PETITIONER: MUNICIPAL CORPORATION OF DELHI Vs. RESPONDENT: RAM KISHAN ROHTAGI AND OTHERS DATE OF JUDGMENT01/12/1982 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA VENKATARAMIAH, E.S. (J) CITATION: 1983 AIR 67 1983 SCR (1) 884 1983 SCC (1) 1 1982 SCALE (2)1124 CITATOR INFO : RF 1983 SC 158 (1) D 1983 SC 288 (3) R 1983 SC 595 (13) RF 1986 SC 833 (46) R 1989 SC 1 (6) R 1992 SC1168 (9) ACT: Code of Criminal Procedure, 1973-ss. 4827 397(2) and 319 - Allegations in complaint not constituting offence against accused-Exercise of <ORG> inherent power under s. 482 to quash interlocutory order summoning accused not affected by s. 397(2)-Court has power under s. 319 to proceed against such accused on production of additional evidence. HEADNOTE: A Food Inspector of <ORG> visited tho premises of a shopkeeper and purchased a sample of toffees which, when analysed by Public Analyst, was found not to conform to the prescribed standards. In clause No. S of the complaint filed before the Magistrate it was stated: "That the accused No. 3 is tho Manager of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of sampling." Accused No. 2 was the Company which manufactured the toffees, accused No. 3 was its Manager and accused Nos. 4 to 7 were its Directors (respondents l to 5 here). The Magistrate passed an order summoning all the accused for being tried for violation of ss. 7 / 16 of the Prevention of Food Adulteration Act and that order was assailed before <ORG>. It was argued before <ORG> that the complaint did not attribute any criminal responsibility to the Directors inasmuch as there was no clear averment of the fact that the Directors were really incharge of the manufacture of toffees and were responsible for the conduct of business and that the words 'as such' in clause No. S of the complaint indicated that the complainant had merely presumed that the Directors of the Company must be guilty because they were holding a particular office. <ORG> accepted the argument and quashed the proceedings against the Directors as well as the Manager of the Company. In appeal, it was contended on behalf. Of the appellant that on the allegations made in the complaint, a clear case had been made out against all the respondents and <ORG> ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence. Counsel for respondents contended that even taking the allegations of the complaint ex facie no case for trial had been made out. 885 Upholding the order of <ORG> in respect of quashing of proceedings against the Directors and allowing the appeal in respect of quashing of proceedings against the Manager, ^ HELD: Where the allegations set out in the complaint do not constitute any offence it is competent to <ORG> exercising its inherent jurisdiction under 8. 482 of the Code of Criminal Procedure, 1973 to quash the order passed by the Magistrate taking cognizance of the offence. It is true that s. 397(2) bars the jurisdiction of the court in respect of interlocutory orders. But s. 482 confers a separate and independent power on <ORG> alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the court has been seriously abused. It is not merely a rovisional power meant to be exercised against the orders passed by subordinate courts. Nothing in s. 397(2) limits or affects the inherent power under s. 482 . The scope, ambit and range of the power under s. 482 are quite different from those of the power conferred under s. 397 . It may be that in some cases there may be overlapping but such cases would be few and far between. It is well settled that the inherent powers under s. 482 can be exercised only when no other remedy is available to the litigant and Dot where a specific remedy is provided by the statute. It is clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. The test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then <ORG> would be justified in quashing the proceedings in the exercise of its powers under s. 482. [889 A-B, G; 887 C; 888 A-B; 887 G-H; 888 C-D; 890 <CITATION>  1 S.C.R. 749; Ra; <CITATION> .,  1 S.C.C. 43; Smt. Nagavva v. <NAME> and <ORG>.,  Suppl. S.C.R. 123; and <CITATION> .  2 S.C.R. 357, referred to. In the instant case, so far as the Manager of the Company was concerned, from the very nature of his duties it could be safely inferred that he would be vicariously liable for the offence as he must have been in the knowledge of the manufacture and sale of the disputed sample. So far as the Directors of the Company were concerned, there was nothing to show, apart from the presumption drawn by the complainant, that there was any act committed by them from which a reasonable inference could be drawn to the effect that they were also vicariously liable and <ORG> was right in holding that no case had been made out ex facie on the allegations made in the complaint. {891 D; 891 A; 891 E-F] 2. The mere fact that the proceedings have been quashed against the Directors will not prevent the court from exercising its discretion under s. 319 of the Code if it is fully satisfied that a case for taking cognizance against them is made out on the additional evidence led before it. Section 319 gives ample powers to any court to take cognizance and add any person not being an accused before it and try him along with the other accused. However, this being an extraordinary power conferred on the court, it should be used very sparingly and only if compelling reasons exist for doing so. [893 G; 893 G; 893 F] <NAME> and Anr. v. State of Punjab and Anr.  2 S.C.R. 306, referred to. 886 JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 701 of 1980.

Appeal by special leave from the Judgment and order dated the 5th March, 1980 of <ORG> in Criminal Revision No. 335 of 1974.

<NAME> for the Appellants.

<NAME>, Mrs. <NAME> and <NAME> for the Respondents.

<NAME>, <NAME>, <NAME> and <NAME> for Respondents.

The Judgment of the Court was delivered by <NAME>, 1. This appeal by special leave is directed against a judgment dated March 5, 1980 of <ORG> quashing the proceedings taken against respondents Nos. 1 to S and arises in the following circumstances.

On March 25, 1974, one <NAME>, Food Inspector, <ORG> visited premises No. 5171, Basant Road, Delhi where <NAME> had kept for sale 'Morton Toffees'. The said Inspector after purchasing the sample of the article sent it to the Public Analyst who opined that the said sample did not conform to the standards prescribed for toffees. The toffees were manufactured by <ORG> Upper Ganges Sugar Mills. Respondent No. 1 (<NAME>) was the Manager of the company and Respondent Nos. 2 to 5 were the Directors of the Company, including the company also.

A complaint was filed before the Metropolitan Magistrate who summoned all the respondents for being tried for violating the provisions of the Prevention of Food Adulteration Act (hereinafter referred to as the 'Acts). The said complaint was filed by the Assistant Municipal Prosecutor in the court of Metropolitan Magistrate, Delhi against the accused for having committed offences under sections 7 / 16 of the Act.

The only point canvassed before us was that on the allegations made in the complaint, a clear case was made out against all the respondents and <ORG> ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence. Before going through the relevant part of the complaint, it mag be necessary to say a few words about the law on the subject.

After the coming into force of the Code of Criminal Procedure, B 1973 (hereinafter referred to as the 'present Code'), there was a serious divergence of judicial opinion on the question as to whether where a power is exercised under section 397 of the present Code, <ORG> could exercise those very powers under section 482 of the present Code. It is true that s. 397 (2) clearly bars the jurisdiction of the <ORG> in respect of interlocutory orders passed in appeal, enquiry or other proceedings. The matter is, however, no longer res integra as the entire controversy has been set at rest by a decision of this <ORG> in <CITATION> (1) where this <ORG> pointed out that s. 482 of the present Code had a different parameter and was a provision independent of s. 397(2) . This <ORG> further held that while s. 397(2) applied to the exercise y of revisional powers of <ORG>, section 482 regulated the . inherent powers of the court to pass orders necessary in order to prevent the abuse of the process of the court. In this connection, <NAME>, J. speaking for the <ORG> observed as follows:-

"On a plain reading of section 482 , however, it would follow that nothing in the Code, which would include sub section (2) of section 397 also, "shall be deemed to limit or affect the inherent powers of <ORG>". But, if we were to say that the said bar is not to operate in the exercise of the inherent power at all, it will be setting at naught one of the limitations imposed upon the exercise of the revisional powers .. But in case the impugned order clearly brings about a situation which is an abuse of the process of the court or for the purpose of securing the ends of justice interference by <ORG> is absolutely necessary, then nothing contained in section 397(2) can limit or affect the exercise of the inherent power by <ORG>. But such cases would be few and far between. <ORG> must exercise the inherent power very sparingly."

It may be noticed that s. 482 of the present Code is the ad verbatim copy of s. 561A of the old Code. This provision confers a separate and independent power on <ORG> alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the <ORG> has been seriously abused. It is not merely a revisional power meant to be exercised against the orders passed by subordinate courts. It was under this section that in the old Code, <ORG>s used to quash the proceedings or expunge uncalled for remarks against witnesses or other persons or subordinate courts. Thus, the scope, ambit and range of s. 561A (which is now s. 482 ) is quite different from the powers conferred by the present Code under the provisions of s. 397 . It may be that in some cases there may be overlapping but such cases would be few and far between. It is well settled that the inherent powers under s. 482 of the present Code can be exercised only when no other remedy is available to the litigant and not where a specific remedy is provided by the statute. Further, the power being an extraordinary one, it has to be exercised sparingly. If these considerations are kept in mind, there will be no inconsistency between sections 482 and 397(2) of the present Code.

The limits of the power under s. 482 were clearly defined by this Court in <CITATION> .(l) where <NAME> Observed as follows:-

"Even so, a general principle pervades this branch of law when a specific provision is made: easy resort to inherent power is not right except under compelling circumstances. Not that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code."

Another important consideration which is to be kept in mind is as to when <ORG> acting under the provisions of s. 482 should exercise the inherent power in so far as quashing of criminal q proceedings are concerned. This matter was gone into in greater detail in <CITATION> .(2) where the scope of ss. 202 and 204 of the present Code was consider ed and while laying down the guidelines and the grounds on which proceedings could be quashed this Court observed as follows:

"Thus, it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside:

(1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused;

(2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused;

(3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like.

The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where <ORG> can quash Proceedings."

Same view was taken in a later decision of this Court in <CITATION> (l) where <NAME>, J. speaking for the Court observed as follows:-

"It is, now settled law that where the allegations set out in the complaint or the charge-sheet do not constitute any offence, it is competent to <ORG> exercising its inherent jurisdiction under section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence."

It is, therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting any thing, if no offence is made out then <ORG> will be justified in quashing the proceedings in exercise of its powers under s. 482 of the present Code.

In the instant cases the argument of the appellant before us is that taking the complaint as a whole, it cannot be said that no offence is made out or that the facts mentioned in the complaint do not constitute any offence against the respondents or some of them. On the other hand, the counsel for the respondents submitted that even taking the allegations of the complaint ex facie no case for trial has been made out at all.

Before going to the complaint, we might state that it is common ground that the complaint clearly contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 (<NAME>) and that the sample taken by him, which was sent to the Public Analyst, was manufactured by <ORG>, Daryagang, Delhi having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated. There is no dispute regarding these facts. The only point on which the contro- versy centres is as to whether or not on the allegations, the Manager as also the other respondents I to 5 committed any offence. The main clause of the complaint which is the subject matter of the dispute is clause No. S which may be extracted thus:

"5. That the accused No. 3 is the Manager, of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of a sampling."

According to this clause, accused No. 3 (<NAME>) who is respondent No. I in this appeal and accused Nos. 4-7 who are respondent Nos. 2 to 4, were the Directors of the company, respondent No. 5. So far as the Manager, respondent No. 1, is concerned it was not and could not be reasonably argued that no case is made out against him because from the very nature of his duties, it is manifest that he must be in the knowledge about the affairs of the sale and manufacture of the disputed sample. It was, however, contended that there is no allegation whatsoever against the Directors, respondent Nos. 2 to 4.

Reliance has been placed on the words 'as such' in order to argue that because the complaint does not attribute any criminal responsibility to accused Nos. 4 to 7 except that they were incharge of and responsible for the conduct of the business of the company. It is true that there is no clear-averment of the fact that the Directors were really incharge of the manufacture and responsible for the conduct of business but the words 'as such' indicate that the complainant has merely presumed that the Directors of the company must be guilty because they are holding a particular office. This argument found favour with <ORG> which quashed the proceedings against the Directors as also against the Manager, respondent No. 1.

So far as the Manager is concerned, we are satisfied that from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act. So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable. In these circumstances, therefore, we find ourselves in complete agreement with the argument of <ORG> that no case against the Directors (accused Nos 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed.

We, however, do not agree that even accused No. 3, respondent No. 1, who is Manager of the Company and therefore directly incharge of its affairs, could fall in the same category as the Directors. Hence, we would set aside that part of the judgment of <ORG> which quashes the proceedings against the Manager, respondent No. I (<NAME>).

Although we uphold the order of <ORG> we would like to state that there are ample provisions in the Code of Criminal Procedure, 1973 in which the Court can take cognizance against persons who have not been made accused and try them in the same manner along with the other accused. In the old Code, s. 351 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused. 1 he Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and s. 319 of the present Code gave full effect to the recommendation of <ORG> by removing the lacuna which was found to exist in s. 351 of the old Code. Section 319 as incorporated in the present Code may be extracted thus:-

"319. Power to proceed against other persons appearing to be guilty of offence.

(1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.

(2) Where such person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid.

(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the enquiry into, or trial of, the offence which he appears to have committed.

(4) Where the Court proceeds against any person under sub-section (1) then-

(a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re-heard;

(b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the <ORG> took cognizance of the offence upon which the inquiry or trial was commenced."

This provision gives ample powers to any court to take cognizance and add any person not being an accused before it and try him alongwith the other accused. This provision was also the subject matter of a decision by this <ORG> in <CITATION> .(1) where <NAME>, J., speaking for the <ORG> observed thus:-

"A plain reading of section 319 (1), which occurs in chapter XXIV dealing with general provisions as to inquiries and trials, clearly shows that it applies to all the Courts including <ORG> and as such <ORG> will have the power to add any person, not being the accused before it, but against whom there appears during trial sufficient evidence indicating his involvement in the offence, as an accused and direct him to be tried along with the other accused."

In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the <ORG> can take cognizance against them and try them along with the other accused. But, we would hasten to add that this is really an extraordinary power which is conferred on the <ORG> and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken. More than this we would not like to say anything further at this stage. We leave the entire matter to the discretion of the court concerned so that it may act according to law. We would, however, make it plain that the mere fact that the proceedings have been quashed against respondent Nos. 2 to S will not prevent the court from exercising its discretion if it is fully satisfied that a case for taking cognizance against them has been made out on the additional evidence led before it.

For these reasons, therefore, we allow this appeal only to the extent that the order of <ORG> quashing the proceedings against the Manager (<NAME>), respondent No. 1, is hereby set aside and that of the Metropolitan Magistrate is restored. As regards the other respondents (Directors) the order of <ORG> stands and the appeal in respect of these respondents only will stand dismissed. An attested copy of this judgment be placed on the file of criminal appeal No. 749 of 1980.

H.L.C. Appeal partly allowed.


JUDGMENT <NAME> - <NAME> and <NAME> were partners in the firm of <NAME> and Co., Panruti. <NAME> submitted his returns for the assessment years 1947-48 to 1954-55 and was duly assessed. Likewise, <NAME> made his returns for the assessment years 1948-49 to è1954-55. The assessment of the incomes of these two persons during the relevant assessment years covered their partnership income in the above-said firm. The assessments were made in the status of resident and ordinarily resident.

In the course of the assessment proceedings for the assessment year 1956-57, the Income-tax Officer became aware that these assessees were non-residents and that they had income outside the taxable territories which if taken into account under the relevant provisions of the Indian Income-tax Act , would attract tax at a rate higher than that at which they had been assessed. Accordingly, he reopened the assessments of these two assessees for the said years and issued notices to them under section 34 of the Act. In the returns filed by the assessees in response to these notices, they declared their status as non-residents and furnished their incomes as they appeared in the original returns made by them. They objected to the proceedings under section 34 of the Act as illegal. The Income-tax Officer, however, assessed them to tax at the rates applicable to non-residents but on the income that arose or accrued in the taxable territories. Against these assessments, appeals were taken to the Appellate Assistant Commissioner, it being contended that section 34 of the Act did not authorise the assessment at the maximum rate, that the notices were invalid inasmuch as they did not contain the necessary particulars required to be stated therein and further that the provision of the Indian Income-tax Act imposing the liability to tax on a non-resident at the maximum rate was unconstitutional as offending article 14 of the Constitution of India. These contentions were overruled. One other contention that was raised was that in the case of <NAME>, there had been an earlier proceeding under section 34 of the Act in respect of the assessment years 1949-50 to 1951-52 and that the statute did not authorise a second proceeding under section 34 . This contention was also rejected.

A further appeal to the <ORG> also failed, the assessees being unable to convince the <ORG> of the sustainability of any of these above contentions.

Under section 66(1) of the Act, the assessees moved the <ORG> to refer certain questions of law for the consideration of this court, and the questions of law so referred ar :

"(1) Whether the provision of the Income-tax Act for the levy of maximum rate is not a denial of equality before the law within the meaning of article 14 of the Constitution of India and void under article 13 and the present assessment as a non-resident at the maximum rate is not, therefore, void?

(2) Whether the aforesaid reassessments under section 34 for all the assessment years 1947-48 to 1954-55 in the case of <NAME> and assessment years 1948-49 to 1954-55 in the case <NAME> are valid?"

We shall deal with the second question first. One of the grounds urged on behalf of the assessees is that the notice did not comply with the requirements of the section and furnished no information to the assessee of the particular reasons which led to the reopening of the assessments. It is claimed that the assessees were not put on notice on the basis of the reopening and that, ètherefore, the notice is bad in law and the proceedings stand vitiated. What is contended in this regard is that in the copy of the notice issued by the Income-tax Officer, the Income-tax Officer stated that he had reason to believe that the assessees income assessable to income-tax for the relevant assessment year had (a) escaped assessment, (b) been under-assessed, (c) been assessed at too low a rate, (d) been subject to excessive relief and (e) been the subject of computation of the excessive loss or depreciation allowance. He continued in the notice, "I, therefore, propose to reassess the said income less depreciation that has (a) escaped assessment; (b)..... etc.," and called upon the assessee to "deliver to me not later than or within 35 days of the receipt of the notice a return in the attached form of your total income and total world income assessable for the assessment years 1948-49." He also indicated that the notice was issued after "obtaining the necessary satisfaction" of the Commissioner of Income-tax, Madras. It will be noticed that all the clauses (a) to (e) referred to above cover the several aspects dealt with in section 34 of the Act by reason of which the Income-tax Officer is enabled to take proceedings under the provision for reassessing the income and the tax. In the present case, however, the contention of the department was that since the assessee is a non-resident having income outside the taxable territories also, he is liable to be taxed at the maximum rate or at a rate dependent upon his total world income under section 17 of the Act. If the assessee fails to furnish his total world income to enable the tax to be levied on the basis of a rate dependent upon such total world income, the Income-tax Officer is authorised to levy the tax at the maximum rate as provided by section 17 of the Indian Income-tax Act. Since the assessees had failed to disclose their status as non-residents, but had in their original returns indicated that they were residents of Panruti and failed also to furnish particulars of their incomes derived outside the taxable territories the tax had been levied at a rate relevant to the income disclosed in those returns, income that accrued or arose within the taxable territories only. Obviously, the rate was too low a rate within the meaning of section 34 of the Act and it was on this basis that the proceedings were launched by the Income-tax Officer. Mr. <NAME> for the assessee contends that the Income-tax Officer was bound to disclose in the notice issued by him the particular reason for the reopening of the assessments and whether the case requiring action fell with one or the other of the heads referred to. In the notice, however, beyond indicating that it was a notice under section 34 of the Indian Income-tax Act, nothing express was stated which would inform the assessees of the case that he had to meet. It is contended that section 34 requires that that should be done, and if that is not done, the notice is not a proper notice and the èproceedings stand wholly invalidated.

A perusal of the section, however, does not support this contention. The relevant requirements in so far as they are material to the present case are that the Income-tax Officer should have reason to believe that by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year, the income, profits or gains chargeable to income-tax had escaped assessment for that year, or been under-assessed, or been assessed at too low a rate. If he has such reason, he is required to serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 . It is clear, therefore, that when the Income-tax Officer honestly believes that the income, profits or gains have been assessed at too low a rate by reason of the failure of the assessee to disclose all material facts necessary for his assessment, the only notice that he is called upon to issue to the assessee is a notice of the description referred to in section 22 , sub-section (2). It does not even appear from the section that the Income-tax Officer should expressly state it to be a notice under section 34 of the Act. If it is a case where the assessee had already been assessed for a particular year, a subsequent notice issued calling upon him to comply with the requirements of section 22 , sub-section (2), would clearly indicate to the assessee that it was a case of reopening of the assessment. Even otherwise, if the assessee had not submitted his return and the assessment year had elapsed, even a notice issued for the first time by the Income-tax Officer under section 22(2) is one which comes within the scope of section 34 , for it would be a case where there had been a failure of the assessee to make a return of his income, and the income, profits or gains chargeable to income-tax had escaped assessment for that year. What all the section, therefore, requires is that the notice should indicate that it is a proceeding under section 34 of the Act, which to the knowledge of the assessee it would be, had there been an earlier assessment for that assessment year. It may also be specifically noticed that the requirements of a notice purporting to be the precursor of the reopening of the assessment is not in any way different from the requirements of a notice required to be issued under section 22(2) of the Act. In this provision, the notices which the Income-tax Officer is called upon to issue is to demand "a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be provided in the notice), his total income and total world income during the previous year." It follows, therefore, that a notice leading to the reopening of the assessment under section 34 is not any special kind of notice which requires any information to be furnished to the assessee as to the reasons for reopening. It may also be noticed that neither the Act nor the Rules provide for any special form of notice under section 34 . That is as it should be, èbecause, the section itself indicates the kind of notice that has to be issued to the assessee and that, as we have seen, is nothing more than a notice conformably to the requirements of section 22 , sub-section (2).

We are not satisfied also that beyond the fact that the Income-tax Officer purports to exercise his jurisdiction under section 34 of the Act and to reopen the assessment, it is necessary for the Income-tax Officer to inform the assessee of the particular reasons leading to the reopening of the assessment. It would suffice in our opinion if the notice merely stated that the Income-tax Officer believed that the case of the assessee required reopening of the assessment under section 34 of the Act and to indicate that he had complied with the requirements of the provision by obtaining the prior approval of the Commissioner of Income-tax and in terms of the section called upon the assessee to submit a return containing such particulars as section 22 , sub-section (2) requires. The conditions for reopening of the assessment are not the same as the contents of the notice to be issued to the assessee. The conditions requisite are merely that the Income-tax Officer should have reason to believe that one or the other of the grounds necessitating the revision of the assessment existed in the case. Which precise grounds operated on his mind and what reasons impelled him to come to that conclusion are not required to be intimated to the assessee. The reason is obvious. It may be that when the Income-tax Officer commences the proceedings under section 34 , he might have had reason to believe that a particular item of income had escaped to be included in the assessable income of the assessee. But having started the proceeding under section 34 , the Income-tax Officer is not, under the terms of the section, as it stands, confined only to that particular item. It may transpire in the course of the proceedings that excessive relief had been given to the assessee and it would be open to the Income-tax Officer to deal with that aspect of the matter also. The intendment behind the section is that the whole of the assessment is thrown open and even if the Income-tax Officers notice contained only one particular head for reopening the assessment, he is not incompetent to deal with cases of under-assessment or the like which may be disclosed as a result of such reopening.

Mr. <NAME> referred to <CITATION> . We are unable to gather anything from this decision which supports the contention at present raised with regard to the requirements of the notice. That was a case where the Income-tax Officer issued a notice under section 34 of the Act (as it stood then) for the purpose of raising the rate of tax on the grounds that the rate originally fixed was too low. The assessees demanded that the Income-tax Officer should reassess his income, that is to say, determine afresh the correct taxable income of the assessee. The argument was that the Income-tax Officer was bound to begin proceedings again as regards assessment and proceed as if there was an enquiry in respect not only of the portion which had èescaped assessment but of all other items also. That contention was repelled. But it may be noticed that even apart from not answering the particular contention now advanced, this decision related to the interpretation of section 34 as it stood prior to the amendment in 1939, when the section was far differently worded.

<CITATION> a similar question arose. The learned judges observe :

"The scheme of section 34 of the Act is that if the conditions of the main section are satisfied, a notice has to be issued to the assessee containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 . But before issuing the notice, the proviso requires that the officer should record his reasons for initiating action under section 34 and obtain the sanction of the Commissioner who must be satisfied that the action under section 34 was justified. There is no requirement in any of the provisions of the Act or any section laying down as a condition for initiation of the proceedings that the reasons which induced the Commissioner to accord sanction to proceed under section 34 must also be communicated to the assessee...... It is not intended by the proviso that the reasons should be communicated to the assessee."

The learned judges also observed that it was unnecessary for the notice to state whether the Income-tax Officer was limiting the assessment for the period of eight years or four years, that is to say, whether it was a case which the Income-tax Officer thought came within the scope of 34(1)(a) or 34(1)(b).

<CITATION> Court pointed out that section 34 is only a section authorising the issue of a notice, that is, a notice under section 22(2) , and that it is not necessary or imperative that a notice under section 34 should specify under which of the two clauses of the section, viz., clause (a) or clause (b), the notice was issued. The learned judges observed that "all that the section itself says is that the Income-tax Officer may serve on the assessee..... a notice under sub-section (2) of section 22 . The main notice to be issued is, therefore, a notice under section 22(2) of the Act and section 34 only authorises the issue of such a notice, in spite of there having been a previous assessment or inspite of the time for the issue of a notice in the normal way having expired. It is true that when answering a notice issued under the section, the assessee may take a plea of limitation, and for purposes of such a plea, it may be necessary for him to know whether his case is being treated as one under clause (a) or as one under clause (b). It appears to me, however, that whether the case is treated as coming under one clause or the other, will transpire in the course of the assessment proceedings, and it is neither required of the Income-tax Officer not is it necessary, that he should specify the clause in the notice itself. Even when a clause is specified, it is conceivably that when making the actual assessment, the Income-tax Officer may come to hold that it comes under the other clause........"

It seems to us that these decisions completely answer the èabove contention.

It has been mentioned earlier that in so far as <NAME> is concerned, there had been certain earlier proceedings under section 34 in connection with the assessment years 1949-50 to 1951-52. It is argued that there cannot be a second proceeding under section 34 . The argument is put somewhat in this manner. Section 23 authorises the making of an order of assessment in the normal course. The power to make such an assessment exhausts itself when once it is exercised. So also, it is claimed, the power to reopen an assessment should be deemed to be exhausted when resort to that provision has been had once. We are really unable to appreciate this argument. Section 34 was intended to deal with cases of escapement of income tax, broadly speaking. It may happen that the Income-tax Officer comes to know that a particular item of income had escaped assessment and take steps to bring that income to tax by way of proceedings under section 34 . If the underlying intendment of the section is to deal with cases of escaped income, we fail to see why the Income-tax Officer should be prevented from having resort to that provision when on a subsequent occasion he becomes aware that another item of income had also escaped assessment. The section could be resorted to only within the period of limitation prescribed and it can be invoked in our opinion on any number of occasions which justifies resort to it. The only limit upon the exercise of that power is that the proceeding should be within the period of limitation prescribed. <CITATION> , the court had before it a case where section 34 had been invoked on a second occasion in the case of the same assessee. The point, however, was not decided therein whether the reopening of an assessment could be effected on more than one occasion. The question came to be considered specifically by a single judge of <ORG> in <CITATION> . The learned judge observed that within the time limit specified in section 34 of the Indian Income-tax Act, there is no restriction as to the number of proceedings that can be taken to reopen the assessment by way of assessment or reassessment, computation or re-computation. We agree with this view of the learned judge. The same view was taken by <ORG> in <CITATION> . The question was very shortly disposed of with the observatio :

"A simple reading of the sub-section leaves no doubt that it places no limit to the number of notices that may be issued, so long as they are within the time limit specified in that section. There can be no restriction as to the number of proceedings that can be taken to reopen the assessment where it is found that any income of the assessee has for one reason or another escaped assessment."

Whatever arguments might be available to the assessee to claim that section 34 authorises only the reopening of an assessment and not the reopening of a reassessment stand obviated by the decision of <ORG> in <CITATION> , where their Lordships held that the word "assessment" is capable of bearing only a comprehensive meaning and would include reassessment. It follows that solely for the reason that in respect of the two assessment years there had been a reassessment of the assessees income by proceedings under section 34 does not bar the exercise of the power under section 34 of the Act in reopening such a reassessment.

On a question of fact, we may point out that the assessee was fully aware of the reason for the reopening of the assessment in this case. In the assessment order for the assessment year 1948-49, the Income-tax Officer states that when the assessee submitted a return in response to the notice under section 34 , he correctly declared his degree of residence as non-resident. While in the earlier returns filed he had not completed that part of the prescribed form showing the degree of residence, but by giving his address as <NAME> had left it to be inferred that he claimed to be a resident, in the subsequent return, he gave his degree of residence as non-resident. In the assessment order relating to 1947-48 also, the assessee filed a letter dated 15th November, 1956, in which he admitted that he was a permanent resident of Karaikal, that is to say, a non-resident, but at the same time questioned the validity of the proceedings as illegal and barred by limitation. There is no doubt, therefore, that the assessee was fully aware of the reasons that led to the reopening of the assessment.

We have next to consider whether the present case would fall within sub-clause (a) or (b) of section 34(1) . That would lead us to a consideration of the question whether the disclosure of the status of the assessee as a resident or non-resident is not a material fact necessary for his assessment. The law broadly stated imposes the liability to tax on the income of any assessee at a rate dependent on the total world income. In the particular case of a non-resident, who has income accruing or arising both within and without the taxable territories, the income arising without the taxable territories is brought to tax, but at a rate dependent upon his total world income. Leaving aside the question of the validity of section 17 of the Act, as the law stands, the fact whether a person is a resident or a non-resident is undoubtedly a material fact necessary for making a proper assessment upon him. The incidence of tax would vary and it is incumbent upon the assessee to make a disclosure of the particular fact, viz., that he is a resident or a non-resident. It is undoubtedly a material fact necessary for the assessment and it is indisputable that in the present case the assessee had failed to disclose this material fact in his return for the relevant assessment years. This is clearly a case that falls within the scope of section 34(1)(a) . It is argued by Mr. <NAME> in this regard that there has been no failure on the part of the assessee to disclose this material fact and that at the best it can only be regarded that in consequence of information which the Income-tax Officer came to possess, the assessment had èbeen made at too low a rate. It is alleged that the assessees might have thought that they fell into all the categories of resident, non-resident or resident but not ordinarily resident. This argument is wholly untenable. The factum of residence is a fact which is exclusively within the knowledge of the assessee and so long as the law differentiates the manner in which persons possessing the character of resident or non-resident are assessed, the precise qualification with regard to the residence is a matter which has to be disclosed by the assessee. There has undoubtedly been a failure on the part of the assessee to disclose the material fact. We must repel the argument that the case is one which comes under sub-clause (b).

The result is that the second question is answered in the affirmative and against the assessee.

It is next contended that the provision in the Income-tax Act levying tax at the maximum rate on a non-resident is violative of article 14 of the Constitution. We need not embark upon a discussion of the case law upon the scope of article 14. Suffice it to say courts have uniformly held that discrimination cannot be lightly inferred and that a classification of the subject-matter for legislation is permissible under the Constitution so long as that classification is based upon some real an substantial distinction and has reasonable relation to the object of the legislation. Having thus broadly stated the proposition, it should necessary follow that the classification of persons for the purpose of levying tax on their incomes on the basis of their status as residents and non-residents it undoubtedly a real one. But what is contended is that for the purpose of levy of tax, such classification and the imposition of a differential levy has no relation to the object of the taxing enactment. It is urged also that the legislature is not competent to tax the other income, that is to say, income which does not arise or accrue within the taxable territories in the case of a non-resident, and that being so, it must equally follow that there can be no lawful authority for the levy of tax on a non-resident at a higher rate dependent upon the extra-territorial income. In so far as a non-resident as a person who earns income within the taxable territories is concerned, undoubtedly a sufficient territorial connection is established between the person sought to be taxed and the country seeking to tax him. That would be sufficient to validate the levy. But it must be emphasised that such territorial connection must be real and the liability sought to be imposed must have a reasonable relation to that connection. It is also undoubted that a taxing enactment is entitled to levy differential rates of tax on different classes of income and to impose also different rates of tax. In so far as income derived from the taxable territory is concerned, it is competent to the Indian legislature to fix the rate of tax upon such income on the basis of any reasonable classification. We are unable to see why the basis of residence is not a valid criterion to be adopted in such a case. If, therefore, the classification as a resident and ènon-resident would be a proper classification for the purpose of levy of tax, it should equally be open to the legislature to vary the incidence of tax in so far as the two classes are concerned. In fact, the resident is liable to be taxed on his total world income, while a non-resident is liable to be taxed only on the territorial income but at a rate dependent on the total world income. We are not concerned with the question whether tax can be imposed on the non-resident in the same manner as the resident on the total world income. We are only dealing with the question whether a rate of tax dependent upon the classification of the assessee as resident or non-resident has a reasonable relation to the object of the legislation. We are unable to see any constitutional disability in this regard and we cannot agree that article 14 is in any way violated. The question is answered against the assessee.

The assessee will pay the costs of the department. Counsels fee Rs. 250.

Question answered against the assessee.


JUDGMENT <NAME>, J.

1. <NAME>, a girl, aged 14 years student on 9th class, died in an accident which took place on 23.1.1997 as she was run over by a Punjab Roadways bus bearing registration No, PB-12-B- 8710. <ORG>, Jalandhar vide its judgment dated 16.7.1999 awarded a total compensation of Rs. 50,000/- alongwith 12% interest in favour of the claimant.

2. Aggrieved against the award of <ORG>, the present appeal has been filed. During the pendency of the appeal, the matter was referred to <ORG>, which, vide order dated 9.12.2003 allowed a compensation of Rs. 1 lac over and above the amount awarded by the <ORG>. As <ORG> did not give any concurrence and acceptance to the award passed by <ORG>, therefore, the claimant-appellant has filed the present application for disposing of the appeal on merits. Learned Counsel for the appellant has contended that the deceased <NAME> was 14 years old at the time of the accident and in terms of the judgment in <CITATION> . 2005 A.C.J. 90, for a teenaged child of 13/14 years and a non-earning person, <ORG> has assessed notional income of Rs. 15,000/- per annum and has adopted a multiplier of 15. On this basis, learned Counsel contends that the claimant is entitled to be awarded Rs. 15,000/- with a multiplier of 15 and thus, a total compensation of Rs.2,25,000/- be awarded in favour of the appellant. Learned Counsel for the <ORG>, however, submits that as the interest rates have considerably been reduced by the nationalised banks, therefore, reduced rate of interest be awarded.

3. After going through <NAME> case (supra), it is clear that as the deceased in the present case was only 14 years old, therefore, the earning of a non-earning person is assessed at Rs. 15,000/- per annum and a multiplier of 15 is adopted. Thus, the appellant is entitled to a total compensation of Rs. 2,25,000/- on account of death of <NAME>, The appellant shall also be entitled to interest at the rate of 9% from the date of filing of the claim petition till realisation.

4. The appeal is allowed. The respondent State is directed to pay the enhanced compensation to the appellant within a period of 3 months from today.


PETITIONER: <NAME> Vs. RESPONDENT: COMMISSIONER OF INCOME-TAX, BOMBAY. DATE OF JUDGMENT: 28/10/1954 BENCH: <NAME>, MEHAR CHAND (CJ) BENCH: <NAME>, MEHAR CHAND (CJ) DAS, <NAME>, <NAME>, <NAME>, <NAME> CITATION: 1955 AIR 740 1955 SCR (1) 876 CITATOR INFO : RF 1961 SC1019 (7) R 1963 SC1185 (9) R 1965 SC1836 (11) RF 1967 SC 81 (11) RF 1970 SC1578 (9) F 1976 SC1790 (14) F 1988 SC1708 (13) ACT: Indian Income-tax Act (XI of 1922), ss. 2(1) , 4(3)(viii) , 69 and rule 24-Agricultural Income, Meaning of-Growing and manufacturing tea company's dividend, Nature of- -Dividend how arises -Distinction between shareholder and partner--Difference between company and firm-Decided cases on English Tax Law, Use of. HEADNOTE: Agricultural income as defined in a. 2(1) of the Indian Income. tat Act, 1922, signifies income proximately derived from direct association with land by a person who actually tills the land or 877 gets it cultivated by others. Agricultural income does not mean income which can be ultimately or indirectly traced to have connection with agricultural operations. Even though a tea company growing and manufacturing top gets an exemption of 60 per cent. of the profits as agricultural income in accordance with rule 24 framed under s. 59 of the Act, it must be held that the dividend of such company is not derived by the shareholder owing to his direct connection with the land in which be% is grown and such dividend is not agricultural income within the meaning of s. 2(1) of the Act and hence is not exempted from income-tax under s. 4(3)(viii) of the Act. The dividend of a shareholder is the outcome of his right to participate in the profits of the company arising out of the contractual relation between the company and the shareholder and this right exists independently of any declaration of the dividend though until such declaration the enjoyment of the profits is postponed. The shareholder by purchase of the share does not acquire any interst in the assets 'of the company till after the company is wound up. The position of a shareholder of a company is altogether different from that of a partner of a firm. A company is a juristic entity distinct from the shareholders but the firm is a collective name or an alias for all the partners. Decisions based on the peculiarities of Income-tax law of England are hardly safe guides for determining the true meaning of the term "agricultural income" Under the Indian Income-tax Act , 1922. <CITATION>  S.C.R. 869) followed. Commissioners of Inland Revenue v. <NAME> (1924) 8 T.C. 704, <NAME>'s <CITATION> .  1 Ch. 279, <CITATION>  16 I.T.R. 325, <CITATION> of lncome-tax, Bombay City  16 I.T.R. 380 and <NAME> <CITATION>  3 I.T.R. 237 referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 104 of 1953. Appeal from the Judgment and Order dated the 28th day of March, 1952, of <ORG> at Bombay in Income-tax Reference No. 39 of 1951 arising out of the Order dated the 23rd day of April, 1951, of <ORG> in Income-tax Appeal No. 5228 of 1950-51.

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

<NAME>, Attorney-General. for India, (<NAME>, with him) for the respondent.

1954. October 28. The Judgment of the Court was delivered by <NAME> appeal raises an interesting point of law under the Indian Income-tax Act .

The question referred by the <ORG> to <ORG> at Bombay was stated thus:

" Whether 60% of the dividend amounting to Rs. 2,750- received by the assessee from the two Tea companies is agricultural income and as such exempt under section 4(3)

(viii) of the Act."

<NAME> and <NAME>, who heard the reference, answered the question in the negative by two separate but concurring judgments dated March 28, 1952. The facts lie within a narrow compass. The appellant, Mrs. <NAME>, was, in the accounting year 1949-50, a shareholder in two Tea:companies, <ORG>, and <ORG>, and received from the aforesaid companies dividends aggregating to Rs. 2,750. The two companies carried on business of growing and manu- facturing tea. By rule 21 of the Indian Income-tax Rules, 1922, made in exercise of the powers conferred by section 59 of the Indian Income-tax Act, it is provided that "income derived from the sale of tea grown and manufactured by the seller in the taxable territories shall be computed as if it were income derived from business and 40% of such income shall be deemed to be income, profits and gains, liable to tax." It is common ground that 40% of the income of the Tea companies was taxed as income from the manufacture and sale of tea and 60% of such income was exempt from tax as agricultural income. According to the appellant, the dividend income received by her in respect of the shares held by her in the said Tea companies is to the extent of 60% agricultural income in her hands and therefore pro tanto exempt from tax while the <ORG> contends that dividend income is not agricultural income and therefore the whole of the income is liable to tax. The Income-tax Officer and on appeal, the Appellate Assistant Commissioner both concurred in holding the whole of the said income to be liable to tax. <ORG> confirmed the view that the dividend income could not be treated as agricultural income in the hands of the shareholder and decided in favour of the <ORG>, but' agreed that its order gave rise to a question of law and formulated the same as set out above and referred it to <ORG>. <ORG> upheld the order of the <ORG> but granted leave to appeal to this Court.

The question, we comprehend, is capable of an easy solution and can best be answered by reference to the material provisions of the Income-tax Act . Under section 2(1) 'agricultural income' means:

(a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land- revenue in the taxable territories or subject to a, local rate assessed and collected by officers of the Government as such;

(b)

(i)..............

(ii).................................

(iii).................................

(c)...................................." Sub-section (15) of section 2 defines " total income" as total amount of income, profits and gains, referred to in sub-section (1) of section 4 computed in the manner laid down in this Act, Section 3 authorises income-tax to be charged upon a person in respect of the total income of the previous year. Section 4 lays down that the total income of any previous year of any person to be charged must include all income, profits and gains, from whatever source derived and defines the scope of its application for purposes of tax. Sub-section (3) of the same section - enacts certain exemptions upon the chargeability of -the income and clause

(iii) includes agricultural income in the category of exemptions. Section 6 mentions the various heads of income, profits and gains, chargeable. to income,-tax including in that category clause (v) 'income from other sources.' It is common ground that dividend falls under this category.

In order, however, that dividend may be held to be Agricultural income it will be incumbent upon the appellant to show that, within the terms of the definition, it is rent or revenue derived from land which is used for agricultural 'purposes. Mr. <NAME>, for the appellant, contends that it is revenue derived from land because 60% of the profits of the company out of which dividends are payable are referable to the pursuit of agricultural operations on the part of the company. It is true that the agricultural process renders 60% of the profits exempt from tax in the hands of the company from land which is used for agricultural purposes but can it be said that when such company decides to distribute its profits to the shareholders and declares the dividends to be allocated to them , such dividends in the hands of the shareholders also partake of the character of revenue derived from land which is -used for agricultural purposes ? Such a position - if accepted would extend the scope of the vital words I revenue derived from land' beyond its legitimate limits. Agricultural income as defined in the Act is obviously intended to refer to the revenue received by direct association with the land which is used for agricultural purposes and not by indirectly extending it to cases where that revenue or part thereof changes hands either by way of distribution of dividends or otherwise. In fact and truth dividend is derived from the investment made in the shares of the company and the foundation of it rests on the contractual relations between the company and the shareholder. Dividend is not derived by a shareholder by his direct relationship with the land. There can be no doubt that the I initial source which has produced the revenue is land used for agricultural purposes but to give to the words 'revenue derived from land the unrestricted meaning, apart from its direct association or relation with the land, would be quite unwarranted. For example, the proposition that a creditor advancing money on interest to an agriculturist and receiving interest out of the produce of the lands in the hands of the agriculturist can claim exemption of tax upon the ground that it is agricultural income within the meaning of section 4 , sub-section (3) (viii), is hardly statable. The policy of the Act as gathered from the various sub-clauses of section 2(1) appears to be to exempt agricultural income from the purview of Income tax Act. The object appears to be not to subject to tax either the actual tiller of the soil or any other person getting land cultivated by others for deriving benefit therefrom, but to say that the benefit intended to be conferred upon this class of persons should extend to those into whosoever hands that revenue falls, however remote the receiver of such revenue may be, is hardly warranted.

It was argued by Mr. <NAME> on the strength of an observation made by Lord <NAME> in <ORG> v. Forrest(1), that an investor buys in the first place a share of the assets of the industrial concern proportionate to the number of shares he has purchased and also buys the right to participate in any profits which the company may make in the future. That a shareholder acquires a right to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires any interest in the assets of the company. The use of the word 'assets' in the passage quoted above cannot be exploited to warrant the inference that a shareholder, on investing money in the purchase of shares, becomes entitled to the assets of the company and has any share in the property of the company. A shareholder has got no interest in the property of the company though he has undoubtedly a right to participate in the profits if and when the company decides to divide them. The interest of a shareholder vis-a-vis the company was explained in the case of <NAME> v. <ORG>). That judgment negatives the position taken up on behalf of the appellant that a shareholder has got a right in the property of the company. It is true that the shareholders of the company have (1) (1924) 8 T.C. 704,710., (2) [1950] S.C.R. 869, 904.

the, sole determining voice in administering the affairs of the company and are entitled, as provided by the Articles of Association to declare that dividends should be distributed out of the profits of the company to the shareholders but the interest of the shareholder either individually or collectively does not amount to more than a right to participate in the profits of the company. The company is a juristic person and is distinct from the shareholders. It is the company which owns the property and not the shareholders. The dividend is a share of the profits declared by the company as liable to be distributed among the shareholders. Reliance is placed on behalf of the appellant on a passage in <ORG> Companies Act , 12th Ed., page 894, where the etymological meaning of dividend is given as dividendum, the total divisible sum but in its ordinary sense it means the sum paid and received as the quotient forming the share of the divisible sum payable to the recipient. This statement does not justify the contention that shareholders are owners of a divisible sum or that they are owners of the property of the company. The proper approach to the solution of the question is to concentrate on the plain words of the definition of agricultural income which connects in no uncertain language revenue with the land from which it directly springs and a stray observation in a case which has no bearing upon the present question does not advance the solution of the question. There is nothing in the Indian law to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company which is a juristic person entirely distinct from the shareholders. The true position of a shareholder is that on buying shares an investor becomes entitled to participate in the profits of the company in which he holds the shares if and when the company declares, subject to the Articles of Association, that the profits or any portion thereof should be distributed by way of dividends among the shareholders. He has undoubtedly a further right to participate in the assets of the company which would be left over after winding up, but not in the assets as a whole as Lord <NAME> puts it.

<ORG> expressed the view that until a dividend is declared there is no -right in a shareholder to participate in the profits and according to them the declaration of dividend by the company is the effective source of the dividend which is subject to tax. This statement of the law we are unable to accept. Indeed the learned Attorney- General conceded that he was not prepared to subscribe to that proposition. The' declaration of -dividend is certainly not the source of the profit. The right to participation in the profits exists independently of any declaration by the company with the only difference that the enjoyment of profits is postponed until dividends are declared.

It was argued that the position of shareholders in a company is analogous to that of partners inter se. - This analogy is wholly inaccurate. Partnership is -merely an association of persons for carrying on the business of partnership and in law the firm name is a compendious method of describing the partners. Such is, however, not the case of a company which stands as a separate juristic entity distinct from the shareholders. In <ORG>, Volume 6 (3rd Ed.), page 234, the law regarding the attributes of shares is thus stated :

" A share is a right to a specified amount of the share capital of a company carrying with it certain rights and liabilities while the company is a going concern and in its winding up. The shares or other interest of any member in a company are personal estate transferable in the manner provided by its articles, and are not of the, nature of real estate. "

In Borland's Trustee v. <ORG>), <NAME> held that "a share in a company cannot properly be likened to a sum of money settled upon and subject to executory limitations to arise in the future ; it is rather to be regarded as the interest of the shareholder in the company, measured, for the purposes of liability and dividend, by a sum of money ..............................." It was suggested that the dividend arises out of the profits accruing from land and is impressed with the same character as the profits (1) L.R. [1901] 1 Ch. 279.

and that it does not change its character merely because of the incident that it reaches the hands of the shareholder. This argument runs counter to. the definition of agricultural income which emphasizes the necessity of the recipient of income having a direct and an immediate rather than an indirect and remote relation with land. To accept this argument will be tantamount to saying that the creditor recovering interest on money debt due from the agriculturist who pays out of the produce of the land is equally entitled to the exemption. In fairness to Mr. <NAME> it must, however, be stated that the contention was not so broadly put but there is no reason why one should stop at a particular stage and not pursue the analogy to its logical limits.

English decisions resting upon the peculiarities of the English Income-tax law can hardly be a safe guide ,in determining upon the language of the Indian Income-tax Act the true meaning of the words 'agricultural income.' A few cases of <ORG> decided with reference to the provisions of the Indian Income-tax Act , however, deserve notice. The first case, - <CITATION> (1), dealt with the question whether interest on arrears of rent payable in respect of land used for agricultural purposes is agricultural income and therefore exempt from income-tax. It was held that it was neither rent nor revenue derived from land within the meaning of section 2(1) of the Income-tax Act. Lord <NAME> who delivered the judgment of <ORG> used the following piquant language in coming to that conclusion : "The word derived' is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of (1)  16 I.T.R. 325.

non-payment. And rent is not land within the meaning of the definition. "

The second case, viz., <CITATION> (1), dealt, with the nature of the commission of a managing agent of the company a part of whose income was agricultural income. The assessee claimed exemption from tax on the ground that his remuneration at 10 per cent. of the profits was calculated with reference to the income of the company part of which was agricultural income. It was held that the assessee received no agricultural income as defined by the Act but that he received a remuneration under a contract for personal service calculated on the amount of profits earned by the employer, payable not in specie out of any item of such profits, but out of any moneys of the employer avail- Able for the purpose, and that the remuneration therefore was not agricultural income and was not exempt from tax. Sir <NAME> in the above case observed :

" In their Lordships' view the principle to be derived from a consideration of the terms of the Income-tax Act and the authorities referred to is that where an assessee receives income, not itself of a character to fall within the definition of agricultural income contained in the, Act, such income does not assume the character of agricultural income by reason of the source from which it is derived, or the method by which it is calculated. "

In the third case, viz., <NAME> v. Commissioner of Income-tax, Bihar and Orissa(1), an annual payment for life to the assessee was not held to be agricultural income and therefore not exempt from tax where the annuity arose out of a transfer made by the assessee of a portion of his estate for discharging his debts and for obtaining an adequate income for his life it being held that it was not rent or revenue derived from land --but. money paid under a contract imposing personal liability on the covenantor the discharge of which was secured by a charge on (1) [1948] 16 I.T.R. 380.

(2) [1935] 3 I.T.R. 237.

land. But reliance was placed uponanother judgment of <ORG> in the same volume at page 305 'in <CITATION> (1). That was a case of a usufructuary mortgagee the profits received by whom were exempt from income-tax on the ground that they were agricultural income in his hands. Lord <NAME>, after referring to certain sections of the Act, observed that "the result of those sections is to exclude agricultural income altogether from the scope of the Act howsoever or by whomsoever it may be received." These observations must be held to be confined to the facts of that particular case which was a case of usufructuary mortgagee who had received profits directly from the land. The obvious implication of the words used by Lord <NAME> was that whosoever receives profit from the land directly is entitled to the exemption. Reference was also made to some English decisions but they have no bearing upon the present case as they were founded on the English Income-tax law and the provisions of the particular statute.

The learned Attorney-General also contended that the conclusion that dividend is not agricultural income also follows from the provisions of section 16 , subsection (2) and the proviso to the Act. According to him, this section compels the assessee to show in his return the whole dividend including the portion which is excluded on the ground of agricultural income. We do not consider it necessary to express any opinion upon this contention as our conclusion reached as a result of the foregoing discussion is sufficient to dispose of the appeal. We accordingly dismiss the appeal with costs.

Appeal dismissed.

(1) [1935] 3 I.T.R. 305.


<NAME>, J.

1. Take the question of estoppel first.

2. It does not arise at all. A former abuse of trust cannot be pleaded against a trustee who seeks to prevent a repetition of that abuse, even if he were formerly implicated in the same indefensible course against which he is seeking to protect the trust property: <NAME> v. <NAME> (1871) 14 Mad. I. A. 289 : 17 W. R. 41, 44. and <NAME> v. <NAME> (1897) 1 C. W. N. 493.

3. What do yon say as to the case of <NAME> v. <NAME> (1842) 3 Q. B. D. 760, 766 : 61 R. R. 397. In that case the mortgagors were empowered to raise money on mortgage, while here the palms cannot be alienated.

4. There was no issue on estoppel; that question has been raised here for the first time.

5. Here the transfer is void under Statute, i.e., Scripture of Hindu Law. For the principle against estoppel, see Bigelow p. 514, Ch. 17, Section 1.

6. Next, as regards the second contention of the appellant, I submit that the custom of transferring a pala or selling the office of a shebait: even to a person of the same caste or sect can never be reasonable and valid: see <CITATION> (1882) I. L. R. 6 Mad. 76., <NAME> v. <NAME> (1867) 7 W. R. 266. and <CITATION> (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76.

7. To validate such a custom would tend to public mischief in inducing needy incumbents of hereditary religions offices who desire to sell them to give a dishonest recognition to qualifications, which in fact were not the qualifications demanded by the nature of the office. I submit that no custom can validate an act which is clearly against public policy. The offerings made by Hindus to a public shrine constitute a public trust, in which the trustee can never have any beneficiary interest, and any appropriation by them of the same would be a clear breach of trust; no custom recognising such appropriation can alter the character of such a transaction, or validate the same.

8. <CITATION> (1907) I. L. R. 35 Calc. 226, 229., which lays down the rule that shebaits cannot bequeath their office by will to non-shebaits. See also <NAME> v. <NAME> (1874) 14 B. L. R. 166. Even if the owners of private temples may alter the character of the trust to a certain extent by family arrangement, still the trustees of the Kalighat temple can never do so, because, as both the Courts below have found, it is a public temple.

<NAME>

9. Then you have been abusing your trust, and you now want the <ORG>" to put you in a position to continue doing so.

10. Further, the alleged custom of transferability of palas does not bear the requisite characteristics of a valid legal custom. For it is not certain, reasonable, immemorial, legal or moral. The earliest instance of transfer of a pala goes back only to 4th October 1819 or about 90 years before the institution of this suit; not even to the beginning of the establishment of regular <ORG> in British India, while the foundation of this <ORG> is lost in the oblivion of mythical ages.

11. The transfer of palas is an abuse of trust, and by implication, mis-appropriation: <CITATION> (1867) 7 W. R. 266. For the personal debt of a shebait, trust property cannot be sold; of. the position of the manager of an infant heir.

<NAME>

12. There is great danger in developing superficial analogies.

13. If this custom be upheld, extravagance among shebaits will be encouraged. Public policy must be vindicated, whether the plaintiff lose her money or not.

<NAME>

14. But yon have not got beyond extravagance, encouraged by any possible decision of ours.

15. Misappropriation does not alter the character of the trust. Even a mourasi mokurari lease of landed property granted to a co-shebait has been held to be void. Regarding the <ORG> case, is pala or turn of worship the same as charao?. No custom was pleaded there; <CITATION> (1896) I. L. R. 23 Calc. 645.

<NAME>

16. The contention of the other side is not that the Kalighat temple palas are transferable, as a matter of right under Hindu Law, but that they are so by custom.

17. Even if such a custom is proved, it is bad in law: see <NAME> v. <NAME> (1897) 1 C. W. N. 493.

18. Instances of continued abuse of trust for 90 years will not make the custom valid.

19. <NAME> v. <NAME> (1882) I. L. R. 6 Mad. 76; custom was not pleaded there. See also <NAME> Hindu Law, p. 486, 491.

20. The custom found by the District Judge to be in existence relates to private and not public endowments: <CITATION> (1877) I. L. R. 2 Calc. 365. See also <NAME> on Hindu Law, p. 453. A turn of worship, cannot be called a shape. [<NAME>'s Hindu Law paras, 437, 438.]

21. As to a foreclosure decree, I submit that a pala or turn of worship has been held in all the reported cases to be moveable property. As a foreclosure decree can only he made with respect to mortgages of immoveable property, the provisions of the Transfer of Property Act which refer to foreclosure of mortgages of immoveable property only, and Order 34 of the Civil Procedure Code of 1908 (applying also to mortgages of immoveable property) are inapplicable to mortgages of palas. There is no provision of Indian Law for granting a decree for foreclosure in the case of pledge, or mortgage of moveables.

22. <NAME>, in reply. It has been urged, that we cannot have a foreclosure decree because a pala is not immoveable property. See Fisher on Mortgage, 6th Edition, Article 985 , p. 505. A pledge presupposes delivery of possession. (Contract Act , Sections 172 . 148.)

23. For the difference between a pledge and a mortgage, I refer to pages 107 and 320 of Ghose's Mortgage. A pledgee can realise his money by sale of the pawn: <NAME> v. <NAME> (1). Regarding foreclosure of a mortgage of moveables, see <ORG>, 7th edition. Ch. 49, para I, p. 1019.

24. [<NAME>. See Halsbury's Laws of England, Vol. I, p. 123. Section 58 of the Transfer of Property Act refers to mortgages of immoveable property.]

28. An regards, the second question, it has riot been disputed on behalf of the mortgagee that in the absence of a custom or usage to the contrary or any term to that effect in the deed of endowment, a religions trust or the right of management of a religious or charitable endowment or a religious office attached to a temple or any other endowment cannot be alienated by the holder: <CITATION> (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., <CITATION> (1882) I. L. R. 5 Mad. 89., <NAME> v. Nila Kandan (1884) I. L. R. 7 Mad. 337., <NAME> v. <NAME> (1902) I. L. R. 26 Mad. 31., <NAME> v. <NAME> (1899) I. L. R. 23 Mad. 271; L. R. 27 I. A. 69., <NAME> v. <NAME> (1896) I. L. R. 24 Calc. 83., <CITATION> (1891) I. L. R. 15 Mad. 183., <NAME> v. <NAME> (1892) I. L. R. 15 Mad. 389., <CITATION> (1894) I. L. R. 19 Mad. 211., <CITATION> (1907) I. L. R. 34 Calc. 828; I. L. R. 35 Calc. 226., <NAME> v. <NAME> (1881) I. L. R. 4 All. 81., Rup Narain v. <NAME> (1878) 3 C. L. R. 112., <NAME> v. <NAME> (1897) 1 C. W. N. 493., <CITATION> (1892) I. L. R. 16 Mad. 146., <NAME> v. <NAME> (1898) I. L. R. 23 Bom. 131., <NAME> v. <NAME> (1865) 3 W. R. 152., <NAME> v. <NAME> (1867) 7 W. R. 266., <NAME> v. <NAME> (1871) 6 B. L. R. 727; 15 W. R. 339, <NAME> v. <NAME> (1870) 5 B. L. R. 617., <CITATION> (1903) I. L. R. 27 Mad. 192., <NAME> v. <NAME> (1895) I. L. R. 20. Bom. 495., <CITATION> (1882) I. L. R. 6 Mad. 76. There is also authority for the proposition that alienation of a religious office may be validly made in favour of a person standing in the line of succession and not disqualified by personal unfitness, <NAME> v. <NAME> (1869) 6 Bom. H. C. R. 250., <NAME> v. <NAME> (1882) I. L. R. 6 Bom. 298., <CITATION> , (1900) I. L. R. 36 Calc. 975., <NAME> v. <NAME> (1909) I. L. R. 36 Calc. 375. But the appellant does not invite us to go even as far as this proposition. She asks us to assume that a pala or turn of worship is not alienable, except by custom, and contends' that the custom which has been proved in this case should be recognised by the <ORG>: <CITATION> (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., Gnanasamandha v. <NAME> (1899) I. L. R. 23 Mad. 271 : L. R. 27 I. A. 69. This raises the question, whether the custom possesses the characteristics deemed essential for the validity of a custom. These essential attributes were specified by <ORG>, in <NAME> v. <NAME> (1838) 9 Ad. & E1. 406., in these terms; "A, custom, to be valid mast have four essential attributes: first, it mast be immemorial; secondly, it must be reasonable; thirdly, it mast have continued without interruption since its immemorial origin; and fourthly, it must be certain in respect of its nature generally, as well as in respect of the locality where it is alleged to obtain and the persons whom it is alleged to affect." See also <NAME> v. <NAME> (1876) L. R. 3 I. A. 259., <CITATION> (1876) I. L. R. 1 Mad. 235 : L. R. 4 I. A. 76., <CITATION> (1882) I. L. R. 9 Calc. 698., <NAME> v. <NAME> (1893) I. L. R. 21 Calc. 149. In the case before us, the custom obviously satisfies the first, third and fourth requirements. The time when the custom originated is unknown; all that has been ascertained is that, as far as the evidence can be carried back, it has "been in existence. This takes the case out of the rule formulated by <NAME>, in Mayor of London v. <NAME> (1867) L. R. 2. H. L. 239, 258. that "a custom originating within time of memory, even though existing in fact, is void at law." There is no force in the contention that the proof of the existence of the custom should have been carried back by direct evidence to 1793 when the first Regulations were passed by <ORG>, if not to the year 1773, when <ORG> was established. It is well settled, that evidence showing exercise of a right in accordance with an alleged custom as far back as living testimony can go, raises the presumption, though only a rebuttable presumption, as to the immemorial existence of the custom. As <NAME>, C.J., said in <NAME> v. <NAME> (1837) 2 Moo. & R. 129, 136., yon cannot reasonably expect to have it proved that the custom did in fact exist before time of legal memory; but you are to require proof, as far back as living memory goes, of a continuous, peaceable and uninterrupted use of the custom. To the same effect is the observation of <NAME>, J., in <NAME> v. <NAME>  2 Ch. 534, 550. (1): "not only ought the <ORG> to be slow to draw an inference of fact which would defeat a right that has been exercised during so long a period as the present, unless such inference is irresistible, but it ought to presume everything possible to presume in favour of such a right." It is interesting to note that <NAME> in his Mitakshara enunciated a similar rule (<NAME>, Book 11, 27). On the authority of a text of <NAME>, he holds that "time within the memory of man extends as far as a hundred years", as a man has, according to <NAME>, a hundred years' duration of life. (Mitakshara, trans., Gharpure, p. 50). <NAME>, in his commentary on the same text of <NAME>, treats a period beyond three generations (that is one hundred and five years) as time immemorial, and, refers to an earlier text to show that a period beyond sixty years might be treated as time beyond human memory. In any event, it is well settled that if the existence of the custom has been proved for a long period, the onus lies on the person seeking to disprove the custom, to demonstrate its impossibility; in this case, the mortgagors have entirely failed to meet the evidence of the custom adduced by the plaintiff. There is also no room for serious controversy as regards the certainty and continuity of the custom. The only question, consequently, for consideration is, whether it is reasonable as the appellant contends or unreasonable and opposed to public policy us the respondent asserts. It is indisputable that if a custom be against reason, it has no force in law; but as explained in Co. Litt., 62a, the reason here referred to is not to be understood as meaning every unlearned man's reason, but artificial and legal reason warranted by authority of law; or, as Blacks tone puts it, (Commentaries, Vol. I, p. 77) it is sufficient if ho good legal reason can be assigned against it. When, however, it is said that a custom is void, because it is unreasonable, nothing more is meant than that the unreasonable character of the alleged custom conclusively proves that the usage, even though it may have existed from time immemorial, must have resulted from accident or indulgence and not from any right conferred in ancient times. <NAME> v. <NAME> (1861) 9 H. L. C. 691, 700, 701. It is also well settled that the period for ascertaining, whether a particular custom is reasonable or not, is the time of its possible inception; this is in accord with the observation in the Tanistry Case (1608) <NAME> 29, 32.: "the commencement of a custom (for every custom hath a commencement, although the memory of man doth not extend to it, as the river Nile hath a spring although geographers cannot Audit) ought to be upon reasonable ground and cause, for if it was unreasonable in the original, no usage or continuance can make it good: Quod ab initio non valuit tractu temporis non convalescet." When tested in the light of these principles, no good ground can be assigned why the custom should be condemned as unreasonable. There is no force in the contention of: the respondents that because the custom contravenes the rule that a religious office is inalienable, it must be pronounced to be against public policy; if this argument were to prevail, all customs would be unreasonable. Since customs in general involve some inconsistency with the general common law of the realm or are contrary to a particular maxim, the fact of this inconsistency is not of itself a ground for holding the custom unreasonable and bad: <NAME> v. <NAME> (1838) 9 A. & E. 406, 422. Thus in the Tanistry Case (1608) <NAME> 29, 33., it is said that "several customs which had been adjudged void in our books as being unreasonable against common right or purely against law, if their nature and quality be considered, will be found injurious to the multitude and prejudicial to the Commonwealth. To the same effect is Co. Litt. 113a; "Consuetudo ex certa causa rationabili usitata privat communem begem." Is there then anything to show that the custom is injurious to the endowment or to the Commonwealth? One of the mortgagors has a turn of worship or pala; he is entitled in this character to collect the offerings made to the goddess on the day on which his turn falls; he applies a portion of the income for the worship of the goddess and appropriates the remainder for his personal use. It is not material to consider whether he should not apply the whole of the income for religious and charitable purposes; but let us assume that he and every shebait like him who has a pala may be compelled to do so. He transfers his turn of worship to a person who, in certain contingencies, might in his own right, have been a shebait and might, have held a pala. The transferee, as holder of the pala, is under precisely the same obligation to the endowment as the transferor himself. It is difficult to appreciate how a custom which recognises and validates a transfer to members of a limited circle under these circumstances can be detrimental to the endowment or to the public. There is no question that a pala of the Kalighat temple is heritable, and it is immaterial whether the heir is a male or female; the custom in this respect is established' beyond doubt: <CITATION> (1877) I. L. R. 2 Calc. 365, 372. There is also no question that though probably religious offices were originally indivisible, they are now deemed partible: <NAME> v. <NAME> (1895) I. L. R. 20 Bam. 495., <NAME> v. <NAME> (1874) 14 B. L. R. 166; 22 W. R. 437., Elder Widow v. Younger Widow (1807) 1 Mac. Sel. Rep. 180, <CITATION> (1909) I. L. R. 34 Mad. 470., <NAME> v. <NAME> (1892) I. L. R. 17 Bam. 271., <CITATION> (1900)11 Mad. L. J. 215, 222., <CITATION> (1888) I. L. R. 13 Bam. 548., <CITATION> (1897) I. L. R. 19 All. 428., <CITATION> (1907) I. L. R. 34 Calc. 828., <NAME> v. <NAME> (1867) 8 W. R. 193., <NAME>. v. <NAME> (1872) 19 W. R. 28., <NAME> v. <NAME> (1878) I. L. R. 3 Calc. 390., Eshan <NAME> v. <NAME> (1878) I. L. R. 4 Calc. 683., <NAME> v. <NAME> (1882) I. L. R. 8 Calc. 807. Indeed, the very name pala or turn of worship shows that the right is partible. This involves, by necessary implication, the attribute of transferability as amongst the members of the family of shebaits; partition signifies the surrender of a portion of joint right in exchange for a similar right from the co-owner. There is further no question that a pala has not only been deemed heritable and partible; it has also been treated as devisable, as is illustrated by the case of the 'Mister of the first defendant, who obtained a, pala under the testamentary devise of her father. This, again, involves the recognition of the transferable character of a pala; the exercise of thy right to make a bequest implies an assertion of the right to make a transfer inter vivos. It follows, consequently, that the customary right to make a sale, mortgage, gift or lease of a, pala in favour of persons within a limited circle is closely associated with and possibly developed out of the heritable, devisable, and partible character of a pala. A custom of this description clearly cannot be characterised on any rational ground as unreasonable or opposed to public policy, it is further worthy of note that this is not a novel view of the true character of such a custom; for, as early as 8th August 1810, the validity of a conditional mortgage of a pala effected on the 18th February, 1835, was upheld in a contested litigation. Since every custom sanctioned by the <ORG>s must be reasonable, it follows that every case where a custom has been upheld by the <ORG>s is an example of a reasonable custom. When the evidence is examined from this point of view, the case for the mortgagee is materially strengthened; for, as is clear from the record, not only the existence but also the validity of the custom has been repeatedly recognised by the <ORG>s during at least 70 years prior to the institution of this suit, while no single instance has been found where its reasonableness has been successfully assailed. The diatom of transferability of a pala in favour of a limited circle of transferees must accordingly be held valid, and no good reason has been assigned why it should be deemed unreasonable or opposed to public policy.

29. As regards the third question, it has been argued on behalf of the mortgagors respondents that as Order 34 of the Civil Procedure Code of 1908 applies only to mortgages of immoveable property, the plaintiff is not entitled to a decree for foreclosure; and in this connection, reference has been made to <NAME> v. <NAME> (1878) I. L. R. 4 Calc. 683., and <CITATION> (1911) I. L. R. 39 Calc. 227., to show that a pala or turn of worship is not immoveable property. There is no substance in this contention. It is well settled that foreclosure is a remedy of the mortgagee which is not confined to mortgages of land; it is equally applicable to mortgages of chattels, as decided by <ORG> in <NAME> v. <NAME> (1726) 1 Comyn. 393; 2 Eq. Cas. Abr. 6., <NAME> v. <ORG>, 5th Ed., 261 n., <NAME> v. <ORG> (1749) 1 Ves. Sen. 278. The case before us is cleanly not that of a pledge of a moveable; such a pledgee, as pointed out hi <NAME> v. <NAME> (1901) 2 Ch. 314., is in a very different position from an ordinary mortgagee, as he has only a special property in the thing pledged and may obtain a sale but not a foreclosure. The plaintiff is a mortgagee, not of immoveable but of intangible property, and he is entitled to foreclose the mortgagor quite as much as a mortgagee of chattels. [Jones, on Chattel Mortgages, 1908, Sections 699 and 776 .] It is worthy of note that, as early as 1181, <ORG> described in detail a remedy applicable to chattel mortgages which is substantially equivalent to the modern procedure for foreclosure and order absolute on failure of the mortgagor to redeem within the period fixed by the Court [<ORG>, Tr. Beames, Book X, Ch.. 6-8; Ed. Beale, 1900, pages 201-210]. It may be added that if the contention of the mortgagors were to prevail, they might find themselves in a worse position, than what they would occupy under a foreclosure decree; for, if the procedure for foreclosure, with its consequent opportunity to the mortgagor to redeem, is not applicable, the mortgagee may very well contend that the contract between the parties must be strictly enforced and that, as the time for repayment has passed away, the title of the mortgagee to the mortgaged property has become absolute; such a result could hardly have been contemplated by the mortgagors.

30. The result is that this appeal is allowed and the decree of the District Judge discharged. On account taken of the sum due on the conditional mortgage in suit on the 16th. November next, it transpires that the mortgagee will be entitled to Rs. 3,421 for principal and interest up to that date. The decree will direct that if the defendants pay this sum, together with costs of all the <ORG> with 'interest' thereon (as specified in the decree of this <ORG>) on or before the 16th November 1914, the mortgage will stand redeemed. On default, the mortgage will, be foreclosed after the decree absolute has been made by <ORG> in due course. The hearing fee in this <ORG> is assessed at thirty gold mohurs.

<NAME>

31. I agree with the proposed order on the second ground discussed by my learned brother. On the question of estoppel, I prefer to reserve my opinion.