JUDGMENT <NAME>, J.

1. Messrs <ORG> (hereinafter referred to as 'the Mills') are engaged in the manufacture of Maida, which is item no. 1-F of the First Schedule attached to the Central Excises and Salt Act , 1944 (hereinafter referred to as 'the Excise Act ') and bolts, nuts and screws which are item no. 52 of the said Schedule as also certain articles which are included under item no. 68 of the Schedule. The details of the other items excluding those under items 1-F and 68 are given in annexure 4 appended to the writ application.

2. By a notification issued by <ORG> dated 10th August, 1971 item no. 1-F of the First Schedule to the Excise Act , has been exempted from payment of duty under Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as 'the rules'), copy of which is Annexure 1. Thereafter by a notification dated 18th June, 1977, under Rule 8(1) of the Rules (copy of which is annexure 2) <ORG> exempted goods falling under item 68 of the First Schedule, if to be utilised for home consumption and if the total value of all excisable goods in the preceding financial year docs not exceed Rupees thirty lakhs. The petitioner claims that under the aforesaid notification the total value of Maida manufactured by it in the preceding financial year could not be included in determining the exemption. The Assistant Collector of Central Excise (respondent no. 3), however, asserts that the value of Maida cleared in the previous financial year shall be taken into account for determining the exemption under the aforesaid notification. Hence this application.

3. The Excise Act , under Section 2(d) , defines excisable goods, and Section 3 is the charging section which provides that 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 at the rates set forth in the First Schedule, and it further empowers different tariff values to be fixed for different classes or descriptions of the same article. Section 6 authorises <ORG>, by notification from such date as may be specified in it, to have the production or manufacture or any process of production or manufacture of any specified goods included in the First Schedule, licence the production or of salt petre or any specified component parts or ingredients of such goods or of specified containers of such goods in accordance with the terms and conditions granted under this Act. This First Schedule attached to the Act details the items of goods as also the basic and additional rates of duty. It appears that to begin with the First Schedule contained 11 items which has now increased to 68 items. Section 37 empowers <ORG> to make rules and under Section 38 such rules have to be laid before <ORG> while it is in session for a total period of 30 days which may be comprised in one or two more successive sessions. The <ORG> have the power to modify or annul the Rules. Under Rule 8(1) <ORG> is authorised from time to time by notification in the official gazette to exempt, subject to such conditions as may be specified in the notification, any excisable goods from the whole or any part of the duty leviable on such goods, The aforesaid two notifications, annexures 1 and 2, have been issued under this provision.

4. Relevant facts leading to this application are that, as already pointed out earlier, by a notification copy of which is annexure I, Maida was exempted from the duty of excise leviable thereon. Thereafter, in 1977, came the notification copy of which is annexure 2, granting exemption under certain conditions to articles manufactured under item no. 68. These items manufactured by the mill are M.S. rivets, castings, machinery parts, job work etc. Item 68 under the Schedule provided at the relevant period the rate of duty as 2% ad valorem. On the 7th or 8th of December, 1979, the Superintendent of <ORG>, Patna City, respondent no. 4, issued a letter to the petitioners that since the annual turnover of the mills including the sale of Maida (which is item 1-F in the Schedule) was more than Rs. 30,00,000/- the mills were not entitled to the exemption from the payment of duty with respect to item No. 68 of the Schedule. Copy of this letter is Annexure 5. The mills did not accept the interpretation to annexure 2 and submitted in reply that the C.E. authorities were wrong in refusing to give the exemption, whereupon the mills have been served with an order of the Assistant Collector, <ORG>, Patna (respondent no. 3) stating that the petitioners were liable for the financial year 1976-77 to <ORG> Duty at the rate of 2% ad valorem on goods manufactured by them under item 68; copy of the communication is annexure 6.

5. A counter affidavit has been filed on behalf of the respondents stating that the exemption granted by annexure 2 would not exempt the liability of the mills from paying the duty upon goods, under the head, item no. 68, manufactured by them, inasmuch as the value of <ORG> produced in the previous financial year had to be taken into account. It is not necessary to refer in detail to the counter affidavit as the facts are not in dispute.

6. Before proceeding to consider the merits of the rival claims made, a preliminary point raised on behalf of the respondents by the learned Standing Counsel for <ORG> has to be disposed of. It was submitted that as the <ORG> had not availed of the alternative remedies provided under the Excise Act itself, the present application was not maintainable. Reference was made to Sections 35 and 35A as also 36 of the Act, which provide for appeals and revisions to <ORG> as also to <ORG> itself. This preliminary objection was resisted by <NAME>, who submitted that where a fundamental right is involved, consideration of alternative remedy is irrelevant, and he referred to a number of decisions in support of this submission.

He further submitted that once a writ petition had been admitted it could not be thrown away on the ground of alternative remedy. In support of this, learned counsel relied upon a Bench decision of this Court in <CITATION> , 1976 BBC J 1 where it was held :

"...it is well established by several authorities of <ORG> that alternative remedy is not a bar to the exercise of power by this Court under Articles 226 and 227 of the Constitution. Whether such an application should not be entertained, as there is an alternative remedy, should be considered at the time of admission of the writ application, and once the writ application is admitted and heard on merits, it should not be rejected merely on that ground."

In this connection it was further observed that at the stage of final hearing a writ application should not be dismissed on the ground that the petitioners have not availed of the alternative remedy provided under the enactment itself. In support, reliance was placed upon the case of <CITATION> , A.I.R. 1971 Supreme Court 33 where it was observed that merely because a revision application could have been moved under Section 35 of the Income-tax Act but was not moved, <ORG> would not be justified in dismissing as not maintainable a petition which was entertained and was heard on merits. Therefore, it would not be permissible now to reject this application on the ground that the petitioners have availed of the alternative remedies provided under the Excise Act itself.

7. It may further be pointed out that in paragraph 27 of the writ petition it has been asserted that the petitioners have learnt that a communication bearing No. F.No. 3.36/8/77-TRU, dated 20th July, 1977, the Under Secretary to <ORG> in the Ministry of Finance, <ORG> has advised all the Collectors of Central Excise in India that in computing the sum of Rupees thirty lakhs as per the proviso to the notification copy of which is annexure 2, the value of all excisable goods whether exempted or not exempted, should be taken into account, and in that view of the advice, the remedy before any of the superior officers of the <ORG> would be futile. In the counter-affidavit filed by the respondents in paragraph 21 it is stated that the aforesaid statement is not admitted and that the decision of respondent no, 3 is based upon a correct interpretation of the notification. If there be such a communication as mentioned above, it is obvious, any appeal or revision to the authorities as contemplated in Sections 35 , 35A and 36 would be of no avail.

8. In support of this application on merits, Mr. <NAME> has made two submissions ; namely, that Maida having been exempted from excise duty was not "excisable goods" the value of which could be taken into account for the annual turnover. The second submission is that even after Maida has been exempted from the excise duty, it cannot be included in the expression "all excisable goods cleared" used in the first proviso to the notification (annexure 2).

9. For the sake of convenience I will first consider the second submission made on behalf of the petitioners. Before doing so, it would be relevant to quote the notification which reads thus :-

"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the <ORG> Rules, 1944 <ORG> hereby exempts goods falling under Item No. 68 of the First Schedule to the <ORG>s and Salt Act , 1944  and cleared for home consumption on or after the first day of April in any financial year, by or on behalf of manufacturer from one or more factories from the whole of the duty of excise leviable thereon, if an officer not below the rank of an Assistant Collector of <ORG> is satisfied that the sum total of the value of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the goods, under clearance, are manufactured, is not more than Rupees Ten lakhs :

Provided that this exemption shall not be applicable to a manufacturer if the total value of all excisable goods cleared by him or on his behalf in the preceding financial year had exceeded Rupees Thirty Lakhs :

Provided further that the exemption contained to this notification shall apply only to the first clearance for home consumption by, or on behalf of, the manufacturer referred to in this notification, from one or more factories, upto a value not exceeding Rupees Thirty Lakhs during a financial year subsequent to 1977-78 and upto a value not exceeding rupees Twenty-four lakhs during the period commencing on the 18th day of June, 1977 and ending on the 31st day of March, 1978.

Explanation :-For the purposes of determining the value of any capital investment, only the face value of such investment at the time when such investment was made shall be taken into account."

It is not disputed that the goods falling under item no. 68 of the First Schedule relating to the mills are for home consumption and that the capital investment made from time to time on plant and machinery installed in the industrial unit of the mills in which the goods are manufactured is more than Rupees Ten Lakhs. In other words, the conditions to be fulfilled under paragraph 1 of the notification are fulfilled. The controversy arises with regard to the meaning and effect of the proviso thereafter, which says that the exemption shall not be available to a manufacturer if the total value in the preceding financial year of "all excisable goods cleared by him" had exceeded Rupees Thirty lakhs. Obviously in calculating the amount of Rupees Thirty lakhs the goods manufactured by the mills under item 52 has got to be included. The question is whether, in computing this amount of Rupees Thirty lakhs, Maida manufactured and sold during the period by the mill will be included or not. According to Mr. <NAME>, the word "cleared" in the Rules and Notifications issued thereunder is used only for those "excisable goods" on which excise duty is actually paid and as no excise duty has to be paid on Maida, it would not be included in the expression "all excisable goods cleared". Learned counsel says that even if Maida in spite of the exemption, is "excisable goods" as defined in Section 2(d) of the Excise Act, it cannot be referred as excisable goods cleared. "Cleared" in the context means, free from obstruction or to free from obligation or encumbrance. Therefore, excisable goods cleared will only mean those excisable goods on which excise duty is payable and has been paid, that is, is free from obstruction or obligation or encumbrance.

10. In this context, reference was made to Rule 9 of the Rules, which provides that excisable goods shall not be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export or manufacture of any other commodity until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require. Rule 52 further provides that when a manufacturer desires to remove the goods on payment of duty either from the place or premises specified under Rule 9 or from a store room or other place of storage approved by the Collector he shall make an application in triplicate to the proper officer in the proper form and shall deliver it to the officer at least 15 hours before it is intended to remove the goods. The officer shall thereupon assess the amount of duty due on the goods and on production of evidence that the same has been paid into the treasury or paid to the account of the Collector in <ORG> or <ORG>, allow the goods to be "cleared". Placing reliance upon this provision, Mr. <NAME> submitted that the word "cleared" is used to signify permission to remove such excisable goods only after payment of excise duty, meaning thereby, only after excise duty levied has already been paid.

11. Rule 52-A provides for goods to be delivered on gate pass and sub-rule (4) reads thus :-

"Gate passes shall be maintained in two sets ; one for clearance for home consumption and the other for clearance for export. Each gate pass shall bear a printed serial number running for the whole year beginning on the first January or such other date as approved by the proper officer as may correspond to the accounting year of the factory. Only one gate pass book of each type shall be used by a factory for an excisable commodity at any one time unless otherwise specially permitted by the Collector in writing in respect of factories having more than one section from which clearances take place."

Mr. <NAME> submitted that the word "clearance" has been used here for the removal of such goods on which either excise duty has to be paid or which are being permitted to be removed for export. It has, therefore, been urged before us that the word "cleared" as used in the notification signifies the removal of an obstruction which is in the way on account of the imposition of excise duty and which obstruction is removed when the excise duty has been paid.

12. The learned Standing Counsel on the other hand contends that the word "cleared" used in the notification has no special or particular meaning. It refers to all excisable goods which are moved out. According to him "all excisable goods "cleared" in the proviso would mean all such goods removed irrespective of the consideration whether excise duty has been paid or such duty is exempted. In other words, Standing Counsel submits that if <ORG> comes within the definition of "exacisable goods" then even if payment of excise duty is exempted, its value would be included in computing the amount of Rupees Thirty Lakhs.

He further emphasises that the word "cleared" as used in the proviso could not relate to excise duty actually paid as the expression used in the proviso is "all excisable goods cleared by him". It is said that the clearance refers to the clearance by the manufacturer and, therefore, the word "cleared" here means "removed".

13. The submissions made by both sides are plausible. <CITATION> , A.I.R. 1957 Supreme Court 657, Bhagwati, J., speaking for the Court ruled :-

"It is no doubt true that in construing fiscal Statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the Statute or the substance of the law. If the <ORG> satisfies the <ORG> that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxaing Statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter."

In the case of <CITATION> A.I.R. 1976 Supreme Court 1503, it was laid down ;

"It is well settled that in case of fiscal Statute the provisions must be strictly interpreted giving every benefit of doubt to the subject and lightening as far as possible the burden of court fees on the litigant".

Therefore, by strictly interpreting and giving every benefit of doubt to the subject, I am of the opinion that the proviso to annexure 2 refers only to such excisable goods on which excise duty has been paid. The contention that out-turn of Maida in the preceding financial year by the mills could not be taken into account for calculating the total output of "excisable goods cleared" must be sustained and Annexure 6 appended to the writ application is quashed and set aside.

14. Reverting to the first submission, Section 2(d) reads "excisable goods" specified in the First Schedule as being subject to duty of excise and includes salt. On behalf of the petitioners it is said that excisable goods under the definition has two attributes, namely : (i) goods which are specified in the First Schedule of the Act, and (ii) which are subject to a duty of excise. The argument proceeds that all the goods specified in the First Schedule are not necessarily subject to a duty of excise. There are some goods mentioned therein where the duty of excise is nil, as for example item No. 4 (1) (7) i.e. unmanufactured tobacco if used for agricultural purpose. It is further submitted that even if there are goods in the First Schedule which are subject to a duty of excise, such duty, at times, is exempted under Rule 8(1) of the Rules. Therefore, excisable goods not only refer to goods specified in the First Schedule but those goods must also be subject to duty of excise and where either of the conditions is missing, it is not excisable goods. In support of this contention, reliance is placed on a Single Judge decision of <ORG> in the case of <CITATION> . 1972 Tax Law Reports 1771. This report was not available here but a copy of the judgment was given to us where it was observed :

"On this observation, it is arguable that the goods manufactured by the petitioner ceased to be "excisable goods" after they were exempted from payment of duty, for the exemption notification was entitled to be regarded as part of the Act itself. If the Act and the Notification are read together, the effect is the goods exempted were not "excisable goods" within the meaning of Section 2(d) of the Act."

15. The Standing Counsel, on the other hand, submitted that the expression "as being subject to a duty of excise" is descriptive of the goods mentioned in the First Schedule and its purpose is to include in the definition of excisable goods only those goods which are subject, to a duty of excise under the Schedule itself. He has submitted that from the year 1944 itself when the Act was first made, there was at least one item in the Schedule where the duty of excise was nil which was item 8 (3) Palmyra Sugar. It is further argued that when the rate of excise duty is prescribed under the Schedule of the Act then such goods are subject to a duty of excise and if some of those goods are exempted by a notification under Rule 8(1) they still continue to be excisable goods on which excise duty is exempted. Exemption of such duty, it is submitted, is the result of an eclipse caused by the notification under Rule 8(1). The Standing Counsel relied upon a Bench decision of <ORG> in the case of <CITATION> , 1978 ELT (J 57), a copy of which has been given to us, as the report is not available, where it was held that the character of excisable goods does not depend on the actual levy a duty but on the description as excisable goods in the First Schedule to the Act and any exemption does not change. the nature and character of the goods as excisable goods within the meaning of the Act.

16. As I have already held that the petitioners are entitled to the relief sought for in this application, as at present advised, I do not consider it necessary to decide this point.

17. In the result, this application is allowed and the impugned order is quashed and set aside. In the circumstances of the case, however, I would make no order as to costs.

<NAME>, J.

I agree with my learned brother on both the questions decided by him but I would like to add a few words.

19. With respect to the preliminary objection taken by the Standing Counsel, appearing on behalf of <ORG>, regarding the maintainability of the writ application, Mr. <NAME> contended that in the facts and circumstances of the case, the provisions for appeal and revision do not provide an effective alternative remedy and since no investigation of fact is involved in the case, this <ORG> should not refuse to exercise its constitutional powers. The notification (Annexure 2) has been erroneously interpreted by the authority and the impugned order must, therefore, be held to be without jurisdiction. This <ORG>, therefore, should not decline to give to the petitioner the relief under Article 226 of the Constitution. He also cited a number of decisions in support of his argument.

20. Mr. <NAME> advanced a further argument that as the writ application was admitted by this Court, it should not be dismissed on the basis of the preliminary objection now. He placed reliance on the decisions in <CITATION> , A.I.R. 1971 Supreme Court 33, <CITATION> , 1976 B.B.C. J. 1 and <CITATION> ., A.I.R. 1973 Madhya Pradesh 175.

21. The appellant in <CITATION> (supra) was aggrieved by the assessment order passed under the Income Tax Act and applied for rectification of a mistake in the order of assessment which he claimed, was apparent from the record. The Income Tax Officer declined to grant any relief and the assessee moved <ORG> under Article 226 of the Constitution challenging the order of the Income Tax Officer. Having lost the case before the . High Court, he approached <ORG> and was granted special leave. <ORG> accepted the claim of the appellant, allowed the appeal and while so doing held as under:-

"It is true that a petition to revise the order could be moved before the Commissioner of Income Tax. But <NAME> moved a petition in <ORG> and <ORG> entertained that petition. If <ORG> had not entertained his petition, <NAME> could have moved the Commissioner in revision, because at the date on which the petition was move 1 the period prescribed by Section 33-A of the Act had not expired. We are unable. to hold that because a revision application could have been moved for an order correcting the order of the Income Tax Officer under Section 35 , but was not moved, <ORG> would be justified in dismissing as not maintainable the petition which was entertained and was heard on the merits".

22. <CITATION> , 1976 B.B.C. J. 1 the petitioner challenged before this Court an order of confiscation passed under Section 6A of the Essential Commodities Act and it was pointed out that Section 60 of the Act provided for an appeal against such an order to be filed within one month from the date of its communication, which the petitioner had failed to avail. The petitioner had approached <ORG> within the period prescribed for filing the appeal and the writ application was admitted and was heard after the expiry of the said period. Relying upon the decision of <ORG> in <NAME> case (supra) <ORG> held that the writ petition could not be dismissed on the ground of alternative remedy.

23. In the present case also, the petitioner filed a wait application before the expiry of the period of limitation which is admittedly three months as mentioned in Section 35 and the case was admitted and an interim order was passed. Now when the period of limitation is over, it will not be a proper exercise of the jurisdiction to dismiss the application merely on the ground that the petitioner should have filed an appeal. The preliminary objection raised on behalf of the respondents must, therefore, be rejected.

24. I entirely agree with the view expressed by my learned Brother on the second point urged on behalf of the petitioner, as discussed in paragraphs 9 to 12 of his judgment.

25. I wish to express my opinion on the first question raised on behalf of the petitioners also as formulated in paragraph 3 of the judgment of my learned Brother.

26. The expression "excisable goods" has been defined in Section 2(d) in the following terms :

"Excisable goods means goods specified in the First Schedule as being subject to a duty of excise and includes salt".

Mr. <NAME> contended that after exemption was granted with respect to <ORG> by Annexure 1, the article ceased to be subject to a duty of excise and consequently cannot be assumed to be covered by the expression. The factual position in this case admittedly is that if the sale of <ORG> in the preceding financial year is taken into account, the total turnover would exceed Rs. 30 lakhs but if <ORG> be excluded, the turnover will be below that figure, and consequently the first proviso in annexure 2 would have no application at all. The question to be answered, therefore, is as to whether <ORG> continued to be excisable goods even after Annexure 1. According to the petitioner, the liability in regard to the payment of excise duty is an essential condition for bringing an article within the expression, and, as by Annexure 1, <ORG> was exempted from duty in 1971, it cannot be treated as excisable goods since then. The learned counsel also tried to take help from the language used in Section 6 as it stood earlier and as it now stands after amendment. He said that if the intention was to include within the expression all the articles specified in the First Schedule then there was no necessity of including the 'words "as being subject to a duty of excise" in the definition. Mr. <NAME> strenuously contended on the well-established principles of interpretation that the legislature must be presumed to have used each word in a Statute for a purpose and that every part of a statutory provision should be given effect to. It was urged that if the intention had been to, treat every article mentioned in the schedule as excisable goods without reference to the question as to whether duty was payable or not, it could have been expressed in a more direct straight forward manner without unnecessarily making a reference to payment of duty.

27. On a close examination of the Act along with the First Schedule arid the rules, I do not find myself in a position to accept the petitioner's stand. It is true that the expression is not intended to include every article mentioned in the First Schedule, but at the same time it is also clear that the definition is not entirely dependent upon liability to pay duty for if that were so, the sub-section would not have mentioned the First Schedule. A reference has been made to both the First Schedule and to the liability in regard to the excise duty and they have been connected by the every significant words "as being". Giving effect to every word in the sub-section, its meaning appears to be that all goods which are subject to duty by virtue of being included in the First Schedule must be treated as excisable. The second part is merely descriptive. Whether a particular article is subject to duty or not by reason of any other provision does not appear to be relevant. What has to be seen is whether by reason of its being included in the First Schedule, it is subject to a duty or not. A reference to the Schedule indicates that Maida is still retained there as item 1 with the rate of duty as 10 paise per kilogram in column 3. It is, therefore, specified in the First Schedule as being subject to a duty and comes squarely within the definition.

28. Let us test the conclusion to which I have arrived above in the light of the argument addressed on behalf of the petitioner. It has been contended that on this view the words "as being subject to duty of excise" are rendered superfluous. The fallacy in this argument is that it is assumed that every item mentioned in the First Schedule is automatically subject to duty. It is not so. In Item No. 60, several articles are excluded from the duty and even before this item was included in the Schedule, there was other articles not subject to duty. Presently, against tobacco if used for agricultural purpose as mentioned in item 4(7), the rate of duty is mentioned as nil. In the past, Palmyra Sugar, now mentioned in item 1(3) earlier at one point of time as mentioned in item 8(3) also was not subject to duty.

29. I, therefore, do not find any substance in the first point urged on behalf of the petitioner. However, since the second question has been decided in its favour, the writ application succeeds.


JUDGMENT <NAME>, J.

1. This is an appeal by defendants 4 and 5 which arises out of a suit for partition. A preliminary decree has been made by the learned Subordinate Judge and the appeal is directed against that preliminary decree. The property which is the subject-matter of this appeal originally belonged to two brothers, <NAME> and <NAME>. <NAME> died in the year 1900 leaving him surviving his widow and three sons. <NAME> got his share partitioned in the year 1905. The three sons of <NAME> purchased the share of <NAME>, which had been partitioned previously by a conveyance dated 31st May 1922. On that very day the three brothers mortgaged the entire interest in the house to a third person, with which we are not concerned in this litigation. On 12th October 1923 these three brothers again mortgaged the property to defendant 5. On 1st September 1924 these three brothers again executed a second mortgage of this very property in favour of their mother. Defendant 5 brought a suit on his mortgage on 10th November 1924 and a preliminary decree was made on 22nd January 1925. In the meantime defendant 4 was appointed as Receiver by an order of the <ORG> in accordance with the terms contained in the indenture of mortgage dated 12th October 1923. The Receiver remained in possession of the property on behalf of the mortgagors and the mortgagee. The present suit for partition was brought by one of the sons of <NAME> on 17th April 1925 and two items of properties were included in his suit. There is no dispute with regard to item 1 with which the present appellants have no concern and the whole dispute centres round item 2 which had been mortgaged to defendant 5. During the pendency of this suit for partition a final decree in the mortgage suit of defendant 5 was made on 19th March 1925 and the property was sold on 7th August 1926 and purchased by defendant 5, as the lower <ORG> finds and as is contended for on behalf of the respondent. But it is stated that there were other purchasers who were trustees with regard to some charitable trust : but that is a matter with which we are not concerned and this was not discussed in the <ORG> below. The Receiver was discharged by order of the <ORG> and defendant 5 took possession of the disputed property as purchaser. In the partition suit the two brothers of the plaintiff were defendants 1 and 2 and his mother was defendant 3; defendant 4 was Receiver and defendant 5 was the mortgagee and subsequently became the purchaser.

2. The question which is in debate in this <ORG> and which was the subject-matter of dispute in the <ORG> below is whether the mother is entitled to a fourth share of the property including property No. 2, according to the provisions of the Hindu Law, on a partition being made among the sons. There is one small matter which has not been much debated that a half share of the property is not the ancestral property of the brothers and therefore if the widow of <NAME> is entitled to a share on a partition between her sons she would get a fourth share of item 2. But the real controversy is whether she would get any share under the circumstances of this case. The learned Subordinate Judge has held that the plaintiff and defendants 1 and 2 have got no subsisting right to property No. 2, which has been described as the-Strand Road premises, and their suit for partition with regard to that plot must fail. He has, however, made a decree to this effect that defendant 3, the mother,, would get a fourth share of both the properties Nos. 1 and 2 and the plaintiff and defendants 1 to 3 would each get a fourth share of the property No. 1. As I have already stated that assuming that the learned Judge is right, the lady would be entitled to get an Right share of the property No. 2. But it is contended on behalf of the appellants that under the circumstances of this case the lady would be entitled to get no share in property No. 2. Their case is that the principle of Hindu Law upon which the learned Subordinate Judge has relied is not applicable in this case and that his decision is, therefore, liable to be reversed. On behalf of the respondents-reliance is placed upon the well known case of <NAME> v. <NAME> [1900] 27 Cal. 77. In that case-<NAME>, J., laid down the principle on which according to the Hindu Law the mother is entitled to get a share on a. partition made among the sons born of her womb of the property inherited from the father. The learned Judge after quoting the text from <NAME> observes:

With reference to the above passage front the Dayabhaga, it has been held, and it must now be taken as settled law, that the mother right to claim a share arises only when her sons come to a partition, in other words that she cannot enforce her claim to a share so long her sons remain joint and do not ask for partition. But there is nothing said in this passage or in any other authoritative text of <ORG> as to a mother's right to a share on partition being so absolutely non-existent before partition, that it may be defeated by any of her sons alienating his share before coming to a partition.

3. He then proceeds in this way:

In my opinion the correct view to take of this right would be to hold that it is an inchoate right as long as no partition is come to amongst the sons and it becomes actually enforceable only when the sons come to a partition ; or in other words that the right when it becomes enforceable by reason of a partition being come to among the sons, is [1900] 27 Cal. 77 enforceable not only as against the song, and as regards so much only of the joint property as at the date of partition is in the hands of the sons, but also as against any person deriving title from any of the sons and as regards the property to which they may have so derived title, subject to certain qualifications and limitations.

4. In that case during the pendency of the suit for partition by one of the sons another son sold his share in the joint property. It was held by the <ORG> that by reason of the sale the interest obtained by the purchaser is subject to the rule of lis pendens and that he cannot stand on a higher footing than that of his vendor and when the partition is made, if his vendor was a party to the suit, the mother would get a share: that right cannot be defeated during the pendency of the suit by one of the sons transferring his interest in favour of a third party. This principle has been elaborated in a subsequent case <CITATION>  27 Cal. 551 where <NAME> <NAME>, sitting alone held that this principle is applicable where a stranger to the family purchases the interest of one of the sons and then seeks for partition of the joint family property. The question has again been discussed in the case of <CITATION> A.I.R. 1921 Cal. 351 by <NAME>, <NAME> But the principle has not been carried further than what was laid down by <NAME>, <NAME> In this case the appellants contend that he is entitled to the property by virtue of his purchase in the same state in which it was at the time of the mortgage or, in other words, that any subsequent alienation made by the mortgagor would not affect his interest. That proposition is uncontroverted. But if the mother could get any right in the present suit by reason of the partition, that would not be by the right created by the mortgagor but it would arise under the Hindu Law and I doubt whether the principle enunciated by the appellant would apply to such a case. In this case, in my opinion, the plaintiff had a right to bring the suit for partition at the time when he brought the suit. Although there had been a preliminary decree for partition the title of the plaintiff to his share of the property was not extinguished by that preliminary decree on mortgage but he had still a subsisting interest in the share of the property by reason of succession to his father. The plaintiff's right to bring the suit was not affected. The mother's right to claim a share, however, arises, as <NAME>, <NAME> laid down, only on a partition no matter whether the partition is made amicably or as the result of a decree by a suit The mere bringing of a suit for partition by one of the sons does not confer any right on the mother to have a share, according to the view expressed by <NAME>, <NAME> If the suit for partition is withdrawn the mother cannot claim any share, nor can she insist that the suit must be carried on to a decree. If the partition suit is dismissed by the <ORG> for some reason or other, then the mother would not get any share in the property. It is only when the property is actually partitioned, the mother would get a share equal to that of her sons. She is not even a necessary party to the suit having no interest in the property when the suit is brought. She can only come in to watch the proceedings to safeguard her interest when the partition is effected.

5. Now, it is contended on behalf of the respondent that defendant 5 is bound by the rule of lis pendens as was applied in the case of <NAME> v. Fulkumari Dassi [1900] 27 Cal. 77 cited above. The difficulty in this case is that that principle cannot be applied to this case. Here defendant 5 has acquired the interest of the plaintiff as well as the defendants who had interest in the property. It is a fundamental principle that a man ; cannot sue himself and the defendant standing in the shoes of the plaintiff with regard to this property cannot continue the suit for partition with regard to this very property. The plea therefore, must fall to the ground by reason of the purchase of defendant 5 and, as the learned Subordinate Judge says, the plaintiff and defendants 1 and 2 cannot ask for partition of property 2. That being so, the mother would not be entitled to any share of property No. by reason of the fact that her sons had no interest in the property and this property could not be the subject of partition. Whether she would have a charge for her maintenance against the property in the hands of the purchaser is another matter. That question cannot arise in a suit for partition and if she has any right, the question must be left open to be debated in a subsequent suit.

6. The result, therefore, is that the judgment and preliminary decree of the Subordinate Judge should be modified to this extent that the suit for partition with regard to property No. 2, i.e., the Strand road premises, should stand dismissed and, therefore, any claim of defendant 3 will also stand dismissed, and the appeal is allowed to this extent. The appellant is entitled to his costs from the respondent who has appeared, hearing fee being assessed at three gold mohurs.

<NAME>, J.

7. I agree.


JUDGMENT <NAME>, J.

1. In pursuance of the directions of this court in T.C. P. No. 186 of 1984, dated December 4, 1934, <ORG>, Madras, has referred the following question of law under section 256(2) of the Income-tax Act for the assessment year 1980-81 for our opinion :

"Whether, on the facts and in the circumstances of the case, <ORG> was justified in holding and had valid materials to hold that the assessee is entitled to the deduction under section 35B in respect of the commission paid to <ORG> and also on its share of contribution paid to <ORG> for participating in a trade exhibition ?"

2. The question referred to us consists of two parts one regarding the claim of the assessee for weighted deduction in respect of the commission paid to <ORG>, and another in respect of its share of its contribution paid to <ORG> for participating in an international trade exhibition.

3. The assessee is a company and the assessee claimed weighted deduction under the provisions of section 35B of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), in its assessment proceedings for the assessment year 1980-81 and the claim of the assessee for weighted deduction in respect of the commission paid to <ORG>, and another in respect of its share of its contribution paid to <ORG> for participating in an international trade exhibition.

4. The assessee is a company and the assessee claimed weighted deduction under the provisions of section 35B of the Income-tax Act 1961 (hereinafter referred to as "the Act"), in its assessment proceedings for the assessment year 1980-81 and the claim of the assessee related to the following items of expenditure.

Rs.

1. Share of Australian office expenditure 12,000 paid to <ORG> 2. Share of export promotion division 3,600 expenditure paid to <ORG> 3. Commission paid to <ORG> on export sales 4. Share of expenditure for participation 32,450 in Second Asian Automotive and Accessories Exhibition at Singapore --------- 65,480 --------- 1/3rd thereof Rs. 21,827.

5. The Income-tax Officer rejected the claim of the assessee for weighted deduction in so far as it related to the commission paid to <ORG>, on export sales and the share of its expenditure for participation in Second Asian Automotive and Accessories Exhibition at Singapore on the ground that the assessee has not established the link between the expenditure and the items enumerated under section 35B of the Act. The assessee preferred an appeal before <ORG>) against the order of <ORG> denying its claim for weighted deduction on the share of export promotion division expenditure and the commission paid to <ORG> and on the share of the expenditure for participation in the second Asian Automotive and Accessories Exhibition. The Commissioner of Income-tax (Appeals) held that the commission paid to <ORG>, was not covered by any of the provisions of section 35B of the Act, and further the commission was also paid in India and hence the assessee was not entitled to claim weighted deduction. In so far as the share of expenditure for participation in the Second Asian Automotive and Accessories Exhibition is concerned, he held that the assessee has not participated in the said exhibition and, therefore, the assessee was not entitled to claim weighted deduction.

6. The assessee carried the matter in appeal before <ORG>. In so far as the claim of the assessee relating to the commission paid to <ORG> is concerned, <ORG> followed its earlier order passed for the assessment years 1976-77 and 1979-80 and held that the assessee is entitled to weighted deduction in respect of the commission paid to <ORG> As regards the claim of the assessee for weighted deduction in respect of the share of expenditure in participating the Second Asian Automotive and Accessories Exhibition is concerned, the Tribunal has found that on the basis of the bills produced by the assessee, the assessee had participated in the exhibition and, therefore, the assessee is entitled to weighted deduction under section 35B of the Act in respect of the sum of Rs. 32,450 also. <ORG> thus allowed the appeal preferred by the assessee as regards the two items claimed by the assessee for weighted deduction.

7. Mr. <NAME>, learned counsel for the <ORG>, submitted that the assessee is not entitled to weighted deduction in respect of both the items as the expenditure incurred cannot be brought in within in any of the items enumerated under section 35B of the Act and there is no nexus between the expenditure and the items mentioned under section 35B of the Act, and the assessee is not entitled to weighted deduction. He however, fairly brought to our notice an earlier unreported decision of this court in <CITATION> . 245 of 1984, dated February 11, 1997 - since reported at  240 ITR 59), wherein this court has held that the assessee was entitled to weighted deduction in respect of the commission paid to <ORG>, Mr. <NAME>, learned counsel for the assessee, submitted that the decision of this court in <CITATION> .  240 ITR 59 cited supra would apply to the commission paid to <ORG> As regards the share of expenditure incurred by the assessee in the participation in the Second Asian Automotive and Accessories Exhibition is concerned, learned counsel for the assessee submitted that the assessee had participated in the exhibition by exhibiting its goods in the foreign country and thereby it has incurred an expenditure towards either advertisement or publicity of the goods or for obtaining information regarding the market outside India, and, therefore, the assessee is eligible to claim weighted deduction in respect of its share of expenditure incurred for participating in the exhibition.

8. We have carefully considered the submissions of learned counsel. In so far as the commission paid to <ORG> is concerned, this court in <CITATION> .  240 ITR 59 cited supra rendered in the assessee's own case, has held that the assessee is eligible to claim weighted deduction in respect of the commission paid to <ORG> This court in the above judgment has upheld the view of <ORG> that the assessee was eligible for weighted deduction in respect of the said expenditure. We are of the view that since the facts prevailing in the earlier decision rendered in the assessee's own case are the same, we hold that <ORG> was right in holding that the assessee is entitled to weighted deduction under section 35B of the Act in respect of the commission paid to <ORG>

9. In so far as the claim of the assessee for weighted deduction in respect of his share of contribution paid to <ORG> is concerned, the Income-tax Officer has not allowed the claim of the assessee on the ground that there was no nexus between the expenditure and the items enumerated under section 35B of the Act. The Commissioner of Income-tax (Appeals) disallowed the claim on the ground that the assessee had not participated in the said exhibition The order of the assessment clearly shows that the exhibition was held in a foreign country, viz., Singapore. <ORG> on a perusal of the material came to the conclusion that the assessee had participated in the exhibition. The logical inference that flows from the above finding of <ORG> is that the assessee had displayed its articles in the Second Asian Automotive and Accessories Exhibition held at Singapore and since there was a display of the assessee's articles in a foreign country, it would amount to either advertisement of its goods or publicity of its goods outside India. The purpose behind the act of the assessee in participating in the exhibition also shows that it was inviting trade enquiries about the assessee's products in the foreign country which would enable the assessee to obtain information regarding the markets outside India and it is significant to note that the expenditure was incurred only in connection with the export of the assessee's products. Since by the display of the goods made in an international exhibition there was a publicity or advertisement of its products eliciting information regarding markets outside India, we are of the view that the claim of the assessee would fall either under sub-clause (i) or sub-clause (ii) of clause (b) of sub-section (1) of section 35B of the Act. We are, therefore, of the view that there is no infirmity in the order of <ORG> in holding that the assessee is entitled to weighted deduction in respect of the share of contribution by <ORG>, when it participated in the international trade exhibition held in the foreign country.

10. We answer the question of law referred to us in the affirmative and against the <ORG>. No costs.


JUDGMENT <NAME>, J.

1. This is an appeal from a judgment of the Subordinate Judge of Burdwan whereby he affirmed a decision of the <NAME> of the third Court at Burdwan.

2. The facts out of which these proceedings arose are stated by the learned <NAME> in the early part of the judgment which he gave on January 15, 1934.

3. The present appellant <NAME> had made an application under Section 47 of the Code of Civil Procedure. The present respondent <NAME> had obtained a decree against the appellant for a certain sum for rent. The decree was dated July 26, 1930, and that decree was put to execution, and proceedings which were described as Rent Execution Case No. 252 of 1930 in <ORG> at Burdwan, were started. Subsequently, on August 13, 1930, there was an agreement between the parties as to the method in which the decree was to be satisfied, or to put the matter in another way, there was an adjustment of the decree. By that agreement the amount due under the decree was made payable by certain instalments, and there was a provision in the agreement, for payment of interest at a certain rate. It also contained a provision that if the judgment-debtor failed to pay any instalment in proper time, the decree-holder would be entitled to realise the whole amount by means of execution proceedings.

4. In June, 1931, there were further proceedings in execution which were described as Rent Execution Case No. 305 of 1930. That case was disposed of on June 20, 1931. There were further execution proceedings being Rent Execution Case No. 53 of 1933, which were disposed of on July 25, 1933. In those proceedings the judgment-debtor filed an objection which was heard as Miscellaneous Case No. 39 of 1935, and finally the present proceedings were started on August 9, 1933.

5. At the hearing before the 3rd <NAME> at <NAME>, the applicant, that is to say the judgment-debtor contended that me present execution petition was barred by limitation and also by res judicata and that the solenama (or adjustment) which had been made in Rent Execution Case No. 252 of 1930 was not a part of the decree, and it was not legal, or valid or binding on the parties. It was further contended that the solenama was at the most a mere contract which could not be enforced in execution proceedings, but could only be enforced by means of a regular suit. The learned <NAME> said in his judgment:

It appears that the rent decree passed on July, 26, 1930, was completely superseded by a solenama on August, 13, 1930. It further appears that the old rent decree being non-existent, was found not capable of execution.

6. Then follows this very important observation:

In the present execution case the decree-holder seeks to execute the solenama or the adjusted decree and not the superseded decree which has been extinguished by virtue of the solenama or adjustment.

7. It is obvious that there are no real merits in this case as regards the attitude adopted by the judgment-debtor or on the contentions pat forward on his behalf. It appears that at the time when the solenama was entered into, that is to say on August 13, 1930, a sum of Rs. 61 was paid by the judgment-debtor to the decree-holder, and after that nothing more whatever was paid and so on August 9, 1933, the present proceedings were instituted. The learned <NAME> came to the following conclusion:

The solenama although it is an agreement, is binding upon the parties and is executable as a decree without recourse to any suit.

8. Then he said:

The period of limitation will run from the date of adjustment.

9. In support of that view he relied upon a decision of this Court in <NAME> v. <NAME> .

10. The Subordinate Judge on all material points agreed with the view taken by the learned <NAME>, and he seems to have come to the conclusion that:

In the present case the <ORG> varied the decree by noting the instalments in <ORG>.

11. In the concluding paragraph of his judgment the learned Subordinate Judge said:

The last execution in which the decree-holder was trying to execute the original decree gave rise to an objection case by the appellant who contended that after the adjustment the original decree was no longer executable. The <ORG> accepted that contention and nobody appealed against that order.

12. We have been invited by Mr. <NAME> on behalf of the appellants before us to come to the exclusion that the decision of. Mr. Justice <NAME> and Mr. Justice <NAME> in the case I have just mentioned is no good law. In that case it was held that since the parties, by agreement, can arrange their own procedure and give jurisdiction to the <ORG> to adopt that procedure, and since the parties agreed that the money due should be realised by execution, the <ORG>-had jurisdiction to proceed by way of execution. That decision is based on a number of cases, notably the following: <NAME> v. Attorney-General for Gibraltar (1874) 5 PC 516 : 22 WR 900 : 30 LT 729, <NAME> v. <NAME> 2 IA 219 : 24 WR 193 : 3 Sar. 519 : 15 BLR 383 : 3 Suth. PCJ 190 (PC), <NAME> v. <NAME> 20 C 22 and <NAME> v. <NAME> 11 A 228 : AWN 1889, 53.

13. There are, however, a number of authorities, chiefly it is true, in other <ORG> and one or two in this <ORG>, in which a contrary view has been taken and in my opinion it is extremely doubtful whether the proposition laid down in the case of <NAME> v. <NAME> (supra) is really good law. If in the present circumstances it was simply a question of our having to decide that whether in any circumstances it is possible for an agreement between the parties to supersede a decree of the <ORG> and then to put it to execution as if it were itself a decree, it would be extremely difficult to hold that the parties can by an agreement substitute as it were a fresh decree in place of the original decree, or even vary the terms of the original decree. In our opinion, however, it is not necessary that we should decide that point, because in the present instance we are disposed to hold on the authority of a decision of the Full Bench of the Allahabad High <ORG> in <CITATION> . in which a number of previous decisions were considered and reviewed, that in the circumstances of this case it was not open to the parties to extend by their agreement, the period of limitation laid down as applicable to execution matters. If in the present case the decree-holder had sought to put to execution the solenama within a period of three years from the date of the original decree then it would have been necessary to decide whether we ought to follow the judgment of Mr. Justice <NAME> and Mr. Justice <NAME>. But in the present instance it is clear from the dates that the present execution proceedings were instituted at a time when more than three years had elapsed from the date of the original decree. The original decree was made on July 26, 1930, and these proceedings were instituted in August, 1933, so that whether the matter falls within the provisions of the ordinary law of limitation or under the provisions of the Bengal Tenancy Act, it was outside the period prescribed.

14. In these circumstances while deprecating the attitude and action taken up by the judgment-debtor, we find ourselves forced to the conclusion that the decree-holder had lost whatever rights he possessed so far as enforcing her claim in execution proceedings.

15. In that view of the matter we come to the conclusion that this appeal must be allowed. But having regard to the circumstances we make no order as to costs.

<NAME>, J.

16. I agree with my learned brother that this appeal should be allowed.

17. It was a rent decree obtained on July 26, 1920. In the first execution case there was an adjustment between the parties on August 13, 1930, by which the judgment-debtor agreed to pay the decretal amount by cert in instalments. The instalments not being paid, the decree-holder instituted a further execution case which the judgment-debtor opposed on. the ground that the decree had been superseded by the subsequent agreement. The <ORG> accepted the judgment-debtor's plea and dismissed the execution petition. Thereafter the decree-holder instituted the present execution case on August 9, 1933, asking execution of the agreement of August 13, 1930. Both the <ORG>s below held on the authority of the case of <NAME> v. <NAME> , that an agreement which superseded the original decree is executable as a decree.

18. Having regard to the various decisions of this <ORG> and of other High <ORG>s which have been cited before us, the question in my opinion in not free from difficulty, but it is, as my learned brother stated, not necessary to decide the question in this case. It is clear having regard to the provisions of Article 6 of Schedule Ill of the Bengal Tenancy Act, which limits the life of a rent decree to three years, that the present decree was barred on August 9, 1933 when the execution case was instituted.

19. I agree that the appeal should be allowed, and having regard to the conduct of the judgment-debtor no cost should be allowed to him.


CASE NO.: Special Leave Petition (civil) 14833 of 1999 PETITIONER: NETAI BAG & ORS. Vs. RESPONDENT: THE STATE OF WEST BENGAL & ORS. DATE OF JUDGMENT: 27/09/2000 BENCH: <NAME> & <NAME>. JUDGMENT:

SETHI,J.

Leave granted.

L...I...T.......T.......T.......T.......T.......T.......T..J Claiming to be the champions to the cause of vegetarians, the Appellant Nos.5 and 6 along with the heirs of the erstwhile land owners, Appellant Nos.1 to 4 herein, moved <ORG> by way of a writ petition, filed in public interest with prayer for the issuance of a writ in the nature of mandamus commanding the respondents to forbear from using or utilising the acquired lands for the purposes other than the one for which the acquisition was made. It was further prayed that directions be issued to give back the lands in question to the erstwhile land owners or to sell the land by public auction only for the public purpose. Prayer for the issuance of writ of prohibition was also made for restraining the respondents to use the land for slaughter house or abattoir by respondent No.5. Pending adjudication of the main petition an injunction was prayed for restraining the respondents from using or utilising any part or portion of land in question for any slaughter house/ abattoir and restraining the respondent No.4 from allowing respondent No.5 to establish or operate any slaughter house/ abattoir on the land in question. Vide order dated 25.5.1988, the learned Single Judge of <ORG> dismissed the writ petition and the appeal filed against the order of the learned Single Judge was dismissed by <ORG> of <ORG> vide the judgment impugned in this appeal.

The facts leading to the filing of the present appeal are that by notification dated 22nd August, 1961 issued under the Land Acquisition Act , <ORG> acquired land measuring 151.18 acres for a public purpose, namely, construction of Mourigram-Dankuni Link Project of South-Eastern <ORG>. After completion of the project, the <ORG> surrendered the surplus land measuring 77.36 acres to <ORG> on 7.7.1972. On 12.5.1973, <ORG> handed over the possession of 74.21 acres of the surplus land to <ORG>, now <ORG>. <ORG> was authorised to set up <ORG> on this land. In furtherance of the establishment of abattoir, a Memorandum of Understanding was signed between India and Australia by which <ORG> agreed to provide assistance for the establishment of an abattoir, in the year 1977. The consultants of <ORG> prepared a detailed three-volume Feasibility Report stating therein that <ORG> was feasible. By that time <ORG> had established another abattoir project at Durgapur which, after commissioning, was running into losses. The appellants apprehended that <ORG>, in collusion with some outsiders, was negotiating to sell out and to transfer the land in fiduciary manner exclusively for a profit purpose allegedly to defraud and mislead the people of the <ORG>. The private party referred to was <ORG>, a Dubai based concern for the purposes of establishing a slaughter house/abattoir. Some correspondence ensued between the appellants and the respondents 1 to 4. It was contended that the respondents were encroaching upon the Constitutional Rights of the appellants by establishing a slaughter house/abattoir on the land acquired for a specified public purpose. It was submitted that after the completion of the project, the excess land should have been transferred to the land owners or sold in public auction but could not be utilised for any private purpose particularly for the establishment of a slaughter house/abattoir. The petitioners alleged that the establishment of the slaughter house/abattoir was not in conformity with List III Entry 17 of the Seventh Schedule of the Constitution. The action was further alleged to be contrary to List III Entry 17(B) and violative of the mandate of Articles 31(2), 48, 48A, 49 and 51 of the Constitution. The delay in filing Writ Petition was sought to be explained on the ground that respondents had allegedly kept the deal a guarded secret.

The disputed land comprises of an area measuring 46.42 acres, being part of the unutilised surplus land. It appears that realising its inability to profitably run the abattoir at Durgapur, <ORG> was in search of some private party to take over the said abattoir along with the proposed Project of establishing abattoir at Mourigram. Newspaper advertisements appears to have been issued by <ORG> in 1986, inviting private parties to take over the Durgapur Abattoir which is shown to be running in losses and for which the Comptroller & Auditor General had severely criticised the aforesaid <ORG> vide its Report submitted in 1993. Respondent No.5 is stated to have been invited by <ORG> vide letter dated 19th October, 1993 for taking over Durgapur Abattoir. In reply <ORG>, a sister concern of respondent No.5 intimated that "we are willing to take over the existing facilities at Durgapur on 'as is where is basis' at reasonable terms for subsequent development into an export oriented integrated complex". On 22nd December, 1993 they informed the Minister concerned that to effectively utilise the State's agro based materials being livestock, fruits and vegetables, fresh water and sea fish in addition to milk based product, the concern proposed to create integrated food processing and preservation facilities. For that purpose, they promised that factory would be complete in accordance with the highest international standards and specifications for conversion and production of food products. They declared that the pulp of mango fruits besides mango slices and other fruits and vegetables from Bardhaman, Malda and Murshidabad Districts would be received at their proposed preliminary and processing centres to be set up in the Districts to ensure direct linkage with the farmers and for maintaining steady supply to their processing unit. Upon the suggestion of the Secretary, <ORG>, the representatives of <ORG> inspected the vacant plot of land at Mourigram and found the same to be suitable for their proposed venture. They desired that the entire site be leased out to them on a long term basis as per the standard terms of the concerned <ORG> West Bengal Government at reasonable terms. On 14th January, 1994, the said concern was offered the land at Mourigram and Durgapur upon the following terms:

"Through long-term lease for 99 years on realisation of 100% market value only.

2. Approximate market value at Mourigram has been assessed at Rs.1,92,800/- per acre for Danga/ Bastu/Bagan land, Rs.1,54,240/- per acre for 'Sali', Rs.77,120/- per acre for 'Doba', Rs.1000/- per acre for 'Khal'.

3. The market value in respect of Durgapur land will be communicated to you shortly.

4. If you do not use the land within a reasonable time for the purpose for which it is given, <ORG>. will reserve the light suo moto to determine the lease." The offer was accepted by the company on 18th January, 1994 with intimation that the leased property shall be utilised for development of integrated multipurpose product food processing plants. The market value of the Durgapur land, building, plant and machinery was communicated to respondent No.5 on 1.2.1994 which was accepted the same day. On 25th February, 1994, <ORG> granted approval to respondent No.5 for setting up of Mourigram and Durgapur Projects. On 2nd March, 1994, <ORG>, Howrah was requested to furnish a report as to whether the entire 46.42 acres of land was fit for settlement for the proposed project and also to furnish the details of the land which would be fit for settlement by mentioning specifically the exact extent for each class and area involved. A decision was taken on 18.4.1994 for transferring the land to the respondent No.5 on long term basis, initially for a period of 99 years on payment of Rs.71,59,820.80. On 13th June, 1994, respondent No.5 was informed that possession of the land would be handed over after payment of the lease premium. Respondent No.5 is stated to have made the payment of Rs.87,27,000/- for the purchase of building, plant and machinery of Durgapur Slaughter House and on 13th July, 1994 and sum of Rs.71,59,820/- as lease premium for Mourigram Abattoir. The lease deed was executed between the parties on 9th June, 1995 on terms and conditions which were incorporated in Part II of the Schedule attached to the said lease deed. Feeling aggrieved, the appellants are stated to have filed the writ petition on 13.4.1998 without impleading respondent No.5 as party thereto. Respondent No.5 is shown to have been impleaded as party in the writ petition on 17th August, 1998. The writ petition was dismissed on 25th September, 1998 and appeal filed against it met the same fate on 10.5.1999, vide the judgment impugned in this appeal. <NAME>, learned Senior Counsel appearing for the appellants has challenged the action of the respondent solely on the ground of arbitrariness and violation of Article 14 of the Constitution. He has contended that the <ORG> largesse in the form of the land, the subject matter of the litigation has been bestowed upon respondent No.5 merely for a song without adhereing to the settled norms of fair play and equity. It is contended that the respondent <ORG>, without issuing any advertisement or resorting to the procedure of auction and tender, has secretly leased out the land which has resulted in huge monetary loss worth crores of rupees to the <ORG> exchequer. Elaborating the arguments, it was submitted that <ORG> is not and should not act as free as an individual in selecting the recepient for its largesse, as has been allegedly done in this case. The Government cannot lay down arbitrary and capricious standards for choice of persons for the conferment of <ORG> benefits. Referring to a host of documents, the learned Senior Counsel submitted that the arbitrary action of the respondent-<ORG> is writ large in this case. The respondents are stated to have not satisfied either <ORG> or this <ORG> about their bonafides in initiating, processing and concluding the lease agreement with respondent No.5. Inviting our attention to the lease deed, the learned Senior Counsel submitted that the said document in fact was a sale deed in cloak of a lease agreement. The consideration of the sale deed has been termed to be "on throw away price". Conceding that the appellants had not made allegations of malafides against any one of the respondents, it is contended that though not actual but legal malafides are discernible from the pleadings of the parties and the record produced by them. Per contra <NAME>, Senior Counsel who was followed by <NAME>, Additional Solicitor General contended that the writ petition is not a bonafide action of the appellants. Four of whom are stated to be the erstwhile owners interested only to get back the land legally acquired from them. The petition is stated to be suffering from unexplained delay and latches. The appellants are stated to have not pleaded or argued the points including the plea of arbitrary action of the respondents before <ORG>. It is submitted that in the light of the pleadings and the record produced before it, <ORG> was justified in dismissing the writ petition filed by the appellants. The proposed setting up of the industry is stated to have provided job opportunities to more than 300 people and is likely to earn foreign exchange to the extent of Rs.50 crores per year. It is argued that there is no defect or error of law in the decision making process of <ORG> by which the land has been leased out to respondent No.5. It is conceded that though the documents executed between the parties is styled as a lease deed, yet in fact it is a sale as the whole of the then prevalent market value of the land has been paid by the respondent No.5. The lease deed is stated to have been got executed for keeping interests of the <ORG> alive in the land which in no way affects the public interest but in effect is adverse to the interests of the respondent No.5. The deed is stated to have been concluded on the basis of negotiations, a recognised method of transferring the <ORG> property. The learned Single Judge formulated the three questions for his adjudication which read as under: "(a)@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Whether the writ petitioner nos.3 to 6 can as a matter of right get back the land which was acquired from the predecessor in interest or not;

(b) Whether a property which has been vested under the Acquisition Act , 1894 can be dealt with and/or used by <ORG> otherwise than public purpose or not;

(c) Whether granting of lease of a vested land to a private company for the purpose of industrial development and for earning foreign exchange is public purpose or not."

Learned counsel who appeared in <ORG> for writ petitioners 3 to 6 conceded that his clients had no right to ask for return of the surplus land. Relying upon the judgments of this Court in [AIR 1977 SC 448] and [1997 (2) SCC 627, the learned Single Judge held that "once the property has been vested unto the <ORG> under Section 17 of the Land Acquisition Act, neither the previous owner nor their successors-in-interest can question the dealing and disposal of the property by the <ORG>". Referring to the decisions of this Court reported in [AIR 1986 SC 72 and AIR 1986 SC 910] and analysing the facts of the case the learned Single Judge held:-

"There are enough materials placed before me which unmistakably substantiate that Mr.<NAME>'s client has brought a promise and/or hope that at least 400 employed youths would be provided in this industry. This industry will also bring foreign exchange to the public exchequer nearly worth 40 crores per annum. It is now accepted position that one of the prime economic policies of this country is to earn foreign exchange as much as possible. So, in my view, when the <ORG> utilizes a land in furtherance of development of industry and/or earning foreign exchange the same is nothing short of public purpose, notwithstanding a statement made in clause 16 of the lease deed. The statements made in clause 16 of the lease at best operate as admission. This admission however is displaced by the above fact to prove the fact of public purpose. My view has been expressed accepting the decision of case reported in AIR 1978 Pat.136. Moreover, here the <ORG> <ORG> instead of leaving the land being unutilised has gainfully utilized by granting long lease to Mr.<NAME>'s client with a premium of Rs.71,59,820.80 which has gone to the <ORG> exchequer." The construction of a slaughter house was also held to be a public purpose. In appeal, while upholding the judgment of the learned Single Judge, <ORG> dealt with the submissions of the appellants to the effect that the land should have been sold by public auction, if after acquisition it was not used for any other public purpose by the <ORG>. The Division Bench held that the surplus land in question need not have been sold in auction when the <ORG> had declared to utilise the land by leasing out the same for 99 years in favour of Respondent No.5. Agreeing with the learned Single Judge, it was held by <ORG> in appeal, that:

"We are, however, of the opinion that this court is not at all required to be satisfied whether a surplus land has been utilised for a public purpose. After acquisition of the land in accordance with the procedure established by law a surplus land has vested in the <ORG> free from all encumbrances. Article 298 empowers the <ORG> to carry on any trade or business and make contracts for any purpose."

Finding that no allegations of malafide and discrimination had been pleaded in the petition, <ORG> was held competent to enter into contracts with private persons for disposal of the property irrespective of the purpose of such acquisition or disposition subject only to the condition of compliance with the relevant provisions of the Constitution. The appellants were held to be having no locus standi to question the agreement executed between the respondent-State and the respondent No.5.

As noticed earlier, Dr.<NAME>, learned Senior Counsel appearing for the appellants has not challenged the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ legality or constitutionality of the lease agreement or the@@ JJJJJJJJJJJJ action of the respondent-<ORG> on the grounds alleged in the writ petition. He has conceded that the erstwhile owners of the land had no right to ask for the return of the land to them. Similarly, <ORG>, petitioner No.5 was not justified in seeking the relief of restraining the respondents from utilising the land for the purposes of abattoir at Mourigram. The sole point urged before us was with respect to the alleged arbitrariness of <ORG>. To appreciate the only submission made before us we scanned the writ petition, the counter affidavit and the accompanying documents and found that no basis for such a plea was laid in the writ petition and the arguments addressed before <ORG> were not referable to any pleadings. It is contended that as the issue had specifically been pleaded in the appeal before <ORG> and has been urged in the grounds of appeal in this <ORG>, a decision on the point was warranted, notwithstanding the absence of sufficient pleadings. We are not impressed with such an argument. Whether any advertisement was issued or not, or whether public auction or floating of tenders should have been dispensed with or not, are such matters which require pleadings in order to enable <ORG> to explain or justify their action in the circumstances of the case. The appeal before <ORG> of <ORG> and in this <ORG> being in continuation of the original proceedings in the form of writ petition, cannot enlarge the scope of inquiry at this belated stage. In the absence of specific allegations of the malafides attributed to any of the respondents, it cannot be said that mere violation of some alleged statutory provisions are safeguards as spelt out by this <ORG>, would render the <ORG> action to be arbitrary in all cases. To buttress his arguments, the learned counsel for the appellants submitted that as the land was transferred to respondent No.5 for a song and at throw away price, resulting in corresponding loss to the <ORG> exchequer, it reflected the legal malafides and the arbitrary action of the respondents. The argument has to be noted to be rejected inasmuch as nowhere in their writ petition the appellants had alleged that the land had been sold at a throw away price. Referring to the lease agreement it is contended that as in fact transaction is sale under the cloak of lease, the legal malafides are writ large exhibiting the arbitration action of the respondents. Learned counsel appearing for the respondents have brought to our notice that in fact the value charged from respondents No.5 was the market value of the land and not lease money as urged. In this regard, in the counter affidavit filed on behalf of the respondent No.1 in this <ORG> it is stated:

"In order that the proper and correct lease premium and lease rent were arrived at a valuation of the land in question was caused to be made by the Special Land Acquisition Officer. By the memo no.49(c) dated 12th January, 1994 of the District Magistrate, Howrah, a copy whereof is annexed hereto and marked "Annexure R1/8", the valuation Report (in L.V. Case No.46/93) was forwarded to the Secretary, <ORG> of the Government of West Bengal Officer. A photocopy of the said valuation report is annexed hereto and marked "Annexure R1/9". From the memo dated 12.1.94 it would be seen that a part of the land which was ultimately leased out to the respondent No.5 was under water and hence demarcation could be done only in respect of 30 acres of the land. On the basis of the said valuation the selami, i.e., lease premium, annual rent and cess payable by the respondent no.5 for the lease to be granted were calculated as per the circulars issued by <ORG> for determination of land revenue and <ORG>, West Bengal respectively, copies whereof are annexed hereto and marked Annexure R1/10. copy of the documents evidencing the manner in which the value of the lands at both Mourigram and Durgapur were arrived at and the lease premium, annual rent, cess etc., arrived is annexed hereto and marked Annexure R1/11. The lease premium so arrived at was of a sum of Rs.71,59,820.80 on the basis of the market value of the land then prevailing. The ground rent arrived at was RS.418/- per annum and cess Rs.296/- per annum without granting any concessions whatsoever.

From the above-mentioned valuation report of the Land Acquisition Officer, the manner in which the market value of the said land which was to be given on lease basis to the respondent no.5 for setting up of the above-mentioned project and the documents relied upon for the said purpose, which included five numbers of executed lease deeds as available in <ORG> at Howrah for the year 1992 and applying appreciation percentage thereon, as well as the order of the Collector dated 29th April, 1993 in a land acquisition case were taken into account. The same clearly shows that, contrary to what had been alleged in the Special Leave Petition, the lease in question has been granted taking into consideration the market price of subject land on the relevant date."

The public purpose, which the <ORG> had in mind has been spelt out in its affidavit as under:

"In finalising the lease terms and conditions and the proposal of the respondent no.5, the fact that setting up of the said industry in the low lying land at Mourigram would not only provide employment to more than 300 persons (which estimate was provided even by <ORG>, Australia in its feasibility study report carried out in the year 1983 as aforesaid) and indirect employment to large number of persons in West Bengal were taken into consideration. It was also taken into consideration that setting up an industry in such a semi-rural area in Mourigram, a Gram Panchayat area under Duillya Gram Panchayat of Zilla Parishad Howrah would help in industrialisation of the said area and consequently the State of West Bengal. The fact that the proposed unit would be an export oriented which would earn valuable foreign exchange of more than Rs.50 crores under export obligation in terms of the EPGC Scheme of <ORG> where-under machinery and equipment for setting up the Project would be imported, as represented by the respondent no.5 during the course of negotiation, was also taken into account."

Learned counsel for the appellant has not referred to any statutory provision mandating the <ORG> to adhere to a specified procedure in the matter of transfer of its property either by way of sale or by lease. In the absence of a statutory restriction imposed upon the <ORG>, it is to be seen whether the impugned action is against public interest or actuated by extraneous considerations or is opposed to fair play or the <ORG> is shown to have conferred undue benefits upon undeserving party.

It has been consistently held by this Court that in a democracy governed by the rule of law, the <ORG>@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Government or any of its officers cannot be allowed to@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJ possess arbitrary powers over the interests of the individual. Every action of <ORG> must be in conformity with reason and should be free from arbitrariness. The Government cannot be equated with an individual in the matter of selection of the recepient for its largesse. Dealing with the limits on the exercise of <ORG> authority in relation to rule of administrative justice, Mr.Justice <NAME> in <NAME> v. <NAME> [(1959) 359 US 535: 3 L Ed 2d 1012] said:

"An executive agency must be rigorously held to the standards by which it professes its action to be judged.... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. ...This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."

This Rule of Administrative law, was accepted as valid and applicable in India by this Court in <NAME> v. The State of Punjab & Ors. [1975 (3) SCR 82], <CITATION> . [1975 (3) SCR 619] and <CITATION> . [AIR 1979 SC 1628].

Though the <ORG> cannot escape its liability to show its actions to be fair, reasonable and in accordance with law,@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ yet wherever challenge is thrown to any of such action,@@ JJJJJJJJJJJJJ initial burden of showing the prima facie existence of violation of the mandate of the Constitution lies upon the person approaching the Court. We have found in this case, that the appellants have miserably failed to place on record or to point out to any alleged constitutional vice or illegality. Neither the High Court nor this Court would have ventured to make a rowing inquiry particularly in a writ petition filed at the instance of the erstwhile owners of the land, whose main object appeared to get the land back by any means as, admittedly, with the passage of time and development of the area, the value of the land had appreciated manifold. It may be noticed that in the year 1961 the erstwhile owners were paid about Rs.5.5 lakhs and the <ORG> Government assessed the market value of the property which was paid by respondent No.5 at Rs.71,59,820/- The appellants have themselves stated that the value of the land round about the time, when it was leased to respondent No.5 was about Rs.11 crores. There cannot be any dispute with the proposition that generally when any <ORG> land is intended to be transferred or the <ORG> largesse decided to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. That would be a sure method of guaranteeing the compliance of mandate of Article 14 of the Constitution. Non-floating of tenders or not holding of public auction would not in all cases be deemed to be the result of the exercise of the executive power in an arbitrary manner. Making an exception to the general rule could be justified by the <ORG> executive, if challenged in appropriated proceedings. <ORG> cannot be expected to presume the alleged irregularities, illegalities or unconstitutionality nor the courts can substitute their opinion for the bonafide opinion of the <ORG> executive. The courts are not concerned with the ultimate decision but only with the fairness of the decision making process.

The Government is entitled to make pragmatic adjustments and policy decision which may be necessary or called for under the prevalent peculiar circumstances. The court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or wiser or more scientific or logical. <CITATION> . [1986 (4) SCC 566] it was held that the policy decision can be interfered with by the court only if such decision is shown to be patently arbitrary, discriminatory or malafide. In the matter of different modes, under the rule of general application made under the M.P. Excise Act, the Court found that the four different modes, namely, tender, auction, fixed licence fee or such other manner were alternative to one another and any one of them could be resorted to. <CITATION> . [1987 (2) SCC 295], it was held that as regards the question of propriety of private negotiation with an individual or corporation, it should be borne in mind that <ORG> 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 being the paramount consideration. One of the methods of securing the public interest when it is considered necessary to dispose of the property is to sell the property by public auction or by inviting tenders. But such a rule is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule. As and when a departure is made from the general rule, it must be shown that such an action was rational and not suggestive of discrimination. In that case on facts the Court found that on the commercial and financial aspect, the lease granted in favour of a group of hoteliers, not arbitrary as the method of "nett sales" was held to be fairly well-known method adopted in similar situations. To the same effect is the judgment in <CITATION> . [1995 Supp. (2) SCC 512]. <CITATION> . [AIR 1980 SC 1992], this Court, after referring to various judgments, including the judgment in <NAME> case, held:

"It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of law and if there is any transgression, the <ORG> must be ready to condemn it. It is a matter of historical experience that there is a tendency in every government to assume more and more powers and since it is not an uncommon phenomenon in some countries that the legislative check is getting diluted, it is left to the <ORG> as the only other reviewing authority under the Constitution to be increasingly vigilant to ensure observance with the rule of law and in this task, the court must not flinch or falter. It may be pointed out that this ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala fides though it may, in a given case, furnish evidence of mala fides." <CITATION> [1997 (7) SCC 592] this <ORG> held:

"Although to ensure fair play and transparency in State action, distribution of largesse by inviting open tenders or by public auction is desirable, it cannot be held that in no case distribution of such largesse by negotiation is permissible. In the instant case, as a policy decision protective measure by entering into agreements with selected industrial units for assured supply of sal trees at concessional rate has been taken by the <ORG>. The rate of royalty has also been fixed on some accepted principle of pricing formula as will be indicated hereafter. Hence, distribution or allotment of sal seeds at the determined royalty to the respondents and other units covered by the agreements cannot be assailed. It is to be appreciated that in case, distribution by public auction or by open tender may not achieve the purpose of the policy of protective measure by way of supply of sal seeds at concessional rate of royalty to the industrial units covered by the agreements on being selected on valid and objective considerations."

It was further held that principle of reasonableness and non- arbitrariness in governmental action is the core of our entire Constitutional scheme and structure. On the facts of that case, the action of <ORG> in granting a contract by way of negotiation was held not arbitrary or irrational.

In the backdrop of the legal position noticed herein, it has to be seen, in the instant case, as to whether the action of the respondent No.1 was illegal, arbitrary or malafide. To justify their action of entering into an agreement of lease by negotiation, even in the absence of pleadings on behalf of the appellants, the <ORG> has submitted that the entire transaction of granting the lease to the respondent No.5 for an integrated food processing unit with an abattoir in a semi-rural area, which was a low lying land, despite their best efforts, the state Government were unable to set up any project. The lease was given to respondent No.5 upon consideration of all the facts and circumstances with the object of setting up an industry in the <ORG> of West Bengal which was likely to generate employment to more than 300 persons and earn foreign exchange worth more than Rs.50 crores. The negotiations were resorted to ensure the disposal of the slaughter house at Durgapur which was proved to have been running in losses. The respondent-<ORG> had failed to get any buyer for Durgapur Project despite Newspaper advertisements. The Government had decided to make a package deal for the purposes of transferring the Durgapur Project and establishment of <ORG>. Earlier a memorandum of understanding had been arrived at between <ORG> and Australia which ultimately did not mature in the shape of an abattoir. Due to financial constraints, continuous loss suffered at Durgapur and lack of technical expertise, the respondent-<ORG> could not venture to undertake the <ORG> for setting up of an abattoir. Having failed in all its efforts, the then Minister-in-charge of <ORG> of <ORG> is stated to have written to some Bombay based firms, reputed in the field, to salvage the two projects. Positive response is stated to have been received from some firms including <ORG>, namely, respondent No.5 and <ORG>. The proposal of <ORG> being very vague was not accepted. <ORG> had shown interest in taking over both Durgapur & Mourigram sites under certain terms and conditions for the purpose of revitalising and making operational the existing abattoir at Durgapur and for setting up of <ORG> along with abattoir at Mourigram. It is further stated in the counter-affidavit of the respondent-<ORG>, that:- "Since, no response was received from the advertisements and the personal requests made in the manner above by the Minister-in-charge of the Department from any concern except as aforesaid, the <ORG> took into account the credentials of the group of companies of which <ORG>, was one, including the export award certificate awarded to <ORG> for outstanding contribution for promotion of agricultural and processed food products during the year 1992-93 as proof of their excellence in their field and thereupon proceeded to finalise the lease terms and conditions under which inter alia the Mourigram land would be leased out to the respondent No.5 for setting up of an integrated food processing unit along with an abattoir, products whereof could be exported as well as sold in the <ORG> of West Bengal. <ORG> alongwith its associated companies was the first company in India to export 1000 million rupees on agricultural and process food products (in 1992-93). <ORG> (<ORG>), <ORG>, <ORG> India, had acknowledged and certified the efforts of <ORG> and its associated companies in the export of Meat and other agro products such as rice, tea, coffee, spices, onion, cashew, pulses extractions, marine products and processed Food and vegetable."

In view of the peculiar facts and circumstances of the case we are not persuaded to hold that the action of the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ respondent-<ORG> in executing the lease deed with respondent@@ JJJJJJJJJJJJJJJJJJJ <ORG> was unreasonable, illegal, arbitrary or actuated by extraneous considerations. In this regard it is worth noticing that none except the erstwhile owners and the propounders of vegetarianism have made any grievance to the effect that the market value of the property, as charged from respondent <ORG>, was either allegedly for a song or at a throw away price. The inaction of the appellants in approaching the <ORG>, almost after three years of the impugned lease deed is an additional circumstance to doubt their bonafides in challenging the impugned action. During the pendency of the litigation between the parties, a huge project has actually, by now, come into existence where the production has also commenced. Respondent <ORG> is claimed to have spent a sum of Rs.73.01 crores as of 30.10.1999 on the project. Interference at this stage will not only adversely affect the business of respondent <ORG> but would also render a large number of people unemployed and deprive the <ORG> its cherished desire of developing the industrial growth.

Under the circumstances, we do not find any ground to interfere with the impugned judgments or the action of the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ respondent-State in granting the lease to respondent No.5.@@ JJJJJJJJJJJJJJJJJJJJ The appeal is accordingly dismissed but without any order as to costs.