JUDGMENT <NAME>, J.

1. This is an appeal by special leave from the judgment of <ORG> confirming the death sentence imposed upon each of the three appellants under Section 302 read with Section 34 of the Penal Code for the murder of five persons belonging to one family. Because of the family disputes and rivalry, a serious occurrence took place at about sun set time on the 2nd of December, 1975 resulting in the death of five members of the same family. The appellants are also very close agnation relations of the deceased.

2. <NAME>, <NAME> and <NAME> were brothers. <NAME> was unmarried and used to live with <NAME>. The three brothers had divided their properties at a private partition. Appellant <NAME> and <NAME> are sons of <NAME> who is dead. Appellant <NAME> and his brother <NAME> (since acquitted) are the sons of appellant <NAME>. <NAME>'s wife was <NAME>. They had three sons and a daughter. Their names being <NAME>, <NAME>, <NAME> and <NAME>. A few months before the occurrence, <NAME> raised a sum of Rs. 3,000/ at the instance of his brother <NAME> mortgaging four Kanals of his land. Appellants <NAME> and <NAME> wanted a share in that money as they could not reconcile themselves with the fact that the branch of <NAME> alone should enjoy the property or the money of <NAME>. They being the sons of another brother of <NAME> wanted to lay a claim on the property and money of <NAME>. It appears that it was not known to the prosecution as to how and to what extent the family disputes and rivalry went on gradually aggrava ting and what was the immediate cause of the occurrence. The two brothers amely <NAME> and <NAME> who could throw light on this aspect of the atter are both killed in the occurrence. But that is of consequence in this case.

3. According to the prosecution case on the day and at the time of the occurrence the four accused went to the house of <NAME> armed with deadly eapons. <NAME> had a spear and the other three had Kripans. The three appellants attacked <NAME> with their respective weapons while he was sitting in a room in his house. <NAME> (since acquitted) was standing at the oor as a guard. <NAME> tried to escape but <NAME> stopped him injuring him on the left shoulder with his <NAME> The others also attacked him and he fell down. <NAME>, <NAME> and <NAME> ran out of the house. They were chased by <NAME> was given a <NAME> injury on the head of <NAME> and she fell down. All the accused surrounded <NAME> and <NAME> nd caused injuries to them. They fell down. The accused raised a Lalkara aying that <NAME> and <NAME> should also be done away with. Saying o they went towards a well and the fields of <NAME> where <NAME> and <NAME> were. There they are said to have attacked, with their respective weapons, <NAME> and <NAME>.

4. <NAME>, P.W. 6, a close neighbour of <NAME>, could see only a part of the occurrence and in the company of <NAME> (not examined) he rushed to <ORG> at Chheharta and gave a report Ext. P/E to <NAME>, P.W. 28, the Assistant Sub-Inspector of Police, Incharge of the Out Post. Since <NAME> did not notice as to whether any person was dead or alive and himself had seen the attack on <NAME> only, in the report which he lodged he mentioned only that part of the occurrence which he had seen with his own eyes. On that report a case under Section 307 of the Penal Code was instituted at the Police Station Sadar. The report was lodged at <ORG> at 6.45 P.M. the same day i.e. the 2nd December, 1975 and it was registered in the Police Station 7.20 P.M. P.W. 28 proceeded to the village of occurrence with a Head Constable and two Constables. They learnt there that <NAME> and <NAME> had died and <NAME> was lying unconscious in the house and that <NAME>, <NAME> and <NAME> and <NAME> had been taken to the Hospital at Amritsar. <NAME> died on the way when he was being removed to the Hospital sometime later. <NAME> died in the Hospital on the 11th December, 1975 and <NAME> died there on the 13th December.

5. The learned Additional Sessions Judge, Amritsar, who tried the four accused for the ghastly murder of five persons and for causing injuries to <NAME>, PW 8 and <NAME>, PW 9 acquitted <NAME> as his name was not mentioned in the First Information Report as also for some other reasons. He, however, convicted the three appellants under Section 302 read with Section 34 of the Penal Code imposing death sentence on each of them as also a fine of Rs. 2,000/ separately for each of the five murders. They were also convicted under Section 324 of the Penal Code for causing hurt to <NAME> and <NAME>. <ORG> dismissed their appeal, accepted the death reference and confirmed the death sentence.

6. Mr. <NAME>, learned Counsel for the appellants, made several submissions to persuade us to acquit them or in any event to commute the death sentence imposed upon each of them. We have considered all the submissions made, many of them were of such a nature that we had no hesitation in rejecting them outright. They do not merit any detailed discussion in our judgment as in an appeal on grant of special leave under Article 136 it is not necessary to deal with all of them. We shall, however, proceed to deal with some of them.

7. At the outset it may be mentioned that the prosecution had also led evidence of recoveries of certain articles said to have been made at the instance of the accused But finding infirmities in that evidence <ORG> did not rely upon them. Apart from the fact that accused <NAME> was a lad of about 12 years of age at the time of the occurrence, the evidence against him was not free from doubt. He, was therefore, acquitted The three appellants were convicted for the murder of <NAME>, <NAME> and <NAME> chiefly upon the evidence of <NAME>, PW 8, <NAME>, PW 9 and partly upon the evidence of <NAME>, PW 6. Mr. <NAME> asked us to reject the evidence of <NAME> and <NAME> in its totality because they had implicated <NAME> also. On the facts and in the circumstances of this case we find no substance in this argument The two courts of fact have rightly believed theirevidence. The other criticism was that Sarpanch <NAME> and another Sarpanch named <NAME> to whom one of the prosecution witnesses had gone were not examined They were not eye witnesses and it is not possible for us to take the view that their non examination in any way affected the prosecution case. The third criticism against the evidence of these two witnesses was that they were tutored witnesses and had given the prosecution version parrot like. Both of them were teenaged children of <NAME> and their version was so truthful that it was rightly believed by the courts below.

8. There were two dying declarations of <NAME> one oral and the other written which was recorded by the Assistant Sub Inspector of Police, PW 28 on 12-12-75. The oral dying declaration was made to PW 11 <NAME>. Neither of the dying declarations was relied upon by <ORG> because he had named <NAME> also. We may also add although a dying declaration recorded by a Police Officer during the course of investigation is admissible under Section 32 of the Indian Evidence Act in view of the exception provided in Sub-section (2) of Section 162 of the CrPC, 1973, it is better to leave such dying declaration out of consideration until and unless the prosecution satisfies the court as to why it is not recorded by a Magistrate or by a Doctor. As observed by this Court in <CITATION> the practice of the Investigating Officer himself recorded a dying declaration during the course of investigation ought not to be encouraged. We do not mean to suggest that such dying declarations are always untrustworthy, but, what we want to emphasize is that better and more reliable methods of recording a dying declarations of an injured person should be taken recourse to and the one recorded by the Police Officer may be relied upon if there was no time of facility available to the prosecution for adopting any better method.

9. There is a dying declaration of <NAME>, Ext. PFF recorded by <NAME>, PW 10 He was the Head Constable of the Police Post Chhenarta. At the direction of the Assistant Sub Inspector of Police PW 28 he recorded the statement of <NAME> at the spot. This dying declaration has been relied upon by the High Court. It could not be rejected on the ground that it was recorded by a Police Officer as he was in a critical condition and no other person could be available in the village to record the dying declaration of <NAME>. But we find that there is a difficulty in relying upon this dying declaration. <NAME> and <NAME> were attacked by the appellants after having raised a Lalkara at the house of <NAME> to murder them. No body actually saw them murdering either of them. The place where the said two persons were murdered was about a furlong away from the house of <NAME>. <NAME> in his statement recorded by PW 10 Ext. PFF which is also signed by the Assistant Sub-Inspector stated:-

<NAME>, <NAME>, sons of <NAME> and <NAME>, son of <NAME>, who are from our brotherhood have caused injuries to me and the male and female members of my family and my elder brother <NAME> with Kirpans, and spears on account of dispute over the property of <NAME>. They have murdered <NAME> and <NAME> by inflicting injuries to them.

The dying declaration seems to be otherwise truthful but for the fact that it could not be within the knowledge or vision of <NAME> that <NAME> was murdered by the appellants. His saying so in the dying declaration makes his statement a bit doubtful. It is, therefore, safe to leave out of consideration this dying declarations. It is important to remember that if the dying declarations both oral and written of <NAME> are discarded so also the dying declaration of <NAME>, then no direct evidence remains on the record in regard to the murder of <NAME> and <NAME> by the appellants. In all probability they had committed the murder of these two person also because after having raised the Lalkara they went towards the field where <NAME> and <NAME> were. But in absence of a direct evidence on the point and also for want of conclusive chain of circumstantial evidence, legally it is not possible to hold that the three appellants were responsible for committing the murder of <NAME> and <NAME>.

10. We are not impressed with the argument advanced on behalf of the appellants that the occurrence did not take place at about sun set time or that the First Information Report was ante-timed merely because the Illaqa Magistrate received the said report late by a few hours. It is difficult to accept the suggestion in this case that the appellants were falsely implicated and some unknown two persons had committed the murder of so many family members of <NAME>. The evidence of the two stamped witnesses, <NAME> and <NAME>, is so truthful that absolutely there cannot be any doubt about the commission of the ghastly crime by the appellant in the murder of three of the five persons. Regarding the other two, a definite finding may not be possible to be recorded for lack of legal evidence.

11. For the reasons stated above, we maintain the conviction of all the three appellants under Section 302 read with Section 34 of the Penal Code for the murder of <NAME>, <NAME> and <NAME>. We also maintain their other convictions. <ORG> gave an opportunity to the appellants of hearing argument on the question of sentence. That was a sufficient compliance with the law, Argument on the question of sentence was also advanced in <ORG>. There is no infirmity on that account at all. Special reasons have been given by both the courts for imposing the extreme penalty of death on each of three appellants. While generally agreeing with those reasons we feel persuaded to take a somewhat lenient view in the case of <NAME>. We could not find with certainty for lack of legal evidence that he alongwith the other two appellants was responsible for causing the death of <NAME> and <NAME>. <NAME> and <NAME> are nephews of <NAME> and they had demanded a share in the sum of Rs. 3,000/- received by <NAME> on execution of the mortgage. <NAME> was a young man in his twenties at the time of the occurrence. He is a grand nephew of <NAME>. We, therefore, feel that in his case ends of justice would be met by sentencing him to life imprisonment instead of the imposition of the extreme penalty of death. We further do not feel persuaded to uphold the imposition of fine of Rs. 2,000/- on any of the appellants because after imposing a sentence of death it was not necessary on the facts of this case to impose any sentence of fine on any of them. In the result we uphold the conviction of all the appellants under various counts to the extent and in the manner indicated above. We uphold the sentence of death awarded to appellants <NAME> and <NAME> but set aside the imposition of fine of Rs. 2,000/ on each of them. We commute the sentence of death imposed upon <NAME> and instead sentence him to undergo imprisonment for life. Sentence of fine of Rs. 2,000/- imposed upon him is also knocked down. The appeals are dismissed subject to the modification in the sentence as made above.


JUDGMENT <NAME>, J.

1. This is an application by the Sholapur Municipality against the order of the learned District Judge of Sholapur purporting to act under Section 198 of the Bombay City Municipalities Act, XVIII of 1925, and directing the Sholapur Municipality to pay compensation for 2997 square feet at the rate of Rs. 1-12-0 per square foot to opponent No. 1 <NAME> alone, and holding that opponent No. 2 <NAME>'s mortgage was vitiated by the doctrine of lis pendens, inasmuch as he took the mortgage with notice of a prior agreement by the owner with Tuljaram during the pendency of a suit by the latter.

2. Opponent No. 1 <NAME> was the owner of the land in suit, and demanded compensation from the Municipality for the land encroached upon by the Municipality at the rate of Rs. 2-8-0 per square foot. The Chief Officer with the consent of <ORG> referred the matter to arbitration under Section 198, Sub-section (1), of the Bombay City Municipalities Act, 1925. The arbitrators gave an award allowing Rs. 1-12-0 per square foot. The award did not specify the number of square feet but the area mentioned in the proceedings related to 2997 square feet. <NAME> then made the present application to the District Court demanding the amount as determined by the panchas, and prayed for an order compelling the Municipality to pay the amount due to the applicant at Rs. 1-12-0 per square foot as determined by the panchas with regard to the area of 2997 square feet. The general body subsequently resolved that 860 square feet covered by the drain were to be acquired, and deposited in Court the amount due in respect of the 860 square feet resolved to be acquired. Opponent No. 2 <NAME> claimed the money as the mortgagee of the property from the predecessor-in-title of the applicant <NAME>.

3. The learned District Judge held that at the time when the negotiations were going on and when the panchayat was constituted, the intention of the <ORG> was to acquire an area of 2997 square feet in order to open up and widen the roads in the locality, that it was impossible to say that the applicant's acceptance of the rate fixed by the panchas was not induced by the consideration of the resulting improvements to his remaining property, and that it was not open to the <ORG> to withdraw from the acquisition of 2997 square feet, and that the award was binding on both the parties not only in respect of the rate but also in respect of the area. With regard to opponent No. 2 the learned District Judge held that Gangappa had both actual and constructive notice of the agreement in favour of Tuljaram and that the mortgage of Gangappa was affected by the doctrine of lia pendena, and ordered interest at the rate of six per cent for the remaining portion of the compensation until payment or deposit in the <ORG> and ordered the <ORG> to bear the coats of Tuljaram.

4. It is urged on behalf of the Municipality that the application made by Tuljaram for compelling the Municipality to pay compensation for the whole of the land is not warranted by any of the provisions of Section 198 of the Bombay City Municipalities Act, 1925, and, therefore, <ORG> had no jurisdiction to entertain the application and the order passed by <ORG> is a nullity and should be set aside. It is urged, on the other hand, that the order passed by <ORG> is not appealable according to the decision in <CITATION> (1911) I.L.R. 36 Bom. 47, s.c. 13 Bom. L.R. 958, and that an application for revision is also incompetent according to the decision in <CITATION> (1916) I.L R. 40 Bom. 509, s.c. 18 Bom. L.R. 340.

5. Under Section 198, Sub-section (1), of the Bombay City Municipalities Act, 1925, if an agreement is not arrived at with respect to any compensation directed to be paid by the Act, the amount and the apportionment of the same, if necessary, shall be determined by a panchayat of five persons, of whom two shall be appointed by the <ORG>, two by the party, and one, who shall be sirpanch, shall be selected by the members appointed. Under Sub-section (2), if both parties fail to appoint the panchas or if the members fail to select the sirpanch, the members can be appointed by the District Judge at the instance of either party. Under Sub-section (8), in the event of the panchayat not giving a decision within one month the matter shall be determined by <ORG> according to the procedure provided by the Land Acquisition Act , 1894. Under Sub-section (4), either party, if dissatisfied with the decision of the panchayat, may apply to <ORG> which shall determine the matter in accordance with Sub-section (3), i.e. according to the procedure prescribed by the Land Acquisition Act , In the present case the panchayat gave the decision in favour of Tuljaram, and it cannot be said that he was dissatisfied with the decision of the panch. The application, therefore, of Tuljaram to <ORG> to compel the defendant to pay compensation for the whole area of 2997 square feet does not fall under Sub-section (4) of Section 198 . Under Sub-section (5), the <ORG> has power, after the award has been made by the panchayat or <ORG>, to take possession of the land after paying the amount of compensation to the party to whom such compensation may be payable, and if the party refuses to accept such compensation, or it there is no person competent to alienate the land, or if there is any dispute as to the title to the compensation or as to the apportionment, the <ORG> may deposit the amount of the compensation in <ORG>, It is clear from the provisions of Section 198 that the application made by Tuljaram to <ORG> to compel the <ORG> to pay compensation for the whole land is not maintainable under any of the provisions of the section. The decision of the panchayat was in favour of Tuljaram, and if the <ORG> was dissatisfied with the decision, it could have applied to <ORG> under Sub-section (4) of Section 198 . It appears that the section has failed to make provision for compelling the <ORG> to pay the amount determined by the panchayat, though provision has been made in favour of the <ORG> to take possession of the property after paying compensation to the party entitled to it or depositing it in Court.

6. It is, therefore, clear that <ORG> had no jurisdiction in this case to entertain the application made by <NAME>, It had also no jurisdiction to determine the right of opponent No. 2 <NAME> who was a mortgagee from the predecessor-in-title of <NAME>. The question of apportionment of the compensation had not been referred to the panchayat under Sub-section (1) of Section 198 , and the determination by <ORG> of the right of <NAME> to the compensation was illegal and without jurisdiction, Mr. <NAME>, appearing on behalf of the opponent <NAME>, was constrained to admit that the application made by his client to the lower Court was not justified by the provisions of Section 193 . <ORG>, therefore, clearly had no jurisdiction to decide the question submitted for its consideration and the decision is null and aoid.

7. The next question is whether <ORG> has power to interfere with the order of <ORG>. <CITATION> it was held that no appeal lay from the decision of <ORG> under Clause (3) of Section 160 of the Bombay District Municipal Act (Bom. Act III of 1901), which corresponds to Section 198 of the Bombay City Municipalities Act, 1925, that though a right of appeal is given by Section 54 of the Land Acquisition Act, no appeal is provided by Section 160 of the Bombay District Municipal Act corresponding to Section 198 of the Bombay City Municipalities Act, and that the order of <ORG> is not a decree because it is made not under the ordinary civil jurisdiction but under the special jurisdiction created by the special Act.

8. <CITATION> , it was held that no application can be made under the revisional jurisdiction of <ORG> from the decision of <ORG> under Clause (3) of Section 160 of the Bombay District Municipal Act, III of 1901. In that case it was held that as no appeal lay from the decision of the. <ORG> under that section, it would be anomalous to hold that an application for revision lay, and further it was held, following the decision in the case of <NAME> v. <NAME> (1895) I.L.R. 21 Bom. 279, that though the words occurring in Section 160 are "<ORG>", the distinction was not sufficient to support an application for revision to <ORG>. Section 198 of the Bombay City Municipalities Act of 1925 refers to "District Judge" in Sub-section (2) and refers to "<ORG>" in Sub-sections (3), (4) and (6), just as in Sub-section (2) and Sub-section (3) of Section 160 of the Bombay District Municipal Act of 1901. It is difficult to under-stand why "District Judge" is mentioned in Sub-section (2) of Section 198 and "<ORG>" in Sub-sections, (8), (4) and (5). The differentiation in the phraseology may be explained if the District Judge is considered a persona designata so far as Sub-section (2) is concerned, and the <ORG> as distinguished from the District Judge is to determine the rights of the parties under Sub-sections. (3), (4) and (5).

9. In <NAME> v. <NAME> it was held that a District Judge acting under Section 23 of the Bombay District Municipal Act was not a Court within the meaning of the word in Section 622 of the Civil Procedure Code, 1882, corresponding to a, 115 of the present Code, and <ORG> had no jurisdiction to revise his order, and it was held that a District Judge as distinguished from <ORG> is a persona designata. The decision in <NAME>'s case was followed in <CITATION> (1925) I.L.R. 50 Bom. 357, s.c. 28 Bom. L.R. 519.

10. <CITATION> (1913) I.L.R. 38 Mad. 594 it was held by <ORG> that an order made by <ORG> under Section 10 of the Religious Endowments Act was an order revisable by the High <ORG> under Section 115 of the Civil Procedure Code, Reference was made to the decision in the case of <NAME> v. <NAME> and the decision that the District Judge was a persona designata under Section 23 of the Bombay District Municipal Act was held to be correct on the ground that the District Judge was a persona designata for a specific purpose and not an officer exercising judicial functions under the Act, but it was held that under the Religious Endowments Act <ORG> was not a persona designata but a civil <ORG> exercising jurisdiction under the Act. The case went on appeal to <ORG> in <NAME> v. <NAME> (1917) L.R. 44 I.A. 261, s.c. 19 Bom. L.R. 715, where it was observed by their Lordships of <ORG>:" Moreover it is to <ORG> and not to the individual Judge who may preside in or constitute <ORG> that jurisdiction is given." The decision in the case of <NAME> was referred to in the Madras case which went up to <ORG>, and the remark of their Lordships appears to have been made in reference to the designation of the person who had to decide an election under Section 23 of the Municipal Act as a District Judge as distinguished from <ORG>, Their Lordships of <ORG> confirmed the view of <ORG> that <ORG>, under Section 10 of the Religious Endowments Act, XX of 1863, empowering a civil <ORG> to fill up the vacancy in <ORG>, was acting in a judicial capacity as a <ORG> and not merely in an administrative capacity, and that though no appeal lay under the Civil Procedure Code from such an order, the matter in which the order of <ORG> was made was a "case" within the meaning of Section 115 of the Civil Procedure Code.

11. It appears, therefore, that where a Judge or the presiding officer of a <ORG> as distinguished from the <ORG> itself is directed to perform any function of an authority created by a statute, such a Judge may be considered as a persona designata and not a <ORG>, but where a civil <ORG> subordinate to the High <ORG> is constituted an authority to decide the rights between the parties and is directed to perform judicial functions, it is difficult to hold that such a <ORG> is a persona designata and not a <ORG> subordinate to the High <ORG>.

12. In <ORG>, v. Postmaster General [1913] A.C. 5446 it was held that <ORG>, which as regards England consisted of one ex officio and two appointed <ORG>ers, was established as <ORG> and an appeal lay from the <ORG> to <ORG> except upon questions of fact and locus standi. Lord <NAME> of Waddington observed as follows (p. 562):

Where by statute matters are referred to the determination of a <ORG> of record with no further provision, the necessary implication is, I think, that the <ORG> will determine the matters, as a <ORG>. Its jurisdiction is enlarged, but all the incidents of such jurisdiction, including the right of appeal from its decision, remain the same.

13. The question was fully discussed by the full bench of <ORG> in <ORG> v. <NAME> (1925) I.L.R. 3 Ram. 560, F.B., where a distinction is made between the entrustment of the determination of any question concerning rights to a Judge or the presiding officer of a <ORG> as distinguished from the <ORG> itself. The same reasoning was adopted in <CITATION> (1923) I.L.R. 50 Mad. 121, 128.

14. The decision in <CITATION> proceeds on two grounds, first, that it would be anomalous to hold that an application for revision would lie when no appeal would lie, When the determination of the rights of parties is entrusted by statute to a civil <ORG> which has to act judicially, the decision of that <ORG> will be subject to appeal if the right is given by the statute, but the fact that no appeal is provided by the statute is not a sufficient basis for concluding that the <ORG> is not subordinate to the High <ORG> and that an application for revision would not lie. Ordinarily an application for revision would lie only when no appeal is provided. The question, therefore, is whether the <ORG> which decides the rights between the parties according to the provisions of any statute is a subordinate <ORG>. Though in Sub-section (2) of Section 198 reference is made to the District Judge, whereas in Sub-sections. (3)(4) and (5) reference is made to the District <ORG>, the District <ORG> under Sub-sections (3) and (4) has to act according to the procedure provided by the Land Acquisition Act of 1894. Though the District Judge may be a persona designata so far as Sub-section (8) is concerned as being empowered to appoint the members of the panchayat, it does not necessarily follow that the District <ORG> mentioned in Sub-section (3) and (4) is not a <ORG> but a persona designati under the Act. I feel some difficulty in agreeing with the view taken in the case of <CITATION> . The case of <CITATION> can be distinguished on the ground that the order of the District <ORG> in that case was passed under clause 0) of Section 160 of Bombay Act III of 1901, whereas in the present case the application made by Tuljaram does not fall under any of the provisions of Section 198 of Bombay Act XVIII of 1925, and the conditions necessary to invest the District <ORG> with jurisdiction to decide the matter in controversy do not exist. Even the Collector performing judicial functions under the Mamlatdars' <ORG>s Act is a subordinate <ORG> within the meaning of Section 115 according to the decision in <CITATION> (1912) I.L.R. 37 Bom. 114. s.c. 14 Bom. L.R. 947, though the Collector is not ordinarily a <ORG> subject to the jurisdiction of the High <ORG>. It is difficult to hold that the District <ORG> when exercising judicial functions is not subject to the superintendence and control of the High <ORG> though ordinarily subject to the superintendence and control of the High <ORG>. In my opinion, the District <ORG> exercising judicial functions in accordance with the procedure laid down in the Land Acquisition Act according to Sub-section (3) and (4) of Section 198 of the Bombay City Municipalities Act of 1925 is a subordinate <ORG> under Section 107 of the Government of India Act if not under Section 115 of the Civil Procedure Code.

15. In the present case, the application made to <ORG> to compel the Municipality to pay the compensation for the whole area was not maintainable under any of the provisions of a 198 of the Bombay City Municipalities Act. The decision, therefore, of <ORG> in such an application is ultra vires. The question as to the area was not referred to the panchayat, though it was assumed, and not disputed that the area to be acquired consisted of 2997 square feet. The determination of the apportionment of the compensation between opponent No. 1 and opponent No. 2 by <ORG> in the absence of any reference to arbitration of the panchayat under Sub-section (i) of Section 198 is also without jurisdiction, I think, therefore, that the decision of <ORG> though purporting to be made under Section 198 of the Bombay City Municipalities Act, 1925, does not fall within the ambit of that section and is ultra vires, and cannot be allowed to stand.

16. <CITATION> where there was no right of appeal to His Majesty in Council and where it appeared that the order of <ORG> was passed without jurisdiction, as the matter could not come in appeal to <ORG>, under Section 47 of the Civil Procedure Code, the orders made by <ORG> were vacated by their Lordships of <ORG>. <CITATION> (1925) 28 Bom. L.R. 64 it was held that no appeal lay to <ORG> from the order passed by the District Judge as persona designata under a scheme for management of a charitable institution, but at page 67 it was observed as follows:-

We are not concerned with hypothetical oases which have been suggested be us, such as, the District Judge declining to exercise the functions imposed upon him by the scheme, or in the exercise of those functions entirely failing to exercise any discretion in the matter, When such oases arise, we have no doubt that <ORG> will be competent to deal with them.

17. I think, on the whole, that <ORG> was not competent to deal with the application made by Tuljaram and its order is illegal and must be vacated. I would, therefore, set aside the order of the lower Court.

18. As this point was not raised by the <ORG> before the lower <ORG> and the action of the <ORG> is not free from blame in the present case, we think that the <ORG> ought to bear their own costs and pay separate sets of costs of the opponents in this <ORG> and in the lower <ORG>.

Broomfield, J.

19. The short facts necessary for deciding this revisional application are these:The present applicant, the Sholapur Municipality, desired to acquire some land belonging to <NAME>, opponent No. 1. It was agreed between the parties that 2997 square feet should be acquired, and as the Municipality considered that the compensation demanded by Tuljaram was exorbitant, the matter was referred to arbitration as provided by Section 198 of Act XVIII of 1925. The panchas decided that compensation should be paid at the rate of Rs. 1-12-0 per square foot. The area to be acquired was not settled by the panchas, because at the time there was no dispute on that point, But afterwards the Municipality changed its mind and proposed to acquire 860 square feet only at the same rate per square foot. Tuljaram having failed to obtain payment made an application to <ORG>, Miscellaneous Application No. 87 of 1928, described as an application under Section 198 of the Act, in which he prayed that the Municipality should be compelled to pay compensation at Rs. 1-12-0 per square foot for 2997 square feet. At the hearing of this application the District Judge considered two principal issues: (1) whether the Municipality was bound to acquire the whole area originally agreed upon, (2) whether the compensation should be paid to Tuljaram or to one <NAME>, who claimed an interest in the property as mortgagee. This <NAME> is opponent No. 2. He was not a party to the arbitration proceedings but was made a party to the proceedings before <ORG> at the instance of the Municipality. The District Judge decided (1) that the Municipality was bound to pay compensation at Rs. 1-12-0 per square foot for the whole area, and (2) that the compensation should be paid to <NAME>, and payment was ordered accordingly. The Municipality has applied to this Court for revision of this order.

20. A preliminary question arises as to whether the application is competent, that is to say, whether <ORG> has any power to revise the order of <ORG> purporting to have been made under Section 198 of Act XVIII of 1925. Prima facie it would appear that <ORG> must possess this power. Section 115 of the Civil Procedure Coda gives power to <ORG> to revise the proceedings of any <ORG> subordinate to <ORG> in a case in which no appeal lies. Section 4 , Clause. (1), of the Code provides as follows:

In the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force.

21. This has been interpreted to mean that the provisions of the Code apply to proceedings under special Acts unless there is some provision in the special Act which shows a contrary intention. <CITATION> (1886) I.L.R. 13 Cal. 221. Velli Peviya Mira v. <NAME> (1886) I.L.R. 9 Mad. 332 was a case under the Madras Rent Recovery Act which contained an express provision that orders passed under it should not be liable to revision except by <ORG>. It was held, therefore, that <ORG> had no power of revision, the implication being that but for this provision <ORG> would have had that power. There is no provision in Act XVIII of 1925 such as there was in the Act dealt with in <NAME> v. <NAME>, which excludes the revisional jurisdiction of <ORG>. It would appear, therefore, that Section 115 must apply and give this <ORG> power to revise the order of the District Judge, if it can be regarded as an order of a <ORG> subordinate to <ORG>.

22. Then there is Section 107 of the Government of India Act which gives <ORG> powers of superintendence over all <ORG> subject to its appellate jurisdiction. The power of superintendence here referred to includes the power of revision: <NAME> v. <NAME> (1882) I.L.R. 9 Cal. 295, P.C. and <NAME> (1925) I.L.R. 3 Ran. 410, 429, 430, F.B. The words "subject to its appellate jurisdiction" do not mean, of course, subject to the appellate jurisdiction in that particular matter, for revision would not be necessary if an appeal lay, but subject to its appellate jurisdiction normally, or even in certain specific cases only: <NAME> v. King-Emperor (1918) 3 P.L.J. 581, F.B. <ORG>. therefore, has power to revise the order in question under Section 107 of the Government of India Act if it is an order of a <ORG> normally subject to the appellate jurisdiction of <ORG>.

23. That in the present case we are concerned with an order of a <ORG> is clear from the language of Section 198 . Under Clause (2) the District Judge is given power to appoint arbitrators in certain circumstances, but when it is a question of the determination of any dispute between the parties, whether on failure of the panchayat to give a decision, Clause (3), or in case either party is dissatisfied with the decision of the panchayat, Clause (4), it is the District <ORG> which is empowered to deal with the matter, and the procedure to be followed is that laid down in the Land Acquisition Act for proceedings referred for the determination of the <ORG>. That being so, the ratio decidendi of such cases as <NAME> v. <NAME> (1907) I.L.R. 30 Mad. 326, <NAME> v. <NAME> (1925) I.L.R. 3 Ran. 410, 429, 430, F.B., <NAME>, In re (1917) I.L.R. 42 Bom. 119, s.c. 19 Bom. L.R. 926, and <NAME> v. King-Emperor (1918) 3 P.L.J. 581, F.B., where it was held, respectively, that the High <ORG> has no power to revise the orders of a District Registrar, a Rent Collector under the Rangoon Rent Act, a District Judge acting departmentally as the head of an office, and a Commissioner appointed under the Defence of India Act, has little or no application in the present case. Lastly, Section 3 of the Code provides in terms that the District <ORG> is subordinate to the High <ORG> for the purposes of the Code. So that for the purposes of Section 107 of the Government of India Act the District <ORG> must be regarded as generally subject to the appellate jurisdiction of the High <ORG>.

24. If the matter were res integra, there could be no question, in my opinion, that this application for revision is competent. The difficulty arises owing to the decision in <ORG> v. <NAME>, where it was held that no application for revision lies against the decision of <ORG> under Clause (3) of Section 160 of the Bombay District Municipal Act III of 1901, which corresponds to Clause (3) of Section 198 of the present Act, The first point to be noted in connection with this case is that the application had been properly made to <ORG> under Clause (3) of Section 160 . In that case the panch had failed to deliver their award and <ORG> was, therefore, empowered to determine the dispute as to the amount of compensation. It is true that the Judge in that casehe happened to be an Assistant Judgedid not decide the dispute, because he was of opinion that he had no jurisdiction to do so until certain other matters had first been submitted to arbitration. Nevertheless it was possible for this <ORG> to hold in the circumstances that the order was one which was intended to be final and should not, therefore, be revised. It was not a case like the present where <ORG> was applied to for an order which it was not empowered to makethere is nothing in Section. 198 which gives <ORG> power to enforce an award on the application of a party who relies upon itand where moreover the <ORG> has determined a dispute, viz., that between Tuljaram and <NAME>, which had not been submitted to arbitration and was not within the jurisdiction of the <ORG> at all.

25. The judgment of Batchelor J. in <CITATION> (1916) I.L.R. 40 Bom. 539, s.c. 18 Bom. L.R. 340 is a short one and I quote the material part of it (p. 511):-

In the case of <CITATION> it has been decided by a Bench of this <ORG> that no appeal lies from the decision of <ORG> under Clause (3) of Section 160 of the Bombay District Municipalities Act. The object of this application is to obtain from the <ORG> a decision that although no appeal would lie, yet an application in revision does lie. Such a decision would, in our opinion, be seriously anomalous, and we do not think that the words of the Statute require us to make such a pronouncement, The only decision which seems to us fairly consistent with that already recorded in <NAME> case, is the decision that no application for revision is competent. In <NAME> v. <NAME> this <ORG> has held that it has no jurisdiction to revise the order of a District Judge acting under Section 23 of the Bombay District Municipalities Act of 1884. And although the words occurring in that section are 'District Judge,' whereas the words occurring in Section 160 , last clause, are 'District <ORG>,' we do not think that the distinction is sufficient to support the argument that an application for revision is competent, although admittedly no appeal would lie.

26. In <NAME> case it was decided that no appeal lies from the decision of <ORG> under Clause (3) of Section 160 of the Bombay District Municipal Act. The fact that there is no appeal does not ordinarily imply that there is no remedy by revision either. In fact revision only lies under Section 115 of the Code in cases where there is no appeal, So that evidently what <NAME> meant when he said that any other decision would be seriously anomalous was this, viz., that the particular grounds on which it had been decided that there was no appeal would apply equally in the case of a revision application. This appears to be the main ground of decision. A subsidiary ground was that in <NAME> v. <NAME> it was decided that <ORG> had no jurisdiction to revise the order of a District Judge under Section 23 of the Bombay District Municipal Act of 1884, on the ground that the District Judge was not a <ORG> but a persona designata. <NAME> apparently considered that it made no material difference whether the powers under a special Act were assigned to the District Judge or to the District <ORG>.

27. It is, therefore, necessary to refer to <CITATION> and <NAME> v. <NAME>, and see exactly what was decided in those cases and what the basis for the decisions was. The facts in <NAME> case were that an application had been properly made to <ORG> under Section 160 , Clause (3), for the determination of the compensation due to the applicant after failure of the panchayat to determine the amount. <ORG> made an order determining the amount and the applicant appealed, <NAME> view was that <ORG> only came in as a substitute for the panchayat where adjudication by the latter had failed, and, therefore, <ORG>'s order could not be questioned any more than the award of the panchayat could be questioned by way of an appeal. The learned Judge also referred to the provisos to Section 160 , Clause (3), which are the same as the provisos to Section 193 , Clause (3), of the present Act, namely, "(a) no application to the Collector for a reference shall be necessary", and "(b) the Court shall have full power to give and apportion the costs of all proceedings in any manner it thinks fit". These provisos were relied upon as indicating that the decision of <ORG> was intended to be final. This, so far as I can see, is the only reason in the judgment which can in any way be said to negative the power of <ORG> to revise <ORG>'s order The additional reason given for holding that there was no appeal, namely, that the order could not be regarded as a decree, would not affect the question of revision at all.

28. Now, if the decision in this case is to be considered not with reference to the question which was decided in the case itself, namely, the question whether there was an appeal, but with reference to the question whether a revision application lies, there are two important points of difference which, I think, must affect the decision. In the first place, though the award of a panchayat is no doubt final in the sense that it is not open to appeal, it is not final in the sense that it can be executed as it stands. It can only be made executable apparently by being filed as a decree as provided by the Civil Procedure Code or by means of a suit to enforce it. On the other hand, the order of <ORG> is itself enforceable in execution as held in <CITATION> (1923) I.L.R. 47 Bom. 654, s.c. 25 Bom. L.R. 305. In that very important respect, therefore, the award of a panchayat and the order of <ORG> do not stand on the same footing, and the argument that the <ORG> intended that there should be no interference with <ORG>'s order is, in my opinion, very materially weakened. The second argument baaed on the intention of the <ORG> to give finality to orders passed under Section 198 can only apply with any force to orders contemplated by the provisions of that section, As I have mentioned, in <CITATION> , it was possible to hold that <ORG>'s order came within the purview of the section. But what the <ORG> has decided and ordered in the present case is outside the purview of the section altogether. It would be impossible to hold that the <ORG> was functioning simply as a substitute for the panchayat when it dealt with matters not referred to the panchayat at all. The main line of reasoning in <NAME> case appears, therefore, to have no application.

29. As regards <NAME> v. <NAME>, that was a case under the Bombay District Municipal Act, 1884, Section 23 of which Act empowered the District Judge to pass an order for confirming or amending the declared result of an election or for setting the election aside. The section also provided that the District Judge might exercise any of the powers of a civil Court and that his decision should be conclusive. In the particular case the District Judge had refused to set aside an election and had ordered the applicant to pay the costs of the other party. It was this order for payment of costs which <ORG> was asked to revise, and it was held that the District Judge acting under Section 23 was not a Court and that <ORG> could not interfere.

30. Two points are to be noted in connection with this case. In the first place, the powers under Section 23 of the Act of 1884 were given to the District Judge and not to <ORG>. <NAME> in <CITATION> no doubt expressed the view that that made no difference. But that view, it would appear, is no longer tenable having regard to the judgment of <ORG> in <NAME> v. <NAME> (1917) I.L.R. 40 Mad. 793, s.c. 19 Bom. L.R. 715, P.C., The reasoning of Lord <NAME> in that case was that in determining whether an order is that of a <ORG>.


PETITIONER: FIRM A. T. B. MEHTABMAJID AND CO. Vs. RESPONDENT: STATE OF MADRAS AND ANOTHER DATE OF JUDGMENT: 22/11/1962 BENCH: <NAME>, RAGHUBAR BENCH: <NAME>, RAGHUBAR DAS, S.K. KAPUR, J.L. SARKAR, A.K. HIDAYATULLAH, M. CITATION: 1963 AIR 928 1963 SCR Supl. (2) 435 CITATOR INFO : RF 1964 SC1006 (9,14) R 1964 SC1729 (4,8,10,13,32) E 1968 SC 599 (14) R 1969 SC 147 (8,18,26) F 1969 SC 504 (6) R 1971 SC 870 (13) RF 1974 SC2344 (1) D 1977 SC 548 (4,6) RF 1977 SC 879 (13,14,19,23) R 1986 SC 63 (36) D 1986 SC 515 (104,106) F 1987 SC1922 (7,10,12) RF 1988 SC 740 (19) R 1988 SC1814 (6) R 1988 SC2038 (4) D 1989 SC1949 (12) R 1989 SC2015 (8) E&D 1990 SC 820 (14,18) ACT: Sales Tax-Tanned hides and skin imported from outside and sold inside the State-Hides and skins tanned and sold inside the State-Sales Tax higher on the latter-If discriminatory- Old rule Substituted by new rule-Old rule does not revive when new rules declared invalid-Constitution of India, Arts.301, 304-Madras General Sales Tax Act (IX Of 193), ss. 3,5, 19.Madras General Sales Tax Rules, r. 16. HEADNOTE: This is a petition under Art. 32 of the Constitution, the petitioners are dealers in hides and skins in the State of Madras. The impugned sales tax assessment relates to turn- over of sales of tanned hides and skins which had been obtained from outside the State of Madras. The main contention of the petitioners is that the tanned hides and skins imported from outside and sold inside the State are, under r. 16 of the Madras General Sales Tax Rules, subject to a higher rates of tax than the tax imposed on hides and skins tanned and sold within the State and this discriminatory taxation offended Art. 304 (a) of the Constitution. The respondents contentions were (a) sales tax doe,; not come within the purview of Art. 304 (a)' as it is not a tax on the import of goods at the point of entry, (b) the impugned 436 rule is not a law made by the State legislature, (c) the impugned rule by itself does not impose the tax but fixes the single point at which the tax is imposed by ss. 3 and 5 of the Act is to be levied. (d) The impugned rule was not made with an eye on the place of origins of the goods. Held, that it is now well settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulating measures. Sales Tax, of the kind under consideration, cannot be said to be a measure, regulating any trade, or a compensatory tax levied for the use of trading facilities, Sales Tax which has the effect of discriminating between goods of one State and goods of another, may affect the free flow of trade and it will then offend against Art. 301 and will be valid only if it comes within the terms of Art. 304 (a).  <CITATION> ,  1 S. C. R. 809, <CITATION> ,  1 S. C. R. 491, followed. Article 304 (a) allows the legislature of a State to impose taxes on goods imported from other States and does not support the contentions that the imposition must be at the point of entry. Section 19 (5) of the Madras General Sales Tax Act provides that the 'rules made thereunder shall have effect as if enacted in the Act and r. 16 of the Madras General Sales Tax Rules would fall within a law made by <ORG>. What that rule provides is a step necessary fur the imposition of tax in view of ss. 3 and 5 and therefore the impugned rule is a part of the enactment which imposes the tax. The fact that the impugned rule was made in view of ss. 385, in order to prescribe the single point in series of sales does not justify its discriminatory character, Rule 16 (2) discriminates against the imported hides or skins which had been purchased or tanned outside and therefore it contravenes Art. 304 (a) of the Constitution. Once an old rule has been substituted by a new rule, it ceases to exist and it does not get revived when the new rule is held invalid. The tax imposed in the present case has not been imposed by misconstruing the provisions of a valid Act but it has been imposed without jurisdiction by reason of the invalidity of r. 16. 437 Ujjam Bai v. State of U. P.,  1 S.C. R. 778, distinguished. JUDGMENT:

ORIGINAL JURISDICTION : Petition No. 147 of 1959. (Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights).

<NAME> and <NAME>, for the petitioner. <NAME> and <NAME>, for respondents Nos. 1 and 2.

<NAME>, for the intervener.

1962. November, 22. The judgment of the <ORG> was delivered by RAGHUBAR DAYAL, J.-This petition under Art. 32 of the Constitution raises the question of the validity of r. 16 of the Madras General Sales Tax (Turnover & Assessment) Rules, 1939, hereinafter called the rules. The impugned rule was published on September 7, 1955, and was substituted in the place of old r. 16. The new rule was to be effective from April 1, 1955.

The petitioner is a dealer in hides and skins. He sells hides and skins tanned outside the State of Madras, as well as those tanned inside the state. The Deputy Commercial Tax Officer, 1, Moore Market Division, Madras, assessed the petitioner to sales tax for the year 1955-56 on a turnover of Rs. 29,89,624-15-11. Out of this a turnover of Rs. 28,10,625-2-0 represented sales of tanned hides and skins which had been obtained from outside the State of Madras. Sales tax was levied on hides and skins under the provisions of the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter called the Act. Section 3 is the charging section and its relevant portions read: "3. (1) Subject to the provisions of this Act, (a) every dealer shall pay for each year a tax on his total turnover for such year; and

(b) the tax shall be calculated at the rate of three pies for every rupee in such turnover :-

x x x x x"

Section 5 of the Act provides for exemptions and reductions of tax in certain cases. Clause (vi ) thereof provides that the sale of hides and skins, whether tanned or untanned, shall be liable to tax under section 3, sub-section (1), only at such single point in the series of sales by successive dealers as may be prescribed. Section 19 empowers <ORG> to make rules to carry out the purposes of the Act.

The new rule 16, whose validity is challenged for the petitioner, reads :

"16.(1) In the case of untanned hides and/or skins the tax under section 3(1) shall be levied from the dealer who is the last purchaser in the State not exempt from taxation under section 3(3) on the amount for which they are bought by him.

(2) (i) In the case of hides or skins which have been tanned outside the <ORG> the tax under section 3(1) shall be levied from the dealer who in the <ORG> is the first dealer in such hides or skins not exempt from taxation under section 3(3) on the amount for which they are sold by him.

(ii)In the case of tanned hides or skins which have been tanned within the State, the tax under section 3(1) shall be levied from a person who is the first dealer in such hides or skins not exempt from taxation under section 3(3) on the amount for which they are sold by him:

Provided that, if he proves that the tax has already been levied under sub-rule (1) on the untanned hides and skins out of which the tanned hides and skins had been produced, he shall not be so liable.

(3)The burden of proving that a transaction is not liable to taxation under this rule shall be on the dealer." It is contended for the petitioner that the effect of this rule is that tanned hides or skins imported from outside the <ORG> and sold within the <ORG> are subject to a higher rate of tax than the tax imposed on hides or skins tanned and sold within the <ORG>-, inasmuch as sales tax on the importer] hides or skins tanned outside the <ORG> is on their sale price while the tax on hides or skins tanned within the <ORG>, though ostensibly on their sale price is, in view of the proviso to cl. (ii) of sub-r. (2) of r. 16. really on the sale price of these hides or skins when they are purchased in the raw condition and which is substantially less than the sale price of tanned hides or skins. Further, for similar reasons, hides or skins imported from outside the <ORG> after purchase in their raw condition and then tanned inside the <ORG> are also subject to higher taxation than hides or skins purchased in the raw condition in the <ORG> and tanned within the <ORG>, as the tax on the former is on the sale price of the tanned hides or skins and on the latter is on the sale price of the raw hides or skins. Such a discriminatory taxation is said to offend the provisions of Art. 304(a) of the Constitution. Similar are the contentions for the interveners in the case. The contentions for the respondents are Sales tax does not come within the purview of Art. 304(a) as it is not a tax on the import of goods at the point of entry. (2) The impugned rule is not a law made by the <ORG> Legislature. (3) The impugned rule, by itself, does not impose the tax, but fixes the sin-ale point at which the tax imposed by ss. 3 and 5 of the Act is to be levied. (4) The impugned rule was not made with an eye on the place of origin of the goods but as a matter of necessity, in view of the requirements of the statutory provisions to the effect that hides or skins, raw or tanned, came within one category and that the tax on them could be levied at a single point only. The impugned rule, therefore, fixed that single point with respect to the sale of raw hides or skins at the last purchase by the dealer in the <ORG> and with respect to the sale of tanned hides or skins at the first sale of such tanned hides or skin$ by the dealer in the <ORG>. In the former case, the tax was levied on the price the purchaser paid while in the latter case it was on the price at which the seller sold.

Article 301 of the Constitution which provides for trade, commerce and intercourse throughout the territory of India to be subject to the other provisions of Part XIII, has been construed by this Court in <CITATION> (1) and in <ORG> v. The State of Rajasthan and Ors.(2) :

The majority view in the Atiabari Tea Co. Case (1) which has been accepted in the Automobile Transport Case (2) is, as expressed by <NAME>, J., at p. 860 : "Thus considered we think it would be reasonable and proper to hold that restrictions freedom (1) [1961] 1. S.C.R. 809.

(2) [1963] 1 S.C.R. 491, from which is guaranteed by Art. 301 , would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Art. 301......... We arc therefore satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by Art. 301 a rational and workable test to apply would be : Does the impugned restriction operate directly or immediately on trade or its movement ?...... Our conclusion therefore is that when Art. 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct restrictions on the very movement of such goods it attracts the provisions of Art. 301 , and its validity can be sustained only if it satisfies the requirements of Art. 302 or Art. 304 of Part XIII." In the majority judgment in the Automobile Transport Case (1) it was said at p. 1424 :

"The interpretation which was accepted by the majority in the <ORG> Case is correct, but subject to this clarification. Regulatory measures or measures imposing Compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Art. 301."

Earlier in the judgment it was observed, at p. 1422: "Such regulatory measures as do not impede (1) [1963] 1 S.C.R. 491.

the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Art. 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and intercourse but rather facilitate them." <NAME>, concurred in this view and said at p. 1436 : "(1) Art. 301 declares a right of free movement of trade without any obstructions by way of barriers, inter-<ORG> or, intrastate, or other impediments operating as such barriers. (2) The said freedom is not impeded, but, on the other hand, promoted, by regulations creating conditions for the free movement of trade, such as, police regulations, provision for services, main- tenance of roads, provision for aerodromes, wharfs etc., with or without compensation." It is therefore now well settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulatory measures. Sales tax, of the kind under consideration here, cannot be said to be a measure regulating any trade or a compensatory tax levied for the use of trading facilities. Sales tax, which has the effect of discriminating between goods of one <ORG> and goods of another, may affect the free flow of trade and it will then offend against Art. 301 and will be valid only if it comes within the terms of Art. 304 (a).  Article 304(a) enables <ORG> a <ORG> to make laws affecting trade, commerce and intercourse. It enables the imposition of taxes on goods from other <ORG>s if similiar goods in the <ORG> are subjected to similiar taxes, so as not to discriminate between the goods manufactured or produced in that <ORG> and the goods which are imported from others <ORG>s. This means that if the affect of the sales-tax on tanned hides or skins imported from outside is that the latter becomes subject to a higher tax by the application of the proviso to sub-rule of r. 16 of the Rules, then the tax is discriminatory and unconstitutional and must be struck down. We do not agree with the contentions for the respondents. The contention that Art. 304 (a) is attracted only when the impost is at the border, i.e., when the goods enter the <ORG> on crossing the border of the <ORG>, is not sound. Art. 304(a) allows <ORG> a <ORG> to impose taxes on goods imported from other <ORG>s and does not support the contention that the imposition must be at the point of entry only.

Section 5 (vi) provides that the sale of hides or skins, whether tanned or untanned, shall be liable to tax under s. 3(1) only at such single point in the series of sales by successive dealers as may be prescribed. 'Prescribed' means 'Prescribed by rules made under the Act.' Rule 16 prescribes such single point. This rule was made by the Governor in the exercise of power confer-red on him under s. 19 of the Act and would therefore have statutory force. In fact, sub- s. (5) of s. 19 provides that the rules shall have effect as if enacted in the Act. We therefore do not agree that r. 16 is not a law which would fall within a law made by <ORG>.

It is true that the impugned rule, by itself, does not impose the tax, but fixes the single point at which the tax imposed by ss. 3 and 5 is to be levied. What the rule provides is a step necessary for the imposition of the tax, in view of ss. 3 and 5 and therefore the impugned rule is a part of the enactment which imposes the tax.

The fact that the impugned rule was made in order to prescribe the single point in the series of sales by successive dealers at which the tax on sale of hides or skins was to be levied, in view of ss. 3 and 5 of the Act, does not justify the making of such a rule which discriminates between the tax imposed on goods imported from outside the State and the goods produced or manufactured in the State.

Now, the only question that remains for consideration is whether this rule discriminates between hides or skins imported from outside the State and those manufactured or produced in the State.

Sub-rule (1) of the rule deals with the sale of raw hides and skins. The tax is levied from the dealer who is the last purchaser in the <ORG>. Its vires is not challenged. Clause (i) of sub-r. (2) provides for the levying of tax on the sale of hides and skins which had been tanned outside the <ORG>. The tax is levied from the dealer who.. in the <ORG>, is the first seller of such hide or skins. The result is that a dealer in hides or skins which have been tanned outside the <ORG> has to pay the tax on the amount for which such hides or skins are sold by him. Clause (ii) of this sub-rule is in identical terms with respect to the sale of tanned hides or skins which have been tanned within the <ORG>. The tax is to be levied from the person who is the first dealer in such hides or skins and is levied on the amount for which they are sold. The descrimination. it is argued, comes in on account of the proviso to this sub-cl.

(ii). The proviso is to the effect that if the dealer of hides or skins which had been tanned within the <ORG> proves that tax had already been levied on those hide or skins in their raw condition, in accordance with sub-r. (1)., he will not be liable to the tax under sub-cl. (ii) of sub-r. (2). The result therefore is that the sale of hides or skins which had been purchased in the <ORG> and then tanned within the <ORG> is not subject to any further tax. Hides and skins tanned within the <ORG> are mostly those which had been purchased in their raw condition in the <ORG> and therefore on which tax had already been levied on the price paid by the purchaser at the time of their sale in the raw condition. If the quantum of tax had been the same, there might have been no case for grievance by the dealer of the tanned hides and skins which had been tanned outside the <ORG>. The grievance arises on account of the amount of tax levied being different on account of the existence of a substantial disparity in the price of the raw hides or skins and of those hides or skins after they had been tanned, though the rate is the same under s. 3 (1) (b) of the Act. If the dealer has purchased the raw hide or skin in the <ORG>, he does not pay on the sale price of the tanned hides or skins, he pays on the purchase price only. If the dealer purchases raw hides or skins from outside the <ORG> and tans them within the <ORG>, he will be liable to pay sales-tax on the sale price of the tanned hides or skins. He too will have to pay more for tax even though the hides and skins are tanned within the <ORG>, merely on account of his having imported the hides and skins from outside-, and having not therefore paid any tax under sub-r. (1). It is true that dealers, though few, selling hides and skins which had been tanned within the <ORG> will also have to pay similar tax if no tax had been paid previously, they having not purchased the raw hides and skins at all as they were from the carcasses of animals owned by them; but this does not affect the discriminatory nature of the tax as already indicated. It is urged for the respondent <ORG> that to consider discrimination between the imported goods and goods produced or manufactured in the <ORG>, circumstances and situations at the taxable point must be similar and that the circumstance of hides or skins tanned within the <ORG> and on which tax had been paid earlier at the time of their purchase in the raw condition is sufficient to consider such hides or skins to be different from the hides or skins which had been tanned outside the <ORG>. We do not consider that the mere circumstance of a tax having been paid on the sale of such hides or skins in their raw condition justifies their forming goods of a different kind from the tanned hides or skins which had been imported from outside. At the time of sale of those hides or skins in the tanned state, there was no difference between them as goods and the hides or skins tanned outside the <ORG> as goods. The similarity contemplated by Art. 304 (a) is in the nature of the quality and kind of the goods and not with respect to whether they were subject of a tax already or not.

We are therefore of opinion that the privisions of r. 16 (2) discriminate against the imported hides or skins which had been purchased or tanned outside the <ORG> and that therefore they contravene the provisions of Art. 304 (a) of the Constitution.

It has been urged for the respondent that if the impugned rule be held to be invalid, old r. 16 gets revived and that the tax assessed on the petitioner will be good. We do not agree. Once the old rule has been substituted by the new rule, it ceases to exist and it does not automatically get revived when the new rule is held to be invalid. Lastly, we may refer to the Preliminary objection raised on behalf of the respondent to the maintainability of this petition, in veiw of the decision of this Court in <CITATION> (3). This petition does not come within that decision. This is not a case in which the tax has been levied by the Deputy Commercial Tax Officer by misconstruing certain provisions of a valid Act, but is a case where the taxing officer had no juris- (1)  1. S.C.R. 778.

diction to assess the tax on account of the invalidity of the rule under which the tax was assessed. We therefore allow this petition with costs holding the impugned rule 16 (2) invalid and order the issue of a writ of mandamus to the State of Madras and <ORG> under the Act to refrain from, enforcing any of the provisions of r. 16 (2) and direct them to refund the tax illegally collected from the petitioner. Petition Allowed.


JUDGMENT <NAME>, J.

1. The plaintiffs are a firm of <ORG> carrying-on banking business in Singapore and other places. They allege in the plaint that they appointed the defendant as their agent to conduct business in Singapore for a period of 3 years and as his conduct was found not to be satisfactory they sent another agent after the expiry of the 3 years' period and wrote to the defendant to hand over the business with the account books, documents and cash on hand to the new agent, that the defendant refused to hand over charge of the business to the new agent until and unless the accounts between him and the plaintiffs were settled and the letter containing the terms of the agency written by him to the plaintiffs, called the salary chit, was returned to him and a release deed was executed in his favour releasing him from all claims against him with reference to his agency, that as the defendant was obdurate and as the plaintiffs feared that they might suffer heavy loss by the stoppage of business they consented to authorise their new agent to give a release to him, that : the defendant after getting the. release deed and the return of the salary chit handed over the account books, vouchers and cash on hand to the new agent and that the release deed was obtained under coercion and is : therefore voidable at their instance. They further allege that the defendant had improperly debited them with the loss sustained by him in his own private transactions in dollars and that he lent large sums of money without proper security and contrary to orders. The plaintiffs pray that the release deed be declared void as having been obtained under coercion and that the defendant be directed to render an account of the transactions during the period he was their agent. The defendant in his written statement denies that the release deed was obtained under coercion and avers that he acted honestly and diligently in his capacity as agent, that he did not wrongly debit the plaintiffs with his losses, that he did not improperly lend money to the customers and that the plaintiffs are estopped by their conduct from denying the validity of the release deed.

2. Two preliminary issues were framed by the Subordinate Judge:

(1) Whether the acquittance granted to the defendant was done under the circumstances detailed in the plaint and hence voidable; and are the plaintiffs entitled to call for an account of the defendant?

(2) Whether the allegations in paragraphs 29 and 30 of the written statement are true, and does it estop the plaintiffs from doing so?

3. The Subordinate Judge held that the release deed was obtained from the plaintiffs' agent under coercion and that they did not ratify the release deed and directed an account to be taken. The defendant has preferred this appeal.

4. The first question for decision is whether Ex. IV, the release deed, was obtained under coercion and as such voidable at the instance of the plaintiffs. The admitted facts are : the plaintiffs appointed the defendant as their agent to conduct their business at two places in Singapore and the defendant, according to the custom obtaining among the Nattukottai Chetties, executed what is popularly known as "salary chit" (Ex. K) on 4th March, 1918, setting out the terms on which he undertook to work as the plaintiffs' agent. He went to Singapore and worked as their agent without any hitch till the beginning of 1920. He did not send the kurippu for Masi corresponding to February-March, 1920, as he should have done about the beginning of Panguni. He sent the kurippu for Masi and Panguni on the 3rd of Chitrai corresponding to the 15th of April, 1920. See Ex. H (2). He wrote to the plaintiffs Ex. F on 24th May, 1920, making a special reference to the loss sustained in exchange transactions and promising to make good the loss in some other transactions. The 1st plaintiff on the receipt of Ex. F sent to the defendant the following-telegram (Ex. F-l) on 10th June, 1920:

Deal with money-lending; don't have other transactions, see letter and wrote Ex. F (2) on 12th June, 1920, charging the defendant with having debited them with losses sustained by him in exchange transactions on his own private account and saying that if he had done the business for the firm he would have taken their permission before embarking upon speculation in the exchange market. The defendant continued to manage the plaintiffs' business at Singapore for more than a year after the date of Ex. F (2).

5. The plaintiffs appointed another agent one <NAME> in the place of the defendant and wrote to the defendant Ex. D-5 on 27th November, 1921 and informed him of their having sent <NAME> to take charge of the business, that he should get the accounts prepared and closed and that he should come away without delay. The following passage in the letter is important:

As soon as he arrives, get the accounts prepared and closed and come without delay.... If there is something more to be collected, better get it collected and make out a copy of the items that can be copied and come away after getting the accounts closed. If in both the said firms any items are not collected and will have to be realised slowly, have them entered as old accounts and come away... Please also intimate to me about the arrival of <NAME> there.

6. From this letter it is clear that the plaintiffs appointed a new agent and asked the defendant to come away from Singapore; in other words, they asked him to cease to be their agent at Singapore as soon as <NAME> went there and took charge of the business. The defendant did not hand over charge to <NAME> and insisted upon the accounts being settled in Singapore contrary to the custom prevailing among the <NAME> and contrary to the terms of Ex. K and insisted upon his being given a release deed in respect of any claim that the plaintiffs might make in respect of any of the transactions conducted by him as agent. Ex. C written by <NAME> on 30th December, 1921, to the plaintiffs shows the attitude of the defendant at the time. He writes:

When <NAME> was asked to prepare and give accounts in the order of dates, he said : 'I cannot prepare and give account. I shall prepare the ayinthogai (balance sheet) as matters stand and give the same. I should be relieved (of my duties) here and my salary chit should be given and the account settled.

7. When he was told that it was not the proper course and that he might prepare and give the accounts as matters stood and that the accounts might be settled on going to the headquarters as usual he said definitely:

It cannot be done. My account should be settled here alone and I should be relieved of my duties.

8. <NAME> appealed to the defendant not to be obstinate and asked the other <NAME> to persuade him to hand over charge of the business to him with the account books, etc. The friends of the defendant and the plaintiffs tried to induce the former to hand over the business to <NAME> and to have the accounts settled at the <NAME>' place in Madura. The plaintiffs wrote Ex. D-2 on 5th January, 1922, complaining of his attitude as being "unusual, novel, indecent and improper" and asking him without allowing the business to get spoiled to write up and deliver the accounts and to let them know about it. The defendant wrote Ex. E-l on 19th January, 1922, to the plaintiffs in which he stated:

You should send my salary chit to <NAME> who has come here for the new account together with a letter signed by yourself and <NAME> and directing that the accounts, documents, etc., of our shop and A. R. K. R. shop should be taken charge of in accordance with the balance sheet, my salary account, etc., looked into and a receipt granted (to me) so as not to have any further claim upon me.

9. The plaintiffs wrote Ex. D-3 on 1st February, 1922, complaining of his not having handed over the account books to <NAME> who had been waiting there from 25th Karthigai and informing him that as requested by him they had sent the salary chit to <NAME> and that he should after getting the salary chit deliver to <NAME> the new account, the accounts relating to the firm as well as the cash items, documents, box, packets, etc., and also execute the necessary power, assignment and all other documents without any further delay. The defendant insisted upon a release deed being executed in his favour before he could hand over the charge to <NAME>. From Exs. D, C and E series it is clear that the plaintiffs found themselves in as helpless state and reluctantly consented to do as the defendant wished. Ex. III written by the 2nd plaintiff to the 1st plaintiff on 19th March, 1922, shows the state of the mind of the plaintiffs. <NAME> strongly advised the plaintiffs to consent to give a release deed to the defendant as otherwise the plaintiffs might sustain heavy loss owing to stoppage of business and that if so advised they might take steps against him afterwards. Ex. IV was executed by <NAME> in favour of the defendant on 21st April, 1922, whereupon the defendant handed over the account books, cash, etc., to <NAME>.

10. The question is do the above facts make out that the defendant got the release, Ex. IV from the plaintiffs under circumstances which amount to coercion. He was in possession of the documents, account books and cash belonging to the plaintiffs. After he was asked to hand over charge to <NAME> he had no right to withhold from the plaintiffs' new agent their property. <NAME> remained there for about 4 months before he could get possession of the account books, etc., in order to carry on the business. The stoppage of the business was likely to cause heavy loss to the plaintiffs. Coercion is defined in Section 15 of the Contract Act, as "committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement". The defendant, having withheld from the plaintiffs their property which they asked to hand over to <NAME>, has brought himself within Section 15 of the Contract Act, and the release deed he obtained under the circumstances is voidable at the instance of the plaintiffs. We therefore agree with <ORG> in finding the first issue against the defendant.

11. It is unnecessary in this view to consider now the charges made by the plaintiffs against the defendant of having debited the loss sustained in his own private transactions against the plaintiffs in their accounts and of having lent large sums of money to impecunious customers. We may, however, observe in passing that from the correspondence it is not at all clear that the plaintiffs instructed the defendant not to dabble in exchange speculation. On the other hand the letters go to show that some of the <NAME> firms including the plaintiffs were speculating in exchange transactions and the defendant also did business in dollars on behalf of the plaintiffs. As regards the loan to one Tirupathi <NAME> it is not suggested that the defendant acted with a corrupt motive; on the other hand it is clear from the evidence that he lost about Rs. 18,000 the amount lent by him to Tirupathi <NAME>.

12. Issue II.--Though the defendant in para. 31 of his written statement uses the word 'estoppel', what is pleaded is not an estoppel in the ordinary sense, but ratification of the arrangement under Ex. IV. No doubt, even a ratification may amount to an estoppel; but it would be more correct to put the question in the following form : whether the plaintiffs ratified the arrangement under Ex. IV; and, if so, whether they could go behind it. After the execution of Ex. IV the account books, cash on hand and the vouchers were handed over to <NAME> by the defendant and he executed a power-of-attorney in <NAME> favour so as to enable him to collect the loans outstanding on mortgages. <NAME> died in August and the plaintiffs sent a third agent named <NAME>. It was necessary that <NAME> should get a fresh power-of-attorney from the defendant in order to realise the loans outstanding on mortgages. Ex. O was written by the solicitors of the plaintiffs to <NAME> on 5th April, 1923, in which they informed him of the death of <NAME> in August, 1922 and asked him whether he was "willing to execute a fresh power-of-attorney in favour of the present agent to enable him to deal with the mortgages and any other matters that may arise". The defendant's solicitors wrote Ex. Q on 13th April that their client had no objection to executing transfers of the mortgages in the names of the proprietors meaning the plaintiffs and that before agreeing to do so he required the plaintiffs to personally execute a release deed in his favour and that he was not satisfied with the release executed by <NAME> in his favour. The plaintiffs' solicitors answered Ex. Q on 14th April that everything had been done at the defendant's request and there was no reason why he should require a fresh release and that their clients were unwilling to accede to that request. The defendant's solicitors wrote to say that their client regretted that he could not see his way to execute a transfer of the mortgages unless the proprietors personally executed a release in his favour. An originating summons was then taken out by the plaintiffs' solicitors for a vesting order in respect of the mortgages standing in the name of the defendant, and the vesting order Ex. V was made by <ORG>.

13. A difficulty arose as regards the mortgage property within the State of Johore as according to the law of Johore a mere vesting order would not entitle the plaintiffs to sue on the mortgages obtained in the name of their agent, the defendant. The plaintiffs' solicitors wrote to the defendant's solicitors on 15th August, 1923:

We find that there are certain difficulties in connection with the making of a vesting order in Johore and that it would therefore be necessary to sue for a declaration and an order to execute the transfer.

14. The defendant's solicitors replied:

that in view of the position he (the defendant) has taken up with regard to the Singapore property he regrets he is unable to execute transfers of the mortgage properties in Johore, and that he will not oppose any order in the action if they undertake not to ask for any costs.

15. The defendant seems to have changed his mind as is clear from the letter of the plaintiffs' solicitors to his solicitors dated 24th September, 1923. He seems to have insisted that the counsel for the plaintiffs should make a statement that the plaintiffs ratified the arrangement under Ex. IV before he could undertake not to contest the claim and to facilitate the passing of a decree in plaintiffs' favour. As a mere vesting order on originating summons would not satisfy the requirements of the law obtaining in Johore the plaintiffs' solicitors filed Suit No. 817 of 1923 in <ORG> praying for an order directing the defendant to execute in the name of <NAME> in manner conforming with the law in Johore such memoranda or other documents as may be necessary according to the laws of Johore to transfer each of the said charges to the plaintiffs or their present agent <NAME>, son of <NAME>.

16. The defendant through his solicitors agreed to accept service of notice and the stipulation was that the draft judgment should be approved by the defendant's solicitors. In accordance with the arrangement the draft judgment was submitted to the defendant's solicitors as appears from the correspondence printed on page 102 of the printed papers. The defendant's solicitors made certain alterations and the plaintiffs' solicitors approved of the alterations. This was on 28th September, 1923. On 10th October, 1923 they sent the transfers in duplicate to the defendant's solicitors for his signature. The plaintiffs' counsel ratified the arrangement under Ex. IV as appears from the order of <ORG>, dated the 2nd October, 1923. The relevant passage is as follows:

and the plaintiffs by their counsel acknowledging that the said release was and is in full force and of full effect and by consent, it is this day adjudged and ordered by consent, that the defendant do execute in the name of <NAME>.

17. The question is whether this statement amounts to a ratification of Ex. IV by the plaintiffs and whether the plaintiffs are bound by the statement of their counsel that the release was and is in full force and of full effect. The defendant knew or had reason to believe that the plaintiffs would challenge the validity of Ex. IV and he evidently consulted his solicitors as to the best course to be adopted and on their advice he insisted upon a second release deed from the plaintiffs failing which upon a clear statement that the plaintiffs ratified the arrangement evidenced by Ex. IV. It is clear from the correspondence that it was finally arranged that the defendant should not contest the suit and that the plaintiffs' counsel should make a statement ratifying the release deed Ex. IV and that the draft judgment should be approved by the defendant's solicitors and thereupon the plaintiffs' counsel made the statement above extracted.

18. It is contended by Mr. <NAME> for the plaintiffs that the counsel had no authority to make the statement that "the plaintiffs acknowledge that the said release was and is in full force and of full effect" and that it is for the defendant to show that the counsel was specially authorised to make it. The Subordinate Judge has dealt with this point in an unsatisfactory manner. He observes in para. 60:

From the correspondence to which I have referred above Ex. O series, it was seen that first defendant wanted to have Ex. IV established by the execution of a fresh release deed by the principals in person. That was not agreed to and the 1st defendant, I think, has been able to get reference made to the release deed somehow and he holds that the admission contained in the judgment does not affect the plaintiffs as an affirmance of the transaction of release.

19. That the plaintiffs' counsel made the statement contained in the order of <ORG> cannot be seriously disputed. The only question is whether he had authority to bind his clients by the statement he made. Mr. <NAME> contended on the authority of <NAME> v. <NAME> (1911) 17 CWN 156, <CITATION> (1900) ILR 27 C 428 (FB) and <NAME> v. <NAME> (1856) 1 CBNS 364 : 140 ER 150, that the counsel had no authority to make the statement and that the statement would not bind the plaintiffs. In <NAME> v. <NAME> (1911) 17 CWN 156 it was held that although a pleader has no power to compromise a suit unless he is specially authorised in that behalf he can bind his client by an admission of a question of fact provided that question of fact falls within the scope of the suit in which he has been retained. <CITATION> (1900) ILR 27 C 428 (FB) the counsel retained in one case consented to a compromise which affected other suits in which he was not retained. The compromise was objected to and before the decree was drawn up one of the parties applied for an order to stay the drawing up of the compromise decree and to have the alleged compromise set aside and the suit retried. <NAME>, J., dismissed the application; and on appeal <NAME>, <NAME>, and two other Judges allowed the application. The learned Chief justice observes at page 438:

There cannot, I think, be any reasonable doubt at the present day that counsel possesses a. general authority--an apparent authority which must be taken to continue until notice be given to the other side by the client that it has been determined--to settle and compromise the suit in which he is actually retained as counsel, and in the exercise of his discretion to do that which he considers best for the interest of his client in the conduct of the particular case in which he is so retained. Here, however, the compromise extended to collateral matters, to matters quite outside the scope of the particular case in which Mr. <NAME> way retained as counsel, and, in order to bind the client, it must be shown that Mr. <NAME> had, from his client, a special authority to compromise, and compromise upon the definite terms which are set up by the present respondents and refers to <NAME> v. <NAME> (1866) LR 1 QB 379, <NAME> v. <NAME> (1856) 1 CBNS 364 : 140 ER 150 and <NAME> v. <NAME> (1877) LR 20 QBD 141 for the authority of a counsel to compromise on behalf of his client. This case is distinguishable on the facts. Here, there was no settlement of collateral matters. It was necessary to prove to the <ORG> that the mortgages which were standing in the name of the defendant were taken for the benefit of the plaintiffs, that the defendant was a trustee of the plaintiffs and that the agency having terminated he was bound to make over the mortgage deeds to the plaintiffs. It cannot therefore be said that the ratification of the release deed, Ex. IV was a matter collateral to the subject-matter of the suit in which the statement ratifying the deed was made. The defendant insisted upon his being given a full discharge as regards the agency and he was not satisfied with the release executed by the agent of the plaintiffs, and it was necessary for obtaining the order prayed for to make out that the defendant . had ceased to be the plaintiffs' agent; and if for obtaining the relief therein prayed the statement insisted upon by the defendant with reference to the agency during the currency of which the mortgage deeds were obtained is made, it cannot be said that the counsel settled a matter collateral to the suit. In <NAME> v. <NAME> (1856) l CBNS 364 : 140 ER 150 the power of a counsel for compromising matters in dispute was considered at length. These are some observations of <ORG>, which may be taken as lending support to Mr. <NAME>'s contention. He observes at p. 461:

I am not aware that any counsel engaged in making terms ever supposed for a moment that his opponent had power to bind his client without express instruction.

20. There are a number of cases which take a liberal view of the authority of a counsel to compromise suits in which he is engaged. In <NAME> v. <NAME> (1824) <NAME> 38 : 48 ER 16 Sir <NAME>, M. R., observes:

In the absence of evidence a Court will conclude that he had authority, for it is not to be presumed that counsel would enter into an agreement without authority. There is in this case evidence on both sides, but after duly considering it I come to the conclusion that counsel had authority which would bind his client.

21. In B.N. Sen & Bros. v. <ORG> (1923) ILR 51 C 385 the plaintiffs instituted a suit for the recovery of the price of goods sold and delivered to the defendants and for damages in respect of goods, of which it was alleged the defendants had refused to take delivery, making a total claim of Rs. 25,508. The defendants admitted that there was due from them to the plaintiffs a sum of Rs. 12,611 in respect of goods sold and delivered but claimed that there was due to them from the plaintiffs a sum of Rs. 58,000 in respect of various transactions between the parties. At the hearing of the suit the defendants' counsel in the absence of the defendants and without their express authority assigned a decree in favour of the plaintiffs for Rs. 22,117, without prejudice to the right of the defendants, if any, to proceed with their claim in their own suit. It was admitted that the attorney for the defendants who was present in <ORG> never asked the learned Counsel to settle the suit, nor did he put any limitation on the authority or discretion of the learned Counsel in any respect to compromise the suit. <NAME>, C. J, and <ORG>, held that the settlement was a matter within the apparent general authority of the counsel and was binding on the defendants. The following observation of the learned Chief Justice may well be applied to the present case:

In my judgment there is no evidence in this case that there was any limitation placed upon the authority of the learned Counsel.... I have a strong suspicion that the course which the learned Counsel took on behalf of the defendants was a wise one, having regard to the nature of the suit and the admissions which the defendants made in the suit. At all events I am satisfied that the settlement was made within the authority of the learned Counsel.

22. There are numerous cases, English and Indian, on the question of a counsel's power to make admissions in, or to refer to arbitration or compromise, suits in which he is instructed. A mere reference to the following cases would be sufficient as it is neither profitable nor necessary to consider them all in detail, <NAME> v. <NAME> (1900) 6 CWN 82 at 87, <NAME> v Lord <NAME> (1859) F & F 619 : 29 LJ Ex. 382, <NAME> v. <NAME> (1858) 5 CBNS 59, <NAME> v. <NAME> (1866) LR 1 QB 379, <CITATION> (1898) 3 CWN 222 and <NAME> v. <NAME> (1871) 5 IR 368 goes the length of laying down that the compromise made by a solicitor or counsel is binding on the client though it may have been made against his express directions unless the client has revoked the authority of the counsel or solicitor to compromise on his behalf and communicated the revocation to the other side. This must be done before the decree or order is sealed.

23. The following propositions are deducible from the authorities:

(1) A counsel has authority to make admissions in Court on behalf of his client on matters of fact relevant to the issues in the case in which he is engaged. Admissions on questions of law would not bind the client.

(2) A counsel has authority to confess judgment, withdraw or compromise, or refer to arbitration the suit in which he is instructed if his doing so is for his client's advantage or benefit even though he has no express authority from his client.

(3) A counsel cannot without express authority agree to compromise or refer to arbitration matters unconnected with the subject-matter of the suit in which he is instructed (4) Where in the course of a suit a counsel makes an admission as to a collateral matter or gives up a doubtful claim which is not a subject-matter of the suit, there is a presumption that the counsel acts under instructions if the admission or the giving up of the doubtful claim is for the benefit of the client.

(5) It is a question of fact in each case whether the counsel acts under instructions when he compromises or refers to arbitration matters not involved in the suit and the Court on a consideration of the probabilities and the circumstances of the case can find that the counsel acted on instructions even though there is no direct evidence on the point.

(6)A counsel has no power to make an admission in, or compromise or refer to arbitration, a suit if he is instructed not to do so, without express authority from his client.

24. The plaintiffs were anxious to have the mortgage deeds in order to enforce the right under them without delay as the fall in the price of rubber made the securities doubtful and they probably acted upon the principle of the apothegm "a bird in the hand is worth two in the bush" and consented to ratify the release deed and thereby secure the mortgage deeds without delay rather than pursue a doubtful remedy against the defendant. All the circumstances of the case and the evidence on record, the non-examination by the plaintiffs of their agent, <NAME>, who instructed the counsel in the proceedings before <ORG>, the absence of any statement in the 2nd plaintiff's deposition that he or his brother, the 1st plaintiff, did not empower <NAME> to make the statement as to ratification contained in the judgment of <ORG>, the urgency with which the mortgage deeds were required by the plaintiffs and the speedy manner in which the suit was decreed in plaintiffs' favour owing to the defendant's consent to accept service and remain ex parte and the readiness with which the defendant executed the transfer deed within a fortnight of the approval of the draft judgment by his solicitors lead to the irresistible conclusion that the plaintiffs' counsel was specially authorised to make the statement that the plaintiffs acknowledged that the said release was and is in full force and of full effect. Even if the counsel was not specially instructed, to make the statement, we hold that the circumstances of the case and the evidence on record fully justify the conclusion that he acted within his authority in making the above statement. A decree has been passed embodying the statement by <ORG> and in pursuance of that decree the defendant signed the transfer deeds. But for the statement the plaintiffs would not have got speedily, and in the manner they got, what they wanted. We have therefore no hesitation in holding that the plaintiffs by their counsel ratified the arrangement evidenced by <ORG> and they cannot now sue to set it aside.

25. In the result, the appeal is allowed and the plaintiffs' suit dismissed. But considering the conduct of the defendant we think he ought not to get his costs. We therefore direct that each party do bear his costs throughout.

Devadoss, J.

26. I agree and have nothing useful to add.