 of the Consti tution, if on the admitted facts no charge is made out against the accused or if the proceedings are initiated on concocted facts, or if the proceedings are initiated for oblique purposes. Once this Court is satisfied that the criminal proceedings amount to abuse of process of court it would quash such proceedings to ensure justice. In State of West Bengal & Ors. vs Swapan Kumar Guha & Ors., ; this Court quashed First Information Report and issued direction prohibiting investigation into the allegations contained in the FIR as the Court was satisfied that on admitted facts no offence was made out against the persons named in the FIR. In Madhavrao Jivajirao Scindia & Ors. vs Sambhajirao Chandrojirao Angre & Ors., ; criminal proceedings were quashed as this Court Was satis fied that the case was founded on false facts, and the proceedings 997 for trial had been initiated for oblique purposes. Article 142(1) of the Constitution provides that Supreme Court in exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete jus tice in any 'cause ' or 'matter ' pending before it. The expression 'cause ' or 'matter ' would include any proceeding pending in court and it would cover almost every kind of proceeding in court including civil or criminal. The inher ent power of this Court under Article 142 coupled with the plenary and residuary powers under Article 32 and 136 em braces power to quash criminal proceedings pending before any court to do complete justice in the matter before this Court. If the court is satisfied that the proceeding in a criminal case are being utilised for oblique purposes or if the same are continued on manufactured and false evidence or if.no case is made out on the admitted facts, it would be in the ends of justice to set aside or quash the criminal proceedings. It is idle to suggest that in such a situation this Court should be a helpless spectator. Mr. Nariman urged that Article 142(1) does not contem plate any order contrary to Statutory provisions. He placed reliance on the Court 's observations in Prem Chand Garg vs Excise Commissioner. U.P. Allahabad, [1963] Supp. 1 SCR 885 at 899 and, A.R. Antulay vs R.S. Nayak & Anr. ; where the Court observed that though the powers con ferred on this Court under Article 142(1) are very wide, but in exercise of that power the ' court cannot make any order plainly inconsistent with the express statutory provisions of substantive law. It may be noticed that in Prem Chand Garg 's and Antulay 's case (Supra) observations with regard to the extent of this Court 's power under Article 142(1) were made in the context of fundamental rights. Those obser vations have no bearing on the question in issue as there is no provision in any substantive law restricting this Court 's power to quash proceedings pending before subordinate court. This Court 's power under Article 142(1) to do "complete justice" is entirely of different level and of a different quality. Any prohibition or restriction contained in ordi nary laws cannot act as a limitation on the constitutional power of this Court. Once this Court has seisin of a cause or matter before it, it has power to issue any order or direction to do "complete justice" in the matter. This constitutional power of the Apex Court cannot be limited or restricted by provisions contained in statutory law. In Har bans Singh vs U.P. State, ; at 243 the Court observed: "Very wide powers have been conferred on this Court for 998 due and proper administration of justice. Apart from the jurisdiction and powers con ferred on this Court under Articles 32 and 136 of the Constitution I am of the opinion that this Court retains and must retain, an inher ent power and jurisdiction for dealing with any extra ordinary situation in the largest interests of administration of justice and for preventing manifest injustice being done. This power must necessarily be sparingly used only in exceptional circumstances for furthering the ends of justice. " No enactment made by Central or State Legislature can limit or restrict the power of this Court under Article 142 of the Constitution, though while exercising power under Article 142 of the Constitution, the Court must take into considera tion the statutory provisions regulating the matter in dispute. What would be the need of "complete justice" in a cause or matter would depend upon the facts and circum stances of each case and while exercising that power the Court would take into consideration the express provisions of a substantive statute. Once this Court has taken seisin of a case, cause or matter, it has power to pass any order or issue direction as may be necessary to do complete jus tice in the matter. This has been the consistent view of this Court as would appear from the decisions of this Court in State of U.P. vs Poosu & Anr. ; ; Ganga Bishan & Ors. vs Jai Narain, ; Navnit R. Kamani & Ors. vs R.R. Kamani, ; ; B.N. Nagara jan & Ors. vs State of Mysore & Ors., Special Reference No. I of 1964, (supra), and Harbans Singh vs State of U,P. Ors. (supra). Since the foundation of the criminal trial of N.L. Patel is based on the facts which have already been found to be false, it would be in the ends of justice and also to do complete justice in the cause to quash the criminal proceedings. We accordingly quash the criminal proceedings pending before the Chief Judicial Magistrate, Nadiad in Criminal Cases Nos. 1998/90 and 1999/ 90. The question arises what punishment should be awarded to the contemners found guilty of contempt. In determining the punishment, the degree and the extent of part played by each of the contemners has to be kept in mind. Sharma, Police Inspector who was the main actor in the entire incident and who had planned the entire episode with a view to humiliate the CJM in the publis eye is the main culprit, therefore, he deserves maximum punishment. Sadia, Sub Inspector took active part in assaulting and tying the CJM at the behest of Sharma, Police Inspector. Valijibhai Kalajibhai, Head Con stable and Pratap 999 Singh, Constable also took active part in handcuffing and tying the CJM with ropes, but as subordinate officials they acted under the orders of his superior officer. M.B. Sawant, Mamlatdar was friendly to Sharma, Police Inspector, he had no axe to grind against the CJM but he acted under the influence of Sharma, Police Inspector. So far as D.K. Dhagal is concerned, he actively abetted the commission of on slaught on the CJM. Having regard to the facts and circum stances and individual part played by each of the aforesaid contemner we hold them guilty of contempt and award punish ment as under: S.R. Sharma, the then Police Inspector, Nadiad shall undergo simple imprisonment for a period of six months and he shall pay fine of Rs.2,000. K.H. Sadia, Sub Inspector, Nadiad shall undergo simple imprisonment for a period of five months and will pay a fine of Rs.2000 and in default he will undergo one month 's simple imprisonment. Valjibhai Kalajibhai, Head Constable and Pratap Singh, Constable, both are convicted and awarded simple imprisonment for a period of two months and a fine of Rs.500 each, in default they would undergo simple imprisonment for a further period of 15 days. M.B. Savant, Mamlatdar is convicted and awarded two month 's simple imprisonment and a fine of Rs. 1000 and in default he would undergo one month 's simple imprisonment. D.K. Dhagal, the then District Superintendent of Police, Kheda, is convicted and sentenced to imprisonment for a period of one month and to pay a fine of Rs. 1000 and in default to undergo simple imprisonment for 15 days. So far as other respondents against whom notices of contempt have been issued by the Court, there is no adequate material on record to hold them guilty of contempt of court, we accord ingly discharge the notices issued to them. Before we proceed further, we would like to express the Court 's displeasure on the conduct of K. Dadabhoy, the then Director General of Police, Gujarat. As the head of the Police in the State he was expected to intervene in the matter and to ensure effective action against the erring Police Officers. We are constrained to observe that he was totally indifferent to the news that a CJM was arrested, handcuffed, roped and assaulted. He took this news as a routine matter without taking any steps to ascertain the correct facts or effective action against the erring Police Officers. If the head of the Police administration in the State exhibits such indifference to a sensitive matter which shook the entire judicial machinery in the State, nothing better could be expected from his subordinate officers. K. Dadabhoy did not act like a responsible officer. The State Government should 1000 take action against him departmentaly on the basis of the findings recorded by the Commission. The State Government has initiated proceedings against other erring officers in respect of whom the Commission has adversely commented, we would make it clear that discharge of contempt notices does not absolve those officers of their misconduct, the State Government is directed to proceed with the disciplinary proceedings for taking appropriate action against them. We are constrained to observe that the State Government did not immediately take effective steps against the erring officials. In spite of the direction issued by this Court the erring Police Officers were neither arrested nor placed under suspension. It was only after this Court took serious view of the matter and directed the State Government to suspend the erring Police Officers and arrest them, the State Government moved in the matter. The apathy of the State Government in taking effective action against the erring Police Officers leads to an impression that in the State of Gujarat, Police appears to have upper hand, as the administration was hesitant in taking action against the erring Police Officers. If this practice and tendency is allowed to grow it would result in serious erosion of the Rule of Law in the State. We hope and trust that the State Government will take effective measures to avoid re occur rence of any such instance. The State Government should further take immediate steps for the review and revision of the Police Regulations in the light of findings recorded by the Commission. The facts of the instant case demonstrate that a presid ing officer of a court may be arrested and humiliated on flimsy and manufactured charges which could affect the administration of justice. In order to avoid any such situa tion in future, we consider it necessary to lay down guide lines which should be followed in the case of arrest and detention of a Judicial Officer. No person whatever his rank, or designation may be, is, above law and he must face the penal consequences of infraction of criminal law. A Magistrate, Judge or any other Judicial Officer is liable to criminal prosecution for an offence like any other citizen but in view of the paramount necessity of preserving the independence of judiciary and at the same time ensuring that infractions of law are properly investigated, we think that the following guidelines should be followed. (A) If a judicial officer is to be arrested for some offence, it should be done under intimation to the District Judge or the High Court as the case may be. 1001 (B) If facts and circumstances necessitate the immediate arrest of a judicial officer of the subordinate judiciary, a technical or formal arrest may be effected. (C) The facts of such arrest should be immedi ately communicated to the District and Ses sions Judge of the concerned District and the Chief Justice of the High Court. (D) The Judicial Officer so arrested shall not be taken to a police station, without the prior order or directions of the District & Sessions Judge of the concerned District, if available. (E) Immediate facilities shall be provided to the Judicial Officer to communication with his family members, legal advisers and Judicial Officers, including the District & Sessions Judge. (F) No statement of a Judicial Officer who is under arrest be recorded nor any panchnama be drawn up nor any medical tests be conducted except in the presence of the Legal Adviser of the Judicial Officer concerned or another Judicial Office of equal or higher rank, it ' available. (G) There should be no handcuffing of a Judi cial Officer. If, however, violent resistance to arrest is offered or there is imminent need to effect physical arrest in order to avert danger to life and limb, the person resisting arrest may be over powered and ' handcuffed. In such case, immediate report shall be made to the District & Sessions Judge concerned and also to the Chief Justice of the High Court. But the burden would be on the Police to establish necessity for effecting physical arrest and handcuffing the Judicial Officer and if it be established that the physical arrest and handcuffing of the Judicial Officer was unjustified, the Police Officers causing or responsible for such arrest and handcuffing would be guilty of misconduct and would also be personally liable for compensation and/or damages as may be summarily determined by the High Court. The above guidelines are not exhaustive but these are minimum safeguards which must be observed in case of arrest of a judicial officer. These guidelines should be implement ed by the State Government as well as by the High Courts. We, accordingly, direct that a copy of the guidelines shall be forwarded to the Chief Secretaries of all the State Governments and to all the High Courts with a direction that the 1002 same may be brought to the notice of the concerned officers for compliance. We do not approve N.L. Patel 's conduct in visiting the Police Station on the invitation of Police Inspector Sharma. In our opinion, no Judicial Officer should visit a Police Station on his own except in connection with his official and judicial duties and functions. If it is necessary for a Judicial Officer or a Subordinate Judicial Officer to visit the Police Station in connection with his official duties, he must do so with prior intimation of his visit to the District & Sessions Judge. Pursuant to this Court 's appeal made on September 29, 1989, the members of the Bar as well as the members of the Judiciary throughout the country refrained from going on strike as a result of which inconvenience to general public was avoided and the administration of justice continued. The Court is beholden to the members of the Bar and members of the Judiciary for their response to this Court 's appeal. We record our appreciation of the able assistance rendered to the Court by the learned counsel for the par ties. We are beholden to Sri Soli Jl. Sorabjee, the then Attorney General, who at our request ably assisted the Court in resolving complex questions of law. The Writ Petitions, Contempt Petitions and Criminal Miscellaneous Petitions are disposed of accordingly. N.V.K. Petitions disposed of.

Mr. N.L. Patel was posted as Chief Judicial Magistrate at Nadiad in October, 1988. He soon found that the local Police was not cooperating with the courts in efficting service of summons, warrants and notices on accused persons, as a result of which the trials of cases were delayed. He made complaint against the local police to the District Superintendent of Police and forwarded a copy of the same to the Director General of Police but nothing concrete hap pened. On account of these complaints, Mr. S.R. Sharma, Police Inspector, Nadiad was annoyed with the Chief Judicial Magistrate and he withdrew constables posted in the CJM Court. In April 1989, the CJM filed two complaints with the Police against the Police Inspector and other Police Offi cials, Nadiad for delaying the process of the Court. On 25th July, 1989, the CJM directed the police to register a crimi nal case against 14 persons who had caused obstruction in judicial proceedings but subsequently since unqualified apology was tendered, the CJM directed the Police Inspector to drop the cases. The Police Inspector reacted strongly to the CJM 's direction and he made complaint against the CJM to the Registrar of the High Court through the District Super intendent of Police. On account of the aforesaid facts there was hostility between the Police of Nadiad and the CJM. 939 On 25th September 1989, the Police Inspector met the CJM in his chambers to discuss a case where the Police had failed to submit the charge sheet within 90 days. During discussion the Police Inspector invited the CJM to visit the police station to see the papers and assured him that he would mollify the sentiments of the police officials. At 8.35 p.m. on the said date, the Police Inspector sent a Police Jeep to the CJM 's residence and he went to the Police Station. According to the CJM when he arrived in the Police Station he was forced to consume liquor and on his refusal he was assulted, handcuffed and tied with rope by Police Inspector, Sub Inspector, Head Constable, and Constable and that he was sent to Hospital for Medical Examination under handcuffs. A photographer was arranged to take his photo graph which was published in the newspapers. The Police Inspector disputed these allegations and according to him the CJM entered his chamber at the Police Station in a drunken state, shouting and abusing him and since he was violent, he was arrested, handcuffed and sent to Hospital for Medical Examination. He himself wanted to be photo graphed and that is why the photographs were taken by the press photographer. As the incident undermined the dignity of courts in the country, Judicial Officers, Judges and Magistrates all over the country were in a state of shock, they felt insecure and humiliated. A number of Bar Associations passed Resolutions and went on strike. The Delhi Judicial Service Association, the All India Judges Association, Bar Council of Uttar Pradesh and many others approached this Court by means of telegrams and petitions under Article 32 for saving the dignity and honour of the judiciary. The CJM also filed an application for quashing the two FIRs lodged against him and for directing the trial of his complaint as State case an award of compensation. On 29.9.1989 this Court took cogni zance of the matter by issuing notices to the State of Gujarat and other Police Officers. Since there was serious dispute between the parties with regard to the entire incident, the Court appointed the senior puisne Judge of the Allahabad High Court to inquire into the incident and to submit a report to the Court. The inquiry was held on behalf of the Court and not under the provisions of the Commission of Inquiry Act. A detailed report was submitted to this Court and the Court directed copies to be delivered to the concerned parties and permit ted the parties and the contemners to file their objections before this Court. 940 The Learned Commissioner 's Report establised the follow ing facts and circumstances: that the CJM found that the Police of Nadiad was not effective in service of summons and had adopted an attitude of indifference to the court 's orders, and as complaints were forwarded to the authorities by the CJM there was confrontation between the local police and the magistracy. When the CJM visited the police station pursuant to the Police Inspector 's request to discuss the matter, he was forced to consume liquor and on his refusal he was assaulted. He was tied up with a rope by the Police personnel and handcuffed deliberately in defiance of the state 's Police Regulations and Circulars and the decision of this Court in Prem Shankar Shukla vs Delhi Administration. , A panchnama showing the drunken state of the CJM was pre pared by the Police Inspector and signed by two panchas a Mamlatdar and a Fire Brigade Officer. A press photographer was brought on the scene, the police personnel posed with the CJM for the press photographer and the same was pub lished in newspapers. A request made by the CJM to the Civil Hospital doctors to contact and inform the District Judge about the incident was not allowed. On examination at the hospital, the body of the CJM was found to have a number of injuries. His blood was taken and chemical examination conducted. The Chemical Examiner submitted a report holding that the blood sample contained alcohol. At the initial stage only one case was registered against the CJM by the Police under the Bombay Prohibition Act, but when lawyers met the Police Inspector for securing release of the CJM on bail, the offence being bailable, the Police Inspector, registered another case under Sections 332 and 506 IPC in order to frustrate the attempt. The District Superintendent of Police did not take immediate action in the matter but created an alibi that he had gone elsewhere and stayed in the government Rest House there, the register of the Rest House however indicating that the entry regarding the stay was manipulated subsequently by making an interpolation. On behalf of the contemners Police Officers it was contended that: (1) this Court had no jurisdiction or power to indict the Police Officers even if they are found to be guilty, as their conduct does not amount to contempt of this Court. Articles 129 and 215 demarcate the respective areas of jurisdiction of the Supreme Court and the High Courts respectively, and this Court 's jurisdiction under Article 129 is confined to the contempt of itself only, and it has no jurisdiction to indict a person for contempt of an infe rior court subordinate to the. High Court. (2) Even if the Supreme Court is a court of record, it has no power to take action for the contempt of a Chief Judicial Magistrate 's court as neither the constitution nor any statutory provi sion confer any 941 such jurisdiction or power on this Court. So far as the High Court is concerned, it has power of judicial and administra tive superintendence over the subordinate courts and Section 15 of the Contempts of Courts Act, 1971 expressly confers power on the High Court to take action for the contempt of subordinate courts. (3) Under Entry 77 of List I of the Seventh Schedule, Parliament has legislative competence to make a law curtailing the jurisdiction of the Supreme Court and Section 15 of the Contempts of Courts Act 1971 curtails the inherent power of this Court with regard to contempt of subordinate courts. Inherent powers are always preserved but they do not authorise a court to invest itself with juris diction when that jurisdiction is not conferred by law. (4) Assumption of contempt jurisdiction with regard to contempt of subordinate and inferior courts on the interpretation of Article 129 of the Constitution is foreclosed by the deci sions of the Federal Court in K.L. Gauba vs The Honable the Chief Justice and Judges of the High Court o] ' judicature at Lahore & Anr., AIR 1942 FC 1. This Court being the successor to the Federal Court was bound by the decisions of the Federal Court under Article 374(2) of the Constitution. (5) In our country there is no court of universal jurisdiction, as the jurisdiction of all courts including the Supreme Court is limited. (6) Article 142(1) does not contemplate any order contrary to statutory provisions. (7) The findings recorded by the Commission cannot be taken into account as those findings are hit by Article 20(3) of the Constitution. The Attorney General urged that the power to punish contempt is a special jurisdiction which is inherent in a Court of record, that a superior court of record has inher ent power to punish for contempt of itself and it necessari ly includes and carries with it the power to punish for contempt committed in respect of subordinate or inferior courts, that a superior court of record having power to correct the order of an inferior court has power to protect that court by punishing those who interfere with the due administration of justice of that court. It was further urged that the recognises and preserves the existing contempt jurisdiction and power of the court of record for punishing for contempt of subordi nate or inferior courts, that the Act has not affected or restricted the suo motu inherent power of the Supreme Court being a court of record which has received constitutional sanction under Article 129, that since this Court has taken cognizance of the contempt matter arising out of the inci dent which is the subject matter of trial before the crimi nal court, this Court has ample power under Article 142 of the Constitution to pass any order necessary to do justice and prevent abuse of process of the court and that there is no limitation on the power of this Court under Article 142 942 in quashing a criminal proceeding pending before a subordi nate court. The basic questions that arose for consideration of the Court were: (a) whether the Supreme Court has inherent jurisdiction or power to punish for contempt of subordinate or inferior courts under Article 129 of the Constitution, (b) whether the inherent jurisdiction and power of the Supreme Court is restricted by the , (c) whether the incident interfered with the due administration of justice and constituted contempt of court, and (d) what punishment should be awarded to the contemners found guilty of contempt. Disposing of the writ petitions, Criminal Miscellaneous Petitions, and contempt petitions, this Court. HELD: 1.1 Contempt of court is an act or commission calculated to interfere with the due administration of justice. It includes civil and criminal contempt. [991D] Bowen L.J. in Helmore vs Smith, at 455, referred to. 1.2 The definition of criminal contempt is wide enough to include any act by a person which would tend to interfere with the administration of justice or which would lower the authority of court. The public have a vital stake in effec tive and orderly administration of justice. The Court has the duty of protecting the interest of the community in the due administration of justice and, so, it is entrusted with the power to commit for contempt of court, not to protect the dignity of the Court against insult or injury, but, to protect and vindicate the right of the public so that the administration of justice is not perverted, prejudiced, obstructed or interfered with Offutt vs U.S.; , , referred to. [991F] 1.3 The power to punish contempt is vested in the Judges not for their personal protecting only, but for the protec tion of public justice, whose interest, requires that decen cy and decorum is preserved in Courts of Justice. Those who have to discharge duty in a Court of Justice are protected by the law, and shielded in the discharge of their duties. Any deliberate interference with the discharge of such duties either in court or outside the court by attacking the presiding officers of the court, would amount to criminal contempt and the courts must take serious cognizance of such conduct. [993B] 943 The object and purpose of punishing contempt for interference with the administration of justice is not to safeguard or protect the dignity of the Judge or the Magis trate, but the purpose is to preserve the authority of the courts to ensure an ordered life in society. [991H] Attorney General vs Times Newspapers, (1974] A.C. 273 at p. 302, referred to. 1.5 The Chief Judicial Magistrate is head of the Magis tracy in the District who administers justice to ensure, protect and safaguard the rights of citizens. The subordi nate courts at the district level cater to the need of the masses in administering justice at the base level. By and large the majority of the people get their disputes adjudi cated in subordinate courts. It is, in the general interest of the community that the authority of subordinate courts is protected. If the CJM is led into a trap by unscrupulous Police Officers, and if he is assaulted, handcuffed and roped, the public is bound to lose faith in Courts, which would be destructive of the basic structure of an ordered society. If this is permitted Rule of Law shall be supplant ed by Police Raj. [992D E] 1.6 The conduct of Police Officers in the instant case, in assaulting and humiliating the CJM brought the authority and administration of justice into disrespect, affecting the public confidence in the institution of justice. [992G] 1.7 The incident is a clear interference with the admin istration of justice, lowering its judicial authority. Its effect was not confined to one District or State, it had a tendency to affect the entire judiciary in the country. The incident high lights a dangerous trend that if the Police is annoyed with the orders of a presiding officer of a court, he would be arrested on flimsy manufactured charges, to humiliate him publicly as has been done in the instant case. [992F] 1.8 The facts of the instant case, demonstrate that a presiding officer of a court may be arrested and humiliated on flimsy and manufactured charges which could affect the administration of justice. In order to avoid any such situa tion in future, it is necessary to lay down guidelines which should be followed in the case of arrest and detention of a Judicial Officer. [1000F] 1.9 In view of ' the paramount necessity of preserving the independence of judiciary and at the same time ensuring that infractions of law are ' properly investigated the following guidelines are to be 944 followed: (a) If a judicial officer is to be arrested for some offence, it should be done under intimation to the District Judge or the High Court as the case may be. (b) If facts and circumstances necessitate the immediate arrest of a judicial officer of the subordinate judiciary, a technical or formal arrest may be effected. (c) The fact of such arrest should be immediately communicated.to the District and Sessions Judge of the concerned District and the Chief Justice of the High Court. (d) The Judicial Officer so arrested shall not be taken to a police station, without the prior order or directions of the District & Sessions Judge of the concerned District, if available. (e) Immediate facilities shall be provided to the Judicial Officer for communication with his family members, legal advisors and Judicial Officers, including the District & Sessions Judge. (f) No statement of a Judicial Officer who is under arrest be recorded nor any panchnama be drawn up nor any medical test be conducted except in the presence of the Legal Advi sor of the Judicial Officer concerned or another Judicial Officer of equal or higher rank, if available. (g) There should be no handcuffing of a Judicial Officer. If, however, violent resistance to arrest is offered or there is imminent need to effect physical arrest in order to avert danger to life and limb, the person resisting arrest may be over powered and handcuffed. In such case, immediate report shall be made to the District & Sessions Judge concerned and also to the Chief Justice of the High Court. But the burden would be on the Police to establish the necessity for effecting physical arrest and handcuffing the Judicial Officer and if it be established that the physical arrest and hand cuffing of the Judicial Officer was unjustified, the Police Officers causing or responsible for such arrest and handcuffing would be guilty of misconduct and would also be personally liable for compensation and/or damages as may be summarily deter mined by the High Court. [1000G 1001F] 1.10 These guidelines are not exhaustive but are the minimum safeguards to be observed in case of arrest of a Judicial Officer. These should be implemented by the State Governments as well as by the High Courts. [1001G] 1. 11 No judicial officer should visit a Police Sta tion on his own except in connection with his official and judicial duties and functions, and this also with prior intimation to the District and Sessions Judge. [1002B] 2.1 The Supreme Court as the Apex Court is the protec tor and guardian of justice throughout the land, therefore, it has a right and also a duty to protect the courts whose orders and judgments are amenable to correction, from com mission of contempt against them. This 945 right and duty of the Apex Court is not abrogated merely because the High Court also has this right and duty of protection of the subordinate courts. The jurisdictions are concurrent and not exclusive or antagonistic. [967G H] 2.2 Article 136 vests the Supreme Court with wide powers to grant special leave to appeal from any judgment, decree determination sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India except a court or tribunal constituted by or under any law relating to the Armed Forces. The Court 's appellate power under Article 136 is plenary, it may entertain any appeal by granting special leave against any order made by any Magistrate, Tribunal or any other subordinate court. The width and amplitude of the power is not affected by the practice and prcedure followed in insisting that before invoking the jurisdiction under Article 136 the aggrieved party must exhaust remedy available under the law before the appellate authority of the High Court. Self imposed restric tions do not divest it of its wide powers to entertain any appeal against any order or judgment passed by any court or tribunal in the country without exhausting alternative remedy before the appellate authority or the High Court. The power of the Court under Article 136 is unaffected by Arti cles 132. 133 and 134(A) in view of the expression "notwith standing anything in this Chapter" occurring in Article 136. [968E 969A] Durga Shankar Mehta vs Thakur Raghuraj Singh & Ors., [1955] 1 SCR 267 and Arunachalam vs P.S.R. Sadhananthm & Anr., ; , referred to. 2.3 In addition to the appellate power, the Supreme Court has special residuary power to entertain appeal against any order of any court in the country. The plenary jurisdiction of the Court to grant leave and hear appeals against any order of a court or Tribunal, confers power of judicial superintendence over all the courts and Tribunals in the territory of India including subordinate courts of Magistrate and District Judge. The Court has, therefore, supervisory jurisdiction over all courts in India. [970F] 2.4 Article 129 provides that the Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Article 215 contains similar provision in respect of High Court. Both the Supreme Court as well as High Courts are courts of record having powers to punish for contempt in cluding the power to punish for contempt of itself. [970G] 946 2.5 The Constitution does not define "Court Of Record". A "Court of Record" is a court where acts and judicial proceedings are enrolled in parchment for a perpetual memo rial and testimony, which rolls are called the 'record ' of the court and.are conclusive evidence of that which is recorded therein. [970H 971 E] ' Wharton 's Law Lexicon: Words & Phrases (Permanent Edi tion) vol. 10 p. 429: Halsbury 's Laws of England Vol. 10 p. 319. 2.6 In India prior to the enactment of the Contempt of Courts Act, 1926, High Court 's jurisdiction in respect of contempt of subordinate and inferior courts was regulated by the principles of Common Law of England. The High Courts in the absence of statutory provision exercised power of con tempt to protect the subordinate courts on the premise of inherent power of a Court of Record. [974F G] Rex vs Aimon, ; ; Rainy vs The Justices of Seirra Leone, 8 Moors PC 47 at 54; Surendra Nath Banerjee vs The Chief Justice and Judges of the High Court at Fort William in Bengal, ILR to Calcutta 109; Rex vs Parke, [1903] 2 K.B. 432 at 442; King vs Davies, ; King vs Editor of the Daily Mail, ; Attorney General vs B.B.C.; , ; Venkat Rao ; Mohandas Karam Chand Gandhi [1920] 22 Bombay Law Re porter 368; Abdul Hassan Jauhar 's AIR 1926 Allahabad 623; Shantha Nand Gir vs Basudevanand, AIR 1930 Allahabad 225 FB; Mr. Hirabai vs Mangal Chand, AIR 1935 Nagpur 46; Harkishan Lal vs Emperor, AIR 1937 Lahore 497; Mohammad Yusuf vs Imtiaz Ahmad Khan, AIR 1939 Oudh, 131 and Legal Remembrancer vs Motilal Ghosh, ILR , referred to. 2.7 The Kings Bench in England and High Courts in India being superior Court of Record and having judicial power to correct orders of subordinate courts enjoyed the inherent power of Contempt to protect the subordinate courts. The Supreme Court being a Court of Record under Article 129 and having wide power of judicial supervision over all the courts in the country, must possess and exercise similar jurisdiction and power as the High Courts had prior to Contempt Legislation in 1926. Inherent powers of a superior Court of Record have remained unaffected even after Codifi cation of Contempt Law. [976G 977A] Sukhdev Singh Sodhi vs The Chief Justice and Judges of the PEPSU High Court, ; and R.L. Kapur vs State of Tamil Nadu, ; , referred to. 947 2.8 The was enacted to define and limit the powers of Courts in punishing contempts of courts and to regulate their procedure in relation there to. There is no provision therein curtailing the Supreme Court 's power with regard to contempt of subordinate courts, Section 15 expressly refers to this Court 's power for taking action for contempt of subordinate courts. The section prescribes modes for taking cognizance of criminal contempt by the High Court and Supreme Court. It is not a substantive provision conferring power or jurisdiction on the High Court or on the Supreme Court for taking action for the contempt of its subordinate courts. The whole object of prescribing procedural modes of taking cognizance in Section 15 is to safeguard to valuable time of the High Court and the Supreme Court being wasted by frivolous complaints of contempt of court. Section 15(2) does not restrict the power of the High Court to the cognizance of the contempt of itself or of a subordinate court on its own motion although apparently the Section does not say so. [977A C, 978G 979A] S.K. Sarkar, Member, Board of Revenue, U.P. Lucknow vs Vinay Chandra Misra; , , referred to. 3.1 Under Entry 77 of List I of the Seventh Schedule read with Article 246, Parliament is competent to enact a law relating to the powers of the Supreme Court with regard to 'contempt of itself '. Such a law may prescribe procedure to be followed and it may also prescribe the maximum punish ment which could be awarded and it may provide for appeal and for other matters. But the Central Legislature has no legislative competence to abridge or extinguish the juris diction or power conferred on the Supreme Court under Arti cle 129. The Parliament 's power to legislate in relation to the law of contempt relating to the Supreme Court is limit ed, therefore the does not impinge upon the Supreme Court 's power with regard to the contempt of subordinate courts under Article 129. [979C F] 3.2 Article 129 declares the Supreme Court a court of record and it further provides that the Supreme Court shall have all the powers of such a court including the power to punish for contempt of itself The expression used in Article 129 is not restrictive, instead it is extensive in nature. If the Framers of the Constitution intended that the Supreme Court shall have power to punish for contempt of itself only, there was no necessity for inserting the expression "including the power to punish for contempt of itself. " [979G] 3.3 Article 129 confers power on the Supreme Court to punish for 948 contempt of itself and in addition, it confers some addi tional power relating to contempt as would appear from the expression "including". The expression "including" has been interpreted by courts, to extend and widen the scope of power. The plain language of the Article clearly indicates that the Supreme Court as a Court of record has power to punish for contempt of itself and also something else which could fall within the inherent jurisdiction of a court of record. [979H 980A] 3.4 In interpreting the Constitution, it is not permis sible to adopt a construction which would render any expres sion superfluous or redundant. [980B] 3.5 While construing Article 129, it is not permissible to ignore the significance and impact of the inclusive power conferred on the Supreme Court. [980B] 3.6 The conferment of appellate power on the Court by a statute section 19 of the does not and cannot affect the width and amplitude of inherent powers of this Court under Article 129 of the Constitution. [981E] K.L. Gauba vs The Honable the Chief Justice and Judges of the High Court of Judicature at Lahore & Anr AIR 1942 FC 1, distinguished. 4.1 Article 374(2) is in the nature of a transitory provision to meet the exigency of the situation on the abolition of the Federal Court and setting up of the Supreme Court. There is no provision in the said Article to the effect that the decisions of the Federal Court shall be binding on the Supreme Court. The decisions of the Federal Court and the Privy Council made before the commencement of the Constitution are entitled to great respect but these decisions are not binding on the Supreme Court and it is always open to this Court to take a different view. [983F G] Om Prakash Gupta vs The United Provinces, AIR 1951 Allahabad 205 and State of Bombay vs Gajanan Mahadev Badley, AIR 1954 Bombay 352, approved. The State of Bihar vs Abdul Majid, ; and Shrinivas Krishnarao Kango vs Narayan Devji Kango & Ors., ; , referred to. 949 K.L. Gauba vs The Hon 'ble the Chief Justice and Judges or the High Court of Judicature at Lahore & Anr., AIR 1942 FC 1 and Purshottam Lal Jaitly vs The King Emperor, , explained and distinguished. The Federal Court exercised limited jurisdiction as conferred on it by the Government of India Act 1935. The question regarding the inherent power of the Supreme Court as a Court of Record in respect of the contempt of subordi nate Courts was neither raised nor discussed in its deci sions. The Federal Court observed that if the High Court and the Federal Court both have concurrent jurisdiction in contempt matters, it could lead to conflicting judgments and anamolous consequences. That may be so under the Government of India Act as the High Court and the Federal Court did not have concurrent jurisdiction, but under the Constitution, High Court and the Supreme Court both have concurrent juris diction in several matters, yet no anamolous consequences follow. [985H 986B] 4.2 The Federal Court did not possess the wide powers as the Supreme Court has under the Constitution. There are marked difference in the constitution and jurisdiction and the amplitude of powers exercised by the two courts. In addition to civil and criminal appellate jurisdiction, the Supreme Court has wide powers under Article 136 over all the courts and Tribunals in the country. The Federal Court had no such power, instead it had appellate power but that too could be exercised only on a certificate issued by the High Court. The Federal Court was a court of record under Section 203 but it did not possess any plenary or residuary appel late power over all the courts functioning in the territory of India like the power conferred on the Supreme Court under Article 136 of the Constitution. Therefore, the Federal Court had no judicial control or superintendence over subor dinate courts. [986C E] 4.3 Advent of freedom, and promulgation of the Constitu tion have made drastic changes in the administration of justice necessitating new judicial approach. The Constitu tion has assigned a new role to the Constitutional Courts to ensure rule of law in the country. These changes have brought new perceptions. In interpreting the Constitution, regard must be had to the social, economic and political changes, need of the community and the independence of the judiciary. The Court cannot be a helpless spectator, bound by precedents of colonial days which have lost relevance. Time has come to have a fresh look to tile old precedents and to lay down law with the changed perceptions keeping in view the provisions of the Constitution. [986F G] 950 5.1 Courts constituted under a law enacted by the Par liament or the State Legislature have limited jurisdiction and they cannot assume jurisdiction in a matter, not ex pressly assigned to them, but that is not so, in the case of a superior court of record constituted by the Constitution such a court does not have a limited jurisdiction, instead it has power to determine its own jurisdiction. No matter is beyond the jurisdiction of a superior court of record unless it is expressly shown to be so, under the provisions of the Constitution. In the absence of any express provision in the Constitution, the Apex Court being a Court of record has jurisdiction in every matter and if there be any doubt, the Court has power to determine its jurisdiction. If such determination is made by the High Court, the same would be subject to appeal to this Court, but if the jurisdiction is determined by this Court it would be final. [988C E] Naresh Shridhar Mirajkar & Ors. vs State of Maharashtra ; and Ganga Bishan vs Jai Narain, , referred to. 5.2 Since the Supreme Court has power of judicial super intendence and control over all the courts and Tribunals functioning in the entire territory of the country, it has a corresponding duty to protect and safeguard the interest of inferior courts to ensure the flow of the stream of justice in the courts without any interference or attack from any quarter. The subordinate and inferior courts do not have adequate power under the law to protect themselves, there fore, it is necessary that this Court should protect them. Under the constitutional scheme it has a special role in the administration of justice and the powers conferred on it under Article 32, 136, 141 and 142 form part of the basic structure of the Constitution. The amplitude of the power of the court under these Articles of the Constitution cannot be curtailed by law made by Central or State Legislature. [987A C] 5.3 The Supreme Court and the High Court both exercise concurrent jurisdiction under the constitutional scheme in matters relating to fundamental rights under Articles 32 and 226 of the Constitution. Therefore, this Court 's jurisdic tion and power to take action for contempt of subordinate courts would not be inconsistent to any constitutional scheme. [987D] 5.4 The Apex Court is duty bound to take effective steps within the constitutional provisions to ensure a free and fair administration of justice through out the country. For that purpose it must wield the 951 requisite power to take action for contempt of subordinate courts. Ordinarily, the High Court would protect the subor dinate courts from any onslaught on their independence, but in exceptional cases, extraordinary situation may prevail affecting the administration of public justice or where the entire judiciary is affected, this Court may directly take cognizance of contempt of subordinate courts. [987F] 5.5 The Supreme Court will sparingly exercise its inher ent power in taking cognizance of the contempt of subordi nate courts, as ordinarily matters relating to contempt of subordinate courts must be dealt with by the High Courts. The instant case is of exceptional nature as the incident created a situation where functioning of the subordinate courts all over the country was adversely affected and the administration of justice was paralysed, therefore, this Court took cognizance of the matter. [987G 988A] 6.1 Though there is no provision like section 482 of the Criminal Procedure Code conferring express power on the Supreme Court to quash or set aside any criminal proceeding pending before a criminal court to prevent abuse of process of the court, but the Court has power to quash any such proceeding in exercise of its plenary and residuary powers under Article 136 of the Constitution, if on the admitted facts no change is made out against the accused or if the proceedings are initiated on concocted facts, or if the proceedings are initiated for oblique purposes. [996E] Once the Supreme Court is satisfied that the criminal proceedings amount to abuse of process of court it would quash such proceedings to ensure justice. [996G] State of West Bengal & Ors. vs Swapan Kumar Guha & Ors., ; and Madhavrao Jivajirao Scindia & Ors. vs Sambhajirao Chandrojirao Angre & Ors., ; , referred to. 6.2 The inherent power of the Supreme Court under Arti cle 142 coupled with the plenary and residuary powers under Articles 32 and 136 embraces power to quash criminal pro ceedings pending before any court to do complete justice in the matter before this Court. If the court is satisfied that the proceedings in a criminal case are being utilised for oblique purposes or if the same are continued on manufac tured and false evidence or if no case is made out on the admitted facts, it would be in the ends of justice to set aside or quash the criminal proceeding. It is idle to sug gest that in such a situation this Court should be a help less spectator. [997B C] 952 6.3 The Court 's power under Article 142(1) to do "complete justice" is entirely of different level and of a different quality. Any prohibition or restriction contained in ordinary laws cannot act as a limitation on the constitu tional power of this Court. Once this Court has seisin of a cause or matter before it has power to issue any order or direction to do "complete justice" in the matter. This constitutional power of the Apex Court cannot be limited or restricted by provisions contained in statutory law. [997G] 6.4 What would be the need of "complete justice" in a cause or matter would depend upon the facts and circum stances of each case and while exercising that power the Court would take into consideration the express provisions of a substantive statute. Once this Court has taken seisin of a case, cause or matter, it has power to pass any order or issue direction as may be necessary to do complete jus tice in the matter. [998D] Prem Chand Garg vs Excise Commissioner, U.P. Allahabad, [1963] Supp. 1 SCR 885 and A.R. Antulay vs R.S. Nayak & Anr., [ ; , referred to. In the instant case, the foundation of the criminal trial of CJM NL Patel is based on facts which have been found to be false. It would be in the ends of justice and also to do complete justice in the cause to quash the crimi nal proceedings. [998F] 7.1 Article 20(3) of the Constitution declares that no person accused of any offence shall be compelled to be a witness against himself. In order to avail the protection of Article 20(3) three conditions must be satisfied. Firstly, the person must be accused of an offence. Secondly, the element of compulsion to be a witness should be there, and thirdly it must be against himself. All the three ingredi ents must necessarily exist before protection of Article 20(3) is available. If any of these ingredients do not exist, Article 20(3) cannot be invoked. [964E F] Balkishan Devidayal vs State of Maharashtra, ; , referred to. 7.2 Mere issue of notice or pendency of contempt proceedings do not attract Article 20(3) of the Constitution as the contemners against whom notices were issued were not accused of any offence. A Criminal contempt is punishable by the superior courts by fine or imprisonment, but it has many characteristics which distinguishes it from an ordinary offence. [964G] 953 7.3 The power to take proceedings for contempt of Court is an inherent power of a Court of record. The Criminal Procedure Code does not apply to such proceedings. Since the contempt proceedings are not in the nature of criminal proceedings for an offence, the pendency of contempt pro ceedings cannot be regarded as criminal proceedings merely because it may end in imposing punishment on the contemner. A contemner it is not in the position of an accused. It is open to the Court to cross examine the contemner and even if the contemner is found to be guilty of contempt, the Court may accept apology and discharge the notice of contempt, whereas tendering of apology is no defence to the trial of a criminal offence. This peculiar feature distinguishes con tempt proceedings from criminal proceedings. In a criminal trial where a person is accused of an offence there is a public prosecutor who prosecutes the case on behalf of the prosecution against the accused but in contempt proceedings the court is both the accused as well as the judge of the accusation. [966C E] Debabrata Bandopadhyaya 's case; , , referred to. 7.4 In the instant case, the contemners do no stand in the position of a "person accused of an offence" merely on account of issue of notice of contempt by this Court and the Commission which was acting on behalf of this Court had full authority to record the testimony of the contemners. There has, therefore, been no violation of Article 20(3) of the Constitution and the Commission 's finding are not violated. [966F G] 8.1 In determining, what punishment should be awarded to contemners found guilty, the degree and the extent of part played by each of the contemners has to be kept in mind. [998G] 8.2 In the instant case, Sharma, the Police Inspector was the main actor in the entire incident and who had planned the entire episode with a view to humiliate the CJM in the public eye is the main culprit and therefore, he deserves maximum punishment. The Sub Inspector took an active part in assaulting and tying the CJM at the behest of the Police Inspector. The Head Constable and Constable also took active part in handcuffing and tying the CJM with ropes, but as subordinate officials they acted under the orders of the superior officers. The Mamlatdar was a friend of the Police Inspector, he had no axe to grind against the CJM but he acted under the influence of the Police Inspec tor. So far as the DSP is concerned, he actively abetted the commission of onslaught on the CJM. The contemners are held guilty of contempt and awarded punishment. [998H 999B] 954 8.3 The Police Inspector to undergo simple imprisonment for a period of six months and to pay fine of Rs.2,000. The Sub Inspector to undergo simple imprisonment for a period of five months and pay a fine of Rs.2,000 and in default one month 's simple imprisonment. Head Constable and Constable, each to undergo simple imprisonment for two months and a fine of Rs.500 and in default 15 days simple imprisonment. The Mamlatdar to undergo simple imprisonment for a period of two months and a fine of Rs.1,O00 and in default one month 's simple imprisonment. The DSP is sentenced to imprisonment for a period of one month and a fine of Rs.1,O00 and in default simple imprisonment for 15 days. So far as the other respondents against whom notices were issued no adequate material on record holds them guilty. The contempt notices are therefore discharged. [999C E] 9.1 The Court expressed displeasure on the conduct of the DGP. As the head of the Police in the State, he was expected to intervene in the matter and to ensure effective action against the erring Police Officers. He was totally indifferent to the news that a CJM was arrested, handcuffed, roped, and assaulted. He took this news as a routine matter without taking any steps to ascertain the correct facts for effective action against the erring Police Officers. If the head of the State Police Administration exhibits such indif ference to a sensitive matter which shook the entire judi cial machinery in the State, nothing better could be expect ed from his subordinate officers. The State Government should take action departmentally on the basis of the find ings recorded by the Commission. [999F 1000A]

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ivil Appeal No. 378 of 1987. 237 From the Judgment and Order dated 4.8.1986 of the Cal cutta High Court in F.M.A.T. No. 1500 of 1984. L.M. Singhvi S.K. Jain, I. Makwana, A.M. Singhvi, Sud hanshu Atreya and S .D. Sharma for the Appellants. N.N. Gooptu, Dipanker Gupta P. Mondal, D.K. Sinha, J.R. Das, T. Ray. R. Pal, B.R. Agarwala and Ms. section Manchanda for the Respondent. The following Judgments of the Court were delivered: CHINNAPPA REDDY, J. We grant special leave and proceed to dispose of the appeal. A hundred and thirty two years ago, in 1854, 'the wise Indian Chief of Seattle ' replied to the offer of 'the great White Chief in Washington ' to buy their land. The reply is profound It is beautiful. It is timeless. It contains the wisdom of the ages. It is the first ever and the most under standing statement on environment. It is worth quoting. To abridge it or to quote extracts from it is to destroy its beauty. You cannot scratch a painting and not diminish its beauty. We will quote the whole of it: * "How can you buy or sell the sky, the warmth of the land? The idea is strange to us. "If we do not own the freshness of the air and the sparkle of the water, how can you buy them? "Every part of the earth is sacred to my people. Every shining pine needle, every sandy shore, every mist in the dark woods, every clearing and humming insect is holy in the memory and experience of my people. The Sap which courses through the trees carries the memories of the red man. "The white man 's dead forget the country of their birth when they go to walk among the stars. Our dead never forget this beautiful earth, for it is the mother of the *Reproduced verbatim from Pariyavaran Vol. I No. 1, June 1984. 238 red man. We are part of the earth and it is part of us. The perfumed flowers are our sisters; the horse, the great eagle, these are our brothers. The rockly crests, the juices in the meadows, the body heat of the pony, and man all belong to the same family. "So, when the Great Chief in Washing ton sends word that he wishes to buy our land, he asks much of us. The Great Chief sends word he will reserve us a place so that we can live comfortably to ourselves. He will be our father and we will be his children. So we will consider your offer to buy our land. But it will not be easy. For this land is sacred to us. "This shining water moves in the streams and rivers is not just water but the blood of our ancestors. If we sell you land, you must remember that it is sacred, and you must teach your children that it is sacred and that each ghostly reflection in the clear water of the lakes tells of events and memo ries in the life of my people. The water 's murmur is the voice of my father 's father. "The rivers are our brothers, they quench our thirst. The rivers carry our canoes, and food our children. If we sell you our land, you must remember, and teach your children, that the rivers are our brothers, and yours and you must henceforth give the kindness you would give any brother. "We know that the white man does not understand our ways. One portion of, land is the same to him as the next, for he is a stranger who comes in the night and takes from the land whatever he needs. The earth is not his brother but his enemy, and when he has conquered it, he moves on. He leaves his fathers ' graves behind, and he does not care. "He kidnaps the earth from his chil dren. His father 's grave and his children 's birth right are forgotten. He treats his mother, the earth, and his brother, the sky, as things to be bought, plundered, sold like sheep or bright beads. His appetite will devour the earth and leave behind only a desert. 239 "I do not know. Our ways are different from your ways. The sight of your cities pains the eyes of the red man. But perhaps it is because the red man is a savage and does not understand. "There is no quite place in the white man 's cities. No place to hear the unfurling of leaves in spring or the rustle of an in sect 's wings. But perhaps it is because I am a savage and do not understand. The clatter only seems to insult the ears. And what is there to life if a man cannot hear the lonely cry of the whippoorwill or the arguments of the frogs around a pond at night? I am a red man and do not understand. The Indian prefers the soft sound of the wind darting over the face of a pond, and the small of the wind itself, cleansed by a mid day rain, or scented with the pinon pine. The air is precious to the red man, for all things share the same breath the beast, the tree, the man, they all share the same breath. The white man does not seem to notice the air he breathes. Like a man dying for many days, he is numb to the stench. But if we sell you our land, you must remember that the air is precious to us, that the air shares its spirit with all the life it supports. The wind that gave our grandfather his first breath also receives the last sigh. And if we sell you our land, you must keep it apart and sacred as a place where even the white man can go to taste the wind that is sweetened by the meadows flowers. "So we will consider your offer to buy our land. If we decide to accept, I will make one condition. The White man must treat the beasts of this land as his brothers. "I am a savage and I do not understand any other way. I have seen a thousand rotting buffaloes on the prairie, left by the white man who shot them from a passing train. I am a savage and I do not understand how the smoking iron horse can be more important than the buffalo that we kill only to stay alive. "What is man without the beasts? If all the beasts were gone, man would die from a great loneliness of spirit. 240 For whatever happens to the beasts soon hap pens to man. All things are connected. "You must teach your children that the ground beneath their feet is the ashes of our grandfathers. So that they will respect the land. Tell your children that the earth is rich with the lives of our kin. Teach your children what we have taught our children, that the earth if sun mother. Whatever befalls the earth befalls the sons of the earth. If men spit upon the ground, they spit upon themselves. "This we know: The earth does not belong to man; man belongs to the earth. This we know: All things are connected like the blood which unites one family. All things are con nected. "Whatever befalls the earth befalls the sons of the earth. Man did not weave to web of life: he is merely a strand in it. Whatever he does to the web he does to himself. "Even the white man, whose God walks and talks with him as friend to friend, cannot be exempt from the common destiny. We may be brothers after all. We shall see. One thing we know, which the white man may one day discov er our God is the same God. You may think now that you own Him as you wish to own our land; but you cannot. He is the God of man, and His compassion is equal for the red man and the white. This earth is precious to Him, and to harm the earth is to heap contempt on its Creater. The white too shall pass; perhaps sooner than all other tribes. Contaminate your bed and you will one night suffocate in your own waste. "But in your perishing you will shine brightly, fired by the strength of the God who brought you to this land and for some special purpose gave you dominion over this land and over the red man. That destiny is a mystery to us, for we do not understand when the wild buffalo are all slaughtered, the wild horses are tamed, the secret corners of the forest heavy with scent of many man and the view of the ripe hills blotted by talking wires. Where is the thicket? 241 Gone. Where is the eagle? Gone. The end of living and the beginning of survival." Today society 's interaction with nature is so extensive that the environmental question has assumed proportions affecting all humanity. Industrialisation, urbanisation, explosion of population, overexploitation of resources, depletion of traditional sources of energy and raw materials and the search for new sources of energy and raw materials, the disruption of natural ecological balances, the destruc tion of a multitude of animal and plant species for economic reasons and sometimes for no good reason at all are factors which have contributed to environmental deterioration. While the scientific and technological progress of man has invest ed him with immense power over nature, it has also resulted in the unthinking use of the power, encroaching endlessly on nature. If man is able to transform deserts into cases, he is also leaving behind deserts in the place of cases. In the last century, a great German materialist philosopher warned mankind: "Let us not, however, flatter ourselves overmuch on account of our human victories over nature. For each such victory nature takes its revenge on us. Each victory, it is true, in the first place brings about the results we expect ed, but in the second and third places it has quite differ ent, unforeseen effects which only too often cancel the first. " Ecologists are of the opinion that the most impor tant ecological and social problem is the wide spread disap pearance all over the world of certain species of living organisms. Biologists forecast the extinction of animal and plant species on a scale that is incomparably greater than their extinction over the course of millions of years. It is said that over half the species which became extinct over the last 2,000 years did so after 1900. The International Association for the Protection of Nature and Natural Re sources calculates that now, on an average, one species or sub species is lost every year. It is said that approximate ly 1,000 bird and animal species are facing extinction at present. So it is that the environmental question has became urgent and it has to be properly understood and squarely met by man. Nature and history, it has been said, are two compo nent parts of the environment is which we live, move and prove ourselves. In India, as elsewhere in the world, uncontrolled growth and the consequent environmental deterioration are fast assuming menacing proportions and all Indian cities are afflicted with this problem. The once Imperial City of Calcutta is.no exception. The question raised in the present case is whether the Government of West Bengal has shown such lack of awareness of the problem of environment in making an 242 allotment of land for the construction of a Five Star Hotel at the expense of the zoological garden that it warrants interference by this Court? Obviously, if the Government is alive to the various considerations requiring thought and deliberation and has arrived at a conscious decision after taking them into account, it may not be for this Court to interfere in the absence of mala fides. On the other hand, if relevant considerations are not borne in mind and irrele vant considerations influence the decision, the Court may interfere in order to prevent a likelihood of prejudice to the public. Whenever a problem of ecology is brought before the Court, the Court is bound to bear in mind article 48A of the Constitution, the Directive Principle which enjoins that "The State shall endeavour to protect and improve the envi ronment and to safeguard the forests and wild life of the country," and article 51A(g) which proclaims it to be the fundamental duty of every citizen of India "to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures. " When the Court is called upon to give effect to the Directive Principle and the fundamental duty, the Court is not to shrug its shoulders and say that priorities are a matter of policy and so it is a matter for the policy making authority. The least that the Court may do is to examine whether appropriate consideration are borne in mind and irrelevancies excluded. In appropriate cases, the Court may go further, but how much further must depend on the circum stances of the case. The Court may always give necessary directions. However the Court will not attempt to nicely balance relevant considerations. When the question involves the nice balancing of relevant considerations, the Court may feel justified in resigning itself to acceptance of the decision of the concerned authority. We may now proceed to examine the facts of the present case. There is in Calcutta a zoological garden located in Allipore, now almost the heart of Calcutta, on either side of Belvedere Road, one of Calcutta 's main arterial roads, fortynine acres on one side and eight acres on the other. The main zoo is in the fortynine acres block of land. There are some old buildings and vacant land in the eight acre plot of land. This eight acre plot of land is known as the Begumbari land. It is out of these eight acres that the land of the extent of four acres has been carved out and given to the Taj Group of Hotels for the construction of a Five Star Hotel. It is this giving away of land, that was challenged before the High Court and is now challenged in this Court in this appeal by two citizens of Calcutta, one of them the Secretary of the Union of workmen of the zoological garden and the other a life 243 member of the zoo, both of whom claiming to be lovers of wild life and well wishers of the zoo. In January 1979, the Director General of Tourism, Gov ernment of India, addressed a letter to the Chief Secretary, Government of West Bengal conveying the resolution of the Tourism Conference which was presided over by the Union Minister of Tourism and attended by several State Ministers and requesting that land in good locations may be made available for construction of hotels in a drive to encourage tourism. In May, 1980 the Taj Group of Hotels came forward with a suggestion that they would be able to construct a Five Star Hotel if any of three properties on Chowringhee, specified by them, was made available to them. The Govern ment found that there was some litigation connected with the Chowringhee properties and, therefore, it would not be possible to convey the Chowringhee properties to the Taj Group of Hotels. On September 29, 1980 and November 29, 1980, there were two notes by the Secretary of the Metropol itan Development Department to the effect that the I.T.D.C. was interested in a property known as the Hastings House Property and that the Taj Group of Hotels who considered the Hastings House property unsuitable may be offered four acres out of the eight acres of Begumbari land. On the same day the Taj Group of Hotels wrote to the Government of West Bengal stating that the proposed land could be seriously considerd for construction of a Hotel. Thereafter the Chief Minsiter along with the Minister of Tourism and the Minister for Metropolitan Development visited the site accompanied by the Director of the Zoo who apparently knew about the pro posal right from the start. A note was then prepared by the secretary, Metropoli tan Development Department and put up to the Chief Minister for his approval. The note suggested that the Hastings House property may be offered to the I.T.D.C. and the Begumbari property may be offered to the Taj Group and that at a later stage a suitable Committee might be appointed to negotiate with the two groups of hotels. The Chief Minister approved the proposal and re quired it to be placed before the Cabinet. On January 7, 1981 a memorandum was prepared for the consideration of the Cabinet explaining the need for more Five Star Hotels in Calcutta and the benefits flowing out of the construction and establishment of such Five Star hotels. It was suggested that the Hastings House Property may be leased to the I.T.D.C. Group and the Begumbari property to the Taj Group of Hotels. In regard to the Begumbari property, it was stated: "From the property of the Zoological Gardens on the Belvedere Road it is possible to carve out about four acres of land currently used for dumping garbage and also for 244 growing grass for the elephants. It will be necessary and in any case advisable to shift the dumping ground, while ade quate space can be made available for growing grass else where in the same area. " It was stated that the Finance and Tourism Department had agreed to the proposal to lease the properties to the I.T.D.C. and the Taj Group respectively. It was stated that though the Forest Department had suggest ed that Salt Lake was a better place for establishing a Five Star Hotel, there was no demand for a Five Star Hotel in that area and the request for a hotel in Salt Lake was confined to a Three Star Hotel. Cabinet approval was sought for the offers to be made to the I.T.D.C. and to the Taj Group and for the constitution of a suitable Committee to undertake negotiations with the two groups. On February 12, 1981, the Cabinet took a decision ap proving the proposal contained in the last paragraph of the Cabinet Memorandum, thus clearing the way for negotiations with the Taj Group. Meanwhile, it appeared that the Public Undertakings Committee appointed by the West Bengal Legislative Assembly submitted a port on February 14, 1981 about the zoo in which they stated. "* * * * * * Originally this zoo was on the outskirts of the City but the City has grown in such a fashion that the zoo has vertually become the City Centre and there is hardly any scope for its expansion. The zoo is situated on the left bank of the Tolly 's Nallla divided with two parts on either said of the Alipore Road. The zoo proper is about 40 acres on the Western side, while the eastern part comprises the Zoo Hospital, audiovisual centre acquari um, Zoo store and Staff quarters. The Commit tee was informed that now adays migratory birds were coming less in number though previ ously more foreign birds used to come here and in the opinion of the Managing Committee, the main reason for this was due to air and sound pollution. Breeding potentialities of animals and birds have been retarded due to constant stress and strain on the animals and also due to atmospheric reasons. * * * * * *The Commit tee came to learn that a big hotel was pro posed to be constructed on the plot of land where fodder for elephant are being grown to meet at least a portion of the elephants food. Moreover, the staff quarters, hospitals for animals and the morgue are also situated near the said plot of land. If the proposed hotel is set up, all the existing buildings, viz. hospital, morgue etc. 245 would have to be shifted to the main Gardens resulting in unhealthy atmosphere for the zoo animals and also hampering the beauty of the zoo Gardens. This would also create problems to the staff quarters and acquarium. " The Committee also referred to a proposal to establish a 'Subsidiary Zoo ' some slight distance from Calcutta City and the request said to have been made for the allotment of 200 acres of land for that purpose. It was suggested that the Government may consider abandoning the proposal to set up a hotel on the Eastern side of the Zoo. The Chief Town Planner also visited the site at the request of the Secretary, Metropolitan Development Depart ment. The inspection was made in the presence of the Direc tor of the zoo. The Chief Town Planner thought that two to 21/2 acres of land only might be made available for the hotel. He expressed the apprehension that if four acres of land were to be given for construction of a hotel, then the entire hospital and the dumping ground would have to be removed and the southern boundary of the hotel would come very close to the residential block. On March 19, the Taj Group submitted a proposal to the Government containing fairly detailed information about the tourism industry and its needs, the situation in Calcutta, the realities of hotel construction, the facts relating to what had been done in other cities, the benefits flowing out of the construction of hotels and their own proposals for constructing a hotel in the four acres of land in Belyedere Road. Two alternative financial arrangements were suggested. The first alternative was the payment of annual rent on the basis of the valuation of the land, the second alternative was based on the concept of nett sales, nett sales being defined as sales after deducting all taxes and levies and service charges. The Metropolitan Development Department expressed a preference for the second alternative and sug gested the constitution of a Committee. The Finance Depart ment also approved. The Taj Group was invited to send the financial projection on the basis of the second alternative. Correspondence went on. On June 5, 1981, a Committee of Secretaries was formally constituted. In the meanwhile, WEBCON, a West Bengal Government Consultancy Undertaking, was asked to examine the proposals and to advise the Government. The WEBCON submitted its report on July 14, 1981 and on the request of the Committee of Secretaries a further report was submitted on July 22, 1981. The report of WEBCON is a 246 comprehensive report on various topics connected with the establishment of a Five Star Hotel in Calcutta. Among other things the report also suggested various financial alterna tives and recommended the second alternative based on nett sales as the best. It is to be mentioned here that even by February 21, 1981 the proposal to lease out the Begumbari land to the Taj Group of Hotels had become public knowledge and newspapers carried reports on the same. On June 9, 1981, the Secretary of the Animal Husbandary and Veterinary Services Department complained to the Secre tary of the Metropolitan Development Department that they were not aware of the decision to lease the Begambari land. The Secretary, Metropolitan Development Department made an endorsement on the letter to the effect that the Minister for Animal Husbandry and Veterinary services had himself visited the site. In fact, as we have seen, the matter had been considered and approved by the Cabinet itself and all Departments must necessarily have been appraised of the proposal. While so, the Managing Committee of the Zoo, on June 11, 1981, passed a resolution expressing itself against the proposal to construct a hotel on land belonging to the Zoo. The Resolution said, "The proposal for soil testing of zoo land in the Begumbari Compound for the purpose of construction of Five Star Hotel was discussed in the meeting. The Committee resolved that construction of a multistories buildings in the near vicinity of the zoo will be highly detrimental to the animals of the Zoo, its ecological balance and adversely affect the bird migration which is one of the greatest attractions of the zoo. The area proposed to be taken for Hotel construction is already used by the zoo for fodder cultivation, burial ground for dead animals, animal hospital, operation theater, quarantine area, segrega tion wards, postmortem room and nursery both for zoo animals and horticultural section. These essential services cannot be accommodat ed within the campus of the main zoo for risk of spreading of infection to other animals of the zoo. Procurement of green fodder for the large number of harvivorous animals of the zoo is already a serious problem for the zoo and any disturbance to fodder cultivation will aggravate the situation. The Calcutta Zoo has the smallest area in comparison to other reputed Zoo. The Committee is of a opinion that no portion of Zoo land can be parted with for any other 247 purpose. This being the position soil testing will hardly be of any avail as the zoo cannot spare the land. Shri Ashoka Basu, M.L.A., Shri K.P. Banerjee and Shri A.K. Das abstained from participation in the proceedings. " The Minister for Metropolitan Development submitted a note to the Chief Minister on the resolution of the Managing Committee of the Zoo. He pointed out that even if four acres out of the eight acres of Begumbari land was given to the Taj Group, there would still remain sufficient land for accommodation of the facilities. He added that the Managing Committee 's resolution was not binding on the Government and suggested that the Director of the Zoo might be asked to allow the Taj Group to undertake soil testing etc. so that work may proceed according to the time schedule. The Chief Minister endorsed the following. "I agree. It is unfortunate that we have not been able to accept the contentions of the Managing Committee. If further facilities are necessary for the Zoo, the Government will provide them." In June 25, 1981, the Managing Committee of the Zoo met again and passed another Resolution by which they withdrew their earlier objections. The Resolution stated. "In view of the letter issued to the Zoologi cal Gardens, Alipore and the Cabinet decision regarding the land of Begumbari Compound and in consideration of the assurance conveyed through Shri Ashoka Bose, Chief Whip and Member that the State Government will give to the Garden adjacent lands and matching grants for the purposes of shifting of the Depart ments of the Zoo within the said compound, the members do not press their objections as contained in the resolution of the Managing Committee held on 11.6.81. This was passed by the majority of the members present, the President Justice Shri R.K. Banerjee dissenting. " On June 29, 1981, the Director of the Zoo wrote to the Secretary of the Animal Husbandry and Veterinary Services Department stating his objections to the Proposal to lease the land for construction of a hotel. He stated, 248 "It appears that a total of four acres of Begumbari land is proposed to be taken for hotel construction. It may be mentioned that this four acres of land proposed to be taken is the only area available there and it is presently covered by structures of hospital buildings, Research Laboratory, Operation Theatre, Segregation Wards, Quarantine areas, post mortem room, burial ground for dead animals. In addition there are flower nursery, dumping ground and fodder cultivation area. It is not at all possible to carve out from this four acres of land without disturbing these structures and services nor it is true that adequate space can be made available in this site for these essential services. It may also be stated in this connection that the Zoo cannot be run for a single day without these essential services, i.e. (i) burial ground for dead animals, a number of which die of infectious and commu nicable diseases, (2) quarantine area for keeping animals coming to the Zoo, at least for 15 days before being shifted to the Zoo proper, (3) isolation wards away from Zoo Hospital and quarantine area for treatment of animals suffering from infectious and conta gious diseases. (4) post mortem room for carrying out p.m. findings, (5) dumping ground for dumping huge garbages coming out of the Zoo daily, (6) fodder cultivation area for growing fodder for the harbivorous animals and (7) pathological laboratory for carrying pathological tests of animals and birds. "As per clause 11 of the Alipore Zoological Garden (Management) Rules, 1957, the disposal of properties and funds are vested in the Managing Committee of he Garden. The relevant clause of the rule reads as below: "The Managing Committee shall have custody and disposal of the property and funds of the Gardens and shall be responsible for proper maintenance. " Presumably as a consequence of the letter from the Director of the Zoo there was a note by the Secretary, Animal Husbandry and Veterinary Services Department suggest ing the postponement of the implementation of the Cabinet decision till the necessary facilities then available at Begumbari land were shifted to other land of the same extent within a reasonable distance from the Zoological Garden, as 249 these facilities were originally linked with the Zoo. He pointed out that the Metropolitan Development Department had not consulted the Animal Husbandry Department before the Cabinet note was prepared and circulated. So the practical problems of the Zoo did not receive detailed consideration earlier. The note also pointed out that immediate transfer of the four acre plot of land would mean discontinuance of existing hospital facilities, research laboratory, operation theatre, segregation wards, quarantine facilities etc. A reference was also made to the report of Public Undertakings Committee. Meanwhile negotiations with Taj Group proceeded apace. The WEBCON submitted further reports. Taj Group suggested further modifications. On September 9, 1981 a detailed memorandum was prepared for cabinet discussion. Two alterna tive financial proposals were set out. A reference was made to the Committee of Secretaries who negotiated with the Taj Group of Hotels. Note was taken of the suggestion of the Negotiation Committee that the overall development plan for the environmental beautification, widening of approach roads, landscaping of Tolley 's Nullah were responsibilities of the State Government and estimated to cost Rs. 2 crores but that it was expected to be of considerable public bene fit. Stress was laid on the direct and indirect economic activities which would be generated by the establishment of a Five Star Hotel. Reference was also made to the report of WEBCON and it was noted that the projected profitability of the ventur to the Government was expected to be high. It was also mentioned that the Ministers, Incharge of Tourism, Animal Husbandry, Land Revenue and Finance had seen the note and agreed to it. On September 10, 1981 the Cabinet took the final decision to grant a ninety nine years lease of the Four acres of Begumbari land to the Taj Group of Hotels. On September 28, 1981 the Government of West Bengal officially conveyed its acceptance of the proposal of the Taj Group of Hotels for the construction of a Five Star Hotel. The terms and conditions of the lease were set out. On January 7, 1982, there was a joint meeting of the Establishment and Finance sub committees of the Zoo and it was decided to recommend to the Committee of management that the demarcated area of four acres may be relinquished in favour of Animal Husbandry and Veterinary Services Department subject to the requirement that the Zoo will continue to get the services and facilities in the existing structures until they were reconstructed on the adjacent land. On January 11, 1982 the Managing Committee endorsed the view of the sub committees and this was communicated to the Government. On January 15, 1982, the Government of West Bengal wrote to the Land Acqui sition Officer, with 250 copies to the Taj Group of Hotels, directing the Land Acqui sition Officer to give possession of the land to the Taj Group of Hotels subject to their later executing a proper long term lease. It was mentioned in the letter that the construction of the hotel should not be started till the lease deed was executed and registered. It was further expressly stipulated as follows: "The Alipur Zoological Garden will continue to get the services and facilities from the existing essential structures which fall within the demarcated in the annexed sketch map till such time when these essential struc tures i.e. hospital and operation theatre are reconstructed on the adjacent land occupied by the Zoological Garden. A copy of the sketch map is enclosed for ready reference. The India Hotels Co. Ltd. will find out in consultation with and with the concurrence of the Animal Husbandry and Veterinary Services Department of this Government and the authorities of the Alipore Zoological Garden the period of time required for reconstruction of the essential structures standing on the land proposed to be leased out to the said company. It will also let this department have in consultation with and with the concurrence of the Animal Hus bandry and Veterinary Services Department of this Government and the Alipore Zoological Garden a plan and estimate for reconstruction of the aforesaid essential structures on the land adjacent to the land proposed to be leased out, so that all these points are incorporated in the deed of lease between the said company and the State Government in this Department for the said land measuring four acres. "As agreed by the said company during the various meetings its representatives had with various departments of this Government, the company will either place the necessary fund in the hands of Animal Husbandry and Veterinary Services Department or the Zoo Garden authorities as the case may be, for reconstruction of the aforesaid essential structures or reconstruction the aforesaid essential structures under its own supervision to the satisfaction of the the Zoo Garden authorities or Animal Husbandry and Veterinary Services Department as the case may be, such funds will in either case be advanced or deemed to be advanced by the Company without interest to 251 be adjusted against dues of the State Govern ment in accordance with the terms and condi tions of the lease. " It is to be noted here that though the stipulation was that the cost of new construction was to be initially met by Taj Group of Hotels and later to be adjusted against the rent payable by Taj Group, the Taj Group later agreed to waive such reimbursement. We are told that a total sum of Rs. 30 lakhs has now been spent by Taj Group of Hotels in connection with the reconstruction. We are also told that an extent of 288 square meters out of the plot given to the Taj Group was carved out and given back for accommodating part of the reconstructed structures. Pursuant to the letter dated January 15, 1982 possession was given to Taj Group on January 16, 1982. Thereafter an expert Committee was consti tuted to supervise the construction Of alternative facili ties. At that stage the writ petition out of which the present appeal arises was filed on February 26, 1982. Ini tially the relief sought was primarily to restrain the Zoo authorities from giving effect to the two resolutions dated January 7, 1982 and January 11, 1982 to hand over the four acres to the Animal Husbandry Department of the Government. Subsequent to the filing of the Writ Petition, a lease deed was executed by the Taj Group of Hotels in favour of the Government. The writ petition was therefore, amended and a prayer for cancellation of the lease deed was added. First a learned Single Judge dismissed the Writ Petition. On appeal, a Division Bench of the High Court confirmed the judgment of the learned Single Judge. The original petitioners are now before us having obtained special leave under article 136 of the Constitution. Before adverting to the submission of the learned coun sel, it is necessary, at this juncture, to refer to certain correspondence. On April 23, 1982, Late Smt. Indira Gandhi, Prime Minister of India wrote to Shri Jyothi Basu, Chief Minister of West Bengal expressing the hope that he would not allow the Calcutta Zoo to suffer in any manner and would leave in intact. She drew the Chief Minister 's attention to the fact that 'apart from ' reduction in the already inadecu ate space for the Zoological Garden construction of a Five Star Multystoreyed Building would disturb the inmates and adversely affect birds migration which was a great attrac tion. ' She also mentioned that the expert Committee of the Indian Board for Wild Life also unanimously disapprove the idea. She queried whether the Hotel could not be located elsewhere. For one reason or the other the Prime Minister 's letter did not reach the Chief Minister for a considerable time. On August 21, 1982 the Chief Minister sent his reply pointing out that the 252 four acres of land were agreed to be relinquished by the Committee of management of the Zoological Garden on condi tion that alternate arrangements were made for shifting the existing structures which were necessary for the Zoo from the plot in question to the adjacent plot. The Chief Minis ter also mentioned that there appeared to be some misconcep tion that the plot in question was a part of the Zoo Garden. It was not so. It was outside the Zoological Garden and separated from it by a 80 100 feet road. The Chief Minister assured the Prime Minister that the existing structures would be relocated on the adjacent land and until that was done the Zoo would continue to get their services and facil ities from the existing structures. The Chief Minister further drew the attention of the Prime Minister to the fact that the hotel was likely to be a six storeyed one and would not be the only tail building near the Zoo. There were already a large number of high rise residential buildings around the Zoo. No one had raised any objection when those building were constituted. Another multistoreyed building which was going to be the largest in the locality was under construction near the Zoo for the Post and Telegraph Depart ment. There was no report that the existing multistoreyed buildings had any adverse affect on the migratory birds or the animals. The Chief Minister also pointed out that the lessee and their experts on wild life has assured them that in any case adequate precaution would be taken in regard to illumination of the hotel and the layout of the surrendings so that no disturbance would be caused to the flight path of the birds or animals. On August 30, 1982, Shri J.R.D. Tata wrote to the Prime Minister pointing out that their Hotel management had discussed the matter at length with represen tatives of the Wild Life fund who were satisfied that the proposed hotel would cause no disturbance to the birds. He had again gone thoroughly into the project with special reference to its possible impact on the birds or environment and had also visited Calcutta in that connection. He was satisfied that the project could not possibly disturb birds using the lake or interfere with their free movement. He gave his reasons as follows: "The four acre plot assigned to the Hotel Company by the State Government is not within the boundaries of the area belonging to the Zoological Gardens but on the other side of Belvedere Road, an important thoroughfare parallel to the main boundary of the zoo and some 700 feet from the main part of the lake. It forms part of an area belonging to the State Government which the Zoo authorities have upto now been allowed to use to look after sick animals of the Zoo and as labour quarters. It contains five small structures 253 including a cage and a small veterinary labo ratory or dispensary. The whole area is in sheckingly unkept condition, most of it cov ered by a single or spear grass and other wild growth. "The hotel is planned to be built away from the frontage of that plot of Belva dere Road and to be low rise structure, the Highest point of which will not exceed 75 feet. "Dr. B. Biswas, a renowned ormitholo gist, who recently retired as Professor Emeri tus of the Zoological Survey of India, whom the Taj Management consulted, confirmed that a 75 feet high building on the location would not worry birds landing on the lake or climb ing out of it. In fact, as the grounds of the zoo between the lake and Belvedre Road are covered with high trees, the climbing or descent angle which the birds have to negoti ate to get over the trees is already steeper that it will be between the lake and the proposed hotel. "As regards the objection that arise from the hotel itself from vehicular traffic to and from the hotel would disturb the birds, the hotel will be totally airconditioned so that no noise will emanate from it, while noise from the heavy traffic on Belvedere Road does not seem to have bothered the birds upto now. The occasional additional cars plying into and out of the hotel could therefore hardly trouble birds resting on the lake some 250 yards away. "Regarding the fear that lights emanating from the hotel or illuminate of signs of the hotel would disorient the birds and possibly cause them to hit the building the Management of the Hotel Company has taken a firm decision that there will be no bright lights or noon signs emanating from the hotel." Shri Tata further suggested that if necessary the Prime Minister could appoint a small advisory Committee consisting of Shri Pushpa Kumar, Director of the Hyderabad Zoo consid ered to be the finest zoo in India and one of the best in Asia, Dr. Biswas, Mrs. Anne Wright and the Chairman of the Managing Committee of the Zoological Garden to advise on the subject. On September 1, 1982, Smt. Indira Gandhi 254 wrote to Mr. Tata expressing her happiness that the Hotel was not going to upset the Zoo animals and welcoming his offer to help the State Government to improve the Zoo 's facilities. Dr. L.M. Singhvi, learned counsel for the appellants made the following submission before us; The Begumbari land was statutorily vested in the Managing Committee of the Zoological Garden and that the Committee could not be di vested by an executive decision without proper procedure being followed. The land could not be leased to the Taj Group of Hotels without inviting tenders from willing per sons and without complying with the requirements of para graphs 166 and 167 of the Land Manual. In taking a decision to take away the land from the Zoo and to lease the same to the Taj Group of Hotels, relevant considerations had been ignored and irrelevant considerations had been taken into account. The decision was taken without considering the impact on the Zoo and without consulting various interested authorities and institutions. Several authorities and insti tutions like the Director of the Zoo, the Managing Committee of the Zoo, the Public Undertakings Committee of West Ben gal, the Indian Wild Life Board, leading ornithologists of the country, etc. had disapproved the taking away of the land from the Zoo and leasing it to the Taj Group of Hotels. These persons and institutions had made several points, none of which had been taken into account by the Government before it took the decision to lease the land. The attention of the government was not focussed on these questions as evident from the fact that the Cabinet Memorandum hardly refers to any of the objections. The decision of the Govern ment was also wrong as it was apparently based on some assumptions which had been made without inquiry and verifi cation. The Chief Minister appeared to be under the impres sion that Dr. Biswas and others were not opposed to the proposal. That was not correct. The construction of a Five Star Hotel was too heavy a cost to pay for the environmental detriment caused by it. The terms on which the lease had been granted were detrimental to the public revenue. Shri Dipankar Gupta, learned counsel for the Taj Group of Hotels and Shri Gooptu learned counsel for the State of West Bengal argued that the former facilities available in the four arce plot of land were not displaced but were replaced and preserved by better facilities in the adjacent plot of land. This was not to the disadvantage, but to the advantage of the Zoo and its inmates. If the dumping ground and the burial ground had to be moved elsewhere, it was certainly more hygienic and a matter for gratification rather than for disgruntlement. Nor was there any obstruc tion to the flight of the visiting birds as the 255 hotel was to be constructed at a distance of 700 feet from the lake and was to rise to a maximum height of 75 feet, being a medium rise and not a high rise building. On the other hand there was going to be an environmental improve ment of the area as the dumping ground, burial ground and the semi dilapidated buildings were to be replaced by a hotel surrounded by broad roads and a very large number of trees proposed to be planted by the hotel management. The landscaping was also designed to improve the ecology and not to diminish it. There was no occassion for the Government to invite tenders since the establishment of a Five Star hotel was not something which could practicably be undertaken by anyone in that fashion. It could only be done by negotiation between the persons coming forward with proposals to estab lish Five Star Hotels. The terms of the lease were not to the financial disadvantage of the Government. The matter had been considered at great length by the Committees of Secre taries appointed by the Government as well as by WEBCON and they had recommended the acceptance the nett sales arrange ment in preference to the arrangement of rent based on land cost. We are unable to agree with the submission of Dr. Singhvi, learned counsel for the appellants, that the Gov ernment of West Bengal decided to grant the lease of the Begumbari land to the Taj Group of Hotels without applying their mind to very important relevant considerations. Much of the argument on this question was based on the assumption that the decision to lease the Begumbari land to the Taj Group of Hotels was taken on February 12, 1981. The decision taken by the Cabinet on February 12, 1981 was merely to enter into negotiations with the I.T.D.C. and the Taj Group of Hotels in regard to leasing the Hastings House property and the Begumbari land. Negotiations with the I.T.D.C. did not fructify while negotiations with the Taj Group of Hotels fruitioned. It was on September 10, 1981 that the Cabinet finally took the decision to lease the Begumbari land to the Taj Group. If there was any decision on February 12, 1981 in regard to leasing the Begumbari land it could at best to characterised as purely tentative and it could not by any stretch of imagination be called an irrevocable or irrevers ible decision in the sense that the Government was powerless to revoke it or that it had created any rights in anyone so as to entitle that person to question any reversal of the tentative decision. It was not a decision, if it was one, on which any right could be hung. At that stage, the Government of West Bengal appeared to have been on the search for two suitable plots of land which could be offered, one to the I.T.D.C. and the other to the Taj Group of Hotels for the construction of Five Star Hotels. The record 256 shows that these two chain hoteliers wer the only hoteliers and, they certainly were leading hoteliers of the country who had come forward to negotiate with the West Bengal Government regarding the construction of Five Star Hotels. The city of Calcutta was noticeably lacking in the 'Five Star Hotel amenity ' to attract tourist, local and foreign, and the Government of West Bengal was anxious to do its best to promote the tourist industry which it was hoped, would provided direct and indirect employment, earn foreign exchange and confer other economic benefits to the people of the State. It is immaterial whether the move come first from the Government or from the Taj Group. The Government was anxious that more Five Star Hotels should be established at Calcutta and the Taj Group was willing to establish one. They wanted a suitable plot for its construction. It was the suggestion for the All India Tourism Conference presided over by the Union Minister for Tourism that State Government should make plots in good locations available at concession al rates for construction of hotels in order to promote the Tourist Industry. It was in pursuance of this general all India policy and, in particular, to fulfill the feltneeds of Calcutta that the Government of West Bengal was looking out for a suitable plot in a good location. They were clearly not doing so at the behest of the Taj Group of Hotels. It does not require much imagination to say that location is among the most important factors to be considered when constructing a Five Star Hotel, particularly if it is to promote tourism. Obviously, one place is not as good as another and the place has to be carefully chosen. After excluding Salt Lake and after considering some properties in Chowringhee, the Government felt that two properties, the Hastings House property and the Begumbari property could be thought of as meeting the requirements. Since the Hastings House property, was not found acceptable by the Taj Group, it was decided to negotiate with them in regard to construc tion of a Five Star Hotel on the Begumbari land. We find it difficult to treat this decision to negotiate with the Taj Group in regard to construction of a Five Star Hotel on the Begumbari land as a final decision to part with the land. The prominent use to which the land was evidently put at the time was as a dumping ground for refuse and rubbish and for growing fodder for elephants. This was noticed and mentioned in the note prepared for the consideration of the Cabinet and it was suggested that separate provision would have to be made for them. Therefore, it is clear that it was not forgotten that if the land was to be allotted to the Taj Group, separate provision would have to be made for whatever use the land was being put to them. The Government was not unmindful of the interests and requirements of the Zoologi cal Garden though at that stage no detailed investigations had 257 apparently been made. The decision of the Government was not one of those mysterious decisions taken in the shrouded secrecy of Ministerial Chambers. It appears to have been taken openly with no attempt at secrecy. The decision, perhaps proposal would be a more appropriate word, was known to the Public Undertakings Committee in less then two days. They expressly refer to it in their report dated February 14, 1981 made two days after the Cabinet decision. By Twen ty first February it was public knowledge and news of the proposal was published in the daily newspapers. We have no evidence or any immediate or subsequent public protest but there were certain objections from some circles. Earlier we have extracted the report of Public Undertakings Committee. The substance of the objection of the Public Undertakings Committee was that the facilities available in the Begumbari land would be left unprovided for if the land was given to the proposed hotel. The available facilities were mentioned as Staff quarters, hospital for animals, burial ground for animals, fodder for elephants etc. It was also said that if the hospital and the burial ground were to be shifted to the main garden it would result in an unhealthy atmosphere for the animals and the zoo and would detract from the beauty of the Zoo Garden. The assumption of the Public Undertakings Committee that the hospital and the burial ground were to be shifted to the main garden was baseless, since, there was never any such proposal. A modern zoo hospital for animals has been constructed in the remaining extent of Begumbari land replacing the old hospital which was housed in a semi dilapidated building. Surely, there should be no complaint about it. It has also been proposed to shift the burial ground elsewhere. That would be most desirable from any point of view. Fodder for elephants should not again be considered to be problem. It would be stretching credibility to suggest that it is necessary to grow fodder in the Begum bari land to feed the elephants in the zoo. Fodder may be bought and brought from elsewhere. The Chief Town Planner who was deputed to visit the site at the request of the Secretary, Metropolitan Development Department and who visited the Zoo accompanied by the Director of the Zoo reported that 2 to 21/2 acres of land might be made avail able for the hotel. If four acres of land were given, he expressed the apprehension that the hospital and the dumping ground would have to be moved elsewhere. The hospital as we have already mentioned has since been conveniently and comfortably accommodated in a new building and the proposal is to move the dumping ground elsewhere. The Managing Com mittee of the Zoo also initially expressed its opposition to the proposal to construction hotel on land belonging to the Zoo. The Committee 's objections were two fold: (1) A muliti storied building in the vicinity of the Zoo will disturb the 258 animals and the ecological balance and will affect the bird migration (2) the land was already used for various pur poses, that is, fodder cultivation, burial ground for ani mals, hospital, operation theatre, quarantine area, post martom room and nursery. It would be impossible, according to the Committee to accommodate these essential services within the campus of the main Zoo. The objections of the Managing Committee were first brought to the notice of the Minister for Metropolitan Development who submitted a note to the Chief Minister pointing out that even if four acres of land out of the eight acres of Begumbari land was given to the Taj Group, there would still remain sufficient land for accommodating the existing facilities. The Chief Minis ter considered the objections and noted that if further facilities were necessary for the Zoo, Government would provide them. Thereafter the Managing Committee reversed its earlier stand. and agreed to the proposal on the assurance that adjacent land and matching grants would be given to the Zoo. We have earlier referred to the letter of the Director of the Zoo dated June 29, 1981 addressed to the Secretary, Animal Husbandary Department where he expressed his opposi tion to the proposal on the ground that the Zoo could not be run for a single day without the essential services which were being provided in the four acres of land proposed to be given for the hotel. This again, we notice, is based on the assumption that there was going to be no provision for those facilities once the hotel was constructed. We have already pointed out that this assumption is wholly incorrect. The letter of the Director of the Zoo was followed by a note by the Secretary of the Animal Husbandry Department suggesting that the practical problems of the Zoo should receive de tailed consideration and that the immediate transfer of the land to the hotel would mean discontinuance of the existing facilities. In the face of all this material, we do not see how it can be seriously contended that the interests and the requirements of the Zoo were totally ignored and not kept in mind when the decision was taken to lease the land to the Taj Group of Hotels. The Chief Minister 's attention was expressly drawn to the Managing Committee 's first Resolution expressing its opposition to the proposal to give the land for the construction of a hotel and detailing the objections and the Chief Minister had expressly noted that all facili ties necessary for the Zoo would be provided by the Govern ment. The assurance was also conveyed to the Managing Com mittee through the amissaries of the Chief Minister. There were inter departmental notings which we presume must also have been brought to the notice of the Chief Minister. We find it impossible to agree with the stricture that the Chief Minister turned a blind eye and a dent ear to the interests and the requirements of the Zoo and went about the question 259 of allotment of land to the Taj Group of Hotels determined to give the land to them and with a mind closed to every thing else. We cannot do so in the face of the assurance of the Chief Minister that facilities would be provided for the Zoo and if, as the saying goes, the proof of the pudding is in the eating, the Chief Minister 's assurances are found reflected in the lease executed by the Taj Group of Hotels in favour of the Government of West Bengal. In Clause 25 of the lease dead, it is expressly stipulated that the lessee shall reconstruct the structures now existing on the demised land (as found in the sketch accompanying the deed) on the adjacent plot of land and that the plan, design, lay out, estimates, etc. of the proposed new structures should be supplied by the Alipur Zoological Garden to the lessee. The reconstructed structures were required to be equal be the existing ones in floor area, but it was open to them to increase the floor area by agreement. The amount expended by the lessee towards the reconstruction of the structures was to be adjusted without interest against the dues of the lessee to the Government. The Alipore Zoological Garden authorities were required to vacate the existing structure within a period of six months which was also the period stipulated for raising the new constructions. We may add here that the Taj Group of Hotels have spent a sum of Rs. 30 lakhs towards the cost of the new constructions, but that they have waived their fight to claim reimbursement from the Government. An affidavit to that effect was also filed before the trial court. Thus we see that the contention of the appellants that the Government of West Bengal had no thought to spare for the facilities which were till then being provided in the Begumbari land is unsustainable. The learned counsel for the appellants urged that the second Cabinet Memorandum dated September 9, 1981 on which date the Government took the final decision to grant the lease made no mention of the needs and interests of the Zoo or the facilities provided in the Begumbari land for the Zoo. It is true that there is no reference to these matters in the second Cabinet Memorandum. But that is for the obvious reason that the matter had already been the subject matter of inter department discussion and communication. The Manag ing Committee of the Zoo which had initially opposed the proposal had also come round and had agreed to the proposal. It was, therefore, thought that there was no need to mention the needs and interests of the Zoo which were already well known and had also received consideration. It was suggested that the Zoo itself required to be expended and there was, therefore, no land which could be spared. The land allotted to the hotel was, as we have seen, not used for the main purpose of the 260 zoo and was not in fact part of the main Zoological Garden. The Government had already in mind a proposal to start a subsidiary Zoo in an extent of about 200 acres of land in the outskirts of Calcutta. This has been mentioned in the various notings made from time to time. We have no doubt that the Government was quite alive to the need for expan sion of the zoo when they decided to grant four acres of Begumbari land which was not used for the main purpose of the zoo for the construction of a Five Star hotel. The next question is whether the Government was alive to the ecological considerations, particularly to the question of the migratory birds when they took the decision of lease the land to the Taj Group of Hotels. Again sustenance to the argument of the learned counsel for the appellants is sought to be drawn from the circumstance that neither of the two Cabinet Memoranda dated January 7, 1981 and September 9, 1981 referred to the migratory birds. It is wrong to think that everything that is not mentioned in the Cabinet Memo randa did not receive consideration by the Government. We must remember that the process of choosing and allotting the land to the Taj Group of Hotels took merely two years, during the course of which objections of various kinds were raised from time to time. It was not necessary that every one of these objections should have been mentioned and considered in each of the Cabinet Memoranda. The question of the migratory birds was first raised in the resolution of the Managing Committee dated June 11, 1981. This resolution was forwarded to the Chief Minister and considered by his as evident from the note of the Chief Minister and the suse quent reversal of the Managing Committee 's resolution at the instance of the Chief Minster and on his assurances. The Chief Minister was certainly aware of the question of the migratory birds before it was finally decided to allot the Begumbari land to the Taj Group of Hotels. That the Govern ment was aware of the dissension based on the alleged ob struction likely to be caused by a mulit storeyed building to the flight of the migratory birds appears from the letter of the Chief Minister to the Prime Minister. In this letter, the Chief Minister pointed out that there were already in existence a number of multistoreyed buildings all around the Zoological Garden, but there was no report that they had any adverse effect on the migratory birds or the animals. He also pointed out that all precautions would be taken in the matter of illumination of the hotel and lay out of the surroundings so that no disturbance would be caused to the flight path of the birds or animals. Shri J.R.D. Tata, on behalf of the Taj Group of Hotels, also wrote to the Prime Minister assuring her that the hotel management had dis cussed the matter at length with a representatives of the Wild 261 Life Fund who, after discussion, had been satisfied that the proposed hotel would cause no disturbance to the birds. He further assured her that he had himself gone thoroughly into the project with special reference to the possible impace on the birds and the environment and had satisfied himself that project would not caused any disturbance to the birds or their free movement. The reasons given by him have already been extracted earlier by us from his letter. He pointed out that the four acre plot was not within the main Zoological Garden, but was separated from it by the Belvedere Road which was an important thoroughfare in the city. It was about 700 feet from the main part of the lake. The hotel was porposed to be built away from the frontage of the plot in Belvedere Road and was to be a low rise structure, the highest point of which would not exceed 75 feet. This was mentioned apparently to indicate that the building would not come within the trajectory of the birds. He mentioned that Dr. Biswas, a renowned ornithologist had also been consulted by the Taj Management and he had also confirmed that a 75 feet building would not interfere with the landing or climb ing out of the birds from the lake. He further mentioned that the grounds of the Zoo between the lake and the Belve dere Road were covered with tall trees and that the birds negotiating the trees would have to fly at the steeper angle than it would be necessary to negotiate the proposed hotel. The vehicular traffic on Belvedere Road which was also heavy did not bother the birds and the slight increase of the vehicular traffic consequent on the construction of the hotel was also not likely to bother them either. It was also pointed out that particular care would be taken in the matter of illumination of the hotel so that bright lights or neor signs emanating from the hotel would not disturb the birds and animals. The learned counsel for the appellants drew our atten tion to a letter written by Dr. Biswas to the Statesman dated August 3, 1982 in which he disowned having made any statement to a press correspondent by name, Bachi J Karkaria that the hotel posed no threat at all to the migratory flight path. He explained that what he meant to say was that migratory birds visiting the Zoo lake choose places to the east and south east of the lake for nocturnal feeding and that their flight to the nocturnal feeding grounds in the marshes would be affected, if the proposed hotel was a high rise building. Apart from the fact that he did not mention what he had in mind when he spoke of a high rise building, the point made by Shri J.R.D. Tata in his letter to the Prime Minister that birds flying in or flying out had to fly at a very steep angle while negotiating the tall trees between the lake and Belvedere Road, an angle much steeper than the angle at which they would have to fly 262 to negotiate a 75 feet tall building, such as, the proposed hotel, remains unanswered. Be it noted that Belvedere Road is to the east of the lake. We may also note here a point made by Dr. Biswas in his letter to the Statesman that there were possible health hazards in the re location of the Zoo hospital, quarantine area and post mortem room in the area adjacent to the staff quarters. He is no expert on the subject of public health and no one has complained that there would be any hazard to the health of those living in the staff quarters by the re location Of the hospital, etc. We are satisfied that the question of obstruction which may be caused to migratory birds did not go unnoticed by the Government before the deciSion to lease the land was taken and we are also satisfied that the building of the proposed hotel is not likely to cause any obstruction to the flight path of the migratory birds. We may refer here to the resolution of the Wild Life Board to which a reference was made by the Prime Minister in her letter to the Chief Minister. Our attention was drawn by the learned counsel for appellants to the presence of two renowned experts at the meeting of the Wild Life Fund on September 25, 1981. They were Shri Pushp Kumar, Director of the Hyderabad Zoo and Mrs. Anne Wright. The subject which was discussed by the Expert Committee on September 25, 1981 was "Construction of a Five Star Hotel within the premises of Alipore Zoo in Calcutta." The proceedings of the Commit tee were recorded as follows: "Director, Geological Survey of India ex plained the whole matter and pointed out the utter impropriety of the decision of the Government of West Bengal to construct a FiveStar Hotel within the premises of Alipore Zoo in Calcutta. The Committee agreed fully with this view and desired that this matter should be taken up immediately by the Central Government with the State Government." This record of the proceedings shows that the Experts Com mittee of the Wild Life Fund was proceeding on the fundamen tal wrong assumption that the hotel was proposed to be constructed "within the premises of Alipore Zoo". The reso lution was justified on the assumed premises but unfortu nately it was rounded on a wrong premises. Later Mrs. Anne Wright appeared to be satisfied with what was finally done as evident from her letter dated November 19, 1983 to Mr. J.R.D. Tata, a copy of which has been placed before us. Bearing in mind the proper approach that we have to make when 263 questions of ecology and environment are raised, an approach which we have mentioned at the outset, we are satisfied that the facts and circumstances brought out by the appellants do not justify an inference that the construction of the pro posed hotel in the Begumbari land would interfere in any manner with the animals in the Zoo and the birds arriving at the Zoo or otherwise disturb the ecology: The proposed hotel is a Garden hotel and there is perhaps every chance of the ecology and environment improving as a result of planting numerous trees all around the proposed hotel and the removal of the burial ground and dumping ground for rubbish. Dr. Singhvi cited before us the well known decisions of this Court in Rohtas Industries Ltd. vs S.D. Agarwal, ; ; Barium Chemicals vs A.G. Rana, ; and Mohinder Singh Gill vs Central Election Commission, to urge that even an administrative decision must be arrived at after taking into account all relevant considera tions and eschewing irrelevant considerations and that the reasons for an order must find a place in the order itself and those reasons cannot be supplemented later by fresh reasons in the shape of an affidavit or otherwise. The submission was that neither the Cabinet memorandum of Janu ary 7, 1981 nor the Cabinet Memorandum of September 9, 1981 revealed that relevant considerations had been taken into account. What was not said in either of the Cabinet Memoran da, it was said, could not later be supplemented by consid erations which were never present to the mind of the deci sion making authority. We do not agree with the submission of Dr. Singhvi. The proposition that a decision must be arrived at after taking into account all relevant considera tions. eschewing all irrelevant considerations cannot for a moment be doubted. We have already pointed out that relevant considerations were not ignored and, indeed, were taken into account by the Government of West Bengal. It is not one of those cases where the evidence is first gathered and a decision is later arrived at one fine morning and the deci sion is incorporated in a reasoned order. This is a case where discussions have necessarily to stretch over a long period of time. Several factors have to be independently and separately weighed and considered. This is a case where the decision and the reasons for the decisions can only be gathered by looking at the entire course of events and circumstances stretching over the period from the initiation of the proposal to the taking of the final decision. It is important to note that unlike Mohinder Singh Gill 's case where that Court was dealing with a Statutory Order made by a statutory functionary who could not therefore, be allowed to supplement the grounds of this order by later explana tions, the present is a 264 case where neither a statutory functions nor a statutory functionary is involved but the transaction bears a commer cial though public character which can only be settled after protracted discussion, clarification and consultation with all interested persons. The principle of Mohinder Singh Gill 's case has no application to the factual situation here. It was said that the principles of Natural Justice had not been observed and that those who are most interested in the Zoological Garden were not heard in the matter before the decision was taken. We do not think that anyone can have a justifiable grievance on this score. The proposal to lease the Begumbari land was public knowledge as we have seen. Such as those as were really interested in the matter like the Managing Committee of the Zoological Garden and the Director of the Zoo did have their say in the matter. The Public Undertakings Committee in its report discussed the matter and invited the Government 's attention to various factors. The matter was further discussed on the floor of the Legislative Assembly. It is impossible to agree with the submission that there was any failure to observe principles of Natural Justice. One of the submissions of Dr. Singhvi, learned counsel for the appellants, was that the Bengal Public Parks Act, 1904 vested the Begumbari land in the Managing Committee of the Zoological Garden and that what had become statutorily vested in the Committee could not be divested by an execu tive fiat. We agree that an Act of the Legislature cannot be undone by a mere act of the executive. But what is the position here? Did the Act deal with the land at all? The Begumbari land was given to the Zoological Garden by the Government in 1880. We do not have the original grant before us. The entire file of the Government relating to the Begum bari land was produced before the Trial Court without any attempt at withholding any document. The records were before the High Court and there are now before us two copies of a letter written on July 7, 1880 by the Assistant Secretary to the Government of Bengal in the Public Works Department to Mr. L. Schwandler, Honorary Secretary, Zoological Garden conveying to him the sanction of the Lt. Governor for the transfer of the land to the east of Belvedere Road, known as Begumbari land to the charge of the Committee of the Zoolog ical Garden on the terms agreed to by the Committee in their letter dated April 23rd. The conditions were mentioned as: "1st. That the land is to be used for the purpose of acclimatization only. 265 2nd. That Oarnivors are not to be kept on any part of it, on any account. That the grounds are to be kept clear and neat. That the land must be restored to the Government if hereafter required. The Zoological Garden Committee being reimbursed for any expenditure they may have incurred in building there." Dr. Singhvi questioned the authenticity of the documents and also objected to their reception in evidence on the ground that no foundation had been laid for the reception of sec ondary evidence. We must straightaway say that no objection was taken either before the single judge or before the Division Bench either to the authenticity or to the admissi bility of the documents. We do not for a moment doubt the genuineness of the two documents which have been produced from old official records. What is important is that the Managing Committee of the Zoological Garden never doubted the authenticity of the documents nor was any question ever raised to suggest that the terms of the grant were other than those mentioned in the letters. We are satisfied that for the purposes of the present case, we will be justified in proceeding on the basis that the land which was undoubt edly Government land, to start with, was given to the Zoo logical Garden upon the terms set out in the two letters. One of the terms was that the land should be restored to the Government whenever required. Another term was that the Zoological Garden Committee would be suitably compensated for any expenditure incurred by it on the construction of any building on the land. The further submission of Dr. Singhvi was that whatever might have been the terms of the grant in favour of the Zoological Garden, the Bengal Parks Act, 1904, vested the land in favour of the Zoological Garden and there was no way by which the Government could divest the Zoological Garden of the land except by a procedure known to the law such as acquisition or requisition. We are unable to find any sub stance in the argument. The Bengal Parks Act, 1904 was enacted "to protect public parks and gardens in Bengal from injury and to secure the public from molestation annoyance while resorting to such parks and gardens. " The Act was made applicable to the public parks and gardens mentioned in the schedule. The Zoological Garden, Alipore was one such park. Section 3 unables the State Government, by notification in the official Gazette "to declare that any specified land, bridge or pontoon shall, for the purposes of this Act, be deemed to be included 266 in any park. " Section 4 enables the Government to make rules for the management, and preservation of any park, and for regulating the use thereof by the public. In particular, the rules may regulate the admission into the park of persons, animals and vehicles, prohibit the causing of any manner of injury to the trees, plants, monuments, furniture etc. in the park, prohibit shooting, bird testing etc. prohibit or regulate fishing or boating, prohibit bathing, or the pollu tion of water by any other means, prohibit the grazing of horses or ponies, prohibit the teasing or annoying of ani mals or birds kept in the park, prohibit the commission of any nuisance, or the molestation or annoyance of any person resorting to the park etc. From the Preamble and the provisions of the Act, it is clear that the Act is intended to protect the inmates and the property of the park from injury by persons resorting to the park and to protect persons resorting to the park from molestation or annoyance by others. The Act is aimed at protecting the park and its visitiors from injury and annoyance by despoilers and ma rauders. The Act has nothing whatever to do with the vesting of any property in the parks. There is infact no provision which deals with the vesting of property in a park. Section 3 enables the State Government to extend by a notification, the boundaries of a park but that can only be for the pur poses of the Act and not for the purpose of vesting or creating any title in a property. If a piece of adjacent land, for example, is taken on lease for a specified number of years by the park and included in the park by a notifica tion under sec. 3, it does not mean that the land has become the property of the park; it only means that the various things, the doing of which is regulated or prohibited by the Act and the rules will not be done or will be regulated on the adjacent land also. We do not think that the provisions of the Bengal Public Parks Act have any relevance to the question of the power of the Government to transfer the Begumbari land to the Taj Group of Hotels. One of the arguments strenuously pressed by Dr. Singhvi was that, even if it was assumed that the Government had the power to transfer the land, the Government did not have the power to deal with the land in any manner that they liked. Certain norms and procedures had to be observed and nothing could be done which would result in loss to the public exchequer. The Bengal Land Manual prescribed the procedure to be followed in the matter of transferring land belonging to the Government. That procedure had to be observed. In any case, it was necessary either to held a public auction or to invite tenders atleast from the limited class of persons interested in utilising the land for the purpose for which the land was proposed to be transferred. The learned 267 counsel invited our attention to several decisions of the court: Rash Bihari Panda vs State of Orissa, ; ; R.D. Shetty vs International Airport Authority, ; ; Kasturi Lal Laxmi Reddy vs State of Jammu & Kashmir, ; ; State of Haryana vs Jage Ram, ; Ram & Shyam Co. vs State of Haryana, and Chenchu Rami Reddy vs Government of Andhra Pradesh, [1986] 3 SCC 391. The West Bengal Land Management Manual, 1977 is pub lished under the authority of the Board of Revenue, West Bengal. Like similar volumes going by whatever name, pub lished by the Boards of Revenue of other States, the West Bengal Land Management Manual also is compendium of (1) statutes and rules framed either by the Government or by the Board of Revenue pursuant to a statutory power conferred on them; (2) Orders issued by the Government from time to time; and (3) Orders, circulars, instructions and memoranda issued by the Board of Revenue from time to time. All these are arranged in such a manner that reference to them by the officials of the Revenue hierarchy is easy. Statutes and statutory orders have, no doubt, to be obeyed. It does not mean that other orders, instructions, etc. may be departed from in an individual case, if applicable to the facts. They are not to be ignored until amended. The Government or the Board may have the power the amend these orders and instruc tions, but nonetheless they must be obeyed so long as they are in force and are applicable. The appellants invited our attention to paragraphs 165, 166 and 167 of the Land Management Manual and urged that the rules laid down by the provisions have been ignored by the Government of West Bengal. These provisions of the Land Management Manual do not appear to have anything to do with the transfer and use of the land in the manner proposed, in which the State also has a vital stake apart from the mere raising of revenue for the State. Paragraphs 165, 166 and 167 deal with simple cases of creation of non agricultural tenancies by way of long term leases. They generally deal with land which is at the disposal of the Government as waste or surplus land and are intended to secure the best revenue for the State. They do not deal with cases of trans fer of land for a specific socio economic object, where, the securing of immediate revenue is not the principal object but other special and economic benefits are sought. In pursuing the socio economic objective is the State bound to 268 invite tenders or held a public auction? To answer this question, we may refer to the cases cited at the Bar. In Rash Bihari Panda vs State of Orissa (supra) the Government offered the option to purchase kendu leaves to certain old contractors on the same terms as in the previous year. Realising that the scheme of offering to renew con tracts with the old licences on the same terms was open to objection, the Government changed its policy and formulated a new scheme by which offers were invited from intending purchasers of Kendu leaves but the invitation was restricted to these individuals who had carried out the contracts in the previous year without default and to the satisfaction of the Government. The Court held that the right to make offers being open to a limited class of persons, it effectively shut out all other persons carrying on trade in Kendu leaves and also new entrants into that business. It was, therefore, ex facie discriminatory and imposed unreasonable restric tions upon the right of persons other than existing contrac tors to carry on business. It is to be seen that in the present case no one has come forward alleging that he has been discriminated against and his fundamental right to carry on business had been affected. The very nature of the construction and establishment of a Five Star Hotel is indicative of a requirement of expertise and sound financial position on the part of those who might offer to construct and establish them. The decision taken by the All India Tourism Council was an open decision well known to everyone in the hotel business. Yet no one except the I.T.D.C. and the Taj Group of Hotels had come forward with any proposal. We have it in the record that the Oberoi Group of Hotels already had a Five Star Hotel in Calcutta while the Welcome Group of Hotels were making their own Private negotiations and arrangements for establishing a Five Star Hotel. In the circumstances, particularly in the absence of any leading hoteliers coming forward, the Government of West Bengal was perfectly justified in entering into negotiations with the I.T.D.C. and the Taj Group of Hotels instead of inviting tenders. In R.D. Shetty vs International Airport Authority (supra). Bhagwatti, J. speaking for the Court observed that the activities of the Government had a public element and if it entered into any contract, it must do so fairly without discrimination and without unfair procedure. Whenever the Government dealt with the public, whether by way of giving jobs or entering into contracts or issuing quotas or li cences or granting other forms of larges, the Government could not act arbitrarily at its sweet will but must act in conformity with standards or norms without being arbitrary, irrational or irrelevant. If 269 the Government departed from such standard or norm in any particular case or cases its action was liable to be struck down unless it could be shown that the departure was not arbitrary but was based on some valid principle which was not irrational, unreasonable or dicriminatory. In the present case as earlier explained by us direct negotiation with these who had come forward with proposals to construct Five Star Hotels was without doubt the most reasonable and rational way of proceeding in the matter rather than invit ing tenders or holding public auction. There was nothing discrminatory in the procedure adopted since no other lead ing hotlier had shown any inclination to come forward. Tenders and Auction were most impractical in the circum stances. In Kasturilal Lakshmi Reddy vs State of Jammu and Kash mir (supra), Bhagwati, J. again, speaking for the Court reiterated what had said earlier in R.D. Shetty vs Interna tional Airport Authority (supra). He proceeded to say, "The Government, therefore, cannot, for exam ple, give a contract or sell or lease out its property for a considerations less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some Directive Principle is sought to be advanced on implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to those considerations only illustratively, for there may be an infinite variety of con siderations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the Court would have to decide whether the action of the Government is reasonable and in public interest. But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the Governmental action is reasonable and in public interest and it is for the party challenging its valid ity to show that is wanting in reasonableness or is not 270 informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the Court by proper and ade quate material. The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. " With reference to the particular facts of the case, it was stated, "The argument of the petitioners was that at the auctions held in December, 1978, January 1979 and April 1979, the price of resin rea lised was as much as Rs. 484, Rs. 520 and Rs. 700 per quintal respectively and when the market price was so high, it was improper and contrary to public interest on the part of the state to sell resin to the second respondents at the rate of Rs. 320 per quintal under the impugned order. This argument, plausible though it may seem is fallacious because it does not take into account the policy of the state not to allow export of resin outside its territories but to allot in only for use in factories set up within the State. It is obvious that, in view of this policy, no resin would be auctioned by the State and there would be no question of sale of resin in the open market and in this situation, it would be totally irrelevant to import the concept of market price with reference to which the adequacy of the price charged by the State to the second respondents could be judged. If the State were simply selling resin, there can be no doubt that the State must endeavour to obtain the highest price subject, of course, to any other over riding considerations of public interest and in that event, its action in giving resin to a private individual at a lesser price would be arbitrary and contrary to public interest. But, where the State has, as a matter of policy, stopped selling resin to outsiders and decided to allot it only to industries set up within the State for the purpose of encouraging industrialisation, there can be no scope for 271 complaint that the State is giving resin at a lesser price than that which could be obtained in the open market. The yardstick of price in the open market would be wholly inept, because in view of the State Policy, there would be no question of any resin being sold in the open market. the object of the State in such a case is not to earn revenue from sale of resin, but to promote the setting up of industries within the State." And again, "If the State were giving tapping contract simpliciter there can be no doubt that the State would have to auction or invite tenders for securing the highest price, subject, of course, to any other relevant overriding considerations of public weal or interest. but in a case like this where the State is allo cating resources such as water, power raw materials etc. for the purpose of encouraging setting up of industries within the State, we do not think the State is bound to advertise and tell the people that it wants a particular industry to be set up within the State and invite those interested to come up with pro posals for the purpose. The State may choose to do so, if it thinks fit and in a given situation, it may even turn to be advantageous for the State to do so, but if any private party comes before the State and offers to set up an industry, the State would not be commit ting breach of any constitutional or legal obligation if it negotiates with such party and agrees to provide resources and other facilities for the purpose of setting up the industry. " The observations of the Court in the light of the facts therein appear to fully justify the action of the West Bengal Government in the present case not inviting tenders or not holding public auction. In State of Haryana vs Jage Ram (supra), it was held that it was not open to the Excise Authorities to pick and choose a few persons only as the recipients of the notice of reauc tion. There was no explanation as to how they came to be chosen and what their status and standing in the trade were to justify the choice. The conduct of the authorities was thought not above suspicion. We have already explained why the choice of the Taj Group of Hotels must be held to be beyond suspicion and above reproach. 272 In Ram & Shyam Company vs State of Haryana (supra) dealing with the question of disposal of State property Desai, J. speaking for the court said, "Let us put into focus the clearly demarcated approach that distinguishes the use and dis posal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public inter est. The marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song. On the other hand, disposal of public property par takes the character of a trust in that in its disposal there should be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purpose viz. the welfare State may be able to expand its beneficial activities by the avail ability of larger funds. This is subject to one important limitation that socialist property may be disposed at the price lower than the market price or even for a token price to achieve some defined constitutionally recongnised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. But where disposal is for aug mentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market econo my. An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as per sonal attachment, or affinity, kinship, empa thy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demure. A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more so when it proclaims to be a socialist State dedicated to eradica tion of poverty. All its attempt must be to obtain the best available price while dispos ing of its property because the greater the revenue, the welfare activities will get a fillip and shot in the arm. Financial con straint may weaken the tempo of activities. Such an 273 approach serves the larger public purpose of expanding welfare activities primarily for which Constitution envisages the setting up of a welfare State." In Chenchu Rami Reddy vs Government of Andhra Pradesh (supra) it was observed that public officials entrusted with the care of 'public property ' were required to show exem plary vigilance. The Court indicated that the best method of disposal of such property was by public auction and not by private negotiation. That was a case where land belonging to a Math was sold by private trenty for Rs. 20 lakhs when there were people ready to purchase the land for Rs. 80 lakhs. The difference between sale of land and other readily saleable commodities and the allotment of land for estab lishing a modern Five Star Hotel of International standard is so obvious as to need no more explanation. On a consideration of the relevant cases cited at the bar the following propositions may be taken as well estab lished. State owned or public owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the depar ture must be rational and should not be suggestive of dis crimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appear ance of bias. jobbery or nepotism. Applying these tests, we find it impossible to hold that the Government of West Bengal, did not act with probity in not inviting tenders or in not holding a public auction but negotiating straightaway at arm 's length with the Taj Group of Hotels. , The last and final submission of the learned counsel for the appellants relates to the commercial and financial aspects of the lease. According to the learned counsel, the 'nett sales ' method of calculating the compensation payable to the Government for the lease of the land had totally sacrificed the State 's interests. He submits that if the market value of the land had been fairly determined and the rent had been stipulated at a percentage of that value, the return to the Government would have been much higher. We do not think that there is any 274 basis for any genuine criticism. The 'nett sales ' method appears to be a fairly well known method adopted in similar situations. This was what was recommended by WEBCON, the consulting agency of the West Bengal Government which sub mitted a detailed report on the subject. This was also the recommendation of the Committee of Secretaries who went into the matter in depth. Even to lay persons like us who are no financial experts, it appears that the 'nett sales ' method does and the rent based on market value method does not take into account the appreciating value of land, the inflation ary tendency of prices and the profit orientation. Even on a prima facie, there appears to be nothing wrong or objection able in the 'nett sales ' method. It is profit oriented and appears to be in the best interests of the Government of West Bengal. On a consideration of all the facts and circumstances of the case, we are satisfied that the Government of West Bengal acted perfectly bona fide in granting the lease of Begumbari land to the Taj Group of Hotels for the construc tion of a Five Star hotel in Calcutta. The Government of West Bengal did not fail to take into account any relevant consideration. Its action was not against the interests of the Zoological Garden or not in the best interests of the animal inmates of the zoo or migrant birds visiting the zoo. The financial interests of the State were in no way sacri ficed either by not inviting tenders or holding a public auction or by adopting the 'nett sales ' method. In the result, the judgments of the learned single judge and the Division Bench of the Calcutta High Court are affirmed and the appeal is dismissed. In the circumstances of the case, we do not desire to award any costs. KHALID, J: The tenacity with which this expensive public interest litigation was pursued by the petitioners, before the learned Single Judge and a Division Bench of the Calcut ta High Court and before this Court is commendable. But, after hearing the lengthy arguments advanced, I ask myself the question whether this exercise could not have been avoided. Originally the writ petition was filed by five persons. The supporting affidavit to the writ petition was sworn to by the first petitioner who described himself as a trade unionist. Petitioner No. 2 & 3 are the life members of the Zoo and the remaining two, bona fide residents of Greater Calcutta and lovers of wild life. The same five persons figured as appellants before the Division Bench. However, before this Court there are only two petitioners, the 1st and the 2nd in the writ petition. 275 3rd and 4th petitioners figure here as respondents 6th and 7th. The 5th petitioner does not figure in the array of parties. My learned brother has considered the facts in detail and the questions of law relevant for the purpose of this appeal. I fully agree with his conclusions. This short tail piece is with a purpose. This case goes by the name "Public Interest Litigation. " I wish to delineate the parameters of public interest litigation concisely, against the background of the facts of this case, so that this salutory type of litigation does not lose its credibility. Today public spirited litigants rush to Course to file cases in profusion under this attractive name. They must inspire confidence in Courts and among the public. They must be above suspicious. See the facts of this case and end result. The concern of the appellants has been to preserve the Zoo, to protect and encourage the migratory birds, to keep their trajectory clear, to preserve their diurnal feed and nocturnal habitat and to protect the Zoo. To serve this purpose they want to prevent a 5 Star Hotel coming up in its vicinity in_four acres land belonging to the Zoo and thus to see that this land is not lost to the Zoo. The litigation has been pending from 1982 and in the bargin what has hap pened is described by the learned Trial Judge as follows, in paragraph 130 of his Judgment: "130. Prayer for stay of the operation of this order is rejected. Because of the pendency of this matter, valuable time has been lost and if further time is lost, the respondent No. 5 may not have any further interest in the matter. They have suffered sufficient loss and the Govt. will also suffer loss. The public has also suffered. Accordingly, I am not inclined to stay this matter any further. I ought to point out further that as the peti tioners obtained the interim order, obviously they were not interested in an early hearing of this matter and until a few months back no step was taken to have this matter heard. If a stay is granted, similar situation will fol low. " This public interest:litigation takes its birth, perhaps from the righteous indignation of the petitioners, against the State Government at their bartering away of four acres of land belonging to the Zoo to the Taj Group of Hotels. The writ petition is mainly based on the ground that the deci sion of the Government is arbitrary. The question to be answered is whether this accusation can be justified. On a 276 perusal of the records I find that the State Government had made available to the Court all the relevant documents so as to satisfy the Court about the propriety of its action. This is how the trial Judge deals about this aspect of the case: "4. Before I deal with the contention of the parties before me I ought to point out one thing. In this case, ultimately the hearing was not confined only in respect of the mate rials specified .in the petition and affida vits or annexure to the same, but the submis sions were based on the further documents and files produced before me mainly by the State and also some documents by the private re spondent being respondent No. 5.1 ought to point out that this is one of the exceptional cases where the State has made available to this Court all documents in connection with the proposal for lending over a piece of the State Government land to respondent No. 5 to enable them to construct a 5 star hotel in Calcutta. The State Government has produced before me the original files, including those containing the notes and Cabinet Memorandum for my inspection, the facts which I shall set out herein are gathered from these records and files produced before me, though most of them do not find place in the affidavits . . . " The two portions of Judgment extracted above show that things: one, the petitioners did not take any steps to get the matter heard expeditiously, after they obtained an interim order to get all the work stopped; two, that the State Government made available to the Court all the materi als to prove that its decision was taken after mature con sideration at all levels. The appellants failed before the learned Trial Judge on all the points raised by them. After an exhaustive discus sion of the various aspects of the case, the learned Trial Judge dismissed the petition. The only ground on which the appellants succeeded before the Trial Judge was on locus standi. This preliminary objection of the Hotel Group was rejected. The matter was taken in appeal. The Division Bench in an equally reasoned Judgment, adverting to all the factual aspects of the case, upheld the Judgment of the learned Trial Judge and dismissed the appeal. 277 One redeeming factor in this case is the total absence of any allegation of malafides against the Government by the petitioners. This is how the Division Bench deals with aspect of the case in its Judgment: "The appellants before us have impunged the State Government 's decision to grant aforesaid four acres of land out of Begumbari Compound to India Hotel Co. Ltd., mainly on the ground that the same was unreasonable and arbitrary. The State Government did not apply its mind to relevant facts before disposing of the said valuable lands in discharge of the public interest. In their writ petition or in course of their submissions before us the appellants did not try to make out a case of personal malice against the State Government or its Ministers and Civil Servants . . " The Division Bench held that the decision taken was neither unreasonable nor arbitrary and that taking away of four acres of land from the Zoo was not detrimental to public interest. One would have thought that the concurrent decisions of the learned Single Judge and the Division Bench, on the facts of the case, would have persuaded the appellants, to rest content with the litigation by accepting the verdicts so given. They could have moved the Government or taken other steps to expedite the starting of an additional Zoo with a larger extent which the Government promised. But the appellants felt that public interest would be served better by moving this Court for reconsideration of the factual details. When the matter came up before this Court, this Court gave priority to this case despite the huge pendency of cases before it, to see whether public interest was really in peril or not. During the course of the arguments, we soared high along with the migratory birds into the realms of ecology, envi ronmental protection, public interest, natural justice, arbitrariness, eminent domain and the like and ultimately, from those ethereal regions descended on the terraferma faced with the reality that this case is devoid of any merits and has only to be dismissed. That is why I prefaced this Judgment with the observation that this was an avoid able exercise. The approach of the Taj Group Hotels in this case has been creditably fair. They have given all the assurances necessary to preserve the Zoo and its inmates. They were willing to afford all the 278 requisite safeguards. In the place of a dilapidated hospi tal, operation theater and the like, they constructed build ings anew at a cost of Rs.30 lakhs which amount they were entitled to be reimbursed under clause 25 of the lease, which they voluntarily gave up. In addition to this, they surrendered an area of 288 sq. mtrs. from the land allotted to them to the Zoo. They agreed to build not the usual skyscrapper hotel, but a garden hotel, the height of which would not go beyond 75 feet, despite the fact that there existed in the surrounding area buildings which were very high. This was done to keep free the route of the flight of the birds. They also agreed to have subdued light in ' the hotel, again in the interest of the birds. They agreed to keep the surroundings of the hotel and the flora well main tained. We were told that already 30000 plants were getting ready to adorn the area to be occupied by them. Regarding the commercial and financial aspects of the lease also there is nothing secretive though they came in for sharp criticism at the hands of the appellants before us. This criticism again, according to me, is unfounded. The learned counsel for the Taj Group made available to us, the method adopted. The method adopted is the nett sales method of calculating the compensation paid. This is a fairly well known method adopted in such situations. This method was also subject to criticism by the appellants ' counsel and he in support of his submission handed over to us a calcula tion, which according to me, betrays unawareness with the method of calculation to be adopted in similar cases. The calculation given to us so far as its arithmetic is con cerned is correct. That is this. An amount of 4 crores, if deposited in bank, at a particular rate of compound inter est, for 99 years, would swell to an astronomical figure. This calculation is relevant only when you think of selling the land and investing the sale proceeds in a bank. This calculation conveniently forgets that what is involved here is not the sale of the land but a lease by the Government, as a policy decision to the hotel group to start a Five Star Hotel, which according to the Government was a prime need to the city of Calcutta. The calculation handed over has no bearing to the facts of this case at all. A deal like this cannot be concluded by public auction. Here, we do not have a case, again, sale of a Government property. Therefore, public auction has necessarily to be ruled out. Only Taj Group of Hotels came forward with an offer to start the hotel. The lease was the culmination after a long, elaborate and open procedure with nothing to hide which therefore cannot justifiably be subject to ad verse criticism. 279 My purpose in adding these few lines of my own is to highlight the need for restraint on the part of the public interest litigants when they move Courts. Public interest litigation has now come to stay. But one is led to think that it poses a threat to courts and public alike. Such cases are now filed without any rhyme or reason. It is, therefore, necessary to lay down clear guide lines and to outline the correct parameters for entertainment of such petitions. If courts do not restrict the free flow of such cases in the name of Public Interest Litigations, the tradi tional litigation will suffer and the courts of law, instead of dispensing justice, will have to take upon themselves administrative and executive functions. I should not be understood to say that traditional litigation should stay put. They have to be tackled by other effective methods, like. decentralising the judicial system and entrusting majority of traditional litigation to village courts and Lok Adalats without the usual populist stance and by a complete restructuring of the procedural law which is the villain in delaying disposal of cases. It is only when courts are apprised of gross violation of fundamental rights by a group or a class action or when basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience that the courts, especially this Court, should leave aside procedural shackles and hear such petitions and extend its jurisdiction under all available provisions for remedying the hardships and miseries of the needy, the under dog and the neglected. I will be second to none in extending help when such help is required. But this does not mean that the doors of this Court are always open for anyone to walk in. It is necessary to have some self imposed restrain of public interest liti gants. Ultimately, by the dismissal of this appeal, the hotel will be completed and will be commissioned. Six long years have passed by. I do not think that the appellants have achieved anything. The first appellant who is a trade union ist has not espoused any grievance of the mazdoors before us. It was faintly suggested by the Government 's counsel that the first petitioner does not represent all the maz doors. This was refuted by the appellants. For the purpose of this case, we will accept the assertion of the first appellant. Still, we did not have before us any of their grievances ventilated, which, if there were any, we would have willingly considered. 280 I conclude this short Judgment, with a lurking doubt in my mind, and with a question "Is there something more than what meets the eye in this case?" S.R. Appeal dis missed.

There is in Calcutta, a Zoological garden located in Alipore, now almost the heart of Calcutta, on either side of Belvedere Road, one of Calcutta 's main arterial roads, fortynine acres of land on one side and eight acres on the other. The main zoo is in the fortynine acres block of land. The said eight acres of land was outside the Zoological garden and separated from it by a 80 100 feet road and is also known as the Begumbari land. The Begumbari land was given to the Zoological garden in '1880. According to a letter written on July 7, 1880 by the Assistant Secretary to the Government of Bengal in the Public works Department to Mr. L. Schwandler, Honorary Secretary Zoological garden conveying the sanction of the Lt. Governor for the transfer of the Begumbari land to the charge of the Committee of the Zoological Garden, on the terms agreed to by the Committee in their letter dated April 23, 1880, the conditions of the transfer were: "(i) that the land is to be used for the purpose of acclimatization only; (ii) that Carnivors are not to be kept on any part of it, on any account; (iii) that the grounds are to be kept clear and neat; (iv) that the land must be restored to the government if hereafter required, the Zoological Garden Committee being reimbursed for any expenditure they may have incurred in building there." In this eight acres of land there are some old buildings and the vacant land was used for fodder cultivation,for raising flower nursery, as a sumping ground for huge garbages and as burial ground for dead animals. In January, 1979, the Director General of Tourism Gov ernment of India addressed a letter to the Chief Secretary Government of West Bengal conveying the Resolution of the Tourism conference which was presided over by the Union Minister of Tourism and attended by several State Ministers and requesting that land in good location may be made avail able for construction of hotels in a drive to encourage tourism. In May, 1980, the Taj Group of Hotels came forward with a suggestion that they would be able to construct a Five Star Hotel. On September 29, 1980 and November 29, 1980, there were two notes by the Secretary of the Metropol itan Development Department to the effect that the I.T.D.C. was interested in a property known as the Hastings House Properly and that the Taj Group of Hotels who considered the Hastings House properly unsuitable may be offered four acres out of the eight acres of Begumbari land. On the same day the Taj Group of Hotels wrote to the Government of West Bengal stating that the proposed land could be seriously considered for construction of a hotel. Thereafter, 225 the Chief Minister along with the Minister of Tourism and the Minister for Metropolitan Development visited the site accompanied by the Director of the Zoo to apparently knew about the proposal right from the start. A note was then prepared by the Secretary, Metropolitan Development Depart ment and put up to the Chief Minister for his approval. The Chief Minister approved the proposal and required it to be placed before the Cabinet. On January 7, 1981 a memorandum was prepared for the consideration of the Cabinet explaining the need for the more Five Star Hotels in Calcutta and the benefits flowing out of the construction and establishment of such Five Star Hotels and suggesting the lease of Hast ings House Property to the I.T.D.C. Group and the Begumbari property to the Taj Group of Hotels. In regard to the Begum bari property, it was stated: "From the property of the Zoological Gardens on the Belvedere Road it is possible to carve out about four acres of land currently used for dump ing garbage and also for growing grass for the elephants. It will be necessary and in any case advisable to shift the dumping ground. While adequate space can be made available for growing grass elsewhere in the same area. " It was stated that the Finance and Tourism Departments had agreed to the proposal to lease the properties to the I.T.D.C. and the Taj Group respectively. It was stated that though the Forest Department had suggested that Salt Lake was a better place for establishing a Five Star Hotel, there was no demand for a Five Star Hotel in that area and the request for a hotel in Salt Lake was confined to a Three Star Hotel. Cabinet approval was sought for the offers to be made to the I.T.D.C. and to the Taj Group and for the constitution of a suitable Committee to undertake negotiations with the two groups. On February 12, 1981, the Cabinet took a decision ap proving the proposal contained in the last paragraph of the Cabinet Memorandum, thus clearing the way for negotiations with the Taj Group. Meanwhile the Public Undertakings Committee appointed by the West Bengal Legislative Assembly submitted a report on 14.2. 1981 about the Zoo. While suggesting that the govern ment may consider abandoning the proposal to set up a hotel on the eastern side of the zoo, the Committee also referred to a proposal to establish a "Subsidiary Zoo" some slight distance from Calcutta and the request said to have been made for the allotment of 200 acres of land for that pur pose. The Chief Town Planner who visited the site at the request of the Secretary, Metropolitan Development Depart ment and in the presence of the Director of the Zoo, sug gested that 2 to 2 1/2 acres of land might be 226 made available for the Hotel. On March 19, 1981 the Taj Group submitted a proposal to the government containing fairly detailed information about the tourism industry and its needs, the situation in Calcut ta, the realities of Hotel construction the facts relating to what had been done in other cities, the benefits i]owing out of the construction of hotels and their own proposals for constructing a hotel in the four acres of land in Belve dere Road. Two alternative financial arrangements were suggested. The first alternative was the payment of annual rent on the basis of the valuation of the land, the second alternative was based on the concept of nett sales, nett sales being defined as sales after deducting all taxes and levies and service charges. The Metropolitan Development Department expressed a preference for the second alternative and suggested the constitution of a Committee. The Finance Department also approved. The Taj Group was invited to send the financial projection on the basis of the second alterna tive. Correspondence went on. On June 5, 1981 a Committee of Secretaries was formally constituted. In the meanwhile WEBCON, a West Bengal Government Consultancy Undertaking, was asked to examine the proposals and to advise the Govern ment. On June 11, 1981, the Managing Committee of the Zoo passed a resolution expressing itself against the proposal to construct a hotel on land belonging to the Zoo. Accepting the note put up by the Secretary Metropolitan Development Department on the said resolution the Chief Minister minuted that "if further facilities are necessary for the zoo, the government will provide for them." On June 25, 1981, the Managing Committee met again and passed another resolution by which they withdrew their earlier objections dated 11.6.1981. On June 29, 1981, the Director of the Zoo, who was a party to all the proceedings etc. right from the beginning wrote to the Secretary of Animal Husbandry and Veterinary Services Department stating his objections to the proposal to lease the land for construction of a hotel. On July 14, 1981, the WEBCON submitted its report and on the request of the Committee of Secretaries a further report was submitted on July 22, 1981. The report of WEBCON is a comprehensive report on various topics connected with the establishment of a Five Star Hotel in Calcutta. Among other things the report also suggested various financial alterna tives and recommended the second alternative based on nett sales as the best. 227 Meanwhile negotiations with Taj Group proceeded apace. The WEBCON submitted further reports. Taj Group suggested further modifications. On September 9, 1981 a detailed memorandum was prepared for cabinet discussion. Two alterna tive financial proposals were set out. A reference was made to the Committee of Secretaries who negotiated with the Taj Group of Hotels. Note was taken of the suggestion of the Negotiation Committee that the overall development plan for the environmental beautification, widening of approach roads, landscaping of Tolley 's Nullah were responsibilities of the State Government and estimated to cost Rs.2 crores but that it was expected to be of considerable public bene fit. Stress was laid on the direct and indirect economic activities which would be generated by the establishment of a five Star Hotel. Reference was also made to the report of WEBCON and it was noted that the projected profitability of the venture to the government was expected to be high. It was also mentioned that the Ministers, incharge of Tourism, Animal Husbandry, Land Revenue and Finance had seen the note and had agreed to it. On September 10, 1981 the Cabinet took the final decision to grant a ninety nine years lease of the four acres of Begumbari land to the Taj Group of Hotels. On September 29, 1981 the Government of West Bengal officially conveyed its acceptance of the proposal of the Taj Group of Hotels for the construction of a Five Star Hotel. The terms and conditions of the lease were set out. On January 7. 1982, there was a joint meeting of the Establishment and Finance sub Committees of the Zoo and it was decided to recommend to the Committee of management that the demarcated area of four acres may be relinquished in favour of Animal Husbandry and Veterinary Services Department subject to the requirement that the zoo will continue to get the services and the facilities in the existing structures until they were reconstructed on the adjacent land. On January 11, 1982 the Managing Committee endorsed the view of the sub commit tees and this was communicated to the government. On January 15, 1982, the Government of West Bengal wrote to the Land Acquisition Officer, with copies to the Taj Group of Hotels directing the Land Acquisition Officer to give possession of the land to the Taj Group of Hotels subject to their later executing a proper long term lease. It was mentioned in the letter that the construction of the Hotel should not be started till the lease deed was executed and registered. Several other stipulations were also made. Though the stipu lation was that the cost of the new construction was to be initially met by Taj Group of Hotels and later to be adjust ed against the rent payable by Taj Group, the Taj Group later agreed to waive such reimbursement (in fact a total sum of Rs.30 lakhs has been spent by Taj Group of Hotels in connections with the reconstruction. Not only this. land in the extent of 288 square 228 meters out of the plot given to them was carved out and given hack for accommodating part of the reconstructed structures. Pursuant to the letter dated January 15, 1982 possession was given to Taj Group on January 16, 1982. Thereafter an expert committee was constituted to supervise the construc tion of alternative facilities. Five petitioners a Trade Unionist, two life members of the Zoo, two other bonafide residents of Greater Calcutta, all lovers of wild life filed a petition in public interest on 26.2.1982. Initially the relief sought was primarily to restrain the Zoo authorities from giving effect to the two Resolutions dated January 7, 1982 and January 17, 1982 to hand over the four acres to the Animal Husbandry Department of the Government. Subsequent to the filing of the writ petition a lease deed was executed by the Taj Group of Hotels in favour of the government. The Writ Petition was therefore amended and a prayer for cancellation was added. While the writ petition was pending in the High Court, Late Smt. Indira Gandhi wrote a letter to Sri Jyothi Basu, the Chief Minister of West Bengal expressing the hope that he would not allow the Calcutta Zoo to suffer in any manner and would leave it intact. The Chief Minister in his reply letter dated 21.8.82 pointed out that:(i) the four acres of land were agreed to be relinquished by the Committee of management of the Zoological Garden on condition that alter native arrangement were made for shifting the existing structures which were necessary for the Zoo from the plot in question to the adjacent plot; (ii) the plot in question was not a part of the Zoo Garden; (iii) till the existing struc tures are relocated on the adjacent land, the zoo would continue to get their services and facilities from the existing structures. (iv) the hotel was not the only tall building since there existed many such residential buildings to which none raised an objection and that P&T Department are also constructing one such tall building; and (v) the lessee and their experts on wild life had assured them that in any case adequate precaution would be taken in regard to illumination of the hotel and the layout of the surrounding so that no disturbance would be caused to the flight path of the birds or animals. To similar effect was .the letter dated 30.8.1982 from Shri J.R.D. Tata to the Prime Minister on September 1, 1982. Indira Gandhi wrote to Mr. Tata expressing her happiness that the hotel was not going to upset the Zoo animals and welcoming his offer to help the State Government to improve the Zoo 's facilities. 229 A learned Single Judge of the High Court dismissed the writ petition holding that the West Bengal Government did not show any lack of awareness of the problem of environment ecology in granting the lease of land. On appeal, a Division Bench confirmed the said judgment. Hence the appeal by Special leave of the Court. Dismissing the appeal, the Court, HELD: (Per Chinnappa Reddy J.) 1.1 Whenever a problem of ecology is brought before the Court, the Court is bound to bear in mind article 48 A of the Constitution the Directive Principle which enjoins that "The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country, "and article 51A(g) Which proclaims it to be the fundamental duty of every citizen of India "to protect and improve the natural environment in cluding forest, lakes, rivers and wild life, and to have compassion for living creatures. " When the Court is called upon to give effect to the Directive Principle and the fundamental duty, the Court is not to shrug its shoulders and say that priorities are a matter of policy and so it is matter for the policy making authority. The least that the court may do is to examine whether appropriate considera tions are borne in mind irrelevancies excluded. In appropri ate cases, the Court may go further, but how much further must depend on the circumstances of the case. The court may always give necessary directions. However the Court will not attempt to nicely balance relevant considerations When the question involves the nice balancing of relevant considera tions, the court may feel justified in resigning itself to acceptance of the decision of the concerned authority. If the Government is alive to the various considerations re quiring thought and deliberation and has arrived at a con scious decision after taking them into account, it may not be for the court to interfere in the absence of mala fides. On the other hand, if relevant considerations are not borne in mind and irrelevant considerations influence the deci sion, the Court may interfere in order to prevent a likeli hood of prejudice to the public. [242B F] 1.2 Applying the above guidelines to be followed when questions of ecology and environment are raised, it is clear that the facts and circumstances brought out by the appel lants do not justify an inference that the construction of the proposed hotel in the Begumbari land would interfere in any manner with the animals in the Zoo and the birds arriv ing at the zoo or otherwise disturb the ecology. The pro posed hotel is a Garden hotel and there is perhaps every chance of the ecology and environment improving as a result of planting numerous trees all 230 around the proposed hotel and the removal of the burial ground and dumping ground for rubbish. [263A B] 1.3 That the question of obstruction which may be caused to migratory birds did not go unnoticed by the government before the decision to lease the land was taken, is clear from the following: (i) the question of the migratory bird was first raised in the resolution of the Managing Committee dated June 11, 1981. This resolution was forwarded to the Chief Minister and considered by him as evident from the note of the Chief Minister and the subsequent reversal of the Managing Committee 's resolution at the instance of the Chief Minister and on his assurance; (ii) that the govern ment was aware of the dissension based on the alleged ob struction likely to be caused by a multi storeyed building to the flight of the migratory birds appears from the letter of the Chief Minister to the Prime Minister. In this letter, the Chief Minister pointed out that there were already in existence a number of multistoreyed buildings all around the Zoological Garden, but there was no report that they had any adverse effect on the migratory birds or the animals. He also pointed out that all precautions would be taken in the matter of illumination of the hotel and lay out of the surroundings so that no disturbance would be caused to the flight path of the birds or animals; (iii) Shri J.R.D. Tata, on behalf of the Taj Group of Hotels also wrote to the Prime Minister assuring her that the hotel management had dis cussed the matter at length with a representative of the Wild Life Fund who, after discussion had been satisfied that the proposed hotel would cause no disturbance to the birds. He further assured her that he had himself gone thoroughly in to the project with the special reference to the possible impact on the birds and the environment and had satisfied himself that project would not cause any disturbance to the birds or their free movement. He pointed out that the four acre plot was not within the main Zoological Garden, but was separated from it by the Belvedere Road which was an impor tant thoroughfare in the city. It was about 700 feet from the main part of the lake. The hotel was proposed to be built away from the frontage of the plot in Belvedere Road and was to be a low rise structure, the highest point of which would not exceed 75 feet, far below the trajectory of the birds. He mentioned that Dr. Biswas a renowned ornithol ogist had also been consulted by the Taj Management and he had also confirmed that a 75 feet building would not inter fere with the landing or climbing out of the birds from the lake. He further mentioned that the grounds of the Zoo between the lake and the Belvedere Road were covered with tail trees and that the birds negotiating the trees would have to fly at a steeper angle than it would be necessary to negotiate the proposed hotel. The vehicu 231 lar traffic on Belvedere Road which was also heavy did not bother the birds and the slight increase of the vehicular traffic consequent on the construction of the hotel was also not likely to bother them either. It was also pointed out that particular care would be taken in the matter of illumi nation of the hotel so that bright lights or neon signs emanating from the hotel would not disturb the birds and animals. In the circumstances, the government was alive to the ecological considerations particularly the question of the migratory birds. [260E H; 261A E] 2.1 It is wrong to think that every thing not mentioned in the Cabinet Memoranda did not receive consideration by the government. In the instant case the process of choosing and allotting the land to the Taj Group of Hotels nearly took two years during the course of which objections of various kinds were raised from time to time. It was not necessary that everyone of these objections should have been mentioned and considered in each of the Cabinet Memoranda. [260C E] 2.2 The proposition that a decision must be arrived at after taking into account all relevant considerations, eschewing all irrelevant considerations cannot for a moment be doubted. In the instant case, relevant considerations were not ignored and indeed were taken into consideration by the Government of West Bengal. It is not one of those cases where the evidence is first gathered and a decision is later arrived at one flue morning and the decision is incorporated in a reasoned order. This is a case where discussion had necessarily to stretch over a long period of time. Several factors have to be independently and separately weighed and considered. This is a case where the decision and the rea sons for the decision could only be gathered by looking at the entire course of events and circumstances stretching over the period from the initiation of the proposal to the taking of the final decision. The argument that what was not said in either of the Cabinet Memoranda could not later be supplemented by considerations which were never present in the mind of the decision making authority is not correct. [263E G] Rohtas Industries Ltd. vs S.D. Agarwal, ; and Barium Chemicals vs A.G. Rana, ; , re ferred to. Mohinder Singh Gill vs Central Election Commission, , distinguished. There was no failure to observe the principles of Natural Justice. Such as those as were really interested in the matter like the Managing Committee of the Zoological Garden and the Director of the 232 Zoo did have their say in the matter. The Public Undertak ings Committee in its report discussed the matter and invit ed the Government 's attention to various factors. The matter was further discussed on the floor of the Legislative Assem bly. [264B D] 4.1 The two letters dated 23.4. 1880 and 7.7. 1880, pertaining to the grant relating to the transfer of land to the east of Belvedere Road, known as Begumbari land in 1880, produced from old official records, are public documents within the meaning of the Evidence Act. No objection either to the authenticity or to the admissibility of the documents was taken either before the Single Judge or before the Division Bench. The Managing Committee of the Zoological Garden never doubted the authenticity of the documents, nor was any question even raised to suggest that the terms of the grant were other than those mentioned in the letters. [265C E] 4.2 The new plea relating to authenticity or admissibil ity of evidence cannot be accepted in an appeal under article 136 of the Constitution. The land which was undoubtedly government land was given to the Zoological Garden upon the terms set out in the two letters. One of the terms was that the land should be restored to the government whenever required. Another terms was that the Zoological Garden Committee would be suitably compensated for any expenditure incurred by it on the construction of any building on the land. [265E] 5.1 It is true that the Act of the legislature cannot be undone by a mere act of the Executive. This is not a case where the statute vests land in the Committee and the Execu tive takes it away by its fiat. The Begumbari land was government land transferred to the charge of the Zoological Garden Committee in 1880 in accordance with the conditions and terms agreed to by the Committee in their letter dated 23.4.1880; namely; "(i) that the land is to be used for the purpose of acclimatization only; (ii) that Carnivors are not to be kept on any part of it, on any account; (iii) that the grounds are to be kept clear and neat; (iv) that the land must be restored to the government if hereafter required. The Zoological Garden Committee being reimbursed for any expenditure they may have incurred in building there. " Therefore, this is a case of resumption of Government land under the terms of Agreement. [264E H; 265A B] 5.2 From the Preamble and the provisions of the Bengal Public Parks Act, 1904, it is clear that the Act is intended to protect the inmates and the property of the park from injury by persons resorting 233 to the park from molestations or annoyance by others. The Act is aimed at protecting the part and its visitors from injury and annoyance by despoilers and marauders. The Act has nothing whatever to do with the vesting of any property in the parks. There is in fact no provision which deal with the vesting of property in a park, Section 3 enables the State Government to extend by a notification, the boundaries of a park but that can only be for the purposes of the Act and not for the purpose of vesting or creating any title in a property. If a piece of adjacent land, for example, is taken on lease for a specified number of years by the park and included in the park by a notification under s.3 it does not mean that the various things, the doing of which is regulated or prohibited by the Act and the rule will not be done or will be regulated on the adjacent land also. The provisions of the Bengal Public Parks Act have no relevance to the question of the power of the government to transfer the Begumbari land to the Taj Group of Hotels. [266C F] 6.1 Statutes and statutory orders have no doubt to be obeyed. It does not mean that other orders, instructions, etc. may be departed from in an individual case, if applica ble to the facts. They are not to be ignored until amended. The government or the Borad may have the power to amend these orders and instructions, but nonetheless they must be obeyed so long as they are in force and are applicable. But, from the perusal of the provisions of paragraphs 165 to 167 of the West Bengal Land Management Manual, it is clear that these provisions of the Land Management Manual do not appear to have anything to do with the transfer and use of the land in the manner proposed, in which the State also have a vital stake apart from the mere raising of revenue for the State. Paragraphs 165, 166 and 167 deal with simple cases of crea tion of non agricultural tenancies by way of long term leases. They generally deal with land which is at the dis posal of the government as waste or surplus land and are intended to secure the best revenue for the State. They do not deal with cases of transfer of land for a specific socio economic object, where, the securing of immediate revenue. is not the principal object but other social and economic benefits are sought. [267E H] 6.2 The following propositions may be taken as well established on a considerations of the earlier decisions of the Supreme Court. State owned or public owned property is not to be dealt with at the absolute discretion of he execu tive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is consid ered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule. it is not an invariable 234 rule. There may be situations where there are compelling reasons necessitating departure from the rule, but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. [273D F] 6.3 Applying the above tests, it cannot be held that the government of West Bengal did not act with probity in not inviting tenders or in not holding a public auction but negotiating straight away at arm 's length with the Taj Group of Hotels, in its pursuit or socio economic objective of encouraging tourism and earning more foreign exchange. In the present case no one has come forward alleging that he has been discriminated against and his fundamental right to carry on business had been affected. The very nature of the construction and establishment of a Five Star Hotel is indicative of a requirement of expertise and sound financial position on the part of those who might offer to construct and establish them. The decision taken by the All India Tourism Council was an open decision well known to everyone in the hotel business. Yet no one except the I.T.D.C. and the Taj Group of Hotels had come forward with any proposal. The Oberoi Group of Hotels already had a Five Star Hotel in Calcutta while the Welcome Group of Hotels were making their own Private negotiations and arrangements for establishing a Five Star Hotel. In the circumstances, particularly in the absence of any leading hotliers coming forward, the govern ment of West Bengal was perfectly justified in entering into negotiation with the I.T.D.C. and the Taj Group of Hotels instead of inviting tenders. Negotiations with those who had come forward with proposals to construct Five Star Hotels was without doubt the most reasonable and rational way of proceeding in the matter rather than inviting tenders or holding public auction. There was nothing discriminatory in the procedure adopted since no other leading hotlier had shown any inclination to come forward. Tenders and auction were most impractical in the circumstances. The choice of the Taj Group of Hotels must therefore be held to be beyond suspicion and above reproach. [273F; 268D F] Rash Bihari Panda vs State of Orissa, ; R.B. Shetry vs International Airport Authority, 14; Kasturi Lal Laxmi Reddy vs State of Jammu & Kashmir, ; ; State of Haryana vs Jaga Ram, ; Ram and Shvam Co. vs State of Haryana, ; and Chenchu Rami Redav vs Go/vt. of Andhra Pradesh, [1986] 3 SCC 391, discussed. 7.1 On a consideration of all the facts and circumstances of the 235 case, it is clear, that the government of West Bengal acted perfectly bonafide in granting the lease of Begumbari land to the Taj Group of Hotels for the construction of a Five Star Hotel in Calcutta. The government of West Bengal did not fail to take into account any relevant consideration. Its action was not against the interest of the Zoological Garden or not in the best interests of the animal inmates of the zoo or migrant birds visiting the zoo. The financial interests of the State were in no way sacrificed either by not inviting tenders or holding a public auction or by adopting the ' 'nett sales" method. [274C E] 7.2 The "nett sales" method appears to be fairly well known method adopted in similar situations. This what was recommended by WEBCON, the consulting agency of the West Bengal Government which submitted a detailed report on the subject. This was also the recommendation of the Committee of Secretaries who went into the matter in death, even to lay persons who are no financial experts, it appears that the "nett sales" method does and the rent based on market value method does not take into account the appreciating value of land, the inflationary tendency of the prices and the profit orientation. Even on a prima a facie view, there appears to be nothing wrong. or objectionable in the "nett sales" method. It is profit oriented and appears to be in the best interests of the Government of West Bengal. [274A C] Per Kahlid J. (concurring) 1. Today public spirited litigants rush to courts to file cases in profusion under attractive name Public Inter est Litigation. They must inspire confidence in courts and amongst the public. They must be above suspicions. Public Interest Litigation has now come to stay. Bue one is led to think that it poses a threat to courts and public alike. Such cases are now filed without any rhyme or reason. It is, therefore, necessary to lay down clear guide lines and to outline the correct parameters for entertainment of such petitions. If courts do not restrict the free flow of such cases in the name of Public Interest Litigations, the tradi tional litigation will suffer and the courts of law, instead of dispensing justice, will have to take upon themselves administrative and executive functions. This does not mean that traditional litigation should stay put. They have to be tackled by other effective methods, like decentralising the judicial system and entrusting majority of traditional litigation to village courts and Lok Adalats without the usual populist stance and by a complete restructuring of the procedural law which is the villain in delaying disposal of cases. It is only when courts are apprised of gross viola tion of fundamental rights by a group or a class action or when 236 basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience that the courts, especially this Court, should leave aside procedural shackles and hear such petitions and extend its jurisdiction under all available provisions for remedying the hardships and miseries of the needy, the under dog and the neglected. Extending help when help is required does not mean that the doors of the Supreme Court are always open to anyone to walk in. It is necessary to have some self imposed restrained on public interest litigants, so that this salutary type of litigation does not lose its credibility. [275C; 279A F] 2. The approach of the Taj Group Hotels in this case has been creditably fair. They have given all the assurances necessary to preserve the Zoo and its inmates. They were willing to afford all the requisite safeguards. In the place of a dilapidated hospital, operation theater and the like, they constructed buildings, a new at a cost of Rs. 30 lakhs which amount they were entitled to be reimbursed under cl. 25 of the lease, which they voluntarily gave up. In addition to this, they surrendered an area of 288 sq. metrs. from the land allotted to them to the Zoo. They agreed to build not the usual sky scrapper hotel, but a garden hotel, the height of which would not go beyond 75 feet, despite the fact that there existed in the surroundings area buildings which were very high. This was done to keep free the route of the flight of the birds. They agreed to have subdued light in the hotel, again in the ineterest of the birds. They also agreed to keep the surroundings of the hotel and the flora well maintained and already 30,000 plants were getting ready to adjourn the area to be occupied by them. [277H; 278A C] 3.1 Regarding the commercial and financial aspects of the lease also, there is nothing secretive. The method adopted is the nett sales method of calculating the compen sation paid, which is a well known method adopted in such situations like the one, here namely lease of land by the Government. [278C E] 3.2 A deal like the one is given cannot be concluded by public auction as it is not a case of sale of a government property. Being not a sale but a lease of land by the gov ernment public auction has necessarily to be ruled out. Only Taj Group of Hotels came forward with an offer to start the hotel. The lease was the culmination after a long, elaborate and open procedure with nothing to hide which therefore cannot justifiably be subject to adverse criticism. [278G H]

16k+

iminal Appeal No. 39 of 1961. Appeal by special leave from the judgment and order dated January 30, 1960 of the Andhra Pradesh High Court (in Criminal Appeals Nos. 277 and 278 of 1957 and Criminal Revision Case No. 810 of 1957. A.S.R. Chari, K. R. Choudhry and P.D. Menon, for the appellant. Bhimasankaran and R. Thiagarajan for respondent No. 1. R. Mahalingier, for respondent No. 2. 1963. April 23. The judgment of the Court was delivered by MUDHOLKAR J. The respondent No. I was tried before the Court of Sessions, Visakhapatnam for offences under section 120 B, Indian Penal Code, section 409, section 477 A and section 471 read with section 467, I.P.C. while respondent No. 2 was tried for an offence under 301 section 120 B and for offences under sections 409 read with section 109, 477 A and 471 read with section 467, I.P.C. Each of the respondents was convicted of the first two offences, but the respondent No. I alone was convicted of the other two offences. Various sentences were passed against them by the Additional Sessions judge, Visakhapatnam, who presided over the court. The respondents preferred appeals before the High Court challenging their convictions and sentences. The State on the other hand preferred an application for revision under section 439, Cr. P.C. for the enhancement of the sentences passed on the respondents. The High Court allowed the two appeals, acquitted the respondents and dismissed the application for revision preferred by the State. The State of Andhra Pradesh has come up before this Court in appeal by obtaining special leave under article 136 of the Constitution. The prosecution case in so far as it is material for the decision of this appeal is as follows : In the year 1929 the Andhra Engineering Co., which was originally a partnership firm formed by one D.L.N. Raju was converted into a private limited, company with its headquarters at Visakhapatnam. (We shall refer to this company throughout as the AECO). It obtained licences from the Government under the Electricity Act for supply of electrical energy to Visakhapatnam, Anakapalli and some other places. As the AECO did not have the necessary capital to undertake the work Raju floated in the year 1933 a public limited company called Visakhapatnam Electric Supply Corporation Ltd., (referred hereafter as VESCO) and another in the year 1936 called the Anakapalli Electric Supply Corporation Ltd. The AECO transferred its licences for the supply of electrical energy to the consumers of Visakhapatnam to VESCO and similarly transferred to AECO the licence to supply 302 electrical energy to consumers at Anakapalli. The AECO was appointed Managing Agent for each of these corporations under separate agreements. Some time later other industrial concerns, the Andhra Cements Ltd., Vi jayawada and the East Coast Ceremics, Rajahmurthy were started apparently by Raju himself and the AECO was appointed the Managing Agent of each of these concerns. The original managing agency agreement in favour of AECO with respect to VESCO was for a period of 15 years i.e., from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the Government under the Electricity Act. A mention may be made of the fact that in June, 1952 the VESCO undertaking was acquired by the Government under the provisions of the " 'Electricity Undertaking Acquisition Act" but nothing turns on it. The VESCO had its own Board of Directors while the AECO had also its own separate Board of Directors. The VESCO had no Managing Director but at each meeting of its Board of Directors one of the Directors used to be elected Chairman. The same practice was followed at the meeting of the general body of the shareholders. The AECO on the other band always had a Managing Director, first of whom was D.L.N. Raju. He died in the year 1939 and was succeeded by R.K.N.G. Raju, an Advocate of Rajahmundry. This person, however, did not shift to Visakhapatnam on his becoming the Managing Director but continued to stay most of the time at Rajahmundry. According to the prosecution both these concerns were running smoothly and efficiently during the lifetime of D.L.N. Raju because he was personally attending to their affairs. His successor, however, apart from the fact that be continued to be staying mostly at Rajahmundry, was also interested in several other ventures, including a sugar factory at Dewas in Central India. 303 Eventually many of those ventures failed. According to the prosecution the second Raju was not bestowing sufficient care and attention on the affairs of VESCO. The AECO as Managing Agents of VESCO had appointed in the year 1939 one D.V. Appala Raju, a trusted employee, as its representative and as the secretary of VESCO. In 1944 this person resigned from his appointments and started his own business in radio and electrical goods in the name of D. Brothers. He was succeeded by T. Visweswara Rao, P.W. 6, an employee of the AECO. The respondent No. 1, Ganeswara Rao was also an old employee of AECO, having been appointed a stenotypist in the year 1923 on an initial salary of Rs. 40/ p.m. Eventually he became the Head Clerk therein. He pressed his claim for appointment as Secretary of VESCO and representative of the Managing Agents at Visakhapatnam and R .H.G. Raju appointed him to that post. All this is not disputed. The respondent No. 1, even after his appointment on two posts connected with VESCO, continued to work with the AECO also whose business had by then been confined only to that of Managing Agents of the four companies floated by D.L.N. Raju. It is the prosecution case that as Secretary of VESCO and the resident representative of the Managing Agents, the respondent No. I was attending to the day to day affairs of VESCO, which included the receiving of all sums of money due to VESCO, spending money for the purpose of VESCO attending to the appointment, supervision and control of the staff of VESCO, purchasing materials required for the purpose of VESCO and supervising over the accounts of VESCO. He was thus all important with respect to the every day affairs of 304 VESCO. His dual capacity enabled the respondent No. I to earn the confidence not only of the Directors of AECO but also of those of VESCO. The accounts maintained by the VESCO used to be explained by him not only to the Directors but also to the shareholders. The knowledge of the Financial position of VESCO obtained by them used to be derived essentially from the respondent No. 1. As Secretary of VESCO it was his duty to convene the meetings of the Board of Directors, to present before them the periodical statement of receipts and expenditure of VESCO, to convene meetings of the General Body, to prepare the Managing Agents ' report and the Director 's report as also to see to the presentation of auditors ' report and the statement of accounts. The explanations of the Managing Agents and the Directors of VESCO with respect to the items mentioned in the orders of the Board used also to be placed by him before the shareholders. It was also his duty to have the accounts of VESCO audited by the auditors elected by the general body and to produce before the auditors the relevant accounts, vouchers, bank statements and so on. There were no complaints about the management of the affairs of VESCO or the AECO till the end of 1946 or the beginning of 1947. One significant fact, however, which occurred prior to 1946 is referred to by the prosecution. Till the year 1945 Messrs C. P. Rao & Co., a firm of Chartered Accountants were the auditors of VESCO but after the respondent No. I became Secretary. one B. Rajan was elected Auditor not only for VESCO but for all the other four concerns, including AECO. This person was Auditor for Greenlands Hotel at Visakhapatnam, of which the respondent No. I was a Director. R.K.N.G. Raju took till towards the end of 1947 and died at Madras in April, 1948. According 805 to the prosecution the respondent No. I wanted to take advantage of this fact and conceived of a scheme for misappropriating as much money belonging to VESCO as possible before the managing agency agreement of AECO came to an end in October, 1948. The respondent No. I secured the promotion of the approver K.V. Ramana, who was originally Accounts Clerk to the post of Senior Accountant. Similarly K. V. Gopala Raju was transferred from the post of Stores Clerk to the general department and K.S.N. Murty, the discharged accused, was appointed Stores Clerk in his place. Later, however, Murty was also got transferred to the general section and replaced by P. W. 18, Srinivasa Rao originally a stores boy. The approver who was originally an Accounts clerk with the AECO was, it may be mentioned, appointed a cashier in VESCO in 1946 at the instance of the respondent No. I and was thus beholden to him. He was later promoted as Senior Accountant and in his place the respondent No. 2 Laksbminarayana Rao was appointed the Cashier. According to the prosecution the respondent No. I took both the approver and Lakshminarayana Rao in his confidence as also some other persons "known and unknown" for carrying out his nefarious purpose, namely, the misappropriation of the funds of VESCO during the subsistence of AECO 's managing agency of VESCO. The conspiracy is said to have been hatched in the year 1947 and falsification of accounts and misappropriation of funds of VESCO went on till the end of the accounting year. The term of the managing agency was renewed in 1943 and AECO con tinued to be managing agents until the VESCO was taken over by the Government in 1952. The respondent No. I continued to be the Secretary of VESCO and resident representative of the Managing Agents throughout the period of conspiracy. 306 After the death of R.K.N.G. Raju, it was discovered that the AECO was indebted to many concerns which were under its managing agency, the liability being shown either as that of AECO or that of R.K.N.G. Raju personally. Again, the VESCO was shown as indebted to the Andhra Cement,; to the extent of Rs. 42,000/ . This amount was, however, paid by the AECO from the funds of VESCO. The respondent No. I and some of his friends were in search of a rich and substantial man who would be amenable to them to fill the post of Managing Director of AECO. Eventually their choice fell on G. V. Subba Raju, P. W. 25, a resident of Manchili, who held a large number of shares in the AECO and who was, besides, related to R.K.N.G. Raju by marriage. It is said that this person has not received much education and knows only bow to sign his name in English. He was assured that by consenting to become the Managing Director be would not be required to discharge onerous duties and that the respondent No. I would look to all the affairs of VESCO. He was also told that apart from signing important papers which may be sent to him by the respondent No. I from time to time to Manchili or wherever be might be would have no work to do. He agreed and was elected Managing Director of AECO in the middle of 1948. Upon this understanding he accepted the position offered to him. The VESCO used to receive large amounts of money from high tension power consumers such as the railways, K. G. Hospital, the Port Administration, the Andhra University etc., by cheques. But domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent No. 2. The respondent No. 2 was asked by the respondent No. I to maintain a private note book. In "that book payments which used to be made by respondent No. 2 on the 307 basis of slips issued by the respondent No. I (which included payments to his relatives or to business firms in which he was personally interested) used to be noted and the amount totalled up at the end of the day. This amount was posted in VESCO 's Cash Handover Book as " 'by safe" indicating that this amount was kept in the safe, though in fact it was not. On the basis of the entries in the Handover Book the final accounts were written up. The respondent No. I opened four personal accounts in different banks, including the Imperial Bank of India (as the State Bank then was). When the respondent No. I had to issue a personal cheque on any of these Banks he used to ask the second respondent to send an equivalent amount to the Bank concerned for being credited to his account. These amounts also used to be noted in the private note book and entered "by safe ' in the Handover Book. Another thing which the respondent No. I initiated was opening a heading in the ledger called "advance purchase of materials. " Amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material. It may be mentioned that Subba Raju used to visit Visakhapatnam twice a month and check up the account books. At that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein (but which were actually misappropriated) had been sent to the Bank for being deposited. Apparently Subba Raju was fully satisfied with this and other explanations and, therefore, he appointed one C. section Raju, who was the Manager of Andhra Cements to supervise over the affairs of VESCO. Apparently because of this a new method of misappropriation was adopted by the respondents by starting in the VESCO account books, an account called "suspense account". A lakh of rupees passed through that account. Amounts which were misappropriated used to find their way in this 308 account. A new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made. Subba Raju was not satisfied with the nature of supervision exercised by C. section Raju over the affairs of VESCO because he used to look only at the cash book entries of the days on which he paid visits to VESCO 's office, to which he used to go with previous intimation. Besides that, C. section Raju 's management of Andhra Cements had landed it into a loss of Rs. 30,000/ `. Because of all these things he had C. section Raju replaced towards the end of the year 1951 by one Subbaramayya, a retired Finance Officer from the Madras Electricity Board both as a Director of Andhra Cements and as a Supervisor over the accounts of VESCO. Subbaramayya took his work seriously and called for information on a number of points from the respondent No. 1. He, however, was unable to obtain any information. In January, 1952 he therefore brought one section G. Krishna Aiyar who had vast experience in the maintenance of accounts of electrical undertaking 's having been Chief Accountant of the South Madras Electric Supply Corporation, to undertake an investigation and then to act as Financial Adviser. In the meantime on November 29, 1951 there was a meeting of the General Body at which the accounts were, among other things, to be considered. There was a considerable uproar at that meeting because the respondent No. 1 said that the Auditor 's report had not been received. The shareholders felt that the report had been received but was being suppressed or deliberately withheld. However, the meeting was postponed and eventually held on December 9, 1951. On that date the respondent No. 1 produced the auditor 's report (exhibit p. 234 of which exhibit P. 235 is a printed copy). According to 309 the prosecution the report is a forged document. That was also the feeling of a number of shareholders who wanted to see the original but one Dutt who was Chairman of the meeting after seeing exhibit P. 234 said that the report seemed to be a genuine one. section G. Krishna Aiyar after his appointment in January, 1952, made close enquiry and submitted an interim report. That report showed that during the period 1948 49 Rs. 33,271 10 0 shown as paid to the Andhra Power System were in fact not paid. The respondent No. 1 on being asked to explain said that he would give his explanation to the Managing Director. The Interim Report showed that there was a shortage of about Rs. 90,000/ for this period. On February 12, 1952 the respondent No. I wrote to the Managing Director admitting his responsibility and agreed to make good the amounts found short or such other amounts as would be found short up to the end of March, 1952. Further scrutiny of the accounts was being carried out by Krishna Aiyar and in his subsequent report he pointed out that Rs. 2,38,000/ which were shown as having been paid to the Andhra Power System had actually not been paid. In fact in April, 1952 the Collector attached VESCO properties for realising this amount. On April 30, 1952 the respondent No. 1, by selling some of his property, himself paid Rs. 50,000/ to the Andhra Power System towards the sum due to it from VESCO and had promised to pay the balance shortly thereafter. He was given time for doing so but he failed to pay it. The Directors of VESCO thereafter authorised K. section Dutt, one of the Directors to lodge a complaint with the police which he accordingly lodged on May 19, 1952. On the next day the police placed an armed guard around the office of the respondent No. I and seized a number of papers. As a result of investigation they found that there was a total misappropriation 310 of Rs. 3,40,000/ . On May 13, 1954 a chargesheet was filed against the two respondents as well as Murti and the approver Ramana. OD September 13, 1954 Ramana offered to make a full Confession to the Additional District Magistrate (Independent) who was empowered to grant pardon under section 337 of i he Code of Criminal Procedure. He, however, directed Ramana to make his confession before a SubMagistrate. The latter accordingly made a confession on November 15, 1954 and on November 17, 1954 the Additional District Magistrate (Independent) granted him pardon and that is how he came to be examined as a witness in this case. As already stated, the Additional Sessions judge convicted both the respondents, the respondent No. I in respect of each head of the offences with which he was charged and the respondent No. 2 in respect only of the offences of conspiracy and misappropriation. The High Court set aside the conviction of the respondents on a number of grounds. In the first place according to the High Court, joint trial of two or more persons in respect of different offences cornmitted by each of them is illegal and that here as they were charged with having committed offences under section 120 B, section 409, section 477 A and section 476/467, I.P.C. they could not be tried jointly. According to it the provisions of section 239 were of no avail. Next according to the High Court even if section 239 is applicable its provisions are subject to those of section 234 and as such the trial being for more than three offences was impermissible. Then according to the High Court offences under. section 409 and section 471/467 are of different kinds and are not capable of joint commission. Therefore, they could not be jointly tried. Further, according to the High Court where a conspiracy has yielded its fruits the conspirators can be charged with the actual offences committed and not with conspiracy to commit those offences. Charge of conspiracy, according to the High Court, can be validly made 311 only when the prosecution establishes that every conspirator expected to receive a personal benefit from it and that the prosecution has not been able to establish that the respondent No. 2 or the approver evidently had any such expectations since they did not in fact receive any corresponding benefit. In so far as the respondent No. 2 is concerned the High Court has held that since he was charged with a specific offence under s.409 I.P.C. he could not be convicted of mere abetment of an offence. The approver 's evidence was held by the High Court to be inadmissible because the pardon granted to him was illegal. The High Court has also held that his evidence is unreliable and further that the Additional Sessions judge was in error in allowing him to refresh his memory by referring to various documents in a manner not permitted by section 159 of the Evidence Act. The High Court has further stated that inadmissible evidence was taken on record by the Additional Sessions judge, namely, account books of Billimoria Brothers, maintained in Gujrati and further that the Additional Sessions judge was in error in allowing the prosecution to use those account books for establishing absence of entries with regard to certain payments alleged in the VESCO books to have been made to them. Finally, the High Court held that the examination of the respondent under section 342 of the Code was unfair for a number of reasons and that the Additional Sessions judge had failed to perform an important duty in that he did not call the attention of the respondents to the provisions of section 342 which enable an accused person to give evidence in his own behalf Mr. Bhimasankaram, appearing for the two respondents, however, has not sought to support the judgment of the High Court on all these points. The points which he urged are briefly these: (1) That there was a misjoinder of charges and persons in that the various provisions 312 of section 239 were clubbed together and an omnibus charge of conspiracy was framed which on its face was one likely to embarrass the respondents and make their task of defending themselves difficult. (2) The procedure adopted in the investiga tion and committal stages was irregular. (3) Irrelevant evidence was introduced and some evidence was introduced in a manner not authorised by the Evidence Act. (4) That the Court abused its powers under s.342, Cr. P.C. while conducting the examination of the respondents. (5) The evidence of the approver was inadmissible because the pardon granted to him was illegal, that, in any case, it is unreliable, was so found even by the Sessions judge and must, therefore, be rejected. If the evidence of the approver is left out the remaining evidence would be inadequate to sustain the prosecution case. We shall deal with Mr. Bhimasankaram 's contentions in the order in which we have set them out. The first question for consideration is whether there was a misjoinder of parties and of persons. The first charge is in respect of the conspiracy alleged to have been entered into by the two respondents, K. V. Ramana, the approver, and others "known and unknown" to commit criminal breach of trust of the funds of VESCO and, in order to screen its detection, to falsify the accounts of VESCO and to use forged documents as genuine. On the face of it this is a valid charge. But certain objections have been taken to it with which we will deal at the 313 appropriate place. The second charge is for an offence of criminal breach of trust punishable under section 409 and the accusation therein is that the two respondents along with Ramana, misappropriated 69 items aggregating to a little over Rs. 3,20,000/ . It is clear from the charge that some of the amounts were misappropriated between April, 1947 and March, 1950, some between April, 1947 and March, 1949, some between April, 1947 and March, 1951 and quite a large number between September, 1947 and March, 1950 and a still large number between April, 1951 and March, 1952. It is thus apparent that offences committed within a space of 12 months were tried along with offences committed beyond that period. Unless, therefore, the provisions of section 239 are applicable it would follow that there was a misjoinder of charges. The third charge is that the two respondents, along with the approver Ramana made false entries on seven different dates in the account books between September 19, 1947 and March 18, 1952 and thus committed an offence under section 477 A, I.P.C. The fourth charge is that the two respondents, along with the approver Ramana forged six documents on different dates between March 28, 1949 and November 12, 1951 and thus committed an offence under section 471 read with section 467, I.P.C. As we have pointed out earlier the respondent No. I alone was convicted by the Additional Sessions judge in respect of the third and fourth charges. Mr. Bhimasankaram supports the reason given by the High Court for coming to the conclusion that there was a misjoinder of charges. The main reasons upon which the conclusion of the High Court is based are firstly that there could be no clubbing together of the provisions of the various clauses of section 239 and secondly that the respondents were charged with more than three offences of the same kind and that this was in contravention of section 239 (c). In coming to the conclusion that the 314 provisions of various clauses of section 239 cannot be applied cumulatively the High Court has relied upon the decision in Re: Vankavalapati Gopala Rao (1). There the learned judges have held thus: "These clauses are mutually exclusive and they cannot be simultaneously applied and to construe them as supplementing each other would be enlarging the scope of the exceptions. Each clause is an exception to the general rule enacted in section 233, Cr. If such a combination is permissible, all persons accused of offences described in cls. (a) to (g) can be tried together in one case which certainly involves a bewildering multiplicity of charges and which would obviously set at naught the salutary principle contained in section 233." (p. 24) In support of this view the High Court in that case has relied upon the decision in T. B. Mukherji vs State (2 ) and referred to the decision in Singarachariar vs Emperor (3) and D. K. Chandra vs The State(,). Before considering these decisions it will be useful to look at the scheme of Chapter XIX of the Code of Criminal Procedure which deals with the charge. The chapter is split up into two sub heads, ' Form of charges" and "Joinder of charges. " Sections 221 to 232 are comprised under the first sub head and sections 233 to 240 in the second. Sections 221 to 223 deal with the framing and content of charge. section 224 deals with the interpretation of the language of the charge and section 225 with the effect of errors in the charge. Sections 226 to 231 deal with the power of the court with regard to framing and altering charges and the procedure to be adopted at the trial where a charge is found to be defective or there is no charge or where a new charge is to be (1) A.I.R. 1956 Andhra 21. (2) A.I.R. 1954 All. 501. (3) A,I,R, (4) A,I.R. F.B, 315 framed. Section 232 deals with the power of the. appellate court or the High Court when it discovers that there is material error in the charge. Then we come to the other sub head of this chapter. Section 233 provides that for every distinct offence of which any person is accused there shall be a. separate charge. It thus lays down the normal rule to be followed in every case. But it also provides that this will be subject to the exceptions contained in SS. 234, 235, 236 and 239. The first three provisions relate to the framing of charges against a single accused person. Section 234 (1) deals with the trial of a person for offences of the same kind not exceeding three committed within the space of 12 months from the first to the last of such offences and section 231 (2) what is meant by the expression 'offences of ' the same kind '. This provision lifts partially the ban on the trial of a person for more than one offence at the same trial. Section 235(1), however, goes a step further and permits the trial of a person for more offences than one if they are so connected together as to form the same transaction. Thus under this provision if the connection between the various offences is established the limitations placed by section 234(1) both as regards the number and the period during which the offences are alleged to have been committed will not apply. Full effect cannot possibly be given to this provision if we hold that it is subject to the limitation of s.234(1). Sub section (2) of section 235 deals with a case where an offence falls within two definitions and sub s.(3) deals with a case in which a number of acts are alleged against an accused person, different com binations of which may constitute different offences. Then we come to section 236 which provides that if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and further provides that any number of such 316 charges may be tried together. It also permits that charges could be framed against an accused person in the alternative if the court thinks fit. Thus, this is a special provision available in case of doubt and is neither subject to the limitations prescribed by section 233 nor those of the other preceding provisions. Now, if the respondent No. 1 were alone tried upon the second, third and the fourth charges the provisions of section 235(1) could have been pressed in aid if the allegations were that the offences were so connected together as to form one and the same transaction and the validity of the trial would not have been open to any attack. Similarly if the second respondent were alone tried on the second charge his trial would not have been open to any objection if the allegation were that the offences were so connected together as to form the same transaction. Here, however, we have a case where the prosecution alleges that there was additionally a conspiracy to which apart from the two respondents the approver and some other persons were parties and where in both the respondents were tried together. A conspiracy must be regarded as one transaction and, there fore, a single individual charged with it could be tried with the aid of section 235(1) for all the acts committed by him in furtherance or in pursuance of the conspiracy without the limitations imposed by s.234(1). For, where all the acts are referable to the same conspiracy their connection with one another is obvious. The only provision in the Code which permits the joint trial of more than one person is section 239 and what we have to see is whether under that provision the two respondents could have been jointly tried for the offences with which they were charged. Let us, therefore, examine closely the provisions of 317 section 239. It will be useful to set out the provisions of that section which run thus : " The following persons may be charged and tried together, namely: (a) persons accused of the same offence committed in the course of the same transaction; (b) persons accused of an offence and per sons accused of abetment, or of an attempt to commit such offence; (e) persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of twelve months; (d) persons accused of different offences committed in the course of the same transaction; (e) persons accused of an offence which includes theft, extortion, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of, property possession of which is alleged to have been transferred by any such offence committed by the first named persons, or of abetment of or attempting to commit any such 1st named offence; (f) persons accused of offences under sec tions 411 and 414 of the Indian Penal Code or either of those sections in respect of stolen property the possession 318 of which has been transferred by one offence; and (g) persons accused of any offence under Chapter XII of the Indian Penal Code relating to counterfeit coin, and persons accused of any other offence under the said Chapter relating to the same coin, or of abetment of or attempting to commit any such offence; and the provisions contained in the former part of this Chapter shall, so far as may be, apply to all such charges. " This first thing to be noticed is that section 239 does not read as if its various clauses can be applied only alternatively. On the other hand at the end of cl. (f) there is a conjunction 'and '. If the intention of the Legislature was that the provisions of these clauses should be available only alternatively it would have used the word "or" and not "and" which has the opposite effect. Grammatically, therefore, it would appear that the provisions of the various clauses are capable of being applied cumulatively. The opening words of the section show that it is an enabling provision and, therefore, the Court has a discretion to avail itself cumulatively of two or more clauses. Of course a Court has the power to depart from the grammatical construction if it finds that strict adherence to the grammatical construction will defeat the object the Legislature had in view. The concluding portion of section 239 shows that the provisions contained in the former part of Chapter XIX shall, as far as may be, apply to the charges framed with the aid of section 239. Does this mean that the provisions of section 233, 234, 235, and 236 must also be complied with? Obviously, section 233 does not override the provisions of section 239. Section 234 cannot also be regarded as an 319 overriding provision because reading it that way will lead to the clear result that whereas several accused persons can be charged at the same trial with any number of different offences committed by them in the course of the same transaction they cannot be tried also for offences of the same kind exceeding three in number and committed beyond a space of 12 months from the first to the last. It could not have been the intention of the Legislature to create such a situation. Again, as already stated, section 234(1) does not override the provisions of section 235(1) which permits trial of a person for more offences than one committed during any period provided they are so connected together as to form one transaction. Unless we read section 234(1) as not enacting a fetter on section 235(1), it may not be possible to give full effect to the latter. Now, since section 234(1) cannot be properly read a,,; overriding section 235(1) there is no valid reason for construing it as overriding the provisions of section 239 either. There are also other reasons which point to this conclusion which we will set out while considering the argument advanced by Mr. Bhimasankaram. Mr. Bhimasankaram contended that s, 239 must be read at least subject to sections 234(1) and 235(1) on the ground that if there are certain restrictions with respect to the trial of a single accused there is no reason why those restrictions will disappear if an accused person is tried along with several other persons. Thus he points out that where several persons are accused of more offences than one of the same kind committed by them jointly within a period of 12 months, the number of offences for which they could be tried cannot exceed three. In this connection he relied upon the words "within the meaning of section 224" occurring in cl. (c) of section 239. These words, he contended, clearly show that cl. (c) of section 239 is subject to the provisions of section 234. In our opinion the words " within the meaning of section 234" indicate that what was meant by the words offence of the same kind" 320 in cl. (c) of section 239 is the same thing as was meant by the identical expression used in section 234(1) and defined in section 234(2) and nothing more. If it was the intention of the Legislature to provide that the number of offences for which several accused persons could be tried under cl. (c) of section 239 should be limited to three as provided in section 234(1), the Legislature would either have Said " 'persons accused of more offences than one of the same kind not exceeding three in number" or may have used the words "person accused of more than one offence of the same kind to the extent permissible under section 234". Language of this kind would have made perfectly clear that cl. (c) of section 239 was subject to section 234(1). As already stated, if section 239(c) is construed as being subject to section 234(1), there would be this anomaly that whereas the same accused person could be charged with and tried jointly for any number of offences of different kinds committed by them, for more than three offences of the same kind committed by them jointly there will have to be a separate trial with respect to such offences. Surely such could not have been the intention of the legislature. The object of enacting section 239 was to avoid multiplicity of trials and the only limitation which could properly be placed on the trial of several persons for the same kind of or different offences would be that which considerations of justice and fairness would require. No doubt, such a construction would also give rise to the result that whereas so far as the trial of a single accused person is concerned the charges must be limited to three offences committed by him within the space of 12 months from the first to the last of such offences, there would be no such limitation when along with that accused person there are one or more persons who have jointly committed those offences. The reason for this possibly is that the Legislature did not want to differentiate between cases where any number of different offences were committed jointly by a group of persons from cases where any number 321 of offences of the same kind were committed by a group of persons. According to Mr. Chari section 235(1) cannot be construed as having an overriding effect on section 239 because whereas it contemplates acts so connected together as to form the same transaction resulting in more offences than one, section 239(d) contemplates offences committed in the course of the same transaction and nothing more. The question is whether for the purposes of section 239(d) it is necessary to ascertain any thing more than this that the different offences were committed in the course of the same transaction or whether it must further be ascertained whether the acts are intrinsically connected with one another. Under section 235(1) what has to be ascertained is whether the offences arise out of acts so connected together as to form the same transaction, but the words "so connected together as to form" are not repeated after the words " 'same transaction" in section 239. What has to be ascertained then is whether these words are also to be read in all the clauses of section 239 which refer to the same transaction. Section 235(1), while pro viding for the joint trial for more than one offence, indicates that there must be connection between the acts and the transaction. According to this provision there must thus be a connection between a series of acts before, they could be regarded as forming the same transaction. What is meant by "same transaction" is not defined anywhere in the Code. Indeed, it would always be difficult to define precisely what the expression means. Whether a transaction can be regarded as the same would necessarily depend upon the particular facts of each case and it seems to us to be a difficult task to undertake a definition of that which the Legislature has deliberately left undefined. We have not come across a single decision of any Court which has embarked upon the difficult task of defining the expression. But it is generally thought that where there is proximity of time or place or 322 unity of purpose and design or continuity of action in respect of a series of acts, it may be possible to infer that they form part of the same transaction. It is, however, not necessary that every one of these elements should co exist for a transaction to be regarded as the same. But if several acts committed by a person show a unity of purpose or design that would be a strong circumstance to indicate that those acts form part of the same transaction. The connection between a series of acts seems to us to be an essential ingredient for those acts to constitute the same transaction and, therefore, the mere absence of the words "so connected together as to from" in cl. (a), (c) and (d) of section 239 would make little difference. Now, a transaction may consist of an isolated act or may consist of a series of acts. The series of acts which constitute a transaction must of necessity be connected with one another and if some of them stands out independently, they would not form part of the same transaction but would constitute a different transaction or transactions. Therefore, even if the expression " 'same transaction" alone had been used in section 235(1) it would have meant a transaction consisting either of a single act or of a series of connec ted acts. The expression "same transaction" occurring in cls. (a), (c) and (d) of section 239 as well as that occurring in section 235(1) ought to be given the same meaning according to the normal rule of construction of statutes. Looking at the matter in that way, it is pointless to inquire further whether the provisions of section 239 are subject to those of section 236(1). The provisions of sub section (2) and (3) of section 235 are enabling provisions and quite plainly can have no overriding effect. But it would be open to the court to resort to those provisions even in the case of a joint trial of several persons permissible under section 239. Section 236 is also an enabling provision to be availed of in case of doubt and it is meaningless to say that section 239 is subject to section 236. ]Bearing in 323 mind the fact that the provisions in the "former part" of Chapter XIX are applicable to charges made with the aid of section 239 only "so far as may be" it would not be right to construe section 239 as being subject to the provisions of sections 233 to 236. It was contended by Mr. Chari that the expression "former part" would apply to the first sub division of chapter XIX which deals with the form and content of the charges and the powers of the court with regard to the absence of charge and alteration of charge. We cannot, however, give the expression such a restricted meaning. For, even in the absence of those words, the earlier provisions could not have been ignored. For, it is a rule of construction that all the provisions of a statute are to be read together and given effect to and that it is, therefore, the duty of the Court to construe a statute harmoniously. Thus, while it is clear that the sections preceding section 239 have no overriding effect on that section,, the courts are not to ignore them but apply such of them as can be applied without detracting from the provisions of S.239. Indeed, the very expression 'so far as may be ' empha sises the fact that while the earlier provisions have to be borne in mind by the Court while applying section 239 it is not those provisions but the latter which is to have an overriding effect. Apart from this, the question whether the provisions of sections 233 to 236 have or have no overriding effect on section 239 is not strictly germane to the question considered by the High Court that is, clubbing together all the provisions of the various clauses of section 239. Whether they can or cannot be read cumulatively must be determined by consideration of the language used in those clauses. We have already indicated how those clauses may be grammatically read. On a plain construction of the provisions of section 239, therefore, it is open to the Court to avail itself cumulatively of the provisions of the different clauses of section 239 for the purpose of framing charges 324 and charges so framed by it will not be in violation of the law, the provisions of sections 233, 234 and 235 notwithstanding. The decision of the Allahabad High Court in T. R. Mukherji 's case (IL), is directly in point and is clearly to the effect that the different clauses of section 239 are mutually exclusive in the sense that it is not possible to combine the provisions of two or more clauses in any one case and to try jointly several persons partly by applying the provisions of one clause and partly by applying those of another or other clauses. A large number of decisions of the different High Courts and one of the Privy Council have been considered in this case. No doubt, as has been rightly pointed out in this case, separate trial is the normal rule and joint trial is an exception. But while this principle is easy to appreciate and follow where one person alone is the accused and the interaction or intervention of the acts of more persons than one does not come in, it would, where the same act is committed by several persons, be not only inconvenient but injudicious to try all the several persons separately. This would lead to unnecessary multiplicity of trials involving avoidable inconvenience to the witnesses and avoidable expenditure of public time and money. No corresponding advantage can be gained by the accused persons by following the procedure of separate trials. Where, however, several offences are alleged to have been committed by several accused persons it may be more reasonable to follow the normal rule of separate trials. But here, again, if those offences are alleged not to be wholly unconnected but as forming part of the same transaction the only consideration that will justify separate trials would be the embarrassment or difficulty caused to the accused persons in defending themselves. We entirely agree with the High Court that joint trial should be founded on some 'principle '. But we find it difficult to appreciate what seems to (1) A. I. R. 1954 All. 325 be the view of the High Court that because each `clause of section 239 enunciates a separate principle those principles are, so to speak, mutually ' exclusive and cannot be cumulatively resorted to for trying several persons jointly in respect of several offences even though they form part of the same transaction. The High Court has propounded that the connection described in each of the various clauses is mutually exclusive, that no two of them can exist simulta neously in any case and that one cannot, therefore, have in any case persons connected with one another in two or more ways. In other words, as the High Court puts it, persons included in two or more of the groups cannot all be tried together and that since there is absolutely nothing to connect one group with any other, the persons of one group cannot be tried with those of any other. No reason has been stated in support of this view. Let us consider whether there is anything intrinsically incompatible in combining two clauses of section 239. Take cls. (a) and (b). Clause (a) says that persons accused of the same offence committed in the course of the same transaction may be charged and tried together. Clause (b) says that persons accused of an offence and persons accused of abetment, or, of an attempt to commit such offence may also be charged and tried together. Now, if persons A, B and C are tried for an offence of murder what intrinsic difficulty would there be in trying X, Y and Z of abetment of the same offence? The transaction in which all of them have participated is the same and the abetment by X, Y and Z of the offence committed by A, B and C would itself establish the connection of their acts with those of X, Y and Z. Next, let us take cls. (a) and (c). Clause (c) provides that persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of twelve months could also be charged and tried together. Let us consider these clauses along with another illustration. Two persons A and 326 B enter a house at night and first together commit the murder of a man sleeping there and then also his wife. Each of them has committed two offences and each of them participated in the same offence. Why can they not be tried jointly for both murders and why should there be two trials for the two murders ? The offences are of the same kind and must be deemed to have been committed in the course of the same transaction because of association and mutual connection. Now, supposing in the illustration given A killed the man and B killed his wife. Under cl. (c) they could be tried together because the offences are of the same kind. It would be ridiculous to say that they cannot be tried together for jointly committing the murder of the man and the wife because cl. (a) and (c) cannot be combined. For, without combining these two clauses their joint trial for the two offences in each of which both have participated would be impermissible. Then take section (a) and (d). Under cl. (d) persons accused of different offences committed in the course of the same transaction can be tried together. Let us suppose that a group of persons are accused of having been members of an unlawful assembly the common object of which was to overawe by sheer force another group of persons and take forcible possession of a piece of land. Some of the members of the unlawful assembly carried axes with them while some others carried lathis and attacked the other group. During the course of the attack one person from the second group was killed, as a rest of blows with an axe inflicted by the aggressors A, B and C. Two persons of the second group sustained grievous hurt as a result of lathi blows and one person sustained simple hurt. Let us say that the grievous hurt was caused as a result of lathi blows given by X and Y, simple hurt was caused by lathi blows given by Z. Here, the offences committed were those under sections 147, 302, 325 and 323, I.P.C. The offences being different and the persons commiting the offences being different, they could not 327 be tried jointly only with the help of cl. (a) of section 239. Nor again, could they be tried jointly only with the help of cl. Yet the transaction in which the offences were committed is the same and there is a close association amongst the persons who have committed the different offences. What intrinsic difficulty is there in trying them all together simultaneously availing of cls. (a) and (d) of section 239? These are enabling provisions which circumstance implies that the court may avail itself of one or more of these provisions unless doing so would amount to an infringement of any of the provisions of the Code. All these persons can be jointly tried for offences under section 147 by recourse to cl. So also A, B and C could be jointly tried together for an offences under section 302. X and Y can be charged not only with offences under sections 147 and 325, I. P.C. but also under section 302 read with section 149. Similarly Z can be charged with offence 's under sections 147, 323 and offences under section 302 read with section 149 and section 325 read with section 149. The same offence committed by all of them is that under section 147 and all of them can be tried jointly in respect of that offence under cl. Similarly, if we take cl. (d) by itself all of them can be tried jointly for the different offences committed by each of them in the course of the same transaction and if cl. (a) is unavailable they could not be tried for the offence under section 147 at the same trial. This means that the trial for an offence under section 147 will have to be separated from the trial for the different offences committed by them. It is difficult to appreciate what purpose would be served by separating the trial for the same offence from the trial for different offences. To repeat, the object of the legislature in enacting section 239, Cr. P.C. clearly was to prevent multiplicity of trials and not only would that object be defeated but an extraordinary result will ensue if the various clauses of section 239 are read disjunctively. The reasons given by the Allahabad High Court, therefore, do not merit acceptance. 328 The decision in Singarachariar 's Case (1), has really no bearing upon the point before us. What was held there was that sections 235 (1) and section 236 are mutually exclusive and if a case is covered by one of them it cannot be covered by the other. In that case the question was whether a person who was first tried for an offence under section 380, I.P.C. for stealing a blank second class railway ticket from the booking office, tried, for it and acquitted, could not be tried subsequently for the offence of forgery by making entries in that ticket and using it. The acquittal in the previous case was urged as a bar under section 403(1) of the Code to the trial for an offence under section 467, I.P.C. The contention apparently was that this was a case which fell under section 236, Cr. P.C. and that if he had been tried alternatively for both the offences at the same trial the Court could have dealt with him under section 237, Cr. The High Court, however, held that to be a kind of case which fell under section 235(1) of the Code and that since that was so, the provisions of section 236 were excluded. It is difficult to appreciate how this case assists the conclusion arrived at by the High Court. In D.K. Chandra 's Case (2) it was held that the provisions of sections 234, 235 and 236 being exceptions to section 233 must be strictly construed and that if joinder of charges did not fall under any of them it would be illegal and contrary to law. The precise point which we have to consider here did not fall for consideration in that case i.e., whether the provisions of the various clauses of section 239 could be used together or not. This decision is, therefore, of little assistance. On the other band there is the decision of this Court in The State of Andhra Pradesh vs Kandinmlla Subbaiah (3), which is to the effect that where several persons had committed offences in the course of the same transactions, they could jointly be tried in respect of all those offences under section 239 of the Code of Criminal (1) A.I.R. 1934 Mad 673. C. (2) A. I.R. , F. B. (3) [1962] 2 section R. 194. 329 Procedure and the limitation placed by section 234 of the Code could not come into operation. There, nine persons were jointly tried for 'an offence under section 5 (1) (c) and (d) of the Prevention of Corruption Act, 1947, and section 109, I. P. C. read with s ' 420, section 466 and section 467, I. P. C. and all except one for offences under sections 420, 467/471, I.P.C. Some of them were also charged with separate offences under some of these provisions. Two of the accused persons preferred a revision application before the High Court of Andhra Pradesh in which they challenged the charges framed against them. The High Court allowed the revision application. But on appeal by the State of Andhra Pradesh to this Court, this Court held that there was no misjoinder of charges, that the introduction of a large number of charges, spread over a long period was a question of propriety and that it should be left to the judge or the Magistrate trying the case to adopt the course which he thought to be appropriate in the facts and circumstances of the case. In so far as some of the charges were concerned this Court pointed out that the Special judge who was to try the case should consider splitting them up so that the accused persons would not be prejudiced in answering the charges and defending themselves. It is true that the question of reading the various clauses cumulatively did not specifically arise for decision in that case but the High Court had held that the first charge was an omnibus charge containing as many as 203 offences and that it was in direct violation of sections 234, 235 and 239 of the Code of Criminal Procedure. Dealing with this matter this Court held at p. 200 : "No doubt, sub section (1) of section 234 provides that not more than three offences of the same kind committed by an accused person within the space of 12 months can be tried at the same trial. But then section 235 (1) provides that if in any one series of acts so connected together 330 as to form the same transaction more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence. Therefore, where the alleged offences have been committed in the course of the same transaction the limitation placed by section 234 (1) cannot operate. No doubt, the offence mentioned in charge No. I is alleged to have been committed not by just one person but by all the accused and the question is whether all these persons can be jointly tried in respect of all these offences. To this kind of charges. 239 would apply. This section provides that the following persons may be charged and tried together, namely : (1) persons accused of the same offence committed in the course of the same transaction; (2) persons accused of abetment or an attempt to commit such an offence; (3) persons accused of different offences committed in the course of the same transaction. Clearly, therefore, all the accused persons could be tried together in respect of all the offences now comprised in charge No. 1. This Court has thus clearly read the provisions of the various clauses cumulatively and we see no reason to read them differently. There remains the decision of this Court in K.V. Krishna Murthy Iyer vs The State of Madras (IN on which Mr. Bhimasankaram strongly relied. In that case this Court upheld the order of the High Court of Madras in quashing the charges in the exercise (1) A. I. R. 1954 s, a. 406. 331 of its inherent powers even before the conclusion of the trial. It is true that there the charges were 67 in number and spread over a long period, of time. That again was a matter which came before the High Court before conviction and not after the trial was over. When an objection is taken at an early stage, there is time enough to rectify an error. But in the case before us no objection was taken to multiplicity or misjoinder of charges before the learned Additional Sessions judge and it was only in the High Court that the point was raised, In such circumstances what the Court has to consider is whether prejudice has in fact been caused to the accused by reason of the multiplicity of charges or misjoinder, if any, of the charges. This is quite clear from the provisions of section 537 of the Code as amended by Act 26 of 1955. In Willie (William) Slaney vs The State of Madhya Pradesh (1), all the learned judges were in agreement on the point that this section and section 535 cover every case in which there is departure from the rules set out in Ch. XIX ranging from error, omissions and irregularities in charges that are framed, down to charges that might have been framed and were not and include a total omission to frame a charge at all at any stage of the trial. The whole question has again been examined by this Court recently in Birichh Bhuian vs The State of Bihar (2). Subba Rao J., who delivered the judgment of the Court has stated the position thus "To summarise: a charge is a precise formula tion of a specific accusation made against a person of an offence alleged to have been com mitted by him. Sections 234 to 239 permit the joinder of such charges under specified condi tions for the purpose of a single trial. Such a joinder may be of charges in respect of different offences committed by a single person or several persons. If the joinder of charges was contrary to the provisions of the Code it would (1) [1955] 2 section Co R. 1140, (2) [1963] Supp. 2S.C.R. 328 332 be a misjoinder of charges. Section 537 prohibits the revisional or the appellate court from setting aside a finding, sentence or order passed by a court of competent jurisdiction on the ground of such a misjoinder unless it has occasioned a failure of justice. " Even if we were to assume that there has been a misjoinder of charges in violation of the provisions of sections 233 to 239 of the Code, the High Court was incompetent to set aside the conviction of the respondents without coming to the definite conclusion that misjoinder had occasioned failure of justice. This decision completely meets the argument based upon Dawson 's Case (1). Merely because the accused persons are charged with a large number of offences and convicted at the trial the conviction cannot be set aside by the appellate court unless it in fact came to the conclusion that the accused persons were embarrassed in their defence with the result that there was a failure of injustice. For all these reasons we cannot accept the argument of learned counsel on the ground of misjoinder of charges and multiplicity of charges. Mr. Bhimasankaram, supporting the view taken by the High Court then contends that it is not permissible to frame a charge of conspiracy when the matter has proceeded beyond the stage of conspiracy and that in pursuance of it offences have actually been committed. A similar view was expressed by the same High Court in the case which was reversed by this Court in The State of Andhra Pradesh V. Kandinalla Subbaiah (2), and it was held that conspiracy to commit an offence being itself an offence a person can be separately charged with respect to such a conspiracy. Then this Court has observed: " Where a number of offences are committed by several persons in pursuance of a conspiracy it is usual to charge them with those (1) (1960)1 All, E. R. 558 (2) , 333 offences as well as with the offence of conspiracy to commit those offences. As an instance of this we may refer to the case in section Swamirathnam vs State of Madras (1). Though the point was not argued before this Court in the way it appears to have been argued. . . before the High Court of Andhra Pradesh, this Court did not see any thing wrong in the trial of several persons accused of offences under section 120 B and s.420. I.P.C. We cannot, therefore, accept the view taken by the High Court of Andhra Pradesh that the charge of conspiracy was bad. If the alleged offences are said to have flown out of the conspiracy the appropriate form of charge would be a specific charge in respect of each of those offences along with the charge of conspiracy." (pp. 201 202). This decision is sufficient to dispose of the point under consideration. In Swamirathnam 's case (1), which is a decision of this Court certain persons were tried for the offence of the conspiracy to cheat the members of the public and for specific offences of cheating in pursuance of that conspiracy. It was urged before this Court that there was misjoinder of charges and persons Negativing the contention this Court held that the charge as framed disclosed a single conspiracy although spread over several years, that there was one object of the conspiracy and that was to cheat the members of the public, that the fact that in the course of years other joined the conspiracy or that several incidents of cheating took place in pursuance of the conspiracy did not have the effect of splitting the conspiracy into several conspiracies. that the several instances of cheating being alleged to be in pursuance of that conspiracy were parts of the same transaction and, therefore, the joint trial of the accused (1) A. I. R. , 343, 344. 334 persons for the different offences was not vitiated. No doubt, there is no discussion there as to the question whether the various clauses of section 239 could be combined or as to the impact of the provisions of section 233 to 236 on those of section 239. The actual decision of the case is, however, directly opposed to the contention now put forward before us. This decision has been followed in Natwarlal Sakarlal Mody vs The State of Bombay (1). In that case the impact of section 120 B, I.P.C. on sections 233 and 239 of the Code of Criminal Procedure was considered by this Court and this Court observed: "The combined effect of the three provisions (sections 235, 236 and 239) is that if there is a criminal conspiracy to commit different offences, the persons who are members of that conspiracy may be charged and tried together but the necessary condition for invoking the provisions of section 239 (d) is that the offence should have been committed in the course of one transaction i.e., in the present case one and the same conspiracy. " Here again, the question of clubbing together of the various provisions of cls. (a) to (d) of section 239 was not raised expressly in the argument before the Court. But the ultimate decision of the case would negative such argument. Mr. Bhimasankaram then relying upon the decision in R. vs Dawson (2), contended that in any event it was not desirable to try the respondents at the same trial for as many as 83 offences and pointed out that these observations had received the approval of this Court in The State of Andhra Pradesh vs Kandimalla Subbaiah (3). In the first place there the trial had not actually begun. Again, what was said by this Court was that it is undesirable to complicate a trial by introducing a large number of charges (1) Crl. A. No. III of 1959 decided on January 19, 1961. (2) , (3) 335 spread over a long period but even so this was a question of propriety which should be left to the discretion of the judge or Magistrate trying the case. Objection was taken very seriously by Mr. Bhimasankaram to the charge of conspiracy framed in this case. That charge reads thus : "That both of you along with K.V. Ramana, exhibit Senior Accountant of the Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam (approver) and others, known or unknown, in or about April 1, 1947, at Visakhapatnam, agreed to do illegal acts, to wit, commit criminal breach of trust in respect of the funds belonging to the Vizagapatam Electric Supply Corporation Ltd., Vizagapatnam; and to screen yourselves from detection of the same, to wilfully, and with intent to defraud, falsify the accounts of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam and that pursuant to the said agreement, you committed criminal breach of trust in respect of funds of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam to the extent of over Rs 3,20,000 and falsified the said accounts between April, 1947 and March, 1952, and also used forged documents as genuine], offences punishable under Sections 409, Indian Penal Code and 477 A, Indian Penal Code and 471 read with section 467, Indian Penal Code ; and thereby committed an offence of criminal conspiracy punishable under Section 120 B of the Indian Penal Code and within my cognizance. " Adverting to the portion which we have bracketed, his first objection was that the charge comprises within it not merely the conspiracy but also what 336 was in fact done in pursuance of the conspiracy. His next objection was that it brought within its purview all the various offences which were alleged to have been committed by the respondents. The third objection was that no charge of conspiracy could have been framed after the conspiracy had borne its fruits. The last objection was that the charge of conspiracy was added to the charge sheet very late. We shall first deal with the third point. The offence of conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy the liability of the conspirators for the conspiracy itself cannot disappear. In the Indian Penal Code, as originally enacted, conspiracy was not an offence. Section 120 B which makes criminal conspiracy punishable was added by the Indian Criminal Law Amendment Act, 1913 (8 of 1913) along with section 120 A. Section 120 A defines conspiracy and section 120 B provides for the punishment for the offence of conspiracy. Criminal conspiracy as defined in section 120 A and consists of an agreement to do an illegal act or an agreement to do an act which is not illegal by illegal means. Section 120 B provides that whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards shall be punishable in the same manner as if he has abetted such offence unless there was an express provision in the Code for the punishment of such conspiracy. Criminal conspiracy was, however, not an unknown thing before the amendment of the Indian Penal Code in 1913. But what the amendment did was to make that conspiracy itself punishable. The idea was to prevent the commission of crimes by, so to ,speak, nipping them in the bud. But it does not follow that where crimes have been committed the liability to punishment already incurred 337 under section 120 B by having entered into a criminal conspiracy is thereby wiped away. No doubt, as already stated, where offences for committing which a conspiracy was entered into have actually been committed it may not, in the particular circumstances of a case, be desirable to charge the offender both with the conspiracy and the offences committed in pursuance of that conspiracy. But that would be a matter ultimately within the discretion of the court before which the trial takes place. In so far as the fourth point is concerned, that would have a bearing not on the form of the charge but on the credibility of the evidence bearing on the point of conspiracy. As we are remanding the appeal to the High Court for a fresh decision after full consideration of the evidence adduced in the case it would be open to it to consider this matter particularly while judging the credibility of the evidence of the approver. In so far as the portion included in the bracket is concerned we agree with the learned counsel that it should not have found place there. The ideas, however, of the committing magistrate in stating all that is said there appears to have been merely to describe the conspiracy and do nothing more. We do not think that either that or the other objection raised, that is, that the charge embraces within it all the offences said to have been committed by the respondents can properly. be said to vitiate the charge. The object in saying what has been set out in the first charge was only to give notice to the respondents as to the ambit of the conspiracy to which they will have to answer and nothing more. Even assuming for a moment that this charge is cumbersome in the absence of any objection by the respondents at the proper time and in the absence of any material from which we could infer prejudice, they are precluded by the provisions of section 225 from complaining about it at any rate after their conviction by the trial court. 338 Coming to the next point of Mr. Bhimsankaram regarding the abuse of powers under section 342 his first contention was that long and involved questions were put to the respondents. His second contention was that reference was made to a number of documents in some of these questions and those documents were not made available to the respondents for answering those questions. The third contention was that the questions were involved, confusing and bordered on cross examination. Finally he said that the court did not perform its duty under section 342 (4) of the Code as amended as it failed to bring to the notice of the respondents that they may, if they chose, give evidence in their defence. In support of his first contention he referred to questions Nos. 4, 8, 9, 10 and 20 put to the respondent No. I and question No. 12 put to the respondent No. 2 and tried to show that those questions rolled up a large number of separate questions and that it could not have been possible for the respondents to give any rational answers to those questions. We have read the questions and so also the answers. While we are disposed to agree with learned counsel that the questions embrace a number of matters and that it would have been better if those matters had been made the subjects of separate questions, the answers given by the respondents clearly show that they understood the questions and wherever possible they have given complete answers to those questions. That is to say, they have given their explantion regarding the circumstances appearing in the evidence set out in the questions and wherever that was not feasible they have said that they would do so in their written statements. In fact written statements have been filed by each of them in which every point left over has been fully answered. We are informed that the questions had been prepared before hand by the learned Additional Sessions judge, copies thereof were made available to 339 each of the respondents and it was with reference to those copies that they gave their answers in the court. A pointed reference was made to question No. 20 put to respondent No. I which contains as many as 22 sub heads and it is said that it was an extremely unfair and embarrassing question. What the learned Additional Sessions judge has done is to err on the side of over cautiousness by putting every circumstance appearing in the evidence to the respondents for eliciting their explanations. His object was to obviate the possibility of a complaint before the appellate court that they were denied the opportunity of explaining the circumstances appearing in evidence against them because of defective questions. Nor again, do we think that there is any substance in the complaint made that the respondents had no opportunity of referring to the documents to which reference has been made in certain questions. No objection was taken on their behalf before the learned Additional Sessions judge and from the manner in which they have answered the questions there is no doubt that they must have had opportunity to look at the relevant documents and answer the questions. We are also satisfied that there is no substance in the complaint that the questioning bordered on cross examination. Undoubtedly the learned Additional Sessions judge has questioned the respondents very fully and elaborately but to say that this bordered on cross examination is wholly unjustifiable. The object of the learned Additional Sessions Judge quite clearly was, as already stated, to leave no loophole for a complaint to be made before the appellate court of incomplete or insufficient examination under section 342. Finally we are clear that it was not the duty of the court to draw the pointed attention of the respondents to the provisions of sub section (4) of section 342 and tell them that they may, if they chose, enter the witness box. It is true that by introducing this provision 340 the disability placed on an accused person in respect of giving evidence on oath in his own defence has been removed and to that extent such person is placed on par with an accused person under the English law. The new provision, however, does no more than lift the ban and does not impose a duty on the court to draw the attention of an accused person to its contents. Apart from that, the respondents were represented by counsel at the trial who knew very well what the law was. No complaint was made by the respondents even in appeal that they were ignorant of their right, that had they known about it they would have given evidence on oath in their defence and that because of this they have been prejudiced. In the circumstances this point must also be rejected as being without substance. The irrelevant evidence to which Mr. Bhimasankaram referred was certain account books. The entries in the. account books of VESCO show that certain sums of money were paid to various parties, Crompton Engineering Co., Lumin Electric Co., D. Brothers, Radio and Electrical, Madras, Vizagapatam Municipality, P. V. Ramanayya Bros., and Andhra Power System. They also show payment case was that the payments which were entered in the account of VESCO do not find a place in the account books of the corresponding firms or authorities because they were never made by VESCO. The High Court has pointed out that the main evidence on which the prosecution rests its case that the amount represented by the entries against these various firms were in. fact misappropriated by the, respondents in the circumstance that there are no corresponding entries in the account books of those firms. The argument before the High Court was and before us is that, the absence of an entry cannot of electricity duty to Government. The prosecution 341 be established by reference to section 34 of the Indian Evidence Act which reads thus: "Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability." This section appears in a group of sections headed "Statements made under special circumstances". What it does is to make entries in books of account regularly kept in the course of business relevant in all proceedings in a court of law. These entries are, however, not by themselves sufficient to charge any person with liability. Therefore, when A sues B for a sum of money it is open to him to put his account books ' in evidence provided they are regularly kept in the course of business and show by reference to them that the amount claimed by him is debited against B. The entry though made by A in his own account books, and though it is in his own favour is a piece of evidence which the court may take into consideration for the purpose of determining whether the amount referred to therein was in fact paid by A to B. The entry by itself is of no help to A in his claim against B but it can be considered by the court along with the evidence of A for drawing the conclusion that the amount was paid by A to B. To this limited extent entries in the account books are relevant and can be proved. Section 34 does not go beyond that. It says nothing about non existence of entries in account books. We, therefore, agree with the High Court that the account books of the various concerns to whom payments are said to have been made by the respondents are not by themselves evidence of the fact that no payments were received by them. The decision in Queen Empress vs Grees Chunder Banerjee (1), upon which reliance (1) Cal. 342 is placed by the High Court in support of its view is also to that effect. Similarly in Ram prashad Singh vs Lakhpati Koer (1). Lord Robertson during the course of the hearing has observed that no inference can be drawn from the absence of any entry relating to any particular matter which observation supports the view taken in Queen Empress vs Girish Chander Banerjee (2). That, however, is not the only provision to be considered. There is section II of the Evidence Act which provides that facts not otherwise relevant are relevant if they are inconsistent with any fact in issue or relevant fact. Some of the facts in issue in this case are whether payments of certain sums of money were made to Crompton Engineering Co., and other firms or authorities. These are relevant facts. Absence of entries in their account books would be inconsistent with the receipt of the accounts and would thus be a relevant fact which can be proved under section 11. The fact that no payments were received by those firms has been deposed to by persons connected with those firms and whose duty it was to receive and acknowledge amounts received by the firms or who were in charge of the accounts of these firms. For the purpose of showing that no amounts were received by the firms, their account books would thus be as relevant as the VESCO account books for the purpose of showing the contrary. Similarly there is section 5 of the Evidence Act which reads thus: "Evidence may be given in any suit or procee ding of the existence or non existence of every fact in issue and of such other facts as are hereinafter declared to be relevant, and of no others. " It is the case of the prosecution that the alleged payments were never made by VESCO to the various firms. It is also their case that these firms maintain their accounts in the regular course of business and it is their practice to enter in those accounts all payments received by them. Both the sets of facts are (1) Cal. 231, 247. (2) C.L 1024. 343 relevant, that is, non receipt of the amounts by the firms and non existence of entries in their account books pertaining to those amounts. It is permissible, therefore, for the prosecution to lead evidence to ,Drove both these facts. The best evidence to prove the latter set of facts consists of the account books of the firms themselves. It is under these provisions that the account books of the firms must be held to be relevant. What value to attach to them is another matter and would be for the Court of fact to consider. It may further be mentioned that the account books of VESCO show certain payments made to Billimoria & Co. of Kharagpur. Papers seized by the police include receipts purporting to have been signed by one J. J. Billimoria on behalf of the firm. The prosecution case is that these receipts are forged documents and the entries in the account books of VESCO are false. One of the partners of the firm was examined by the prosecution as a witness in the case and he produced the account books of the firm. Those account books are in Gujrati and he stated in his evidence that the accounts were regularly kept and that there were no entries in them corresponding to the entries in the VESCO accounts. The High Court held that since the account books were not translated they are not admissible in evidence. The High Court was clearly wrong in so holding. In coming to this conclusion it has relied upon the provisions of section 356 (2A) of the Code of Criminal Procedure. That section reads thus: "When the evidence of such witness is given in any other language, not being English, than the language of the Court, the Magistrate or Sessions judge may take it down in that language with his own hand, or cause it to be taken down in that language in his presence and hearing and under his personal direction and superintendence, and an authenticated translation of 344 such evidence in the language of the Court or in English shall form part of the record." This provision relates only to the oral evidence adduced in a case and not to documentary evidence. Mr. Bhimasankaram, therefore, very rightly did not support the view of the High Court. In the circumstances we wish to say nothing further on the point. We may, however, point out that Billimoria himself gave his evidence in English. Another point urged by Mr. Bhimasankaram was that as many as 2,000 documents were "dumped" by the prosecution in this case out of which 1600 documents were not sought to be proved by it. Further, 64 documents were missing from the records when they came to the High Court and that this has caused serious prejudice to the respondent. No objection, however, was taken in the courts below on this score and in the absence of any prejudice to the respondents we do not think that we should take notice of the complaint made by Mr. Bhimasankaram. The third point stressed by him was that the approver was allowed to refresh his memory, while deposing in the case, by referring extensively to the account books and various documents produced in the case. This, according to him, was an absue of the provisions of section 159 of the Evidence Act. Now, section 159 expressly enables a witness while under examination to refresh his memory by referring to any writing made by himself at the time of the transaction concerning which he is being questioned or soon afterwards, or to a writing made similarly by another person and read by the witness immediately or soon after the writing was made. Section 160 provides that a witness may also testify to the facts mentioned in any such document as is mentioned in section 159. The complaint of Mr. Bhimasankaram is that the approver should have been questioned 345 about the various facts which were sought to be established through his evidence and it was only if and when he was in a difficulty that he should have been allowed to refer to the account books. Instead of doing that what he was permitted to do was just to prove the various documents or read those documents and then depose with reference to them. In our opinion, where a witness has to depose to a large number of transactions , and those transactions referred to are or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents while answering the questions put to him in his examination. He cannot be expected to remember every transaction in all its details and section 160 specifically permits a witness to testify the facts mentioned in the documents referred to in section 159 although he has no recollection of the facts themselves if he is sure that the facts were correctly recorded in the document. That is precisely what happened in this case and we do not think that the Additional Sessions judge adopted a procedure which was either a violation of law or was an abuse of the power of the Court. The next point is a formidable one. According to Mr. Bhimasankaram, the pardon tendered to the approver was illegal and if the pardon is illegal his evidence is wholly inadmissible. Further, according to him, the evidence of the approver was found by the Additional Sessions judge to be unreliable and therefore, the first condition referred to in Sarwan Singh vs The State of Punjab (1), was not satisfied. For all these reasons the evidence of the approver must be left out of account. If it is left out of account, he contends, there is nothing left in the prose cution case, because, as pointed out by the Additional Sessions judge himself the evidence of the approver is the pivot of the prosecution case. (1) ; 346 The pardon is stated to be illegal for two reasons. The first reason is that none of the offences alleged to have been committed falls within section 337 of the Code of Criminal Procedure and the second reason is that the pardon was granted by an authority not empowered to grant it. Section 337 (1) as it stood before its amendment by Act 26 of 1955 read thus "In the case of any offence triable exclusively by the High Court or Court of Session, or any offence punishable with imprisonment which may extend to ten years, or any offence punishable under section 211 of the Indian Penal Code with imprisonment which may extend to seven years, or any offence under any of the following sections of the Indian Penal Code namely, sections 161, 165, 165A, 216A, 369, 401, 431, 435 and 477 A, the District Magistrate, a Presidency Magistrate, a sub divisional Magistrate or any Magistrate of the first class may, at any stage of the investigation or inquiry into, or the trial of the offence, with a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in or privy to the offence, tender a pardon to such person on condition of his making a full and true disclosure of the whole of the circumstances within his knowlege relative to the offence and to every other person concerned, whether as principal or abettor, in the commission thereof : Provided that, where the offence is under inquiry or trial, no Magistrate of the first class other than the District Magistrate shall exercise the power hereby conferred unless he is the Magistrate making the inquiry or holding the trial, and, where the offence is under investigation, no such Magistrate shall 347 exercise the said power unless he is a Magistrate having jurisdiction in a place where the offence might be inquired into or tried and the sanction of the District Magistrate has been obtained to the exercise thereof." His contention is that where none of the offences is exclusively triable by the High Court or the Court of Sessions pardon could be granted only if the offences are punishable with imprisonment which could extend to ten years but not if a higher punishment were provided for them. Here, one of the offences alleged against the respondents is criminal breach of trust punishable under section 409, I.P.C. It is not exclusively triable by a Court of Sessions and the punishment as set out in the 7th column of Schedule II, Cr. P. C. was transportation for life or imprisonment of either description for ten years and fine. He contends that since the offence is punishable with transportation for life, section 337 (1) could not be availed of for granting pardon to the approver. It seems to us that it would not be correct to read section 337 (1) in the way sought by learned counsel. The very object of this provision is to allow pardon to be tendered in cases where a grave offence is alleged to have been committed by several persons so that with the aid of the evidence of the person pardoned the offence could be brought home to the rest. The gravity is of course to be determined with reference to the sentence awardable with respect to that offence. On the strength of these considerations Mr. Chari for the State contends that if the words "any offence punishable with imprisonment which may extend to 10 years" were interpreted to mean offences which were punishable with imprinsonment of less than 10 years grave offences which are not exclusively triable by a court of Sessions will be completely out of section 337 (1). He suggests that this provision can also be reasonably 348 interpreted to mean that where the offences are punishable with imprisonment exceeding 10 years pardon may be granted to the approver. No doubt, if this interpretation is accepted the object of the section, that is, to embrace within it the graver offences, would be fulfilled, but we wish to express no opinion on it. For, the pardon granted in this case can be regarded as being within the ambit of section 337 (1) for another reason. It will be noticed that transportation for life was not the only punishment provided for an offence under section 409 of the Indian Penal Code even before the amendment made to the Indian Penal Code by section 117 of the Act 26 of 1955, the other alternative being imprisonment up to 10 years. Therefore, since the offence under section 409 was not merely punishable with transportation for life but alternately also punishable with imprisonment which could extend to 10 years, section 337 (1) would apply. This section does not expressly say that the only punishment provided for the offence should be imprisonment not exceeding 10 years. The reason why two alternative maximum sentences are given in col. 7, that is, transportation for life (now imprisonment for life) and imprisonment not exceeding 10 years appears to be that the offence is not exclusively triable by a court of session and could also be tried by a Magistrate, who, except when empowered under section 30 would be incompetent to try offences punishable with transportation for life (now imprisonment for life) and the further reason that it should be open to the court of Session, instead of awarding the sentence of transportation for life to a convicted person to award him imprisonment in a jail in India itself for a period not execeeding 10 years. Now, of course, by the amendment made by section 117 of Act 26 of 1955 for the words "transportation for life" the words "imprisonment for life" have been substituted, but the original structure of all the sections now amended continues. That is why they read rather queer but even so they serve the purpose 349 of allowing certain offences triable by a court of Session, to be triable also by Magistrates of the First Class. Be that as it may, there is no substance in the first ground. What we have said about pardon in respect of an offence under section 409 would apply equally to that for one under section 120 B because the punishment for it is the same as that for the offence under section 409. The offence under section 467 read with section 471 is punishable with imprisonment for life or imprisonment of either description for a period of 10 years but it is exclusively triable by a court of Session and, therefore, in so far as such offence is concerned the argument of Mr. Bhimasankaram would not even have been available. As regards the offence under section 477 A, it is one of those sections which are specifically enumerated in section 337 (1) and the argument advanced before us and which we have rejected would not even be available with regard to the pardon in respect of that offence. It is true that the respondent No. I alone was convicted by the Additional Sessions judge of this offence and the offence under section 467 read with section 471 but the validity of a pardon is to be determined with reference to the offence alleged against the approver alone and not with reference to the offence or offences for which his associates were ultimately convicted. Coming to the next ground of attack on the validity of pardon, the argument of Mr. Bhimasankaram is that whereas section 337 (1) speaks of pardon being granted by a District Magistrate, or Presidency Magistrate, a Sub Divisional Magistrate or any Magistrate of First Class, except in cases where an enquiry or trial was pending before another Magis tratc, the pardon here was granted by the Additional District Magistrate in a case where an enquiry was pending before the District Magistrate and is, therefore, illegal and of no avail. He contends that 350 section 337 (1) speaks of the District Magistrate which expression does not include an Additional District Magistrate. Mr. Bhimasankaram 's argument on the point may be summarised thus : Such a power cannot be conferred upon an Additional District Magistrate because section 337 (1) does not contemplate grant of pardon by an Additional District Magistrate and that the Additional District Magistrate would have no status other than that of a Magistrate, First Class. No doubt, under entry (9 a) in Part III of Sch. III to the Code a Magistrate, First Class, has the power to grant pardon under section 337 but it is limited by the proviso thereto to certain classes of cases. A case under enquiry or trial before another magistrate does not fall in any of these classes. Therefore, a pardon granted by him in such a case would be illegal. The Magistrate before whom the enquiry or trial is proceeding or the District Magistrate would be the only authorities competent to grant a pardon in such a case. Alternatively, the State Government has not made any directions under sub section (2) of section 10 specifying the powers of the District Magistrate which would lie exercisable by the Additional District Magistrate concerned. In order to appreciate and consider the argument it is desirable to bear in mind the changes in the magisterial set up in the former province of Madras which comprised within it the district of Visakhapatnam. By Government Order No. 3106 dated September 9, 1949 the Government of the Province of Madras issued certain instructions to the Magistrates in pursuance of the separation of the judiciary from the executive. It divided the magistrates into two groups, Judicial magistrates and executive magistrates. The latter category comprises of the executive officers of the Revenue Department, on whom the responsibility for the maintenance of law and order was to continue to rest. , Para 4 of the instructions provides 351 ". . . To enable them to discharge this respon sibility, these officers will continue to be magistrates. The Collector, by virtue of office, will retain some of the powers of a District Magistrate and will be called the 'Additional District Magistrate. To distinguish him from his Personal Assistant, he may be called 'Additional District Magistrate (Independent) '. He will continue to be the Head of the Police. Similarly, the Revenue Divisional Officers will be exofficio First Class Magistrates, and the Tahsildars and the Deputy Tahsildars will be ex officio Second Class Magistrates. The extent of their magisterial powers will be as indicated in the Schedule of allocation of powers. They will exercise these powers within their respective revenue jurisdictions. " Para 5 provides that as officers of the Revenue Department, those magistrates would be under the control of the Government through the Board of Revenue. The Additional District Magistrates (Independent) would also be under the control of the Government through the Board of Revenue. The category of judicial Magistrates was constituted of the following: (1) District Magistrate; (2) Sub divisional Magistrates; (3) Additional First Class Magistrates and (4) Second Class Magistrates (Sub magistrates). The District Magistrate was constituted as the principal magistrate of the District and as such was entrusted with the duty of general administration and superintendence and control over the other judicial magis trates in the district. In addition to his general supervisory functions and the special powers under the Code of hearing revision petitions, transfer petitions, appeals from Second Class Magistrates and the like, the District Magistrate was also to be assigned a specific area, the cases arising from which would be disposed of normally by himself. This body of magistrates was made subordinate to the High Court. Till the separation between the judiciary and the executive was effected the Collector as the head of the Revenue Department was also the 352 District Magistrate. Consequent on the separation he became only an Additional District Magistrate. Part IV of the Government order deals with the allocation of powers between the judicial and executive magistrates. Para 19(3) occurring in this part deals with allocation of powers under the provisions of the Code otherwise than these referred to in the earlier paragraphs. It specifically provides that the power to tender pardon udder section 337 shall be exercised by executive magistrates except in cases referred to in the proviso to sub section (1) of that section, in which case a judicial magistrate may exercise that power. In spite of the Government order all Magistrates who have, under Sch. III to the Code of Criminal procedure the power to grant pardon will continue to have that power and, therefore, a pardon granted by a judicial Magistrate in contravention of the Government order will not be rendered invalid. However, that is not the point which is relevant while considering the argument of Mr. Bhimasankaram. His point is that the proviso to section 337(1) confers the power on "the District Magistrate" to grant pardon in a case pending before another Magistrate and not on "a District Magistrate" and, therefore, his power to grant pardon in such cases cannot be conferred under sub s.(2) of section 10 on an Additional District Magistrate. According to him, under that section only the powers of "a District Magistrate" meaning thereby only the powers under Entry 7 (a) in Part V of Sch. III as distinguished from the power under the proviso to section 337 (1) can be conferred upon an Additional District Magistrate. Secondly, according to him, no direction has in fact been shown to have been made by the State Government conferring upon an Additional District Magistrate the power of the District Magistrate to grant pardon. In our opinion, there is no subtance in the contention. The power conferred by sub section (1) of section 337 on the different clauses of Magistrates is of the same character. 353 The power to grant pardon in a case pending before another Magistrate is no doubt conferred by the proviso only on the District Magistrate. But Entry 7 (a) in Part V of Sch. III when it refers to the power of a District Magistrate under section 337 (1) does not exclude the power under the proviso. There is, therefore, no warrant for drawing a distinction between the powers of "the District Magistrate" and the powers of " 'a District Magistrate." The power of a District Magistrate to grant Pardon has been specifically conferred on Additional District Magistrates as would appear from section No. 37 of Sch. III of the Government Order, which reads thus : "SI. Concurrent No. magis magis jurisdic trate trate tion 37 337(1) 2nd paragraph (proviso) Remarks Reference to the District Magistrate in the proviso should be construed as reference to the Executive District Magistrate. Reference to the Magistrate making the enquiry or holding the trial etc., should be construed as a reference to the judicial Magistrate. " No doubt, here the reference is to the Executive District Magistrate. But it is clear from the other part of the Government Order that what is meant by that is the Additional District Magistrate (Independent). This was., and, we are told, is being regarded as a direction of the Government falling under subs. (2) of section 10 of the Code. Whether the interpretation is correct or not, we feel little doubt that the 354 action of the Additional District Magistrate (Independent) Visakhapatnam in granting a pardon to the approver in this case though it was pending enquiry before the District Magistrate (judicial), was bona fide. A pardon granted bona fide is fully protected by the provisions of section 529, Cr. P. C. The High Court has not considered any of the provisions to which we have referred but held that as the offence was being equired into by the District Magistrate,the Additional District Magistrate could not usurp the functions of the former and grant a pardon. Had it done so, it would not have come to this conclusion. We are, therefore, unable to accept it. Mr. Chari for the State advanced a further argument before us in case his main argument that the pardon was valid failed and said that the approver, even if we ignore the pardon, was a competent witness. In support of his contention he strongly relied upon the decision in Kandaswamy Gounder In re : the appellant (1), and the cases referred to therein, in particular the decision in Winson vs Queen (2). What has been held in all these cases is that where the trial of a person who was charged with having committed an offence or offences jointly with several persons is separated from the trial of those persons, he would be a competent witness against them though of course there will always be the question as to what weight should be attached to his evidence. Mr. Chari then referred to section 133 of the Evidence Act and pointed out that this section clearly makes an accomplice evidence admissible in a case and that an approver whose pardon is found to be invalid does not cease to be an accomplice and contends that he is, therefore, as competent a witness as he would have been if he had not been granted pardon at all and not been put on trial. Learned counsel further pointed out that the decisions show (1) I.L.R. , (2) (1866) L.R. I Q.B. 355 that however undesirable it may be to adduce the evidence of a person jointly accused of having committed an offence along with others, his evidence is competent and admissible except when it is given in a case in which he is being actually tried. This legal position does not, according to him, offend the guarantee against testimonial compulsion and he points out that that is the reason why an accused person is not to be administered an oath when the court examines him under section 342 (1) for enabling him to explain the circumstances appearing in evidence against him. If pardon is tendered to an accused person and eventually it is found that the pardon is illegal such person is pushed back into the rank of an accused person and being no more than an accomplice would be a competent witness. The question raised is an important one and requires a serious consideration. Mr. Chari in support of his contention has cited a large number of cases, Indian as well as English, and certain passages from Halsbury 's Laws of England. But in the view we take about the legal validity of the pardon tendered, we do not wish to pronounce one way or the other on this very interesting question. Now, as regards the reliability of the approver. It is no doubt true that an approver has always been regarded as an infamous witness, who, on his own showing has participated in a crime or crimes and later to save his own skin, turned against his former associates and agreed to give evidence against them in the hope that he will be pardoned for the offence committed by him. The High Court seems to think that before reliance could be placed upon the evidence of the approver it must appear that he is a penitent witness. That, in our opinion, is not the correct legal position. The section itself shows that the motivating factor for an approver to turn, what in England is called "King 's evidence" is the hope of pardon and not any noble sentiment like contrition 356 at the evil in which he has participated. Whether the evidence of the approver should in any given case be accepted or not will have to be determined by applying the usual tests such as the probability of the truth of what he has deposed to the circumstances in which he has come to give evidence whether he has made a full and complete disclosure, whether his evidence is merely self exculpatory and so on and so forth. The court has, in addition, to ascertain whether his evidence has been corroborated sufficiently in material particulars. What is necessary to consider is whether applying all these tests we should act upon the evidence of the approver should be acted upon. We however, find that certain documents upon which Mr. Chari wants to rely are not included in the paper book. It would take considerable time if we were to adjourn this matter now and give an opportunity to the parties to include those documents on record. The better course would be for us to set aside the acquittal of the respondents and send back the appeal to the High Court ?or being decided on merits. The High Court will of course be bound by the finding which we have given on the questions of law agitated before us. What it must now do is to consider the entire evidence and decide for itself whether it is sufficient to bring home all or any of the offences to the respondents. We may mention that the High Court 's observation that the approver 's evidence was treated as unreliable by the learned Additional Sessions judge is not correct. Of course, the view taken by the Additional Sessions judge is not binding on the High Court. But it should remove from its mind the misconception that the Additional Sessions judge has not believed him. There is another thing which we would like to make clear. The decision in Sarwan Singh vs The State of Punjab (1), on which reliance has been placed by the High Court has been explained by this Court in the case of (1) 357 Maj. E. G. Barsay vs The State of Bombay (1). This Court has pointed out in the latter decision that while it must be shown that the approver is a witness of truth, the evidence adduced in a case cannot be considered in compartments and that even for judging the credibility of, the approver the evidence led to corroborate him in material particulars would be relevant for consideration. The High Court should bear this in mind for deciding whether the evidence of the approver should be acted upon or not. Then again it would not be sufficient for the High Court to deal with the evidence in a general way. It would be necessary for it to consider for itself the evidence adduced by the prosecution on the specific charges and then to conclude whether those charges have been established or not. The prosecution would be well, advised if, instead of placing the evidence on each and every one of those large number of charges against the respondents, it chooses to select a few charges under each head other than the head of conspiracy and concentrates on establishing those charges, this would save public time and also serve the purpose of the prosecution. With these observations we set aside the acquittal of the respondents and remit the appeal to the High Court for decision on merits in the light of our observations. Appeal allowed. Case remanded.

A and B were tried together at one trial, A of offences under sections 120 B, 409,477 A and 471 read with section 476 Indian Penal Code and B of offences under sections 120 B,409 read with 109 298 and 471 read with 467 Indian Penal Code. The Sessions judge who tried them convicted A of all the offences charged and B of the first two charges. On appeal the High Court acquitted both of them. The State appealed to the Supreme Court. The respondents contended: (i) that there was a misjoinder of charges and persons on account of the cumulative use of the various clauses of section 239 of the Code of Criminal Procedure which was not permissible, (ii) that no charge of conspiracy could be framed after the conspiracy had fructified, (iii) that the Sessions judge had failed to inform the accused of their right under 3. 342 ( 4 ) of the Code to examine themselves as witnesses, (iv) that the pardon had been granted to the approver illegally, (v) that the approver had been allowed illegally to refresh his memory by reference to documents at the time when he was examined before the Court, and (vi) that the account books of certain firms which contained no entries regarding payments alleged to have been made to them were inadmissible in evidence. Held that there was no misjoinder of charges and of accused persons. It is open to the Court to avail itself cumula tively of the provisions of the different clauses of section 239 of the Code for the purpose of framing charges. Sections 233 to 236 do not override the provisions of section 239. But the provisions of sections 234 to 236 can also be resorted to in the case of a joint trial of several persons permissible under section 239. Even if there was a misjoinder the High Court was incompetent to set aside the convictions without coming to the definite conclusion that the misjoinder bad occasioned failure of justice. Re: Fankaralapati Gopala Rao, A.I.R. 1936 Andhra 21 and T.B. Mukherji vs State, A.I.R. 1954 All. 501, not approved. State of Andhra Pradesh vs Kandimalla Subbaiah, , K.V. Kriahna Murthy Iyer vs State of Madras, A.I.R. 1954 S.C. 406, Willi (William) Slaney vs State of Madhya Pradesh. ; , Birichh Bhuian vs The State of Bihar. (1964) Supp. 2 S.C.R. 328. Held further that where offences have been committed in pursuance of a conspiracy, it is legally permissible to charge the accused with these offences as well as with the conspiracy to commit those offences. Conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy, the liability of the conspirators for the conspiracy itself cannot disappear. 299 State of Andhra Pradesh vs Kandimalla Subbaiah. , relied on. S, Swamirathnam vs State of Madras, A.I.R. 1957 S.C. 340 and Natwarlal Sakarlal Mody vs State of Bombay, Cr. A. No. 111 of 1959, dt 19.1.196 1, referred to. Held further, that there was no violation of the provisions of section 342 of the Code. The Sessions Judge had erred on the side of overcautiousness by putting every circumstance appearing in the evidence to the accused. Copies of the questions put to the accused were given to them before hand. Any point left over in the questions was covered in the written statements filed by the accused. In such circumstance the length of the questions or of the examination could not prejudice the accused. Further, there was no duty cast on the Court to inform the accused of their right under section 342 (4) to examine themselves as witnesses. They were represented by counsel who must have been aware of this provision. Held further, that the pardon was legally granted to the approver under section 337 of the Code and was a valid pardon. The offences with which the accused were charged were all such in respect of which a pardon could be granted under section 337 (1). The offences under section 467 read with section 471 which was exclusively triable by a court of sessions and the offence under section 477 A which was mentioned in section 337 (1) itself and thus both fell within the ambit of section 377 (1). the offence under section 409. and consequently the offence under section 120 B also, was punishable with imprisonment for life or with imprisonment not exceeding ten years and was an "offence punishable with imprisonment which may extend to ten years" within the meaning of section 337 (1). Further, tinder G.O. No. 3106 dated September 9, 1949, the Madras Government, the power of a District Magistrate to grant pardon was specifically conferred on Additional District Magistrates, and the Additional District Magistrate, (Independent) who granted the pardon in the present case was competent to do so. Held further, that the Sessions judge acted legally and properly in allowing the approver to refresh his memory, while deposing, by referring to the account books and other documents produced in the case. Where a witness has to depose to a large number of transactions and those transactions are referred to or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents 300 while questions are put to him. Such a course is specifically permitted by sections 19 and 160 of the Evidence Act. Held further, that the account books of the firms which contained no entries with respect to payments alleged to have been made were not relevant under section 34 of the Evidence Act, as that section is applicable only to entries in account books regularly kept and says nothing about non existence of entries. But they were relevant under section I I of the Act as the absence of the entries would be inconsistent with the receipt of the amounts which was a fact in issue. They were also relevant under section 5 to prove the facts alleged by the prosecution that payments were never made to these firms and that those firms maintained their accounts in the regular course of business, and both these were relevant facts. Queen Empress V. Grees Chander Banerjee (1884) I.L.R. IO Cal, 1024, and Ram Pershad Singh vs Lakhpati Koer, Cal. 231, referred to.

16k+

Appeal No. 635 of 1965. Appeal by special leave from the Award dated January 8. 1963 of the First Industrial Tribunal, West Bengal in Case No. VIH 354 of 1961. B. Sen, Janardan Sharma, P.K. Ghosh and S.K. Nandy, for the appellants. Niren De, Solicitor General, M. Mukherjee and Sardar Bahadur. for respondent No. 1. The JUdgment of the Court was delivered by Bhargava, J. This appeal by special leave has been filed by ' the workmen of Messrs Hindustan Motors Ltd. against the decision of the First Industrial Tribunal, West Bengal in a dispute relating to payment of bonus for the year 1960 61. The respondent, M/s Hindustan Motors Ltd., (hereinafter referred to as 315 "the Company") was established in the year 1942 and, initially, the work taken up by the Company was that of assembling of motor cars from components imported from foreign countries. Later on, manufacture of components of motor cars was started and gradually the Company developed this work of manufacture of components by increasing the number of components manufactured by it until, at the present time, the Company is manufacturing more than 70% of the components utilised in the cars put on the market by the Company. The work of manufacturing components was taken in hand for the first time in the year 1949, according to the reply of the Company filed on 10th January, 1962, to the statement filed on behalf of the workmen. before the Tribunal. At the initial stages of its existence, the Company was running at a loss and even, as late as the year 1956. the Tariff Commission 's Report on the Automobile Industry mentioned that this Company was making a loss of Rs. 833 per car on the Hindustan Landmaster which was the car put on the market by the Company at that time. Even Subsequently, for several years. no profit was shown in the profit and loss account and, consequently, no bonus was paid to the workmen until the dispute about it was raised for the first time in respect of the year 1959 60. We were informed that the dispute relating to the payment of bonus for the year l 959 60 is still pending before the Industrial Tribunal, while the dispute with respect to bonus for the next year 1960 61 has been decided and is now before us in this appeal. In this year 1960 61, the profit and loss account of the Company showed a net profit of Rs. 249.71 lacs. Out of this, a sum of Rs. 59.53 lacs was allocated for payment of dividend on ordinary shares @ 12% and a sum of Rs. 27.55 lacs for dividend on preference shares @8.57%. The total amount allocated for payment of dividends was thus Rs. 87.08 lacs. In view of the fact that, in this year, the Company had earned a net profit of over Rs. 249 lacs. the workmen demanded bonus equivalent to six months ' wages. The monthly wage bill of the workmen is about Rs. 4 lacs, so that the total amount claimed towards bonus by the workmen came to Rs. 24 lacs. It was also stated on behalf of the workmen that, if this bonus to the extent of Rs. 24 lacs is awarded, the actual amount which the Company would have to pay will only be 55% of this amount, because 45% representing income tax on this amount would be refundable to the Company from the Government. Before the Tribunal, there was no dispute between the parties that, in order to find out whether any surplus was available for distribution of bonus, calculations must be made on the basis of the Full Bench Formula approved by this Court in The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka vs Its 316 Workmen & Another(1). The Tribunal, after making all other deductions from the surplus which have to be made in accordance with the Full Bench Formula and without taking into account provision for rehabilitation, arrived at a figure of Rs. 87.80 lacs as the amount of surplus available. Thereafter, the Tribunal held that a sum of Rs. 373.62 lacs every year was needed for rehabilitation purposes and, since this amount very much exceeded the surplus otherwise available, there was no scope for granting, any bonus at all. Consequently, the Tribunal decided the reference against the workmen and held that no bonus was payable for this year. The workmen have come up to this Court against this decision of the Tribunal. In this appeal also, there is no dispute that the principles to be applied for working out the surplus available for distribution of bonus must be those approved by this Court in the case of Associated Cement Companies Ltd.(1). On behalf of the workmen, however, it was urged that the Tribunal committed an error in applying the Formula in respect of five different items involved in the calculation. These are: (1) Rehabilitation, (2) Return on reserves used as working capital, (3) Return on paid up capital, (4) Interest on fixed deposits, and (5) Home delivery commission. Of these items, the most controversial is the first item of rehabilitation and that is also the most material one, because, if the figure of annual rehabilitation arrived at by the Tribunal is accepted, it is clear that no surplus can possibly remain out of the profits earned during the year for distribution of bonus. In the calculation of rehabilitation, various factors are involved which have been indicated by this Court in the case of Associated Cement Companies(1). The factors in calculation of rehabilitation accepted by the Tribunal which have been challenged by the workmen are: (i) the divisor, which depends upon the life of the plant, machinery and buildings, the year of their installation or erection, and the residuary life which must be taken into account when working out the divisor, (ii) the calculation of the multiplier for arriving at the replacement cost of the old machinery which requires rehabilitation. and (1) 317 WORKMEN V. HINDUSTAN MOTORS LTD. (Bhargava, 1.) 317 (iii) the deductions which should be made when working out the annual rehabilitation. We shall now proceed to deal with these points. When the dispute was taken up for adjudication by the Tribunal, the Company, on 3 l st May, 1962 filed statements showing calculations of rehabilitation provision required for rehabilitating the plant, machinery and buildings. Amongst these statements was a statement described as Schedule IA (hereinafter referred to as "the first Schedule IA") and in that statement it was claimed on behalf of the Company that the average total life of its machinery was 6 years. On behalf of the workmen, it was urged that the life of the machinery should be taken to be 30 years and on this basis, ,after the arguments were over a rehabilitation cost calculation was filed on 21st November, 1962. Thereafter, in the course of arguments on 22nd November, 1962, some fresh statements were filed by the Company. These statements in respect of the machinery had two new Schedules, both marked as Schedule IA. In one of these Schedules IA filed on 22nd November. 1962, the multiplier taken for replacement of the machines installed in various years was higher than the multiplier in the first Schedule 1A. This Schedule shall be referred to. as "the second Schedule 1A". At the same time, as mentioned earlier, another Schedule IA was filed and, in this Schedule IA, the multipliers were the same as in the first Schedule 1A. This shall be referred to hereinafter as "the third Schedule 1A". In none of these Schedules filed, either on behalf of the Company or on behalf of the workmen, was there any classification of plant and machinery into precision or non precision machinery. Some statements for the purpose of calculation of rehabilitation were again filed on behalf of the Company on 28th December, 1962 under the directions of the Tribunal and it appears that, taking into account the evidence which had been led before the Tribunal, the Tribunal at this stage asked the Company to give separate Charts for precision machinery and non precision machinery. Consequently, the statements flied on 28th December. 1962 classified the machinery into precision and non preCision machinery. It seems that the Tribunal, in making this direction was also influenced by the circumstance that, under the Income tax Law, the depreciation allowed in respect of precision and non precision machinery is different, from which the Tribunal. inferred that precision machinery will have a shorter life than non precision machinery. In fact, the Tribunal was of the view that the proportion between the life of precision and non precision machinery can be safely taken to be the same as the proportion between the depreciation allowed in respect of the two. Proceeding on this basis, the Tribunal, in the statements prepared for and annexed as. part of the LISup. C.I./68 6 318 Award, classified the machinery into precision and non precision machinery and worked out different life for the two kinds of machinery. In the course of arguments before us, it was urged on behalf of the workmen that the Company not having claimed that machinery classified as precision had a shorter life than machinery classified as non precision either in the written statements or at the stage of filing the first Schedule 1A or even the second or third Schedule IA, there was no justification for the Tribunal to. accept this. classification and work out different periods of life for different classes. of machinery. Mr. Niren De, counsel appearing on behalf o.f the Company, in his argument before us also urged that the Company at No. stage put forward the Case that the machinery should be classified into precision and non precision machinery and different life should be attributed to the two classes of machinery. According to him, the Company 'section case throughout has been that all machinery installed m the. factory of the Company has an economic life of 6 years only, so that the Company is not prepared to justify the decision given by the Tribunal on the basis of this classification. Since both parties before us challenge the adoption of this classification by the Tribunal, we consider that it will be right to ignore this. classification and to proceed on the basis that the total life of the machinery must be worked out on an average for all the machines installed in the factory of the Company, without making any distinction between precision machinery and non precision machinery. As we have mentioned earlier, the contention on behalf of the workmen was that the life of the whole machinery should be taken to be 30 years. Mr. B. Sen, counsel appearing on behalf of the workmen, drew our attention to a number of cases, in which the life of the machinery came up for consideration either before the Labour Appellate Tribunal or before this Court in connection with calculation of rehabilitation provision. first case brought to our notice was Saxby & Farmer Mazdoor Union, Calcutta vs M/s. Saxby & Farmer (India) Ltd., Calcutta(1), in which, for purposes. of calculation of rehabilitation, the life of machinery was taken to be 30 years. Another case between the Workmen of M/s. Saxby & Farmer (India) Pvt. Ltd. vs M/s. Saxby & Farmer (India) Private Ltd.(2) in respect of a subsequent year came up before this Court. In that case, the Tribunal, in its Award, fixed the life of the machinery at 20 years and on behalf of the, workmen it was urged that it should have been 30 years as accepted by the Labour. Appellate Tribunal in respect of the earlier year in the of Saxby & Farmer Mazdoor Union, Calcutta(1). This Court held that the life of 30 years. had been taken at a time when (1) (2) Civil Appeal No. 152 of 1964 decided on 12 4 1965. 319 the machinery was. being worked in two, shifts, while, in the subsequent case, it was shown that the machinery was working in three shifts, so that it could not be said that the Tribunal was wrong in fixing the life in this subsequent case at 20 years. Relying on these cases, Mr. Sen urged that, in the present case also, we should take the life of the machinery to be 30 years. In The Millowners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh,Bombay(1), the Full Bench of the Labour Appellate Tribunal, when laying down the formula that was later approved by this Court, appears to. have accepted the life of textile machinery as 25 years, while this Court, in the case of the Associated Cement Companies Ltd. (2), proceeded on the basis that the life of the machinery was 30 years. In the Honorary Secretary, South India Millowners Association and Others vs The Secretary, Coimbatore District Textile Workers ' Union(1), this Court confirmed the finding of the Tribunal that the estimated life of the textile machinery of the Company concerned in that case should be taken. to be 25 years. It is on the basis of these decisions that the claim was put forward that the life of the machinery in the present case should also. be taken to be 30 years or at least 25 years. In our opinion.this argument proceeds on an entirely incorrect basis. The life of a machinery of one particular factory need not necessarily be the same as that of another factory. Various factors come in that affect the useful life of a machinery. There is, first, the consideration of the quality of machinery installed. If the machinery is purchased from a country producing higher quality of machines,it will naturally have longer life, than the machinery purchased from another country where the quality of production is lower. Again, the articles on which the machinery operate.s may very markedly vary the life of a machine. If, for example, a machine is utilised for grinding of cement, the strain on the machine will necessarily not be the same as on a machine which operates on steel o.r iron. We are, therefore, unable to accept the suggestion that the: life of the machinery in the present case should have been fixed on the basis of the life accepted in other cases in which decisions were given on bonus disputes either by the Labour Appellate Tribunal or by this Court. The Tribunal, in its decision, worked. out the life of the machinery on 'the basis of the percentage of depreciation allowed under the Income tax Act. The application of this principle has been attacked before us by both the parties. It is urged that the artificial rule laid down in the Income tax Act for calculation of notional depreciation can provide no criterion at all for determining the life of the machinery. We think that the parties are (1) (2) (3) [1962] 2 Supp. S.C.R. 926. 320 correct and that the Tribunal committed an error in proceeding on this basis. Though, in the case of the Honorary Secretary, South India Millowners ' Association(1), this Court, on the facts of that case, accepted the life of the textile machinery as 25 years; the Court also laid down the principle for.finding out the life of machinery in the following words : "We are not prepared to accept either argument because, in our opinion, the life of the machinery in every case has to be. determined in the light of evidence adduced by the parties." (p. 933) Obviously, this is the correct principle, because it is only when the life of machinery is determined in the light of evidence adduced by the parties in a particular case that the authority determining the life can take into account all the factors applicable to the particular machinery in question. As we have indicated earlier, when determining the life of a machinery, factors, such as the quality of the material used in the machines and the nature of the material on which the machines are to operate, very materially affect their life. Further, the life of a machine will also depend on the. manner in which it is handled in a particular factory. We, consequently, in this case proceed to examine the evidence given by the parties. in this behalf. In order to prove the life of machinery, one method usually adopted by the Companies is to tender evidence of experts. In the. present case, the Company tendered in evidence the statement of an expert, Gerald Waplington, which was recorded earlier on 5th November, 1961 by the Fifth Industrial Tribunal in a dispute pending before it. That dispute was also between this very Company and its workmen. In giving the life of machinery, Waplington first classified the machines into two classes general purpose machine tools and special or single purpose machine tools and expressed the opinion that a general purpose machine tool used for one single operation is likely to have a shorter economic life than special or single purpose machine tool. According to him, a general purpose machine carrying on work of high accuracy will have an economic life of the: order of 2 to 3 years only, while a special purpose machine doing similar work of high accuracy working 400 hours a month will have an economic life of 5 to 6 years. If the work taken. from the machines is of less accuracy. then, in his opinion, a general purpose machine may have an,economic life up to 5 years, and a special purpose machine an econoevidence available in this case. It may however, be noted that (1) [1962] 2 Supp. S.C.R. 926. 321 tinction between economic life and useful life. He twice stated that economic life of a machine would be only 1/3rd of the useful life of the machine, so that if, on the basis of his evidence, the useful life of various classes of machines mentioned by him is to be worked out, the member of years given for each class by him above will have to be multiplied by 3. Thus, according to his evidence, the economic life of a machine will vary from 2 to 3 years as a minimum to 7 to 10 years at the maximum, and working out the useful life on the basis of his statement that economic life is only 1/3rd of the useful life, the machines would have a minimum of 6 to 9 years and a maximum of 21 to 30 years useful life. We shall consider what inferences can be drawn from his statement at a later stage when we have discussed the other evidence available in tiffs case. It may, however, be noted that Waplington is the only expert who can be held to. be entirely disinterested, because the other two experts examined are employed as Engineers by the Company itself. This independent witness, Waplington, was not asked whether he had seen the various machines in the factory of the Company, nor was he at any tune requested to indicate how many different machines in the factory of the Company would fail in the various classifications mentioned by him for which he has given different periods in respect of economic life. The Other two witnesses examined are Joseph Joyce, General Master Mechanic, and Girish Chandra Bansal, Master Mechanic, employed by the Company. Both of them have, in their statements given out their qualifications and experience which they. have in dealing with automobile manufacturing machinery. According to Joyce, the economic life of the machinery of the Company cannot go beyond 6 years, and this statement was. made on the basis of the machines working 16 hours a. day in two shifts of 8 hours each. Later on, he added that, applying American standard, the life of the machines can only be 6 to 10 years. In giving the life, he qualified that word with "economic" or "economic useful", so that he equated economic life with economic useful life and gave the figures on this basis. In cross examination, he, however, admitted that useful life of a machine is longer than its economic life. Thus, if various, statements of his are taken into account and it is kept in view that he is. an employee. of the Company, it may be accepted that, according to him, the maximum ,economic life of the machinery of the Company will be between 6 to 10 years and the useful life will be longer how much longer, he has not indicated. If we were to assume that he is using the expressions "economic life" and "useful life" in the same: sense in which they were used by Waplington, economic life would be 1/3rd of the useful life, with the result that, on his evidence, useful life of the machinery of the Company would work out to be 322 anywhere between 18 to 30 years. The third witness, Girish Chandra Bansal, estimated the efficient economic life, based on 16 hours per day working, at 6 to 10 years, which Coincides with the ' estimate by Joyce. In his case, however, no questions were put to. elicit from him whether he would make any distinction between efficient economic life and useful life, so. that his evidence does not appear to carry us any farther than the evidence of Joyce. It may be added that both these witnesses in their evidence stated that the workmen employed by the Company were not very skilled workers and this was a factor that had to be taken into account in considering the life of ' the machines in this company. It is obvious that, if a machine is handled by a more skilful worker, it will last longer and have a longer life. A Statement was also made by Joyce that machine.s running at high speed will have shorter life than those running at lower speeds; but this general statement made by him offers no assistance to us in this case, because he has not indicated in his evidence how many and which of the machines of the Company run at high speed and which at lower speed. Apart from this evidence of experts, the Company has attempted to provide some other data which can be of assistance in assessing the life ' of the machinery. In this connection, Mr. Niren De, arguing the case on behalf of the Company; drew our attention to the history of this Company which showed that, initially, this Company started the work of assembly of cars from parts imported from foreign countries. some time in the year 1942 43, but, later, the policy was. altered and manufacture of components was taken up and progressively increased so as to minimise foreign. import. He also pointed out that this policy of progressive production of indigenous parts was pressed Upon the Company by the Government and, for this purpose, drew our attention to the: first and the Second reports of the Tariff Commission in the years 1953 and 1956, as well as the report of the lid Hoc Committee on Automobile Industry known as the Report of the Jha Committee, because Sri L.K. Jha was its Chairman. This report came out in the year 1960. It was Urged by Mr. De that, due to. this policy of progressive increase in manufacture of new components, it was not possible for the Company to find money to rehabilitate old machinery and, consequently, the fact that the Company continued to use old machinery for a number of years should not be taken as indicating that machinery 'still had economic or useful life. It was argued. that the Company per force had to continue use of these 'old machines, because it was under pressure to expand its activities. by taking up manufacture of components and the Company was running at a loss. It has already been mentioned earlier ' that in the second report of the Tariff Commission in 1956 it was clearly stated that this Company was selling cars at a loss of 323 Rs. 833 per car. It is in this background that the evidence given by the Company should be judged to find out what is the life of the machinery possessed by the Company. He also drew our attention to the principles laid down in this connection by the Full Bench of the Labour Appellate Tribunal in the Millowners ' Association 's case (1), and by this Court in the Associated Cement Companies ' case(2). In the former case, when laying down the principle that provision should be ' made for rehabilitation replacement and modernization of the machinery, the Tribunal held that: "It is essential that the plant and machinery should be kept continuously in good working Order for the purpose of ensuring good return. and such maintenance of plant and machinery would also be to the advantage of labour, for. the better the machinery the larger the earnings, and the better the chance of securing a good bonus. " In the latter case, this Court, when examining the scope of claim for rehabilitation. held that: "this claim covers not only cases of replacement pure and Simple but of rehabilitation and modernisation. In the context, rehabilitation is distinguished from ordinary repairs which go into the working expenses of the industry. It is also distinguished from replacement. It is quite/conceivable that certain parts of machines which constitute a block may need rehabilitation though the block itself can carry on for a number of years; and this process of rehabilitation is in a sense a continual process. Unlike replacement, its date cannot always be fixed or anticipated. So with modernisation and all these three items are included in the claim for rehabilitation. That is why we think it is necessary that the Tribunals should exercise their discretion in admitting all relevant evidence which would enable them to ' determine this vexed question satisfactorily." Proceeding further to. distinguish between cases of replacement. modernisation and expansion, the Court held: "If it appears fairly 'on the evidence that the introduction of the modern plant or machine is in substance an item of expansion of the industry, expenses incurred in that behalf have to be excluded. On the other hand, if the employer had to introduce the. new plant essentially because the use of the old plant. though capable (1) (2) 324 of giving service was uneconomic and otherwise wholly inexpedient, it may be a case of modernisation. Similarly; if by the introduction of a modern plant or machine the production capacity of the industry has. appreciably increased, it would be relevant for the Tribunal to consider in an appropriate case whether it would be possible to apportion expenses on the basis that it is a case of partial modernisation and partial expansion. " It will thus. be seen that, when considering the question of rehabilitation, what is essentially to be taken into. account is that the old plant, though capable of giving service, was uneconomic and otherwise wholly inexpedient when provision for its replacement and rehabilitation, even though it will include modernisation would be fully justified. In this context, it may be worthwhile examining at this stage the difference between economic life and useful life on which emphasis has been laid by Mr. Sen on behalf of the workmen. We have already indicated earlier that even the expert examined behalf of the Company, Gerald Waplington, made a distinction between economic life of machinery and its useful life, Further, in giving the life, he applied American standards which may not be applicable in India. Court, in various cases where the question of rehabilitation has been discussed, has laid emphasis on useful life rather than on economic life and, oven in the Associated Cement Companies ' case(1) in the extract quoted above, the Court held that modernisation is justified when the use of the old plant becomes uneconomic and otherwise wholly inexpedient. Thus, two tests were laid down, first, that it should be uneconomic and, second, that it should be also otherwise wholly inexpedient. The economic life, as envisaged by Waplington, was not, therefore, considered the appropriate. test for determining when rehabilitation of the plant and machinery would be justified. In fact, one of the very major considerations, that should be taken into account is the actual practice of the manufacturers using the machinery and if evidence be available, to find out how long the manufacturers continue to use the machinery as a rule. It may be that, during the last few years of use, the machinery may.be continued to. be utilised because of want of resources and compulsion to retain the machinery, because replacement is not possible at all. It is in the light of this. situation that we proceed to examine the evidence given by the Company about the behaviour of its machinery and the steps taken by the Company to have the old machinery rehabilitated. (1) 325 In this connection, two statements filed on behalf of the Company are of significance. One of these is a list of obsolete and/or discarded machines prepared on 26th October, 1962 and marked as Ext. It is to be. noticed that, though 40 different machines were discarded by 26th October, 1962 when this statement was prepared, none of the machinery discarded was that installed up to. the year 1947 48. In fact, this situation is also borne out by the three Schedules IA which have been referred to earlier by us. In those Schedules 1 A, the machinery discarded and written off from books is shown as being worth Rs. 35,000/ out of machinery of the value of Rs. 89.75 lacs installed in the year 1947 48. Thus, the machinery of that year discarded was nominal in value. None of the machinery installed between 'the years 1948 49 to 1951 52 was discarded. Again, the machinery installed in 1952 53 was discarded to the extent of the nominal value of Rs. 39,000/ out of Rs. 11.06 lacs, and no machinery installed in 1953 54 was discarded. The machinery discarded was primarily that installed in the years 1954 55 to 1957 58, and its value was in the region of Rs. 46 lacs. Thus, right up to 1962, the old machinery purchased up to the year 1954 was almost all continued in use and was not discarded, even though machinery installed in the next four years was considered unfit for further use and. was discarded or written off, The second statement is Ext. 21 which bears the heading "replacement programme condition of machine tools" and which was prepared in March, 1960 in order to claim foreign exchange from the Government for replacement of machinery. That list contains more than 200 machines, but, again, the machines installed during the year 1947 48 or earlier included in it are only 5 in number, whereas the majority of machines. included in that list are those installed in later years,. Significance attaches to this factor, because the machines ins.tailed in the year 1947 48 were of very large value, their cost being. in excess of Rs. 89 lakhs. In fact, that is the year in which the investment on installation of machinery was highest, barring the year of bonus and the year immediately preceding it. This statement thus shows that, even though the Company wanted replacement of a number of machines which had been installed even in the year 1949 50 and some machines installed in later years, the replacement of those machines was given preference over the replacement of machines installed earlier in the year 1947 48. In this statement, in the remarks column,. it was mentioned that these machines are to be scrapped. but there was no statement that machines which had been installed in the year 1947 48 were also in such a condition that they required scrapping. Thus, these statements provide some indication of the life of machinery which point both ways. The fact that old machinery of 1947 48, though of large value, was not 326 considered to be in such a condition as to require immediate replacement in preference to machinery installed later would point towards that machinery having a fairly long life. On the other hand, there is the factor that machinery installed in later years was actually scrapped or was sought to be scrapped, and this necessarily means that later machinery was considered as having shorter life. In this connection, another statement of which notice may be taken is Ext. 29 which shows prices of certain machines originally purchased by. the Company which is to be rehabilitated, and the prices of the same machines, which were purchased in the two years preceding the time when Girish Chandra Bansal was examined before the Tribunal. Girish Chandra Bansal 's ,evidence was recorded on 14th November, 1962 'and in his statement before the Tribunal he stated that Ext. 29 was prepared to compare the prices of same machines in earlier years when they were purchased originally and again when similar machines were purchased a second time in the past two years. This statement has the significance that, though in the past two years the Company took the step of purchasing machines which would perform the identical functions which the old machines were performing, the Company chose to add these machines as new ones, as a part of its scheme of expansion rather than replace those old machines. In the year 1961 62, therefore, the Company was still of the opinion that it was preferable to add a new machine of the same type rather than replace an old machine doing the same work, and an inference would necessarily follow that old machine must have been considered to be sufficiently serviceable. This is the view that the Company appears to have held in respect of machinery which was installed 14 or 15 years earlier. On behalf of the Company, some statements were also. filed to show that there were very frequent break downs in the machinery of the Company and. as an illustration, our attention was drawn to the statement for the period January, 1960 to September, 1960. It is true that, if there are very frequent break downs in machinery, this would give an indication of the condition of the machinery and lead to the inference that their useful life is coming to an end. There is, however, one great difficulty in drawing any conclusion from the statistics of number of break downs of the machinery put forward on behalf of the Company. The Company has. no doubt, shown us statements that a number of machines had break downs during the last few years preceding the year of bonus. but no material was brought to our notice from which it might have been possible to compare how the same machinery was behaving in earlier years or within the first few years after it was installed. Unless it be possible to compare the number of 327 break downs. when their life is claimed to be over with the number of break downs when the machine was almost new ' or 'was running its economic or Useful life, no assistance is available for assessing the. life of the machinery from a mere table showing the number of break downs. Further, it was not possible from these statements ' to find out which of the machines installed in which year were subject to the break downs, nor did these statements give us any picture about the percentage of machines installed in different years which ' were included in these 'statements. Consequently, we have felt handicapped in drawing any inference from these statements. Reliance was also placed on some statements showing that, for purposes of granting incentive bonus, a rated time was prescribed for various machines and progressively this rated time in respect of a large number of machines has had to be increased in order to enable the workmen to earn bonus, because the machines themselves are not working efficiently and. if the rated time is not increased, the workmen would fail to qualify for incentive bonus for no fault of their own and simply because the machines on which they were required to work had deteriorated in condition. It is true that the statement given of increase of rated time gives some indication that the condition of the machinery in this factory has been going down and though this. factor is relevant in determining the useful life of machinery, it cannot carry us very far, because there is no evidence ' which would enable us to lay down a correlation between the increase in the rated time and the expiry of the useful life of the machinery. It is not possible on the evidence to discover how much the rated time is expected to increase before it can be said that the machinery has completely run out its useful life. Mr. De also drew our attention to the statements of some of the witnesses who. deposed that machinery running at high speed has a shorter life than that running at low speed. This general statement, however, is of no assistance, because the Company did not attempt to classify its machines between high speed and low speed ones and ' to give evidence in that behalf. Lastly, it was urged by Mr. Sen on behalf of the workmen that another factor which should be taken into account is that, according to the Full Bench Formula, for calculation of rehabilitation the machinery is treated as scrapped when its value is reduced to 5%, because the break down value of 5% is all that is deducted when calculating the requirements for rehabilitation. The argument was that the fact that the. break down value is taken at 5% indicates that the machinery 'for purposes of rehabilitation is treated as still useful unless its value is reduced to that low figure. 328 This is, no doubt, another aspect that must be taken into. account, though we are unable to accept the submission that a machinery should be deemed to have useful life until it reaches the stage of having a break down value of 5%. No such absolute rule can be inferred. In this case, the Tribunal, in fixing the life of the machinery, as we have mentioned earlier, proceeded to calculate it on the basis of the depreciation rate permitted under the Income tax Act. That basis was not acceptable to either of the parties before us. On behalf of the workmen, it was urged that it was an entirely wrong principle of calculating the life, and even o.n behalf of the Company no attempt was made to support this method adopted by the Tribunal. In the Honorary Secretary, South India Millowners, Association 's case(1), this Court also rejected the argument that the calculation of the life may be based on the depreciation rate permitted by the income tax Act. In these circumstances, we have to consider the cumulative effect of the various pieces of evidence and circumstances which we have discussed above and, on its basis, to estimate what should be considered to be the useful life of the machinery of this Company. Reference may briefly be made to the various conclusions arrived at. The evidence of the independent expert and of the engineer employees of the Company gives a figure. for useful life. of machinery which may be anywhere between 6 years to. 30 years. The lower figures given by them cannot be, accepted as they relate to economic life in the strict sense of that expression and are based on American standards. At the same time, the maximum life worked out from their evidence is on the hypothesis that the useful life stated by Waplington to be three times that of economic life is also the useful life in the same proportion to economic life as given in the evidence of Joyce. Then, there is the evidence that this Company itself has been running its old machinery for quite a large number of years and even after 13 or 14 years of use, the Company in quite a large number of cases preferred, when buying similar machines, to utilise them for expansion rather than for rehabilitation. On the face of it, replacement of old machinery would have been preferred to expansion, if the old machinery had really completed its useful life. In some cases, however, machinery purchased in later years had to be rehabilitated after much shorter periods, but no detailed information is available. why such early replacement became necessary. No. ' material was provided to show the comparative quality of machines which have been run for a long time and machines which were replaced or sought to be replaced after shorter periods of us. After tak (1) [1962] 2 supp. S.C.R. 926. 329 ing into consideration the various factors mentioned by us above, and on the evidence before us, we think that in this case, it would. be appropriate to hold that the average life of the machinery of this. Company in respect of different kinds of machines obtained from different sources may be appropriately taken as 15 years. This life of 15 years arrived at by us, it may be mentioned is on the basis that the machines of the Company have been running during most of the. period, to which the evidence relates, in two shifts only. Girish Chandra Bansal, one of the Engineers of the Company, examined as a witness, stated that the machines in this Company were working in two shifts only, until, for the first time in 1959 60, the factory started to run round the clock, i.e., in three shifts. He added that the factory had been working in two shifts from the time it was founded. It is also clear that; if the. factory had been working in only one shift, the life of the machinery would have been longer, and we think that in that case lit. would have been appropriate to take the life of the machinery as 25 years. On the other hand, after the machines are being worked in three shifts, the Life of the machinery is bound to be lower and, consequently, if the machines be worked in three shifts, it would be appropriate to take the life of the machinery at 10 years. In the present case, however, we are accepting the; average life as 15 years for all the machines requiring rehabilitation, because the evidence, as mentioned above, shows that the machines have been. working in two shifts only from the time when the factory started functioning, with the exception that, in the first few years, they were worked in only one shift while, from the year preceding the year of bonus, they have been worked in three shifts. Consequently, it may be taken that, up to the year of bonus, the machines have been worked on the average, in two shifts. In working out the divisor, however, it will have to be kept in view that future life of the machinery will have to be calculated on the basis of three shifts and, consequently, on the basis of the figure of 10 years as the useful life of the machinery. We may also incidentally mention that this Court, in the case of National Engineering 'Industries Ltd. vs The Workmen & Vice Versa(1), accepted the life of the precision machinery of the Company concerned in that case as 15 years, so that the conclusion arrived at by us on the evidence in the present case happens to coincide with the figure of life accepted in that case. In this connection, we may also take notice of one point urged by Mr. De on behalf of the Company. It appears that, when working out the divisor and finding out what machinery required rehabilitation, the Tribunal did not take into account machinery installed during the bonus year itself for making provision for mic life of 7 to 10 years. In his evidence, further, he made a dis (1) Civil Appeals Nos. 356 357 of 1966 decided on 6 10 1967. 330 any machinery is installed in bonus1 year, the Company would be justified in claiming that it must immediately start making provision for its rehabilitation, though the period for rehabilitation of that machinery would only start at the end of the bonus year. Once machinery has been installed and is in existence. in the bonus year, the Company is entitled. to say that it will require= rehabilitation in future and that provision should be made for rehabilitation of that machinery also and the Company should start keeping reserves. for that purpose from the year of bonus itself. Thus, in the present case, the machinery installed in the year 1960 61 should have been included in the rehabilitation statement, though the divisor in respect of that machinery will, on our decision given above, be 15 on the basis of two shifts and 10 on the basis. of three shifts, as the machines will still have a residuary life of 15 or 10 years, computing the period from the bonus year which is also the year of installation. The second factor entering the calculation of rehabilitation requirement about which there was controversy between the parties is the multiplier. We have already mentioned the fact that, in the first and the third Schedules 1A, the Company gave one set of multipliers, while in ' the second Schedule 1A higher multipliers were given. The Tribunal took both sets of multipliers into. account and worked out the average and accepted that as the correct multiplier, representing the rise in the price: rate of the machinery requiring rehabilitation. Thereafter, the Tribunal held that the machinery which was to replace the old one would have a larger production and proceeded to work out figures for reducing the multipliers on that account. The Tribunal held that it would be justified to reduce the average multipliers arrived at by 75 for machinery installed up to ' 1951 52, by 55 for machinery installed during the years 1952 53 to 1955 56, and by 35 for that installed during the years 1956 57 to 1960 61. Before us, this method adopted by the Tribunal was criticised by counsel ' for both parties. On behalf of the workmen, it was contended that there was no justification for the Tribunal to take the average of the multipliers in the first and the second Schedules IA and that the Tribunal should only have proceeded on the basis that the multipliers given in the first Schedule IA were proved and were correct ones. On behalf of the Company, it was urged that the Tribunal should have accepted the multipliers given in the second Schedule IA and should not have reduced them by taking into account those given in the first Schedule 1A, and, further, that there was no justification at all for the Tribunal to reduce the figures of the multipliers for the various blocks of machinery by 75, 55 or 35 on the ground that the machinery to be installed in replacement would have a higher production. 331 We were taken by learned counsel for parties into the evidence tendered on behalf of the Company to prove the multipliers. We nave found that the correctness of the multipliers shown in the first Schedule 1A has been very satisfactorily proved. It appears that those figures were arrived at by comparing the prices of the old machinery installed in various years with similar machinery purchased in subsequent years. That comparison was contained m statement Ext. The Company 's witness Bansal not only proved this statement, but also clearly stated that the machines originally purchased and those purchased later shown in, that statement Ext. 29 were the same machines. In cross examination, he further specifically arrested that the production capacity of these new machines mentioned in Ext. 29 was very much the same as that of the original machines which were to be replaced when they were new. It is also, significant that these figures of multipliers included in the first Schedule IA. were not challenged on behalf of the workmen before the Tribunal. So far as the figures contained in the second Schedule 1 A are concerned, it was suggested on behalf of the Company that they were ' based on subsequent quotations received for replacement machinery which formed part of a series Ext. Learned counsel for the Company was, however, unable to point out any statement in the evidence of any witness which would show that the figures for multipliers incorporated in the second Schedule IA were actually calculated from the quotations contained in Ext. In fact, no such evidence was possible, because the second Schedule IA was filed on behalf of the Company after the evidence of parties was over and that second Schedule IA not being a part of the record before the Tribunal when evidence was recorded, it was not possible for any witness to give evidence proving those figures for multipliers. In these circumstances, we must hold that the. Tribunal committed an error in taking into account the multipliers given in the second Schedule IA and that the only figures for multipliers that could have been and should be accepted are those in the first Schedule 1A. At the same time, we must also accept 'the contention on behalf of the Company that the Tribunal had No. justification fox reducing the multipliers by deducting 75, 55, and 35 in respect of the three blocks of machinery sought to be replaced. As we have indicated earlier, the Tribunal proceeded to hold that this deduction was justified on the ground that the new machines which had been purchased and which were being compared with the original machines sought to be replaced must necessarily have more productive capacity. We have not been able to find any evidence on the record of any witness which would support this conclusion. It is true that the statements. made by Company witnesses, particularly Bansal show that the new machines were 332 more efficient and were likely to produce better quality goods. no stage, however, in the cross;examination of Bansal was any statement made admitting that ' these new machines, whose. prices. were being compared with those of the old machines for rehabilitation, had a larger productive capacity than those original machines. In fact, as we have pointed out earlier, in his cross examination Bansal made a definite statement that these new machines will produce exactly the same number of pieces as the original machines when they were new. This Court in the case of the Associated Cement Companies Ltd.(1) had indicated that it is only if, by the introduction of a modern plant or machine, the production capacity of the industry has appreciably increased that it would be relevant for the Tribunal to consider in an appropriate case whether it would be possible to apportion expenses on the basis that it is a case of partial modernisation and partial expansion. If, however, the increased production is not of a significant order. it may be regarded as incidental to replacement or modernisation and the question of apportionment may not arise (p. 969). It is, of course, possible that Bansal, in stating that the new machines, the prices of which formed the basis of calculation of multipliers, have exactly the same capacity as the original machines to be replaced, may not be quite correct; but there was no material at all from which 'the Tribunal could have justifiably inferred that the increase in production would be so material as to attract the principle 'for apportionment laid down by this Court in the case cited above and, consequently, the Tribunal fell into an error in reducing the multipliers merely on the assumption that the new machines must necessarily have a larger production capacity than the original machines. In these circumstances, we hold that the rehabilitation, provision should have been calculated by the Tribunal on the basis of the. multipliers given by the Company in the first Schedule 1A, without taking an average of those multipliers and the multipliers given in the second Schedule IA and without decreasing the multipliers by 75, 55 and 35 in respect of various blocks. The third contested question with regard to rehabilitation relates to the deductions which have to. be made out of the total rehabilitation requirement to arrive at the annual provision for that purpose which must be allowed in working out the available surplus for distribution of bonus. In the Associated Cement Companies Ltd. case (1), when approving the Full Bench Formula this Court indicated how the calculations should be made. It was held : "Before actually awarding an appropriate amount in respect of rehabilitation for the bonus year certain (1) 333 deductions have to be made. The first deduction is made on account of the break down value of the plant and machinery which is usually calculated at the rate of 5 % of the cost price of the block in question. Then the depreciation and general liquid reserves available to the employer are deducted. The reserves which have already been reasonably earmarked for specific purposes of the industry are, however, not taken into account in this connection. Last of all the rehabilitation amount which may have been allowed to the employer in previous years would also have to be deducted if it appears that the amount was available at the time when it was awarded in the past and that it had not been used for rehabilitation purposes in the meanwhile. These are the broad features of the steps which have to be taken in deciding the employer 's claim for rehabilitation under the working of the formula. "(p.970). The dispute in the present case relates to the deduction of the depreciation and general liquid reserves. One aspect in controversy in this behalf raised on behalf of the Company is that even depreciation should not be deducted unless it is available to the employer for purposes of rehabilitation. The argument was that in the sentence "Then the depreciation and general liquid reserves available to the employer are deducted" the word "depreciation" should be read with the words "reserves available to the employer" and, consequently, the deduction should only be made of. depreciation reserves available to the employer. We are unable. to accept this submission, because the very principle on which rehabilitation provision is allowed when making calculations for awarding. bonus militates against this interpretation. This Court, in the:same case, in explaining why rehabilitation is granted, held: "We have already noticed that the object of providing depreciation of wasting assets in commercial "accounting is to recoup the original capital invested in the purchase of such assets; but the amount of depreciation which is allowed under the formula can hardly cover the probable cost of replacement. That is why ' the formula has recognised the industry 's claim for rehabilitation in addition to the admissible depreciation." (p. 966) It will thus be seen that the purpose of providing for rehabilitation charges is to enable the industry to cover the difference between the amount of depreciation which is recouped by making provision for it in accordance with the principles of commercial accounting and the amount that would be required to purchase the new machinery for replacement. Once the price of the new machinery sup. C.1./68 7 334 is known, the rehabilitation amount would, be the difference between that price and the amount provided as depreciation of wasting assets in accordance with the principles of commercial accounting. The deduction of depreciation provision made in ,the accounts is not, therefore, on the basis that amount must be available for purchasing the replacement machinery even in the year when provision for rehabilitation is being made. That amount is deducted from the price of the machinery Which will be required to be purchased in order to determine what amount the industry is going to require for rehabilitation in spite of having been allowed depreciation. In our view, therefore, this Court, when it later held that the depreciation and general liquid reserves available are to be deducted in calculating the rehabilitation amount, did not intend to lay down that the depreciation must also be available in the year of bonus. The words "available to the employer" were intended to qualify the expression "general liquid reserves" only and not the word "depreciation". General liquid reserves are to be deducted on the principle that if such reserves are in the hands of the industry and are not earmarked for binding purposes, the industry must utilise those reserves for rehabilitating the old machinery instead of asking for provision to be made out of profits in the year of bone and in future years. The principle adopted is that provision for rehabilitation is to be made only to the extent of the difference between the price of the machinery which will have to be paid for replacing the old machinery and the amount of depreciation provision shown in the accounts according to the commercial system of accounting and even that rehabilitation requirement must first be met by the industry out of available liquid reserves rather than by asking for provision to be made out of profits. In the present case, the Tribunal, when calculating the provision for rehabilitation, took the entire price of the replacement machinery as required to be provided out of profits and did not take into account that price should have been reduced to the extent of the depreciation provided for in the accounts. The annual report of this Company for the year of bonus 1960 61 was produced before us and at page 24 it showed that at the beginning of the year 1960 61 depreciation to the extent of Rs. 325.48 lacs had been provided in the balance sheet of the Company. This amount has, therefore, to be deducted from the price of the machinery which is to replace the original machinery when rehabilitation is resorted to. The second question on this aspect that arises is whether there were any liquid reserves available which should also have been deducted. In the balance sheet of the Company contained in the Annual Report, various kinds of reserves have been shown. There. was a reserve for contingencies to the extent of Rs. 10.00 lacs on 31 3 1960 and a development rebate reserve of Rs. 39.51 lacs on 335 the same date. On behalf of the workmen, it was urged that this amount of Rs. 39.51 lacs should at least be deducted when calculating the requirement for rehabilitation. From the balance sheet itself an inference was sought to be drawn that this reserve existed in the form of a liquid reserve available for rehabilitation. For this purpose reference was made to the entries on the assets side of the balance sheet which shows a sum of Rs. 220 lacs as lying in fixed deposit account. The argument was that if the Company had such a large sum as Rs. 220 lacs in the fixed deposit account, it could not possibly urge that the sum of Rs. 39.51 lacs in respect of development rebate reserve was not a part of it and was not available as a liquid reserve. It is but natural that in the balance sheet the Company could not show any correlation. between the amounts entered on the two sides, liabilities and ' assets, as that is not required by any principle of commercial accounting. The argument of learned counsel for the company was ,that this development rebate reserve had been used ' as a part of the working capital of the Company represented by various items shown on 'the assets side and this fact was proved by the affidavit of Satya Narayan Murarka, Commercial Manager of the Company, who categorically stated that all the reserves had been utilised as part of the working capital. It seems to us that a mere statement by the Commercial Manager that the reserves have been utilised in the working capital cannot be accepted as conclusive evidence of that fact. When the balance sheet itself shows that cash amounts in the form of fixed deposits were available which were far in excess of the development rebate reserve in question there would be no justification for holding that this development rebate reserve was not available as a liquid asset and had been included by the Company in its working capital. At the stage it is not necessary, therefore, to go into any further details to arrive at the conclusion that this development rebate reserve was a liquid asset available for rehabilitation and, consequently, liable to ' be deducted when calculating the rehabilitation requirement We shall deal in greater detail with the question of what items were included in the working capital at a later stage when dealing with the controversy relating to the claim of the Company for return on working capital which is allowed under the Full Bench Formula, when calculating the surplus available for distribution of bonus. On the question of calculation for provision for rehabilitation, the only point raised on behalf of the workmen with regard to buildings was that the Tribunal, in taking the life of the factory buildings at 25 years and non factory buildings at 40 years, was not correct and that the life of the two types of buildings should have been taken at 40 years and 50 years respectively. At the 336 time of the hearing before the Tribunal, the Company had claimed that factory buildings have a normal life of 25 years only and non factory buildings 30 years, while the claim of the workmen was that the factory buildings had a life of 40 years and the non factory buildings 50 years. In arriving at its decision, the Tribunal primarily took into account the provisions of Rule 9 of the Rules framed under the Income tax Act, 1922 which lays down the principle for calculation of depreciation in respect of buildings. That principle, no doubt, cannot be taken as giving any correct indication of the life of buildings for purposes of calculation of rehabilitation provision, but, in this case, there was the difficulty that the Tribunal did not accept the evidence given by the Company to prove the age of the buildings as claimed by it, while no evidence was given on behalf of the workmen in support of their claim that the life of the buildings should be taken at the figures contended on their behalf. In the course of arguments before us. all that learned counsel did was to refer to the decision of this Court in the Associated Cement Companies Ltd. case(1) at p. 993 where the calculations made in the Chart show that the life of the various buildings concerned in that case were taken to be between 30 and 35 years. We do not think that, in the absence of evidence showing that the buildings of the Company were similar to those buildings whose life came up for consideration in the case cited above, it is possible to derive any assistance from the figures accepted in that case. In these circumstances, the position before us is that neither on behalf of the Company, nor on behalf of the workmen is there any reliable evidence brought to our notice on the basis of which we can arrive at a correct estimate of the life of the buildings of the Company and, consequently, we do not think that there will be any justification for us to vary the decision given by the Tribunal in this behalf. The last controversy in the calculations for rehabilitation provision is on the question whether the depreciation and the liquid reserves available should be deducted from the total amount of rehabilitation requirement or whether it should be taken into account at the very first stage when the machinery or the buildings requiring earliest rehabilitation are taken into consideration and the annual requirement in respect of them is worked out. On behalf of the workmen, we think, it was rightly urged that, if depreciation and liquid reserves available are to be deducted, they must be incorporated in the accounts against the replacement cost of those items which required replacement earliest in time. It is obvious that if funds in the form of depreciation provision and other liquid reserves are available, the Company claiming provision for rehabilitation must utilise them in rehabilitating those (1) 337 machines and buildings which require rehabilitation at the earliest point of time. There is no principle at all that the depreciation in respect of a particular machinery must be deducted when calculating the rehabilitation requirement in respect of that machinery itself. The Full Bench Formula approved by this Court only recognises the industry 's claim to make provision out of profits for rehabilitation of machinery which might require replacement even in future only on the ground that the industry may not be able to meet those replacement cost out of funds available in its hands. The provision for future requirement of rehabilitation must at any time depend upon what is immediately available and what is going to be required in future. If some machines have fully run out their lives, they fast necessarily be replaced out of resources available immediately and there would be no justification for keeping the available resources in reserves for future rehabilitation, while not providing out of those available resources for immediate replacement of the machinery. Then, there is the second aspect that an employer in order to claim more and more rehabilitation provision, will have a tendency to keep old blocks of machinery running and to avoid adoption of such a device it would be fair that he is required to utilise available resources at the very first opportunity when the old blocks of machinery require replacement and claim annual provision for future only in respect of that machinery which will require replacement later on. It appears that this Court in The Associated Cement Companies Ltd. case(1) proceeded on this very basis when calculating the rehabilitation requirement, though without discussing this question in detail. In that case, reserves to the extent of Rs. 311 lacs were found to be available. The machinery which required to be rehabilitated was divided into four blocks, the earliest block consisting of machinery installed up to 1939 in respect of which the rehabilitation requirement was Rs. 1172.76 lacs. In respect of three later blocks, the rehabilitation requirement was Rs. 70.40 lacs, 270.37 lacs and Rs. 768.50 lacs. The total requirements for rehabilitation in respect of all the four blocks was thus Rs. 2282.03 lacs. When calculating the annual requirement the Court did not deduct the sum of Rs. 311 lacs in respect of available reserves 'out of this total of Rs. 2282.03 lacs, but instead deducted this amount from the cost of the machinery required to replace the pre 1939 block for which the amount arrived at was Rs. 1172.76 lacs. After deducting this amount of reserves from the replacement cost of that block, the balance was divided by the divisor 7 which was treated as the remainder life of the machinery falling within that block. This calculation adopted in that case, therefore, fully bears out our view that the depreciation and available reserves must be taken into account when calculating the annual (1) 338 provision in respect of that machinery which requires earliest replacement and should not be deducted out of the total rehabilitation cost as urged by learned counsel for the. Company. Mr. De in this connection drew our attention to a decision of the kabour Appellate Tribunal in Saxby & Farmer Mazdoor Union, Calcutta(1) at pp. 711 712. In that case, the Tribunal first worked out the total rehabilitation and replacement cost of 'the machinery at Rs. 43.81 lacs. From this amount were deducted a sum of Rs. 14.75 lacs in respect of available reserve, a sum of Rs 9, 03 lacs as the total depreciation on the plants and machinery and a sum of Rs. 0.737 lac in respect of the break down value of the machinery at 5 % of the cost price, leaving a balance of Rs. 19.364 lacs as the rehabilitation requirement. Then the Tribunal noticed that, on the basis of total requirement of Rs. 43.81 lacs over the several periods during which rehabilitation and replacement was to take place, the annual requirement was worked out at Rs. 8.04 lacs. Applying the simple arithmetic of ratio, the Tribunal held that the proportionate annual requirement would be Rs. 3.54 lacs, if the total requirements are reduced to Rs. 19.364 lacs. In that case, thus, the Tribunal proceeded on the basis which has been canvassed on behalf of the Company before us. The total rehabilitation requirement was first worked out, while the annual requirement was also worked out on the basis of that requirement,. without taking into account the depreciation, available liquid reserves and the break down value of the machinery to be replaced. Thereafter, the total rehabilitation requirement was reduced. by the amount of depreciation, liquid reserves available and break down value of the machinery, and the annual requirement was reduced in respect of each block of machinery in the same proportion as the proportion between the total requirement and the net amount available arrived at, after deducting depreciation, ,available liquid reserves and break down value. We do not think that the principle adopted by the labour Appellate Tribunal was correct and should be accepted. On the face of it, it introduces a very anomalous position. In a case where some machinery may require immediate replacement in the year of bonus in question and resources may be available for meeting the cost of the entire machinery required to replace it, the principle adopted by the Tribunal would still permit the industry not to replace that machinery, but claim future provision for its replacement on the basis that the available resources are to be proportionately allocated to machinery which may require replacement in much later years. We hold that in approving this course, the Tribunal did not adopt the correct principle according to which calculation should be made, when applying the, Full Bench (1) 339 Formula for calculation of bonus. Learned counsel also referred us. to the decision of this Court in M/s. Titaghur Paper Mills Co. Ltd. vs Its Workmen(1) to show that, in that case, this Court also, when calculating the rehabilitation provision, deducted the entire depreciation and reserves available from the total rehabilitation requirement and did not adopt the course of deducting it from different blocks of machinery requiring rehabilitation. That case, however, does not support the view taken by the Labour Appellate Tribunal, because in that case this Court had accepted the decision of the Tribunal that all the machinery in whichever year it may have been installed had a uniform residuary life of 10 years, so that all the machinery was to be rehabilitated simultaneously during the next 10 years. There was, therefore, no distinction between machinery installed in one year and that installed in other years insofar as the year in which it was to be replaced was concerned. It is true that, in some cases while describing the Full Bench Formula,this Court has mentioned that the total depreciation and liquid reserves available are to be deducted from the total rehabilitation requirement,but we do not think that it was intended to lay down in those cases that the method of deduction to be adopted is that laid down by the Labour Appellate Tribunal in Saxby and Farmer Mazdoor Union, Calcutta(2). On the other hand as we have already indicated this Court, in The Associated Cement Companies Ltd. case(a), very clearly proceeded to apply the principle which we are accepting in this case. Consequently, we hold that the depreciation provision of Rs. 325.48 lacs and available development rebate reserve of Rs. 39.51 lacs must be taken in to account when calculating the annual provision for rehabilitation required for replacement of the earliest installed machinery until it is exhausted, whereafter the annual requirement for the remaining blocks of machinery will have to be calculated, ignoring these available resources. The next contest between the parties in this appeal relates to the claim of the Company to return on reserves and other funds used as working capital during the bonus year when calculating the surplus available for distribution of bonus. That a Company is entitled to return on reserves used as working capital was recognised by the Full Bench of the Labour Appellate Tribunal in The Millowners ' Association 's(4) case, when laying down the formula for calculation of available surplus which was approved by this Court in the case of The Associated Cement Companies Ltd.(a). In the latter case in dealing with this aspect of the matter, the Court pointed out that no distinction has been made by Tribunals between reserves used as working capital and depre (13 [1959] Supp. 2 S.C.R. 1012 at p. 1042. (2) (3) (4) 340 ciation fund similarly used. The Court approved the decision of the Labour Appellate Tribunal in The Millowners ' Association Bombay vs The Rashtriya Mill Mazdoor Sangh(1), where the objection of the labour to depreciation fund earning any return, even if it was utilised for or about the business of the year, was ovre ruled and the Tribunal observed that "no essential difference could be made between the depreciation fund and any other fund belonging to the Company which could be invested so as to earn return. ' The Court further held: "It is thus clear that what is material is not the origin of the fund. It is the fact that the fund in the hands of the concern has been used as working capital that justifies the claim for an adequate return on it. We think it is common sense that if the concern utilises liquid funds available in its hands for the purpose of meeting its working expenses rather than borrow the necessary amounts, it is entitled to claim some reasonable return on the funds thus used." (pp. 964 65). In this appeal, it is not disputed that the Company is entitled to claim a return on reserves which were actually utilised as working capital during the year of bonus, but Mr. Sen on behalf of the workmen urged that this return must be allowed only on reserves used as working capital and not on any other funds used at such, ,On the face of it, this argument cannot be accepted in view of the decision of this Court in the case of The Associated Cement Companies Ltd.,(2) where it has been clearly held that the origin of the fund is immaterial, though with the qualification that the fund should be one which is available for investment before a claim can be made by the employer for a return on it. This principle has been affirmed or followed in a number of cases subsequently decided by this Court, but we do not consider it necessary to refer to them in view of the fact that Mr. De on behalf of the employer conceded that this is the settled law and only contended that, in this case, the Company has in fact discharged the burden of proving that all the reserves shown in the balance sheet for the year of bonus were actually utilised as working capital. Consequently, we proceed to examine this submission made on behalf of the Company. Mr. De, in support of this submission, drew our attention to the affidavit of Satya Narayan Murarka who is the Commercial 'Manager of the Company. In this affidavit, Murarka stated. that all the sums shown as reserves and surpluses in the balance sheet 'were available for being utilised as working capital and were, in (1) [1952] 1.L.L.J. 518, 522. (2) 341 fact, so utilised. Murarka was also tendered for cross examination, so that the workmen hand an opportunity of testing the correctness of his evidence by cross examining him. It was urged by Mr. De that there was nothing in the cross examination of Murarka which would justify rejection of the statements made by him in his affidavit that all the reserves and surpluses available had been employed as part of the working capital of the Company, and, in this connection, drew our attention to some decisions of this Court where the evidence given on behalf of the employer on affidavit has been accepted by this Court as sufficient proof. The first case cited by him is The Tara Oil Mills Co., Ltd. vs IIts Workmen and Others(1). In that case, a question arose whether the Company concerned was entitled to claim return on the amount of depreciation reserves used as working capital. Dealing with this claim, the Court held: "An affidavit was made on behalf of the Company that it had used its reserve funds comprising premium on ordinary shares, general reserve, depreciation reserve, workmen 's compensation reserve, employees ' gratuity reserve, bad and doubtful debt reserves and sales promotion reserve as working capital. The Tribunal, however, allowed return at 4 per centum on a working capital of Rs. 31.88 lacs. This excluded the depreciation reserve but included all other reserves which were claimed by the company and having been used for working capital. " Proceeding further, the Court held : "It is enough to say that the affidavit of the Chief Accountant filed on behalf of the company was not challenged before the Industrial Tribunal on behalf of the respondents. It would, therefore, be impossible for us now to overlook that affidavit, particularly when the Tribunal gave no reason why it treated the working capital as Rs. 31.88 lacs only. " The Court, thus, accepted the evidence of the affidavit, though it was added that it will be open to the workmen in future to show by proper cross examination of the Company 's witnesses or by proper evidence that the amount shown as the depreciation reserve was not available in whole or in part to be used as working capital and that whatever may be available was not in fact so used in the sense explained above. In Anil Starch Products Ltd. vs Ahmedabad Chemical Worker 's Union and Others(2) this Court, dealing with the ques (1) ; at p. 10. (2) A.I.R. 1963 S.C, 1346 at p. 1348. 342 tion of proof that depreciation reserve had been used as working capital, held: "It is enough to say in that connection that an affidavit was filed by the manager of the company to the effect that all its reserves including the depreciation fund had been used as working capital. The manager appeared as a witness for the company before the Tribunal and swore that the affidavit made by him was correct. He was cross examined as to the amount required for rehabilitation, which was also given by him in that affidavit; but No. question was put to him to challenge his statement that the entire depreciation reserve had been used as working capital. The Tribunal also did not go into the question whether any money was available in the depreciation reserve fund and had been actually used as working capital. It dismissed the claim for return on the depreciation reserve on entirely different grounds. In the circumstances, we must accept the affidavit so far as. the present year is concerned and hold that the working capital was Rs. 34 lacs. It will, however, be open to the workmen in future to show by proper cross examination of the company 's witnesses. or by proper evidence that the amount shown as depreciation reserve was not available in whole or in part as explained above to be used as working capital and that whatever was available was not in fact so used." In Khandesh Spg. & Wvg. Mills Co. Ltd. vs The Rashtriya Girni Kamgar Sangh, Jalgaon,(1) this Court, again dealing with the question of proof of working capital, referred to the earlier cases and held: "This judgment again reinforces the view of this Court that proper opportunity should be given to the labour to. test the correctness of the evidence given on affidavit on behalf of the management in regard to the user of the reserves as working capital. " On the basis of these views expressed by this Court, it was urged that, in the present case, the affidavit of Murarka should be accepted as sufficient evidence in proof of the company 's claim that all the reserves and funds mentioned in the affidavit were in fact used as working capital, so that the company is entitled claim a return on them. It appears to us that the affidavit of Murarka in the present case is not such that it can be held to have discharged the burden (1) ; at p. 850. 343 which lay upon the Company to prove that all the reserves and other funds had, in fact, been utilised as working capital. In the affidavit, Murarka referred to the balance sheet and stated that the various funds claimed as having been used as working capital were shown at the beginning of the bonus year as in existence and the further entries indicated that those amounts were still intact at the end of the bonus year and were carried forward to the next year. Such a statement was made by him in respect of reserve for contingencies amounting to Rs. 10 lacs, forfeited dividends amounting to Rs. 450 lacs, profit and loss account balance amount to Rs. 3.63 lacs, provision for depreciation amounting to Rs. 325.48 lacs, and development rebate reserve amounting to Rs. 39.51 lacs. It is to be noticed that the fact that these amounts were shown as in existence at the beginning of the bonus. year as well as at the end of that year can certainly lead to a reasonable inference that these funds were all available to the company for being utilised in its business during the year; but the mere fact of these entries showing the existence of these funds at. the beginning and at the end of the year cannot be the basis for a conclusion that these funds must have been utilised as part of the working capital of the Company. In order to claim a return, it is not enough for a Company to show that the amounts were available during the year for being utilised as working capital. The Company has further to discharge the burden of proving that those funds were in fact so utilised. This principle was clearly indicated by this Court in Bengal Kagazkal Mazdoor Union and Others vs Titagarh Paper Mills Company, Ltd. and Others(1). It was in that case that this Court gave an indication of how the availability of reserves and other funds for use as working capital can be inferred from the balance sheet. It was said: "What is usually done is to take into account the ' liquid assets of various kinds available at the beginning of the relevant year and the total of such assets available at the beginning of the year is considered as working capital for that year, if there is evidence that it has. been actually used during the year. But when we come to the end of the year and look at the balance sheet, we have to find out the liquid assets available at the end of the year from which the amount available as working capital for the next year may be arrived at. But the liquid assets available at the end of the year will usually be of two kinds firstly, there will be cash assets in the various reserves and secondly, there will be assets in the shape of raw materials, etc., and both together become the available working capital for the next year subject (1) at p. 364. 344 to necessary adjustments and also subject to the evidence that they were actually used as working capital. " Proceeding further, the Court, while dealing with the bonus year 1955 56, held : "Now the working capital is generally arrived at by finding the liquid reserves available on 1st April, 1955. These liquid reserves may be in the form of reserves of various kinds, i.e., depreciation reserves, general reserve, renewal reserve, and so on, and also in the form of investments, advances and raw materials, etc. in stock. All these have to be taken into account in arriving at the working capital after necessary adjustments. As we have already pointed out, the amount of working capital thus arrived at, if there is evidence that it was actually used as working capital for the year, may be allowed interest in accordance with the Full Bench Formula." In that case, thus, the two steps necessary for proving the claim were separately indicated. The first step in proving that reserves and other funds have been used as working capital is to show that they were available by proving the balance sheet in which those reserves and funds are shown in existence at the beginning of the year. The second step indicated is that evidence must be given to prove that these reserves and funds were actually utilised as working capital during the year. Obviously, this proof is needed, because, even though the reserves and funds may be available, they may not be utilised as part of the working capital and may form part of cash amounts kept by the Company or may be utilised for purposes other than that of working capital. The mere existence of the reserves and funds at the beginning of the year, even taken together with their existence at the end of the year, cannot lead to. any inference that these reserves and funds must have formed part of the working capital during the year and could not form part of other items such as fixed deposits, investments, etc. Murarka in his affidavit, as we have indicated above, gave his conclusion that the various reserves were used as part of the working capital only on the basis that these reserves and funds were in existence both at the beginning and at the end of the year. The conclusion drawn by Murarka had, therefore, no basis at all. The facts on which he relied could only justify an inference that these reserves and funds were available, but they could not exclude the possibility that they were utilised for purposes other than that of working capital. The affidavit of Murarka in this case cannot thus be held to be sufficient proof of this second ingredient that the reserves and 345 funds were in fact utilised as working capital. So far as the cases referred to by learned counsel are concerned, which we have discussed earlier, they do not, in our opinion, lay down the principle that, if in an affidavit filed on behalf of the employer a broad statement is 'made that all reserves and other funds were used as part of the working capital, that statement must be accepted as. sufficient proof, even when the statement is coupled with an admission that it is based on an inference from the balance sheet only and no other proof is furnished to show that these available reserves and funds were in fact brought in as working capital by the employer during the year in question. In these circumstances, even though in the cross examination of Murarka on behalf ' of the workmen nothing very material was elicited on this question, we have to hold that the affidavit given by Murarka is not sufficient discharge the burden which lay on the Company to prove that all the reserves and other funds shown in the balance sheet as in existence at the beginning and at the end of the bonus year in question were utilised as working capital. The balance sheet, it appears to us, itself gives an indication. that this claim made on behalf of the Company cannot be fully justified. In the balance sheet, the assets of the Company are shown under various heads and it seems to us that items falling under certain heads only can be treated as working capital of the Company during the year, while others have to be excluded. The items which cannot be treated as part of the working capital are: fixed assets of the value of Rs. 411.08 lacs, investments of the value of Rs. 14.48 lacs, fixed deposit amount of Rs. 220 lacs, loans and advances recoverable in cash or in kind or for value to be received or pending adjustment amounting to Rs. 11.74 lacs, and loans and advances from Trust and other authorities amounting to Rs. 8.09 lacs. On the other hand, the working capital would consist of current assets of the value of Rs. 31.34 lacs, Stock in Trade of the value of Rs. 337 lacs, sundry debts of the value of Rs. 69.82 lacs, bank and cash balances of the value of Rs. 37.98 lacs, loans and advances of the value of Rs. 14.27 laes, and insurance and other claims of the value of Rs. 7.61 lacs. Thus, in the present case, the balance sheet gives an 'indication that a sum of Rs. 498.02 lacs was the amount shown at the beginning of the year against items of assets which can be classified as part of the working capital, whereas the remaining sum of Rs. 665.38 lacs represent fixed assets, fixed deposits, investments and other loans and advances which cannot be classified as part of working capital. Similarly, an examination of the items entered on the side of liabilities in the balance sheet shows what were the sources from which moneys became available for acquisition of these assets. 346 Amongst these, the reserves shown are only Rs. 10 lacs for contingencies and Rs. 39.51 lacs as development rebate reserve. Though the balance sheet does not itself show the depreciation fund, it is also clear from the Schedule attached to the balance sheet that, up to the beginning of the year, a depreciation provision had been made to the extent of Rs. 325.48 lacs. In order not to show it as available development reserve or fund in the balance sheet, what the Company did was to show the depreciated value of the capital assets at Rs. 411.07 Iacs instead of the actual value of Rs. 736.56 lacs which was the amount paid in cash for acquiring those fixed assets. For purposes of dealing with the question whether any reserve was used as working capital, we must, therefore, proceed on the basis that there was a depreciation reserve of Rs. 325.48 lacs, while the investment on the fixed assets was Rs. 736.56 lacs and not merely Rs. 411.07 lacs. Taking this depreciation reserve also into account, it would thus appear that the reserves available at the beginning of the year Were of the amount of Rs. 374.99 lacs. The subscribed capital and capital available from forfeited shares was Rs. 819.57 lacs. Funds available from other resources, such as profit and loss account balance, unsecured loans, current liabilities and provisions, provision for taxation, proposed dividends and contingent liabilities not provided for, amounted to Rs. 294.33 lacs. The question that arises. is how much money from each of these ' sources had gone into the working capital and how much into fixed assets or other items of assets indicated by us above. In examining this position, the value of the fixed assets has to be taken as Rs. 736.56 lacs which was the actual amount spent in acquiring 'those assets and not at the written down value of those assets at Rs. 411.08 lacs. It seems to us that this being the position, there was no justification for Murarka to claim that all the amounts available in reserve had gone towards the working capital and did not represent other assets, such as the fixed deposit of Rs. 220 lacs and similar other items. In these circumstances, we have. to hold that no reliance can be placed on the affidavit of Murarka that all the reserves, including the depreciation reserve and the contingent anti development rebate reserve were actually used as part of the working capital during this year. The question that next arises on this conclusion of ours is whether any return at all should be allowed to the Company on reserves or other funds claimed as having been utilised as working capital during this year. The exact figure on which the Company could claim return has not been proved by it, but it seems to us that at least some part of the reserves must necessarily have been utilised in the working capital. The Company had a paid up capital of Rs. 819.57 lacs and it can safely be assumed that 'this money:was utilised for acquiring the fixed assets, as that will 347 be the primary purpose of obtaining capital from the share holders. A sum of Rs. 736.56 lacs must, therefore, have gone in cash into the fixed assets out of this sum of Rs. 819.57 lacs, leaving a balance of Rs. 83.01 lacs. The sum available from other resources was Rs. 294.33 lacs which, together with the balance of the subscribed capital left over, gives a figure of Rs. 377.34 lacs. Consequently, for purposes of the working capital, a maximum amount of Rs. 377.34 lacs could have been available from the subscribed capital or other resources and the balance of the amount must necessarily come out of the reserves. The items of assets classified as representing the working capital, as we have indicated above, have a total value of Rs. 498.02 lacs. Deducting from this amount the sum of Rs. 377.34 lacs available from subscribed capital or other resources, there remains a balance of Rs. 120.68 lacs which must have necessarily come out of the various reserves, including the depreciation reserve, and this amount at least must be held to represent reserves acually used as working capital during the year by the Company. We think that,since the information available from the balance sheet itself shows that at least Rs. 120.68 lacs out of the reserves did form part of the working capital of the Company, it would be fair to allow the Company 4% return on this amount, even though we are not inclined to accept the evidence of Murarka and have to hold that the Company on its part failed to prove that this amount or the whole of the amount of reserves had been utilised as part of them working capital during this year. Consequently, the amount which the Company has to be allowed as return on reserves utilised as working capital comes to Rs. 4.83 lacs. In this connection, we may also take notice of the claim made by the Company that return should also be allowed on certain other sums. used as working capital which have been described as working income. The Company claimed that it had money available from four different sources. The details given were Rs. 249.71 lacs from profit as worked out in the Profit and Loss Account at the end of the year, Rs. 63.07 lacs as reserve for depreciation for the year. Rs. 36.00 lacs as development rebate for this year and Rs. 4.71 lacs as value of discarded fixed assets written off. The claim was that at least half the amount represented by these figures should be treated as a fund which was available during the bonus year for being utilised as working capital. This submission, in our opinion, cannot be accepted. There is nothing to show whether any of these amounts became available to the Company during the year and if so, when they became available. In fact, the profit as worked out in the Profit and Loss. Account can be held to have accrued to the Company only when the Profit and Loss Account was worked out at the end of the year. We have already referred to the decision of this Court in 348 Bengal Kagazkal Mazdoor Union and Others(1) where it was held that amounts shown as liquid assets at the beginning of the year are the only amounts which can be held to be available for utilisation as working capital in that year. Amounts which accrue during the year or at the end of the year cannot be held to be available, unless evidence is led on the basis of which a positive finding can 'be recorded that those amounts became available on a particular date during the year and were thereafter actually utilised as part of the working capital. Profit for the year and reserve or development rebate for the year in question cannot be proved to have accrued on any particular date during the year and, therefore, it is also not possible to hold that they were utilised as part of the working capital during that very year. This claim which is a novel one put forward on behalf of the Company for the first time in applying the Full Bench Formula for calculation of available surplus for distribution of bonus, must, therefore, be rejected. A point that was raised on behalf of the workmen, but which was not seriously argued before us, was that the return on paid up capital should not be allowed at least to the extent to which money had been invested in the subsidiary or other companies. The amount in question is Rs. 14.48 lacs already noticed by us earlier when dealing with the question of proof of utilisation of reserves as working capital. In dealing with that question, we have already proceeded on the basis that the paid up capital was either invested in fixed assets, or must have been utilised as part of the working capital, and have not accepted the plea that this sum of Rs. 14.48 lacs of investment came out of the paid up capital. Consequently, no question can arise of reducing this amount from the paid up capital when allowing 6% return on it in accordance with the Full Bench Formula. Another deduction, while calculating the surplus out of the profits available for distribution of bonus, which has been challenged on behalf of the workmen relates to the income from home delivery commission. From the facts, it appears that this Company was manufacturing cars in collaboration with a foreign concern and the arrangement was that,if that foreign concern sold any of its goods in India, the Company would be entitled to its commission on those sales, even though the Company may not be a party to the transactions of those sales. This arrangement thus recognised the exclusive right of the Company in respect of sale of its cars and to reimbursement in case the foreign collaborator entered into transactions infringing that right. It seems to us that the income thus accruing to the Company has to be treated as extraneous income which was earned by the Company without (1) 349 any activities in which the workmen participated or contributed their labour. Learned counsel for the workmen referred us to the decisions of this Court in the Tata Oil Mills Co. Lid. Q) and Voltas Limited vs Its workmen(1). The situations that were discussed in those cases were different. In those cases, the principle laid down was that, if any income was earned in the course of the normal business of the Company in which the workmen were also engaged, that income must be included in the profits for calculation of surplus available for distribution of bonus. None of the instances that came up for consideration were similar to the one before us. The home delivery commission earned in the present case did not require any contribution of work or labour on the part of the workmen, and accrued to the Company simply because of its agreement with the foreign collaborator ' which entitled the Company to claim the commission without going through any process of manufacturing or selling the cars or their components. In the circumstances, the deduction of the home delivery commission from the profits was fully justified. The last point urged related to the interest on fixed deposits earned by the Company during the bonus year. We have already indicated earlier that a sum of Rs. 220 lacs was in fixed deposit account and the profit and loss account shows that a sum of Rs. 5.17 lacs was received as interest on it by the Company. This has also to be excluded when calculating the available surplus, because this income also accrued to the Company without any contribution on the part of the workmen. It was not the regular business of the Company to keep money in fixed deposits and earn interest thereon. ' At the same time, however, we feel that on equitable grounds, the Company should not be entitled to claim the sum of Rs. 2.16 lacs as an expenditure of the business of the Company in respect of interest paid to bank and others. When the Company was receiving interest on fixed deposits, it would be proper to hold that at least the interest paid by the. Company should come out of the interest earned by it. There seems to be no justification for permitting a Company to keep money in a fixed deposit and treat the interest accruing on it as extraneous income, while, at the same time permitting the Company to take loans, pay interest and treat that interest as business expenditure. Consequently, in this case, when calculating the available surplus, a sum of Rs. 5.17 lacs minus Rs. 2.16 lacs Rs. 3.01 lacs only will be deducted as extraneous income which was earned without any contribution from the workmen and which cannot therefore, be taken into account when calculating available surplus. On the basis of these decisions, we have worked out Charts bowing the amount of annual rehabilitation provision which (1) ; (2) ; LISupCl/688 350(a) CHART Year Original Cost Discarded Price Replace and Factor ment Cost written or Multi off from plier books 1 2 3 4 5 1942 43 to 1946 47 2.17 . 2.80 6.08 1947 48 89.75 0.35 2.80 250.32 1948 49 44.77 . 2.50 111.93 1949 50 37.60 . 2.30 86.48 1950 51 5.29 . 2.40 12.70 1951 52 14.63 . 2.70 39.50 1952 53 11.06 0.39 2.50 26.68 1953 54 9.09 . 1.50 13.64 1954 55 38.65 24.33 1.90 27.23 1955 56 30.05 8 01 1.80 39.69 1956 57 34.47 5.95 1.60 45 63 1957 58 75.32 7.79 2.00 135.06 ]958 59 53.74 . 1.25 67.17 1959 60 140.15 . 1.15 161.17 1960 61 98.52 . 1.10 108.37 350(b) (All figures in lacs of rupees) Less 5 % Balance Deduct Balance Resi Annual Cost deprecia require duary Rehabili tion & other ment Age tation reserve require available ment 6 7 8 9 10 11 0. 11 5.97 364.99 Nil Immaterial . 4.47 245.85 359.02 Nil " . 2.24 169.69 113.17 Nil " . 1.88 84 60 3.48 81.12 3 27.04 0.27 12.43 12.43 3 4.14 0 45 13.19 . 13.19 5 2.64 0 72 26.51 26.51 6 4.42 1.43 44.20 44.20 7 6.31 3.37 131.69 . 131.69 8 16.46 2.69 64.48 64 48 9 7.16 7.01 154.16 154.16 9 17.13 4.93 103.44 103.44 10 10.34 116.70 351 CHART II (All figures in lacs of rupees) Annual Requirement for Rehabilitation for all the Machinery 116.07 Less Depreciation Provision for the Year of Bonus 1960 61 63.07 Net Requirement for Rehabilitation of Machinery in the Year 1960 61 53.00 Requirement for Rehabilitation of Buildings 11.97 Total Rehabilitation Requirement 64,97 CHART III (All figures in lacs of rupees) Profit as per Profit&Loss Account 249 '71 Add : Provision for Depreciation 63.07 Reserve for Development Rebate 36.00 Charity and Donation 0.35 Expenses pertaining to previous years (Sales tax) 0,01 99 43 99,43 349,14 Less: Income pertaining to previous years and Provisions no longer required 5.70 Surplus on Sale of Fixed Assets 0,09 Home Delivery Commission 1.03 Interest on Fixed Deposits 3,01 Normal Notional Depreciation 69,26 Income tax Liability for the year 112,37* 6% Return on Ordinary Share Capital 29,77* 8.57% Return on Preference Share Capital 27,55 4%Return on Working Capital 4,83 Provision for Rehabilitation 64,97 318.58 318,58 Net Surplus Available for Payment of Bonus 30.56 *These figures have been corrected by us. In the statement filed by the Company they were wrongly entered as 12.18 lacs and 129 ' 89 lacs respectively. 359. must be allowed to the Company and, taking that into account, the amount of surplus available out of the profits for distribution as bonus. Chart 1 shows the annual rehabilitation requirement for machinery which works out at Rs. 116.07 lacs. Chart II gives the calculation, on the basis of this figure, of the net amount required for rehabilitation during the year of bonus for the machinery and buildings, after taking into account the depreciation provision for the year of bonus. This net amount is Rs. 64.97 lacs. Chart 111, based on these figures and on other figures arrived at by us in our judgment, shows that a net amount of Rs. 30.56, lacs would be available as surplus for payment of bonus during this year. The Tribunal was, therefore, not right in arriving at its decision that this Company was not in a position to pay bonus at all. As we have indicated earlier, the workmen have claimed bonus equivalent to 6 months ' wages which would amount to a sum of Rs. 24 lacs. We do not find any justification for granting bonus at such a high rate. Though the Company has earned a large amount of profit during the year of bonus, it is to be noticed that, for quite a large number of years, the Company has been running at a loss. The Company has an expanding business and the total amount of surplus available for allocation between the capital and the labour is Rs. 30.56 lacs. In all these circumstances, we consider it just and proper that bonus should be paid to the workmen. 20% of their annual wages, so that a total sum of Rs. 9.60 lacs out of this surplus will be paid out as bonus, leaving the balance of Rs. 21.03 lacs with the Company for being utilised for other purposes. The appeal is, consequently, allowed, the decision of the Tribunal is set aside and it is hereby ordered that the Company shall pay to the workmen a total amount of Rs. 9.60 lacs as bonus, representing 20% of the annual wage of the workmen. In the circumstances of this case, we direct parties to bear their own costs of this appeal. G.C. Appeal allowed.

The workmen of the respondent company raised an industrial dispute about bonus claimed by them for the year 1960 61. The Industrial Tribunal applying the Full Bench Formula held that the sum needed for rehabilitation of machinery exceeded the surplus otherwise available and therefore no bonus was payable. Against this decision of the Tribunal the workmen appealed to this Court and raised various objections as to the manner in which the available surplus was calculated by the Tribunal. HELD: (i) On the facts and the evidence produced in the case the life of the respondent company 's machinery should be taken at an average of 15 years if the machinery is worked in two shifts. and 10 years if it is worked in three shifts. The artificial rule laid down in the Income tax Act for calculation of notional depreciation can provide no criterion at all for determining the life of the machinery, and the Tribunal committed an error in proceeding on that basis. [319 H] The life of machinery taken in other cases is also not a correct basis for fixing the life of machinery in a particular case. Various factory come in that affect the useful life of a machinery. Factors such as the quality of the material used in the machines, and the nature of the material on which the machines are to operate, very materially affect their life. Further the life of a machine will also depend on the manner in which it is handled in a particular factory. Consequently the correct principle is to determine the life of machinery in each case on the evidence adduced by the parties. [319 E F; 320 D] Further what has to be determined is the useful life of the machinery rather than its economic life. In fact one of the very major considerations which should be taken into account is the actual practice of the manufacturers using the machinery and, if the evidence be available, to find out how long the manufacturers continue to use the machinery as a rule. [324 D H] The fact that in the Full Bench Formula the breakdown value of machinery is taken at 5% is certainly an aspect to be taken into account. but it cannot be accepted that a machinery should be deemed to have useful life until it reaches the stage of having a breakdown value of 5% No such absolute rule can be inferred. [328 A] The Tribunal was wrong in not taking into account machinery installed during the bonus year itself for making provision for rehabilitation. If any machinery is installed in. the bonus year, the company would be 312 justified in claiming that it must immediately Start making provision for its rehabilitation, though the period for rehabilitation of that machinery would only start at the end of the bonus year. [330 A C] ' (ii) The multipliers given by the company in the schedule originally submitted by the company which were not objected to by the workers were the correct basis for Calculation of the rehabilitation cost and the Tribunal should not have departed from them. There was no justification for taking an average of the multipliers submitted at first and those submitted thereafter in a second schedule. The Tribunal also was not justified in reducing the multipliers on the ground that the new machines which would be purchased to replace the original ones would necessarily have more ' productive capacity. There was no material at all from which the Tribunal could justifiably have inferred that the increase in production would be so. material as to, attract the principle of apportionment laid down by this Court in the case of the Associated Cement Companies Ltd. 1331 A F; 332 (iii) In calculating the rehabilitation requirement for the machinery the depreciation provision made in accordance with the principles of commercial accounting has to be deducted from the amount that would be required to purchase the new machinery for replacement. The contention that deduction should be made only of depreciation reserves available to the employer cannot be accepted. SUch an interpretation militates against the very purpose for which rehabilitation provision is allowed, namely, to enable the industry to cover the difference between the amount of depreciation which is recouped by making provision for it in accoromance with the, principles of commercial accounting and the amount that would be required to purchase the new machinery for replacement. Therefore, in the present case, the Tribunal erred when in calculating the provision for rehabilitation it took the entire price of the replacement machinery as required to be provided, entirely out of profits without reducing the price to the extent of the depreciation provided for in the accounts. [333 E 334 B F] (iv) The claim of the workmen that the sum shown in the balance sheet of the company as development rebate reserve should be deducted from the available surplus must be allowed. The mere statement of the General Manager on affidavit to. the effect that the reserves had been utilised as part of the working capital could not be aceepted as evidence of the fact. When the balance sheet itself showed that cash amounts in the form of fixed deposits were available which were far in excess of the development rebate reserve in question, there would be No. justification for holding that this development. rebate reserve was not available as a liquid asset and had been included by the company in the working capital. This development rebate reserve was a liquid asset available for rehabilitation and consequently liable to be deducted when calculating the rehabilitation requirement. [335 A G] (v) If some. machines have fully run out their lives, they must necessarily be replaced out of resources available immediately and there would be no justification for keeping the available resources in reserve for future rehabilitation while not providing out of those available resources for immediate. replacement of machinery. There is also the aspect that an employer in order to claim more and, more rehabilitation provision will have a tendency to keep old blocks of machinery running and to avoid adoption of such a device it would be fair that he is required to utilise available resources at the very first opportunity when the old blocks of machinery require replacement and claim annual provision for future only in respect of that machinery which will require replacement later 313 on. Consequently, in the present case the depreciation provision and the available development rebate reserve must be taken into account when calculating the annual provision for rehabilitation required for replacement of the earliest installed machinery until it was exhausted, whereafter 'the annual requirement for the remaining blocks of machinery would have to be calculated, ignoring these available resources. [336 G H; 337 C D] (vi) For the purpose of working 'out return on working capital in the year of bonus the origin of the fund used as working capital is immaterial and it cannot be said that the return must be allowed only on reserves used as working capital and not on any other funds used as such. However the fund must be available for investment before a claim can be made by the employer for a return on it. [340 E F] But, the mere existence of reserves and funds at the beginning of the year, even taken together with their existence at the end of the year cannot lead to any inference that these reserves and funds must have formed part of the working capital during the year and could not form part of other items such as fixed deposits, investments etc. The affidavit filed by the company in this connection did not exclude the possibility that they were utilised for purposes other than that of working capital. in the balance sheet the amounts which represented fixed assets, fixed deposits, investments and other loans and. advances could not be classified as part of the working capital. The items representing working capital were current assets, stock in trade, sundry debts, bank and cash. balances, certain loans and advances and insurance and other claims. The items representing working capital had a total value of Rs. 498.02 lacs. Deducting from this the sum of Rs. 377.34 lacs available from subscribed capital or other sources. there remained a balance of Rs. 120.68 lacs which must have necessarily come out of the various reserves including the depreciation, and this amount at least must be held to represent resources actually used as working capital during the year by the company. On this amount it would be fair to allow a 4% return to the company. [344 F H; 347 D E] (vii) The company 's claim that half the amount from the following sources, namely, (1) the profit in the profit and loss account worked out at the end of the year, (2) depreciation reserve for the year, (3) development rebate for the year, (4) value of discarded fixed. assets written off should be treated as 'a fund which was available during the bonus year for being available for being utilised as working capital, could not be accepted. There was nothing to show whether any of these amounts became available to the company during the year and if so when they came available. [347 F] (viii) In allowing 6% return on paid up capital in accordance with the Full Bench Formula no question could arise of deducting the amounts invested in subsidiary companies from the paid up capital because the said investment had not been held to have come out of paid up capital [348 [348 F] (ix) The income of the company from interest on fixed deposits was its extraneous income which accrued to the company without any contribution by the workmen. this income had therefore to be excluded in calculating the available surplus. At the same time the company could not on equitable grounds be permitted to claim the interest paid by it on its borrowings as business expenditure. Therefore the interest on fixed deposits was to be treated as extraneous income only after deducting from it the interest paid on the borrowings. [349 D F] 314 (x) The income received by the company from its foreign collaborators as commission on sales effected by the said collaborators of their own cars in India was extraneous income to which the company 's wOrkmen made no contribution. It was not therefore to be taken into account in calculating the available surplus. [349 C] (xi) Calculated in the above manner the available surplus came 10 Rs. 30.56 lacs. The Tribunal was not right in its decision that the company was not in a position to pay bonus at all. However, though the company had earned a large amount of profit in the year of bonus it had for quite a large number of years been running at a loss. The available surplus being only Rs. 30.56 lacs, the workmen 's demand of bonus equivalent to six months ' wages amounting to Rs. 24 lacs was too high. It would be just and proper to allow bonus at 20% of their annual wages which would come to Rs. 8.60 lacs. [352 A E] Associated Cement Companies Ltd. Dwarka Cement Works, Dwarka vs Its Workmen & Anr. , Saxby & Farmer Mazdoor Union, Calcutta vs M/s. Saxby & Farmer (India) Ltd. , Workmen M/s. Saxby & Farmer (India) Pvt. Ltd. vs M/s. Saxby & Farmer (India) Private Ltd. C.A. 152/64 dr. 12 4 1965, The Millowners ' Association, Bombay vs The Rashuriya Mill Mazdoor Sangh, Bombay, The Honorary Secretary South India Millowners ' Association & Ors. vs The Secretary, Coimbatore District Textile Workers ' Union. [1962] 2 Supp. S.C.R. 926, National Engineering Industries Ltd. vs The Workmen & Vice Versa, [1968] 1 S.C.R. M/s. Titaghar Paper Mills Co. Ltd. vs Its Workmen, [1959] Supp. 2 S.C.R. 1012, Millowners, Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, , Tata Oil Mills Co. Ltd. vs It 's Workmen & Ors. ; , Anil Starch Products Ltd. vs Ahmedabad Chemical Workers ' Union & Ors., , Khandesh Spg & Wvg. Mills Co. Ltd. vs The Rashtriya Girni Karogat Sangh, Jalgaon, ; , Bengal Kagazkal Mazdoor Union & Ors. vs Titagarh Paper Mills Company, Ltd., [1963] II L.L.J. 358 and Voltas Limited vs Its Workmen, ; , considered.

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